BEIJING, May 15, 2013 /PRNewswire-FirstCall/ -- Tri-Tech
Holding Inc. (Nasdaq: TRIT), which provides turn-key water
resources management, water and wastewater treatment, industrial
safety and pollution control solutions, announced its financial
performance for the first quarter ended March 31, 2013. Highlights include the
following:
- In the first quarter, the Company's revenues declined by 45.5%
to $10.5 million, compared to
$19.2 million in first quarter
2012.
- In the first quarter, gross profit declined by 55.3% to
$2.3 million compared to $5.2 million in first quarter 2012. Gross margin
decreased to 22.3% from 27.1% in the first quarter of 2012.
- The Company had a Loss from operations of $1.6 million, compared to income from operations
of $1.5 million in first quarter of
2012.
- Net loss was $1.1 million,
compared to net income of $1.4
million in the same period of 2012.
- Weighted average number of diluted shares outstanding was
8,238,406 compared to 8,317,224 in the same period in 2012.
- Diluted earnings per share was a loss of $0.13 compared to a gain of $0.17 per share in the same period of 2012
(Logo:
http://photos.prnewswire.com/prnh/20100603/CNTH016LOGO)
Mr. Gavin Cheng, CEO of Tri-Tech
Holding Inc. commented, "The Company has experienced another
quarter of loss due primarily to delays in implementing a number of
projects as clients required project design adjustments. These
delays in turn slowed project-related revenue recognition. As new
competitors entered the market and competed on pricing, our gross
margin suffered. In an effort to broaden its market coverage, the
Company increased spending and efforts in sales and marketing. The
Company believes its strategies will position the Company well for
the long term and thanks our shareholders for their continued
confidence in these efforts and our Company."
FY2012 Financial Performance Metrics
Revenue
Revenue decreases were primarily attributable to a decrease of
50.7% in the system integration category, from $18,532,662 in the first quarter of 2012 to
$9,137,158 in the same period for
2013. Of the system integration category, revenue from the Ordos
project decreased from $3,132,366 for
the period ended March 31, 2012 to
$559,116 in the same period 2013
because the project was primarily completed. In order to reduce
cash flow pressures, we evaluated the projects we planned to bid on
and elected not to bid on domestic BT projects, which typically
require significant investments and feature slower client payment
periods. At the same time, these BT projects are typically
higher-value projects, so the absence of these projects from 2013
results significantly reduced our revenues.
Gross Margin
Our gross margin decrease was largely a result of increases in
material and equipment costs and labor subcontracting costs.
Shifting from BT projects, which usually have higher gross margins,
also contributed the lower gross margin.
Selling and Marketing Expenses
Selling and marketing expenses consist primarily of
compensation, marketing, travel and business entertainment
expenses. In the first quarter of 2013, total selling and marketing
expenses increased by 24.5%, from $838,993 in the first quarter of 2012 to
$1,044,526 in the same period of 2013
as a result of the increased efforts required to drive revenue from
a larger number of lower-value projects in light of our move away
from BT projects.
General and Administrative Expenses
General and administrative expenses consist primarily of
compensation costs, rental expenses, professional fees, and other
overhead expenses. General and administrative expenses increased by
$45,651 from $2,853,360 in the first quarter of 2012 to
$2,899,011 in the first quarter of
2013 due largely to first quarter 2013 costs associated with
reducing our headcount in the fourth quarter of 2012.
Loss before Income Taxes
In the quarter ended March 31,
2013, our net loss before provision for income taxes was
$1,192,508, a decrease of
$2,939,690 compared to net income
before income tax of $1,747,182 in
the same period in 2012. The Company's provision for income taxes
decreased by 82.6%, from $314,493 in
the first three months of 2012 to $54,749 in the same period in 2013. Some of the
entities were income tax free because of loss while the others were
taxable, so the Company had income tax expenses in spite of overall
net loss. In the period ended March 31,
2013, net loss attributable to the shareholders of TRIT was
$1,098,773, a decrease of
$2,536,898, from net income of
$1,438,125 for the same period in
2012.
Liquidity and Capital Resources
Our liquidity and available capital resources are impacted by
four key components: (i) cash and cash equivalents,
(ii) operating activities, (iii) financing activities,
and (iv) investing activities.
Cash and Cash Equivalents
As of March 31, 2013, our cash and
cash equivalents amounted to $6,014,862. The restricted cash as of
March 31, 2013 and December 31, 2012 amounted to $7,523,965 and $7,816,967, respectively, which are not included
in the total amount of cash and cash equivalents. The restricted
cash consisted of deposits as collateral for the issuance of
letters of credit. Our subsidiaries that own these deposits do not
have material cash obligations to any third parties. Therefore, the
restriction does not impact our liquidity.
Operating Activities
Net cash used in operating activities was $693,046 for the three months ended March 31, 2013, compared with $7,731,944 in the same period in 2012. The
decrease of $7,038,898 in operating
cash outflow was caused by our strategic adjustments and cost
control efforts in 2012. Net accounts and notes receivable
increased from $18,598,110 on
December 31, 2012 to $19,689,826 on March 31,
2013, an increase of 5.9%. Current unbilled receivables
increased from $27,954,525 on
December 31, 2012 to $28,267,776 on March 31,
2013, an increase of 1.1%. The remaining portion was mainly
due to the decreased accounts payable and cost accruals, due to the
drop in total revenue.
Investing Activities
Net cash used in investing activities was $177,287 during the three months ended
March 31, 2013, a decrease of
$197,800 from net cash used in
investing activities of $375,087 in
the same period of 2012.Currently we have no further plan to add
capital expenditure.
Financing Activities
The cash used in by financing activities was $1,365,888 in the three months ended March 31, 2013, compared to cash provided by
financing activities of $3,317,057 in
the same period of 2012. The decrease was due to paying back bank
borrowings and loans from third-party companies and a
noncontrolling shareholder.
Restricted Net Assets
As of both March 31, 2013 and
December 31, 2012,restricted retained
earnings were $2,246,910, and
restricted net assets were $4,878,975. Unrestricted retained earnings as of
March 31, 2013 and December 31, 2012 were $15,939,623 and $17,038,396, respectively, which were the amounts
available for distribution in the form of dividends or for
reinvestment.
Working Capital and Cash Flow Management
As of March 31, 2013, our working
capital was $24,916,099, with current
assets totaling $86,514,353 and
current liabilities totaling $61,598,254. Of the current assets, cash and cash
equivalents was $6,014,862. We
believe our current assets are sufficient to meet our capital
requirements for the next 12 months.
To support our operations, we plan to sell our real property in
Baoding, along with all construction including the costs of
construction and operation expended since acquisition for
approximately $18 million. We
acquired this property on November 26,
2010. The sale is expected to close before the end of 2013
and we expect to break even on the sale. This fund will support our
operating cash flow and the corporate bond will be removed from
financing cash flow.
Order Backlog and Pipelines
The Company's backlog represents the amount of contract work
remaining to be completed, that is, revenues from existing
contracts and work in progress expected to be recognized in current
period, based on the assumption that these projects will be
completed on time according to the project schedules. The Company
evaluates the ongoing projects regularly and updates the schedules
as appropriate.
The following table provides backlogs by segments for as of
March 31, 2013 and December 31, 2012, respectively.
|
March 31, 2013
|
December 31, 2012
|
|
USD
Million
|
% of
Total Backlog
|
USD
Million
|
% of
Total Backlog
|
Segment
1:
|
37.8
|
60.2%
|
38.7
|
64.4%
|
Segment
2:
|
8.3
|
13.3%
|
6.7
|
11.1%
|
Segment
3:
|
16.6
|
26.5%
|
14.7
|
24.5%
|
Total
|
62.7
|
100.0%
|
60.1
|
100.0%
|
Our pipeline represents the values of projects we have been
actively pursuing. The pipeline by the ended of March 31, 2013 was $38.1
million in Segment 1, $23.7
million in Segment 2 and $5.4
million in Segment 3.
Having a dynamic nature, the values of secured projects move
from pipeline into backlog and backlog to revenue based on
percentage of completion, sometimes simultaneously. The backlog
increased by $2.6 million from
December 31, 2012 to March 31, 2013, which is because we successfully
bid for new contracts.
Conference Call
Tri-Tech Chairman Warren Zhao,
CEO Gavin Cheng, CFO & President
Phil Fan and COO Peter Dong will host a conference call at
8:00PM EDT, May 15, 2013, (8:00AM Beijing/Hong Kong Time on May 16, 2013) to review the company's financial
results and outlook of operations, to discuss our growth strategies
and to respond to questions and comments.
To participate, call U.S. toll free number (877) 941-
8416 approximately 10 minutes before the call.
International callers, please dial 1 (480) 629 -
9808. The conference ID number is 4619281. A
live and archived webcast of the call will be available
at http://public.viavid.com/index.php?id=104728. An MP3
file will be available one hour after the call and will be archived
for 90 days at www.tri-tech.cn/ir.
- FINANCIAL TABLES -
TRI-TECH HOLDING INC. AND
SUBSIDIARIES
|
CONSOLIDATED BALANCE SHEETS
|
|
|
|
March
31, 2013
|
|
December 31, 2012
|
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash
|
$
|
6,014,862
|
$
|
8,098,657
|
Restricted
cash
|
|
4,977,526
|
|
4,352,443
|
Accounts
and notes receivable, net of allowance for doubtful accounts
of $1,549,227 and $1,475,771 as of March 31, 2013 and December
31,
2012, respectively
|
|
19,689,826
|
|
18,598,110
|
Unbilled
revenue
|
|
28,267,776
|
|
27,954,525
|
Other
current assets
|
|
3,618,626
|
|
3,825,770
|
Inventories
|
|
9,677,020
|
|
8,459,073
|
Deposits
on projects
|
|
1,285,829
|
|
1,469,550
|
Prepayments to suppliers and
subcontractors
|
|
12,982,888
|
|
9,353,490
|
Total
current assets
|
|
86,514,353
|
|
82,111,618
|
Long-term
unbilled revenue
|
|
42,624,081
|
|
51,219,694
|
Long-term
accounts receivable
|
|
517,748
|
|
413,770
|
Plant and
equipment, net
|
|
1,672,292
|
|
1,764,784
|
Construction in progress
|
|
5,537,946
|
|
5,359,466
|
Intangible
assets, net
|
|
10,750,434
|
|
10,902,932
|
Long-term
restricted cash
|
|
2,546,439
|
|
3,464,524
|
Goodwill
|
|
1,441,278
|
|
1,441,278
|
Total
Assets
|
$
|
151,604,571
|
$
|
156,678,066
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts
payable
|
$
|
4,732,420
|
$
|
5,890,511
|
Costs
accrual on projects
|
|
22,165,069
|
|
23,637,751
|
Advance
from customers
|
|
865,281
|
|
1,157,247
|
Loans from
third party companies and individual
|
|
4,619,651
|
|
6,400,659
|
Amount due
to noncontrolling interest investor
|
|
6,525,751
|
|
9,047,068
|
Amount due
to related party
|
|
1,668,604
|
|
1,656,420
|
Other
payables
|
|
581,208
|
|
461,258
|
Taxes
payable
|
|
6,021,909
|
|
5,577,533
|
Accrued
liabilities
|
|
524,101
|
|
485,354
|
Payable on
investment consideration
|
|
582,966
|
|
582,966
|
Deferred
income taxes
|
|
2,040,315
|
|
1,782,786
|
Deferred
revenue
|
|
264,386
|
|
289,485
|
Short-term
bank borrowing (including VIE short-term borrowing of the
consolidated VIEs without recourse to Tri-Tech Holdings of
$6,221,064
and $2,754,158 as of March 31, 2013 and December 31, 2012,
respectively)
|
|
11,006,593
|
|
8,150,041
|
Total
current liabilities
|
|
61,598,254
|
|
65,119,079
|
Noncurrent
deferred income taxes
|
|
3,489,747
|
|
3,699,790
|
Long-term
bank borrowings
|
|
16,475
|
|
17,976
|
Corporate
Bond
|
|
7,935,122
|
|
7,935,122
|
Total
Liabilities
|
|
73,039,598
|
|
76,771,967
|
|
|
|
|
|
Equity
|
|
|
|
|
Tri-Tech
Holding Inc. shareholders' equity
|
|
|
|
|
Ordinary
shares ($0.001 par value, 30,000,000 shares authorized;
8,259,506 and 8,259,506 shares issued as of March 31, 2013 and
December 31, 2012, respectively; 8,238,406 and 8,238,406 shares
outstanding as of March 31, 2013 and December 31, 2012,
respectively)
|
|
8,259
|
|
8,259
|
Additional
paid-in-capital
|
|
50,257,633
|
|
50,119,428
|
Statutory
reserves
|
|
2,246,910
|
|
2,246,910
|
Retained
earnings
|
|
15,939,623
|
|
17,038,396
|
Treasury
shares (21,100 shares in treasury as of March 31, 2013
and December 31, 2012, respectively)
|
|
(193,750)
|
|
(193,750)
|
Accumulated other comprehensive income
|
|
4,891,220
|
|
5,086,827
|
Total
Tri-Tech Holding Inc. shareholders' equity
|
|
73,149,895
|
|
74,306,070
|
Noncontrolling interests
|
|
5,415,078
|
|
5,600,029
|
Total
equity
|
|
78,564,973
|
|
79,906,099
|
Total
Liabilities and Equity
|
$
|
151,604,571
|
$
|
156,678,066
|
TRI-TECH HOLDING INC. AND
SUBSIDIARIES
|
CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
|
|
|
|
For The
Three Months Ended March 31,
|
|
|
2013
|
|
2012
|
|
|
(Unaudited)
|
|
(Unaudited)
|
Revenues:
|
|
|
|
|
System integration
|
$
|
9,137,158
|
$
|
18,532,662
|
Hardware products
|
|
1,341,670
|
|
688,650
|
Total revenues
|
|
10,478,828
|
|
19,221,312
|
Cost of
revenues
|
|
|
|
|
System
integration
|
|
7,180,386
|
|
13,584,217
|
Hardware products
|
|
963,749
|
|
419,595
|
Total cost of revenues
|
|
8,144,135
|
|
14,003,812
|
Gross profit
|
|
2,334,693
|
|
5,217,500
|
Operating
expenses:
|
|
|
|
|
Selling and marketing expenses
|
|
1,044,526
|
|
838,993
|
General and administrative expenses
|
|
2,899,011
|
|
2,853,360
|
Research and development expenses
|
|
9,162
|
|
68,870
|
Total operating expenses
|
|
3,952,699
|
|
3,761,223
|
(Loss)
Income from operations
|
|
(1,618,006)
|
|
1,456,277
|
Other
income (expense):
|
|
|
|
|
Other income (expense), net
|
|
1,187,348
|
|
672,495
|
Interest income
|
|
10,268
|
|
41,774
|
Interest expense
|
|
(772,118)
|
|
(435,773)
|
Investment gain
|
|
-
|
|
5,409
|
Fair Value change on contingent investment consideration
|
|
-
|
|
7,000
|
Total
other income (expenses), net
|
|
425,498
|
|
290,905
|
(Loss)
Income before provision for income taxes
|
|
(1,192,508)
|
|
1,747,182
|
Provision
for income taxes
|
|
54,749
|
|
314,493
|
Net
(loss) income
|
|
(1,247,257)
|
|
1,432,689
|
Less: Net
(loss) income attributable to noncontrolling interests
|
|
(148,484)
|
|
(5,436)
|
Net (loss)
income attributable to Tri-Tech Holding Inc.
shareholders
|
$
|
(1,098,773)
|
$
|
1,438,125
|
Net (loss)
income
|
|
(1,247,257)
|
|
1,432,689
|
Other
comprehensive income
|
|
|
|
|
Foreign currency translation adjustment
|
|
(232,074)
|
|
193,353
|
Comprehensive (loss) income
|
|
(1,479,331)
|
|
1,626,042
|
Less:
Comprehensive (loss) income attributable to noncontrolling
interests
|
|
(184,951)
|
|
8,429
|
Comprehensive (loss) income attributable to Tri-Tech
Holding Inc.
|
$
|
(1,294,380)
|
$
|
1,617,613
|
Net (loss)
income attributable to Tri-Tech Holding Inc. shareholders
per share are:
|
|
|
|
|
Basic
|
$
|
(0.13)
|
$
|
0.18
|
Diluted
|
$
|
(0.13)
|
$
|
0.17
|
Weighted
average number of ordinary shares outstanding:
|
|
|
|
|
Basic
|
|
8,238,406
|
|
8,208,480
|
Diluted
|
|
8,238,406
|
|
8,317,224
|
TRI-TECH HOLDING INC. AND
SUBSIDIARIES
|
CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
|
|
|
For The
Three Months Ended March 31,
|
|
|
2013
|
|
2012
|
|
|
(Unaudited)
|
|
(Unaudited)
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
Net (loss)
income
|
$
|
(1,247,257)
|
$
|
1,432,689
|
Adjustments to reconcile net (loss) income to cash
used
in operating activities:
|
|
|
Amortization of share-based compensation
expense
|
|
138,205
|
|
90,913
|
Depreciation and amortization
|
|
309,944
|
|
285,479
|
Provision
for doubtful accounts
|
|
65,773
|
|
152,717
|
Loss on
disposal of plant and equipment
|
|
12,003
|
|
-
|
Deferred
income taxes
|
|
54,749
|
|
314,493
|
Fair value
change on contingent investment consideration
|
|
-
|
|
(7,000)
|
Gain on
investment in joint venture
|
|
-
|
|
(5,409)
|
Changes
in operating assets and liabilities:
|
|
|
|
|
Accounts
and notes receivable
|
|
(1,241,770)
|
|
(3,160,643)
|
Unbilled
revenue
|
|
8,289,666
|
|
(8,837,581)
|
Restricted
cash
|
|
316,761
|
|
280,518
|
Other
current assets
|
|
386,473
|
|
(1,258,278)
|
Inventories
|
|
(1,231,663)
|
|
762,767
|
Prepaid
expenses
|
|
(38,225)
|
|
(133,743)
|
Prepayments
|
|
(3,574,243)
|
|
(267,700)
|
Accounts
payable
|
|
(1,397,701)
|
|
(5,294,693)
|
Notes
payable
|
|
-
|
|
(59,248)
|
Cost
accrual on projects
|
|
(1,556,734)
|
|
10,693,084
|
Advance
from customers
|
|
(401,072)
|
|
(634,643)
|
Other
payables
|
|
(32,707)
|
|
(1,856,643)
|
Taxes
payable
|
|
427,581
|
|
(154,840)
|
Accrued
liabilities
|
|
53,717
|
|
(74,183)
|
Deferred
revenue
|
|
(26,546)
|
|
-
|
Net
cash used in operating activities
|
|
(693,046)
|
|
(7,731,944)
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
Cash
proceeds from disposal of plant and equipment
|
|
1,150
|
|
-
|
Payment to
purchase plant and equipment
|
|
(27,718)
|
|
(118,550)
|
Cash paid
for construction in progress
|
|
(150,719)
|
|
(41,125)
|
Payment in
business acquisition
|
|
-
|
|
(75,159)
|
Payment of
loan to joint venture
|
|
-
|
|
(250,000)
|
Payment of
loan to third-party companies
|
|
-
|
|
(190,253)
|
Collection
of loan to third-party companies
|
|
-
|
|
300,000
|
Net
cash used in investing activities
|
|
(177,287)
|
|
(375,087)
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
Proceeds
from bank borrowings
|
|
4,243,848
|
|
3,408,695
|
Payment of
bank borrowing
|
|
(1,435,083)
|
|
-
|
Proceeds
from loan from third-party companies
|
|
-
|
|
215,620
|
Payment of
loan from third-party companies
|
|
(1,291,799)
|
|
(307,258)
|
Payment of
loan from non-controlling shareholders
|
|
(2,882,854)
|
|
-
|
Net
cash (used in) provided by financing activities
|
|
(1,365,888)
|
|
3,317,057
|
|
|
|
|
|
EFFECTS OF
EXCHANGE RATE CHANGE IN CASH
|
|
152,426
|
|
394,818
|
|
|
|
|
|
NET
DECREASE IN CASH
|
|
(2,083,795)
|
|
(4,395,156)
|
|
|
|
|
|
CASH,
beginning of the period
|
|
8,098,657
|
|
11,935,746
|
CASH,
end of the period
|
$
|
6,014,862
|
$
|
7,540,590
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure for cash flow
information:
|
|
|
|
|
Income
taxes paid
|
$
|
87,637
|
$
|
154,361
|
Interest
paid on debt
|
$
|
534,748
|
$
|
151,606
|
|
|
|
|
|
Supplemental disclosure for noncash investing
activity:
|
|
|
|
|
Fair value
change on contingent consideration payable
|
|
-
|
|
(7,000)
|
Gain on
long-term investment to India Joint Venture
|
|
-
|
|
5,409
|
About Tri-Tech Holding Inc.
Tri-Tech is an innovative provider of consulting, engineering,
procurement, construction and technical services. The Company
supports government, state owned entities and commercial clients by
providing efficiency oriented solutions focused on treatment of
water and waste water, management of water resources and
water-efficient irrigation, as well as industrial emission and
safety controls. With software copyrights, product patents, and
capable employees in China, the U.S. and India, Tri-Tech's
capabilities span the cycle of innovation. Please visit
www.tri-tech.cn for more information.
An online investor kit including a company profile,
presentations, press releases, current price quotes, stock charts
and other valuable information for investors is available at
http://www.tri-tech.cn/ir. To subscribe to future releases via
e-mail alert, visit http://www.tri-tech.cn/ir/info/request.
This press release contains forward-looking statements. These
statements are made under the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements include statements concerning plans, objectives, goals,
strategies, future events or performance, and underlying
assumptions and other statements that are other than statements of
historical facts. These statements are subject to uncertainties and
risks including, but not limited to, product and service demand and
acceptance, changes in technology, economic conditions, the impact
of competition and pricing, government regulation, and other risks
contained in reports filed by the company with the Securities and
Exchange Commission. All such forward-looking statements, whether
written or oral, and whether made by or on behalf of the company,
are expressly qualified by the cautionary statements and any other
cautionary statements which may accompany the forward-looking
statements. In addition, the company disclaims any obligation to
update any forward-looking statements to reflect events or
circumstances after the date hereof.
For more information, please contact:
Tri-Tech Holding Inc.
www.tri-tech.cn
IR Department
+86 10 57323666
ir@tri-tech.cn
SOURCE Tri-Tech Holding Inc.