YTD Revenue Up 96.5% to $10.9M; EPS $0.68 Conference Call to be
held on November 13, 2009 at 10:00 AM Eastern Time BEIJING, Nov. 12
/PRNewswire-Asia-FirstCall/ -- Tri-Tech Holding Inc. (NASDAQ:TRIT),
a premier Chinese company that engineers, manages and monitors
China's municipal sewer systems, natural waterways and resources,
announced today that revenue for the third quarter ended September
30, 2009 increased 131% to $4.9 million from $2.1 million in the
third quarter of 2008. Diluted earnings per share for the quarter
were $0.27 based on net income of $1.1 million. This compares with
net income of $506,000 or $0.14 diluted EPS a year ago. Third
Quarter 2009 Highlights -- Revenue for Q3 2009 increased 131% to
$4.9 million from $2.1 million in Q3 2008. -- Gross profit
(exclusive of depreciation and amortization) increased 112% to $1.9
million for Q3 2009 from $0.9 million in Q3 2008. -- Q3 2009 gross
margins decreased slightly at 39.1%, vs. 42.6% for Q3 2008. --
Income from operations increased 150% to $1.3 million from $536,000
in Q3 2008. -- Net income increased 112% to $1.1 million from
$506,000 in Q3 2008. -- Diluted earnings per share increased to
$0.27, from $0.14 in Q3 2008. -- Weighted average number of diluted
shares outstanding was 3.95 million as of September 30, 2009,
compared to 3.56 million as of September 30, 2008. -- Completed an
initial public offering of 1,700,000 ordinary shares at a price of
$6.75 per share, traded on NASDAQ Capital Market on September 10,
2009. -- Awarded $960,000 in Mountain Torrent Forecasting contracts
covering eight projects in four provinces. -- Awarded $1.6 million
Municipal Sewage Treatment contract in Kuancheng County of Hebei
Province. Third Quarter 2009 Financial Performance Total revenue
was $4.9 million in the quarter ended September 30, 2009, a 131%
increase from $2.1 million in the quarter ended September 30, 2008.
The increase was mostly because of increased sales of system
integration services in the wastewater and tail gas treatment
segment, which generated revenue of $3.8 million, or 77.4% of
revenues in Q3 2009 compared to $1.2 million, or 58% of revenues in
Q3 2008. Revenue from Tri-Tech's other business segment -- water
resources management -- was approximately $1.1 million in Q3 2009,
accounting for 22.6% of total quarter revenues. Net income in the
quarter increased to $1.1 million or $0.27 per diluted share,
compared to net income of $506,000 or $0.14 per diluted share in
the quarter ended September 30, 2008. Gross profit (exclusive of
depreciation and amortization) was $1.9 million in the quarter, a
112% increase from $0.9 million a year ago. This strong increase
was primarily due to an increase in the number and size of
contractual engagements as a result of the growth of its client
base and improvement of its project execution capabilities. Gross
margin (exclusive of depreciation and amortization) was 39.1%
compared to 42.6% in the quarter ended September 30, 2008. This
decrease was due to relatively higher costs of the hardware
products compared to system integration and software products.
Gross margins in the wastewater and tail gas business and water
resources management segments were 39.2% and 38.7% respectively.
Operating income was $1.3 million, a 150% increase from $536,000 in
the quarter ended September 30, 2008. Operating margin was 27.3%,
compared to 25.2% in the three months ended September 30 2008. As a
certified software hi-tech enterprise, Tri-tech received a partial
tax rebate of $26,275 from the Chinese government for value added
tax (VAT) paid on sold software. This partial rebate was classified
as other income. Liquidity and Capital Resources The cash balance
following the IPO was approximately $10.3 million. As of September
30, 2009, the Company had long-term debt of $69,000 and short-term
debt of $695,000. The Company had working capital of $17.4 million.
Stockholders' equity totaled $18.3 million compared to $5.8 million
as of September 30, 2008. Net cash provided in financing activities
totaled $10.5 million. Initial Public Offering On September 10,
2009, Tri-Tech completed an initial public offering of 1,700,000
ordinary shares at a price of $6.75 per share. Net proceeds from
the initial public offering, after deducting underwriting
discounts, commissions and offering expenses, totaled $10 million.
Nine months 2009 Financial Performance For the first nine months of
2009, revenue was $10.9 million, an increase of 96.5% over $5.6
million for the comparable period last year. Net income for the
first nine months was up 97.3% at $2.5 million compared to $1.3
million for the first nine months of 2008. Diluted EPS was $0.68
compared to $0.36 for the first nine months of 2008. Warren Zhao,
Tri-Tech's Chief Executive Officer, said, "We are pleased with our
Q3 2009 financial results and our first financial report as a
public company. We believe our over triple digit growth in Q3
revenue and our operational performance demonstrated the strength
of our business model and our competitive position in enhancing
water quality and people's health in China. Several factors
contributed to our strong performance including our patented
technology, the increasing efforts of our sales force and growth of
our customer base. We feel confident that our water resources
management business and wastewater and tail gas treatment
businesses will continue their robust growth through the remainder
of 2009. "Our business in water resources, flood control and
mitigation, water quality monitoring and assessment, municipal
water and wastewater management, water reuse, and odor control are
poised to benefit from China's massive ongoing investments in
infrastructure. Government investment in the water resources sector
last year was up over 54% and is expected to increase $11.7 billion
in 2009 and $45 billion over the next three years. "We are excited
to move forward into the last quarter of 2009 and the year 2010 in
a strong and flexible financial position. We expect to take
advantage of long-term opportunities driven by the urgent need for
water treatment projects for commercial, industrial and residential
uses and the solid support from the government for water resources
projects. We intend to use the proceeds from the IPO to reinforce
our competitive position. We plan to undertake new projects in
municipal projects, and to focus our research and development on
improved water treatment systems to maximize water disposal
capacity and disposal rates at a lower cost. "We are currently
pursuing over 100 smaller river basin flood monitoring and
forecasting systems and groundwater monitoring systems for over 100
counties across the country with a market potential of
approximately $145 million. Through local distributors and
partnerships, we also expect to promote our proprietary products
targeting the water monitoring and dispatching systems of the
Northward Rerouting of Southern River engineering project with a
market potential of approximately $43.5 million. "We expect an
increase in sales associated with the South-North Water Transfer
Project with dozens of major urban water supply tasks and six
nation-wide projects of flood forecasting and hydrological
monitoring proposed by the Ministry of Water Resources. "Based on
multiple contracts for sewage treatment plants won in Hebei
Province recently, we will continue to target our wastewater
treatment business in the Tianjin area and Hebei Province. Within
the next few years, Tianjin Binhai New Area plans to construct over
40 large-scale pumping stations and over 30 sewage treatment plants
with a total market potential of approximately $8.7 billion. Hebei
Province plans to construct over 50 sewage and grey water reuse
treatment plants in the next two years with total spending of
approximately US$ 1.23 billion. "We will also actively pursue
opportunities in the industrial wastewater and process tail gas
treatment market in the petrochemical industry, such as the SINOPEC
Yanshan Plant, the Petro China Jilin Plant, the SINOPEC Anqing
Plant, and Dalian Petro China Plant. Currently almost all newly
designed sewage treatment plants have odorous gases containment and
control requirements. As such, we expect an increase in sales of
our proprietary biofiltration odor control systems," Zhao said.
Conference Call Tri-Tech CEO Warren Zhao, President Phil Fan and
CFO Peter Dong will host a conference call at 10:00 AM Eastern Time
tomorrow November 13, 2009 (11:00 PM Beijing/Hong Kong Time on
November 13) to review the company's financial results and respond
to questions and comments. To participate, call U.S. Toll Free
Number 1-877-941-4775 approximately 10 minutes before the call.
International callers, please dial 1-480-629-9761. The conference
ID number is 4182163. A live webcast of the call will be available
at http://viavid.net/dce.aspx?sid=00006CEE . An MP3 file will be
available approximately one hour after the call and a transcript
within 48 hours after the call. These will be archived for 90 days
via http://www.tri-tech.cn/ and http://www.hawkassociates.com/ .
--FINANCIAL TABLES-- TRI-TECH HOLDING INC. CONSOLIDATED STATEMENTS
OF INCOME AND OTHER COMPREHENSIVE INCOME (Unaudited) For the Nine
Months Quarter Ended ended September 30, September 30, 2009 2008
2009 2008 USD USD USD USD Revenues: System integration 7,523,762
4,708,939 4,145,404 1,753,264 Hardware products: 1,878,048 64,489
483,907 29,112 Software products revenues: 1,503,359 777,938
281,522 340,122 Total revenues 10,905,169 5,551,366 4,910,833
2,122,498 Cost of revenues: (exclusive of depreciation and
amortization shown separately below) System integration 4,907,767
3,161,601 2,552,799 1,202,537 Hardware products 1,586,613 35,492
437,290 15,020 Cost of software 42,064 3,935 -- 189 Total cost of
revenues(exclusive of depreciation and amortization shown
separately below) 6,536,444 3,201,028 2,990,089 1,217,746 Operating
expenses: Depreciation and amortization expenses 75,449 59,722
30,049 20,705 Other operating expenses 1,370,115 1,015,065 550,498
348,233 Total operating expenses 1,445,564 1,074,787 580,547
368,938 Income from operations 2,923,162 1,275,551 1,340,198
535,813 Other income (expenses): Other expense (4,694) (1,291)
(3,542) 223 Interest income 25,126 16,544 24,291 865 Interest
expense (4,173) (2,389) (514) (1,462) Tax rebates 49,042 65,243
26,275 356 Total other income (expenses), net 65,301 78,108 46,511
(19) Income before provision for income taxes and noncontrolling
interests income 2,988,463 1,353,659 1,386,709 535,795 Provision
for income taxes 450,466 60,476 314,371 20,276 Net income 2,537,997
1,293,183 1,072,338 515,519 Noncontrolling Interests Income 12,452
13,525 (1,273) 9,078 Net income attributable to Tri-Tech Holding
Inc 2,525,545 1,279,658 1,073,611 506,441 Other comprehensive
income Foreign currency Translation adjustment 67,115 306,542
50,372 83,417 Comprehensive income 2,605,112 1,599,725 1,122,710
598,936 Comprehensive income attributable to noncontrolling
interests 13,158 24,206 (508) 11,580 Comprehensive income
attributable to Tri-Tech Holding Inc. 2,591,954 1,575,519 1,123,218
587,356 Net income attributable to Tri-Tech Holding Inc. per share:
Basic 0.69 0.36 0.27 0.14 Diluted 0.68 0.36 0.27 0.14 Shares used
in computation: Basic 3,679,542 3,555,000 3,924,565 3,555,000
Diluted 3,689,604 3,555,000 3,954,422 3,555,000 TRI-TECH HOLDING
INC. CONSOLIDATED BALANCE SHEETS September 30, December 31, 2009
2008 (Unaudited) (Restated) ASSETS Current Assets Cash $10,306,076
$732,418 Accounts receivable, net of allowance for doubtful
accounts of $51,285 and $62,286 as of September 30, 2009 and
December 31, 2008, respectively 4,125,163 3,105,859 Unbilled
revenue 4,213,095 1,429,846 Notes receivable 594,523 7,316 Other
receivables 327,531 166,395 Inventories 1,651,819 1,466,468
Deposits on projects 580,161 266,973 Deferred income taxes -- --
Prepayments to suppliers and subcontractors 364,501 567,346 Total
current assets 22,162,869 7,742,621 Plant and equipment, net
325,148 174,128 Proprietary technology, net 820,186 857,475 Total
assets $23,308,203 $8,774,224 LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities Accounts payable and cost accrual on projects
$2,844,743 $1,589,103 Commercial paper and other short-term notes
payable Non-related parties 695,370 271,041 Related party -- 14,631
Customer deposits 350,017 436,372 Billings in excess of revenue
108,275 30,639 Other payables 45,946 81,721 Accrued liabilities
52,978 84,660 Deferred income taxes 327,257 83,643 Income taxes
payable 181,249 141,818 Other taxes payable 138,145 90,908 Total
current liabilities 4,743,980 2,824,536 Long-term liabilities
69,069 -- Total liabilities 4,813,049 2,824,536 Shareholders'
equity Tri-Tech Holding Inc. shareholders' equity Common stock
(30,000,000 shares authorized and $0.001 par value, 5,255,000 and
3,555000 issued as of September 30, 2009 and December 31, 2008,
340,000 shares issued were held in escrow. See note 11 for more
discussions.) 5,255 3,555 Additional paid-in-capital 12,852,713
2,914,058 Statutory reserves 50,655 50,655 Retained earnings
5,008,118 2,482,573 Accumulated other comprehensive income 427,737
361,328 Total Tri-Tech Holding Inc. shareholders' equity 18,344,478
5,812,169 Noncontrolling Interests 150,676 137,519 Total
shareholders' equity 18,495,154 5,949,688 Total liabilities and
shareholders' equity $23,308,203 $8,774,224 TRI-TECH HOLDING INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) For the Nine
Months ended September 30, 2009 2008 USD USD Cash flows from
operating activities: Net income 2,537,997 1,293,183 Adjustments to
reconcile net income to cash: Depreciation 37,826 27,445
Amortization 38,116 72,011 Allowance for doubtful accounts (11,047)
26,921 Deferred income taxes 251,765 11,408 Changes in operating
assets and liabilities: Accounts receivable (1,005,397) (1,308,486)
Unbilled revenue (2,780,854) 329,785 Other receivables (494,253)
(178,636) Inventories (184,068) 83,927 Prepayments and deferred
expenses 99,301 (149,336) Accounts payable 1,190,555 99,485
Customer deposits (80,481) 328,867 Billings in excess of revenue
93,774 -- Other payables (35,826) 72,891 Accrued liabilities
(31,738) 56,225 Taxes payable 86,438 (36,158) Net cash provided by
operating (287,892) 729,533 activities Cash flows from investing
activities: Loan to the other parties (586,944) -- Additions to
equipment (188,778) 26,103 Net cash provided by investing
activities (775,722) 26,103 Cash flows from financing activities:
Common stock 10,038,847 -- Borrow money from third parties 522,234
459,322 Repayments to third parties of advances (43,911) (76,372)
Repayment from a related party of an advance -- -- Net cash
provided by (used in) financing activities 10,517,170 382,950
Effect of exchange rate changes on cash and cash equivalents
120,102 101,827 Net increase in cash 9,573,658 1,240,413 Cash,
beginning of year 732,418 367,713 Cash, end of period 10,306,076
1,608,126 Supplemental Data: Income taxes paid 17,496 -- Interest
paid on debt 4,173 2,388 About Tri-Tech Holding Inc. Tri-Tech
designs customized sewage treatment and odor control systems for
China's municipalities and its larger cities. These systems combine
software, information management systems, resource planning and
local and distant networking hardware that includes sensors,
control systems, programmable logic controllers, supervisory
control and data acquisition systems. The company also designs
systems that track natural waterway levels for drought control,
monitor groundwater quality and assist the government in managing
its water resources. Tri-Tech owns seven software copyrights and
two technological patents and employs 108 people. Please visit
http://www.tri-tech.cn/ for more information. An online investor
kit including a company profile, press releases, current price
quotes, stock charts and other valuable information for investors
is available at http://www.hawkassociates.com/profile/trit.cfm . To
subscribe to future releases via e-mail alert, visit
http://www.hawkassociates.com/about/alert/ . Tri-Tech Holding Inc.
has based these forward-looking statements as defined by 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: Investors Contact: Hawk Associates Susan Zhou Tel:
+1-305-451-1888 Email: DATASOURCE: Tri-Tech Holding Inc. CONTACT:
Investors Contact: Susan Zhou of Hawk Associates, +1-305-451-1888,
Web site: http://viavid.net/dce.aspx?sid=00006CEE
http://www.tri-tech.cn/ http://www.hawkassociates.com/
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