March 28, 2013 at 10:34 AM EDT
Guanwei Recycling Corp. Reports 2012 Revenues Grew 24.28% Over Prior Year

FUQING CITY, CHINA - Mar 28, 2013 - Guanwei Recycling Corp. (NASDAQ:GPRC), a leading clean tech manufacturer in China of recycled low density polyethylene (LDPE), today reported revenues advanced 24.28% year over year to a record $79,043,356 in the year ended December 31, 2012. Operating in a relatively weaker economy in China, growth was fueled by continued domestic demand for the Company's competitively priced, high quality recycled plastic. Despite a moderation in some key costs in the second half of 2012, especially for raw materials, year over year increases in manufacturing costs slightly outpaced steady gains in sales prices. This resulted in slightly lower full year net income compared with the prior year.

 

2012 Highlights

-         Net revenues grew to a record $79,043,356, up 24.28% from revenues of $63,600,678 in 2011.

-         Net income declined 7.49 % from $12,793,448, or $1.28 per share in 2011, to $11,835,295, or $1.15 per share, as gross profit margins declined from 30.64% in 2011 to 23.54% in 2012. The earnings per share data retroactively reflects the reverse stock split which took place in December, 2012.

-         At year end, the Company had no bank debt, cash and cash equivalents of $12,083,358, and working capital of $35,505,028, up 49.16% from the prior year.

-         The Company maintained its competitive advantage of being licensed by Chinese and German authorities to import lower cost, higher quality plastic waste from Germany and other European raw material suppliers by continuing to meet exacting green standards.

 

Volume and Sales Price Increases

 

The Company's sales of manufactured recycled LDPE in 2012 were a record $67,331,679, up 8.77% from 2011. This increase reflected year over year growth in tonnage sales from 52,666 tons in 2011 to 55,448 tons in 2012, a 5.28% increase. Average selling prices for manufactured recycled LDPE in 2012 were approximately $1,214 per ton, a 3.32% increase from approximately $1,175 per ton a year earlier.

 

Sales of sorted non-LDPE materials increased 12.57% to $1,913,859 reflecting a 5.41% increase in tonnage sales to 6,135 tons as average sales prices increased 6.85% to approximately $312 per ton.

 

During the year, the Company also recorded $9,797,818 in low margin sales of raw materials. It had no such sales in 2011. The sales in 2012 resulted from a Company decision to increase bulk buying of raw materials to reduce costs which required sales of unused raw materials to increase storage space.

 

Capital Expenditures

 

During the year the Company incurred capital expenditures of approximately $2.69 million, primarily related to building improvements and other factory equipment purchases aimed mainly at improving its production process and efficiencies. Production capacity at year end was 80,000 tons.

 

Import Quota

 

The Company received governmental approval for an import quota in 2013 of 100,000 tons of imported plastic waste, up from 80,000 tons in 2012. At the same time, the Company's ability to utilize the import quota of Fuqing Huan Li Plastics Company was reduced from 35,000 tons in 2012, to 15,000 tons in 2013. The combined imported plastic waste tonnage allowed in 2012 was which is the same combined tonnage allowed in 2013.

 

Outlook

 

Mr. Min Chen, Chairman and CEO of the Company, commented, "We believe our financial strength and the continuing growth in sales we achieved in 2012 -- despite China's relatively slower economic environment -- bode well for the future, as we provide key products required in a wide variety of end uses to a broad range of customers. A primary goal this year is to improve profit margins as sales continue to expand, with a particular focus on managing key manufacturing costs to the extent possible."

 

He added, "We also remain committed to our U.S. listing and believe it is only a matter of time before investors recognize the outstanding growth still ahead in China, and companies such as ours that are well positioned to benefit from that growth."

 

Conference Call Invitation

 

The Company will discuss 2012 year end results during a live conference call and webcast onMonday , April 1st, at 8:00am ET.

 

To participate in the call, interested participants should call 1-877-941-4774 when calling within the United States or 1-480-629-9760 when calling internationally. Please ask for the Guanwei Recycling Corp. 2012 Year End Conference Call, Conference ID: 4609603. There will be a playback available until 04/08/13. To listen to the playback, please call 1-877-870-5176 when calling within the United States or 1-858-384-5517 when calling internationally. Use the Replay Pin Number: 4609603.

 

This call is being webcast by ViaVid Broadcasting and can be accessed by clicking on this linkhttp://public.viavid.com/index.php?id=103983 or at ViaVid's website at http://viavid.com.

 

SEE ATTACHED TABLES

 

Description of Guanwei Recycling Corp.

Adhering to the highest "green" standards, Guanwei Recycling Corp. (the "Company") has generated rapid growth producing recycled low density polyethylene (LDPE) from plastic waste procured mostly in Europe for sales to more than 300 customers (including over 150 active recurring customers) in more than ten different industries in China. The Company is licensed by Chinese authorities and also has been issued a Compliance Certificate by Umweltagentur Erftstadt, which issues certificates of approval for certain plastics manufacturers that meet Germany's strict environmental standards. This enables the Company to procure high quality plastic waste directly from Germany and other European countries (Spain and Holland) with no middlemen, and permits highly economic production of the highest grades of LDPE. Additional information regarding Guanwei Recycling Corp. is available at www.guanweirecycling.com.

 

Information Regarding Forward-Looking Statements

 

Except for historical information contained herein, the statements in this press release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause our actual results in future periods to differ materially from forecasted results. These risks and uncertainties include, among other things, product demand, market competition, and risks inherent in our operations. These and other risks are described in our filings with the U.S. Securities and Exchange Commission.

 

 

 

 

GUANWEI RECYCLING CORP.

 

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

 

 

 

 

 

Year Ended December 31,

 

 

 

2012

 

 

2011

 

 

 

 

 

 

 

 

 

 

Net revenue

 

$

79,043,356

 

 

$

63,600,678

 

Cost of revenue

 

 

60,440,237

 

 

 

44,111,700

 

 

 

Gross profit

 

 

18,603,119

 

 

 

19,488,978

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Selling and marketing

 

 

417,597

 

 

 

398,513

 

 

General and administrative

 

 

2,297,782

 

 

 

1,994,873

 

 

 

Total operating expenses

 

 

2,715,379

 

 

 

2,393,386

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

15,887,740

 

 

 

17,095,592

 

 

 

 

 

 

 

 

 

 

Other income (expenses)

 

 

 

 

 

 

 

 

 

Interest income

 

 

55,781

 

 

 

88,249

 

 

Interest expenses

 

 

-

 

 

 

(29,083

)

 

Net foreign exchange gain

 

 

62,806

 

 

 

156,602

 

 

Loss on disposal of property and equipment

 

 

(33,452

)

 

 

(72,174

)

 

Miscellaneous

 

 

6,372

 

 

 

7,383

 

 

 

Total other income

 

 

91,507

 

 

 

150,977

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

15,979,247

 

 

 

17,246,569

 

 

 

 

 

 

 

 

 

 

Income taxes

 

 

4,143,952

 

 

 

4,453,121

 

 

 

 

 

 

 

 

 

 

Net income

 

 

11,835,295

 

 

 

12,793,448

 

 

 

 

 

 

 

 

 

 

Other comprehensive income - foreign currency translation adjustments

 

 

284,318

 

 

 

1,067,008

 

 

 

 

 

 

 

 

 

 

Comprehensive income

 

$

12,119,613

 

 

$

13,860,456

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share - basic and diluted

 

$

1.15

 

 

$

1.28

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding

 

 

 

 

 

 

 

 

 

- basic and diluted

 

 

10,293,872

 

 

 

10,000,015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GUANWEI RECYCLING CORP.

CONSOLIDATED BALANCE SHEETS

 

 

 

December 31,

 

 

2012

 

2011

ASSETS

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

12,083,358

 

$

12,432,803

 

Accounts receivable

 

 

9,305,104

 

 

4,475,386

 

Inventories

 

 

18,696,648

 

 

16,858,801

 

Advances to suppliers

 

 

1,827,480

 

 

-

 

Value added tax refundable

 

 

-

 

 

1,221,531

 

Prepaid expenses and other current assets

 

 

131,564

 

 

882,818

 

 

Total current assets

 

 

42,044,154

 

 

35,871,339

 

 

 

 

 

 

 

Property, plant and equipment, net

 

 

10,223,874

 

 

8,151,012

Construction in progress

 

 

-

 

 

174,295

Land use right, net

 

 

663,800

 

 

673,762

Other assets

 

 

202,346

 

 

205,437

 

 

Total Assets

 

$

53,134,174

 

$

45,075,845

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Accounts payable

 

$

4,082,982

 

$

8,741,822

 

Accrued expenses and other payables

 

 

796,705

 

 

714,072

 

Value added taxes payable

 

 

110,484

 

 

-

 

Amount due to shareholder

 

 

517,863

 

 

1,468,167

 

Income tax payable

 

 

1,031,092

 

 

1,144,516

 

 

Total current liabilities

 

 

6,539,126

 

 

12,068,577

Commitments and contingencies

 

 

 

 

 

 

Shareholders' Equity

 

 

 

 

 

 

 

Common stock, $0.001 par value, 500,000,000 shares authorized, 10,407,839 and 10,000,015 shares issued and outstanding, as of December 31, 2012 and December 31, 2011

 

 

10,408

 

 

10,000

 

Additional paid-in capital

 

 

2,767,787

 

 

1,300,028

 

PRC statutory reserves

 

 

805,483

 

 

805,483

 

Accumulated other comprehensive income

 

 

2,546,999

 

 

2,262,681

 

Retained earnings

 

 

40,464,371

 

 

28,629,076

 

 

Total shareholders' equity

 

 

46,595,048

 

 

33,007,268

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

53,134,174

 

$

45,075,845

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contacts :Richard Sunguanweirecycling@gmail.comKen DonenfeldDGI Investor Relations kdonenfeld@dgiir.comTel: 212-425-5700 Fax: 646-381-9727

 

Related Stocks:
Stock Market XML and JSON Data API provided by FinancialContent Services, Inc.
Nasdaq quotes delayed at least 15 minutes, all others at least 20 minutes.
Markets are closed on certain holidays. Stock Market Holiday List
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
Press Release Service provided by PRConnect.
Stock quotes supplied by Six Financial
Postage Rates Bots go here