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      Tri-Tech Holding Q1 2011 Revenue Up 314% to $17.6M Net Income Up 108% to $1.7M EPS $0.21



      Beijing, China – May 13, 2011 – Tri-Tech Holding Inc. (Nasdaq: TRIT), a premier Chinese company that provides leading turn-key solutions in China for the water resources, water and wastewater treatment, industrial safety and pollution control markets, announced today that revenue for the first fiscal quarter ended March 31, 2011 increased 314% to $17.6 million from $4.2 million in Q1 2010. Net income for the quarter was $1.7 million or a 108% increase over net income of $0.8 million in Q1 2010. Diluted EPS was $0.21 per diluted share compared to that of $0.15 in Q1 2010.

      Additional First Quarter 2011 Highlights
      • Revenue from Water/Wastewater Treatment and Municipal Infrastructure operations increased 404% to $12.9 million
      • Revenue from Water Resource Management Systems and Engineering Services increased 1.5% to $1.6 million
      • Revenue from Industrial Pollution Control and Safety increased 4,860% to $3 million from $0.06 million in Q1 of 2010 
      • Gross profit increased 184% to $5 million from $1.8 million in Q1 2010
      • Gross margin decreased to 29% compared to 42% for Q1 2010, reflecting a decline in the proportion of revenue attributable to higher margin software sales
      • Income from operations increased 213% to $2.6 million from $0.8 million in Q1 2010
      • Weighted average number of diluted shares outstanding was 8,155,222 for the quarter ended March 31, 2011, compared to 5,559,260 for the quarter ended March 31, 2010, due to completion of secondary offering, additional issuance of ordinary shares from the acquisition, warrants and stock options exercised.

      Key First Quarter 2011 Events
      • Awarded a $2.17 million contract with Shaanxi Yanchang Petroleum to construct the Yan’an Emergency Command and Control Center
      • Awarded water monitoring and forecasting contracts collectively valued at $1.26 million in Inner Mongolia, Hunan, Sichuan and Beijing 
      • Completed handover of multiple projects for municipal wastewater, solid waste treatment, tail gas control, and flood monitoring and control 
      • Presented at four conferences in the U.S. to maintain and foster open communications with investors


      First Quarter 2011 Financial Performance

      Revenue was $17.6 million in the quarter ended March 31, 2011, an increase of $13.3 million, or 314%, compared to revenue of $4.2 million in the same period of 2010. This substantial increase was primarily attributable to sizable revenue recognition of implementation of ongoing major projects, particularly the Ordos water plant construction project, recording an increase of $12.3 million for 25% completion in Q1 2011, in total, the Ordos project has been reached 45% completion by the end of Q1 2011. Revenue from Water/Wastewater Treatment and Municipal Infrastructure continued to be very strong, constituting 74% of total revenue, or $12.9 million, an increase of $10.3 million or 404%, compared to $2.6 million in Q1 2010. Revenue from Water Resources Management Systems and Engineering Services saw a slight 1.5% increase to $1.64 million from $1.62 million in Q1 2010, representing 9% of total revenue. Revenue from Industrial Pollution Control and Safety was $3 million, an increase of 4,860% from the same period in 2010, representing 17% of the total revenue for Q12011.

      Net Income 
      Net income attributable to shareholders of the Company was $1.7 million, an increase of $0.9 million, or 108%, from $0.8 million in the same period of 2010.

      Diluted EPS was $0.21, based on net income of $1.7 million and weighted average number of diluted shares outstanding of 8,155,222 for the quarter ended March 31, 2011, compared to $0.15 in the first quarter of 2010, based on net income of $0.8 million and weighted average number of diluted shares outstanding of 5,559,260.

      Gross Profit 
      Gross profit increased 184% to $5.0 million for the quarter, compared to $1.8 million in Q1 2010. This increase reflected stable revenue growth in sales of system integration and hardware products.

      Gross Margin 
      Gross margin for the quarter decreased to 29% compared to 42% for the same quarter in 2010. The major reason is that most of the revenue for Q1 2011 was generated by the Ordos project, which, given the scale of the project, has a relatively low gross margin. On the other hand, in Q1 2010, the Xinle project, which had fewer competitive bids, had a high gross margin. In addition, the Company has been conservative on its estimates of Ordos project costs. Higher accrued project costs also contributed to the lower gross margin. Normally, the larger the project, the lower the gross margin will be for the project.

      Operating Income
      Operating income increased 213% to $2.6 million from $0.8 million in Q1 2010. Operating margin was 14.8%, compared to 19.5% in Q1 2010. Operating expenses for the quarter were $2.4 million, an increase of $1.5 million, or 158%, compared to operating expenses of $0.9 million in the same period of 2010. The increase in operating expenses mainly reflected a 179% increase in general and administrative expenses, which grew from $0.7 million to $2.1 million in Q1 2011. 

      Liquidity and Capital Resources
      As of March 31, 2011, cash and cash equivalents were $22.8 million, including U.S. dollar deposits of $7.9 million and RMB deposits of $14.9 million. As of March 31, 2011, working capital was $28.2 million.

      Order Backlog and Pipeline
      As of March 31, 2011, the Company had a total order backlog of $48.3 million, expected to be collected by the end of 2011. This included $40.4 million in Municipal Water and Wastewater Services, $1.0 million in Water Resource Services and $6.9 million in Industrial Sector Services.

      The Company is currently tracking potential projects with a total expected value of $100.6 million, of which approximately $63 million is Wastewater Treatment and Municipal Infrastructure, $26.2 million is Water Resource Management and Engineering Services Segment and $11.4 million is Industrial Pollution Control and Safety.  The Company has not been awarded any of these projects, and there are no guarantees that it will be selected for any of such projects. 

      Year 2011 Guidance Reaffirmation
      The Company reaffirms the previously announced guidance for the year 2011.  Revenue will reach the range of $69 million to $80 million. Net income will likely be between $11.0 million and $12.8 million.  These are the Company’s targets, not predictions of actual performance. The foregoing statements regarding targets are forward-looking and actual results may differ materially.

      Management Comment
      Chief Executive Officer Warren Zhao said, "Tri-Tech’s solid first quarter results reflected expected growth in our three lines of businesses, Water/Wastewater Treatment and Municipal Infrastructure, Water Resource Management and Engineering Services and Industrial Pollution Control and Safety. These results provide us with an excellent start to 2011 and bode well for our future. We believe Tri-Tech will continue to maintain rapid growth by providing reliable and workable solutions to complex environmental challenges faced by China’s national and local governments and enterprises and addressed in the 12th Five-Year Plan. Our businesses are poised to directly benefit from the increased investment in water and environmental protection infrastructure as China focuses on the sustainability of its economic growth.

      Water/Wastewater Treatment and Municipal Infrastructure
      “Municipal wastewater treatment infrastructure will be a key Chinese investment priority in the next five years. Increasing demands for water reuse and technology improvement in large cities are driving demand for advanced wastewater treatment technologies.  Currently, a majority of towns and villages in China still have no access to any wastewater treatment infrastructure and regional disparity of wastewater treatment infrastructure development is quite evident. Treatment capacity of some existing wastewater treatment plants is no greater than 30% due to the use of outdated technologies. New requirements and standards for environment management and pollution control will create more technology-oriented business and new markets, driving business opportunities for municipal and industrial wastewater treatment plant upgrades and retrofits.

      “We are expanding our geographical reach to all of China including Hubei, Shaanxi, Sichuan and Heilongjiang Provinces and the Inner Mongolia and Xinjiang Autonomous Regions. Our recent expansion has taken us to Anhui, Shanxi and Shandong Provinces.

      “As the deadline for full compliance of new drinking water quality standards approaches, we are more involved in the application of advanced technologies such as membrane technology, disinfection and online monitoring to upgrade, retrofit or replace existing treatment facilities to meet enhanced government requirements.

      “We are expanding our capabilities from sub-contracting to prime contracting services and have grown from a provider of system integration and hardware to a company capable of engineering, procurement and construction of municipal water, wastewater and solid waste disposal facilities. As the Ordos project progresses, we are gaining experience in the build-and-transfer (“BT”) project process. At the same time, we are positioning ourselves to explore possibilities of using the BT business model to help cities with new strategic and financing paradigms and to implement value-added solutions for government agencies. We also intend to focus on larger projects and higher quality projects.

      Industrial Pollution Control and Safety 
      “We are strengthening our industrial pollution services for the oil and petrochemical industry. During the quarter, we established a new business unit in BSST to focus on industrial water and wastewater treatment in the oil and petrochemical industry.

      Water Resource Management and Engineering Services
      “The Ministry of Finance has budgeted RMB 128 billion for water conservancy projects in 2011 and over RMB 200 billion will be spent when including local projects.. 
      “We are gradually transforming from a partial solution provider to a comprehensive total solution provider for larger scale river basin projects. The Chinese government’s decision to initiate new programs and allocate significant investment for their implementation offers us significant business opportunities. Our goal is to ensure that it keeps pace with the development and automation in the water sector.

      Research and development 
      “We currently have three major on-going R&D projects involving software product development and product research. These development phase projects are expected to be completed in the second half of 2011.

      “We held a ground-breaking ceremony on April 29, 2011 for our new Tianjin Baoding Environment Technology Development Center, which focuses on technology development, software development, pilot testing, pre-installation/pre-assembly and manufacturing of our proprietary products. The first two phases of the R&D center are to be completed in 2014 with a total capital budget of $18 million.

      “We are also seeking cooperative opportunities with several industrial companies in the U.S. and Europe.

      “Our plans include constructing and operating one or more forward osmosis pilot units using technology licensed from Hydration Technology Innovations, LLC (“HTI”) in 2010. Tri-Tech is authorized and licensed to construct and operate pilot units in both municipal and industrial sites for wastewater treatment testing, demonstration and evaluation. The HTI personal hydration products are at the development stage and are undergoing design changes for localization.

      Potential Acquisitions 
      “Finally, we are actively seeking acquisitions that will further strengthen our water treatment business lines,” Mr. Zhao said.

      Conference Call
      Tri-Tech CEO Warren Zhao, President Phil Fan, Co-President Gavin Cheng and CFO Peter Dong will host a conference call at 9:00 AM EDT, May 16, 2011 (9:00 PM Beijing/Hong Kong Time on May 16, 2011) to review the Company's financial results and respond to questions and comments.

      To participate, call U.S. Toll Free Number +1 (877) 941-1429 approximately 10 minutes before the call. International callers, please dial +1 (480) 629-9857. The conference ID number is 4440532. A live webcast of the call will be available at Both an MP3 file one hour after the call and a transcript 48 hours after the call will be available. These will be archived for 90 days and accessible via and


      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. The company is also moving into the industrial pollution control market. Tri-Tech owns 23 software copyrights and two technological patents and employs 260 people. Please visit for more information.

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      This press release contains forward-looking statements. These statements are made under the “safe harbor” provisions of 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. Among other things, expectations about expansion into adjacent industry verticals, growth of our Industrial Pollution Control Services, and the potential development of the company’s other existing service lines contain forward-looking statements. 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.