SmartHeat Inc. Reports Record 2nd Quarter Financial Results, Reaffirms 2008 Sales and Earnings Guidance

SOURCE:

SmartHeat Inc.

2008-08-14 06:05:00

NEW YORK, NY–(EMWNews – August 14, 2008) – SmartHeat Inc. (OTCBB: SMHT)


--  Earnings per Share of $0.03, increased approximately 400% from Q2 in

    2007.

--  Net Income of $0.73 Million, Increased 2270% from Q2 in 2007.

--  Record Revenue of $5.56 Million, Increased 380% from Q2 in 2007.

--  Expects strong earnings growth to continue in the second half of 2008

    which is SmartHeat's two strongest quarters of the year.

--  Reaffirms 2008 revenue guidance of approximately $42 million, net

    income between $7.4 million and $7.7 million.

    

SmartHeat Inc. (Website: www.smartheatinc.com) (OTCBB: SMHT), a market

leader in China’s “green” technology heat energy saving industry, today

announced record financial results for the quarter ended June 30, 2008.

SmartHeat generated revenues of $5.56 million, compared to $1.16 million in

the same period in 2007, an increase of approximately 380%. The sales

increase was primarily due to the expansion of the company’s sales force,

growth of SmartHeat’s existing sales channels which developed new customers

and the extension of the company’s customer base into new markets in China.

SmartHeat expects its growth momentum to continue through the remainder of

2008.

Net income for the quarter was $732,412, compared to approximately $3,219

for the same period in 2007. This increase is attributed to greater

economies of scale combined with rapid growth in revenues and significantly

improved operating efficiency. SmartHeat believes that net income growth

momentum will continue in the second half of 2008.

James Jun Wang, SmartHeat’s CEO, commented: “We are very pleased with the

2nd quarter financial results. Our strong financial performance reflects

implementation of our growth strategies in a favorable market environment

as China embraces more energy efficient products. SmartHeat stands to

benefit greatly from China’s ‘green’ movement towards clean environment as

our efficient energy saving products reduce heat energy use by as much as

50%. We look forward to continued execution of our growth plan as we enter

two of SmartHeat’s strongest quarters.”

About SmartHeat Inc.

SmartHeat Inc. is a US company with its primary operations in China.

SmartHeat is a market leader in China’s “green” technology heat energy

saving industry. SmartHeat manufactures plate heat exchangers and compact

plate heat exchanger units — the technology that helps to capture and

recycle waste heat thus reduces fossil fuel related costs and pollution.

SmartHeat’s products and technology have broad residential and industrial

applications. China’s heat transfer market is currently estimated at

approximately $2.4 billion with double digit annual growth according to

China Heating Association. Additional information about SmartHeat is

available at its corporate website: www.smartheatinc.com

Safe Harbor Statement

All statements in this press release that are not historical are

forward-looking statements made pursuant to the “safe harbor” provisions of

the Private Securities Litigation Reform Act of 1995. There can be no

assurance that actual results will not differ from the company’s

expectations. SmartHeat’s actual results may differ from its projections.

Further, preliminary results are subject to normal year-end adjustments.

You are cautioned not to place undue reliance on any forward-looking

statements in this press release as they reflect SmartHeat’s current

expectations with respect to future events and are subject to risks and

uncertainties that may cause actual results to differ materially from those

contemplated. Potential risks and uncertainties include, but are not

limited to, the risks described in SmartHeat’s filings with the Securities

and Exchange Commission.


                     SMARTHEAT, INC. AND SUBSIDIARY

     CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME

                                (Unaudited)



                              FOR THE SIX MONTHS     FOR THE THREE MONTHS

                                ENDED JUNE 30,          ENDED JUNE 30,

                               2008        2007        2008        2007

                            ----------  ----------  ----------  ----------



Net sales                   $8,637,283  $2,457,967  $5,558,232  $1,159,098



Cost of goods sold           6,228,156   1,598,789   4,115,200     756,368

                            ----------  ----------  ----------  ----------



Gross profit                 2,409,127     859,178   1,443,032     402,730



Operating expenses

     Selling expenses          608,028     484,893     410,607     267,682

     General and

      administrative

      expenses                 446,470     298,842     162,325     141,397

                            ----------  ----------  ----------  ----------



     Total operating

      expenses               1,054,498     783,735     572,932     409,079

                            ----------  ----------  ----------  ----------



Income (loss) from

 operations                  1,354,629      75,443     870,100      (6,349)



Non-operating income

 (expenses)

     Interest income           260,683     164,421     113,545      95,396

     Interest expense         (163,040)    (87,966)    (96,412)    (57,854)

     Other income                8,290      12,000       6,116      10,923

     Subsidy income              9,141      51,830         134         272

                            ----------  ----------  ----------  ----------



     Total non-operating

      income                   115,074     140,285      23,383      48,737

                            ----------  ----------  ----------  ----------



Income before income tax     1,469,703     215,728     893,483      42,388



Income tax expense             266,028      52,486     161,071      39,178

                            ----------  ----------  ----------  ----------



Income after income tax      1,203,675     163,242     732,412       3,210



Less: minority interest              -      (1,846)          -          (9)



                            ----------  ----------  ----------  ----------

Net income                   1,203,675     165,088     732,412       3,219



Other comprehensive item

     Foreign currency

      translation              410,896      77,254     168,802      39,842

                            ----------  ----------  ----------  ----------





Comprehensive Income        $1,614,571  $  242,342  $  901,214  $   43,061

                            ==========  ==========  ==========  ==========



Basic and diluted weighted

 average shares outstanding 20,213,419  18,500,000  21,926,838  18,500,000

                            ----------  ----------  ----------  ----------



Basic and diluted earnings

 per share                  $     0.06  $     0.01  $     0.03  $     0.00

                            ==========  ==========  ==========  ==========







                      SMARTHEAT, INC. AND SUBSIDIARY

                        CONSOLIDATED BALANCE SHEETS



                                                 AS OF            AS OF

                                               JUNE 30,        DECEMBER 31,

                                                 2008             2007

                                              (Unaudited)

ASSETS



CURRENT ASSETS

     Cash & cash equivalents                $       207,495 $       393,147

     Restricted cash                                807,709         537,098

     Accounts receivable, net                     7,954,078       4,762,822

     Retentions receivable                           26,552         191,319

     Advances to suppliers                        2,111,461         158,750

     Other receivables                            1,100,950         766,231

     Inventories                                  5,474,046       7,928,408

     Due from related party                         224,710         118,560

                                            --------------- ---------------



        Total current assets                     17,907,001      14,856,335



NON-CURRENT ASSETS

     Property and equipment, net                  2,133,803       2,040,809

     Construction in progress                        40,696               -

     Accounts receivable, net                             -         949,998

     Retentions receivable                                -         169,309

     Intangible assets, net                         620,801         534,208

                                            --------------- ---------------



       Total noncurrent assets                    2,795,300       3,694,324



                                            --------------- ---------------

TOTAL ASSETS                                $    20,702,301 $    18,550,659

                                            =============== ===============





LIABILITIES AND STOCKHOLDERS' EQUITY



CURRENT LIABILITIES

     Accounts payable                       $     4,724,904 $     3,128,585

     Unearned revenue                             1,565,208       3,125,406

     Tax payable                                    362,121         503,010

     Other payables                               1,294,697         807,700

     Due to related party                           526,772         445,990

     Loans payable                                4,693,917       4,619,856

                                            --------------- ---------------



         Total current liabilities               13,167,619      12,630,547



COMMITMENTS AND CONTINGENCIES



MINORITY INTEREST                                         -               -



STOCKHOLDERS' EQUITY

     Common stock, $0.001 par value;

      75,000,000 shares authorized,

      22,549,900 and 18,500,000 shares

      issued and outstanding at June 30, 2008

      and December 31, 2007, respectively            22,550          18,500

     Paid in capital                              3,098,082       3,102,132

     Statutory reserve                              627,722         506,532

     Accumulated other comprehensive income         884,755         473,859

     Retained earnings                            2,901,573       1,819,089

                                            --------------- ---------------



         Total stockholders' equity               7,534,682       5,920,112



                                            --------------- ---------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $    20,702,301 $    18,550,659

                                            =============== ===============

Contact Information:
U.S. Contact:
Mr. Arnold Staloff
Independent Board Member
Tel: 212-631-3510

Corporate Contact:
James Wang
CEO
SmartHeat Inc.
Tel: 011-86-13701368262
Email:
www.smartheatinc.com

free cash grants, free grant money, free money, cash grants, scholarships, business grants, foundation grants, government grants, debt grants, consolidation, college tuition, financial aid, medical grants, personal grants, medical bills, unsecured loans, no interest loans, financing, loans, capital, non profit organizations

Major Newsire & Press Release Distribution with Basic Starting at only $19 and Complete OTCBB / Financial Distribution only $89

Get Unlimited Organic Website Traffic to your Website 
TheNFG.com now offers Organic Lead Generation & Traffic Solutions