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Guanwei Recycling Corp. Reports 2012 Revenues Grew 24.28% Over Prior Year

Mar 28 2013 12:00AM

Marketwire

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FUQING CITY, CHINA -- (Marketwire) -- 03/28/13 -- Guanwei Recycling Corp. (NASDAQ: GPRC), a leading clean tech manufacturer in China of recycled low density polyethylene (LDPE), today reported revenues advanced 24.28% year over year to a record $79,043,356 in the year ended December 31, 2012. Operating in a relatively weaker economy in China, growth was fueled by continued domestic demand for the Company's competitively priced, high quality recycled plastic. Despite a moderation in some key costs in the second half of 2012, especially for raw materials, year over year increases in manufacturing costs slightly outpaced steady gains in sales prices. This resulted in slightly lower full year net income compared with the prior year.

2012 Highlights

•Net revenues grew to a record $79,043,356, up 24.28% from revenues of $63,600,678 in 2011. •Net income declined 7.49 % from $12,793,448, or $1.28 per share in 2011, to $11,835,295, or $1.15 per share, as gross profit margins declined from 30.64% in 2011 to 23.54% in 2012. The earnings per share data retroactively reflects the reverse stock split which took place in December, 2012. •At year end, the Company had no bank debt, cash and cash equivalents of $12,083,358, and working capital of $35,505,028, up 49.16% from the prior year. •The Company maintained its competitive advantage of being licensed by Chinese and German authorities to import lower cost, higher quality plastic waste from Germany and other European raw material suppliers by continuing to meet exacting green standards.

Volume and Sales Price Increases

The Company's sales of manufactured recycled LDPE in 2012 were a record $67,331,679, up 8.77% from 2011. This increase reflected year over year growth in tonnage sales from 52,666 tons in 2011 to 55,448 tons in 2012, a 5.28% increase. Average selling prices for manufactured recycled LDPE in 2012 were approximately $1,214 per ton, a 3.32% increase from approximately $1,175 per ton a year earlier.

Sales of sorted non-LDPE materials increased 12.57% to $1,913,859 reflecting a 5.41% increase in tonnage sales to 6,135 tons as average sales prices increased 6.85% to approximately $312 per ton.

During the year, the Company also recorded $9,797,818 in low margin sales of raw materials. It had no such sales in 2011. The sales in 2012 resulted from a Company decision to increase bulk buying of raw materials to reduce costs which required sales of unused raw materials to increase storage space.

Capital Expenditures

During the year the Company incurred capital expenditures of approximately $2.69 million, primarily related to building improvements and other factory equipment purchases aimed mainly at improving its production process and efficiencies. Production capacity at year end was 80,000 tons.

Import Quota

The Company received governmental approval for an import quota in 2013 of 100,000 tons of imported plastic waste, up from 80,000 tons in 2012. At the same time, the Company's ability to utilize the import quota of Fuqing Huan Li Plastics Company was reduced from 35,000 tons in 2012, to 15,000 tons in 2013. The combined imported plastic waste tonnage allowed in 2012 was 115,000 tons which is the same combined tonnage allowed in 2013.

Outlook

Mr. Min Chen, Chairman and CEO of the Company, commented, "We believe our financial strength and the continuing growth in sales we achieved in 2012 -- despite China's relatively slower economic environment -- bode well for the future, as we provide key products required in a wide variety of end uses to a broad range of customers. A primary goal this year is to improve profit margins as sales continue to expand, with a particular focus on managing key manufacturing costs to the extent possible."

He added, "We also remain committed to our U.S. listing and believe it is only a matter of time before investors recognize the outstanding growth still ahead in China, and companies such as ours that are well positioned to benefit from that growth."

Conference Call Invitation

The Company will discuss 2012 year end results during a live conference call and webcast on Monday, April 1st, at 8:00am ET.

To participate in the call, interested participants should call 1-877-941-4774 when calling within the United States or 1-480-629-9760 when calling internationally. Please ask for the Guanwei Recycling Corp. 2012 Year End Conference Call, Conference ID: 4609603. There will be a playback available until 04/08/13. To listen to the playback, please call 1-877-870-5176 when calling within the United States or 1-858-384-5517 when calling internationally. Use the Replay Pin Number: 4609603.

This call is being webcast by ViaVid Broadcasting and can be accessed by clicking on this link http://public.viavid.com/index.php?id=103983 or at ViaVid's website at http://viavid.com.

SEE ATTACHED TABLES

Description of Guanwei Recycling Corp.

Adhering to the highest "green" standards, Guanwei Recycling Corp. (the "Company") has generated rapid growth producing recycled low density polyethylene (LDPE) from plastic waste procured mostly in Europe for sales to more than 300 customers (including over 150 active recurring customers) in more than ten different industries in China. The Company is licensed by Chinese authorities and also has been issued a Compliance Certificate by Umweltagentur Erftstadt, which issues certificates of approval for certain plastics manufacturers that meet Germany's strict environmental standards. This enables the Company to procure high quality plastic waste directly from Germany and other European countries (Spain and Holland) with no middlemen, and permits highly economic production of the highest grades of LDPE. Additional information regarding Guanwei Recycling Corp. is available at www.guanweirecycling.com.

Information Regarding Forward-Looking Statements

Except for historical information contained herein, the statements in this press release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause our actual results in future periods to differ materially from forecasted results. These risks and uncertainties include, among other things, product demand, market competition, and risks inherent in our operations. These and other risks are described in our filings with the U.S. Securities and Exchange Commission.


GUANWEI RECYCLING CORP. CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME Year Ended December 31, -------------------------- 2012 2011 ------------ ------------Net revenue $ 79,043,356 $ 63,600,678Cost of revenue 60,440,237 44,111,700 ------------ ------------ Gross profit 18,603,119 19,488,978 ------------ ------------Operating expenses: Selling and marketing 417,597 398,513 General and administrative 2,297,782 1,994,873 ------------ ------------ Total operating expenses 2,715,379 2,393,386 ------------ ------------Income from operations 15,887,740 17,095,592 ------------ ------------Other income (expenses) Interest income 55,781 88,249 Interest expenses - (29,083) Net foreign exchange gain 62,806 156,602 Loss on disposal of property and equipment (33,452) (72,174) Miscellaneous 6,372 7,383 ------------ ------------ Total other income 91,507 150,977 ------------ ------------Income before income taxes 15,979,247 17,246,569Income taxes 4,143,952 4,453,121 ------------ ------------Net income 11,835,295 12,793,448Other comprehensive income - foreign currency translation adjustments 284,318 1,067,008 ------------ ------------Comprehensive income $ 12,119,613 $ 13,860,456 ============ ============Earnings per share - basic and diluted $ 1.15 $ 1.28 ============ ============Weighted average number of common shares outstanding - basic and diluted 10,293,872 10,000,015 ============ ============




GUANWEI RECYCLING CORP. CONSOLIDATED BALANCE SHEETS December 31, 2012 2011 ------------ ------------ASSETSCurrent assets Cash and cash equivalents $ 12,083,358 $ 12,432,803 Accounts receivable 9,305,104 4,475,386 Inventories 18,696,648 16,858,801 Advances to suppliers 1,827,480 - Value added tax refundable - 1,221,531 Prepaid expenses and other current assets 131,564 882,818 ------------ ------------ Total current assets 42,044,154 35,871,339Property, plant and equipment, net 10,223,874 8,151,012Construction in progress - 174,295Land use right, net 663,800 673,762Other assets 202,346 205,437 ------------ ------------ Total Assets $ 53,134,174 $ 45,075,845 ============ ============LIABILITIES AND SHAREHOLDERS' EQUITYCurrent liabilities Accounts payable $ 4,082,982 $ 8,741,822 Accrued expenses and other payables 796,705 714,072 Value added taxes payable 110,484 - Amount due to shareholder 517,863 1,468,167 Income tax payable 1,031,092 1,144,516 ------------ ------------ Total current liabilities 6,539,126 12,068,577 ------------ ------------Commitments and contingenciesShareholders' Equity Common stock, $0.001 par value, 500,000,000 shares authorized, 10,407,839 and 10,000,015 shares issued and outstanding, as of December 31, 2012 and December 31, 2011 10,408 10,000 Additional paid-in capital 2,767,787 1,300,028 PRC statutory reserves 805,483 805,483 Accumulated other comprehensive income 2,546,999 2,262,681 Retained earnings 40,464,371 28,629,076 ------------ ------------ Total shareholders' equity 46,595,048 33,007,268 ------------ ------------ Total liabilities and shareholders' equity $ 53,134,174 $ 45,075,845 ============ ============





Contacts:

Richard Sun
guanweirecycling@gmail.com

Ken Donenfeld
DGI Investor Relations
kdonenfeld@dgiir.com
Tel: 212-425-5700
Fax: 646-381-9727





Source: Marketwire


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