Newater Technology, Inc. Announces Year 2018 Audited Financial Results
YANTAI, China, April 30, 2019 /PRNewswire/ -- Newater Technology, Inc. (NASDAQ: NEWA) (''NEWA,'' ''we,'' ''our'' or the ''Company''), a leading company specializing in development, production and application of DTRO equipment and systems used in waste water filtration, today announced its financial results for the year ended December 31, 2018.
The year ended December 31, 2018 Financial Highlights (all comparisons to the year ended December 31, 2017):
Revenues increased by 86% from $25 million to $47 million in 2018, evidenced by a large increase in project sales, an increased number of customers and large-scale projects won.
Cost of revenues increased by 52% from $17 million to $26 million in 2018, due to the corresponding costs incurred in manufacturing for the equipment sold in the same period.
Gross profit increased by 157% from $8.1 million to $20.9 million in 2018, while the gross profit margin was 44% in 2018.
Net income (before currency translation loss) increased by 178% from $2.6 million to $7.2 million in 2018, and the net profit margin in 2018 was 15%.
Total assets increased by 36% from $45 million to $62 million in 2018 mainly driven by the new production facility and production line completed during the year.
Basic earnings per share was $0.67 in 2018, compared to $0.26 in 2017 and $0.28 in 2016.
Mr. Yuebiao Li, the Company's CEO, commented "In 2018, NEWA's flexible automated production line started operation in our new facility in Yantai. With more knowledge and experience accumulated, we expect to maximize the output quality and quantity while reducing costs. While fortifying our market leadership in our existing markets of landfill leachate and industrial waste water, NEWA also invested in technology innovation to apply DTRO technology in the municipal waste water field.
In 2019, we will focus on executing our business strategy and expand globally. We expect the company's operation results to continue to grow at the current speed, which will generate significant returns to our shareholders."
About Newater Technology, Inc.
Founded in 2012 and headquartered in Yantai, China, Newater, operating its business through its wholly owned subsidiary Yantai Jinzheng Eco-Technology Co., Ltd. ("Jinzheng"), is a service provider and manufacturer of membrane filtration equipment and related hardware and engineered systems that are used in the treatment, recycling and discharge of wastewater using DTRO (Disk Tube Reverse Osmosis) and DTNF (Disk Tube Nano-Filtration) membranes. Newater also provides integrated technical solutions in engineering support and installation, technical advice and wastewater treatment services, and other project-related solutions to turn wastewater into reusable water. More information about the Company can be found at www.dtnewa.com
The Company's core business includes:
-- Wastewater treatment and reuse of high quality reclaimed water;
-- Treatment of hypersaline and highly-polluted wastewater and achieve zero
liquid discharge;
-- Highly efficient treatment of landfill leachate;
-- Process and recycle salts from acid or alkaline wastewater.
More information about the Company can be found at: www.dtnewa.com
Notice
Rounding amounts and percentages: Certain amounts and percentages included in this press release have been rounded for ease of presentation. Percentage figures included in this press release have not in all cases been calculated on the basis of such rounded figures, but on the basis of such amounts prior to rounding. For this reason, certain percentage amounts in this press release may vary from those obtained by performing the same calculations using the figures in the financial statements. In addition, certain other amounts that appear in this press release may not sum due to rounding.
Forward-Looking Statements
This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. When the Company uses words such as "may", "will", "intend", "should", "believe", "expect", "anticipate", "project", "estimate" or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Specifically, the Company's statements regarding its ability to: 1) maximize its output quality and quantity while reducing cost; 2) executing its business strategy to expand globally; 3) and growth of its operations and generation of returns to shareholders are forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the actual results to differ materially from the Company's expectations discussed in the forward-looking statements. These statements are subject to uncertainties and risks including, but not limited to, the following: the Company's goals and strategies; the Company's future business development; product and service demand and acceptance; changes in technology; economic conditions; the growth of the water filtration industry in China; reputation and brand; the impact of competition and pricing; government regulations; fluctuations in general economic and business conditions in China and assumptions underlying or related to any of the foregoing and other risks contained in reports filed by the Company with the Securities and Exchange Commission. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company's filings with the U.S. Securities and Exchange Commission, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.
For more information, please contact:
Newater Technology, Inc.
Zhuo Zhang (CFO)
Ike Ma (Corporate Manager)
Phone: +86 (535) 625-8200
Phone : +86 188-6551-5312
Email: CFO@dtnewa.com
Email : qlma@jinzhenghb.com
NEWATER TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2018 2017
---
ASSETS
Current assets
Cash and cash equivalents $
2,461,501 $
3,118,080
Restricted cash, current 6,033,482 6,753,685
Accounts receivable, net 10,064,847 5,442,520
Accounts receivable -related parties, net 1,948,009 607,975
Notes receivable 6,999
Inventories 13,762,959 10,279,397
Deposit - related party 10,180
Deferred cost of revenue 343,090 752,358
Deferred cost of revenue -related party 1,795,222
Advances to suppliers and other current assets,
net 4,904,290 2,885,510
Total current assets 39,535,357 31,634,747
Restricted cash, non-current 500,000
Retentions receivable, non-current 344,856
Property, plant and equipment, net 18,753,340 10,449,466
Land use right, net 2,078,240 2,243,183
Deferred tax assets 604,064 518,251
Deposit on loan agreement 436,275
Total assets $
61,752,132 $
45,345,647
===
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and bank acceptance
notes to vendors $
5,353,538 $
4,644,784
Accounts payable - related parties 3,389,148 258,274
Loans due within one year 10,867,111 9,020,697
Advances from customers 2,953,595 660,944
Advances from customers -related parties 586,719 747,264
Income tax payables 732,699 501,921
Accrued expenses and other payables 6,375,800 8,509,425
Total current liabilities 30,258,610 24,343,309
Long term loans, less current portion and
unamortized debt issuance costs 4,449,889 11,050
Total liabilities 34,708,499 24,354,359
Shareholders' equity
Common shares ($0.001 par value, 200,000,000
shares authorized,10,809,000 shares issued and
outstanding as of December 31, 2018 and 2017) 10,809 10,809
Additional paid-in capital 15,059,181 15,059,181
Statutory reserves 1,765,711 705,698
Retained earnings 11,380,149 5,228,733
Accumulated other comprehensive loss (1,172,217) (13,133)
Total shareholders' equity 27,043,633 20,991,288
Total liabilities and shareholders'
equity $
61,752,132 $
45,345,647
===
NEWATER TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
For the Years ended December 31,
2018 2017 2016
---
Net revenues $
25,973,963 $
16,192,503 $
6,425,338
Net revenues from related parties 21,066,741 9,146,994 5,854,383
Total revenues 47,040,704 25,339,497 12,279,721
Cost of revenues 20,474,072 17,199,866 7,182,081
Cost of revenues from related parties 5,669,252 556,692
Total cost of revenues 26,143,324 17,199,866 7,738,773
Gross profit 20,897,380 8,139,631 4,540,948
Operating expenses:
Selling, general and administrative 12,025,924 5,452,349 3,146,521
Total operating expenses 12,025,924 5,452,349 3,146,521
Income from operations 8,871,456 2,687,282 1,394,427
Interest expense 658,290 242,707 155,553
Interest income (26,632) (112,592) (5,091)
Government grants (627,748) (513,538) (1,750,726)
Other expenses (income) (1,162) 3,956 12,534
Total other expenses (income) 2,748 (379,467) (1,587,730)
Income before income taxes provisions 8,868,708 3,066,749 2,982,157
Income tax provisions 1,657,279 475,818 548,437
Net income $
7,211,429 $
2,590,931 $
2,433,720
---
Other comprehensive income (loss)
Foreign currency translation adjustment (1,159,084) 535,810 (383,947)
Total comprehensive income $
6,052,345 $
3,126,741 $
2,049,773
===
Earnings per common share
Basic $
0.67 $
0.26 $
0.28
===
Diluted $
0.67 $
0.26 $
0.28
===
Weighted average common shares outstanding
Basic 10,809,000 9,864,479 8,767,738
Diluted 10,809,000 9,864,479 8,767,738
NEWATER TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Number of Shares Common Additional Paid- Retained Statutory Accumulated Total
Shares in Capital Earnings Reserves Other Shareholder's
Comprehensive Equity
Loss
Balance, January 1, 2016 8,200,000 $
8,200 $
2,999,947 $
816,785 $
92,995 $
(164,996) $
3,752,931
Net income 2,433,720 2,433,720
Capital contribution from owners 198,917 198,917
Statutory reserves (289,807) 289,807
Issuance of common shares for debt conversion 999,000 999 3,846,001 3,847,000
Issuance of common shares for cash 5,323,026 5,323,026
Capital distribution in connection with acquisition of a subsidiary (4,418,425) (4,418,425)
Foreign currency translation adjustment (383,947) (383,947)
Balance, December 31, 2016 9,199,000 $
9,199 $
7,949,466 $
2,960,698 $
382,802 $
(548,943) $
10,753,222
Net income 2,590,931 2,590,931
Statutory reserves (322,896) 322,896
Issuance of common shares for cash 1,610,000 1,610 7,109,715 7,111,325
Foreign currency translation adjustment 535,810 535,810
Balance, December 31, 2017 10,809,000 $
10,809 $
15,059,181 $
5,228,733 $
705,698 $
(13,133) $
20,991,288
Net income 7,211,429 7,211,429
Statutory reserves (1,060,013) 1,060,013
Foreign currency translation adjustment (1,159,084) (1,159,084)
Balance, December 31, 2018 10,809,000 $
10,809 $
15,059,181 $
11,380,149 $
1,765,711 $
(1,172,217) $
27,043,633
NEWATER TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
2018 2017 2016
---
Cash flows from operating activities
Net income $
7,211,429 $
2,590,931 $
2,433,720
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization expense 558,327 233,493 187,662
Deferred income taxes (118,199) (312,997) (82,162)
Bad debt expense 280,228 229,707 76,459
Amortization of debt issuance costs 103,772
Loss on disposal of property, plant and equipment 13,256
Gain on disposal of subsidiary (789)
Changes in assets and liabilities:
Accounts receivable, net (5,327,278) (5,076,425) 2,148,124
Accounts receivable - related parties, net (1,427,078) 2,821,621 87,683
Notes receivable (7,276) 70,000 (56,139)
Inventories (5,762,750) (4,923,400) (2,743,853)
Deferred cost of revenue 383,382 (657,875)
Deferred cost of revenue - related party 1,765,856 (1,795,222)
Advances to suppliers and other current assets, net (2,108,928) (412,955) (2,289,933)
Due from related parties 703 75,469
Retentions receivable, non-current (358,505)
Deposit - related party (10,583)
Other non-current assets 4,719 22,857
Accounts payable and bank acceptance notes to vendors 996,619 2,577,192 1,079,258
Accounts payable - related parties 3,269,238 248,695 (2,140,504)
Deferred income (26,639) (30,102)
Advances from customers 2,420,363 (220,483) 425,736
Advances from customers - related parties (125,099) 719,550
Due to related parties 5,102 (28,257)
Income tax payables 267,988 144,944 (181,386)
Accrued expenses and other payables (4,481,539) 589,638 352,502
Net cash used in operating activities (2,456,777) (3,189,701) (663,655)
Cash flows from investing activities
Purchase of land use right (2,261,745)
Purchase of property, plant and equipment (5,511,732) (1,482,360) (66,641)
Proceeds from disposal of property, plant and equipment 22,072
Advances to related parties (239,467)
Advances to third parties (1,236,490) (301,019)
Repayments from third parties 1,236,490 338,646
Repayments from related parties 2,960 473,320
Cash received in connection with disposal of subsidiary (1,209)
Deposit on acquisition of subsidiary (200,000)
Net cash used in investing activities (5,689,660) (1,479,400) (2,058,115)
Cash flows from financing activities
Proceeds from issuances of common shares 7,111,325 5,323,026
Capital contribution from shareholders 198,917
Capital distribution in connection with acquisition of a subsidiary (4,418,425)
Borrowings from related parties 2,558,661
Repayment to related parties (9,703) (739,973) (1,982,733)
Deposit on loan agreement (473,698)
Proceeds from loans due within one year 11,493,557 8,805,683 11,613,289
Repayment of loans due within one year (11,952,224) (3,283,830) (8,142,563)
Proceeds from long-term loans 8,631,493
Payment of debt issuance costs (284,219)
Repayment of long-term loans (730,595)
Net cash provided by financing activities 6,674,611 11,893,205 5,150,172
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash (404,956) 222,973 (235,260)
Net change in cash, cash equivalents and restricted cash (1,876,782) 7,447,077 2,193,142
Cash, cash equivalents and restricted cash, beginning of the year 10,371,765 2,924,688 731,546
Cash, cash equivalents and restricted cash, end of the year $
8,494,983 $
10,371,765 $
2,924,688
===
Supplemental cash flow information
Cash paid for interest $
689,867 $
244,753 $
307,797
===
Cash paid for income taxes $
1,507,489 $
656,602 $
812,637
===
Non-cash investing and financing activities:
Stock issued for debt conversion
$
$ $
3,847,000
Properties acquired with loans $
52,161 $
206,000
$
===
Liabilities assumed in connection with purchase of property, plant and equipment $
2,636,770 $
7,445,478
$
===
Operating expenses paid by related parties $
9,703
$
$ -
Property, plant and equipment transferred from inventories $
1,566,314
$
$ -
Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheets
Cash and cash equivalents $
2,461,501 $
3,118,080 $
1,484,762
Restricted cash 6,033,482 7,253,685 1,439,926
Total cash, cash equivalents and restricted cash $
8,494,983 $
10,371,765 $
2,924,688
===
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SOURCE Newater Technology, Inc.
