Wowjoint Holdings (NASDAQ:BWOW)

First Quarter Ended March 31, 2012

• Revenues for the Company's first quarter ended March 31, 2012 was $1.2 million as compared to $6.6 million in the first quarter of 2011.
• Revenue from leasing increased by 333% to $1.1 million compared to the first quarter of 2011. These services, as well as technical service sales, continue to be a focus for Wowjoint as they provide a more stable source of cash flows and higher margins compared to machinery sales.
• Gross profit was $0.4 million compared to $1.4 million for the same period last year. Gross margins increased 1330 basis points to 34.6% in the first quarter 2011 compared to 21.3% in the same period in 2011.
• Operating income was a loss of $1.0 million for the first quarter 2012 compared to operating income of $0.3for the first quarter 2011.
• Net loss for the first quarter 2012 was $0.4 million, compared to net income of $0.4 million in same period 2011.

Cost of sales for the three months ended March 31, 2012 was approximately $0.8 million as compared to $5.2 million for the three months ended March 31, 2011. The lower cost of sales in first quarter 2012 was due to lower sales volume. Operating expenses for the three months ended March 31, 2012 were approximately $1.5 million compared to $1.1 million for the same period in 2011, due to the increase in sales staff. Selling expenses for the three months endedMarch 31, 2012 totaled $0.3 million compared to $0.2 million in the same period of 2011, due to a continued increase in sales force.

"The first quarter gross margins are a substantial increase from the first quarter 2011, due to a focus on reducing the material costs for our projects, as well as the diversification of our revenue stream, specifically with lease revenue. Lease revenue was very strong and we believe that will continue to grow, along with international sales and revenue from technical services," commented Mr. Yabin Liu, Chairman and Chief Executive Officer of Wowjoint. "In addition, during the first quarter we offered a stock dividend to our shareholders and commenced a warrant exchange to our warrants holders. We believe that both of these events demonstrate our belief in Wowjoint and provides for a solid capitalization structure."

Revenue Guidance and Contract Backlog

Management issued revenue guidance for the second quarter of 2012 of approximately $1 to $2 million. As of March 31, 2012, Wow joint's backlog of signed contracts totaled approximately $18.7 million.

Last updated May 16, 2012