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.
•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.
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.
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.
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