Tri-Tech Holding Full Year 2009 Revenue Up 99% to $16.8M Net Income Up 127% to $3.8M EPS $0.92 vs. $0.48
BEIJING, March 25 /PRNewswire-Asia-FirstCall/ -- Tri-Tech Holding Inc. (Nasdaq: TRIT), a leading Chinese project development and management company that engineers, manages and monitors China's municipal sewer systems, natural waterways and resources, announced today that revenue for the fiscal year ended December 31, 2009 increased 99% to $16.8 million from $8.4 million in 2008. Diluted earnings per share for the year were $0.92 based on net income of $3.8 million. This compares with net income of $1.7 million or $0.48 diluted EPS in 2008.
Fourth Quarter 2009 Highlights
-- Revenue for Q4 2009 increased 103% to $5.9 million from $2.9 million in Q4 2008.
-- Gross profit (exclusive of depreciation and amortization) increased 190% to $2.3 million for Q4 2009 from $0.8 million in Q4 2008.
-- Q4 2009 gross margin 38% vs. 27% for Q4 2008.
-- Income from operations increased 117% to $1.1 million from $0.5 million in Q3 2008.
-- Net income increased 212% to $1.3 million from $0.4 million in Q4 2008.
-- Diluted earnings per share increased to $0.24, from $0.12 in Q4 2008.
-- Weighted average number of diluted shares outstanding was 5.54 million as of December 31, 2009, compared to 3.56 million as of December 31,
FY 2009 Highlights
-- Revenue for 2009 increased 99% to $16.8 million from $8.4 million in 2008.
-- Wastewater and Tail Gas Treatment segment revenue increased 80% to $9.0 million.
-- Water Resource Management segment revenue was up 125% to $7.8 million.
-- Gross profit (exclusive of depreciation and amortization) increased 112% to $6.6 million for 2009 from $3.1 million in 2008.
-- 2009 gross margin 39% vs. 37% for 2008.
-- Income from operations increased 126% to $4.1 million from $1.8 million in 2008.
-- Net income increased 127% to $3.8 million from $1.7 million in 2008.
-- Diluted earnings per share increased to $0.92 from $0.48 in 2008.
-- Weighted average number of diluted shares outstanding was 4.17 million as of December 31, 2009, compared to 3.56 million as of December 31, 2008.
-- Completed successful initial public offering of 1.7 million ordinary shares at a price of $6.75 per share, traded on NASDAQ Capital Market on September 10, 2009.
FY 2009 Financial Performance
Total revenue was $16.8 million in 2009, an increase of $8.3 million, or 99%, compared to revenue of $8.4 million in 2008. The increase was driven by larger contracts, several of which exceeded $1.5 million. The revenue was primarily generated by system integration work and hardware and software sales from two operating segments. For wastewater and tail gas treatment, revenue was $9 million, an increase of $4 million or 80%, compared to $5 million in year 2008. Revenue from water resources management saw a 125% significant increase to $7.8 million from $3.5 million in 2008.
Net income attributable to shareholders was $3.8 million, an increase of $2.2 million or 127%, compared to $1.7 million in year 2008.
Diluted earnings per share for the year were $0.92 based on net income of $3.8 million. This compares with net income of $1.7 million or $0.48 diluted EPS in 2008.
Gross profit (exclusive of depreciation and amortization)
Gross profit (exclusive of depreciation and amortization) increased 112% to $6.6 million for 2009 from $3.1 million in 2008. Of total revenue, cost (exclusive of depreciation and amortization) decreased to 61%, compared with 63% in 2008, because the company sourced more locally made equipment at lower cost for the projects. Gross margin (exclusive of depreciation and amortization) for 2009 was 39%, compared to 37% for 2008.
During 2009, significant Chinese government spending along with tight construction timelines, and strong market demand resulted in high market value for construction projects. Under such business climate, Tri-Tech enjoyed rapid growth in revenue while limited cost of that revenue.
Operating income increased 126% to $4.1 million from $1.8 million in 2008. Operating margin was 24%, compared to 21% in the year ended December 31 2008.
Liquidity and Capital Resources
As of December 31, 2009, cash and cash equivalents were $7.2 million, including a deposit of $3.3 million. As of December 31, 2009, working capital was $17 million, including cash and cash equivalents of $7.2 million.
As of December 31, 2009, the company had a total backlog of $11.5 million to be collected in 2010, including $9.3 million in municipal water and wastewater services, $1.5 million in water resources services and $0.7 million in industrial sector services. The backlog represents the amount of our existing contract work remaining to be completed in 2010 for which we have not been paid in full, based on the assumptions that our customers will approve these projects upon completion.
Chief Executive Officer Warren Zhao said, "We are pleased with the financial results in our first year as a publicly-traded company. The strong growth in our two business segments has highlighted the strength of our business model, which we believe will continue to get stronger as we work to help alleviate China's critical water resource crisis.
"We are currently pursuing smaller river basin flood monitoring and forecasting systems and groundwater monitoring systems across the country. In 2009, we received awards for five projects for smaller river basin flood and forecasting systems.
"Through local distributors and partnerships, we are promoting our proprietary products targeting the water monitoring and dispatching systems of the Northward Rerouting of Southern River engineering construction. We believe that the entire Northward Rerouting of Southern River engineering project has a market potential of approximately $43.5 million.
"In 2009, the Chinese government launched the 103 Pilot-County Mountain Torrent Forecast Plan. Accordingly, the government allocated approximately $29 million to fund these projects to deal with frequent mountain torrents devastation. During the year, we won the bids for 14 of these pilot projects, which was in line with our internal expectations on the bid win rate.
"At present, our wastewater treatment business is focused on Tianjin City and Hebei Province. In 2009, we won 26 contracts from this targeted wastewater treatment market, including pump stations, treatment plants, odor control systems, automatic controls and instruments.
"We are actively pursuing opportunities in the industrial wastewater and process tail gas treatment markets in the oil and gas industry and the petrochemical industry such as SINOPEC and PetroChina. Additionally, we intend to strengthen our industrial pollution control services by penetrating adjacent industry verticals such as the power generation industry.
"Currently almost all newly-designed sewage treatment plants have odorous gas containment and control requirements. Therefore, we expect an increase in the sales of our proprietary bio-filtration odor control systems.
"In order to pursue several major new projects and increase our interaction with our clients, we recently set up branch offices in Tianjin Dongli Economic Development Zone, Tianjin Baodi Economic Development Zone and Hebei Province.
"In our municipal wastewater business, we plan to expand our target market. In our current business footprint in only Hebei and Tianjin, the government is building 80 new wastewater treatment plants. We believe significant opportunities exist in 32 other provinces, municipalities and autonomous regions in China.
"We intend to expand our role from sub-contractor to prime-contractor. Since inception, we have grown from a provider of system controls to a company capable of managing the whole installation of municipal water and wastewater facilities. As we continue to grow, we will focus our business on more complex installation projects.
"We also intend to further develop our water resource management services from partial management solutions to full management of large-scale river basin projects. We believe the Chinese government's allocation of significant investment offers us huge business opportunities.
"In addition to organic growth, we are targeting selected acquisitions. In general, our markets are highly fragmented with small competitors. We will consider acquiring companies that we believe will add significant value to our business. These targets may have strong customer relationships but limited market reach, or may possess specialized skills but the businesses have not scaled up. When evaluating targets, we use a disciplined, conservative approach to ensure the acquisitions are strategic and accretive," Zhao said.
About Tri-Tech Holding Inc.
Tri-Tech designs customized sewage treatment and odor control systems for China's municipalities and its larger cities. These systems combine software, information management systems, resource planning and local and distant networking hardware that includes sensors, control systems, programmable logic controllers, supervisory control and data acquisition systems. The company also designs systems that track natural waterway levels for drought control, monitor groundwater quality and assist the government in managing its water resources. Tri-Tech owns seven software copyrights and two technological patents and employs 120 people. Please visit http://www.Tri-Tech.cn for more information.
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Tri-Tech Holding Inc. has based these forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulation, and other risks contained in reports filed by the company with the Securities and Exchange Commission. All such forward-looking statements, whether written or oral, and whether made by or on behalf of the company, are expressly qualified by the cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.