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Newater Technology, Inc. Announces Year 2017 Audited Financi

时间:2018-04-30

Newater Technology, Inc. Announces Year 2017 Audited Financial Results

YANTAI, CHINA / ACCESSWIRE / April 30, 2018 / Newater Technology, Inc. (NASDAQ: NEWA) (''NEWA,'' ''we,'' ''our'' or the ''Company''), a developer, service provider and manufacturer of membrane filtration products and related hardware and engineered systems that are used in the treatment, recycling and discharge of wastewater, today announced its financial results for the year ended December 31, 2017.

The year ended December 31, 2017 Financial Highlights (all comparisons to the year ended December 31, 2016)

  • Revenues increased by 106% from $12.28 million to $25.34 million, which resulted primarily from the increased demand for our projects and services, evidenced by a large increase in our project sales, an increased number of customers and larger scale projects, and service sales.
  • Cost of revenues increased by 121% from $7.74 million to $17.08 million, primarily due to the revenue growth in the same period.
  • Gross profit increased by 82% to $8.26 million in 2017 from $4.54 million in 2016, while the gross profit margin was 33%, compared to 37% for the same period in 2016.
  • Selling, general and administrative expenses (SG&A) increased by 77% from $3.15 million to $5.58 million, however, the percentage of SG&A compared to revenue decreased from 26% to 22%.
  • Operating income increased by 93% from $1.39 million to $2.69 million. Our operating income as a percentage of total revenues was 11% for both 2016 and 2017.
  • Basic earnings per share was $0.26 in 2017 compared to $0.28 in 2016.

Selected Consolidated Statements of Income and Comprehensive Income Data
in $ million


   
Year 2017
   
Year 2016
   
Change $
   
change %
   
Year 2015
   
Year 2014
 
Total Revenues
    25.34       12.28       13.06       106 %     6.98       1.03  
Total Cost of Revenues
    17.08       7.74       9.34       121 %     3.76       0.67  
Gross profit
    8.26       4.54       3.72       82 %     3.21       0.36  
Gross profit margin
    33 %     37 %                     46 %     35 %
SG&A
    5.58       3.15       2.43       77 %     1.64       0.36  
SG&A %
    22 %     26 %                     24 %     35 %
Operating income
    2.69       1.39       1.29       93 %     1.57       0.00  
Operation margin
    11 %     11 %                     23 %     0 %
Other Expenses (Income)
    (0.38)       (1.59)       1.21               0.17       -  
Income before tax
    3.07       2.98       0.08       3 %     1.40       0  
Income tax provision
    0.48       0.55                       0.45       0.00  
Net income
    2.59       2.43       0.16       6 %     0.95       (0.00)  
Basic Earnings Per share
  $ 0.26     $ 0.28                       0.12          
Basic Weighted average number of common shares outstanding
    9,864,479       8,767,738       8,200,000               8,200,000          

Mr. Yuebiao Li, the Company's Chairman and Chief Executive Officer, commented ''2017 was an important and pivotal year for NEWA. Our company successfully completed its initial public offering and our common shares were listed on the Nasdaq Capital Market. We continued to have robust growth in our revenues and achieved strong operating results. We are excited about 2018, as our membrane technology was successfully selected as one of the advanced technologies to be promoted in China in 2018 by China's Ministry of Water Resources in its proclamation ''2018 Guide to Promote Advanced Practical Technology.'' In addition, Phase I of our new manufacturing complex in Yantai, China, is expected to be completed as scheduled. With our new manufacturing facilities, we expect to increase our production capacity significantly, making it possible to meet the increasing expected demand for our products. In addition, we believe our unwavering commitment to R&D will position NEWA for a long-term growth.''

About Newater Technology, Inc.

Founded in 2012 and headquartered in Yantai, China, Newater, operating its business through its wholly owned subsidiary Jinzheng, specializes in the development, manufacture and sale of DTRO (Disk Tube Reverse Osmosis) and DTNF (Disk Tube Nano-Filtration) membranes for waste water treatment, recycling and discharge. Newater provides integrated technical solutions in engineering support and installation, technical advice and water purification services, and other project-related solutions to turn wastewater into valuable clean water.

The Company's products can be used across a wide spectrum of industries, including:

- Leachate from landfills
- Wastewater from oil fields
- High acid wastewater
- Power plant waste water
- Wastewater from gas production
- Desalination

More information about the Company can be found at: www.newater.cc.

Notice

Rounding amounts and percentages: Certain amounts and percentages included in this press release have been rounded for ease of presentation. Percentage figures included in this press release have not in all cases been calculated on the basis of such rounded figures, but on the basis of such amounts prior to rounding. For this reason, certain percentage amounts in this press release may vary from those obtained by performing the same calculations using the figures in the financial statements. In addition, certain other amounts that appear in this press release may not sum due to rounding.

Forward-Looking Statements

This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. When the Company uses words such as ''may,'' ''will,'' ''intend,'' ''should,'' ''believe,'' ''expect,'' ''anticipate,'' ''project,'' ''estimate'' or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Specifically, the Company's statements regarding: 1) its continued growth and business outlook, 2) completion of its manufacturing facility on schedule; and 3) abiltiy to increase its production capacity to meet the anticipated demand for its products are forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the actual results to differ materially from the Company's expectations discussed in the forward-looking statements. These statements are subject to uncertainties and risks including, but not limited to, the following: the Company's goals and strategies; the Company's future business development; product and service demand and acceptance; changes in technology; economic conditions; the growth of the water filtration industry in China; reputation and brand; the impact of competition and pricing; government regulations; fluctuations in general economic and business conditions in China and assumptions underlying or related to any of the foregoing and other risks contained in reports filed by the Company with the Securities and Exchange Commission. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company's filings with the U.S. Securities and Exchange Commission, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

For more information, please contact:

Company

Zhuo Zhang CFO
NEWATER TECHNOLOGY INC.
Phone: +86 (535) 626-4177
Email: zhuozhang@newater.cc

Investor Relations

Y. Tracy Tang CFA, CPA
SINO-AMERICAN INVESTOR ADVISORY
Phone: +1 (646) 485-1040
Email: Tracy.tang@sino-UsInvestors.com


NEWATER TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS


   
December 31,
   
December 31,
 
   
2017
   
2016
 
             
ASSETS
   
 
Current assets
           
Cash and cash equivalents
 
$
3,118,080
   
$
1,484,762
 
Restricted cash, current
   
6,753,685
     
1,439,926
 
Accounts receivable, net
   
6,050,495
     
2,637,236
 
Accounts receivable from related party, net
   
-
     
1,060,977
 
Notes receivable
   
-
     
68,108
 
Inventories
   
10,279,397
     
4,840,234
 
Deferred cost of revenue
   
2,547,580
     
-
 
Advances to suppliers and other current assets, net
   
2,885,510
     
2,528,411
 
Due from related parties
   
-
     
3,563
 
Total current assets
   
31,634,747
     
14,063,217
 
                 
Restricted cash, non-current
   
500,000
     
-
 
Property, plant and equipment, net
   
10,449,466
     
1,199,611
 
Land use rights, net
   
2,243,183
     
2,143,002
 
Deferred tax assets
   
518,251
     
181,003
 
Other non-current assets
   
-
     
4,591
 
Total assets
 
$
45,345,647
   
$
17,591,424
 
                 
LIABILITIES AND SHAREHOLDERS' EQUITY
               
Current liabilities
               
Accounts payable and bank acceptance notes to vendors
 
$
4,903,058
   
$
1,844,077
 
Loans due within one year
   
9,020,697
     
2,879,853
 
Due to related parties
   
-
     
714,999
 
Deferred income
   
-
     
25,919
 
Advances from customers
   
1,408,208
     
833,742
 
Income tax payables
   
501,921
     
329,212
 
Accrued expenses and other payables
   
8,509,425
     
210,400
 
Total current liabilities
   
24,343,309
     
6,838,202
 
                 
Long term loans
   
11,050
     
-
 
Total liabilities
   
24,354,359
     
6,838,202
 
                 
Shareholders' equity
               
Common shares ($0.001 par value, 200,000,000 shares authorized, 10,809,000 and 9,199,000 shares issued and outstanding as of December 31, 2017 and 2016, respectively)
   
10,809
     
9,199
 
Additional paid-in capital
   
15,059,181
     
7,949,466
 
Statutory reserves
   
705,698
     
382,802
 
Retained earnings
   
5,228,733
     
2,960,698
 
Accumulated other comprehensive loss
   
(13,133)
 
   
(548,943)
 
Total shareholders' equity
   
20,991,288
     
10,753,222
 
Total liabilities and shareholders' equity
 
$
45,345,647
   
$
17,591,424
 

NEWATER TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME


   
For the Years Ended December 31,
 
   
2017
   
2016
   
2015
 
                   
Net revenues
 
$
25,339,497
   
$
11,985,055
   
$
3,318,833
 
Net revenues from related parties
   
-
     
294,666
     
3,659,421
 
Total revenues
   
25,339,497
     
12,279,721
     
6,978,254
 
Cost of revenues
   
17,077,129
     
7,182,081
     
778,903
 
Cost of revenues from related party
   
-
     
556,692
     
2,984,968
 
Total cost of revenues
   
17,077,129
     
7,738,773
     
3,763,871
 
Gross profit
   
8,262,368
     
4,540,948
     
3,214,383
 
Operating expenses:
                       
Selling, general and administrative
   
5,575,086
     
3,146,521
     
1,643,313
 
Total operating expenses
   
5,575,086
     
3,146,521
     
1,643,313
 
Income from operations
   
2,687,282
     
1,394,427
     
1,571,070
 
Interest expense
   
242,707
     
155,553
     
164,613
 
Interest income
   
(112,592)
 
   
(5,091)
 
   
(2,612)
 
Government grants
   
(513,538)
 
   
(1,750,726)
 
   
-
 
Other expenses
   
3,956
     
12,534
     
10,642
 
Total other expense (income)
   
(379,467)
 
   
(1,587,730)
 
   
172,643
 
Income before income tax provisions
   
3,066,749
     
2,982,157
     
1,398,427
 
Income tax provisions
   
475,818
     
548,437
     
452,850
 
Net income
 
$
2,590,931
   
$
2,433,720
   
$
945,577
 
Other comprehensive income (loss)
                       
Foreign currency translation adjustment
   
535,810
     
(383,947)
 
   
(166,349)
 
Total comprehensive income
 
$
3,126,741
   
$
2,049,773
   
$
779,228
 
                         
Earnings per common share
                       
Basic
 
$
0.26
   
$
0.28
   
$
0.12
 
Diluted
 
$
0.26
   
$
0.28
   
$
0.10
 
Weighted average number of common shares outstanding
                       
Basic
   
9,864,479
     
8,767,738
     
8,200,000
 
Diluted
   
9,864,479
     
8,767,738
     
9,160,087
 

NEWATER TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY


   
Number of Shares
   
Common Shares
   
Additional Paid-in Capital
   
Retained Earnings (Deficit)
   
Statutory Reserves
   
Accumulated Other Comprehensive Income (Loss)
   
Total Shareholders' Equity
 
                                           
Balance, January 1, 2015
   
8,200,000
   
$
8,200
   
$
787,151
   
$
(35,797)
 
 
$
-
   
$
1,353
   
$
760,907
 
Net income
   
-
     
-
     
-
     
945,577
     
-
     
-
     
945,577
 
Capital contribution from owners
   
-
     
-
     
2,212,796
     
-
     
-
     
-
     
2,212,796
 
Statutory reserves
   
-
     
-
     
-
     
(92,995)
 
   
92,995
     
-
     
-
 
Foreign currency translation adjustment
   
-
     
-
     
-
     
-
     
-
     
(166,349)
 
   
(166,349)
 
Balance, December 31, 2015
   
8,200,000
     
8,200
     
2,999,947
     
816,785
     
92,995
     
(164,996)
 
   
3,752,931
 
Net income
   
-
     
-
     
-
     
2,433,720
     
-
     
-
     
2,433,720
 
Capital contribution from owners
   
-
     
-
     
198,917
     
-
     
-
     
-
     
198,917
 
Statutory reserves
   
-
     
-
     
-
     
(289,807)
 
   
289,807
     
-
     
-
 
Issuance of common shares for debt conversion
   
999,000
     
999
     
3,846,001
     
-
     
-
     
-
     
3,847,000
 
Issuance of common shares for cash
   
-
     
-
     
5,323,026
     
-
     
-
     
-
     
5,323,026
 
Capital distribution in connection with acquisition of a subsidiary
   
-
     
-
     
(4,418,425)
 
   
-
     
-
     
-
     
(4,418,425)
 
Foreign currency translation adjustment
   
-
     
-
     
-
     
-
     
-
     
(383,947)
 
   
(383,947)
 
Balance, December 31, 2016
   
9,199,000
     
9,199
     
7,949,466
     
2,960,698
     
382,802
     
(548,943)
 
   
10,753,222
 
Net income
   
-
     
-
     
-
     
2,590,931
             
-
     
2,590,931
 
Statutory reserves
   
-
     
-
     
-
     
(322,896)
 
   
322,896
     
-
     
-
 
Issuance of common shares for cash
   
1,610,000
     
1,610
     
7,109,715
     
-
     
-
     
-
     
7,111,325
 
Foreign currency translation adjustment
   
-
     
-
     
-
     
-
     
-
     
535,810
     
535,810
 
Balance, December 31, 2017
   
10,809,000
   
$
10,809
   
$
15,059,181
   
$
5,228,733
   
$
705,698
   
$
(13,133)
 
 
$
20,991,288
 

NEWATER TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS


   
For the Years Ended December 31,
 
   
2017
   
2016
   
2015
 
Cash flows from operating activities
                 
Net income
 
$
2,590,931
   
$
2,433,720
   
$
945,577
 
Adjustments to reconcile net income to net cash used in operating activities:
                       
Depreciation and amortization expense
   
233,493
     
187,662
     
86,396
 
Bad debt expense
   
229,707
     
76,459
     
39,173
 
Deferred income taxes
   
(312,997)
 
   
(82,162)
 
   
(106,401)
 
Loss on disposal of property, plant and equipment
   
-
     
-
     
6,199
 
Gain on disposal of subsidiary
   
-
     
(789)
 
   
-
 
Changes in assets and liabilities:
                       
Accounts receivable
   
(3,345,269)
 
   
(1,410,115)
 
   
(1,411,777)
 
Accounts receivable from related parties
   
1,090,465
     
3,645,922
     
(3,754,977)
 
Notes receivable
   
70,000
     
(56,139)
 
   
64,218
 
Inventories
   
(4,923,400)
 
   
(2,743,853)
 
   
(1,890,918)
 
Deferred cost of revenue
   
(2,453,097)
 
   
-
     
-
 
Advances to suppliers and other current assets
   
(412,955)
 
   
(2,289,933)
 
   
(540,737)
 
Advances to supplier - related party
   
-
     
-
     
793,106
 
Due from related parties
   
703
     
75,469
     
(1,023)
 
Other non-current assets
   
4,719
     
22,857
     
132,971
 
Accounts payable and bank acceptance notes to vendors
   
2,825,887
     
1,079,258
     
582,555
 
Accounts payable to related party
   
-
     
(2,140,504)
 
   
1,159,416
 
Deferred income
   
(26,639)
 
   
(30,102)
 
   
61,007
 
Advances from customers
   
499,067
     
425,736
     
(42,227)
 
Due to related parties
   
5,102
     
(28,257)
 
   
(68,302)
 
Income tax payables
   
144,944
     
(181,386)
 
   
550,163
 
Accrued expenses and other payables
   
589,638
     
352,502
     
437,151
 
Net cash used in operating activities
   
(3,189,701)
 
   
(663,655)
 
   
(2,958,430)
 
Cash flows from investing activities
                       
Purchase of land use rights
   
-
     
(2,261,745)
 
   
-
 
Purchase of property, plant and equipment
   
(1,482,360)
 
   
(66,641)
 
   
(1,218,404)
 
Proceeds from disposal of property, plant and equipment
   
-
     
-
     
9,296
 
Advances to third parties
   
(1,236,490)
 
   
(301,019)
 
   
(40,136)
 
Repayments from third parties
   
1,236,490
     
338,646
     
-
 
Advances to related parties
   
-
     
(239,467)
 
   
(353,767)
 
Repayments from related parties
   
2,960
     
473,320
     
20,871
 
Net change in restricted cash
   
(5,712,407)
 
   
(922,380)
 
   
(621,567)
 
Cash received in connection with disposal of subsidiary
   
-
     
(1,209)
 
   
-
 
Net cash used in investing activities
   
(7,191,807)
 
   
(2,980,495)
 
   
(2,203,707)
 
Cash flows from financing activities
                       
Proceeds from issuances of common shares
   
7,111,325
     
5,323,026
     
-
 
Capital contribution from shareholders
   
-
     
198,917
     
2,212,796
 
Capital distribution in connection with acquisition of a subsidiary
   
-
     
(4,418,4250)
 
   
-
 
Borrowings from related parties
   
-
     
2,558,661
     
478,969
 
Repayment to related parties
   
(739,973)
 
   
(1,982,733)
 
   
(799,590)
 
Proceeds from loans due within one year
   
8,805,683
     
11,613,289
     
4,013,614
 
Repayment of loans
   
(3,283,830)
 
   
(8,142,563)
 
   
(642,178)
 
Net cash provided by financing activities
   
11,893,205
     
5,150,172
     
5,263,611
 
Effect of foreign exchange rate changes on cash and cash equivalents
   
121,621
     
(156,412)
 
   
(3,080)
 
Net increase in cash and cash equivalents
   
1,633,318
     
1,349,610
     
98,394
 
Cash and cash equivalents, beginning of the year
   
1,484,762
     
135,152
     
36,758
 
Cash and cash equivalents, end of the year
 
$
3,118,080
   
$
1,484,762
   
$
135,152
 
Supplemental cash flow information
                       
Cash paid for interest
 
$
244,753
   
$
307,797
   
$
8,354
 
Cash paid for income taxes
 
$
656,602
   
$
812,637
   
$
9,088
 
                         
Non-cash investing and financing activities:
                       
Stock issued for debt conversion
 
$
-
   
$
3,847,000
   
$
-
 
Properties acquired with loans
 
$
206,000
   
$
-
   
$
-
 
Liabilities assumed in connection with purchase of property, plant and equipment
 
$
7,445,478
   
$
-
   
$
-
 

SOURCE: Newater Technology, Inc.


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