CHINA INDUSTRIAL WASTE MANAGEMENT, INC. 
By
Second Quarter Highlights
-- Revenues increased 100.8% to $4.9 million compared to the second
quarter of 2009
-- Gross profit increased 93.9% to $3.1 million
-- Operating income increased 242.6% to $1.8 million
-- Operating margin increased to 37.3% from 21.9%
-- Net income increased 178.3% to $1.2 million, or $0.07 per diluted share,
compared to $0.4 million, or $0.03 per diluted share for the same
period last year
-- Operating cash flow was $0.9 million versus negative cash flow from
operations of $1.0 million in the prior year period
-- New solid waste treatment facility ("Expansion Project"), which will
double existing capacity, is 70% complete and scheduled to open by the
fourth quarter of 2010
"China Industrial Waste Management had a strong second quarter as we again
delivered robust growth with strong increases in revenue and earnings," said
Mr.
Second Quarter 2010 Results
For the three months ended
Revenues from service fees, which consist of service fees generated from
industrial solid waste treatment, sewage treatment and sludge treatment, were
Sales of recycled commodities were
Gross profit was
Income from operations was
Net income increased 178.3% to
First Half 2010 Results
For the six months ended
Gross profit was
Net income increased 188.6% to
Financial Condition
As of
As of
Recent Developments
In
In
In
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
"We are also excited about the prospects for our Dongtai Organic sludge
treatment business. Dongtai Organic operates the first sludge treatment plant
in
"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
Conference Call
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About China Industrial Waste Management, Inc.
China Industrial Waste Management, Inc. is engaged in the collection,
treatment, disposal and recycling of industrial wastes principally in
Cautionary Statement Regarding Forward-Looking Information
This release may include "forward-looking statements." You can identify
these statements by the fact that they do not relate strictly to historical or
current facts. These statements contain such words as "may," "project,"
"might," "expect," "believe," "anticipate," "intend," "could," "would,"
"estimate," or the negative or other variations thereof or comparable
terminology. These forward-looking statements are based on current
expectations and projections about future events. Investors are cautioned that
forward-looking statements are not guarantees of future performance or results
and involve risks and uncertainties that cannot be predicted or quantified and,
consequently, our actual performance may differ materially from those
expressed or implied by such forward-looking statements. Such risks and
uncertainties include, but are not limited to, the following factors, as well
as other factors described from time to time in our reports filed with the
Securities and Exchange Commission: the timing and magnitude of technological
advances; the prospects for future acquisitions; the effects of political,
economic and social uncertainties regarding the governmental, economic and
political circumstances in
CHINA INDUSTRIAL WASTE MANAGEMENT, INC.
COMBINED AND CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME
(UNAUDITED)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2010 2009 2010 2009
Revenues
Service fees $3,226,923 $1,642,748 $6,171,481 $2,840,447
Sales of recycled
commodities 1,697,657 810,247 2,847,940 1,224,499
Total revenues 4,924,580 2,452,995 9,019,421 4,064,946
Cost of revenues
Cost of service fees 1,228,378 370,713 2,256,871 840,876
Cost of recycled
commodities 643,518 507,525 1,031,977 765,212
Total cost of revenues 1,871,896 878,238 3,288,847 1,606,088
Gross profit 3,052,684 1,574,758 5,730,574 2,458,858
Operating expenses
Selling expenses 168,680 44,756 320,304 222,071
General and
administrative expenses 1,044,763 993,214 2,012,857 1,518,585
Total operating expenses 1,213,443 1,037,970 2,333,160 1,740,656
Income from operations 1,839,242 536,787 3,397,414 718,202
Other income (expense)
Other income 80,425 47,393 87,592 62,069
Other expense (224,229) (94,416) (452,552) (79,741)
Settlement expense -- -- (439,821) --
Total other income
(expense) (143,804) (47,023) (804,781) (17,672)
Net income before tax
provision
Tax provision 254,941 60,250 387,942 105,279
Net income 1,440,497 429,515 2,204,691 595,251
Net income attributable
to the noncontrolling
interest 235,305 (3,618) 390,644 (33,401)
Net income attributable
to the Company $1,205,192 $433,132 $1,814,047 $628,652
Foreign currency
translation adjustment 183,453 8,299 184,985 (8,003)
Comprehensive income
attributable to the
Company 1,388,645 441,431 1,999,032 620,649
Comprehensive income
attributable to the
noncontrolling interest 235,305 (3,618) 390,644 (33,401)
Comprehensive income $1,623,951 $437,814 $2,389,677 $587,247
Basic and diluted weighted
average shares
outstanding
Basic 15,336,535 15,268,068 15,323,068 15,265,085
Diluted 17,594,787 15,268,068 17,549,633 15,265,085
Basic and diluted net
earnings per share
Basic $0.08 $0.03 $0.12 $0.04
Diluted $0.07 $0.03 $0.10 $0.04
CHINA INDUSTRIAL WASTE MANAGEMENT, INC.
COMBINED AND CONSOLIDATED BALANCE SHEETS
June 30, December 31,
2010 2009
(Unaudited) (Audited)
ASSETS
Current assets
Cash and cash equivalents $4,830,344 $11,419,129
Notes receivable 135,663 335,780
Accounts receivable, net 4,850,576 2,021,421
Construction reimbursement
receivable 107,426 846,270
Other receivables 72,341 91,872
Inventories 2,530,549 2,085,029
Advances to suppliers 1,548,968 800,694
Deferred expense 17,214 14,650
Total current assets 14,093,080 17,614,845
Long-term equity investment 147,460 87,900
Property, plant and equipment, net 31,738,023 32,319,145
Construction in progress 12,472,166 9,123,927
Land usage right, net of accumulated
amortization 1,986,633 1,994,394
BOT franchise right 4,128,880 4,102,023
Certificate of deposit -- 293,002
Restricted cash 3,129,244 96,707
Other asset 950,461 1,074,531
Deferred tax asset 329,865 377,381
Related party receivable 235,936 234,401
TOTAL ASSETS $69,211,748 $67,318,256
LIABILITIES
Current liabilities
Accounts payable $1,203,296 $418,435
Short-term loan 2,949,200 6,739,038
Tax payable 229,224 200,957
Advance from customers 629,839 544,125
Deferred sales 355,682 958,930
Accrued expenses 29,705 301,531
Construction projects payable 2,934,195 3,932,297
Other payable 170,112 235,211
Long-term loan-current portion 2,259,825 2,245,125
Related party payable 383,396 380,902
Total current liabilities 11,144,474 15,956,551
Long-term loan 14,337,720 13,755,512
Asset retirement obligation 632,875 610,445
Government subsidy 5,562,442 2,464,079
TOTAL LIABILITIES 31,677,511 32,786,587
EQUITY
Stockholders' equity of the Company
Preferred stock: par value $.001;
5,000,000 shares authorized; none
issued and outstanding -- --
Common stock: par value $.001;
95,000,000 shares authorized;
15,336,535 and 15,274,035 shares
issued and outstanding as of June
30, 2010 and December 31, 2009,
respectively 15,337 15,274
Additional paid-in capital 7,602,625 7,162,867
Deferred stock-based compensation (768,817) (884,139)
Accumulated other comprehensive
income 2,511,278 2,326,292
Retained earnings 19,304,966 17,490,919
Total stockholders' equity of the
Company 28,665,389 26,111,213
Noncontrolling interest 8,868,848 8,420,456
TOTAL EQUITY 37,534,237 34,531,669
TOTAL LIABILITIES AND EQUITY $69,211,748 $67,318,256
CHINA INDUSTRIAL WASTE MANAGEMENT, INC.
COMBINED AND CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Six Months Ended June 30,
2010 2009
Cash flows from operating activities:
Net income attributable to the
Company $1,814,047 $628,652
Adjustments to reconcile net income
to net cash provided by operating
activities:
Nontrolling interest 390,644 (33,401)
Depreciation 1,033,799 590,263
Amortization 33,286 21,515
Amortization of deferred stock-based
compensation 115,322 --
Bad debt allowance 113,486 --
Stock and warrant issued for
settlement 439,821 --
Stock issued for service -- 15,600
Accretion expenses 18,314 18,055
Government subsidy recognized as
income (14,337) (46,940)
Changes in operating assets and
liabilities:
Notes receivable 201,011 (357,696)
Accounts receivable (2,911,253) (350,336)
Construction reimbursement
receivable 739,586 --
Other receivables 19,998 (94,860)
Inventories (429,084) (54,716)
Advance to suppliers (738,292) (211,287)
Deferred expense (2,452) 16,099
Other asset 124,812 (202,426)
Deferred tax assets 49,665 --
Accounts payable 777,080 (341,317)
Tax payable 26,777 (156,500)
Advance from customers 81,622 17,985
Accrued expense (272,036) (338,538)
Other payable (65,500) (84,509)
Deferred income (605,598) (7,513)
Net cash provided by (used in)
operating activities 940,718 (971,870)
Cash flows from investing activities
Investment in Xiangtan Dongtai (58,604) --
Purchase of property and equipment (246,186) (270,787)
Construction in progress (3,202,966) (5,707,268)
Purchase of intangible assets (6,873) --
Due from related party -- (234,171)
Certificate of deposit 293,019 (219,536)
Net cash used in investing activities (3,221,610) (6,431,762)
Cash flows from financing activities
Repayment of construction project
payable (1,017,247) (1,232,780)
Proceeds from short-term loan 2,930,188 6,732,430
Repayment of short-term loans (6,739,433) (3,366,215)
Proceeds from long-term loan 1,611,604 11,468,548
Repayment of long-term loans (1,122,628) --
Cash released from escrow account -- 750,000
Proceeds from related party loan -- 102,450
Net cash provided by (used in)
financing activities (4,337,516) 14,454,433
Effect of exchange rate on cash 29,623 1,750
Net increase (decrease) in cash and
cash equivalents (6,588,785) 7,802,552
Cash and cash equivalents, beginning
of period 11,419,129 5,710,784
Cash and cash equivalents, end of
period $4,830,344 $13,513,336
Supplemental cash flow information:
Cash paid during the year for:
Interest $660,077 $231,056
Income taxes $304,778 $269,275
For further information, please contact:
Company Contact:
Mr. Darcy Zhang, Director of Investor Relations
Tel: +86-411-8259-5339
Email: darcy.zhang@chinaciwt.com
Web: http://www.chinaciwt.com
CCG Investor Relations:
Mr. Athan Dounis, Account Manager
Tel: +1-646-213-1916
Email: athan.dounis@ccgir.com
Web: http://www.ccgirasia.comSOURCE China Industrial Waste Management, Inc.
