EX-99.1 2 v321767_ex99-1.htm EXHIBIT 99.1

Wowjoint Holdings Limited Reports Second Quarter 2012 Financial Results

  • Q2 2012 revenue of $1.4 million in-line with guidance
  • Order backlog is $17.8 million as of June 30, 2012
  • Gross margins increased to 32.8% for Q2 2012, an increase of 390 basis points from 28.9% in Q2 2011.
  • Q3 2012 revenue guidance: $1-2 million

BEIJING, August 15, 2012 -- Wowjoint Holdings Limited ("Wowjoint" or the ”Company”) (Nasdaq: BWOW), China’s innovative infrastructure solutions provider of customized heavy duty lifting and carrying machinery, reported today financial results for the second quarter 2012.

 

Second quarter Ended June 30, 2012 

  • Revenues for the Company's second quarter ended June 30, 2012 was $1.4 million as compared to $8.4 million in the second quarter of 2011.
  • Gross profit was $0.4 million compared to $2.4 million for the same period last year. Gross margins increased to 32.8% in the second quarter 2012 from 28.9% in the same period last year.
  • Operating income was a loss of $0.8 million for the second quarter 2012 compared to operating income of $1.5 million for the second quarter 2011.
  • Net loss for the second quarter 2012 was $0.9 million, compared to net income of $1.0 million in same period 2011.

Cost of sales for the three months ended June 30, 2012 was approximately $0.9 million as compared to $6.0 million for the three months ended June 30, 2011. The lower cost of sales in second quarter 2012 was attributable to lower sales volume. The gross profit increased from 29% to 33% due to the contribution by lease contracts. Operating expenses for the three months ended June 30, 2012 were approximately $1.3 million compared to $0.9 million for the same period in 2011, due to the increase in sales staff in international locations. Selling expenses for the three months ended June 30, 2012 totaled $0.4 million which remain the same as compared to the same period of 2011.

 

“The second quarter saw continued strong gross margins, as well as a decrease in accounts receivable. Both of these are substantial improvements from the second quarter 2011, due to a focus on collecting our outstanding receivables and reducing our material costs,” commented Mr. Yabin Liu, Chairman and Chief Executive Officer of Wowjoint. “In addition, during the second quarter we announced a contract in Peru, which is the first contract we have in South America and an area we believe has great potential. We also held our ground breaking ceremony for our new manufacturing and R&D facility. This facility provides for a strategic partnership with Beijing Jiaotong University and an ideal location near Shanghai for international expansion.”

 

 
 

 

Balance Sheet as of June 30, 2012 

  • Cash and cash equivalents totaled $2.3 million as of June 30, 2012, compared to $4.3 million at June 30, 2011.
  • Accounts receivable were $9.2 million as of June 30, 2012 as compared to $15.8 million as of June 30, 2011. This substantial reduction in account receivables is due to a continued effort by the Company to collect its accounts receivable.
  • Inventories decreased to $4.0 million, due to reduced sales, from $8.4 million on June 30, 2011.
  • Working capital was $6.0 million as of June 30, 2012.
  • The Company had total stockholders' equity of $21.6 million, with total assets of $48.1 million versus total liabilities of $26.4 million on June 30, 2012.

Six Months Ended June 30, 2012 

  • Revenues for the six month period ended June 30, 2012 were $2.5 million, compared to $15.0 million for the six month period ended June 30, 2011.
  • Revenues generated from the leasing business for the six months ended June 30, 2012 increased to $1.3 million, from $0.5 million for the six months ended June 30, 2011.
  • International based revenues accounted for approximately 26% of total sales for the six months ended June 30, 2012 compared to 41 % for the six months ended June 30, 2011.
  • Gross profit was $0.9 million compared to $3.8 million compared to the same period in 2011. Gross margins increased 780 basis points to 33.3% in the first six months of 2012 compared to 25.5% in the same period in 2011.
  • Operating loss for the six months ended June 30, 2012 was$1.9 million for compared to income of $1.9 million for the same period in 2011.
  • Net loss for the first six months of 2012 was$1.3 million, compared to net income of $1.9 million in same period 2011.

Cost of sales for the six months ended June 30, 2012 was approximately $1.7 million as compared to $11.2 million for the six months ended June 30, 2011, because of the lower revenue. The gross profit increased from 26% to 34%, due to the revenue contribution by lease contracts. Operating expenses for the six months ended June 30, 2012 were approximately $2.7 million compared to $2.0 million for the same period in 2011. Selling expenses for the six months ended June 30, 2012 totaled $0.7 million compared to $0.6 million in the same period of 2011.

 

Business Updates

 

During 2012 Wowjoint has been actively marketing in China and in international markets. The Company has announced a contract to provide two Movable Scaffolding Systems in Malaysia, as well as a contract with Titan Peru S.A.C. to provide a tire gantry. In addition, Wowjoint has signed three new contracts in China which include a contract to supply a marine hoist, a service contract and a leasing contract.

 

 
 

 

To further increase its international exposure, Wowjoint attended the UIC Highspeed – 8th World Congress on High Speed Rail conference in Philadelphia. This conference brought together companies specializing in high-speed rail development from all around the world. Wowjoint had a booth at the conference to highlight its years of experience in the industry and to introduce itself to new markets looking to implement high-speed rail within their countries. This exposure is very important for Wowjoint to gain recognition in international markets.

 

“We continued to experience a reduction in China’s infrastructure spending, although it is anticipated that the spending will return. The Company has focused on leasing and international contracts to mitigate the impact of the current slowdown in the Chinese market. Since the beginning of 2012, we have expanded our customer base, commenced construction of our manufacturing and R&D facility, increased our gross margins and decreased our accounts receivable,” stated Mr. Liu. “We remain focused on streamlining our business and increasing our visibility internationally. A key competitive advantage remains our ability to produce customized equipment, which solves complex construction and logistical problems for our customers. We become a partner with our customers to provide complete solutions for their project. We believe our determination and drive to expand our business into other countries and vertical markets will result in strong growth.”

 

Revenue Guidance and Contract Backlog

 

For the third quarter of 2012, management anticipates total revenue in the range of approximately $1 million to $2 million. As of June 30, 2012, Wowjoint's backlog of executed contracts totaled approximately $17.6 million.

 

About Wowjoint Holdings Limited

 

Wowjoint is a leading provider of customized heavy duty lifting and carrying machinery used in large scale infrastructure projects such as railway, highway and bridge construction. Wowjoint's main product lines include launching gantries, tyre trolleys, special carriers, marine hoists and special purpose equipment. The Company's innovative design capabilities have resulted in patent grants and proprietary products. Wowjoint believes it is well-positioned to benefit directly from China's rapid infrastructure development by leveraging its extensive operational experience and long-term relationships with established blue chip customers. Information on Wowjoint's products and other relevant information are available on its website at http://www.wowjoint.com.

 

 
 

 

Forward Looking Statements

 

This press release includes "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Words such as "expect," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," "may," "will," "could," "should," "believes," "predicts," "potential," "continue," and similar expressions are intended to identify such forward-looking statements. Forward-looking statements in this press release include matters that involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to differ materially from results expressed or implied by this press release. Wowjoint undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after the date of this communication. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this communication. All forward-looking statements are qualified in their entirety by this cautionary statement. All subsequent written and oral forward-looking statements concerning Wowjoint or other matters and attributable to Wowjoint or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements above. Wowjoint does not undertake any obligation to update any forward-looking statement, whether written or oral, relating to the matters discussed in this news release.

 

For additional information contact:

 

Wowjoint Holdings:
Aubrye Foote, Vice President, Investor Relations
Tel: +1-530-475-2793
Email: aubrye@wowjoint.com

 

Website: www.wowjoint.com

 

 

 
 

 

WOWJOINT HOLDINGS LTD
Unaudited Consolidated Statement of Income
(US dollars in thousands, except for EPS and share data)

 

   Three Months Ended   Six Months Ended 
   June 30,
2012		   March 31,
2012		   June 30,
2011		   June 30,
 2012		   June 30,
 2010		 
                     
Sales                         
Machinery sales   1,127    85    7,834    1,212    13,582 
Technical service   -    -    344    0    957 
Lease income   231    1,105    238    1,336    493 
Total sales   1,358    1,190    8,416    2,548    15,032 
                          
Cost of goods sold   913    778    5,980    1,691    11,189 
Gross profit   445    412    2,436    857    3,843 
                          
Operating expenses:                         
Selling expenses   389    323    376    712    603 
General and administrative expenses   899    1,133    544    2,032    1,379 
Total operating expenses   1,288    1,456    920    2,744    1,982 
                          
Income from operations   (843)   (1,044)   1,516    (1,887)   1,861 
                          
Other expenses:                         
Interest expense (net)   72    79    58    151    104 
Bank expense   1    13    32    14    32 
Foreign currency exchange loss (gain)   (57)   60    9    3    (53)
Other expense (profit)   14    (804)   (1)   -790    (2)
Total other expenses   30    (652)   98    (622)   81 
                          
Income before income taxes   (873)   (392)   1,418    (1,265)   1,780 
                          
Income taxes (Benefits) expenses   0    -    394    0    466 
                          
Net income attributed to ordinary shareholders   (873)   (392)   1,024    (1,265)   1,314 
                          
Earnings per share                         
 Basis   0.00    0.00    0.13    0.00    0.17 
 Diluted   0.00    0.00    0.13    0.00    0.17 
                          
Weighted average number of shares used in computing earnings per share               
 Basis   7,971,465    7,971,465    7,949,965    7,971,465    7,949,965 
 Diluted   7,971,465    7,971,465    7,949,965    7,971,465    7,949,965 

 

 

 
 

 

 

WOWJOINT HOLDINGS LTD

Unaudited Consolidated Balance Sheet

(US dollars in thousands) 

 

     June 30,     March 31,     December 31, 
    2012    2012    2011 
ASSETS               
Current Assets:               
Cash and cash equivalents   2,271    1,484    4,627 
Accounts receivable(net)   9,164    9,504    12,308 
Other receivables   1,713    1,553    1,656 
Advances to suppliers   8,921    8,857    8,956 
Inventories   4,010    3,697    3,979 
Costs and estimated earnings in excess of billings   5,100    4,480    4,413 
Amount due from related parties   22    76    76 
Restricted cash   644    649    578 
Total Current Assets   31,845    30,300    36,593 
                
Long-term investment   -    -    - 
Property, plant and equipment   15,160    14,886    14,589 
Intangible asset, net   1,049    1,061    1,067 
Prepaid expense - Long-term   -    -    - 
Total Assets   48,054    46,247    52,249 
                
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY               
Current Liabilities:               
Short-term loans   3,478    2,701    3,492 
Accounts payable and accrued expenses   12,037    12,047    14,203 
Advances from customers   4,953    3,647    5,314 
Due to related parties   -         54 
Unearned lease income   -    -    - 
Taxes payable   4,110    4,347    4,591 
Other payables   744    474    481 
Billings in excess of costs and estimated earnings   -    -    - 
Long-term loan due within one year   474    477      
Total Current Liabilities   25,796    23,693    28,135 
                
Long-term loan   633    635    1,587 
                
Stockholders' Equity:               
Common stock   8    8    8 
Additional paid in capital   10,336    10,336    10,336 
Statutory surplus reserves   3,025    3,025    3,025 
Retained earnings   5,884    6,757    7,149 
Accumulated other comprehensive income   2,371    1,793    2,010 
Total Stockholders' Equity   21,624    21,919    22,527 
Total Liabilities and Stockholders' Equity   48,054    46,247    52,249 

 

 
 

 

 

WOWJOINT HOLDINGS LTD

Statement of Cash Flows

(US dollars in thousands)

 

   Six Months Ended 
   June 30,
 2012		   June 30,
2011		 
         
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net income (loss)   (1,265)   1,314 
Adjustments to reconcile net income to net cash provided by operating activities:   -      
Depreciation and amortization   449    212 
Bad debt expense   83    (591)
Other   -      
Changes in operating assets and liabilities:   -      
Accounts receivable   3,061    2,656 
Other receivables   (57)   (651)
Advances to suppliers   35    598 
Inventories   (31)   (3,163)
Costs and estimated earnings in excess of billings   (686)   (539)
Prepaid expense – Short-term   -    - 
Accounts payables and accrued expenses   (2,165)   3,773 
Other payables   263    610 
Unearned lease income   -    (477)
Advances from customers   (361)   (1,700)
Taxes payable   (481)   (163)
Billings in excess of costs and estimated earnings   -    (586)
Total adjustments   110    (21)
Net cash (used in) provided by operating activities   (1,155)   1,293 
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Long term investment        - 
Purchase of property, plant and equipment   (1,021)   (3,925)
Prepaid expense - Long-term   -    (44)
Net cash used in investing activities   (1,021)   (3,969)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Net cash provided by acquisition        - 
Repayment of short-term loans   (13)   - 
Proceeds from short-term loans   -    2,353 
Proceeds from long-term loans   (480)   1,545 
Restricted cash   (67)   442 
Due from related parties   54    45 
 Due to related parties   (54)   - 
Net cash provided by (used in) financing activities   (560)   4,385 
           
NET INCREASE (DECREASE) IN CASH   (2,736)   1,709 
EFFECT OF EXCHANGE RATE CHANGES ON CASH   380    446 
CASH, BEGINNING OF PERIOD   4,627    2,168 
           
CASH, END OF PERIOD   2,271    4,323 
           
SUPPLEMENTAL DISCLOSURES:          
Cash paid during the period for:          
Interest paid   158    71 
Income tax paid   316    316