China Solar & Clean Energy Solutions, Inc. Announces Record Fourth Quarter and 2007 Year End Results

  -- 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:   [phone]
   Email: 

  Investor Relations
   Alan Sheinwald
   HC International, Inc.
   Tel:   [phone]
   Email: 

DATASOURCE: China Solar & Clean Energy Solutions, Inc.



CONTACT:  Yihai Yang of China Solar & Clean Energy Solutions, Inc.,

[phone], or ; or Investor Relations, Alan

Sheinwald of HC International, Inc., [phone], or

 



Web Site:  http://www.cn-cse.com/ 

Copyright