FUQING CITY, CHINA--(Marketwire - Mar 28, 2013) - Guanwei Recycling Corp. (
- Net revenues grew to a record $79,043,356, up 24.28% from revenues of $63,600,678 in 2011.
- Net income declined 7.49 % from $12,793,448, or $1.28 per share in 2011, to $11,835,295, or $1.15 per share, as gross profit margins declined from 30.64% in 2011 to 23.54% in 2012. The earnings per share data retroactively reflects the reverse stock split which took place in December, 2012.
- At year end, the Company had no bank debt, cash and cash equivalents of $12,083,358, and working capital of $35,505,028, up 49.16% from the prior year.
- The Company maintained its competitive advantage of being licensed by Chinese and German authorities to import lower cost, higher quality plastic waste from Germany and other European raw material suppliers by continuing to meet exacting green standards.
Volume and Sales Price Increases
The Company's sales of manufactured recycled LDPE in 2012 were a record $67,331,679, up 8.77% from 2011. This increase reflected year over year growth in tonnage sales from 52,666 tons in 2011 to 55,448 tons in 2012, a 5.28% increase. Average selling prices for manufactured recycled LDPE in 2012 were approximately $1,214 per ton, a 3.32% increase from approximately $1,175 per ton a year earlier.
Sales of sorted non-LDPE materials increased 12.57% to $1,913,859 reflecting a 5.41% increase in tonnage sales to 6,135 tons as average sales prices increased 6.85% to approximately $312 per ton.
During the year, the Company also recorded $9,797,818 in low margin sales of raw materials. It had no such sales in 2011. The sales in 2012 resulted from a Company decision to increase bulk buying of raw materials to reduce costs which required sales of unused raw materials to increase storage space.
During the year the Company incurred capital expenditures of approximately $2.69 million, primarily related to building improvements and other factory equipment purchases aimed mainly at improving its production process and efficiencies. Production capacity at year end was 80,000 tons.
The Company received governmental approval for an import quota in 2013 of 100,000 tons of imported plastic waste, up from 80,000 tons in 2012. At the same time, the Company's ability to utilize the import quota of Fuqing Huan Li Plastics Company was reduced from 35,000 tons in 2012, to 15,000 tons in 2013. The combined imported plastic waste tonnage allowed in 2012 was 115,000 tons which is the same combined tonnage allowed in 2013.
Mr. Min Chen, Chairman and CEO of the Company, commented, "We believe our financial strength and the continuing growth in sales we achieved in 2012 -- despite China's relatively slower economic environment -- bode well for the future, as we provide key products required in a wide variety of end uses to a broad range of customers. A primary goal this year is to improve profit margins as sales continue to expand, with a particular focus on managing key manufacturing costs to the extent possible."
He added, "We also remain committed to our U.S. listing and believe it is only a matter of time before investors recognize the outstanding growth still ahead in China, and companies such as ours that are well positioned to benefit from that growth."
Conference Call Invitation
The Company will discuss 2012 year end results during a live conference call and webcast on Monday, April 1st, at 8:00am ET.
To participate in the call, interested participants should call 1-877-941-4774 when calling within the United States or 1-480-629-9760 when calling internationally. Please ask for the Guanwei Recycling Corp. 2012 Year End Conference Call, Conference ID: 4609603. There will be a playback available until 04/08/13. 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: 4609603.
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 for sales 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 (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.|
|CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME|
|Year Ended December 31,|
|Cost of revenue||60,440,237||44,111,700|
|Selling and marketing||417,597||398,513|
|General and administrative||2,297,782||1,994,873|
|Total operating expenses||2,715,379||2,393,386|
|Income from operations||15,887,740||17,095,592|
|Other income (expenses)|
|Net foreign exchange gain||62,806||156,602|
|Loss on disposal of property and equipment||(33,452||)||(72,174||)|
|Total other income||91,507||150,977|
|Income before income taxes||15,979,247||17,246,569|
|Other comprehensive income - foreign currency translation adjustments||284,318||1,067,008|
|Earnings per share - basic and diluted||$||1.15||$||1.28|
|Weighted average number of common shares outstanding|
|- basic and diluted||10,293,872||10,000,015|
|GUANWEI RECYCLING CORP.|
|CONSOLIDATED BALANCE SHEETS|
|Cash and cash equivalents||$||12,083,358||$||12,432,803|
|Advances to suppliers||1,827,480||-|
|Value added tax refundable||-||1,221,531|
|Prepaid expenses and other current assets||131,564||882,818|
|Total current assets||42,044,154||35,871,339|
|Property, plant and equipment, net||10,223,874||8,151,012|
|Construction in progress||-||174,295|
|Land use right, net||663,800||673,762|
|LIABILITIES AND SHAREHOLDERS' EQUITY|
|Accrued expenses and other payables||796,705||714,072|
|Value added taxes payable||110,484||-|
|Amount due to shareholder||517,863||1,468,167|
|Income tax payable||1,031,092||1,144,516|
|Total current liabilities||6,539,126||12,068,577|
|Commitments and contingencies|
|Common stock, $0.001 par value, 500,000,000 shares authorized, 10,407,839 and 10,000,015 shares issued and outstanding, as of December 31, 2012 and December 31, 2011||10,408||10,000|
|Additional paid-in capital||2,767,787||1,300,028|
|PRC statutory reserves||805,483||805,483|
|Accumulated other comprehensive income||2,546,999||2,262,681|
|Total shareholders' equity||46,595,048||33,007,268|
|Total liabilities and shareholders' equity||$||53,134,174||$||45,075,845|