WUXI, Jiangsu, China,
March 30, 2011
/PRNewswire-Asia-FirstCall/ -- China Wind Systems, Inc. (Nasdaq:
CWS), ("China Wind Systems" or the "Company"), a leading supplier
of forged rolled rings and other forged components to the wind
power and other industries and industrial equipment primarily to
the textile industry in China, today announced its financial
results for the fourth quarter and full year ended December 31, 2010.
Fourth Quarter 2010 Financial Highlights
- Revenue increased 41.5% year-over-year to $22.5 million
- Revenue from the sale of forged products to the wind power and
other industries increased 62.8% year-over-year to $17.0 million, or 75.8% of revenue
- Revenue from the sale of forged products exclusively to the
wind power industry increased 76.5% year-over-year to $12.1 million, or 53.6% of revenue
- Operating income increased 17.9% year-over-year to $4.4 million
- Earnings before interest, taxes, depreciation and amortization
(EBITDA), a non-GAAP measurement, increased 26.5% year-over-year
to $5.5 million
- Net income increased 16.6% to $3.1
million, or $0.13 per diluted
share
- The Company received a new $3.0
million order to supply 1,500 units of high-speed shafts to
Nanjing Chang Feng New Energy Holdings ("Nanjing Chang Feng"). The
Company commenced shipping the order in December 2010 and expects to complete the order
by June 30, 2011
- The Company received a conditional purchase order for
approximately $1.0 million to supply
precision manufactured subassemblies for solar cell manufacturing
equipment, for which the initial units were delivered in
March 2011.
Full Year 2010 Financial Highlights:
- Revenue increased 48.8% year-over-year to $79.5 million
- Revenue from the sale of forged products to the wind power and
other industries increased 63.3% year-over-year to $58.3 million, or 73.4% of revenue
- Revenue from the sale of forged products exclusively to the
wind power industry increased 102.3% year-over-year to $40.6 million, or 51.1% of revenue
- Operating income increased 44.8% year-over-year to $15.5 million
- EBITDA increased 47.8% year-over-year to $18.8 million
- Net income increased 45.5% to $11.1
million, or $0.44 per diluted
share
"In the fourth quarter of 2010, we continued to expand our
market presence in the wind sector. We reported strong
year-over-year and quarter-over-quarter revenue growth from our
business selling forged products to the wind industry," commented
Mr. Jianhua Wu, Chairman and Chief
Executive Officer of China Wind Systems. "During the quarter, we
delivered precision forged products from our newly built
electro-slag remelting (ESR) facility while maintaining output from
our traditional forged rolled ring facility. However, gross margin
for our ESR products did not meet our previously anticipated level
and we are revising down our margin guidance for our ESR products
to 32%-35% range. In addition, our next generation, energy
efficient and environmentally friendly dyeing machines continue to
gain increased traction and we are receiving strong customer
interest."
Fourth Quarter 2010 Results
Revenue for the fourth quarter of 2010 increased 41.5% to
$22.5 million, compared to
$15.9 million in the same period of
2009. The increase was primarily due to strong sales growth of
forged rolled rings and related components sold to the wind power
and other industries, as well as the addition of ESR products. The
Company's dyeing and finishing equipment segment also contributed
to the quarter's revenue growth as a result of increased interest
and order flow from the Company's next generation and energy
efficient dyeing machines and positive growth in China's textile
industry following a year in which the industry suffered as a
result of the worldwide economic decline. Revenue from the sale of
forged rolled rings to the wind power industry and other industries
grew 62.8% to $17.0 million, or 75.8%
of revenue, compared to $10.5
million, or 65.9% of net revenue, in the same period last
year.
Revenue from the sale of forged rolled rings exclusively to the
wind power industry rose 76.5% to $12.0
million, representing 53.6% of revenue, compared to
$6.8 million, or 43.0% of revenues in
the comparable period last year.
Revenue from the sale of forged rolled rings to other industries
increased 37.1% to $5.0 million, or
22.1% of revenue, compared with $3.6
million for the comparable period of the prior year.
Revenue from the Company's dyeing and finishing equipment
segment increased 11.0% to $5.4
million, or 24.2% of net revenues, compared to $4.9 million, or 30.9% of revenue, for the fourth
quarter of 2009.
Gross profit for the fourth quarter of 2010 increased 41.0% to
$6.1 million, compared to
$4.3 million for the same period in
2009. Gross margin remained similar at 27.2% during the fourth
quarter of 2010 compared to 27.3% for the same period a year ago.
Gross margins for the Company's forged rolled rings and other
components and dyeing and finishing equipment were 29.0% and 21.4%,
respectively, during the fourth quarter of 2010.
Operating expenses increased 194.7% to $1.7 million, compared to $0.6 million in the comparable period last year,
as a result of higher selling, general, and administrative expenses
related to increased payroll expenses, stock-based compensation,
traveling expenses and shipping expenses reflecting the Company's
growth. The Company also significantly increased its bad debt
allowance based on its evaluation of its account receivable
balances.
Operating income increased 17.9% to $4.4
million, compared to $3.8
million for the same period of 2009. Operating margin was
19.7% compared to 23.7% in the fourth quarter last year.
EBITDA, a non-GAAP measurement, rose 26.5% to $5.5 million, compared to $4.3 million in the same period last year.
The reconciliation of EBITDA to net income is provided in
Table 4 below.
Net income increased 16.6% to $3.1
million, compared to $2.7
million in the comparable period last year. Basic earnings
per share in 2010 and 2009 were $0.17
and $0.17, respectively. Basic
earnings per share were calculated using basic weighted average
shares of 18,493,325 and 15,514,682 for the three months ended
December 31, 2010 and 2009,
respectively. Diluted earnings per share were $0.13, compared to $0.11 in the same period of 2009. Diluted
earnings per share were calculated using diluted weighted average
shares of 24,285,100 and 24,006,547 for the three months ended
December 31, 2010 and December 31, 2009, respectively.
Full Year 2010 Results
For the year ended December 31,
2010, revenues increased 48.8% to $79.5 million from $53.5
million in 2009. Gross profit increased 61.9% to
$20.9 million, compared to
$12.9 million last year. Gross
margin for the forged rolled rings segment was 28.2% compared to
25.5% in 2009. The increase in gross margin was due to the
Company's increased operational efficiency. For the dyeing and
finishing equipment segment, gross margin was 20.9% compared to
21.4% in 2009. The slight decrease in gross margin was due to an
increase in raw material costs that could not be passed on to
customers and a decline in selling prices due to stronger
competition in China's textile industry. Overall, gross margin for
2010 was 26.3%, up 210 basis points from 24.2% in 2009. Operating
income increased 44.8% to $15.5
million from $10.7 million in
2009. EBITDA, a non-GAAP measurement, rose 47.8% to $18.8 million, compared to $12.7 million last year. Net income was
$11.1 million, a 45.5% increase from
$7.6 million last year. Basic
earnings per share in 2010 and 2009 were $0.62 and $0.37,
respectively. Diluted earnings per share in 2010 and 2009 were
$0.44 and $0.24, respectively.
Financial Condition
As of December 31, 2010, China
Wind Systems held cash and cash equivalents of $0.9 million, accounts receivable of $8.2 million, and total current assets of
$15.7 million. The Company had
$1.8 million in short-term loans
payable, no long-term debt and stockholders' equity stood at
$62.6 million.
In fiscal 2010, the Company generated $14.7 million in operating cash flow and had
capital expenditures of $19.4
million, primarily for property and equipment related to the
Company's ESR production line. The Company also added heat
treatment related equipment, machining equipment, a hydraulic press
for its forging factory, and purchased a large scale machining
center for its new solar division.
Recent Events
In January 2011, the Company
announced it has appointed Mr. Fernando
Liu, CPA, as its new Chief Financial Officer, effective
January 1, 2011. The Company also
announced that it sold 35,014 shares of its common stock to its Mr.
Liu at the market price, for a total purchase price of $125,000.
On January 12, 2011, the Company
engaged Shanghai KRC Business Consulting Co., Ltd. to assist the
Company in preparing for the compliance of the internal control
over financial reporting requirements of Article 404 of the
Sarbanes-Oxley Act.
In March 2011, announced the
appointment of Mr. Jason Carline as
the Company's Chief U.S. Sales Director effective March 15, 2011.
Business Outlook
As previously announced in November
2010, China Wind received a
conditional purchase order for approximately $1.0 million to supply precision manufactured
subassemblies for solar cell manufacturing equipment. The Company
has completed delivery of two initial units to the customer and has
received purchase orders to supply 15 additional units by
May 2011.
In addition, the Company has received positive customer feedback
on its next generation air dye machine equipment which it launched
in November 2010. The next generation
dye machine model is designed to be environmentally friendly and
energy and cost efficient as it uses mostly airflow instead of
water to help dye clothing. Since its introduction, the Company has
recorded sales of approximately $1.0
million through March 29,
2011, reflecting, in part, government policies which
encourage the use of energy efficient and environmentally friendly
equipment. The Company also expects to deliver another 11 units of
air dye machine for total revenue of $0.9
million by the second quarter of fiscal 2011. Mr. Wu
concluded, "In addition to supplying components to the wind
industry, we have made significant progress in delivering clean
energy products and solutions in other sectors. In the solar
market, we are pleased with the initial feedback from our customer.
We are confident that our products will meet our customer's
requirements and look forward to entering into a long term supply
contract. This will mark a major milestone for China Wind Systems
as we diversify our product offering to the solar industry.
"Our next generation dye machine models continue to generate
increased interest from new and existing customers and we expect to
achieve a higher sales contribution from this segment. We believe
clean energy solutions will drive our future growth and
profitability and we are committed to focusing on this area to
create both environmental benefits and sustainable shareholder
value."
Conference Call
China Wind Systems will conduct a conference call at
8:00 a.m. Eastern Time on
Wednesday, March 30, 2011 to discuss
results for the fourth quarter and fiscal year 2010.
To participate in the live conference call, please dial the
following number five to ten minutes prior to the scheduled
conference call time: (866) 759-2078. International callers should
dial (706) 643-0585. When prompted, please enter conference
passcode: 548 37 040
If you are unable to participate in the conference call at this
time, a replay will be available for 14 days starting on
March 30, 2011 at 10:00 a.m. ET. To access the replay, dial (800)
642-1687. International callers dial (706) 645-9291, and enter
passcode: 548 37 040
About China Wind Systems, Inc.
China Wind Systems, Inc. is a profitable, rapidly growing
supplier of precision forged components primarily to the wind
industry in China - the world's leading wind-power market. The
Company also supplies forged and other components and fabricated
products to other industries. For more information on the Company,
visit http://www.chinawindsystems.com. Information on the Company's
Web site or any other Web site does not constitute a portion of
this release.
Safe Harbor Statement
This release contains certain "forward-looking
statements" relating to the business of the Company
and its subsidiary and affiliated companies. These forward looking
statements are often identified by the use of forward-looking
terminology such as "believes,"
"expects" or similar expressions. Such
forward looking statements involve known and unknown risks and
uncertainties that may cause actual results to be materially
different from those described herein as anticipated, believed,
estimated or expected. Investors should not place undue reliance on
these forward-looking statements, which speak only as of the date
of this press release. 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. All forward-looking statements
attributable to the Company or to persons acting on its behalf are
expressly qualified in their entirety by these factors other than
as required under the securities laws. The Company does not assume
a duty to update these forward-looking statements.
CHINA WIND
SYSTEMS, INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
|
|
|
For the
Three Months Ended
|
|
For the
Years Ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET REVENUES
|
$
22,468,599
|
|
$
15,880,399
|
|
$
79,548,609
|
|
$
53,457,566
|
|
|
|
|
|
|
|
|
|
|
COST OF REVENUES
|
16,363,257
|
|
11,550,270
|
|
58,628,150
|
|
40,536,636
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT
|
6,105,342
|
|
4,330,129
|
|
20,920,459
|
|
12,920,930
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
Depreciation
|
79,746
|
|
82,996
|
|
319,239
|
|
326,972
|
|
Selling, general
and administrative
|
1,589,353
|
|
483,397
|
|
5,091,592
|
|
1,880,455
|
|
|
|
|
|
|
|
|
|
|
Total
Operating Expenses
|
1,669,099
|
|
566,393
|
|
5,410,831
|
|
2,207,427
|
|
|
|
|
|
|
|
|
|
|
INCOME FROM
OPERATIONS
|
4,436,243
|
|
3,763,736
|
|
15,509,628
|
|
10,713,503
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSE):
|
|
|
|
|
|
|
|
|
Interest
income
|
582
|
|
1,869
|
|
3,794
|
|
2,727
|
|
Interest
expense
|
(30,092)
|
|
(57,147)
|
|
(147,428)
|
|
(311,127)
|
|
Foreign currency
loss
|
(2,265)
|
|
(5,931)
|
|
(15,338)
|
|
(9,337)
|
|
Grant
income
|
274
|
|
35
|
|
49,552
|
|
146,180
|
|
Debt issuance
costs
|
-
|
|
-
|
|
-
|
|
(14,000)
|
|
|
|
|
|
|
|
|
|
|
Total
Other Income (Expense)
|
(31,501)
|
|
(61,174)
|
|
(109,420)
|
|
(185,557)
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME
TAXES
|
4,404,742
|
|
3,702,562
|
|
15,400,208
|
|
10,527,946
|
|
|
|
|
|
|
|
|
|
|
INCOME TAXES
|
1,274,194
|
|
1,018,419
|
|
4,325,876
|
|
2,918,773
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
|
3,130,548
|
|
2,684,143
|
|
11,074,332
|
|
7,609,173
|
|
|
|
|
|
|
|
|
|
|
DEEMED PREFERRED STOCK
DIVIDEND
|
-
|
|
(1,560,000)
|
|
-
|
|
(2,022,000)
|
|
|
|
|
|
|
|
|
|
|
NET INCOME ALLOCABLE TO COMMON
SHAREHOLDERS
|
$
3,130,548
|
|
$
1,124,143
|
|
$
11,074,332
|
|
$
5,587,173
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME
|
$
3,130,548
|
|
$
2,684,143
|
|
$
11,074,332
|
|
$
7,609,173
|
|
|
|
|
|
|
|
|
|
|
OTHER
COMPREHENSIVE INCOME:
|
|
|
|
|
|
|
|
|
Unrealized foreign currency translation gain
|
782,903
|
|
3,126
|
|
1,907,789
|
|
87,455
|
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE INCOME
|
$
3,913,451
|
|
2,687,269
|
|
$
12,982,121
|
|
$
7,696,628
|
|
|
|
|
|
|
|
|
|
|
NET INCOME PER COMMON
SHARE:
|
|
|
|
|
|
|
|
|
Basic
|
$
0.17
|
|
$
0.17
|
|
$
0.62
|
|
$
0.37
|
|
Diluted
|
$
0.13
|
|
$
0.11
|
|
$
0.44
|
|
$
0.24
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
|
|
|
|
|
|
|
|
|
Basic
|
18,493,325
|
|
15,514,682
|
|
17,879,940
|
|
15,236,023
|
|
Diluted
|
24,285,100
|
|
24,006,547
|
|
25,396,821
|
|
22,821,086
|
|
|
|
|
|
|
|
|
|
CHINA WIND
SYSTEMS, INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
|
|
December 31,
2010
|
|
December 31,
2009
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS:
|
|
|
|
|
Cash and cash
equivalents
|
$
947,177
|
|
$
2,278,638
|
|
Notes
receivable
|
50,593
|
|
329,492
|
|
Accounts
receivable, net of allowance for doubtful accounts
|
8,207,797
|
|
6,046,422
|
|
Inventories, net of
reserve for obsolete inventory
|
3,371,128
|
|
2,232,264
|
|
Advances to
suppliers
|
333,923
|
|
450,507
|
|
Prepaid VAT on
purchases
|
2,759,763
|
|
378,543
|
|
Prepaid expenses
and other
|
36,338
|
|
213,835
|
|
|
|
|
|
|
Total
Current Assets
|
15,706,719
|
|
11,929,701
|
|
|
|
|
|
|
PROPERTY AND EQUIPMENT -
net
|
54,742,993
|
|
36,863,501
|
|
|
|
|
|
|
OTHER ASSETS:
|
|
|
|
|
Land use rights,
net
|
3,767,159
|
|
3,729,427
|
|
|
|
|
|
|
Total
Assets
|
$
74,216,871
|
|
$
52,522,629
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|
Loans
payable
|
$
1,814,937
|
|
$
2,040,111
|
|
Accounts
payable
|
7,660,768
|
|
3,404,521
|
|
Accrued
expenses
|
526,006
|
|
556,662
|
|
VAT and service
taxes payable
|
81,614
|
|
25,284
|
|
Advances from
customers
|
236,004
|
|
143,261
|
|
Income taxes
payable
|
1,331,713
|
|
1,018,514
|
|
|
|
|
|
|
Total
Current Liabilities
|
11,651,042
|
|
7,188,353
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY:
|
|
|
|
|
Preferred stock
$0.001 par value (60,000,000 shares authorized, all of which
were designated
|
|
|
|
|
as series A
convertible preferred, 16,205,268 and 15,419,088 shares issued and
outstanding
|
|
|
|
|
at December
31, 2010 and 2009, respectively)
|
16,205
|
|
15,419
|
|
Common stock
($0.001 par value; 150,000,000 shares authorized;
|
|
|
|
|
18,751,128
and 16,402,204 shares issued and outstanding at December 31, 2010
and 2009, respectively)
|
18,751
|
|
16,402
|
|
Additional paid-in
capital
|
26,579,053
|
|
22,332,756
|
|
Retained
earnings
|
29,264,152
|
|
18,595,037
|
|
Statutory
reserve
|
1,658,197
|
|
1,252,980
|
|
Accumulated other
comprehensive gain - foreign currency translation
adjustment
|
5,029,471
|
|
3,121,682
|
|
|
|
|
|
|
Total
Stockholders' Equity
|
62,565,829
|
|
45,334,276
|
|
|
|
|
|
|
Total
Liabilities and Stockholders' Equity
|
$
74,216,871
|
|
$
52,522,629
|
|
|
|
|
|
CHINA WIND
SYSTEMS, INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
For the
Years Ended
|
|
|
|
|
|
|
December
31,
|
|
|
|
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM OPERATING
ACTIVITIES:
|
|
|
|
|
|
|
Net income
|
|
$
11,074,332
|
|
$
7,609,173
|
|
|
Adjustments to reconcile net
income from operations to net cash
|
|
|
|
|
|
|
|
provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation
|
|
3,192,662
|
|
1,808,899
|
|
|
|
Amortization of debt discount to
interest expense
|
|
44,993
|
|
47,992
|
|
|
|
Interest expense related to debt
conversion
|
|
-
|
|
135,272
|
|
|
|
Amortization of land use
rights
|
|
87,204
|
|
86,413
|
|
|
|
Increase (decrease) in allowance
for doubtful accounts
|
|
1,006,162
|
|
(118,872)
|
|
|
|
Increase in inventory
reserve
|
|
-
|
|
81,222
|
|
|
|
Stock-based compensation
expense
|
|
546,963
|
|
188,483
|
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
Notes receivable
|
|
282,986
|
|
(59,241)
|
|
|
|
Accounts receivable
|
|
(2,913,257)
|
|
(1,397,241)
|
|
|
|
Inventories
|
|
(1,036,591)
|
|
(416,511)
|
|
|
|
Prepaid value-added taxes on
purchases
|
|
(2,309,987)
|
|
(378,339)
|
|
|
|
Prepaid and other current
assets
|
|
159,152
|
|
(159,587)
|
|
|
|
Advances to suppliers
|
|
128,693
|
|
(332,241)
|
|
|
|
Due from related
party
|
|
-
|
|
438,540
|
|
|
|
Accounts payable
|
|
4,040,484
|
|
912,852
|
|
|
|
Accrued expenses
|
|
(48,312)
|
|
376,435
|
|
|
|
VAT and service taxes
payable
|
|
54,102
|
|
(72,260)
|
|
|
|
Income taxes payable
|
|
271,619
|
|
447,487
|
|
|
|
Advances from
customers
|
|
85,695
|
|
97,347
|
|
|
|
|
|
|
|
|
|
|
NET CASH PROVIDED BY OPERATING
ACTIVITIES
|
|
14,666,900
|
|
9,295,823
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES:
|
|
|
|
|
|
|
|
Purchase of property and
equipment
|
|
(19,406,064)
|
|
(12,662,466)
|
|
|
|
|
|
|
|
|
|
|
NET CASH USED IN INVESTING
ACTIVITIES
|
|
(19,406,064)
|
|
(12,662,466)
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING
ACTIVITIES:
|
|
|
|
|
|
|
|
Proceeds from loans
payable
|
|
1,770,238
|
|
1,207,080
|
|
|
|
Repayment of loans
payable
|
|
(2,100,238)
|
|
-
|
|
|
|
Proceeds from sale of common
stock
|
|
380,000
|
|
-
|
|
|
|
Proceeds from sale of preferred
stock, net
|
|
-
|
|
3,493,000
|
|
|
|
Proceeds from exercise of
warrants
|
|
3,320,000
|
|
615,945
|
|
|
|
|
|
|
|
|
|
|
NET CASH PROVIDED BY FINANCING
ACTIVITIES
|
|
3,370,000
|
|
5,316,025
|
|
|
|
|
|
|
|
|
|
|
EFFECT OF EXCHANGE RATE ON CASH
AND CASH EQUIVALENTS
|
|
37,703
|
|
642
|
|
|
|
|
|
|
|
|
|
|
NET (DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS
|
|
(1,331,461)
|
|
1,950,024
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUILAVENTS -
beginning of year
|
|
2,278,638
|
|
328,614
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS - end
of year
|
|
$
947,177
|
|
$
2,278,638
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
|
|
|
|
|
|
|
Cash paid for:
|
|
|
|
|
|
|
|
|
Interest
|
|
$
104,578
|
|
$
125,430
|
|
|
|
|
Income taxes
|
|
$
4,054,257
|
|
$
2,485,941
|
|
|
|
|
|
|
|
|
|
|
NON-CASH INVESTING AND FINANCING
ACTIVITIES:
|
|
|
|
|
|
|
Debt discount for grant of
warrants
|
|
$
-
|
|
$
92,985
|
|
|
Deemed preferred stock dividend
reflected in paid-in capital
|
|
$
-
|
|
$
2,022,000
|
|
|
Series A preferred converted to
common shares
|
|
$
3,646
|
|
$
2,109
|
|
|
Common stock issued for debt and
interest
|
|
$
-
|
|
$
146,180
|
|
|
Common stock issued for prior
and future service
|
|
$
2,469
|
|
$
40,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Use of Non-GAAP Financial Information
To supplement the Company's consolidated financial statements
presented on a GAAP basis, the Company has provided non-GAAP
financial information, namely earnings before interest, taxes,
depreciation and amortization (EBITDA). The Company's management
believes that this non-GAAP measure provides investors with an
understanding of how the results relate to the Company's historical
performance. The non-GAAP information is not meant to be considered
in isolation or as a substitute for GAAP financials. A
reconciliation of each non-GAAP measures appear below:
China Wind
Systems, Inc. and Subsidiaries
Reconciliation of Net Income to
EBITDA
(USD)
|
|
|
Three Months
Ended
|
For the year
ended
|
|
|
31-Dec
|
31-Dec
|
31-Dec
|
31-Dec
|
|
|
2010
|
2009
|
2010
|
2009
|
|
Net income from consolidated
statement of income
|
3,130,548
|
2,684,143
|
$11,074,332
|
$7,609,173
|
|
Income tax expense
|
1,274,194
|
1,018,419
|
4,325,876
|
2,918,773
|
|
Interest expense(net of interest
income)
|
29,510
|
55,278
|
143634
|
308400
|
|
Depreciation and
amortization
|
1,069,361
|
592,596
|
3,279,866
|
1,895,312
|
|
EBITDA
|
5,503,613
|
4,350,436
|
18,823,708
|
12,731,658
|
|
|
|
|
|
|
For more information, please
contact:
|
|
|
|
|
|
|
|
Company
Contact:
|
|
Investor Relations
Contact:
|
|
Mr. Fernando
Liu
|
|
Mr. Athan
Dounis
|
|
Chief Financial
Officer
|
|
CCG Investor
Relations
|
|
China Wind
Systems, Inc.
|
|
Tel:
+1-646-213-1916
|
|
Tel: +
86-13761347367
|
|
Email:
athan.dounis@ccgir.com
|
|
Email:
fol@chinawindsystems.com
|
|
Web:
www.ccgirasia.com
|
|
Web:
www.chinawindsystems.com
|
|
|
|
|
|
|
SOURCE China Wind Systems, Inc.