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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Guanwei Recycling Corporation (CE) | USOTC:GPRC | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.000001 | 0.00 | 01:00:00 |
Sales Rebound in Final Quarter of 2013 Couldn't Offset Previously Reported Interruption of Production and Sales Cycle in Third Quarter Stemming From Government's New "Green Fence" Policy; Growth Outlook for 2014 Remains Positive With No Anticipated Negative Effects From New Government Policy; 2013 Year End Investor Conference Call to Be Held Tuesday, April 1, 2014 at 8:00am ET
FUQING CITY, CHINA--(Marketwired - Mar 31, 2014) - Guanwei Recycling Corp. (NASDAQ: GPRC), China's leading clean tech manufacturer of recycled low density polyethylene (LDPE), today announced somewhat lower full year results in 2013 mainly due to the impact in its third quarter of a more than one week production delay and interruption of its sales cycle, stemming from China's tighter "Green Fence" policy with respect to imported waste materials.
Despite finishing 2013 on a positive note, with fourth quarter manufactured recycled LDPE sales volume up to 13,679 tons, an increase of approximately 9% from third quarter sales -- and slightly higher year over year average selling prices -- mainly due to the production delays in the second half of 2013, full year revenues from manufactured recycled LDPE decreased 3.74% to approximately $64.81 million. The production delay in the second half also impacted 2013 full year net income, which decreased 18.05% to approximately $9.7 million, or $0.93 per share, from approximately $11.83 million, or $1.15 per share a year earlier.
Environmental Leadership: A Competitive Edge
"Given the positive trends we experienced in the first half of the year and again as we closed the year out, the full year result was a disappointment," stated Mr. Chen Min, Chairman and CEO of the Company. He added, "The government focus on imported waste, which led to heightened examinations of our production and storage facility, is not likely to impact our results in the future. Further, as a leader in maintaining the highest possible environmental standards, we applaud the government's focus on the environment and believe our leadership and the investments we continue to make in environmental improvements will permit our Company to retain its key competitive edge."
Financial Highlights
No Bank Debt, Increased Working Capital
The Company's financial position entering 2014 continued to be very strong. As of December 31, 2013, the Company had no bank debt and cash and cash equivalents of $11,887,032. Additionally, working capital as of the same date was $45,459,190, a nearly $10 million or 28.04% increase year over year. Contributing to the increase was an increase in accounts receivable, an increase in advances to suppliers, and a decrease in accounts payable, which was partially offset by a decrease in inventories.
Looking Ahead
"The opportunity for continued growth in 2014 is there," stated Mr. Chen. "In 2012 we increased our manufacturing capacity to 80,000 tons and, in January this year, received approvals for a total of 135,000 tons of imported plastic waste. Our customer list is well diversified and should insulate us from the fluctuating demand in any one industry, as we continue to expand further into the construction equipment industry in line with the Chinese government's stimulus plans." He noted further, "Most importantly, we will continue to aim to maintain a significant price advantage over competitors who in most cases lack the scale or the sophistication to match the environmental standards of our facilities."
Conference Call Invitation The Company will discuss 2013 year end results during a live conference call and webcast on Tuesday, April 1, 2014 at 8:00am ET.
To participate in the call, interested participants should call 1-877-941-1427 when calling within the United States or 1-480-629-9664 when calling internationally. Please ask for the Guanwei Recycling Corp. 2013 Year End Conference Call, Conference ID: 4675415. There will be a playback available until April 8, 2014. To listen to the playback, please call 1-877-870-5176 when calling within the United States or 1-858-384-5517 when calling internationally. Use the Replay Pin Number: 4675415.
This call is being webcast by ViaVid Broadcasting and can be accessed by clicking on this link http://public.viavid.com/index.php?id=108398 or at ViaVid's website at http://viavid.com.
SEE ATTACHED TABLES
Description of Guanwei Recycling Corp.
Adhering to the highest "green" standards, Guanwei Recycling Corp. (the "Company") has generated rapid growth producing recycled low density polyethylene (LDPE) from plastic waste procured mostly in Europe. The Company sells the recycled LDPE to more than 300 customers (including over 150 active recurring customers) in more than ten different industries in China. The Company is licensed by Chinese authorities and also has been issued a Compliance Certificate by Umweltagentur Erftstadt, which issues certificates of approval for certain plastics manufacturers that meet Germany's strict environmental standards. This enables the Company to procure high quality plastic waste directly from Germany and other European countries with no middlemen, and permits highly economic production of the highest grades of LDPE. Additional information regarding Guanwei Recycling Corp. is available at www.guanweirecycling.com.
Information Regarding Forward-Looking Statements
Except for historical information contained herein, the statements in this press release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause our actual results in future periods to differ materially from forecasted results. These risks and uncertainties include, among other things, product demand, market competition, and risks inherent in our operations. These and other risks are described in our filings with the U.S. Securities and Exchange Commission.
GUANWEI RECYCLING CORP. | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
December 31, | |||||||
2013 | 2012 | ||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 11,887,032 | $ | 12,083,358 | |||
Accounts receivable | 14,837,198 | 9,305,104 | |||||
Inventories | 14,717,808 | 18,696,648 | |||||
Advances to suppliers | 7,426,023 | 1,827,480 | |||||
Prepaid expenses and other current assets | 136,396 | 131,564 | |||||
Total current assets | 49,004,457 | 42,044,154 | |||||
Property, plant and equipment, net | 11,074,021 | 10,223,874 | |||||
Construction in progress | 534,556 | - | |||||
Land use right, net | 668,597 | 663,800 | |||||
Other assets | 203,751 | 202,346 | |||||
Total Assets | $ | 61,485,382 | $ | 53,134,174 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Current liabilities | |||||||
Accounts payable | $ | 612,303 | $ | 4,082,982 | |||
Accrued expenses and other payables | 720,888 | 796,705 | |||||
Value added taxes payable | 827,517 | 110,484 | |||||
Amount due to shareholder | 934,892 | 517,863 | |||||
Income tax payable | 449,667 | 1,031,092 | |||||
Total current liabilities | 3,545,267 | 6,539,126 | |||||
Commitments and contingencies | |||||||
Shareholders' Equity | |||||||
Common stock, $0.001 par value, 500,000,000 shares authorized, 10,407,839 shares issued and outstanding, as of December 31, 2013 and December 31, 2012 | 10,408 | 10,408 | |||||
Additional paid-in capital | 2,811,370 | 2,767,787 | |||||
PRC statutory reserves | 805,483 | 805,483 | |||||
Accumulated other comprehensive income | 4,148,986 | 2,546,999 | |||||
Retained earnings | 50,163,868 | 40,464,371 | |||||
Total shareholders' equity | 57,940,115 | 46,595,048 | |||||
Total liabilities and shareholders' equity | $ | 61,485,382 | $ | 53,134,174 | |||
GUANWEI RECYCLING CORP. | |||||||
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME | |||||||
Year Ended December 31, | |||||||
2013 | 2012 | ||||||
Net revenue | $ | 72,263,043 | $ | 79,043,356 | |||
Cost of revenue | 56,493,385 | 60,440,237 | |||||
Gross profit | 15,769,658 | 18,603,119 | |||||
Operating expenses: | |||||||
Selling and marketing | 494,394 | 417,597 | |||||
General and administrative | 2,232,352 | 2,297,782 | |||||
Total operating expenses | 2,726,746 | 2,715,379 | |||||
Income from operations | 13,042,912 | 15,887,740 | |||||
Other income (expenses) | |||||||
Interest income | 56,387 | 55,781 | |||||
Interest expense | (43,583 | ) | - | ||||
Net foreign exchange gain | 49,797 | 62,806 | |||||
Gain (loss) on disposal of property and equipment | 3,602 | (33,452 | ) | ||||
Government subsidy | 32,308 | - | |||||
Miscellaneous | (31,494 | ) | 6,372 | ||||
Total other income | 67,017 | 91,507 | |||||
Income before income taxes | 13,109,929 | 15,979,247 | |||||
Income taxes | 3,410,432 | 4,143,952 | |||||
Net income | 9,699,497 | 11,835,295 | |||||
Other comprehensive income - foreign currency translation adjustments | 1,601,987 | 284,318 | |||||
Comprehensive income | $ | 11,301,484 | $ | 12,119,613 | |||
Earnings per share - basic and diluted | $ | 0.93 | $ | 1.15 | |||
Weighted average number of common shares outstanding | |||||||
- basic and diluted | 10,407,839 | 10,293,872 | |||||
GUANWEI RECYCLING CORP. | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
Year Ended December 31, | ||||||||
2013 | 2012 | |||||||
Cash flows from operating activities | ||||||||
Net income | $ | 9,699,497 | $ | 11,835,295 | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities | ||||||||
Depreciation of property, plant and equipment | 1,089,846 | 884,224 | ||||||
Amortization of land use rights | 15,713 | 15,432 | ||||||
(Gain) loss on disposal of property and equipment | (3,602 | ) | 33,452 | |||||
Bad debt | - | 69 | ||||||
Imputed interest on amount due to shareholder | 43,583 | - | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (5,173,867 | ) | (4,791,673 | ) | ||||
Inventories | 4,503,312 | (1,700,239 | ) | |||||
Advances to suppliers | (5,469,806 | ) | (1,826,813 | ) | ||||
Value added taxes refundable | - | 1,223,236 | ||||||
Prepaid expenses and other current assets | (2,913 | ) | 790,864 | |||||
Other assets | 4,846 | 4,759 | ||||||
Accounts payable | (3,551,548 | ) | (4,728,146 | ) | ||||
Accrued expenses and other payables | (106,791 | ) | (2,264 | ) | ||||
Value added taxes payable | 704,352 | 110,443 | ||||||
Income tax payable | (605,664 | ) | (122,679 | ) | ||||
Net cash provided by operating activities | 1,146,958 | 1,725,960 | ||||||
Cash flows from investing activities | ||||||||
Purchase of property, plant and equipment | (2,134,849 | ) | (2,694,126 | ) | ||||
Proceeds from disposal of property and equipment | 4,846 | - | ||||||
Net cash used in investing activities | (2,130,003 | ) | (2,694,126 | ) | ||||
Cash flows from financing activities | ||||||||
Advance from shareholder | 417,029 | 517,863 | ||||||
Net cash flows provided by financing activities | 417,029 | 517,863 | ||||||
Effect of exchange rate change on cash | 369,690 | 100,858 | ||||||
Net decrease in cash and cash equivalents | (196,326 | ) | (349,445 | ) | ||||
Cash and cash equivalents at the beginning of year | 12,083,358 | 12,432,803 | ||||||
Cash and cash equivalents at the end of year | $ | 11,887,032 | $ | 12,083,358 | ||||
Contacts: Richard Sun guanweirecycling@gmail.com Ken Donenfeld DGI Investor Relations kdonenfeld@dgiir.com Tel: 212-425-5700 Fax: 646-381-9727
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