CSOL - China Solar & Clean Energy Solutions, Inc.
CSOL is one of the few China solar stocks that has not run up yet. I looked at CSOL over the weekend and was impressed with their earnings reports and growth going forward. Seems like it's waiting to be discovered. Perhaps being on the OTC:BB is hurting this company, but they intend to move their listing to NASDAQ or AMEX in the future.
Nine Month Results
Sales increased approximately 57% to $25 million for nine months ended September 30, 2007 as compared to $16 million for the same period last year. Operating expenses for the nine months ended September 30, 2007 were $3.4 million as compared to $2.4 million for the same period in 2006, an increase of 42.7% which includes expenses from Tianjin Huaneng since the acquisition on July 1, 2007. Operating income for the nine months ended September 30, 2007 was $1.8 million, an increase of 73.7% as compared to $1.1 million for the nine months ended September 30, 2006.
Net income was $1.4 million for the nine months ended September 30, 2007, an increase of $0.4 million, or approximately 35.4% compared to same period last year. This equated to earnings of $.20 per share, compared to $.13 per share for the first nine months of 2006 based on 7.04 million and 8.03 million weighted average number of shares respectively.
Balance Sheet and Cash Flow Discussion
From a balance sheet perspective, the Company had $3.3 million in cash and equivalents on September 30, 2007 while stockholders' equity increased to $16.6 million, representing a book value of approximately $2.00 per diluted share. Net cash flow from operations was $324,013 for the nine months ended September 30, 2007.
Inventory increased to $5.2 million and accounts receivable increased to $7.2 million due to the consolidation with Tianjin Huaneng. Different from CSOL's core business, Tianjin Huaneng collects receivables during the project life, where 30 percent of the total cost is pre-paid by customers, 30 percent is paid once installation is commenced, 30 percent is paid when installation is completed and 10 percent is held back for one year to guarantee work.
''Inventory levels were directly related to longer-term projects. Tianjin Huaneng is currently fulfilling for its customers and we expect a significant portion to convert to revenue during the fourth quarter with further improvements made for inventory management on a go forward basis. The increase in accounts receivable were also related to Tianjin Huaneng which extends credit terms to customers. In addition, we continue to evaluate new acquisition targets which will complement our product portfolio as an integrated clean technology energy solution provider and open up new market opportunities in China.''
''We would like to welcome Mr. Gary Lam who recently joined CSOL as our new CFO. He brings extensive corporate finance experience and expertise in developing strategic business plans. In addition, we would like to welcome Mr. Randolph to the board of directors as his experience in a variety of Asian companies will complement the Board's composition while further assisting with all corporate governance issues. We believe these gentlemen will benefit us as we continue to grow organically and through strategic acquisitions, while further evolving as a public company,'' Mr. Du concluded.
About China Solar & Clean Energy Solutions, Inc.
China Solar & Clean Energy Solutions, Inc. operates through its wholly owned subsidiaries Bazhou Deli Solar Heating Energy Co. Ltd., Beijing Deli Solar Technology Development Co., Ltd. and its 51% ownership in Tianjin Huaneng, all of which are located in the PRC. The Company manufactures and distributes hot water and space heating devices to customers in the PRC, in addition to waste heat recovery systems. For more information, please visit delisolar.com .
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