China Industrial Waste Management Inc. (CIWT)

[IndoInvest]

DALIAN, China, April 13, 2011 /PRNewswire-Asia/ -- China Industrial Waste Management, Inc. (OTCQB: CIWT) ("China Industrial Waste Management" or the "Company"), a leading environmental services and solutions provider in China, today announced financial results for the fiscal year ended December 31, 2010.
Full Year 2010 Highlights
Revenues increased 106.2% to $21.8 million
Gross profit increased 97.7% to $12.6 million
Operating income increased 447.6% to $6.8 million
Operating margin increased to 31.3% from 11.8%
Net income attributable to the Company increased 129.8% to $4.5 million
Diluted earnings per shares increased 142.9% to $0.29 per diluted share
Operating cash flow increased 130.9% to $4.7 million
Working capital increased 306.9% to $6.7 million

"We are very pleased with our 2010 financial performance as we achieved strong growth in sales, profitability, EPS, and operating cash flow," said Mr. Jason Dong, the Company's Chairman and Chief Executive Officer. "Our business rebounded significantly in 2010 from the lows of 2009, a year where we were impacted by the global recession and slowdown in world trade. In 2010, our customers increased their production volumes and their business with us, we added new customers as the manufacturing sector in Dalian continues to grow, our sludge treatment facility began contributing to our sales, and we received additional revenues from waste disposal operations related to the tragic oil spill in Dalian in June of 2010. Importantly, we grew our bottom line and operating cash flow even faster than our top line at both the net income and EPS lines. Our increased profitability was the result of our strong sales rebound combined with the operating leverage of our business. Overall, we are proud of our accomplishments in 2010 and believe we are on sound footing to continue our strong financial performance in 2011."
Full Year 2010 Results
Revenues increased 106.2% to $21.8 million from $10.6 million in 2009. The increase in revenues is mainly attributable to an increase in the Company's solid waste treatment business as production volumes from the Company's industrial customers continued to recover from the lows of 2009, the addition of new customers in 2010, additional revenue generated by the Company's subsidiary, Dongtai Organic, from municipal sludge treatment, as well as sales of biogas (methane), a byproduct derived from sludge fermentation, and from revenues generated from the Company's waste disposal operations in connection with the June 2010 oil spill in Dalian.
Revenues from service fees increased 114.6% to $14.9 million, or 68.3% of total revenues, from $6.9 million, or 65.6% of total revenues, in 2009. Sales of recycled commodities increased 90.1% to $6.9 million, or 31.7% of revenues, compared to $3.6 million, or 34.4% of revenues, in 2009. The increase in sales of recycled commodities was attributable to higher selling prices and sales volume for these products. The average selling price of cupric sulfate was approximately $1,723 per ton in 2010 as compared to $1,285 per ton in 2009, a 34% increase in average unit price. In addition, in 2010, revenues from the sale of methane gas generated $1.3 million whereas there were no sales of methane gas in 2009.
Gross profit increased 97.7% to $12.6 million from $6.4 million in 2009. Gross margin was 57.9% compared to 60.4% in 2009. The decline in gross margin is primarily attributable to the additional overhead imposed by Dongtai Organic's sludge treatment operations, a business added in 2010, which has not yet reached full operating capacity.
Income from operations increased 447.6% to $6.8 million from $1.2 million in 2009. Operating margin increased to 31.3% from 11.8% in 2009. The increase in operating margin is primarily due to operating leverage from the Company's higher volume of sales.
Net income attributable to the Company increased 129.8% to $4.5 million from $2.0 million in 2009. Diluted earnings per share increased 142.9% to $0.29 from $0.12 in 2009.
Financial Condition
As of December 31, 2010, the Company had cash and cash equivalents of $8.2 million compared to $11.4 million at the end of 2009. The Company had working capital of $6.7 million, an increase of 306.9% compared to $1.7 million as of December 31, 2009. Shareholder's equity increased 20.4% to $41.6 million from $34.5 million at the end of 2009. Operating cash flow increased 130.9% to $4.7 million compared to $2.0 million in the prior year period.
Business Outlook
The Company is currently building in Dalian one of the most advanced one-stop service centers for industrial solid waste treatment in China (the "Expansion Project"). The construction of this Expansion Project is now 90% complete and we expect it to become operational in the third quarter of 2011. Once fully operational, this new facility will increase our industrial solid waste treatment capacity to 114,000 tons per year, which is double our current treatment capacity.
For the first half of 2011, the Company expects revenues of between $10 million and $12 million and net income attributable to the Company of between $2.0 million and $2.5 million.
Mr. Dong concluded, "The industrial waste treatment business in China continues to show strength. Environmental sustainability and more balanced industrial development are key priorities for the PRC government in the 12th Five-Year Plan. The solid waste treatment business in China is still in the start-up stage and we believe we are well positioned to take advantage of very strong growth opportunities in 2011 and beyond. We expect a surge in demand for sludge and other degradable waste treatment services as a result of a shortage in sludge treatment facilities. For example, in Liaoning Province there are currently 42 sewage treatment plants processing 4 million tons of waste water every day, and these sewage treatment plants generate approximately 1 million tons of sludge annually. Our Dongtai Organic facility is currently the only sludge treatment facility in Liaoning Province. We believe that the shortage of sludge treatment facilities in Liaoning Province is a representative example of a problem that exists at a much larger scale throughout China.
"We are excited about our future opportunities and believe that we are poised to benefit from the rising demand for waste treatment in China. Supported by our state-of-the-art technology, we strive to become the leading industry player in Northern China. We expect the Expansion Project and other initiatives to contribute to our financial performance in fiscal 2011."
Conference Call
The Company will host a conference call at 9:00 a.m. Eastern Daylight Time on Thursday, April 14, 2011, to discuss its financial results for the fiscal year 2010.
To participate in this live conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: [phone]. International callers should dial [phone]. The Conference Pass Code is 53975142.
If you are unable to participate in the call at this time, a replay will be available for 14 days starting on Thursday, April 14, 2011, at 10:00 a.m. Eastern Time. To access the replay, call [phone]. International callers should call [phone]. The Conference Pass Code is 53975142.
About China Industrial Waste Management
China Industrial Waste Management is a leading environmental services and solutions provider in China. The Company is based in Dalian, Liaoning Province, China and has been engaged in the industrial solid waste treatment business since 1991. Today, the Company is the largest industrial solid waste management enterprise in northeastern China. China Industrial Waste Management's main businesses are industrial solid waste treatment and recycling, municipal sewage and sludge treatment, and environmental protection engineering. For more information, please visit the Company's website (www.chinaciwt.com).
Cautionary Statement Regarding Forward-Looking Information
This release may include "forward-looking statements." You can identify these statements by the fact that they do not relate strictly to historical or current facts. These statements contain such words as "may," "project," "might," "expect," "believe," "anticipate," "intend," "could," "would," "estimate," or the negative or other variations thereof or comparable terminology. These forward-looking statements are based on current expectations and projections about future events. Investors are cautioned that forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties that cannot be predicted or quantified and, consequently, our actual performance may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to, the following factors, as well as other factors described from time to time in our reports filed with the Securities and Exchange Commission: the timing and magnitude of technological advances; the prospects for future acquisitions; the effects of political, economic and social uncertainties regarding the governmental, economic and political circumstances in the People's Republic of China, the possibility that a current customer could be acquired or otherwise be affected by a future event that would diminish their waste management requirements; the competition in the waste management industry and the impact of such competition on pricing, revenues and margins; uncertainties surrounding budget reductions or changes in funding priorities of existing government programs and the cost of attracting and retaining highly skilled personnel; our projected sales, profitability, and cash flows; our growth strategies; anticipated trends in our industries; our future financing plans; and our anticipated needs for working capital. Forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.
Company Contact:
Mr. Darcy Zhang, Corporate Secretary
Tel: [phone]
Email: [e-mail]
Website: www.chinaciwt.com

CCG Investor Relations:
Mr. Athan Dounis
Phone: [phone]
Email: [e-mail]
Website: www.ccgirasia.com


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