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.