WEB NEWS Investor Alert
DALIAN, China , Oct. 20, 2011 /PRNewswire-Asia/ -- China Industrial Waste Management, Inc. (OTCBB: CIWT) ("China Industrial Waste Management" or the "Company"), a leading environmental services and solutions provider in China , today announced that it has determined to file a certification on Form 15 with the Securities and Exchange Commission ("SEC") in order to suspend its reporting obligations under Section 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
The Board of Directors has approved this action as a cost reduction measure. Suspending and, ultimately, terminating the Company's SEC reporting obligations will allow it to reduce the substantial legal, accounting and other expenses associated with reporting compliance and make those savings available for continued operation of the business.
"The decision to become a non-reporting public company has not been entered into lightly. The Board of Directors has sought advice from several outside resources before making the decision. Historically, the Company's stock has been negligibly traded. We plan to streamline our operations and focus more on expanding our waste processing business and increasing market share in China ," said Jinqing Dong , Chief Executive Officer of the Company.
The Company is eligible to suspend its reporting obligations and deregister its common stock because it has fewer than 300 record holders of its common stock as of the date hereof and anticipate keeping the similar status in addition to its satisfaction of other eligibility criteria under Rule 12h-3 of the Exchange Act on the date of filing the Form 15. Immediately upon the filing of the Form 15, certain reporting obligations of the Company, such as its obligation to file Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, will be suspended. Shares are anticipated being available for trading on the OTC Pink sheets, although there can no assurances that any trading market for the Company's securities will exist, after the Company has filed the Form 15.
Comments & Business Outlook
Second Quarter 2011 Results
Revenues increased 69.4% to $8.3 million
Gross profit increased 41.2% to $4.3 million
Operating income increased 35.7% to $2.6 million
Net income attributable to the Company increased 40.1% to $1.7 million
Diluted earnings per share from continuing operations increased 71.4% to $0.12 vs $0.07 in 2010
"In the second quarter 2011 we achieved another period of excellent financial results, reflecting strong overall demand for our products and services, including hazardous and non-hazardous waste disposal, sludge treatment, and recycled commodities," said Mr. Jason Dong , Chairman and Chief Executive Officer. "Through the first half of the year, our existing operations performed well across the board and we also are making significant progress on our Dagushan expansion project, which we expect to complete in late third quarter 2011. Given our recent momentum, we remain optimistic for continued strong performance in the second half of the year."
Business Outlook
The Company is currently building in Dalian one of the most advanced one-stop service centers for industrial solid waste treatment in China (the "Dagushan Expansion Project"). The construction of the Dagushan Expansion Project is now 95% complete and management expects the center to become operational late in the third quarter of 2011. Once fully operational, this new facility will double the Company's hazardous industrial solid waste treatment capacity to 114,000 tons per year.
Investor Alert
DALIAN, China , July 19, 2011 /PRNewswire-Asia / -- China Industrial Waste Management, Inc. (OTCBB: CIWT) ("China Industrial Waste Management" or the "Company"), a leading environmental services and solutions provider in China , today announced that it has dismissed Jewett, Schwartz, Wolfe & Associates ("JSW") and engaged the firm of UHY LLP ("UHY") as its new independent registered public accountant. The change was announced on Form 8-K and filed with the US Securities and Exchange Commission on July 7, 2011 .
Both the dismissal of JSW and the appointment of UHY were considered and approved by the Board of Directors of the Company.
UHY has been a leading accounting firm specializing in serving China -related companies and addressing the complexity of cross-border financial reporting issues. Ranked by Accounting Today as a Top 20 professional services firm, UHY has more than 1,000 professionals across the US. UHY's international network also ranks among the top 15 accounting organizations based on the criterion of combined fee income.
In connection with the audits of the Company's financial statements for the fiscal periods ended December 31, 2010 and 2009, and through June 30, 2011 , there were: (i) no disagreements between the Company and JSW on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of JSW, would have caused JSW to make reference to the subject matter of the disagreement in its reports on the Company's financial statements for such periods, and (ii) no reportable events of the type listed in paragraphs (A) through (D) of Item 304(a)(1)(v) of Regulation S-K.
"It is important to note that we have made this change not as a result of any disagreement with JSW," commented Mr. Jinqing Dong , Chairman and Chief Executive Officer of China Industrial Waste Management. "We are very pleased to be working with UHY."
Auditor trail
Effective as of June 30, 2011 , China Industrial Waste Management, Inc. (the “Company”) dismissed Jewett, Schwartz, Wolfe & Associates (“JSW”) and engaged UHY LLP (“UHY”) as its new independent registered public accountant. These actions were recommended by the Audit Committee of the Company’s Board of Directors (the “Board”) and approved by the Board.
The reports of JSW on the Company’s financial statements as of December 31, 2010 and 2009 and for the fiscal years ended December 31, 2010 and 2009 did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope, or accounting principles.
In connection with the audits of the Company’s financial statements for the fiscal periods ended December 31, 2010 and 2009, and through June 30, 2011, there were: (i) no disagreements between the Company and JSW on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of JSW, would have caused JSW to make reference to the subject matter of the disagreement in its reports on the Company’s financial statements for such periods, and (ii) no reportable events of the type listed in paragraphs (A) through (D) of Item 304(a)(1)(v) of Regulation S-K.
During its two most recent fiscal periods ended December 31, 2010 and 2009, and the subsequent interim period through the engagement of UHY on June 30, 2011, the Company did not consult with UHY on (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that may be rendered on the Company’s financial statements, and UHY did not provide either a written report or oral advice to the Company that was an important factor considered by the Company in reaching a decision as to any accounting, auditing, or financial reporting issue; or (ii) the subject of any disagreement, as defined in Item 304 (a)(1)(iv) of Regulation S-K and the related instructions, or a reportable event within the meaning set forth in Item 304(a)(1)(v) of Regulation S-K.
The Company provided JSW with a copy of the disclosures contained herein and requested that JSW furnish it with a letter addressed to the Securities and Exchange Commission stating whether or not JSW agrees with its statements in this Item 4.01. A copy of the letter to be furnished by JSW in response to such request, will be filed as Exhibit 16.1 to an amendment to this Form 8-K promptly when the Company is in receipt of the letter. The Company anticipates it will be provided with the letter within ten business days from the date of filing this Form 8-K.
Comments & Business Outlook
First Quarter Results :
Revenues increased 48.1% to $6.1 million
Gross profit increased 15.2% to $3.1 million
Operating income increased 10.3% to $1.7 million
Net income attributable to the Company increased 101.4% to $1.2 million
Diluted earnings per share doubled to $0.08
"We are pleased to announce strong financial performance for the first quarter and begin 2011 on a strong note. We achieved substantial revenue, net income, and EPS growth ," said Mr. Jason Dong, Chairman and Chief Executive Officer. "In the first quarter of 2011, we had increased demand for waste disposal services from our customers; our sales of recycled commodities increased as a result of favorable market prices; and our sludge treatment business generated additional service fees. In addition, our discarded domestic appliance disposal operations contributed to our revenues ."
The Company reaffirms that for the first half of 2011, the Company expects revenues of between $10 million and $12 million and net income attributable to the Company of between $2.0 million and $2.5 million .
Liquidity Requirements
We expect our pending projects such as the Dagushan Expansion Project with the Dalian government will require us to invest an aggregate of approximately $4.3 million in 2011. We expect to fund these projects through a combination of cash generated from operating activities, bank loans, government subsidies, and
sales of our securities.
Comments & Business Outlook
Full Year 2010 :
Revenues increased 106.2% to $21.8 million
Gross profit increased 97.7% to $12.6 million
Operating income increased 447.6% to $6.8 million
Operating margin increased to 31.3% from 11.8%
Net income attributable to the Company increased 129.8% to $4.5 million
Diluted earnings per shares increased 142.9% to $0.29 per diluted share
Operating cash flow increased 130.9% to $4.7 million
Working capital increased 306.9% to $6.7 million
"We are very pleased with our 2010 financial performance as we achieved strong growth in sales, profitability, EPS, and operating cash flow ," said Mr. Jason Dong, the Company's Chairman and Chief Executive Officer. "Our business rebounded significantly in 2010 from the lows of 2009, a year where we were impacted by the global recession and slowdown in world trade. In 2010, our customers increased their production volumes and their business with us, we added new customers as the manufacturing sector in Dalian continues to grow, our sludge treatment facility began contributing to our sales, and we received additional revenues from waste disposal operations related to the tragic oil spill in Dalian in June of 2010. Importantly, we grew our bottom line and operating cash flow even faster than our top line at both the net income and EPS lines. Our increased profitability was the result of our strong sales rebound combined with the operating leverage of our business. Overall, we are proud of our accomplishments in 2010 and believe we are on sound footing to continue our strong financial performance in 2011 ."
For the first half of 2011, the Company expects revenues of between $10 million and $12 million and net income attributable to the Company of between $2.0 million and $2.5 million .
Investor Presentations
By press release dated February 23, 2011, we announced our planned
presentation at the Rodman & Renshaw Annual China Investment Conference, scheduled for March 6-8 in Shanghai, China.
Comments & Business Outlook
DALIAN, China, March 2, 2011 /PRNewswire-Asia / -- China Industrial Waste Management, Inc. today announced its unaudited preliminary results for the fiscal year ended December 31, 2010.
For the fiscal year ended December 31, 2010, the Company's total unaudited revenue increased 98.1% to approximately $21 million from $10.6 million for the year ended December 31, 2009.
Full year 2010 unaudited net income was approximately $4.5 million, up 125% from $2.0 million for the year ended December 31, 2009.
The Company expects to release its audited financial results when it files its Annual Report on Form 10-K on or before March 29, 2011.
GeoTeam ® Note : This guidance implies 2010 vs. 2009 (we need to wait for the release of the 10K to determine if guidance was non-GAAP).
Year end EPS of: $0.26 vs. $0.16
Fourth quarter EPS of $0.10 vs. $0.05
Comments & Business Outlook
Third Quarter Highlights
Revenues increased 47.6% to $4.6 million compared to the third quarter of 2009
Gross profit increased 24.0% to $2.4 million
Operating income increased 69.9% to $1.3 million
Operating margin increased to 29.1% from 25.3%
Net income i ncreased 46.8% to $1.0 million , or $0.06 per diluted share, compared to $0.7 million , or $0.05 per diluted share for the same period last year.
"Our strong third quarter results were the result of the continued growth of our Dontai Organic sludge treatment business and higher selling prices and sales volumes of recycled commodities," said Mr. Jason Dong , Chairman and Chief Executive Officer. "While our gross profit margin was off slightly as our sludge treatment business has not yet reached full capacity, every other significant financial measure showed improved.The need within China for environmentally-sound waste disposal methods is at a historic high and we believe we are well-positioned to provide solutions to this growing market. "
Business Outlook
The Company's Dalian Dongtai subsidiary is currently building one of the most advanced one-stop service centers for industrial solid waste treatment in China (the "Expansion Project"). The construction of this Expansion Project is now 80% complete and we expect it to become operational in the second quarter of 2011. Once fully ramped up, this new facility will provide Dalian Dongtai with 114,000 tons per annum of industrial solid waste treatment capacity, which is double the capacity of the current plant.
The Company's Dongtai Organic operates the first BOT (Build-Operate-Transfer) plant in China using anaerobic fermentation technology. This is a build-operate-transfer or 'BOT' project with a 20-year franchise period. During this period, this sludge-to-energy plant is expected to dispose of the sludge derived from all of the sewage treatment plants located in urban Dalian City. This plant has a designed capacity of 600 tons per day and is expected to generate approximately 11,000 cubic meters of methane gas once it reaches its full capacity, which is expected to happen within two years. As a first-mover in this space in China and having Dongtai Organic function as a demonstration project in Dalian, the Company is well positioned to promote our sludge treatment facility engineering business across the country. The Company's expertise is in-line with the Chinese government's goal of encouraging sustainable and environmentally friendly development.
Mr. Dong concluded, "We are optimistic about our prospects. The environmental protection industry in China is growing faster than China 's overall rapid GDP growth rate and we are an industry leader in this rapidly developing industry. Our Dalian Dongtai business has a strong track record of developing and operating industrial waste treatment systems with over 770 customers, including major multinational companies. From our dominant position in Dalian, a major industrial center that is a hub for shipbuilding and other heavy industries, we intend to continue to build out our environmentally-conscious waste processing capabilities and look forward to doubling our capacity in this area with our new Expansion Project which we expect to come online next year.
"We have focused our efforts on developing next generation solutions for China 's waste challenges, including a state-of-the-art anaerobic sludge treatment facility operated by Dongtai Organic. We anticipate that the Dongtai Organic facility will continue to positively contribute to our financial performance as the project approaches full capacity. In addition, we are actively seeking new opportunities to utilize our expertise in this area to lead similar projects in other regions of China ."
Liquidity Requirements
We intend to use our available funds as working capital and to expand and develop our current lines of business. We believe that our available funds will provide us
with sufficient capital for at least the next twelve months ; however, to the extent that we make acquisitions, we may require additional capital for the acquisition or to support the operations of the combined companies.
Comments & Business Outlook
Second Quarter 2010 Results :
For the three months ended June 30, 2010 , revenues were $ 4.9 million compared to $2.5 million in the same period last year, an increase of 100.8% . Net income increased 178.3% to $1.2 million from $0.4 million in the same period last year. Diluted earnings per share increased 141.5% to $0.07 from $0.03 in the same period last year.
"China Industrial Waste Management had a strong second quarter as we again delivered robust growth with strong increases in revenue and earnings," said Mr. Jason Dong, Chief Executive Officer. "Sales continued to rise as our customers increased their manufacturing production in the wake of the global recovery. Our Dongtai Organic business remained a meaningful contributor to our revenues, and our sales and margins for recycled commodities grew in an environment where prices were significantly higher than last year. We are pleased with our performance and believe it is a testament to the high level of services we provide for our customers and our leadership position in the fast growing industrial waste management market in China."
Business Outlook for 2010
Mr. Dong added, "As we enter the second half of 2010 we are proud of the progress our business has made and optimistic about the future of our company. Our core Dalian Dongtai solid waste treatment business has rebounded strongly from the lows of last year as our customers' production volumes continue to recover and we see this trend continuing at least through the end of 2010. To further bolster our capabilities in this market we are currently building one of the most advanced one-stop service centers for industrial solid waste treatment in China . The construction of this Expansion Project is now 70% complete and we expect it to become operational in the fourth quarter of this year. Once fully ramped up, this new facility will provide us with 114,000 tons per annum of industrial solid waste treatment capacity, which is double the capacity of our current plant .
"Overall, as we look at our business going forward, we believe we have laid the groundwork for future growth. We have invested considerable resources in expanding our capacity and capabilities, and we are seeing the early rewards as we execute against our plan. Dongtai Organic's sludge processing facility and our soon-to-open Expansion Project are among the most advanced in China , and our other engineering projects demonstrate our considerable expertise and abilities. We believe our strong quarterly and first half results are evidence that we are on a compelling and profitable path in what we believe is a very attractive growth industry in China ."
Contract Awards
China Industrial Waste Management
today announced that the Company's 90%-owned subsidiary Dalian Dongtai Industrial Waste Treatment Co., Ltd. ("Dalian Dongtai") signed a major waste management contract with a national petrochemical firm located in Liaoning Province (the "Customer").
Under the terms of the contract, beginning on September 1, 2010, Dalian Dongtai will treat and dispose of the industrial waste sludge and slag generated by the Customer's production over the next 30-months, which the Customer estimates will total approximately 40,000 tons. Based on this expected volume,
Dalian Dongtai anticipates it will generate an additional $3.65 million in revenues from this Customer over the life of the 30-month contract . "We are pleased to announce this major contract win," said Mr. Jason Dong, Chief Executive Officer. "Our selection by this prestigious customer is a testament to our leadership position and strong reputation in Liaoning Province. We expect this contract to significantly boost our financial performance and we anticipate that this will be the first of many opportunities in the petrochemical industry."
Comments & Business Outlook
China Industrial Waste Management
For the second quarter of 2010, the Company expects:
revenues of between $4 million and $4.5 million
net income of between $1.0 million and $1.2 million.
For full year 2010, the Company continues to expect:
revenues of between $15.0 million and $18.0 million
net income of between $4.5 million and $4.8 million.
Mr. Dong added, "We are optimistic about our business prospects going forward. Our customers have returned to healthy production volumes and we see this trend continuing. We are also starting to benefit from the investments we made in expanding into sludge treatment via our Dongtai Organic BOT plant which is now starting to ramp up and will account for a growing percentage of our revenues going forward. Come the fourth quarter, our Dongtai Expansion project is expected to come online and begin contributing to our financial results. Overall, we believe we are well positioned to capitalize on the growing market for industrial waste treatment in China and look forward to delivering continued strong results for our shareholders."
Comments & Business Outlook
The Company has seen signals of a strong recovery from the recession since the third quarter of 2009, as the demand from existing customers and new customers increased significantly, and the Company expects this trend to continue in 2010 and thereafter .
In terms of specific projects that will contribute to the Company's growth, Dalian Dongtai commenced the construction of its expansion project in July 2008. The total investment for the project was estimated to be $16 million, 30% of which (approximately $4.8 million) is expected to be subsidized by the central government. To date, $1.5 million has been released to the Company, and the balance is expected to be disbursed consistent with construction progress. The project is approximately 50% complete, and upon completion, which is expected in the fourth quarter of 2010, Dalian Dongtai's industrial solid waste treatment capacity is anticipated to increase to 114,000 tons per annum, or twice its existing capacity.
In accordance with Dongtai Organic's franchise agreement with the local government, Dongtai Organic is entitled to process all of the sludge generated from sewage treatment plants in the urban area of Dalian City. The project generates revenues from two sources: (i) fees which are based on the volume of sludge processed and (ii) fees from the sale of biogas (Methane) to the Dalian Gas Company. In the first quarter of 2010, Dongtai Organic received its first payment of $120,000 from the sale of biogas (Methane) and its first payment of $185,000 for processing municipal sludge in Dalian City. The Company expects Dongtai Organic to be an increasingly important contributor to the Company's financial performance in 2010.
For full year 2010, the Company expects revenues of between $15.0 million and $18.0 million and net income of between $4.5 million and $4.8 million.
Mr. Dong added, "The growth drivers of our business in 2010 will be a continued increase in industrial waste processing volumes from our existing customer base as China's export sector continues on the path of recovery from last year's slowdown and from our Dalian Dongtai expansion project, which is scheduled to be completed in the fourth quarter of this year; a broadening of our client base to new customers as we grow our capabilities and further refine our high tech waste management offerings; and the ramp up of our Dongtai Organic sludge treatment facility. Overall, we are optimistic and expect to see a continued recovery and growth in our business in 2010 and thereafter."
Source: PR Newswire (April 14, 2010 )
Comments & Business Outlook
"Our full year 2009 sales were down from 2008 because most of our customers are in China's export sector, an area of the market that was negatively impacted by the global economic slowdown," said Mr. Jinqing Dong, Chief Executive Officer. "However, the global economy and the export sector in China continue to recover from the trough of the first quarter of 2009. Our business is growing as our customers ramp up their production and exports from the very low levels of early last year, driving an increase in demand for our waste management services. Throughout this difficult period we have remained profitable and operating cash flow positive, and we expect our business to continue on this recovery path in 2010."
Comments & Business Outlook
The GeoTeam® will track the China Industrial Waste story due to the following commentary in a recent press release:
'With the economic recovery in China, we expect that the industrial waste management market will increase significantly from levels seen at the beginning of this year,' commented Mr. Dong. 'We look forward to improved second half results as volumes for our industrial waste treatment business increase and prices for recycled products recover.'
Source: PR Newswire (August 17, 2009 )
Research
The company recently reported increased sales and earnings for 2007 . The company is currently paying no taxes. The GEO team has adjusted Net Income for a standard tax rate and one time gains/charges.GEO Notes: tax adjusted EPS number. from the recent 10K , could infer that the share count could increase, due to 2008 capital needs, potentially leading to EPS dilution and a change in the valuation scenarios:We anticipate that our various projects will require us to invest an aggregate of approximately RMB 42 million (approximately $5.8 million). We will fund this investment through a combination of internally generated funds, bank loans and sales of our securities."
Potential Valuation Scenarios
Short-Term scenario based on P/E of 25 on trailing EPS: $3.40 fully taxed scenario and any one time charges or gains. Future EPS numbers have been obtained from public sources. a standard tax rate is necessary for investors to make proper investment decisions.
Financials
2007 Financial highlights: The GEO Team has made the following adjustments to net income in order to get a clearer picture of the company's financial picture:
