Guanwei Recycling Corp. Reports Third Quarter Results
Positive Trends Continued in Selling Prices, Raw Material and Labor Costs but an Approximately One Week Unplanned Interruption in Production Slightly Lowered Results; Company Maintains Favorable Outlook for Remainder of the Year; Investor Conference Call to Be Held Thursday, November 14th at 8:00am ET
(firmenpresse) - FUQING CITY, CHINA -- (Marketwired) -- 11/13/13 -- (NASDAQ: GPRC)China's leading clean tech manufacturer of recycled low density polyethylene (LDPE), reported today that the positive trends it began to see in the second half of 2012 in selling prices and stabilized labor and raw material costs continued through its third quarter ended September 30, 2013. An approximately one week interruption in production and shipping cycles in the 2013 third quarter, however, slightly lowered revenues and net income in the quarter compared with the prior year.
Mr. Chen Min, Chairman and CEO of the Company, explained that the interruption in production was a consequence of heightened inspections of its facilities by various government agencies stemming from the government's new "Green Fence" policy which tightens requirements for imported waste materials.
"Going forward," he said, "we anticipate maintaining our industry leading environmental practices and see no material impact on our business from this new policy. We are therefore maintaining our favorable outlook for the remainder of the year, based on anticipated moderately improved demand and selling prices for our products, in an improving economy, coupled with continuing anticipated stabilization in our labor and raw material costs."
Reflecting the approximately one week interruption in production described above, net revenues in the 2013 third quarter were $16,299,676, down 8.97% from the same period last year. This decrease reflected a 9.61% decrease in year over year sales of manufactured recycled LDPE from $17,430,616 to $15,755,342 in the 2013 third quarter, and sales of $544,334 of sorted non-LDPE materials in the 2013 third quarter, up 14.51% from $475,358 in the same period in 2012. Revenues from LDPE sales in the 2013 third quarter reflected a 3.89% increase in average selling prices in the quarter to approximately $1,255 per ton, compared with approximately $1,208 per ton a year earlier. The average selling price in this year's first quarter was $1,223 per ton. Labor costs in the 2013 third quarter remained steady at approximately $51 per ton, while the per ton raw material costs for recycled LDPE and sorted non-LDPE material increased 7.6% to $750, compared with $697 in the 2012 third quarter, and $748 in the second quarter this year. The reduced LDPE sales volume in the 2013 third quarter of 12,553 tons, compared with 14,427 tons in the corresponding quarter last year.
Net income in the 2013 third quarter was $2,857,806, or $0.27 per share, compared with $3,622,832, or $0.35 per share in the same quarter last year. The diluted weighted average number of common shares in both periods was 10,407,839. The decrease in net income in the 2013 third quarter primarily reflects the reduced production volume stemming from the approximately one week interruption in the period in production and sales cycles as previously described. Gross margins in the quarter also were impacted by the reduced production, as many of the costs relating to production are fixed costs.
For the nine months ended September 30, 2013, revenues from the sale of manufactured recycled LDPE were $47,534,161, down 0.73% from the same period last year. Primarily reflecting the approximately week long interruption of production in the 2013 third quarter, in the 2013 nine month period the sales volume of manufactured recycled LDPE was down 3.05% to 38,359 tons from 39,565 tons in the corresponding period the prior year. This was somewhat offset by a 2.4% increase in selling price in the first nine months of 2013 to approximately $1,239 per ton, from $1,210 per ton in the year earlier period. Year over year revenues from sales of sorted non-LDPE material also declined in the 2013 nine month period by 6.09% to $1,337,668. A 3.5% year over year increase in average selling price to $325 per ton could not fully offset a 9.61% decline in year over year tonnage sold to 4,119 tons. Combined sales of manufactured LDPE and sorted non-LDPE materials were $48,871,829 in the first nine months of 2013. In 2012, revenues in the comparable period of $52,772,402 also included $3,462,238 in sales of excess raw material inventory. The cost of plastic waste raw material in the first nine months of 2013 increased 5.88% to $756 per ton, compared with the same period in 2012, while labor costs remained stable throughout 2013 at approximately $51 per ton.
Net income in the first nine months of 2013 decreased $389,922, or 4.41%, to $8,461,196 or $0.81 per share, from $8,851,118, or $0.86 per share in the same period last year. These results primarily reflect the decline in sales volume stemming from the approximately one week long interruption of production and sales cycles in the 2013 third quarter, and the resulting slight decline in margins. The diluted weighted average number of common shares outstanding was 10,407,839 in the first nine months of 2013, as compared with 10,254,521 in the year earlier period.
As of the end of the 2013 third quarter, the Company continued to improve its already strong financial position. As of September 30, 2013, working capital increased approximately $9.37 million to $44,877,259 from $35,505,028 as of December 31, 2012. This reflected, in part, an increase in cash and cash equivalents to $15,643,526, and a decrease in accounts receivable reflecting continuing efforts to speed collections from clients. The Company also reported that it had no outstanding bank debt as of the end of the quarter.
"Although disappointed by the week long interruption in our production and sales volume in the quarter," Mr. Chen stated, "we continue to be pleased by the steady improvements in other core elements of our business, as well as growing indications of an improving economic environment in China. By retaining the advantages that come from our environmental leadership -- including the very competitive selling prices we expect to continue to be able to offer our customers -- we remain very confident in a favorable growth outlook for our Company."
The Company will discuss 2013 third quarter results during a live conference call and webcast on .
To participate in the call, interested participants should call 1-877-941-1429 when calling within the United States or 1-480-629-9857 when calling internationally. Please ask for the Guanwei Recycling Corp. 2013 Third Quarter Conference Call, Conference ID:. 4650133 There will be a playback available until November 21, 2013. 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: 4650133
This call is being webcast by ViaVid Broadcasting and can be accessed by clicking on this link or at ViaVid's website at .
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. The Company sells the recycled LDPE 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 .
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.
Richard Sun
Ken Donenfeld
DGI Investor Relations
Tel: 212-425-5700
Fax: 646-381-9727
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Datum: 13.11.2013 - 06:25 Uhr
Sprache: Deutsch
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