Worldwide Energy (PINK:WEMU)

On July 18, 2011, Worldwide Energy and Manufacturing USA, Inc. (the “Company”) received notice that the obligations of the Business Loan Agreement (the “Loan Agreement”) dated as of May 20, 2008 between the Company and Bank of the West (the “Bank”) and related ancillary documents (collectively with the Loan Agreement, the “Loan Documents”) have been accelerated by the Bank. According to the Bank, an event of default has occurred and is continuing under the Loan Documents due to:

(i) the Company’s failure to furnish the Bank with its annual financial statements for the fiscal year ended December 31, 2010 by April 30, 2011;

(ii) the Company’s failure to furnish the Bank with its quarterly financial statements for its fiscal quarter ended March 31, 2011;

(iii) the change in the Company’s management, as previously disclosed in the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on April 27, 2011, constitutes an “Adverse Change” under the Loan Documents; and

(iv) due to the aforementioned change in management, the Bank believes itself insecure under the Loan Agreement.

On June 3, 2011, shareholders of Worldwide Energy and Manufacturing USA, Inc. (the “Company”) holding a majority of the outstanding common stock of the Company (the “Majority Shareholders”), took action by written consent, dated as of June 3, 2011, in order to remove the following directors from the Company’s Board of Directors:

• Mindy Wang
• Dora Dong
• Lauren Byrne
• Jeff Watson
• Michael Steingrebe 

Additionally, pursuant to their action by written consent dated June 3, 2011, the Majority Shareholders appointed the following individuals as directors to fill the vacancies on the Company’s Board:

•  Aaron Todd Switz
•  Michael Edward O’Connor, Jr.
•  Todd Michael Altman

On April 26, 2011, Michael Toups resigned from his position as Chief Financial Officer of the Company.

SOUTH SAN FRANCISCO, CA and SHANGHAI, CHINA--(Marketwire - December 29, 2010) - Worldwide Energy & Manufacturing USA, Inc. announced today that it expects fiscal year 2010 revenues to come in at the high end of its guidance based on the year-end sales strength that the Company is experiencing.

On December 7, 2010, Worldwide provided revenue guidance of between $160 million to $165 million for fiscal year 2010, a record for the Company. The update to the Company's revenue estimate is based on the strength it sees from contracts and commitments, primarily from its Solar Division. The Company's 'AmeriSolar' brand of photovoltaic solar modules continues to capture increasing market share globally and is building momentum and gaining recognition.

"Worldwide Energy & Manufacturing's revenue continues to grow rapidly as reflected in the revision of our 2010 revenue estimates to be the upper end of our previously stated range," said Jimmy Wang, CEO of Worldwide. "We are benefitting from strong international demand for PV Solar systems, particularly from Europe, which is a significant market for our AmeriSolar brand. Going forward, we expect to see strong demand for our products based on an overall increase in global demand for the adoption of clean, reliable solar energy solutions

Worldwide estimates that its 2010 revenues will increase by approximately 160% to between $160 million to $165 million. The revenue estimate is based on contracts and commitments primarily from the Company's Solar Division, which continues to capture increasing market share globally with its 'AmeriSolar' brand of photovoltaic solar modules. In addition, the Company anticipates that its margins will continue to improve as it ramps up production at its new, wholly-owned state-of-the-art manufacturing and research facility in Nantong, China, which has an initial manufacturing capacity of 100 megawatts and a highly competitive cost structure. 

"We expect to achieve significant revenue growth for the fiscal year ending 2010 and going forward given the strong growth we see in the global solar market and increasing demand for our AmeriSolar PV modules," said Jimmy Wang, CEO of Worldwide. "Europe continues to be a strong market for our products, particularly for us in Italy and the U.K, and we anticipate that Asia and the U.S. will become growing markets in the next three to four years, where we are already well positioned. Solar is a very fast growing industry within the clean tech sector and we are confident that we are taking the right steps to aggressively grow our customer base as spending on renewable energy continues to rise."

Third Quarter 2010 Financial Highlights

• Revenues for the third quarter of fiscal year 2010 increased by 139.3% year-over-year to $44.6 million, up from $18.6 million in the third quarter of 2009.
   
• Solar division revenue increased by 157.6% to $40.0 million, up from $15.5 million in the same period a year ago.
   
• Net income attributable to Worldwide for the third quarter decreased 40.5% year-over-year to $1.2 million, compared with $2.0 million for the third quarter of 2009.
   
• Gross profit for the third quarter increased 48.7% to $4.0 million, up from $2.7 million a year ago; Gross margin was 8.9%, compared to 14.4% in the same period last year.
   
• Operating income and operating margin for the third quarter were $0.4 million and 0.9%, respectively, compared to $1.3 million and 7.2%, respectively, in the third quarter of 2009.
   
• Earnings per diluted share were $0.21 for the quarter, compared with diluted EPS of $0.55 achieved in the same period a year ago.

Jimmy Wang, CEO of Worldwide, stated, "We achieved triple-digit sales growth for the sixth consecutive quarter, driven by strong demand for our PV solar modules. Although market dynamics negatively impacted our margins during the quarter, demand for our modules continued to increase significantly, and our solar backlog currently stands at a record $106 million. By working toward a competitive environment for our supplier base as well as leveraging economies of scale to negotiate with suppliers, we expect to see a rebound in profitability in the near future."

Mr. Wang continued, "Looking ahead, we plan to continue growing our solar business through our recently opened manufacturing and research facility in Nantong, China. We believe that the solar energy industry offers us our greatest growth and profit potential, and we anticipate improved performance for the rest of 2010 and into 2011."

Yesterday, WEMU reported 2010 second quarter financial results:

• Revenues Up 286.2% Year-Over-Year to $39.8 million.
• Net Income Attributable to Worldwide Reaches $1.3 million, Up From Net Loss of $1.1 Million.
• EPS of $0.23, Up From $0.30 Loss Per Share in 2Q09

Jimmy Wang, chairman and chief executive officer of Worldwide, stated: "We are excited to report another record revenue quarter, as well as strong financial results in our second fiscal quarter. Our success in penetrating the solar module market through our AmeriSolar brand is clearly showcased by the dramatic increase in solar revenues during the second quarter, and we also benefited from the effects of stabilizing market prices and a significant increase in demand over 2009 levels. Our manufacturing division experienced similarly strong growth this quarter, driven by an increase in order shipment volume. The Company enters the second half of 2010 with a record backlog, which currently stands in excess of $100 million. The brand new solar manufacturing and research facility in Nantong is completed, and we have high expectations for the plant's contribution to the Company's financial performance in the near future."

GeoTeam note: A closer inspection of the results reveals that, after adjusting for non-cash items, WEMU actually reported EPS of $0.03 results for the 2010 second quarter vs. $0.07 in the second quarter of 2009.

The Company has secured contracts in its second quarter with 15 new solar customers, located primarily in Germany, France, Italy, and the United Kingdom, bringing the Company's total client base for its Solar Division to roughly 60 customers. Orders from the new clients average more than 1 MW of power each, with the largest accounting for 17.5 MW. Additionally, the Company's total order backlog now exceeds $100 million, and management expects the majority of the pending orders to be completed and shipped by the end of the year.

Worldwide estimates that it delivered a total of more than $38 million in orders during the second quarter, compared with $10.3 million in the same period last year, an increase of about 270% year-over-year. The Company's solar division alone shipped roughly $35 million in orders in its second 2010 fiscal quarter, an increase of roughly 370% from second quarter 2009 sales of $7.5 million.

Global demand for photovoltaic solar panels continues to show enormous growth potential for the second half of 2010. Solar research and consulting firm Solarbuzz recently raised its projection of the 2010 photovoltaic market size to 15.2 GW, more than double 2009 installations of 7.5 GW. Companies in the industry generated estimated revenues of $12 billion in the first quarter of 2010, or almost 300% greater than first quarter revenues in 2009.

Worldwide's Chief Executive Officer, Jimmy Wang, stated: "Our strong order backlog and new client additions in the recently ended second fiscal quarter speak to the quality of our products and our growing industry exposure. As we enter the second half of our fiscal year, we are very optimistic and expect to deliver continued strong financial performance for the foreseeable future."

Source: Globe Newswire

Our intent over the short-term is to build a check list to assess the risk position of firms in the ChinaHybrid space. For the time being this will consist of the following: (this list is likely to grow substantially)

Second quarter revenues are expected to exceed $30 million, an approximate 200% increase compared to the same period a year ago.

Commenting on today's news, Chief Executive Officer Jimmy Wang stated, "It is with great pleasure that we provide our shareholders with such a positive quarterly update. The numbers we provided to the marketplace in the first quarter as well as the anticipated revenue numbers for our second quarter are outperforming the expectations that we previously held for the Company internally. The Company will keep shareholders well informed of any new developments and will release new positive forward-looking guidance when the second quarter financials are released in August 2010. At this point, we fully anticipate a record year for the Company and we remain very confident in our business model for the foreseeable future. We look forward to sharing any additional information with our shareholders as it becomes available."

Added to the GeoSpecial list on December 3, 2009 @ $5.20
 
Catalyst: Significant contract news and financial guidance indicated that WEMU was on its way to a swift turn around in its operations.
Peak performance: Reached a high of $6.25 on March 16, 2010
Current Price: $3.95
 
Current road block:  The Company threw us for a loop on January 27, 2010 when it announced that it was issuing shares for expansion purposes. While the move may increase margins and add capacity, it also resulted in a whopping 47.3% increase in WEMU's share count (94.5 % if warrants are included). Thus, we are postulating that dilution could be an issue in the near-term; Company has yet to hit its financial targets since we have followed the company; Company has not issued full year guidance despite the existence of EBITDA make good targets tied to its recent financing (WEMU does expect to issue guidance upon the releases of  its 2010 second quarter report); Constant amendments to its filings for issues as simple as share count; Lack of non-GAAP EPS presentation in its press releases;  Investor sentiment will be tied to oil prices; The company also indicated that it sees 2010 second quarter net income to be conservatively higher than the 2009 comparable period.  Without an EPS target we need to be mindful of dilution.

Remains on the GeoSpecial list, on a thin line.   Despite dilution WEMU was still able to grow its EPS in its 2010 first quarter. Still, issues of near term dilution will weigh on our minds. We are also tepid due the financial clarity concerns.

Liquidity seems in tact:

"We will continue to focus on the expansion of our renewable energy division by the continued development of our newly established solar factory in Ningbo, China as well as the continued quality enhancements of our solar module brand, "Amerisolar".  Additionally, we intend to develop the U.S. solar module market and plan to expand our operation in this market. We believe that the renewable energy division offers us our greatest growth and profit potential in both the present and foreseeable future. We presently have enough liquidity to meet our expansion plans. However, depending on growth the Company may need additional funding in the future."

Recall in that on July 22, 2009 we removed Worldwide Energy & Manafacturing from the GeoBargain list.

Subsequently:

• The Company had announced that it would not meet previously issued guidance
• The CFO resigned

We were also concerned with the abundance of financial restatements for what seemed to be routine matters.

It appears that Worldwide Energy is garnering investor interest once again. In its November 5, 2009 third quarter conference call the Company issued new guidance.

^a The above forecasts reflect the Company's current and preliminary views and are therefore subject to change. Please refer to the Company's Safe Harbor Statement (usually in press releases) for the factors that could cause actual results to differ materially from those contained in any forward-looking statement.

^bEBITDA and Non-GAAP EPS Figures exclude certain non-operating gains and losses as well as certain non-cash items. Non-GAAP information should not be viewed in isolation or as a substitute for reported, or GAAP information . For a more complete explanation of the company's definition of non-GAAP please refer to its financial press releases. The GeoTeam® non-GAAP figures may, from time to time,  differ from company supplied figures.

^c GeoCalculated Figure

While the guidance is not as aggressive as in the past, it is more "believable", still implies impressive growth and offers room for upside.  (The initial EPS  guidance was close to $1.00)

On a positive note, Worldwide Energy recently reiterated its guidance once again,  instilling a degree of confidence that WEMU will not disappoint this time around. New 2010 contract wins announced over the past three days, totaling over $45 million, gives the Company a great jumpstart on 2010 and increases the likelihood that it will meet general 2010 EPS growth goals of at least 30%.

Also impressive is the CFO' ability to articulately address difficult investor questions.

One thing investors should keep in mind is that WEMU's pricing environment can experience volatility, posing a challenge to forecasting EPS even when a revenue backlog is available.  If the Company does meet its 2009 tax-adjusted EPS goals and attains a P/E of 25, WEMU shares could approach $12.50.  If not for the WEMU's recent hiccup, we would have coded it as a GeoBargain. For now, we will take it one quarter at a time.

"Though we will not meet our $100 million revenue goal in 2009, I am confident we will generate $60 million in revenue; EBIDTA of $2.5 million or approximately 70 cents and a net income of approximately $2 million, or approximately 56 cents per share. Our solar division continues to drive the growth in our company. We expect 2010 to be a blockbuster year for our solar division. We continue to focus on building our solar module division and enhancing our factory operations."

^a The above forecasts reflect the Company's current and preliminary views and are therefore subject to change. Please refer to the Company's Safe Harbor Statement (usually in press releases) for the factors that could cause actual results to differ materially from those contained in any forward-looking statement.

^b EBITDA and Non-GAAP EPS Figures exclude certain non-operating gains and losses as well as certain non-cash items. Non-GAAP information should not be viewed in isolation or as a substitute for reported, or GAAP information . For a more complete explanation of the company's definition of non-GAAP please refer to its financial press releases. The GeoTeam® non-GAAP figures may, from time to time,  differ from company supplied figures.

^c GeoCalculated Figure

GeoNuggets®- Quick Check List Highlighting Undiscovered Opportunities

Worldwide Energy & Manufacturing USA, Inc. (OTCBB:WEMU)

Price (4/19/09): $4.50   
Trailing P/E (tax adjusted): 11.54

Fiscal Year Ends In December

12 Months trailing EPS (tax adjusted): $0.39*
2009 Company Guidance (tax adjusted): $3.2 million**
2009 Implied EPS Guidance (tax adjusted): $0.91***

* EPS numbers have been adjusted by the GeoTeam to add back share holder compensation expense and reflect a standard United States tax rate.

** 2009 guidance has been adjusted by the GeoTeam to reflect a standard United States tax rate

***The Company did not provide 2009 EPS guidance.  The GeoTeam® calculated an implied 2009 EPS guidance number using year end outstanding shares of 3,509,512.

Company Description: Worldwide Energy & Manufacturing Specializes in PV panel, mechanical, electronics and fiber optic products manufacturing. The company's global customer base includes those in the industries of solar energy, wireless telecommunications, aerospace, automobiles and medical equipment.

Reasons for optimism

1. The company meets seven out of ten GeoBargain categories

2. With its renewed focus the company operates in a favorable Industry as it is aggressively targeting the Solar Market.

3. The company’s 2009 solar order backlog of $52 million already exceeds 2008 revenues of $45.9 million.

4. The company should begin to realize efficiencies from it new manufacturing facility in China, reducing the need to outsource its production.

5.  The company is forecasting 2009 net income to increase over 200% to $5 million.

Potential valuation scenarios if the company can achieve its EPS growth goals

Short-Term Potential value based on fully taxed adjusted trailing EPS 

• P/E 15*  $0.39= $5.85
• P/E 20*  $0.39= $7.80
• P/E 25*  $0.39= $9.75

Short-term Potential value based on 2009 fully taxed adjusted Implied EPS Guidance

• P/E 10*  $0.91 = $9.10
• P/E 15*  $0.91 = $13.65

These scenarios are not intended to be investment advice, but are scenarios based on some commonly used investment guidelines. They are provided to aid investors in making their own investment decisions.

Guidance Report:

Mr. Jimmy Wang, CEO of Worldwide Energy and Manufacturing, stated: "We are very pleased to announce the best year end result in our company's history. Our Solar Energy division is performing beyond expectations and with our new solar factory and new solar contracts, we expect triple-digit growth both in revenue and net income in 2009.

"Already we have $52 million in backlog solar orders for 2009. Our new solar factory in Ningbo, China has the capacity to generate $225 million in revenue. Our gross margins and ultimately our net margins will increase substantially as we will manufacture all solar modules in our own factory. Our strong financial performance clearly demonstrates that the company has successfully made the transition into the renewable energy market as well as maintaining strength in its other contract manufacturing business. We have successful laid the foundation in 2008 to provide explosive growth in 2009."

Full Year Fiscal 2009 Guidance Ending December

*The Company did not provide 2009 EPS guidance.  The GeoTeam® calculated an implied 2009 EPS guidance number using year end outstanding shares of 3,334,473 million.

Source: Marketwire (April 13, 2009)