BEIJING, Nov. 15, 2010 /PRNewswire-Asia-FirstCall/ --
LianDi Clean Technology Inc. (OTC Bulletin Board: LNDT), ("LianDi"
or the "Company"), a leading provider of clean technology,
downstream flow equipment, engineering services and software to
China's leading petroleum and
petrochemical companies, today announced financial results for the
second fiscal quarter ended September 30,
2010.
SUMMARY FINANCIALS
|
|
Second
Quarter Fiscal 2011 Results (USD)
(unaudited)
|
|
(Three months
ended September 30)
|
Q2
2011
|
Q2
2010
|
CHANGE
|
|
Sales
|
$43.3
million
|
$21.6
million
|
+100.3%
|
|
Gross Profit
|
$9.1
million
|
$6.2
million
|
+46.9%
|
|
GAAP Net Income
(Available
to Common
Stockholders)
|
$6.0
million
|
$5.3
million
|
+12.2%
|
|
Adjusted Net
Income
(Available
to Common
Stockholders)
|
$6.8
million (1)
|
$5.3
million
|
+27.4%
|
|
GAAP EPS
(Diluted)
|
$0.20
|
$0.19
|
+5.3%
|
|
Adjusted EPS
(Diluted)
|
$0.20
|
$0.19
|
+5.3%
|
|
|
|
|
|
|
|
(1) Adjusted net income available to common
stockholders and EPS for Q2 2011 excludes a $0.81
million deemed dividend related to the escrow share
arrangement for preferred stock issued in the February 26, 2010 private placement.
Second Quarter FY 2011 Results
The Company reported revenue of $43.3
million, an increase of 100.3%, compared to revenue of
$21.6 million generated in the same
period of fiscal year 2010. Growth was driven by a 81.2%
year-over-year increase in sales of our equipment and $1.1 million of revenues from services we
provided. During the second quarter, the Company performed
equipment delivery and installation work on 19 projects for
customers compared to three projects in the same period in 2009.
The acquisition of Anhui Jucheng Fine Chemicals Co., Ltd. ("Anhui
Jucheng") that occurred during the second quarter of fiscal 2011
contributed $8.5 million to second
quarter fiscal 2011 sales. The Company reported no software sales
during the quarter.
Gross profit was $9.1 million and
gross margins were 20.9% for the quarter ended September 30, 2010, compared to $6.2 million and 28.5%, respectively, for the
same period in 2009. Excluding Anhui Jucheng, LianDi's gross
margins were 24.0%. Margins were impacted by the absence of
software sales, which typically carry 85%-90% gross margins
compared to 15%-25% gross margins for equipment delivery and
installations.
Operating expenses for the quarter ended September 30, 2010 were approximately
$1.7 million, compared to
$0.5 million in the same period in
2009. As a component of operating expenses, selling expenses were
$0.4 million compared to $0.3 million in the second fiscal quarter of
2010. General and administrative expenses increased by
approximately $1.0 million to $1.3
million due primarily to $0.7
million in professional fees related to being a public
company, which were not present in the period one year ago.
GAAP net income available to common stockholders for the second
quarter of 2011 totaled $6.0 million.
Adjusted net income available to common stockholders for the second
quarter of fiscal 2011, excluding a $0.81
million deemed preferred stock dividend, was approximately
$6.8 million, or $0.20 per diluted share, based on weighted
average shares outstanding of 36.6 million, compared to
$5.3 million, or $0.19 per diluted share based on weighted average
shares outstanding of 27.4 million.
Mr. Jianzhong Zuo, Chairman,
Chief Executive Officer and President of the Company said, "Our
team recently traveled to Houston
to meet with DeltaValve executives. Discussions are now progressing
with DeltaValve's parent company, Curtis
Wright, and we expect a final, comprehensive agreement to be
executed soon."
"We are optimistic about meeting our 2011 fiscal year guidance,
as reflected in the significant increase in our signed contracts
and order backlog. Our performance during the second quarter
reflects our ability to successfully service the needs of our
petroleum and petrochemical-based customers located throughout
China. As the industry continues
its growth trend to meet the strong domestic market demand for
fuel, LianDi's products, technical services and optimization
software allow companies to produce, distribute and handle
petroleum based products in a more efficient and environmentally
conscious manner."
"We are currently advancing several development projects which
will drive future incremental revenue growth. In addition, we are
making further progress with our DeltaValve initiative focused on
building and installing unheading units used by oil refiners in the
delayed coking process. We are on track to complete our first
customer installations during the first half of our fiscal
2012."
First Half FY 2011 Results
|
|
First Half
Fiscal 2011 Results (USD) (unaudited)
|
|
(Six
months ended September
30)
|
1H
2011
|
1H
2010
|
CHANGE
|
|
Sales
|
$52.5
million
|
$28.8
million
|
+82.2%
|
|
Gross Profit
|
$13.0
million
|
$8.2
million
|
+59.5%
|
|
GAAP Net Income
(Available
to Common
Stockholders)
|
$7.7
million
|
$6.7
million
|
+16.4%
|
|
Adjusted Net
Income
(Available
to Common
Stockholders)
|
$9.7 million
(2)
|
$6.7
million
|
+45.8%
|
|
GAAP EPS
(Diluted)
|
$0.26
|
$0.24
|
+8.3%
|
|
Adjusted EPS
(Diluted)
|
$0.29
|
$0.24
|
+20.8%
|
|
|
|
|
|
|
|
(2) Adjusted net income available to common
stockholders and EPS for 1H 2011 excludes a $1.95
million deemed dividend related to the escrow share
arrangement for preferred stock issued in the February 26, 2010 private placement.
Revenues for the first half of fiscal 2011 increased 82.2% to
$52.5 million. Equipment sales were
$40.0 million, a $15 million increase, or 59.9%, from the first
half of fiscal 2010. Sales from Anhui Jucheng contributed
$8.5 million to total net revenue in
the first half of fiscal 2011.
For the first six months of fiscal 2011, cost of sales increased
91.2% while gross profit rose 59.5%. Gross margins fell 360 basis
points year-over-year to 24.8% due to lower software sales and the
inclusion of Anhui Jucheng, which had a relatively lower gross
margin.
Selling expenses and general and administrative expenses were
$0.6 million and $1.8 million for the first half of fiscal 2011,
respectively. Management continues to work diligently to manage
operating costs. Operating income was up 49.6% from the first half
of fiscal 2010 to $10.5 million,
while operating margins were 20.1% compared to 25.5% in the same
period one year ago.
Net income available to common shareholders was $7.7 million compared to $6.7 million in the prior year period. Adjusted
net income, excluding the $1.95
million deemed preferred stock dividend, was $9.7 million, 45.8% higher than net income during
the first half of fiscal 2010. GAAP diluted earnings per share were
$0.26 and $0.24 for the first half of 2010 and 2009,
respectively. Adjusted diluted earnings per share were $0.29 and $0.24 for
the first half of 2010 and 2009, respectively.
Balance Sheet and Cash Flow
As of September 30, 2010, the
Company had cash and cash equivalents of $52.5 million, compared to $59.2 million at March 31,
2010. The decline reflects approximately $9.3 million of prepayments to suppliers. The
Company had total stockholders' equity of $61.5 million at September
30, 2010, including $5.6
million of non-controlling interest, which represents the
49% interest of Anhui Jucheng. The current ratio was 2.8 with
working capital of $56.8 million on
September 30, 2010. Cash
outflow from operations was $0.9
million through the first six months of fiscal 2011.
Fiscal year 2011 Guidance
For fiscal year 2011, management reaffirmed revenue guidance of
$117 million, representing
year-over-year growth of 50.6% over fiscal 2010, and net income
guidance of approximately $24.6
million for fiscal year 2011, representing year-over-year
growth of approximately 64%. Management expects software sales to
contribute 8-10% of total revenues for fiscal year 2011. Further
revenue and net income may come from the Anhui Jucheng acquisition.
Guidance does not include any contribution from the delayed
coking units.
This is the Company's current and preliminary view, which is
subject to change.
The company had 30 contracts with an aggregate value of
$56 million in backlog at
September 30, 2010.
Management believes that its current customers purchase billions
of products and services similar to the ones it offers annually. By
continuing to prove its ability to execute and meet customers'
needs, the Company expects to further penetrate its existing
relationships, which we expect will drive significant growth in the
coming year.
Business Updates
On July 5, 2010 LianDi, acquired a
51% equity interest in Anhui Jucheng for approximately $6 million. Anhui Jucheng is a leading
manufacturer of specialty chemicals used in oil exploration
applications. Management expects LianDi can leverage its
long-standing customer relationships with oil producers to increase
Anhui Jucheng's sales while reducing distribution costs to enhance
margins. The acquisition is consistent with management's goal of
broadening the products and services LianDi provides to its
customer base.
LianDi announced an exclusive alliance with System Kikou Co.,
Ltd ("SKK") in Japan, one of the
world's leading automated oil sludge treatment companies to offer
SKK's automated sludge treatment services to oil refiners in
China. The two companies are
aiming to launch the service in calendar year 2011.
About LianDi Clean Technology Inc.
LianDi was established in July
2004 to serve the largest Chinese petroleum and
petrochemical companies. Through its four operating subsidiaries,
Hua Shen Trading (International) Ltd., Petrochemical Engineering
Ltd., Bright Flow Control Ltd. and Beijing JianXin Petrochemical
Engineering Ltd., the Company distributes a wide range of
customized valves and equipment and provides associated value-added
technical and integration service. The Company also develops and
markets proprietary optimization software for the polymerization
process. In addition, LianDi is focused on the large, rapidly
growing, clean technology market for oil refineries. This market is
expected to benefit from favorable Chinese government policies,
including tax benefits and other incentives.
About Non-GAAP Financial Measures
To supplement the unaudited condensed consolidated statement of
income and comprehensive income presented in accordance with
Accounting Principles Generally Accepted in the United States of America ("GAAP"), we also
provided non-GAAP measures of net income available to common
stockholders and the basic and diluted earnings per shares for the
three months ended September 30,
2010, which are adjusted from results based on GAAP to
exclude the non-cash charges recorded, which related to the escrow
share arrangement allocated to the Series A preferred stock,
treated as deemed dividend, an deduction of net income available to
common stockholders in conjunction to the private placement we
consummated on February 26, 2010.
The non-GAAP financial measures are provided to enhance the
investors' overall understanding of our current performance in
on-going core operations as well as prospects for the future. These
measures should be considered in addition to results prepared and
presented in accordance with GAAP, but should not be considered a
substitute for or superior to GAAP results. We use both GAAP
and non-GAAP information in evaluating and operating business
internally and therefore deems it important to provide all of this
information to investors.
Cautionary Statement Regarding Forward-Looking
Information
This press release may contain certain "forward-looking
statements" relating to the business of LianDi and its subsidiary
companies. All statements, other than statements of historical fact
included herein are "forward-looking statements" including
statements regarding: the impact of the proceeds from the private
placement on the Company's short term business and operations; the
general ability of the Company to achieve its commercial
objectives, including the ability of the Company to sustain growth;
the business strategy, plans and objectives of the Company and its
subsidiaries; and any other statements of non-historical
information. These forward-looking statements are often identified
by the use of forward-looking terminology such as "believes,"
"expects" or similar expressions, involve known and unknown risks
and uncertainties. The Company's actual results could differ
materially from those anticipated in these forward-looking
statements as a result of a variety of factors, including those
discussed in the Company's periodic reports that are filed with the
Securities and Exchange Commission and available on its website
(http://www.sec.gov )
For more information, please
contact:
|
|
|
|
Investor Relations:
|
|
HC International,
Inc.
|
|
Ted Haberfield,
Executive VP
|
|
Tel:
+1-760-755-2716
|
|
Email:
thaberfield@hcinternational.net
|
|
|
-- Financial Tables Follow –
|
|
LIANDI CLEAN TECHNOLOGY
INC
|
|
CONDENSED CONSOLIDATED BALANCE
SHEETS
|
|
|
September
30,
|
|
March
31,
|
|
|
2010
|
|
2010
|
|
|
(US
$)
|
|
(US
$)
|
|
|
(Unaudited)
|
|
(Audited)
|
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$52,455,484
|
|
$59,238,428
|
|
Restricted cash
|
8,277,571
|
|
2,964,864
|
|
Notes
receivables
|
463,686
|
|
-
|
|
Accounts receivable,
net
|
5,440,303
|
|
2,295,231
|
|
Deferred costs of
revenue
|
157,611
|
|
1,168,025
|
|
Inventories
|
2,352,600
|
|
30,103
|
|
Prepaid expenses and
deposits
|
15,724,294
|
|
657,257
|
|
Other
receivables
|
3,809,285
|
|
3,416,284
|
|
Trading
securities
|
11,592
|
|
11,592
|
|
Prepaid land use right –
current portion
|
46,868
|
|
-
|
|
Total
current assets
|
$88,739,294
|
|
$69,781,784
|
|
|
|
|
|
|
Other Assets
|
|
|
|
|
Property and equipment,
net
|
11,325,390
|
|
151,660
|
|
Intangible assets,
net
|
4,994,237
|
|
5,192,738
|
|
Prepaid land use
right – non current portion
|
1,812,222
|
|
-
|
|
Deposit for land use
right
|
1,186,522
|
|
-
|
|
Goodwill
|
357,635
|
|
-
|
|
Total
Assets
|
$108,415,300
|
|
$75,126,182
|
|
|
|
|
|
|
Liabilities and Stockholders'
Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Short-term bank
loan
|
$2,536,897
|
|
-
|
|
Accounts
payable
|
3,012,261
|
|
11,926
|
|
Deferred
revenue
|
320,414
|
|
2,481,771
|
|
Other payables and
accrued expenses
|
8,865,200
|
|
3,496,612
|
|
Provision for income
tax
|
148,357
|
|
59,763
|
|
Due to
shareholders
|
10,636,668
|
|
8,461,161
|
|
Amount due to
non-controlling interests
|
5,136,607
|
|
-
|
|
Preferred stock
dividend payable
|
579,241
|
|
184,820
|
|
Deferred tax
liabilities
|
691,776
|
|
-
|
|
Total
current liabilities
|
$31,927,421
|
|
$14,696,053
|
|
|
|
|
|
|
Total
liabilities
|
$31,927,421
|
|
$14,696,053
|
|
|
|
|
|
|
|
|
|
|
|
Commitments
and contingencies
|
|
|
|
|
|
|
|
|
|
8% Series A
contingently redeemable convertible preferred stock (25,000,000
shares authorized; par value: $0.001 per share; 6,572,283 and
7,086,078 shares issued and outstanding, respectively; aggregate
liquidation preference amount: $23,582,232 and $24,986,093,
including accrued but unpaid dividend of $579,241 and $184,820 at
September 30, 2010 and March 31, 2010, respectively)
|
14,991,475
|
|
14,059,018
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Common stock (par
value: $0.001 per share; 50,000,000 shares authorized; 29,872,567
and 29,358,772 shares issued and outstanding,
respectively)
|
29,873
|
|
29,359
|
|
Additional paid-in
capital
|
20,922,857
|
|
19,891,932
|
|
Statutory
reserves
|
1,138,733
|
|
1,138,733
|
|
Retained
earnings
|
32,993,591
|
|
25,245,926
|
|
Accumulated other
comprehensive income
|
778,956
|
|
65,161
|
|
Total Liandi Clean's
stockholders' equity
|
$55,864,010
|
|
$46,371,111
|
|
|
|
|
|
|
Noncontrolling
interest
|
5,632,394
|
|
-
|
|
|
|
|
|
|
Total
equity
|
$61,496,404
|
|
$46,371,111
|
|
|
|
|
|
|
Total
liabilities and stockholders' equity
|
$108,415,300
|
|
$75,126,182
|
|
|
|
|
|
|
|
|
|
LIANDI CLEAN TECHNOLOGY
INC
|
|
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
|
|
|
For the
Three Months Ended September 30,
|
|
For the Six
Months Ended June 30,
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
(US
$)
|
|
(US
$)
|
|
(US
$)
|
|
(US
$)
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
NET REVENUE
|
|
|
|
|
|
|
|
|
Sales and installation of
equipment
|
$33,682,153
|
|
$18,584,322
|
|
$40,031,287
|
|
$25,028,997
|
|
Sales of
software
|
-
|
|
3,042,254
|
|
2,805,799
|
|
3,743,042
|
|
Services
|
1,134,607
|
|
-
|
|
1,137,708
|
|
23,373
|
|
Sales of chemical
products
|
8,490,510
|
|
-
|
|
8,490,510
|
|
-
|
|
|
$43,307,270
|
|
$21,626,576
|
|
$52,465,304
|
|
$28,795,412
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
|
|
|
|
|
|
|
Cost of equipment
sold
|
(26,303,920)
|
|
(15,312,464)
|
|
(31,335,336)
|
|
(20,325,521)
|
|
Amortization of
intangibles
|
(150,631)
|
|
(149,317)
|
|
(300,115)
|
|
(298,660)
|
|
Cost of chemical products
sold
|
(7,797,118)
|
|
-
|
|
(7,797,118)
|
|
-
|
|
|
(34,251,669)
|
|
(15,461,781)
|
|
(39,432,569)
|
|
(20,624,181)
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
$9,055,601
|
|
$6,164,795
|
|
$13,032,735
|
|
$8,171,231
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
Selling
expenses
|
(429,879)
|
|
(261,632)
|
|
(570,821)
|
|
(537,282)
|
|
General and administrative
expenses
|
(1,248,683)
|
|
(254,934)
|
|
(1,795,056)
|
|
(570,938)
|
|
Research and development
expenses
|
(69,543)
|
|
(9,223)
|
|
(128,853)
|
|
(18,304)
|
|
Total operating
expenses
|
(1,748,105)
|
|
(525,789)
|
|
(2,494,730)
|
|
(1,126,524)
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
$7,307,496
|
|
$5,639,006
|
|
$10,538,005
|
|
$7,044,707
|
|
|
|
|
|
|
|
|
|
|
Other income (expenses),
net:
|
|
|
|
|
|
|
|
|
Interest income
|
33,733
|
|
35,826
|
|
59,747
|
|
47,102
|
|
Interest and bank
charges
|
(114,702)
|
|
(165,116)
|
|
(260,333)
|
|
(297,546)
|
|
Exchange gains
(losses),net
|
(57,170)
|
|
(188,971)
|
|
(126,938)
|
|
(280,858)
|
|
Investment
income
|
6,748
|
|
-
|
|
6,748
|
|
-
|
|
Value added tax
refund
|
1,428
|
|
-
|
|
370,611
|
|
122,638
|
|
Others
|
289,535
|
|
580
|
|
292,342
|
|
19,075
|
|
Total other income
(expenses),net
|
$159,572
|
|
(317,681)
|
|
$342,177
|
|
(389,589)
|
|
|
|
|
|
|
|
|
|
|
Income before income tax
expense
|
$7,467,068
|
|
$5,321,325
|
|
$10,880,182
|
|
$6,655,118
|
|
Income tax
expense
|
(84,646)
|
|
-
|
|
(84,646)
|
|
(817)
|
|
Net income
|
$7,382,422
|
|
$5,321,325
|
|
$10,795,536
|
|
$6,654,301
|
|
Income attributable to
noncontrolling interests
|
(124,430)
|
|
-
|
|
(124,430)
|
|
-
|
|
Net income attributable to
Liandi clean shareholders
|
$7,257,992
|
|
$5,321,325
|
|
$10,671,106
|
|
$6,654,301
|
|
|
|
|
|
|
|
|
|
|
Preferred stock deemed
dividend
|
(809,331)
|
|
-
|
|
(1,951,844)
|
|
-
|
|
Preferred stock
dividend
|
(477,698)
|
|
-
|
|
(971,597)
|
|
-
|
|
Net income available to Liandi
Clean's common stockholders
|
$5,970,963
|
|
$5,321,325
|
|
$7,747,665
|
|
$6,654,301
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
Earnings per common
share
|
|
|
|
|
|
|
|
|
Basic
|
$0.20
|
|
$0.19
|
|
$0.26
|
|
$0.24
|
|
Diluted
|
$0.20
|
|
$0.19
|
|
$0.26
|
|
$0.24
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
common shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
29,679,646
|
|
27,354,480
|
|
29,526,643
|
|
27,354,480
|
|
Diluted
|
36,618,829
|
|
27,354,480
|
|
30,016,764
|
|
27,354,480
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE LianDi Clean Technology Inc.