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 115,000 tons
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 on Monday, 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 link
http://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 Sun guanweirecycling@gmail.com Ken
Donenfeld DGI Investor Relations kdonenfeld@dgiir.com Tel:
212-425-5700 Fax: 646-381-9727
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