XI'AN, CHINA -- (Marketwire) -- 08/18/09 -- Sino Clean Energy, Inc. (OTCBB: SCLX) ("Sino Clean Energy," the "Company"), a producer and distributor of coal-water mixture ("CWM") in the People's Republic of China ("PRC"), announced its financial results for the second quarter ended June 30, 2009.
Second Quarter 2009 Highlights
-- Total revenue increased 151% period-over-period to $8.1 million
-- Gross profit increased 161% period-over-period to $2.6 million
-- Gross margin increased period-over-period from 30.9% to 32.2%
-- Income from operations increased 181% period-over-period to
$2.19 million
Second Quarter 2009 Results
Total revenue for the second quarter of 2009 was $8,161,903, an increase of 151% from $3,251,224 for the same period in 2008. The number of our customers increased from 5 for the three months ended June 30, 2008, to 18 for the same period in 2009, contributing to the revenue increase period-over-period.
"Our sales and number of customers in the second quarter of 2009 as compared to the same period of 2008 are indicative of the growing market acceptance of coal-water mixture," commented Mr. Baowen Ren, Chairman and CEO of Sino Clean Energy.
Cost of sales increased 146% for the second quarter of 2009 to $5,534,929 from $2,245,700 a year ago, in line with our increase in sales. Gross profit increased 161% period-over-period, from $1,005,524 to $2,626,974, with gross margin rising to 32.2% for the second quarter of 2009 from 30.9% for the same period of 2008.
Income from operations for the second quarter of 2009 was $2,192,301, compared to $780,858 for the same period in 2008, an increase of 181%.
Net income for the second quarter of 2009 was $541,829, or $0.01 per diluted common share, as compared to $811,890, or $0.01 per diluted common share, for the same period of 2008, a decrease of 33%. GAAP results for the second quarter of 2009 include $120,166 of non-cash expense in the treatment as stock-based compensation of common shares placed in escrow by Mr. Ren in connection with our private financing in September 2008, as well as a change of $1,779,968 in the fair value of the warrants and the conversion feature of the debt instruments issued in the September 2008 financing, which are offset by non-cash income from extinguishment of derivative liabilities of $989,260. Excluding these items, net income for the second quarter of 2009 would have been $1,452,703 (See "About Non-GAAP Financial Measures" toward the end of this release).
Financial Condition
As of June 30, 2009, the Company had $9,351,117 in cash and cash equivalents, total liabilities of $7,632,787, working capital of $5,310,422, and total shareholders' equity was $17,616,347.
Recent Events
In July 2009, the Company raised approximately $11.6 million in gross proceeds from several investors in a private financing, and redeemed or converted all of the then outstanding convertible debentures that it issued in September 2008.
In August 2009, the Company added another independent director to its board of directors, Mr. Yong Li, who brings with him his financial experience and knowhow.
Business Outlook
"We anticipate 2009 to be a positive year for us," commented Mr. Ren. "Successfully raising $11.6 million in July, we believe that we have sufficient cash flow to satisfy the increasing demands for CWM from increasing numbers of customers."
About Non-GAAP Financial Measures
This press release contains non-GAAP financial measures for earnings that exclude the stock-based compensation treatment of the common shares placed in escrow by Mr. Ren in connection with the September 2008 private financing as well as the change in fair value of the warrants and the conversion feature of the convertible debentures issued in that financing. The Company believes that these non-GAAP financial measures are useful to investors because they exclude non-cash charges that our 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 such items when making operational decisions. The Company believes that providing the non-GAAP measures that management uses to its investors 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.
The following table provides the non-GAAP financial measure and the related GAAP measure and provides a reconciliation of the non-GAAP measure to the equivalent GAAP measure.
Adjusted Income
(Unaudited)
Three months ended Six months ended
June 30, June 30,
2009 2008 2009 2008
Net income-U.S. GAAP $ 541,829 $ 811,890 $ 2,107,305 $ 1,335,389
----------- ----------- ----------- -----------
Add:
Amortization of deferred
debt issuance costs 119,974 217,102
Amortization of discount
on convertible notes 423,687 753,025
Expense related to
escrow shares 120,166 240,333
Charge for change in
fair value of warrants
and conversion feature 1,779,968 1,200,990
Subtract:
Extinguishment of
derivative liability 989,260 989,260
Adjusted $ 1,996,364 $ 811,890 $ 3,529,495 $ 1,335,389
----------- ----------- ----------- -----------
About Sino Clean Energy
Sino Clean Energy is a U.S. publicly traded company and a China-based producer and distributor of coal-water mixture ("CWM"). Based in Shaanxi Province, Sino Clean Energy is the largest CWM producer in Northwestern China. For more information about Sino Clean Energy, please visit http://www.sinocei.net.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: 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.
Sino Clean Energy Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
June 30, December 31,
2009 2008
------------ ------------
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 9,351,117 $ 3,914,306
Accounts receivable, net 2,113,857 899,629
Inventories 212,584 45,068
Prepaid inventories 1,177,530 1,996,584
Prepaid expenses 25,964 86,958
Refundable advance - 731,861
Government grant receivable - 146,314
Other receivables 23,438 16,986
Land use right - current portion 38,719 38,703
------------ ------------
Total current assets 12,943,209 7,876,409
Property, plant and equipment, net of
accumulated depreciation and amortization
of $837,564 and $491,247, respectively 8,704,176 9,394,416
Land use right - non current portion 1,785,630 1,804,277
Prepayments and deposits 946,515 994,395
Goodwill 762,018 762,018
Deferred debt issuance costs, net of
accumulated amortization of $331,336
and $114,233, respectively 107,586 274,278
------------ ------------
Total assets $ 25,249,134 $ 21,105,793
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Convertible notes, net $ 736,515 $ 383,490
Accounts payable and accrued expenses 1,463,595 1,004,999
Taxes payable 561,155 305,903
Amount due to directors 70,000 465,049
Fair value of warrants and embedded
conversion feature 4,801,522 -
------------ ------------
Total current liabilities 7,632,787 2,159,441
------------ ------------
Commitments and Contingencies
Shareholders' Equity
Preferred stock, $0.001 par value, 50,000,000
shares authorized, none issued and outstanding - -
Common stock, $0.001 par value, 200,000,000
shares authorized, 97,181,416 and 92,181,750
issued and outstanding as of June 30, 2009
and December 31, 2008 respectively 97,181 92,182
Additional paid-in capital 12,499,688 12,696,549
Retained earnings 2,539,250 3,686,087
Statutory reserves 348,309 348,309
Accumulated other comprehensive income 2,131,919 2,123,225
------------ ------------
Total shareholders' equity 17,616,347 18,946,352
------------ ------------
Total liabilities and shareholders' equity $ 25,249,134 $ 21,105,793
============ ============
Sino Clean Energy, Inc. and Subsidiaries
Condensed Consolidated Statements of Income and Other Comprehensive Income
(Unaudited)
Three months ended Six months ended
June 30, June 30,
-------------------------- --------------------------
2009 2008 2009 2008
------------ ------------ ------------ ------------
Revenue $ 8,161,903 $ 3,251,224 $ 15,901,486 $ 5,736,352
Cost of goods sold (5,534,929) (2,245,700) (10,883,036) (3,930,379)
------------ ------------ ------------ ------------
Gross profit 2,626,974 1,005,524 5,018,450 1,805,973
Selling, general
and administrative
expenses 434,673 224,666 987,131 390,569
------------ ------------ ------------ ------------
Income from
operations 2,192,301 780,858 4,031,319 1,415,404
Other income
(expense)
Interest expense (596,098) - (1,081,845) -
Expense related to
escrow shares (120,166) - (240,333) -
Commission income 152,597 144,875 191,291 144,875
Rental income, net - 25,894 - 79,613
Interest income 7,285 11,511 11,271 11,511
Extinguishment of
derivative
liability 989,260 - 989,260 -
Change in fair
value of warrants
and conversion
feature (1,779,968) - (1,200,990) -
Other - (10,217) - 26,843
Gain on disposal of
property - 33,000 - 33,000
------------ ------------ ------------ ------------
Total other income
(expense) (1,347,090) 205,063 (1,331,346) 295,842
------------ ------------ ------------ ------------
Income before
income taxes and
noncontrolling
interest 845,211 985,921 2,699,973 1,711,246
Provision (benefit)
for income taxes 303,382 (21,375) 592,668 24,708
------------ ------------ ------------ ------------
Income before
noncontrolling
interest 541,829 1,007,296 2,107,305 1,686,538
Income attributable
to noncontrolling
interest - (195,406) - (351,149)
------------ ------------ ------------ ------------
Net income 541,829 811,890 2,107,305 1,335,389
Other comprehensive
income
Foreign currency
translation
adjustment 12,010 322,619 8,694 810,677
------------ ------------ ------------ ------------
Comprehensive
income $ 553,839 $ 1,134,509 $ 2,115,999 $ 2,146,066
============ ============ ============ ============
Weight average
number of shares
- Basic 95,320,611 84,764,168 93,766,296 84,723,186
============ ============ ============ ============
- Diluted 99,109,256 84,764,168 98,067,546 84,723,186
============ ============ ============ ============
Income per common
share
- Basic $ 0.01 $ 0.01 $ 0.02 $ 0.02
============ ============ ============ ============
- Diluted $ 0.01 $ 0.01 $ 0.02 $ 0.02
============ ============ ============ ============
Capital Group Communications, Inc. - Investor Relations
Kevin Fickle
Email Contact
(415)332-7200
(415)332-7201
Website: http://www.capitalgc.com...
Sino Clean Energy Inc.
Ming Lee
Assistant to the Chairman
+86-29-84067376
Source: Marketwire (August 18, 2009 - 6:00 AM EDT)
