Exhibit 99.1
SmartHeat Inc. Reports Record 2nd Quarter Financial Results, Reaffirms 2008 Sales and Earnings Guidance.
NEW YORK, NY--(MARKET WIRE) -- August 14, 2008 SmartHeat Inc. (Website: www.smartheatinc.com; OTCBB: SMHT
· | Earnings per Share of $0.04, increased approximately 400% from Q2 in 2007. |
· | Net Income of $0.73 Million, Increased 2270% from Q2 in 2007. |
· | Record Revenue of $5.56 Million, Increased 380% from Q2 in 2007. |
· | Expects strong earnings growth to continue in the second half of 2008 which is SmartHeat’s two strongest quarters of the year. |
· | Reaffirms 2008 revenue guidance of approximately $42 million, net income between $7.4 million and $7.7 million. |
SmartHeat Inc. (Website: www.smartheatinc.com; OTCBB: SMHT - News), a market leader in China's “green” technology heat energy saving industry , today announced record financial results for the quarter ended June 30, 2008.
SmartHeat generated revenues of $5.56 million, compared to $1.16 million in the same period in 2007, an increase of approximately 380%. The sales increase was primarily due to the expansion of the company’s sales force, growth of SmartHeat’s existing sales channels which developed new customers and the extension of the company’s customer base into new markets in China. SmartHeat expects its growth momentum to continue through the remainder of 2008.
Net income for the quarter was $732,412, compared to approximately $3,219 for the same period in 2007. This increase is attributed to greater economies of scale combined with rapid growth in revenues and significantly improved operating efficiency. SmartHeat believes that net income growth momentum will continue in the second half of 2008.
James Jun Wang, SmartHeat’s CEO, commented: “We are very pleased with the 2nd quarter financial results. Our strong financial performance reflects implementation of our growth strategies in a favorable market environment as China embraces more energy efficient products. SmartHeat stands to benefit greatly from China’s ‘green’ movement towards clean environment as our efficient energy saving products reduce heat energy use by as much as 50%. We look forward to continued execution of our growth plan as we enter two of SmartHeat’s strongest quarters. ”
About SmartHeat Inc.
SmartHeat Inc. is a US company with its primary operations in China. SmartHeat is a market leader in China’s “green” technology heat energy saving industry. SmartHeat manufactures plate heat exchangers and compact plate heat exchanger units - the technology that helps to capture and recycle waste heat thus reduces fossil fuel related costs and pollution. SmartHeat’s products and technology have broad residential and industrial applications. China’s heat transfer market is currently estimated at approximately $2.4 billion with double digit annual growth according to China Heating Association. Additional information about SmartHeat is available at its corporate website: www.smartheatinc.com
Safe Harbor Statement
All statements in this press release that are not historical are forward-looking statements made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. There can be no assurance that actual results will not differ from the company's expectations. SmartHeat's actual results may differ from its projections. Further, preliminary results are subject to normal year-end adjustments. You are cautioned not to place undue reliance on any forward-looking statements in this press release as they reflect SmartHeat's current expectations with respect to future events and are subject to risks and uncertainties that may cause actual results to differ materially from those contemplated. Potential risks and uncertainties include, but are not limited to, the risks described in SmartHeat’s filings with the Securities and Exchange Commission.
Contact Information: U.S. Contact: Mr. Arnold Staloff Independent Board Member Tel: 212-631-3510 | Corporate Contact: James Wang, CEO SmartHeat Inc. Tel: 011-86-13701368262 Email: info@smartheatinc.com www.smartheatinc.com |
SMARTHEAT, INC. AND SUBSIDIARY | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
AS OF JUNE 30, 2008 | AS OF DECEMBER 31, 2007 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
CURRENT ASSETS | |||||||
Cash & cash equivalents | $ | 207,495 | $ | 393,147 | |||
Restricted cash | 807,709 | 537,098 | |||||
Accounts receivable, net | 7,954,078 | 4,762,822 | |||||
Retentions receivable | 26,552 | 191,319 | |||||
Advances to suppliers | 2,111,461 | 158,750 | |||||
Other receivables | 1,100,950 | 766,231 | |||||
Inventories | 5,474,046 | 7,928,408 | |||||
Due from related party | 224,710 | 118,560 | |||||
Total current assets | 17,907,001 | 14,856,335 | |||||
NON-CURRENT ASSETS | |||||||
Property and equipment, net | 2,133,803 | 2,040,809 | |||||
Construction in progress | 40,696 | - | |||||
Accounts receivable, net | - | 949,998 | |||||
Retentions receivable | - | 169,309 | |||||
Intangible assets, net | 620,801 | 534,208 | |||||
Total noncurrent assets | 2,795,300 | 3,694,324 | |||||
TOTAL ASSETS | $ | 20,702,301 | $ | 18,550,659 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
CURRENT LIABILITIES | |||||||
Accounts payable | $ | 4,724,904 | $ | 3,128,585 | |||
Unearned revenue | 1,565,208 | 3,125,406 | |||||
Tax payable | 362,121 | 503,010 | |||||
Other payables | 1,294,697 | 807,700 | |||||
Due to related party | 526,772 | 445,990 | |||||
Loans payable | 4,693,917 | 4,619,856 | |||||
Total current liabilities | 13,167,619 | 12,630,547 | |||||
COMMITMENTS AND CONTINGENCIES | |||||||
MINORITY INTEREST | - | - | |||||
STOCKHOLDERS' EQUITY | |||||||
Common stock, $0.001 par value; 75,000,000 shares authorized, 22,549,900 and 18,500,000 shares issued and outstanding at June 30, 2008 and December 31, 2007, respectively | 22,550 | 18,500 | |||||
Paid in capital | 3,098,082 | 3,102,132 | |||||
Statutory reserve | 627,722 | 506,532 | |||||
Accumulated other comprehensive income | 884,755 | 473,859 | |||||
Retained earnings | 2,901,573 | 1,819,089 | |||||
Total stockholders' equity | 7,534,682 | 5,920,112 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 20,702,301 | $ | 18,550,659 |
SMARTHEAT, INC. AND SUBSIDIARY | |||||||||||||
CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME | |||||||||||||
(Unaudited) | |||||||||||||
FOR THE SIX MONTHS ENDED JUNE 30, | FOR THE THREE MONTHS ENDED JUNE 30, | ||||||||||||
2008 | 2007 | 2008 | 2007 | ||||||||||
Net sales | $ | 8,637,283 | $ | 2,457,967 | $ | 5,558,232 | $ | 1,159,098 | |||||
Cost of goods sold | 6,228,156 | 1,598,789 | 4,115,200 | 756,368 | |||||||||
Gross profit | 2,409,127 | 859,178 | 1,443,032 | 402,730 | |||||||||
Operating expenses | |||||||||||||
Selling expenses | 608,028 | 484,893 | 410,607 | 267,682 | |||||||||
General and administrative expenses | 446,470 | 298,842 | 162,325 | 141,397 | |||||||||
Total operating expenses | 1,054,498 | 783,735 | 572,932 | 409,079 | |||||||||
Income (loss) from operations | 1,354,629 | 75,443 | 870,100 | (6,349 | ) | ||||||||
Non-operating income (expenses) | |||||||||||||
Interest income | 260,683 | 164,421 | 113,545 | 95,396 | |||||||||
Interest expense | (163,040 | ) | (87,966 | ) | (96,412 | ) | (57,854 | ) | |||||
Other income | 8,290 | 12,000 | 6,116 | 10,923 | |||||||||
Subsidy income | 9,141 | 51,830 | 134 | 272 | |||||||||
Total non-operating income | 115,074 | 140,285 | 23,383 | 48,737 | |||||||||
Income before income tax | 1,469,703 | 215,728 | 893,483 | 42,388 | |||||||||
Income tax expense | 266,028 | 52,486 | 161,071 | 39,178 | |||||||||
Income after income tax | 1,203,675 | 163,242 | 732,412 | 3,210 | |||||||||
Less: minority interest | - | (1,846 | ) | - | (9 | ) | |||||||
Net income | 1,203,675 | 165,088 | 732,412 | 3,219 | |||||||||
Other comprehensive item | |||||||||||||
Foreign currency translation | 410,896 | 77,254 | 168,802 | 39,842 | |||||||||
Comprehensive Income | $ | 1,614,571 | $ | 242,342 | $ | 901,214 | $ | 43,061 | |||||
Basic and diluted weighted average shares outstanding | 20,213,419 | 21,926,838 | 18,500,000 | 18,500,000 | |||||||||
Basic and diluted earnings per share | $ | 0.06 | $ | 0.01 | $ | 0.04 | $ | 0.00 |