-- 4Q Revenues Increased 119% to $12 Million -- 4Q Net Income
Increased 479% to $1.1 Million -- Full Year Revenue Increased 73%
to $37.1 Million -- Full Year Net Income Increased 104% to $2.53
Million NEW YORK and BEIJING, April 11
/Xinhua-PRNewswire-FirstCall/ -- China Solar & Clean Energy
Solutions, Inc. (OTC:CSOL) (BULLETIN BOARD: CSOL) , a premier
seller and distributor of solar water heaters, renewable energy
solutions, and space heating devices in the People's Republic of
China (the "PRC"), today announced its financial results for the
fourth quarter and fiscal year ended December 31, 2007 ('FY07').
Revenues for fourth quarter 2007 increased approximately 119% to
approximately $12 million, from $5.5 million in the prior year's
quarter. The increase was driven primarily by its recent
acquisition of Tianjin Huaneng Group Energy Equipment Co., Ltd.
(Tianjin), which contributed $5.8 million in revenue for the fourth
quarter of 2007 compared to none for the same period in 2006 and
$3.8 million for the third quarter in 2007. Revenues of the
Company's core business generated from its Bazhou facility in the
quarter totaled approximately $6.2 million, a slight increase over
the prior year's fourth quarter. The Company's gross profit in the
fourth quarter of 2007 increased by 158% to approximately $3.1
million compared to the year ago period. Of the $3.1 million, $1.2
million was contributed by the Bazhou facility, representing 22%
organic growth. Tianjin Huaneng contributed $1.9 million in the
fourth quarter and was not a component of the Company in the fourth
quarter 2006. Revenues emanating from our Bazhou facility had gross
margins of 21%, while Tianjin had 28%, and overall gross margins
were 22.39%, an increase from 21.7% reported in 2006 which
benefited from integration of Tianjin and the operational
advantages it brought to Bazhou. Operating expenses in the fourth
quarter increased 66% to $1.7 million as compared to $1.0 million
in the prior year period, representing operating margins of 14.4%
and 18.9% respectively. This increase in expenses was primarily a
result of higher general and administrative expenses associated
with the integration of the Tianjing Huaneng acquisition. As a
percentage of sales, operating expenses decreased to 4.7% from
4.9%. Net income in the fourth quarter increased 479% to $1.1
million, or 9% of revenue, up from $0.2 million, or 3.5% of revenue
last year. Excluding the Tianjing Huaneng facility, net income and
net margins were $1.02 million and 16% respectively. The higher net
income was due primarily to substantially higher revenues. Diluted
earnings per share (EPS) in the fourth quarter of 2007 were $0.11
based on 9.9 million fully diluted shares, versus $0.03 on 6.96
million fully diluted shares in the prior year period. Mr. Deli Du,
President and Chief Executive Officer of China Solar commented, "We
are encouraged by the successful consolidation of Tianjin Huaneng
with our Bazhou facility which will enable us to become one of the
leading integrated solution providers of clean and renewable energy
to industrial and residential customers in China. During the fourth
quarter, we complemented our core solar water heater business with
strong growth from Tianjin Huaneng, which enabled us to achieve
72.1% revenue growth. As anticipated, we experienced margin
pressure in our core solar water heater products which was offset
by higher margins through Tianjin Huaneng's proprietary energy
saving boilers and environmental protection equipment which helped
to improve our overall profitability in 2007. Tianjin also
integrated our solar water heaters into its heat recovery projects
to further increase waste heat recovery while we began to
incorporate Tianjin's technology into our product portfolio. We
believe we are well positioned as a leading player in the clean
energy industry in China and will grow the business both
organically and through complementary acquisitions, which
collectively will enable us to capitalize on our technology and
engineering expertise, marketing and branding strength, to deliver
a truly integrated clean energy solutions company. Full Year 2007
Financial Results For the full year 2007, revenues were $37.1
million, up 72.7% from $21.5 million in 2006. $9.6 million in
revenue for the full year 2007 was contributed by Tianjin Huaneng
which began contributing revenue in the third quarter of 2007. $6
million, or 38% of the revenue growth, was primarily attributed to
the organic growth of the Company's solar water heater and space
heating products, due to increased marketing efforts and expansion
of the Company's distribution network and additional market share
gains. Operating expenses totaled $5.1 million for 2007 compared
with $3.4 million for 2006. The increase was primarily related to
increases in general administrative expenses and other expenses
related to an increased sales force, the hiring of key management
staff, and an increase in professional fees for legal and
accounting services. Net income for the full year grew 103.8% to
$2.5 million, or 6.8% of net sales. Diluted EPS for the fiscal year
ended December 31, 2007 were $.14 compared to $.18 in 2006. The
weighted average numbers of shares outstanding to calculate diluted
EPS were 11.2 million and 7 million for 2007 and 2006,
respectively. Balance Sheet and Cash Flow Discussion The Company
reported $5.5 million in cash and equivalents on December 31, 2007,
while stockholders' equity increased to $17.9 million. Net cash
flow from operations was $4.7 million for the twelve months ended
December 31, 2007, an increase of 273% from the same year ago
period. Inventory increased to $3.9 million and accounts receivable
increased to $7.5 million due to the consolidation with Tianjin
Huaneng. Different from CSOL's core business, Tianjin Huaneng
collects receivables during the project life, where 30 percent of
the total cost is pre-paid by customers, 30 percent is paid once
installation is commenced, 30 percent is paid when installation is
completed and 10 percent is held back for one year to guarantee the
work. Mr. Du continued, "We continue to make further progress on
our acquisition strategy to complement our solar product portfolio
and increase our customer base. In addition, we anticipate that our
new flat plate collector production line to be completed and fully
operational during April 2008, which we expect will expand our
production capacity, enhance our production efficiencies and
further improve the quality of our products while contributing to
overall profitability. We finished 2007 with a strong cash and
working capital position to support future growth as we look to
increase capacity, expand our product lines, and geographic
distribution. There are still significant growth opportunities for
China Solar.' Mr. Du concluded, "We are excited about the ongoing
synergies that we will be able to generate as a result of the
integration of the Tianjin Huaneng acquisition. Management
continues to evaluate all the Company's opportunities to eliminate
redundant expenses while prudently managing overall costs. Everyday
we focus on a seamless integration with our acquisitions, and
increasing the quality of our solar products to improve
profitability, and generating strong financial results for our
shareholders." On March 24, 2008, China Solar announced the
appointment of Mr. Yihai Yang to the position of the Acting Chief
Financial Officer. The Company plans to initiate investor
conference calls when it reports its first quarter 2008 financial
results in May 2008. About China Solar & Clean Energy
Solutions, Inc. China Solar & Clean Energy Solutions, Inc.
operates through its wholly owned subsidiaries Bazhou Deli Solar
Heating Energy Co. Ltd., Beijing Deli Solar Technology Development
Co., Ltd. and its 51% ownership in Tianjin Huaneng Energy Equipment
Company, all of which are located in the PRC. The Company
manufactures and distributes hot water and space heating devices to
customers in the PRC, in addition to waste heat recovery systems.
For more information, please visit http://www.cn-cse.com/ . Safe
Harbor Statement: Certain statements in this news release may
contain forward-looking information about China Solar & Clean
Energy Solutions, Inc. and its subsidiaries' business and products
within the meaning of Rule 175 under the Securities Act of 1933 and
Rule 3b-6 under the Securities Exchange Act of 1934, and are
subject to the safe harbor created by those rules. The actual
results may differ materially depending on a number of risk factors
including, but not limited to, the general economic and business
conditions in the PRC, market and customer acceptance and demand
for products, ability to market products, fluctuations in foreign
currency markets, the use of estimates in the preparation of
financial statements, the impact of competitive products and
pricing, the ability to develop and launch new products on a timely
basis, the regulatory environment, fluctuations in operating
results, and various other factors beyond its control. All
forward-looking statements are expressly qualified in their
entirety by this Cautionary Statement and the risks factors
detailed in the Company's reports filed with the Securities and
Exchange Commission. China Solar & Clean Energy Solutions, Inc.
undertakes no duty to revise or update any forward-looking
statements to reflect events or circumstances after the date of
this release. CHINA SOLAR & CLEAN ENERGY SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS (Currency expressed in United States
Dollars ('US$'), except for number of shares) As of December 31,
2007 2006 ASSETS Current assets: Cash and cash equivalents $
5,466,637 $ 3,212,065 Accounts receivable, net 7,453,009 870,446
Inventories 3,875,658 315,765 Other receivables and prepayments
1,637,948 1,387,911 Total current assets 18,433,252 5,786,187
Property, plant and equipment, net 8,819,216 5,926,468 Goodwill
1,789,324 -- Intangible assets, net 1,597,921 1,003,530 TOTAL
ASSETS $ 30,639,713 $ 12,716,185 LIABILITIES AND STOCKHOLDERS'
EQUITY Current liabilities: Accounts payable, trade $ 2,111,028 $
147,901 Income tax payables 1,108,433 -- Other payables and accrued
liabilities 8,552,452 342,811 Total current liabilities 11,771,913
490,712 Minority interests 935,825 -- Stockholders' equity:
Convertible preferred stock: par value $0.001; 25,000,000 shares
authorized, 1,774,194 and - 0 - shares issued and outstanding,
respectively 1,774 -- Common stock, $0.001 par value; 66,666,667
shares authorized; 6,205,290 and 6,205,290 shares issued and
outstanding, respectively 6,205 6,205 Additional paid-in capital
9,260,607 5,705,574 Accumulated other comprehensive income
1,134,270 533,909 Retained earnings 7,529,119 5,979,785 Total
stockholders' equity 17,931,975 12,225,473 TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 30,639,713 $ 12,716,185 CHINA SOLAR &
CLEAN ENERGY SOLUTIONS, INC. CONSOLIDATED STATEMENTS OF INCOME
(Currency expressed in United States Dollars ('US$')) Years ended
December 31, 2007 2006 2005 Revenue, net $ 37,072,346 $ 21,468,313
$ 15,577,447 Cost of revenue 28,772,078 16,842,994 11,868,459 Gross
profit 8,300,268 4,625,319 3,708,988 Operating expenses:
Depreciation and amortization 282,822 154,946 14,631 Selling and
distribution 827,839 459,746 256,634 General and administrative
4,003,973 2,800,015 2,117,920 Total operating expenses 5,114,634
3,414,707 2,389,185 Income from operations 3,185,634 1,210,612
1,319,803 Other income (expenses): Other income 220,057 45,606 --
Interest expense (65,481) (16,717) (20,829) Total other income
(expenses) 154,576 28,889 (20,829) Income before income taxes
3,340,210 1,239,501 1,298,974 Income tax expense (615,325) -- --
Minority interests (199,744) -- -- NET INCOME $ 2,525,141 $
1,239,501 $ 1,298,974 NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $
1,549,334 $ 1,239,501 $ 1,298,974 Net income per share - basic $
0.25 $ 0.20 $ 0.23 Net income per share - diluted $ 0.14 $ 0.18 $
0.17 Weighted average shares outstanding - basic 6,205,290
6,205,290 5,732,616 Weighted average shares outstanding - diluted
11,233,026 6,957,876 7,558,335 CHINA SOLAR & CLEAN ENERGY
SOLUTIONS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Currency
expressed in United States Dollars) Years ended December 31, 2007
2006 2005 Cash flows from operating activities: Net income $
2,525,141 $ 1,239,501 $ 1,298,974 Adjustments to reconcile net
income to net cash provided by operating activities: Depreciation
and amortization 324,157 178,437 100,171 Provision for allowance on
accounts receivable 650,432 (77,267) 105,030 Changes in operating
assets and liabilities: Accounts receivable, trade (7,232,995)
(238,334) (476,106) Inventories (3,559,893) 67,418 (8,279) Other
receivables and prepayments (250,037) (238,268) (566,989) Accounts
payable, trade 1,963,127 58,526 (79,124) Income tax payable
1,108,433 -- -- Other payables and accrued liabilities 8,209,641
262,885 (300,621) Minority interest 935,825 -- -- Net cash provided
by operating activities 4,673,831 1,252,898 73,056 Cash flows from
investing activities: Acquisition of a subsidiary (489,459) -- --
Deposits made to acquire subsidiary -- (256,278) -- Purchase of
intangible assets (635,726) (932,732) (2,711) Purchase of property,
plant and equipment (4,294,741) (2,815,398) (845,126) Net cash used
in investing activities (5,419,926) (4,004,408) (847,837) Cash
flows from financing activities: Repayment of short-term borrowings
(180,694) (130,112) (403,101) Capital contribution received from
shareholders -- -- 4,882,389 Proceeds from issuance of preferred
stock (net of offering costs of $169,000 paid in cash) 2,581,000 --
-- Related receivable -- 82,639 518,637 Related payables -- 22,528
(10,341) Net cash (used in) provided by financing activities
2,400,306 (24,945) 4,987,584 Foreign currency translation
adjustment 600,361 359,352 174,557 NET CHANGE IN CASH AND CASH
EQUIVALENTS 2,254,572 (2,417,103) 4,387,360 CASH AND CASH
EQUIVALENTS, BEGINNING OF YEAR 3,212,065 5,629,168 1,241,808 CASH
AND CASH EQUIVALENTS, END OF YEAR $ 5,466,637 $ 3,212,065 $
5,629,168 Cash paid for income taxes $ 939,798 $ -- $ -- Cash paid
for interest expenses $ 95,446 $ 16,717 $ 20,884 Warrant shares
granted for offering costs $ 138,338 $ -- $ -- For more
information, please contact: Yihai Yang China Solar & Clean
Energy Solutions, Inc. Tel: +86-10-6385-0516 Email: Investor
Relations Alan Sheinwald HC International, Inc. Tel:
+1-914-669-0222 Email: DATASOURCE: China Solar & Clean Energy
Solutions, Inc. CONTACT: Yihai Yang of China Solar & Clean
Energy Solutions, Inc., +86-10-6385-0516, or ; or Investor
Relations, Alan Sheinwald of HC International, Inc.,
+1-914-669-0222, or Web Site: http://www.cn-cse.com/
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