FUQING CITY, CHINA--(Marketwire - Nov 13, 2012) - Guanwei Recycling Corp. (
- Net revenues in the 2012 third quarter increased 7.36% to $17,905,974 compared with $16,679,012 in the same period last year based on increases in sales prices and tonnage sold. Tonnage sales of self-manufactured recycled LDPE increased 5.77% to 14,427 tons year over year while recycled LDPE prices in the same time period increased 0.75% to $1,208 per ton.
- Gross profit in the 2012 third quarter compared with the prior year period increased by $574,704, or 11.59%, to $5,531,524. Wages and welfare costs, which had increased substantially in the first half of the year, stabilized in the third quarter, as did costs for raw materials and overhead. At the same time, selling prices for manufactured recycled LDPE and sorted non-LDPE materials outpaced costs.
- 2012 third quarter net income grew 7.32% to $3,622,832, or $0.17 per share, on 20,815,654 diluted shares outstanding compared with $3,375,758, or $0.17 per share, in the third quarter of 2011 on 20,000,006 diluted shares outstanding.
- Revenues for the nine months ended September 30, 2012, which included the low margin sale of $3,462,238 of certain raw materials in the first half of 2012, increased 13.30% to $52,772,402 compared with the year ago period. There were no raw materials sales in the first nine months of 2011.
- Net income of $8,851,118 in the first nine months of 2012, or $0.43 per share, on 20,509,042 diluted shares outstanding, was 7.26% lower than the $9,544,400 in net income, or $0.48 per share on 20,000,006 diluted shares outstanding in the same period in 2011. This decline primarily reflected increased raw material, labor and overhead costs in the first half of 2012 until this trend was reversed in the third quarter of 2012.
As of September 30, 2012, the Company had cash and cash equivalents of $13,236,896 and no short term borrowings. Working capital as of September 30, 2012 was $32.4 million, compared with $23.8 million at the same time last year. This increase reflected higher accounts receivable as the Company continued to expand credit sales to long term customers with good credit history, increased inventories and increased cash as a result of achieving net profits period after period.
Net cash used in investing activities in the nine months ended September 30, 2012 was $2,412,469. During this period, the Company built additional storage space for raw materials to better manage its production cycle. It also acquired additional machinery and equipment which was placed into service in the third quarter of 2012.
Mr. Min Chen, Chairman and CEO of the Company, stated, "Despite the economic downturn in China we again managed to generate quarter over quarter sales growth from our increasingly diversified customer base, and saw what we believe is a key turning point in the third quarter with costs moderating as our revenues continued to grow. Looking ahead, we anticipate further moderate increases in selling prices while costs for raw materials, labor and overhead should continue to stabilize or perhaps increase slightly. With the expectation of continued long term strong demand for recycled LDPE, we remain very optimistic about our continuing growth potential in an improving economy."
Conference Call Invitation
The Company will discuss 2012 third quarter and nine month results during a live conference call and webcast on Wednesday, November 14th, at 8:00am ET. This will follow distribution of a news release with the Company's third quarter and nine month results on Tuesday, November 13, 2012.
To participate in the call, interested participants should call 1-877-941-8418 when calling within the United States or 1-480-629-9809 when calling internationally. Please ask for the Guanwei Recycling Corp. 2012 Third Quarter Conference Call, Conference ID: 4575618. There will be a playback available until 11/21/12. To listen to the playback, please call 1-877-870-5176 when calling within the United States or1-858-384-5517 when calling internationally. Use the Replay Pin Number: 4575618.
Description of Guanwei Recycling Corp.
Guanwei Recycling Corp. is China's largest manufacturer of recycled low density polyethylene (LDPE). Adhering to the highest "green" standards, it has generated rapid growth producing LDPE from plastic waste procured mostly in Europe for sales to more than 300 customers (including over 150 active recurring customers) in more than ten different industries in China. Guanwei Recycling Corp. is one of the few plastic recyclers in China that has been issued a Compliance Certificate by Umweltagentur Erftstadt, which issues certificates of approval for certain plastics manufacturers which meet strict environmental standards in Germany. This enables the Company to procure high quality plastic waste directly from Germany and other European countries (Spain and Holland), 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.|
|UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME|
|Three Months Ended |
|Nine Months Ended |
|Cost of revenue||12,374,450||11,722,192||38,793,696||32,291,990|
|Selling and marketing||125,536||95,288||293,286||299,233|
|General and administrative||524,112||431,316||1,647,140||1,404,042|
|Total operating expenses||649,648||526,604||1,940,426||1,703,275|
|Income from operations||4,881,876||4,430,216||12,038,280||12,584,021|
|Other income (expenses)|
|Net foreign exchange (loss) gain||(92,074||)||67,485||(121,754||)||198,609|
|Total other (expenses) income||(75,270||)||86,921||(76,442||)||250,642|
|Income before income taxes||4,806,606||4,517,137||11,961,838||12,834,663|
|Other comprehensive (loss) income - foreign currency translation adjustments|| |
|Earnings per share attributable to shareholders of|
|Guanwei Recycling Corp. - basic and diluted||$||0.17||$||0.17||$||0.43||$||0.48|
|Weighted average number of common shares outstanding|
|- basic and diluted||20,815,654||20,000,006||20,509,042||20,000,006|