Welcome!

News Feed Item

Cleantech Solutions International Reports Second Quarter 2014 Results

Second quarter 2014 revenues were $17.5 million

WUXI, China, Aug. 14, 2014 /PRNewswire/ -- Cleantech Solutions International, Inc. ("Cleantech Solutions" or "the Company") (NASDAQ: CLNT), a manufacturer of metal components and assemblies used in various clean technology and manufacturing industries and textile dyeing and finishing machines, today announced its financial results for the three and six months ended June 30, 2014.

"In the second quarter, we saw a modest increase in revenue from the second quarter of 2013, were profitable and generated strong operating cash flow. Sales of our low emission airflow dyeing machines, which enable textile manufacturers to meet the Chinese government's more aggressive pollution control requirements, grew at a more tempered pace this quarter as we operated near full utilization and are in the process of bringing additional capacity online. In our forged products business, we saw an uptick in sales to customers in the wind power industry, which was offset by a decline in sales to customers in other industries," said Mr. Jianhua Wu, Chairman and CEO of Cleantech Solutions.

Second Quarter 2014 Results

Revenue for the second quarter of 2014 increased by 1.8% to $17.5 million, compared to $17.2 million for the same period of 2013.

The Company experienced continued revenue growth from sales of dyeing and finishing equipment, somewhat offset by lower sales of forged products, resulting in a modest decline from revenues in the first quarter of 2014:

  • Revenue from the dyeing and finishing equipment segment increased by 7.3% to $9.7 million, compared to $9.0 million for the second quarter of 2013. The Company continues to experience strong demand for its low emission airflow dyeing machines that enable manufacturers to meet China's increasingly strict environmental standards.
  • Revenue from the sale of forged rolled rings to other industries fell by 9.6% to $4.6 million, compared with $5.1 million for the comparable period of the prior year.
  • Revenue from the sale of forged rolled rings for the wind power industry rose by 4.5% to $3.2 million, compared to $3.1 million for the comparable period last year.

Gross profit for the second quarter of 2014 increased by 2.8% to $4.1 million, compared to $4.0 million for the same period in 2013. Gross margin increased to 23.3% during the second quarter of 2014 compared to 23.1% for the same period a year ago. The increase in gross margin for the second quarter was primarily attributable to (i) increased operational and cost efficiencies in the forged rolled rings and related products segment and (ii) a small decline in gross margin in the dyeing and finishing equipment segment, reflecting the introduction of a new model of machine and its initial production at relatively low volumes.

Operating expenses rose by 21.9% to $1.1 million, compared to $0.9 million in the comparable period last year. The increase was primarily due to higher selling, general and administrative expenses. Selling, general and administrative expenses in the year ago period benefited from a $0.3 million recovery of an account previously written off.

Operating income was $3.0 million, down from $3.1 million in the same period of 2013. Operating margin was 17.3% compared to 18.1% in the second quarter last year.

EBITDA, a non-GAAP measurement, which adds back to net income interest expense, income tax, depreciation and amortization, was $5.2 million, up from $4.8 million in the second quarter last year. The calculation of EBITDA is shown in a table following the financial statements.

Net income for the second quarter of 2014 was $2.2 million, or $0.61 per basic and diluted share, compared to $2.3 million, or $0.79 per basic and diluted share, in the second quarter of 2013.

Six Month Results

For the six months ended June 30, 2014, revenue increased by 13.1% to $35.2 million from $31.1 million in the first half of 2013. Gross profit increased by 17.7% to $8.4 million, compared to $7.1 million last year. Gross margin for first half of 2014 was 23.8%, compared to 22.8% in the first half of 2013. Operating income increased 16.9% to $6.3 million from $5.4 million in the first half of 2013. EBITDA, a non-GAAP measurement, was $10.5 million, compared to $8.7 million in the first half of 2013. Net income was $4.6 million, up from $3.9 million in the first half of 2013. Net income per basic and diluted share was $1.29 compared to $1.35 in the first half of 2013.

Financial Condition

As of June 30, 2014, Cleantech Solutions held cash and cash equivalents of $1.8 million compared with $1.1 million at December 31, 2013. Accounts receivable were $13.7 million and total current assets were $25.1 million as of June 30, 2014. The Company had $3.1 million in short-term bank loans payable at June 30, 2014, relatively unchanged from December 31, 2013. Stockholders' equity was $97.4 million at June 30, 2014.

In the first half of 2014, the Company generated $5.3 million in cash flow from operations. During the first half of 2014, the Company spent approximately $6.3 million in capital expenditures to expand production capabilities and purchase equipment for its dyeing and finishing equipment segment.

Recent Events

On June 2, 2014, the Company's Chairman and CEO, Mr. Jianhua Wu, and his wife, Ms. Lihua Tang, purchased a total of 290,984 shares of common stock at a purchase price of $5.58 pursuant to a stock purchase agreement dated June 2, 2014 for the purchase price of RMB10,000,000 (approximately $1,624,000). The proceeds were used to fund the expansion of the Company's dyeing machine business in anticipation of increased business from that business line.

Business Outlook

"We believe our dyeing equipment business will continue to perform well as textile manufacturers upgrade to lower emission machinery in response to new environmental directives from the Chinese government, although we may see some near-term fluctuation in demand as the industry consolidates and the growth rate has declined in second quarter of 2014. Order flow for our low emission airflow dyeing machines remains strong and we are optimistic about our new garment washing machine for denim. We are looking to diversify into new areas for our forged rolled rings and related products. We are currently developing components for industrial blowers for the power equipment industry which we believe can hold strong growth potential, although we have not generated any revenue from these products to date," said Mr. Wu.

Conference Call

Cleantech Solutions will conduct a conference call at 9:00 a.m. Eastern Time on Thursday, August 14, 2014 to discuss financial results for the second quarter ended June 30, 2014.

To participate in the live conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: (866) 250-8117. International callers should dial (412) 317-6011 and enter pin code 86765634.

If you are unable to participate in the conference call at this time, a replay will be available starting an hour after the conference call through 10:00 A.M. ET August 22, 2014. To access the replay, dial (855) 452-5696 and enter pin code 85394589.

Use of Non-GAAP Financial Measures

The Company has included in this press release certain non-GAAP financial measures. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the performance of the Company and when planning and forecasting future periods. Readers are cautioned not to view non-GAAP financial measures on a stand-alone basis or as a substitute for GAAP measures, or as being comparable to results reported or forecasted by other companies, and should refer to the reconciliation of GAAP measures with non-GAAP measures also included herein.

About Cleantech Solutions International

Cleantech Solutions is a manufacturer of metal components and assemblies, primarily used in clean technology and other industries. The Company supplies forging products, fabricated products and machining services to a range of clean technology customers and supplies dyeing and finishing equipment to the textile industry. The Company's website is www.cleantechsolutionsinternational.com. Any information on the Company's website or any other website is not a part of this press release.

Safe Harbor Statement

This release contains certain "forward-looking statements" relating to the business of the Company and its subsidiary and affiliated companies. These forward looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions. Such forward looking statements involve known and unknown risks and uncertainties that may cause actual results to be materially different from those described herein and in the conference call referred to in this press release as anticipated, believed, estimated or expected. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website, including factors described in "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Form 10-K for the year ended December 31, 2013 and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Form 10-Q for the quarter ended June 30, 2014. All forward-looking statements attributable to the Company or to persons acting on its behalf are expressly qualified in their entirety by these factors other than as required under the securities laws. The Company does not assume a duty to update these forward-looking statements.

Company Contacts:

Cleantech Solutions International, Inc.
Adam Wasserman, CFO
E-mail: [email protected]
Web: www.cleantechsolutionsinternational.com

Compass Investor Relations
Elaine Ketchmere, CFA
Email: [email protected]
+1-310-528-3031
Web: www.compassinvestorrelations.com

- Financial Tables Follow-

CLEANTECH SOLUTIONS INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
INCOME


 For the Three Months Ended


For the Six Months Ended


 June 30, 


June 30,


2014


2013


2014


2013









REVENUES

$17,528,018


$17,214,134


$35,163,289


$31,098,833

COST OF REVENUES

13,443,581


13,241,114


26,805,566


23,995,723









GROSS PROFIT

4,084,437


3,973,020


8,357,723


7,103,110









OPERATING EXPENSES:








     Depreciation

118,410


244,673


228,269


351,887

     Selling, general and administrative

935,715


620,151


1,823,185


1,358,151

        Total Operating Expenses

1,054,125


864,824


2,051,454


1,710,038

INCOME FROM OPERATIONS

3,030,312


3,108,196


6,306,269


5,393,072









OTHER INCOME (EXPENSE):








     Interest income

3,905


688


9,145


1,169

     Interest expense

(60,099)


(64,526)


(117,826)


(169,653)

     Grant income

199


-


32,086


-

     Foreign currency gain (loss)

1,270


(5,979)


1,270


(5,979)

     Other income

33,866


8,152


33,866


37,082









        Total Other Income (Expense), net

(20,859)


(61,665)


(41,459)


(137,381)









INCOME BEFORE INCOME TAXES

3,009,453


3,046,531


6,264,810


5,255,691









INCOME TAXES

791,549


723,978


1,650,548


1,310,538









NET INCOME

$2,217,904


$2,322,553


$4,614,262


$3,945,153









COMPREHENSIVE INCOME:








      NET INCOME

$2,217,904


$2,322,553


$4,614,262


$3,945,153









      OTHER COMPREHENSIVE INCOME (LOSS):






           Unrealized foreign currency

             translation gain (loss)

106,313


1,217,027


(675,475)


1,645,467









      COMPREHENSIVE INCOME

$2,324,217


$3,539,580


$3,938,787


$5,590,620









NET INCOME PER COMMON SHARE:







    Basic

$0.61


$0.79


$1.29


$1.35

    Diluted

$0.61


$0.79


$1.29


$1.35









WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:





    Basic

3,632,222


2,955,786


3,568,219


2,925,355

    Diluted

3,632,222


2,955,786


3,568,219


2,925,355

 

CLEANTECH SOLUTIONS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS


June 30,
2014

December 31,
2013


(Unaudited)



ASSETS








CURRENT ASSETS:




    Cash and cash equivalents

$1,766,655


$1,114,873

    Restricted cash

357,421


687,353

    Notes receivable

100,711


703,718

    Accounts receivable, net of allowance for doubtful accounts

13,663,007


15,234,863

    Inventories, net of reserve for obsolete inventories

7,915,013


4,733,558

    Advances to suppliers

675,372


695,254

    Prepaid VAT on purchases

112,231


489,302

    Deferred tax assets - current portion

251,331


253,173

    Prepaid expenses and other

260,347


74,030





        Total Current Assets

25,102,088


23,986,124





PROPERTY AND EQUIPMENT, net

72,827,658


70,595,138





OTHER ASSETS:




   Deferred tax assets - net of current portion

1,213,320


1,222,216

   Equipment held for operating lease, net

4,549,061


4,751,206

   Land use rights, net

3,710,476


3,786,051





        Total Assets

$107,402,603


$104,340,735





LIABILITIES AND STOCKHOLDERS' EQUITY








CURRENT LIABILITIES:




    Short-term bank loans

$3,086,821


$3,109,453

    Bank acceptance notes payable

357,421


687,353

    Accounts payable

5,031,492


4,961,555

    Accrued expenses

513,698


899,816

    Advances from customers

386,990


1,455,740

    VAT and service taxes payable

164,155


126,349

    Income taxes payable

460,467


1,623,603





        Total Current Liabilities

10,001,044


12,863,869





        Total Liabilities

10,001,044


12,863,869





STOCKHOLDERS' EQUITY:




    Preferred stock ($0.001 par value; 10,000,000 shares authorized;

        0 share issued and outstanding at June 30, 2014 and

        December 31, 2013)

-


-

    Common stock ($0.001 par value; 50,000,000 shares authorized;

       3,859,986 and 3,503,502 shares issued and outstanding at

       June 30, 2014 and December 31, 2013, respectively)

3,860


3,503

    Additional paid-in capital

33,517,857


31,532,308

    Retained earnings

50,454,995


46,322,329

    Statutory reserve

3,226,316


2,744,720

    Accumulated other comprehensive gain - foreign currency
translation adjustment

10,198,531


10,874,006





        Total Stockholders' Equity

97,401,559


91,476,866





        Total Liabilities and Stockholders' Equity

$107,402,603


$104,340,735

 

CLEANTECH SOLUTIONS INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS






For the Six Months Ended






June 30,






2014


2013

CASH FLOWS FROM OPERATING ACTIVITIES:




Net income


$4,614,262


$3,945,153


Adjustments to reconcile net income from operations to net cash



provided by operating activities:







Depreciation


4,084,790


3,221,159



Amortization of land use rights


48,141


47,307



Decrease in allowance for doubtful accounts


-


(312,411)



Stock-based compensation expense


181,108


132,956


Changes in operating assets and liabilities:







Notes receivable


599,395


(264,582)



Accounts receivable


1,464,659


555,644



Inventories


(3,224,025)


518,191



Prepaid value-added taxes on purchases


374,452


(192,840)



Prepaid and other current assets


(5,553)


(60,237)



Advances to suppliers


14,859


(473,782)



Accounts payable


(283,743)


(1,740,644)



Accrued expenses


(381,669)


(409,484)



VAT and service taxes payable


38,824


(34,233)



Income taxes payable


(1,154,225)


(63,582)



Advances from customers


(1,060,826)


300,212









NET CASH PROVIDED BY OPERATING ACTIVITIES

5,310,449


5,168,827









CASH FLOWS FROM INVESTING ACTIVITIES:





Purchase of property and equipment


(6,280,015)


(5,824,104)









NET CASH USED IN INVESTING ACTIVITIES


(6,280,015)


(5,824,104)









CASH FLOWS FROM FINANCING ACTIVITIES:





Principal payments on capital lease


-


(130,633)



Proceeds from bank loans


2,280,242


3,041,002



Repayments of bank loans


(2,280,242)


(2,240,739)



Decrease (increase) in restricted cash


325,749


(1,312,433)



(Decrease) increase in bank acceptance notes payable

(325,749)


1,312,433



Net proceeds from sale of common stock


1,623,691


1,767,546









NET CASH PROVIDED BY FINANCING ACTIVITIES

1,623,691


2,437,176









EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS  

(2,343)


27,354









NET INCREASE IN CASH AND CASH EQUIVALENTS

651,782


1,809,253









CASH AND CASH EQUIVALENTS - beginning of period

1,114,873


1,445,728









CASH AND CASH EQUIVALENTS - end of period

$1,766,655


$3,254,981









SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:


Cash paid for:







Interest


$117,826


$169,653



Income taxes


$2,804,773


$1,374,120









NON-CASH INVESTING AND FINANCING ACTIVITIES:


Property and equipment acquired on credit as payable

$390,060


$840,277


Common stock issued for future service


$181,107


$            -

 

Reconciliation of Net Income to EBITDA

(Amounts expressed in US$)


For the Three Months ended
June 30,


For the Six Months ended
June 30,


2014

2013


2014

2013

Net income

$2,217,904

$2,322,553


$4,614,262

$3,945,153

Add: income tax

791,549

723,978


1,650,548

1,310,538

Add: interest expense

60,099

64,526


117,826

169,653

Add: depreciation and amortization  

2,143,492

1,675,404


4,132,931

3,268,466

EBITDA

$5,213,044

$4,786,461


$10,515,567

$8,693,810

SOURCE Cleantech Solutions International, Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
New competitors, disruptive technologies, and growing expectations are pushing every business to both adopt and deliver new digital services. This ‘Digital Transformation’ demands rapid delivery and continuous iteration of new competitive services via multiple channels, which in turn demands new service delivery techniques – including DevOps. In this power panel at @DevOpsSummit 20th Cloud Expo, moderated by DevOps Conference Co-Chair Andi Mann, panelists will examine how DevOps helps to meet th...
SYS-CON Events announced today that Hitachi, the leading provider the Internet of Things and Digital Transformation, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Hitachi Data Systems, a wholly owned subsidiary of Hitachi, Ltd., offers an integrated portfolio of services and solutions that enable digital transformation through enhanced data management, governance, mobility and analytics. We help globa...
DevOps is being widely accepted (if not fully adopted) as essential in enterprise IT. But as Enterprise DevOps gains maturity, expands scope, and increases velocity, the need for data-driven decisions across teams becomes more acute. DevOps teams in any modern business must wrangle the ‘digital exhaust’ from the delivery toolchain, "pervasive" and "cognitive" computing, APIs and services, mobile devices and applications, the Internet of Things, and now even blockchain.
SYS-CON Events announced today that T-Mobile will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. As America's Un-carrier, T-Mobile US, Inc., is redefining the way consumers and businesses buy wireless services through leading product and service innovation. The Company's advanced nationwide 4G LTE network delivers outstanding wireless experiences to 67.4 million customers who are unwilling to compromise on ...
@DevOpsSummit has been named the ‘Top DevOps Influencer' by iTrend. iTred processes millions of conversations, tweets, interactions, news articles, press releases, blog posts - and extract meaning form them and analyzes mobile and desktop software platforms used to communicate, various metadata (such as geo location), and automation tools. In overall placement, @DevOpsSummit ranked as the number one ‘DevOps Influencer' followed by @CloudExpo at third, and @MicroservicesE at 24th.
Quickly find the root cause of complex database problems slowing down your applications. Up to 88% of all application performance issues are related to the database. DPA’s unique response time analysis shows you exactly what needs fixing - in four clicks or less. Optimize performance anywhere. Database Performance Analyzer monitors on-premises, on VMware®, and in the Cloud, including Amazon® AWS and Azure™ virtual machines.
The age of Digital Disruption is evolving into the next era – Digital Cohesion, an age in which applications securely self-assemble and deliver predictive services that continuously adapt to user behavior. Information from devices, sensors and applications around us will drive services seamlessly across mobile and fixed devices/infrastructure. This evolution is happening now in software defined services and secure networking. Four key drivers – Performance, Economics, Interoperability and Trust ...
The goal of Continuous Testing is to shift testing left to find defects earlier and release software faster. This can be achieved by integrating a set of open source functional and performance testing tools in the early stages of your software delivery lifecycle. There is one process that binds all application delivery stages together into one well-orchestrated machine: Continuous Testing. Continuous Testing is the conveyor belt between the Software Factory and production stages. Artifacts are ...
All organizations that did not originate this moment have a pre-existing culture as well as legacy technology and processes that can be more or less amenable to DevOps implementation. That organizational culture is influenced by the personalities and management styles of Executive Management, the wider culture in which the organization is situated, and the personalities of key team members at all levels of the organization. This culture and entrenched interests usually throw a wrench in the work...
SYS-CON Events announced today that Juniper Networks (NYSE: JNPR), an industry leader in automated, scalable and secure networks, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Juniper Networks challenges the status quo with products, solutions and services that transform the economics of networking. The company co-innovates with customers and partners to deliver automated, scalable and secure network...
Back in February of 2017, Andrew Clay Schafer of Pivotal tweeted the following: “seriously tho, the whole software industry is stuck on deployment when we desperately need architecture and telemetry.” Intrigue in a 140 characters. For me, I hear Andrew saying, “we’re jumping to step 5 before we’ve successfully completed steps 1-4.”
Five years ago development was seen as a dead-end career, now it’s anything but – with an explosion in mobile and IoT initiatives increasing the demand for skilled engineers. But apart from having a ready supply of great coders, what constitutes true ‘DevOps Royalty’? It’ll be the ability to craft resilient architectures, supportability, security everywhere across the software lifecycle. In his keynote at @DevOpsSummit at 20th Cloud Expo, Jeffrey Scheaffer, GM and SVP, Continuous Delivery Busine...
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm.
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
The 20th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held June 6-8, 2017, at the Javits Center in New York City, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Containers, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal ...