Newater Technology, Inc. Announces Year 2019 Audited Financial Results
NEW YORK, June 5, 2020 /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, 2019.
The year ended December 31, 2019 Financial Highlights (all comparisons to the year ended December 31, 2018):
Revenues decreased by 20% from $47 million to $37.6 million in 2019, the decrease in revenues for the year ended December 31, 2019 was mainly due to in 2017-2018, the revenue of Laixi operation project accounted for a large proportion of the whole year's revenue. In 2019, there was no such operation project that generated as much revenue.
Cost of revenues decreased by 17% from $26 million to $21.7 million in 2019, the decrease in cost of revenues directly corresponded to the decrease in revenue during the same year.
Gross profit decreased by 24% from $20.9 million to $15.9 million in 2019, while the gross profit margin was 42% in 2019.
Net income (before currency translation loss) decreased by 40% from $7.2 million to $4.3 million in 2019, and the net profit margin in 2019 was 11.48%.
Total assets increased by 26% from $62 million to $78 million in 2019 mainly driven by the new production facility and production line completed during the year.
Basic earnings per share was $0.40 in 2019, compared to $0.67 in 2018 and $0.26 in 2017.
Mr. Yuebiao Li, the Company's CEO, commented "We are pleased with our accomplishments in 2019, we moved our business office to a new industrial park, management has focused its attention to strategic adjustments of operations and administration, invested more effort in an innovative team for the construction of new products, established a new R & D laboratory, completed our new automatic DTRO membrane production line to achieve high production standard, instituted a chief engineer responsible for product quality in each of the industries we serve, and developed a new patented process package."
In 2020, we will continue to make more efforts to skillfully apply our products to more wastewater treatment fields and undertake larger projects, in order to achieve company's eternal goal of "renewable resources (New Water) recycling".
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., specializes in the development, manufacture and sale of DTRO (Disk Tube Reverse Osmosis) and DTNF (Disk Tube Nano-Filtration) membranes for waste water treatment, recycling and discharge. Newater provides integrated technical solutions in engineering support and installation, technical advice and services, and, and other project-related solutions to turn wastewater into valuable clean water. Newater also provides wastewater treatment services, such as landfill leachate treatment and purification services.
More information about the Company can be found at www.dtNEWA.com.
The Company's products can be used across a wide spectrum of industries, including:
-- Landfill leachate;
-- Wastewater from coal mines;
-- Industrial park common effluent; and
-- Briny 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 apply its products to more industries and obtain larger products 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.
NEWATER TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2019 2018
---
ASSETS
Current assets
Cash and cash equivalents $
9,944,765 $
2,461,501
Restricted cash, current 4,021,177 6,033,482
Accounts receivable, net 11,293,625 10,064,847
Accounts receivable -related parties, net 2,392,087 1,948,009
Notes receivable 360,505 6,999
Inventories 13,715,369 13,762,959
Deposit - related party 10,180
Deferred cost of revenue 221,737 343,090
Advances to suppliers and other current assets,
net 4,699,755 4,904,290
Total current assets 46,649,020 39,535,357
Retentions receivable, non-current 734,140 344,856
Property, plant and equipment, net 24,611,862 18,753,340
Land use right, net 2,008,096 2,078,240
Operating lease right-of-use assets, net 141,016
Deferred tax assets 604,064
Deposit on loan agreement 918,643 436,275
Long-term investments 2,997,419
Total assets $
78,060,196 $
61,752,132
===
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and bank acceptance
notes to vendors $
8,099,529 $
5,353,538
Accounts payable - related parties 5,225,004 3,389,148
Loans due within one year 11,809,449 10,867,111
Advances from customers 5,522,913 2,953,595
Advances from customers - related parties 7,254,968 586,719
Income tax payables 322,419 732,699
Accrued expenses and other payables 6,971,505 6,375,800
Operating lease liabilities, current 56,852
Deferred income 43,061
Total current liabilities 45,305,700 30,258,610
Deferred Income, non-current 43,061
Deferred tax liabilities 288,687
Operating lease liabilities, non-current 68,420
Long term loans, less current portion and
unamortized debt issuance costs 1,377,217 4,449,889
Total non-current liabilities 1,777,385 4,449,889
Total liabilities 47,083,085 34,708,499
Shareholders' equity
Common shares ($0.001 par value, 200,000,000
shares authorized,10,809,000 shares issued and
outstanding as of December 31, 2019 and December
31, 2018) 10,809 10,809
Additional paid-in capital 26,303,348 15,059,181
Statutory reserves 2,267,219 1,765,711
Retained earnings 3,946,021 11,380,149
Accumulated other comprehensive loss (1,550,286) (1,172,217)
Total shareholders' equity 30,977,111 27,043,633
Total liabilities and shareholders'
equity $
78,060,196 $
61,752,132
===
NEWATER TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
For the Years ended December 31,
2019 2018 2017
---
Net revenues $
23,716,978 $
25,973,963 $
16,192,503
Net revenues from related parties 13,857,014 21,066,741 9,146,994
Total revenues 37,573,992 47,040,704 25,339,497
Cost of revenues 20,233,998 20,474,072 17,199,866
Cost of revenues from related parties 1,450,627 5,669,252
Total cost of revenues 21,684,625 26,143,324 17,199,866
Gross profit 15,889,367 20,897,380 8,139,631
Operating expenses:
Selling, general and administrative 10,148,039 12,025,924 5,452,349
Total operating expenses 10,148,039 12,025,924 5,452,349
Income from operations 5,741,328 8,871,456 2,687,282
Interest expense 1,087,051 658,290 242,707
Interest income (38,328) (26,632) (112,592)
Government grants (946,164) (627,748) (513,538)
Investment loss 17,023
Other expenses (income) (153,546) (1,162) 3,956
Total other expenses (income) (33,964) 2,748 (379,467)
Income before income taxes provisions 5,775,292 8,868,708 3,066,749
Income tax provisions 1,463,745 1,657,279 475,818
Net income $
4,311,547 $
7,211,429 $
2,590,931
---
Other comprehensive income (loss)
Foreign currency translation adjustment (378,069) (1,159,084) 535,810
Total comprehensive income $
3,933,478 $
6,052,345 $
3,126,741
===
Earnings per common share
Basic $
0.40 $
0.67 $
0.26
===
Diluted $
0.40 $
0.67 $
0.26
===
Weighted average common shares outstanding
Basic 10,809,000 10,809,000 9,864,479
Diluted 10,809,000 10,809,000 9,864,479
NEWATER TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Number of Shares Common Additional Paid- Retained Earnings Statutory Accumulated Total
Shares in Capital Reserves Other Shareholder's
Comprehensive Equity
Loss
Balance, January 1, 2017 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
Net loss 4,311,547 4,311,547
Statutory reserves (501,508) 501,508
Capital increase from retained earnings 11,244,167 (11,244,167)
Foreign currency translation adjustment (378,069) (378,069)
Balance, December 31, 2019 10,809,000 $
10,809 $
26,303,348 $
3,946,021 $
2,267,219 $
(1,550,286) $
30,977,111
NEWATER TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
2019 2018 2017
---
Cash flows from operating
activities
Net income $
4,311,547 $
7,211,429 $
2,590,931
Adjustments to reconcile net income
to net cash used in operating
activities:
Loss from equity method investment 17,023
Depreciation and amortization
expense 1,549,296 558,327 233,493
Deferred income taxes 892,548 (118,199) (312,997)
Bad debt expense 1,243,709 280,228 229,707
Amortization of debt issuance costs 324,221 103,772
Noncash lease expense 41,935
Loss on disposal of property, plant
and equipment 1,367 13,256
Changes in assets and liabilities:
Accounts receivable, net (1,509,728) (5,327,278) (5,076,425)
Accounts receivable -related
parties, net (1,103,104) (1,427,078) 2,821,621
Notes receivable (356,648) (7,276) 70,000
Inventories (2,923,465) (5,762,750) (4,923,400)
Deferred cost of revenue 117,910 383,382 (657,875)
Deferred cost of revenue -related
party 1,765,856 (1,795,222)
Advances to suppliers and other
current assets, net (311,090) (2,108,928) (412,955)
Due from related parties 703
Retentions receivable, non-current (397,157) (358,505)
Deposit - related party 10,134 (10,583)
Other non-current assets 4,719
Accounts payable and bank
acceptance notes to vendors 2,839,752 996,619 2,577,192
Accounts payable -related parties 1,896,054 3,269,238 248,695
Deferred income 43,433 (26,639)
Advances from customers 2,630,143 2,420,363 (220,483)
Advances from customers -related
parties 6,733,465 (125,099) 719,550
Due to related parties 5,102
Deferred income, non-current 43,433
Operating lease liabilities (76,752)
Income tax payables (404,231) 267,988 144,944
Accrued expenses and other payables (2,322,199) (4,481,539) 589,638
Net cash provided by (used in)
operating activities 13,291,596 (2,456,777) (3,189,701)
Cash flows from investing
activities
Cash paid for equity investments (3,015,119)
Purchase of property, plant and
equipment (2,316,967) (5,511,732) (1,482,360)
Proceeds from disposal of property,
plant and equipment 427,261 22,072
Advances to third party (1,236,490)
Repayments from third party 1,236,490
Repayments from related parties 2,960
Deposit on acquisition of
subsidiary (200,000)
Net cash used in investing
activities (4,904,825) (5,689,660) (1,479,400)
Cash flows from financing
activities
Proceeds from issuances of common
shares 7,111,325
Repayment to related parties (9,703) (739,973)
Deposit on loan agreement (503,939) (473,698)
Proceeds from loans due within one
year 7,454,711 11,493,557 8,805,683
Repayment of loans due within one
year (8,046,350) (11,952,224) (3,283,830)
Proceeds from long-term loans 6,376,169 8,631,493
Payment of debt issuance costs (335,938) (284,219)
Repayment of long-term loans (7,736,415) (730,595)
Net cash provided by (used in)
financing activities (2,791,762) 6,674,611 11,893,205
Effect of foreign exchange rate
changes on cash, cash equivalents
and restricted cash (124,050) (404,956) 222,973
Net change in cash, cash
equivalents and restricted cash 5,470,959 (1,876,782) 7,447,077
Cash, cash equivalents and
restricted cash, beginning of the
year 8,494,983 10,371,765 2,924,688
Cash, cash equivalents
and restricted cash,
end of the year $
13,965,942 $
8,494,983 $
10,371,765
===
Supplemental cash flow information
Cash paid for interest $
608,431 $
689,867 $
244,753
===
Cash paid for income
taxes $
977,755 $
1,507,489 $
656,602
===
Non-cash investing and financing
activities:
Properties acquired with
loans
$ $
52,161 $
206,000
Liabilities assumed in
connection with
purchase of property,
plant and equipment $
2,980,582 $
2,636,770 $
7,445,478
===
Operating expenses paid
by related parties
$ $
9,703
$ -
Property, plant and
equipment transferred
from inventories $
2,791,339 $
1,566,314
$
===
Reconciliation of cash, cash
equivalents and restricted cash to
the consolidated balance sheets
Cash and cash
equivalents $
9,944,765 $
2,461,501 $
3,118,080
Restricted cash 4,021,177 6,033,482 7,253,685
Total cash, cash
equivalents and
restricted cash $
13,965,942 $
8,494,983 $
10,371,765
===
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SOURCE Newater Technology, Inc.
