Guanwei Recycling Reports Year Over Year Gains in Sales and Net

Guanwei Recycling Reports Year Over Year Gains in Sales and Net
Income in 2012 Third Quarter as Gross Profit Increased 11.59% 
Turning Point Achieved in Third Quarter as Sales Prices Increased at
a Faster Pace Than Manufacturing Costs Which the Company Believes Are
Now Stabilized; Investor Conference Call to Be Held Wednesday,
November 14th at 8:00am ET 
FUQING CITY, CHINA -- (Marketwire) -- 11/13/12 --  Guanwei Recycling
Corp. (NASDAQ: GPRC), China's leading clean tech manufacturer of
recycled low density polyethylene (LDPE), reported today that in its
third quarter ended September 30, 2012 a reversal in an approximately
year long trend of manufacturing cost increases outpacing increases
in selling prices helped generate a 7.32% year over year increase in
net income on a 7.36% increase in sales, as gross profit in the
quarter increased 11.59%.  
Financial Highlights 


 
--  Net revenues in the 2012 third quarter increased 7.36% to $17,905,974
    compared with $16,679,012 in the same period last year based on
    increases in sales prices and tonnage sold. Tonnage sales of
    self-manufactured recycled LDPE increased 5.77% to 14,427 tons year
    over year while recycled LDPE prices in the same time period increased
    0.75% to $1,208 per ton.
--  Gross profit in the 2012 third quarter compared with the prior year
    period increased by $574,704, or 11.59%, to $5,531,524. Wages and
    welfare costs, which had increased substantially in the first half of
    the year, stabilized in the third quarter, as did costs for raw
    materials and overhead. At the same time, selling prices for
    manufactured recycled LDPE and sorted non-LDPE materials outpaced
    costs.
--  2012 third quarter net income grew 7.32% to $3,622,832, or $0.17 per
    share, on 20,815,654 diluted shares outstanding compared with
    $3,375,758, or $0.17 per share, in the third quarter of 2011 on
    20,000,006 diluted shares outstanding.
--  Revenues for the nine months ended September 30, 2012, which included
    the low margin sale of $3,462,238 of certain raw materials in the
    first half of 2012, increased 13.30% to $52,772,402 compared with the
    year ago period. There were no raw materials sales in the first nine
    months of 2011.
--  Net income of $8,851,118 in 
the first nine months of 2012, or $0.43
    per share, on 20,509,042 diluted shares outstanding, was 7.26% lower
    than the $9,544,400 in net income, or $0.48 per share on 20,000,006
    diluted shares outstanding in the same period in 2011. This decline
    primarily reflected increased raw material, labor and overhead costs
    in the first half of 2012 until this trend was reversed in the third
    quarter of 2012.

  
Financial Strength 
As of September 30, 2012, the Company had cash and cash equivalents
of $13,236,896 and no short term borrowings. Working capital as of
September 30, 2012 was $32.4 million, compared with $23.8 million at
the same time last year. This increase reflected higher accounts
receivable as the Company continued to expand credit sales to long
term customers with good credit history, increased inventories and
increased cash as a result of achieving net profits period after
period. 
Capital Expenditures 
Net cash used in investing activities in the nine months ended
September 30, 2012 was $2,412,469. During this period, the Company
built additional storage space for raw materials to better manage its
production cycle. It also acquired additional machinery and equipment
which was placed into service in the third quarter of 2012.  
Management Comment 
Mr. Min Chen, Chairman and CEO of the Company, stated, "Despite the
economic downturn in China we again managed to generate quarter over
quarter sales growth from our increasingly diversified customer base,
and saw what we believe is a key turning point in the third quarter
with costs moderating as our revenues continued to grow. Looking
ahead, we anticipate further moderate increases in selling prices
while costs for raw materials, labor and overhead should continue to
stabilize or perhaps increase slightly. With the expectation of
continued long term strong demand for recycled LDPE, we remain very
optimistic about our continuing growth potential in an improving
economy."  
Conference Call Invitation 
The Company will discuss 2012 third quarter and nine month results
during a live conference call and webcast on Wednesday, November
14th, at 8:00am ET. This will follow distribution of a news release
with the Company's third quarter and nine month results on Tuesday,
November 13, 2012. 
To participate in the call, interested participants should call
1-877-941-8418 when calling within the United States or
1-480-629-9809 when calling internationally. Please ask for the
Guanwei Recycling Corp. 2012 Third Quarter Conference Call,
Conference ID: 4575618. There will be a playback available until
11/21/12. To listen to the playback, please call 1-877-870-5176 when
calling within the United States or1-858-384-5517 when calling
internationally. Use the Replay Pin Number: 4575618. 
This call is being webcast by ViaVid Broadcasting and can be accessed
by clicking on this link http://public.viavid.com/index.php?id=102532
or at ViaVid's website at http://viavid.com. 
Description of Guanwei Recycling Corp. 
Guanwei Recycling Corp. is China's largest manufacturer of recycled
low density polyethylene (LDPE). Adhering to the highest "green"
standards, it has generated rapid growth producing LDPE from plastic
waste procured mostly in Europe for sales to more than 300 customers
(including over 150 active recurring customers) in more than ten
different industries in China. Guanwei Recycling Corp. is one of the
few plastic recyclers in China that has been issued a Compliance
Certificate by Umweltagentur Erftstadt, which issues certificates of
approval for certain plastics manufacturers which meet strict
environmental standards in Germany. 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 www.guanweirecycling.com.  
Information Regarding Forward-Looking Statements 
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. 


 
                                                                            
                                                                            
                                                                            
                          GUANWEI RECYCLING CORP.                           
  UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE   
                                   INCOME                                   
                                                                            
                           Three Months Ended 
        Nine Months Ended     
                              September 30,             September 30,       
                        ------------------------  ------------------------- 
                            2012         2011         2012          2011    
                        -----------  -----------  ------------  ----------- 
                                                                            
Net revenue             $17,905,974  $16,679,012  $ 52,772,402  $46,579,286 
Cost of revenue          12,374,450   11,722,192    38,793,696   32,291,990 
                        -----------  -----------  ------------  ----------- 
    Gross profit          5,531,524    4,956,820    13,978,706   14,287,296 
                        -----------  -----------  ------------  ----------- 
                                                                            
Operating expenses:                                                         
  Selling and marketing     125,536       95,288       293,286      299,233 
  General and                                                               
   administrative           524,112      431,316     1,647,140    1,404,042 
                        -----------  -----------  ------------  ----------- 
    Total operating                                                         
     expenses               649,648      526,604     1,940,426    1,703,275 
                        -----------  -----------  ------------  ----------- 
                                                                            
Income from operations    4,881,876    4,430,216    12,038,280   12,584,021 
                        -----------  -----------  ------------  ----------- 
                                                                            
Other income (expenses)                                                     
  Interest income            14,395       22,889        42,903       70,302 
  Interest expenses               -       (3,453)            -      (28,667)
  Net foreign exchange                                                      
   (loss) gain              (92,074)      67,485      (121,754)     198,609 
  Miscellaneous               2,409            -         2,409       10,398 
                        -----------  -----------  ------------  ----------- 
    Total other                                                             
     (expenses) income      (75,270)      86,921       (76,442)     250,642 
                        -----------  -----------  ------------  ----------- 
                                                                            
Income before income                                                        
 taxes                    4,806,606    4,517,137    11,961,838   12,834,663 
                                                                            
Income taxes              1,183,774    1,141,379     3,110,720    3,290,263 
                        -----------  -----------  ------------  ----------- 
                                                                            
Net income                3,622,832    3,375,758     8,851,118    9,544,400 
                                                                            
Other comprehensive                                                         
 (loss) income -                                                            
 foreign currency                                                           
 translation                                                                
 adjustments                (47,331)     527,199       166,087    1,070,727 
                        -----------  -----------  ------------  ----------- 
                                                                            
Comprehensive income    $ 3,575,501  $ 3,902,957  $  9,017,205  $10,615,127 
                        ===========  ===========  ============  =========== 
                                                                            
Earnings per share                                                          
 attributable to                                                            
 shareholders of                                                            
  Guanwei Recycling                                                         
   Corp. - basic and                                                        
   diluted              $      0.17  $      0.17  $       0.43  $      0.48 
                        ===========  ===========  ============  =========== 
                                                                            
Weighted average number                                                     
 of common shares                                                           
 outstanding                                                                
  - basic and diluted    20,815,654   20,000,006    20,509,042   20,000,006 
                        ===========  ===========  ============  =========== 

  
Contacts: 
Richard Sun
guanweirecycling@gmail.com 
Ken Donenfeld
DGI Investor Relations
kdonenfeld@dgiir.com 
Tel: 212-425-5700
Fax: 646-381-9727