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Sino Clean Energy, Inc. Announces Record 2009 Financial Resu


编辑:AG88 时间:2019-01-28

XI'AN, China, April 9 /PRNewswire-Asia-FirstCall/ --

- Company exceeded revenue and net income guidance for full-year 2009

- Full-year 2009 revenue increased 222.8% to $46.0 million; adjusted net

income increased 173.9% to $11.0 million, with adjusted EPS of $0.11

- Company increased full-year 2010 revenue and net income guidance to

$105 million and $25.0 million, respectively

- Management to host Earnings Conference Call on Friday, April 9, 2010 at

10:00 a.m. EDT

Sino Clean Energy, Inc. (OTC Bulletin Board: SCLX; "Sino Clean Energy," or the "Company"), a leading producer and distributor of coal-water slurry fuel ("CWSF") in the People's Republic of China ("China"), today announced the Company's financial results for the year ended December 31, 2009, and increased revenue and net income guidance for the full-year 2010.

Full-year 2009 Results (USD)

(years ended December 31,2009) 2009 2008 CHANGE

Revenue $46.0 million $14.3 million +222.8%

Gross Profit $17.1 million $5.0 million +242.7%

GAAP Net Income (Loss) ($34.8 million) $3.4 million --

Adjusted Net Income $11.0 million* $4.0 million** +173.9%

GAAP EPS (Basic and Diluted) ($0.36) $0.03 --

Adjusted EPS (Basic and

Diluted) $0.11* $0.03** +266.7%

* Excludes non-cash charges of $12.8 million related to the changes in fair value of warrants and embedded beneficial conversion feature, $25.0 million from the stock-based cost of the Company's private placement in July 2009, and $11.1 million related to the shares of common stock placed in escrow in connection with the Company's September 2008 financing.

**Excludes a non-cash charge of $0.7 million in Q4 2008 related to the shares of common stock placed in escrow in connection with the Company's September 2008 financing.

Please note: For more information about the non-GAAP financial measures contained in this press release, please see "About Non-GAAP Financial Measures" below.

Full-year 2009 Financial Results

Revenue - Revenue for the year ended December 31, 2009 increased 222.8% to $46.0 million from $14.3 million in the year ended December 31, 2008. The significant increase is primarily attributable to increased production resulting from the addition in 2009 of a two new production lines, which led to an increase in sales from new and existing customers. The Company's annual production capacity at year-end 2009 was 650,000 metric tons following the commencement of the two new CWSF production lines, which increased annual output capacity by 550,000 metric tons. As of December 31, 2009, Sino Clean Energy had 30 customers under CWSF supply agreements totaling approximately 600,000 metric tons per year, compared to 27 customers totaling approximately 400,000 metric tons of CWSF per year at December 31, 2008.

Cost of Goods Sold - Cost of Goods Sold was $28.9 million for the year ended December 31, 2009, compared to $9.3 million for the year ended December 31, 2008, representing an increase of 212.1%. The increase in cost of goods sold is approximately proportional with the increase in sales.

Gross Profit and Gross Profit Margin -- Gross profit increased 242.7% to $17.1 million in 2009 from $5.0 million in 2008, as gross profit margin improved to 37.1% in 2009 from 35.0% in 2008 as a result of better pricing for CWSF. As a result of the new production line added in 2009, depreciation of plant and machinery for 2009 was $1.5 million as compared to $0.3 million in 2008.

Operating Expenses -- Operating expenses for the year ended December 31, 2009 were approximately $2.9 million, up 414.5% from $0.6 million for the year ended December 31, 2008. Selling expenses totaled $1.1 million for 2009, as compared to approximately $13,000 for 2008. The increase was mainly in transportation cost which amounted to $1.1 million due to the growth of the Company's business in 2009. General and administrative expenses totaled $1.8 million for 2009, as compared to $0.6 million for 2008, an increase of 223.7% due primarily to the expansion of the Company's operations.

Income from Operations -- Income from operations in 2009 increased 220.6% to $14.2 million from $4.4 million in 2008, with operating margins of 30.8% compared to 31.0% in the respective periods.

Net Income -- For the year ended December 31, 2009, the Company reported a net loss of $34.8 million compared to net income of $3.0 million for the year ended December 31, 2008, with a corresponding net loss per share of $0.36 compared to net income per share of $0.03 based on 97.9 million and 88.2 million shares, respectively. The decrease in net income is primarily attributable to incurrence of stock-based cost of the Company's private placement in July 2009, changes in the fair value and extinguishment of certain derivative liabilities, and expenses related to the shares of common stock held by the Company's Chief Executive Officer and placed in escrow in connection with the Company's September 2008 financing transaction. Results for 2008 included expenses related to the shares of common stock held by the Company's Chief Executive Officer and placed in escrow in connection with the Company's September 2008 financing transaction. Excluding these items, adjusted net income for 2009 and 2008 would have been $11.0 million and $4.0 million, respectively, with corresponding adjusted net income per share of $0.11 and $0.03 based on 97.9 million and 88.2 million shares, respectively. (See "Reconciliation of GAAP Net Income (Loss) to Adjusted Net Income" table below.)

"We are pleased to have exceeded both revenue and net income guidance for 2009, and expect sales of our coal water slurry fuel to continue to increase during 2010 due to our increased production capacity, expanded customer base, current order rates and growing demand for clean energy in China," stated Baowen Ren, Chairman of Sino Clean Energy. "Our total production capacity today is 850,000 metric tons following the recent addition of 200,000 metric tons at our existing facility located in Tongchuan, Shaanxi province. Currently, we have 35 customers under CWSF supply agreements totaling approximately 800,000 metric tons per year. We are negotiating with 15 potential customers for supply agreements which could represent up to 500,000 metric tons of CWSF and plan to expand our production capacity to 1,050,000 metric tons by the end of 2010. The CWSF market continues to expand due to growing customer demand for clean and efficient sources of energy and the government's mandate for reduced emissions through improved utilization of coal. We believe that CWSF is an ideal alternative for addressing China's pollution problem while meeting its growing energy requirements. CWSF increases burning efficiency and reduces air pollution, coal consumption and coal material costs for end users while generating attractive gross profit margins for energy producers. As a result, we believe we are well-positioned to further gain market share as a leading producer of CWSF in China."

Liquidity and Capital Resources

Cash and cash equivalents were $18.3 million at December 31, 2009 compared to $3.9 million at December 31, 2008. For 2009, the Company generated $9.7 million in net cash flow from operations, compared to $4.7 million in 2008. The Company had working capital of $7.7 million at December 31, 2009 and a current ratio of .37-to-1. Inventories were $0.9 million and the accounts receivable balance was $3.7 million at December 31, 2009, compared to approximately $45,000 and $0.9 million respectively at December 31, 2008. The annualized days sales outstanding for the fourth quarter of 2009 were 31 days.

Financial Outlook for 2010

For the year ending December 31, 2010, management increased guidance and now expects revenues of at least $105 million in revenues and adjusted net income of at least $25 million, representing an increase of approximately 128.3% and 127.3% compared to 2009 revenues and adjusted net income, respectively. This guidance assumes total sales volume of 850,000 metric tons of CWSF in 2010. The Company expects to end 2010 with 1,050,000 metric tons of total CWSF production capacity.

Government Support in China

China is the world's largest producer and consumer of coal and is also one of the world's leading emitters of greenhouse gas (GHG). Approximately 70% of China's energy comes from coal, the greatest part of which is burned in older, inefficient power plants that are primary contributors to GHG. To address environmental concerns from the use of coal, the Chinese central government formulated the "9th Five-Year Plan for Clean Coal Technology in China and a Development Program to 2010" in 1995, which emphasized the need to strengthen research and development of clean coal technologies and to promote commercialization of proven clean coal technologies including CWSF. The China State Environmental Protection Agency (SEPA) states that over $190 billion will be spent by industrial companies for environmental cleanup as part of the 11th Five Year Plan (2006-2010).

Conference Call

The conference call will take place at 10:00 a.m. ET on Friday, April 9, 2010. Interested participants should call 1-877-941-4774 when calling within the United States or 1-480-629-9760 when calling internationally.

A playback will be available through April 16, 2010. To listen, please call 1-800-406-7325 within the United States or 1-303-590-3030 when calling internationally. Utilize the pass code 4281232 for the replay.

This call is being webcast by ViaVid Broadcasting and can be accessed by clicking on this link http://viavid.net/dce.aspx?sid=0000731E, or visiting ViaVid's website at http://www.viavid.net, where the webcast can be accessed through April 16, 2010.

About Sino Clean Energy

Sino Clean Energy is a U.S. publicly traded company and a China-based producer and distributor of coal-water slurry fuel ("CWSF"). With locations in Shaanxi Province and Liaoning Province, Sino Clean Energy is the largest CWSF producer in Northwestern China with 850,000 metric tons of total annual capacity. For more information about Sino Clean Energy, please visit http://www.sinocei.net/ .

About Non-GAAP Financial Measures

The following table excludes from net income (loss) certain items related to the cost of escrow shares put in escrow by the Company's chairman as a guarantee on the issuance of Sino Clean Energy's convertible notes, the cost related to the issuance of the Company's private placement (primarily related to the fair value of the derivatives created upon issuance related to the conversion feature of the notes and the fair value of the warrants issued to the convertible note holders), the change in fair value of these derivatives during the period as well as the extinguishment of a portion of the derivative upon conversion of the notes, and amortization of the valuation discount recorded as interest expense relating to these convertible notes. The Company believes that these non-GAAP financial measures are useful to investors because they exclude non-cash charges that management excludes when it internally evaluates the performance of the Company's business and makes operating decisions, including internal budgeting, and performance measurement, because these measures provide a consistent method of comparison to historical periods. Moreover, management believes these non-GAAP measures reflect the essential operating activities of Sino Clean Energy. Accordingly, management excludes these items when making operational decisions. The Company believes that providing to its investors the non-GAAP measures that management uses is useful to investors for a number of reasons. The non-GAAP measures provide a consistent basis for investors to understand the Company's financial performance in comparison to historical periods. In addition, it allows investors to evaluate the Company's performance using the same methodology and information as that used by our management. Non-GAAP measures are subject to inherent limitations because they do not include all of the expenses included under GAAP and because they involve the exercise of judgment of which charges are excluded from the non-GAAP financial measure. However, our management compensates for these limitations by providing the relevant disclosure of the items excluded.

Reconciliation of GAAP Net Income (Loss) to Adjusted Net Income

2009 2008

GAAP Net (loss) income $(34,736,689) $3,351,454

Non-GAAP adjustment

Expense related to escrow shares 11,125,071 676,466

Extinguishment of derivative liability (7,046,556) 0

Change in fair value of warrants and embedded 12,770,113 0

conversion feature

Cost of private placement 24,977,114 0

Amortization of notes discount 3,942,185 0

Adjusted Net income $11,031,238 $4,027,920

Safe Harbor Statement

This press release contains certain "forward-looking statements," as defined in the United States Private Securities Litigation Reform Act of 1995, that involve a number of risks and uncertainties. There can be no assurance that such statements will prove to be accurate and the actual results and future events could differ materially from management's current expectations. Such factors include, but are not limited to uncertainties in product demand, the impact of competitive products and pricing, our ability to obtain regulatory approvals, changing economic conditions around the world, release and sales of new products and other factors detailed from time to time in the Company's filings with the United States Securities and Exchange Commission and other regulatory authorities. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

For further information please contact:

Company:

Ming Lee

Assistant to the Chairman

Tel: +86-29-8406-7376 (China)

Email: marin_lm@163.com

Investor Relations:

HC International, Inc.

Ted Haberfield, Executive VP

Tel: +1-760-755-2716

Email: thaberfield@hcinternational.net

Web: http://www.hcinternational.net

FINANCIAL TABLES FOLLOW

Sino Clean Energy Inc. and Subsidiaries

Consolidated Balance Sheets

(Amounts expressed in U.S. Dollars)

ASSETS

Pro Forma

December 31, December 31, December 31,

2009 2009 2008

(Unaudited)

Current assets

Cash and cash equivalents $18,302,558 $18,302,558 $3,914,306

Accounts receivable, net 3,655,473 3,655,473 899,629

Inventories 892,609 892,609 45,068

Prepaid inventories 5,453,095 5,453,095 1,996,584

Prepaid expenses 259,627 259,627 86,958

Refundable advance -- -- 731,861

Government grant receivable -- -- 146,314

Other receivables 65,584 65,584 16,986

Tax recoverable 138,495 138,495 --

Prepaid land use right -

current portion 38,739 38,739 38,703

Total current assets 28,806,180 28,806,180 7,876,409

Property, plant and

equipment, net 12,557,691 12,557,691 9,394,416

Land use right - non

current portion 1,778,562 1,778,562 1,804,277

Prepayments and deposits 729,328 729,328 994,395

Goodwill 762,018 762,018 762,018

Deferred debt issuance cost -- -- 274,278

Total assets $44,633,779 $44,633,779 $21,105,793

LIABILITIES AND SHAREHOLDERS'

EQUITY (DEFICIENCY)

Current liabilities

Convertible notes net

of discount $-- $-- $383,490

Accounts payable and

accrued expenses 2,672,211 2,672,211 1,004,999

Taxes payable 1,577,249 1,577,249 305,903

Amount due to directors 73,466 73,466 465,049

Derivative liabilities 16,752,858 16,752,858 --

Total current liabilities 21,075,784 21,075,784 2,159,441

Convertible notes, net of

discount -- 1,615,025 --

Derivative liabilities -- 28,404,181 --

Total liabilities 21,075,784 51,094,990 2,159,441

Commitments and Contingencies

Shareholders' Equity Deficiency)

Preferred stock, $0.001 par

value, 50,000,000 shares

authorized, none issued and

outstanding -- -- --

Common stock, $0.001 par

value, 300,000,000 shares

authorized, 108,498,625 and

92,181,750 issued and

outstanding as of December 31,

2009 and 2008 respectively,

and 162,272,309 as of

December 31, 2009 on

proforma basis 162,273 108,499 92,182

Additional paid-in capital 35,498,381 25,335,155 12,696,549

(Accumulated deficit)

Retained earnings (16,000,781) (35,802,987) 3,686,087

Statutory reserves 1,758,553 1,758,553 348,309

Accumulated other

comprehensive income 2,139,569 2,139,569 2,123,225

Total shareholders' equity

(Deficiency) 23,557,995 (6,461,211) 18,946,352

Total liabilities and

shareholders' equity $44,633,779 $44,633,779 $21,105,793

As of December 31, 2009, the Company had outstanding $10,217,000 of

its 10% Senior Secured Convertible Notes. Subsequent to December 31,

2009, and by March 5, 2010, all the convertible notes holders

converted these notes into 53,773,684 shares of common stock of the

Company pursuant to the original Securities Purchase Agreement and

Form of Note. As of December 31, 2009, the Company had reflected a

valuation discount of $8,601,975 against these convertible notes

payable, and had recorded a derivative liability of $28,404,181

relating to the fair value of the conversion feature of these notes.

The unamortized portion of the valuation discount will be treated as

additional interest expense on the date of conversion, and the fair

value of the derivative liability will be recognized as a gain on

extinguishment on the date of conversion. The effects of the above

conversion and extinguishment of the derivative liability on the

recorded assets, liabilities and shareholders equity of the Company as

if the conversion had occurred on December 31, 2009 are reflected in

the "pro forma" column in the accompanying balance sheet.

Sino Clean Energy Inc. and Subsidiaries

Consolidated Statements of Operations and Other Comprehensive Income (Loss)

For the years ended December 31, 2009 and 2008

(Amounts expressed in U.S. Dollars)

Years Ended December 31,

2009 2008

Revenue $46,012,353 $14,253,989

Cost of goods sold (28,922,846) (9,266,832)

Gross profit 17,089,507 4,987,157

Selling expenses 1,125,884 13,128

General and administrative

expenses 1,796,032 554,766

Income from operations 14,167,591 4,419,263

Other income (expenses)

Interest expense (4,937,441) (566,752)

Expense related to escrow shares (11,125,071) (676,466)

Rental income, net of outgoings -- 78,691

Interest income 43,285 27,397

Extinguishment of derivative

liability 7,046,556 --

Change in fair value of

derivative liabilities (12,770,113) --

Cost of private placement (24,977,114) --

Sundry income (expenses) (29,293) --

Gain on disposal of property -- 33,069

Government grant -- 141,501

Total other income (expenses) (46,749,191) (962,560)

(Loss) Income before provision

for income taxes (32,581,600) 3,456,703

Provision for income taxes 2,243,088 105,249

Net (loss) income (34,824,688) 3,351,454

Net income allocated to non-

controlling interest -- (351,849)

Net (loss) income allocated to

Sino Clean Energy, Inc. (34,824,688) 2,999,605

Other comprehensive (loss) income

Foreign currency translation

adjustment 16,344 962,127

Comprehensive (loss) income $(34,808,344) $3,961,732

Weight average number of shares

-Basic 97,929,217 87,169,614

-Diluted 97,929,217 88,162,076

(Loss) Income per common share

- Basic $(0.36) $0.03

- Diluted $(0.36) $0.03

Sino-Clean Energy, Inc. and Subsidiaries

Consolidated Statements of Changes in Shareholders' Equity (Deficiency)

For the years ended December 31, 2009 and 2008

Additional

Common Stock paid-in Statutory

Share Amount capital reserve

Balance, January 1, 2008 84,681,750 $84,682 $9,153,174 $348,309

Fair value of shares

issued for acquisition

of minority interest 7,500,000 7,500 1,492,500 --

Fair value of warrant

issued for debt

issuance fee -- -- 30,759 --

Fair value of warrant

issued with

convertible notes -- -- 1,335,650 --

Expense related to

escrow shares -- -- 676,466 --

Fair value of vested

stock options -- -- 8,000 --

Foreign currency

translation gain -- -- -- --

Net income -- -- -- --

Balance, December

31, 2008 92,181,750 92,182 12,696,549 348,309

Reclassification of

warrants and conversion

feature to derivative

liability -- -- (1,335,650) --

Balance, January 1, 2009

as adjusted 92,181,750 92,182 11,360,899 348,309

Fair value of shares

issued for service 2,333,000 2,333 452,602 --

Common stock issued upon

conversion of convertible

notes and accrued

interest 13,983,875 13,984 2,396,583 --

Expense related to

escrow shares -- -- 11,125,071 --

Net loss -- -- -- 1,410,244

Foreign currency

translation gain -- -- -- --

Balance, December

31, 2009 108,498,625 $108,499 $25,335,155 $1,758,553

Sino-Clean Energy, Inc. and Subsidiaries

Consolidated Statements of Changes in Shareholders' Equity (Deficiency)

For the years ended December 31, 2009 and 2008

Accumulated

other

Retained comprehensive

earnings income Total

Balance, January 1, 2008 $686,482 $1,161,098 $11,433,745

Fair value of shares issued

for acquisition of

minority interest -- -- 1,500,000

Fair value of warrant issued

for debt issuance fee -- -- 30,759

Fair value of warrant issued

with convertible notes -- -- 1,335,650

Expense related to escrow shares -- -- 676,466

Fair value of vested stock options -- -- 8,000

Foreign currency translation gain -- 962,127 962,127

Net income 2,999,605 -- 2,999,605

Balance, December 31, 2008 3,686,087 2,123,225 18,946,352

Reclassification of warrants

and conversion feature to

derivative liability (3,254,142) -- (4,589,792)

Balance, January 1, 2009

as adjusted 431,945 2,123,225 14,356,560

Fair value of shares issued

for service -- -- 454,935

Common stock issued upon

conversion of convertible

notes and accrued interest -- -- 2,410,567

Expense related to escrow shares -- -- 11,125,071

Net loss (36,234,932) -- (34,824,688)

Foreign currency

translation gain -- 16,344 16,344

Balance, December 31, 2009 $(35,802,987) $2,139,569 $(6,461,211)

Sino Clean Energy Inc. and Subsidiaries

Consolidated Statements of Cash Flows

For the years ended December 31, 2009 and 2008

(Amounts expressed in U.S. Dollars)

Year ended December 31,

2009 2008

Cash flows from operating activities:

Net income (loss) $(34,824,688) $3,351,454

Adjustments to reconcile net income (loss)

to cash provided by operating activities:

Depreciation & amortization 1,530,238 253,826

Amortization of discount on

convertible notes 3,942,185 383,490

Amortization of deferred debt

issuance costs 274,278 114,234

Fair value of vested stock options -- 8,000

Gain on sale of leasehold -- (33,069)

Fair value of shares issued for services 454,935 --

Expense related to escrow shares 11,125,071 676,466

Cost of private placement 24,977,114 --

Change in fair value of

derivative liabilities 12,770,113

Extinguishment of derivative liability (7,046,556) --

Change in operating assets and liabilities:

Accounts receivable (2,755,844) 233,367

Receipt of government grants 146,314 264,686

Inventories (847,541) (1,282)

Prepaid inventories (3,456,511) --

Prepaid expenses (172,669) (1,059,963)

Refundable advance 731,861 --

Other receivables (48,598) 154,861

Tax recoverable (138,495) --

Accounts payable and accrued expenses 1,759,335 27,822

Taxes payable 1,271,346 161,226

Assets on discontinued operation

Other receivables -- 141,795

Net cash provided by operating activities 9,691,888 4,676,913

Cash flows from investing activities:

Prepayments and deposits 265,067 --

Proceeds from sale of leasehold -- 1,024,465

Purchase of property, plant and equipment (4,654,910) (6,225,019)

Net cash used in investing activities (4,389,843) (5,200,554)

Cash flows from financing activities:

Repayment of amount due to a director (391,583) --

Repayment from a director -- 370,478

Advance from a director -- 70,000

Deferred debt issuance costs -- (357,753)

Proceeds from issuance of convertible notes 9,874,370 1,335,650

Payment of convertible notes (400,000) --

Net cash provided by financing activities 9,082,787 1,418,375

Effect of foreign currency translation 3,420 187,440

Net increase (decrease) in cash

and cash equivalents 14,388,252 1,082,174

Cash and cash equivalents,

beginning of year 3,914,306 2,832,132

Cash and cash equivalents, end of year $18,302,558 $3,914,306

Supplemental Disclosure Information

Interest paid $640,406 $--

Income taxes paid 1,161,346 24,760

Supplemental non-cash investing

and financing activities

Conversion of convertible notes and

accrued interest into common stock 2,410,567 --

Allocation of derivative liability

to note discount 11,592,000 --

Cumulative effect of change in accounting

principle upon adoption of new accounting

pronouncement on January 1,2009,

reclassification of warrants and conversion

feature to derivative liability 4,589,792 --

Fair value of warrants and beneficial

conversion feature related to issuance

of convertible notes -- 1,335,650

Fair value of warrant issued for

debt issuance fee -- 30,759

Issuance of common stock for

minority interest -- 1,500,000

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