SHENYANG, China, Nov. 17, 2008 (GLOBE NEWSWIRE) -- NF Energy Saving Corporation of America (OTCBB:NFES) ("NFES" or "the Company"), a manufacturer of energy-saving equipment and a provider of integrated energy conservation solutions in Liaoning province, People's Republic of China ("PRC"), reported financial results for its third quarter ended September 30th, 2008.
Third Quarter 2008 Highlights
* Revenue increased to $4,601,826 and $11,763,310 for the periods of three and nine months ended September 30, 2008 respectively. * Gross profit increased to $1,236,242, up 32% from $2,454,486 for the same period in last year. * Net income was $1,065,096, or $0.03 per fully diluted share, up 75% from $0.04 for the same period in last year.
Third Quarter Fiscal Year 2008 Results
Total revenues were $4,601,826 and $11,763,310 for the three and nine months ended September 30, 2008, respectively, as compared to $2,031,016 and $7,062,399 for the corresponding periods in 2007. Total revenues increased by $2,570,810 and $4,700,911, a 127% and 67% increase, for the three and nine months ended September 30, 2008, as compared to total revenues for the three and nine months ended September 30, 2007.
The overall gross profit for the Company was $1,236,242 and $3,244,421, or 26.86% and 27.58%, for the three and nine months ended September 30, 2008 respectively. Profit margin increased by $510,688 to $1,236,242, but the gross margin ratio decreased 8.86% to 26.86%, for the three months ended September 30, 2008 and increased by $789,935 to $3,244,421, but the gross margin ratio decreased 7.17% to 27.58%, for the nine months ended September 30, 2008 as compared to the corresponding three and nine month periods in 2007.
"It is pleasant to announce that we have lots of increasing in revenue and net income in such a vile economic environment," said Mr Gang Li, President & CEO of NF Energy Saving Corporation of America. "Our strong growth certified our substantial increase in energy-saving area since last year. We are confident to maintain such a growth trend in next year with the growth of our energy-saving re-engineering projects and EMC projects."
Nine Month Results
For the nine months ended September 30th, 2008, total operating revenues were $11,763,310, up 100% from $7,062,399 from the same period last year. Gross profit was $3,244,421, up 27.58% from the same period 2007. Gross margin was increased by $789,935 to $3,244,421, but the gross margin ratio decreased 7.17% to 27.58% for the nine months ended September 30, 2008. Net income increased by $1,341,341 (100.49%) to $2,676,207 for the nine months ended September 30, 2008, as compared to the corresponding three and nine month periods in 2007.
Financial Condition
For the nine months ended September 30, 2008, net cash provided by financing activities was $2,000,000 attributable to the issuance of common stock to two investors from a convertible note.
For the nine months ended September 30, 2008, the Company had $2,904,609 in cash and cash equivalents.
About NF Energy Saving Corporation of America
NF Energy Saving Corp of America (OTCBB:NFES) is a China-based provider of integrated energy conservation solutions utilizing energy-saving equipment, technical services and energy management re-engineering project operations to provide energy saving services to clients. Headquartered in Shenyang city of China, the Company currently has 220 employees and several proprietary energy saving technologies and patents. The management team of the Company has over 10 years of EMC project experience and has completed over 300 successful energy-saving projects. For more information on the Company, please visit: http://www.nfenergy.com
Safe Harbor Statement
This press release contains certain statements that may include 'forward-looking statements' as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are often identified by the use of forward-looking terminology such as "believes, expects, anticipate, optimistic, intend, will" 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 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 and available from the Securities and Exchange Commission. All forward-looking statements attributable to the Company or 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.
NF ENERGY SAVING CORPORATION OF AMERICA
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2008 AND DECEMBER 31, 2007
(Currency expressed in United States Dollars ("US$"),
except for number of shares)
(Unaudited)
September 30, December 31,
2008 2007
----------- -----------
(Unaudited) (Audited)
ASSETS
Current assets:
Cash and cash equivalents $ 2,904,609 $ 2,240,901
Accounts receivable, trade 8,264,829 4,061,352
Inventories 2,175,182 1,448,386
Prepayments and other receivables 953,803 605,989
----------- -----------
Total current assets 14,298,423 8,356,628
----------- -----------
Plant and equipment, net 3,150,192 2,514,795
----------- -----------
TOTAL ASSETS $17,448,615 $10,871,423
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable, trade $ 2,221,138 $ 1,259,081
Customer deposits 379,229 22,719
Value added tax payable 76,293 70,604
Other payables and accrued liabilities 166,487 355,390
----------- -----------
Total current liabilities 2,843,147 1,707,794
----------- -----------
Stockholders' equity:
Common stock, $0.001 par value;
50,000,000 shares authorized;
39,872,704 and 33,227,328 shares issued
and outstanding as of September 30, 2008
and December 31, 2007 39,872 33,227
Additional paid-in capital 7,706,587 5,713,232
Statutory reserve 517,774 517,774
Accumulated other comprehensive income 1,323,135 557,503
Retained earnings 5,018,100 2,341,893
----------- -----------
Total stockholders' equity 14,605,468 9,163,629
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $17,448,615 $10,871,423
=========== ===========
NF ENERGY SAVING CORPORATION OF AMERICA
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE INCOME
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
(Currency expressed in United States Dollars ("US$"),
except for number of shares)
Three months ended Nine months ended
September 30, September 30,
------------------------ ------------------------
2008 2007 2008 2007
----------- ----------- ----------- -----------
REVENUE, NET
Product $ 3,557,112 $ 1,383,252 $ 8,836,478 $ 5,328,588
Services 939,406 211,915 2,108,342 1,297,962
Projects 105,308 435,849 818,490 435,849
----------- ----------- ----------- -----------
Total operation
revenues 4,601,826 2,031,016 11,763,310 7,062,399
----------- ----------- ----------- -----------
COST OF REVENUES:
Cost of products 2,639,688 881,432 6,391,906 3,889,149
Cost of services 711,781 93,152 1,517,172 387,886
Cost of projects 14,115 330,878 609,811 330,878
----------- ----------- ----------- -----------
Total cost of
revenues 3,365,584 1,305,462 8,518,889 4,607,913
----------- ----------- ----------- -----------
GROSS PROFIT 1,236,242 725,554 3,244,421 2,454,486
----------- ----------- ----------- -----------
OPERATING EXPENSES:
Sales and
marketing 16,318 9,568 78,598 24,277
Research and
development 10,377 14,014 95,963 343,920
Stock-based
compensation -- -- -- 510,000
General and
administrative 153,262 125,478 411,091 254,707
----------- ----------- ----------- -----------
Total operating
expenses 179,957 149,060 585,652 1,132,904
----------- ----------- ----------- -----------
INCOME FROM
OPERATIONS 1,056,285 576,494 2,658,769 1,321,582
----------- ----------- ----------- -----------
Other income:
Interest income 8,902 4,085 17,716 4,427
Other income 76 (2,662) 194 8,857
----------- ----------- ----------- -----------
Total other income 8,978 1,423 17,910 13,284
----------- ----------- ----------- -----------
INCOME BEFORE
INCOME TAXES 1,065,263 577,917 2,676,679 1,334,866
Income tax expense (167) -- (472) --
----------- ----------- ----------- -----------
NET INCOME $ 1,065,096 $ 577,917 $ 2,676,207 $ 1,334,866
=========== =========== =========== ===========
Other
comprehensive
income:
- Foreign currency
translation gain 77,186 206,182 765,632 278,034
----------- ----------- ----------- -----------
COMPREHENSIVE
INCOME $ 1,142,282 $ 784,099 $ 3,411,839 $ 1,612,900
=========== =========== =========== ===========
Net income per
share - basic and
diluted $ 0.03 $ 0.02 $ 0.07 $ 0.04
=========== =========== =========== ===========
Weighted
average shares
outstanding -
basic and diluted 33,227,328 2,320,661 36,377,728 31,699,180
=========== =========== =========== ===========
(Unaudited)
NF ENERGY SAVING CORPORATION OF AMERICA
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
(Currency expressed in United States Dollars ("US$"))
(Unaudited)
Nine months ended
September 30,
--------------------------
2008 2007
----------- -----------
Cash flows from operating activities:
Net income $ 2,676,207 $ 1,334,866
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation 238,702 190,161
Gain on disposal of plant and equipment (7,640)
Stock-based compensation 510,000
Change in operating assets and
liabilities:
Accounts receivable (3,804,182) (1,004,058)
Inventories (609,412) 213,836
Prepayments and other receivables (306,187) (1,878,371)
Accounts payable 849,318 16,063
Customer deposits 343,490 67,294
Income tax payable 167 (392,183)
Value added tax payables 8,618 5,123
Other payables and accrued liabilities (156,442) (23,392)
----------- -----------
Net cash provided by operating activities (759,721) (968,301)
----------- -----------
Cash flows from investing activities:
Purchase of plant and equipment (738,043) (166,605)
Proceeds from disposal of plant and
equipment -- 79,504
----------- -----------
Net cash (used in) provided by investing
activities (738,043) (87,101)
----------- -----------
Cash flows from financing activities:
Proceeds from private sale of common
stock 2,000,000 870,000
----------- -----------
Net cash provided by financing activities 2,000,000 870,000
----------- -----------
Effect on exchange rate change on cash
and cash equivalents 161,472 38,262
----------- -----------
NET CHANGE IN CASH AND CASH EQUIVALENTS 663,708 (147,140)
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD 2,240,901 796,944
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 2,904,609 $ 649,804
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for income taxes $ 305 $ 392,183
=========== ===========
Cash paid for interest expenses $ -- $ --
=========== ===========
NF ENERGY SAVING CORPORATION OF AMERICA
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
2008 (Currency expressed in United States Dollars ("US$"),
except for number of shares)
(Unaudited)
Common stock
-----------------------
Additional
No. of paid-in Statutory
shares Amount capital reserve
----------- --------- ---------- ----------
Balance as of
January 1, 2008 $33,227,328 $ 33,227 $5,713,232 $ 557,503
Private sale of
common stock 6,645,376 6,645 1,993,355 --
Foreign currency
translation
adjustment -- -- -- 765,632
Net income for the
period -- -- -- --
----------- --------- ---------- ----------
Balance as of
September 30,
2008 $39,872,704 $ 39,872 $7,706,587 $1,323,135
=========== ========= ========== ==========
Accumulated
other Total
comprehensive Retained stockholders'
income earnings equity
----------- ----------- -----------
Balance as of
January 1, 2008 $ 517,774 $ 2,341,893 $ 9,163,629
Private sale of
common stock -- -- 2,000,000
Foreign currency
translation
adjustment -- -- 765,632
Net income for the
period -- 2,676,207 2,676,207
----------- ----------- -----------
Balance as of
September 30,
2008 $ 517,774 $ 5,018,100 $14,605,468
=========== =========== ===========