Wowjoint Holdings Limited Reports Third Quarter 2012 Financial Results

        






Wowjoint Holdings Limited Reports Third Quarter 2012 Financial Results

• Q3 2012 revenue of $1.5 million was in-line with guidance
• Gross margins increased 470 basis points to 29.5%
• Order backlog is $19.74 million as of September 30, 2012
• Q4 2012 revenue guidance: $2-3 million

BEIJING, Nov. 15, 2012 /PRNewswire/ -- Wowjoint Holdings Limited ("Wowjoint," or the "Company") (OTCQB: BWOWF), China's innovative infrastructure solutions provider of customized heavy duty lifting and carrying machinery, today reported financial results for the third quarter 2012.

Third Quarter Ended September 30, 2012

• Revenues for the Company's third quarter ended September 30, 2012 were $1.5 million compared to $5.4 million in the third quarter of 2011.
• Lease revenue was $0.4 million for the third quarter 2012 compared to $0.3 million in the same period of 2011.  
• Gross profit was $0.4 million compared to $1.3 million in the same period of 2011. Gross margins increased 470 basis points to 29.5% in the third quarter 2012 compared to 24.8% in the same period of 2011.
• Operating loss was $0.8 million for the third quarter 2012 compared to income of $0.3 million for the third quarter 2011.
• Net loss for the third quarter 2012 was $0.8 million, compared to net income of $0.3 million in same period of 2011.

Cost of sales for the three months ended September 30, 2012 was approximately $1.0 million compared to $4.0 million for the three months ended September 30, 2011. The lower cost of sales in third quarter 2012 was due to a higher percentage of leasing revenue, 23% in Q3 2012 compared to 5% in Q3 2011, which enjoys a higher gross margin. Operating expenses for the three months ended September 30, 2012 were approximately $1.3 million compared to $1.0 million for the same period in 2011. The third quarter 2012 reflects additional R&D expenses related to new projects and new products. Selling expenses for the three months ended September 30, 2012 totaled $0.2 million, which is relatively flat compared to the same period of 2011.

"Our gross margins remain strong and this quarter's increase was directly due to the diversification of our sales, specifically our leasing and international contracts, which provide a higher gross margin," commented Mr. Yabin Liu, Chairman and Chief Executive Officer of Wowjoint. "We continue to focus on our International sales and our leasing and service businesses to maintain strong gross margins. During this quarter we were pleased to announce new contracts, which include leasing service and additional expansion into the marine hoist industry. We are also pleased that our recent contracts in the Peru and Malaysia markets are progressing well and we believe future business will develop in these markets."

Balance Sheet as of September 30, 2012

• Cash and cash equivalents totaled $0.7 million as of September 30, 2012, as compared to $2.3 million as of June 30, 2012.
• Accounts receivable were $9.0 million as of September 30, 2012 as compared to $9.2 million as of June 30, 2012.  The Company continues to focus on collecting its receivables from its large Blue Chip customers.
• Inventories amounted to $3.8 million, which is relatively flat from $4.0 million at June 30, 2012.
• Working capital was $4.9 million as of September 30, 2012.
• The Company had total stockholders' equity of $20.8 million, with total assets of $46.1 million versus total liabilities of $25.3 million as of September 30, 2012.

Nine Months Ended September 30, 2012

• Revenues for the nine month period ended September 30, 2012 was $4.1 million compared to $20.4 million for the nine month period ended September 30, 2011.
• Lease revenues for the nine months ended September 30, 2012 were $1.7 million compared to $0.8 million in the same period of 2011.
• International based revenues accounted for approximately 36% of total sales, compared to 30% of total sales in the nine months ended September 30, 2011.
• Gross profit was $1.4 million for the nine month period ended September 30, 2012 compared to $5.2 million in the same period of 2011. Gross margins increased 810 basis points to 33.5% in the nine month period ended September 30, 2012 compared to 25.4% in the same period of 2011, which was due to a higher percentage of leasing revenue, 42% in the nine months ended September 30, 2012 compared to 4% in the same period 2011.
• Operating loss for the nine months ended September 30, 2012 was $2.7 million compared to an income of $2.2 for the same period of 2011.
• Net loss for the nine months ended September 30, 2012 was $2.1 million, compared to a net income of $1.6 million in same period of 2011.

Cost of sales for the nine months ended September 30, 2012 was approximately $2.7 million compared to $15.2 million for the nine months ended September 30, 2011. Operating expenses for the nine months ended September 30, 2012 were approximately $4.1 million compared to $3.0 million for the same period in 2011, due to increased R&D expenses related to new projects and new products. Selling expenses for the nine months ended September 30, 2012 totaled $0.9 million compared to $0.8 million in the same period of 2011.

Business Updates

Wowjoint continues to pursue international contracts and diversify its business. During the third quarter 2012 and recently, the Company participated in three industry conferences in the US, two of which focused on precast and segmental bridge development and one on high-speed rail. At the ASBI Conference in Adventura, Florida, Wowjoint presented to over 350 people, representing various companies in the segmental bridge industry, on the Company's technology and the use of full span method construction. These conferences provided for additional exposure to the US market and generated relationships that the company plans to pursue. In addition, Wowjoint conducted a US sales road show to further develop its business relationships. The Company plans to execute additional sales road shows throughout South East Asia and Latin America in the coming months, in which key sales managers will attend to facilitate the development of potential customers.

"We're pleased with the potential that we have in the International infrastructure project landscape. In addition, we are also experiencing an increased interest in leasing and servicing both in China and in our International markets," stated Mr. Liu. "We continue to experience a reduction in China's infrastructure spending, although projects still remain in the Chinese government's stimulus plan and it's believed that the reduction is based on timing of those projects. Wowjoint has signed new contracts since the beginning of 2012, with a substantial percentage of which are in leasing, technical services or International markets."

Revenue Guidance and Contract Backlog

Management issued revenue guidance for the fourth quarter of 2012 of approximately $2 to $3 million. As of September 30, 2012, Wowjoint's backlog of signed contracts totaled approximately $19.74 million.

About Wowjoint Holdings Limited

Wowjoint is a leading provider of customized heavy duty lifting and carrying machinery used in large scale infrastructure projects such as railway, highway and bridge construction. Wowjoint's main product lines include launching gantries, tyre trolleys, special carriers, marine hoists and special purpose equipment. The Company's innovative design capabilities have resulted in patent grants and proprietary products. Wowjoint believes it is well-positioned to benefit directly from China's rapid infrastructure development by leveraging its extensive operational experience and long-term relationships with established blue chip customers. Information on Wowjoint's products and other relevant information are available on its website at www.wowjoint.com.

Forward Looking Statements

This press release includes "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Words such as "expect," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," "may," "will," "could," "should," "believes," "predicts," "potential," "continue," and similar expressions are intended to identify such forward-looking statements. Forward-looking statements in this press release include matters that involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to differ materially from results expressed or implied by this press release. Wowjoint undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after the date of this communication. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this communication. All forward-looking statements are qualified in their entirety by this cautionary statement. All subsequent written and oral forward-looking statements concerning Wowjoint or other matters and attributable to Wowjoint or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements above. Wowjoint does not undertake any obligation to update any forward-looking statement, whether written or oral, relating to the matters discussed in this news release.

For additional information contact:  

Wowjoint Holdings:    
Aubrye Foote, Vice President, Investor Relations
Tel:  [phone]
Email: [e-mail]

Website: www.wowjoint.com

– Financial Tables Follow –

 

WOWJOINT HOLDINGS LTD
Unaudited Consolidated Statement of Income
(US dollars in thousands, except for EPS and share data)
	Three Months Ended				Nine Months Ended
	September 30, 2012	June 30, 2012	September 30, 2011		September 30, 2012	September 30, 2011
Sales
Machinery sales	1,159	1,127	4,906		2,371	18,488
Technical service	0	-	167		0	1,124
Lease income	351	231	282		1,688	775
Total sales	1,510	1,358	5,355		4,058	20,387
Cost of goods sold	1,006	913	4,026		2,697	15,215
Gross profit	446	445	1,329		1,361	5,172
Operating expenses:
Selling expenses	188	389	226		900	829
General and administrative expenses	1,152	899	806		3,184	2,185
Total operating expenses	1,341	1,288	1,032		4,084	3,014
Income from operations	(837)	(843)	297		(2,723)	2,158
Other expenses:
Interest expense (net)	87	72	107		239	211
Bank expense	1	1	10		15	42
Foreign currency exchange loss(gain)	1	(57)	-		4	(53)
Other expense (profit)	(103)	14	(10)		(893)	(12)
Total other expenses	(14)	30	107		(635)	188
Income before income taxes	(823)	(873)	190		(2,088)	1,970
Income taxes (Benefits) expenses	0	0	(60)		0	406
Net income attributed to ordinary shareholders	(823)	(873)	250		(2,088)	1,564
Earnings per share
Basic	(0.10)	(0.11)	0.03		(0.26)	0.20
Diluted	(0.10)	(0.11)	0.03		(0.26)	0.20
Weighted average number of shares used in computing earnings per share
Basic	7,971,465	7,971,465	7,949,965		7,949,965	7,949,965
Diluted	7,971,465	7,971,465	7,949,965		7,949,965	7,949,965

 

WOWJOINT HOLDINGS LTD
Unaudited Consolidated Balance Sheet
(US dollars in thousands)
	September 30,	June 30,	December 31,
	2012	2012	2011
ASSETS
Current Assets:
Cash and cash equivalents	723	2,271	4,627
Accounts receivable(net)	9,019	9,164	12,308
Other receivables	1,445	1,713	1,656
Advances to suppliers	8,026	8,921	8,956
Inventories	3,803	4,010	3,979
Costs and estimated earnings in excess of billings	5,087	5,100	4,413
Amount due from related parties	21	22	76
Restricted cash	984	644	578
Total Current Assets	29,108	31,845	36,593
Long-term investment	-	-	-
Property, plant and equipment	15,994	15,160	14,589
Intangible asset, net	1,038	1,049	1,067
Prepaid expense - Long-term	-	-	-
Total Assets	46,141	48,054	52,249
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Short-term loans	1,577	3,478	3,492
Accounts payable and accrued expenses	12,890	12,037	14,203
Advances from customers	5,012	4,953	5,314
Due to related parties	-	-	54
Unearned lease income	-	-	-
Taxes payable	3,929	4,110	4,591
Other payables	806	744	481
Billings in excess of costs and estimated earnings	-	-	-
Long-term loan due within one year	-	474	-
Total Current Liabilities	24,214	25,796	28,135
Long-term loan	1,104	633	1,587
Stockholders' Equity:
Common stock	8	8	8
Additional paid in capital	10,336	10,336	10,336
Statutory surplus reserves	3,025	3,025	3,025
Retained earnings	5,061	5,884	7,149
Accumulated other comprehensive income	2,394	2,371	2,010
Total Stockholders' Equity	20,823	21,624	22,527
Total Liabilities and Stockholders' Equity	46,141	48,054	52,249

 

WOWJOINT HOLDINGS LTD
Statement of Cash Flows
(US dollars in thousands)
	Nine Months Ended
	September 30,  2012	September 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	(2,088)	1,564
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	498	308
Bad debt expense	79	(462)
Other
Changes in operating assets and liabilities:
Accounts receivable	3,210	3,257
Other receivables	211	(3,140)
Advances to suppliers	930	(325)
Inventories	176	(2,575)
Costs and estimated earnings in excess of billings	(673)	(1,095)
Prepaid expense – Short-term	-	-
Accounts payables and accrued expenses	(1,313)	3,104
Other payables	325	244
Unearned lease income	-	(748)
Advances from customers	(302)	6,586
Taxes payable	(663)	237
Billings in excess of costs and estimated earnings	-	(366)
Total adjustments	2,477	5,023
Net cash (used in) provided by operating activities	389	6,587
CASH FLOWS FROM INVESTING ACTIVITIES:
Long term investment	-	(4,723)
Purchase of property, plant and equipment	(1,902)	(4,915)
Prepaid expense - Long-term	-	(19)
Net cash used in investing activities	(1,902)	(9,656)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net cash provided by acquisition	-	-
Repayment of short-term loans	(1,915)	-
Proceeds from short-term loans	-	1,795
Repayment of long-term loans	(483)	-
Proceeds from long-term loans	-	1,574
Restricted cash	(406)	368
Due from related parties	55	82
Due to related parties	(54)	-
Net cash provided by (used in) financing activities	(2,803)	3,818
NET INCREASE (DECREASE) IN CASH	(4,316)	749
EFFECT OF EXCHANGE RATE CHANGES ON CASH	413	845
CASH, BEGINNING OF PERIOD	4,627	2,168
CASH, END OF PERIOD	723	3,762
SUPPLEMENTAL DISCLOSURES:
Cash paid during the period for:
Interest paid	188	145
Income tax paid	316	316

SOURCE Wowjoint Holdings Limited

Copyright 2012 PR Newswire