THT Heat Transfer Technology, Inc. Announces Third Quarter 2012 Results

   THT Heat Transfer Technology, Inc. Announces Third Quarter 2012 Results

Third quarter 2012 sales revenue totaled US$12.5 million, exceeding guidance

PR Newswire

SIPING, China, Nov. 14, 2012

SIPING, China, Nov. 14, 2012 /PRNewswire/ --THT Heat Transfer Technology,
Inc. (NASDAQ:THTI, "the Company", or "THT"), a leading provider of heat
exchangers and heat exchange solutions in China'sclean technology industry,
today announced its unaudited financial results for the third quarter ended
September 30, 2012.

Third Quarter 2012 Financial Highlights

  oSales revenue increased by 21.3% year-over-year to US$12.5 million. Sales
    revenue exceeded the Company's previously announced guidance of US$10
    million to US$12 million for the third quarter 2012.
  oGross profit increased by 14.9% year-over-year to US$5.2 million.
  oGross margin was 41.4%, compared to 43.8% for the third quarter 2011.
  oOperating income increased by 325.7% year-over-year to US$0.8 million.
  oNet income attributable to common stockholders increased by 312.7%
    year-over-year to US$0.5 million.
  oBasic and fully diluted net income per share was US$0.02, compared with
    net income per share of US$0.01 for the third quarter 2011.

Chairman and Chief Executive Officer Guohong Zhao commented, "Against a
backdrop of continuing global macroeconomic headwinds, moderating domestic
economic activity and more conservative credit policies, we managed to deliver
a steady financial performance in the third quarter with revenues exceeding
our guidance. The market for plate heat exchanges and air-cooled heat
exchangers remained challenging, with revenues in both segments decreasing on
a year-over-year basis. However, this decrease was offset by robust growth in
heat exchange units and shell-and-tube heat exchangers, continuing the trend
from the preceding quarter and further demonstrating the success of our
strategy to develop a more diversified and stable revenue base.

"While we are pleased with our progress in the quarter and are beginning to
see some positive longer-term economic indicators, we expect that the
challenging market conditions that we have faced over the past year will
continue to impact demand in our end markets in the fourth quarter. As a
result, we have taken a conservative view of our outlook and expect revenue in
the fourth quarter to decline on a year-over-year basis.Nevertheless, we
believe that our underlying business and our financial position remain sound,
and that we have the right strategy in place to return us to a growth
trajectory as and when the economy improves."

Third Quarter 2012 Financial Results

Revenue

Sales revenue for the third quarter 2012 was US$12.5 million, a 21.3% increase
from US$10.3 million during the same period in 2011, primarily due to
increased sales revenue from heat exchange units and shell-and-tube heat
exchangers. Sales volume of heat exchange products totaled 704 units in the
third quarter 2012, an increase of 59 units from 645 units in the same period
of 2011.

In terms of revenue breakdown for the third quarter 2012, sales revenue from
heat exchange units increased by US$3.1 million, or 223.9%, to US$4.5 million
from US$1.4 million in the same period of 2011, mainly due to the increased
product demand in the heating industry. Sales revenue from shell-and-tube heat
exchangers increased by US$1.4 million, or 178.6% year-over-year, to US$2.2
million from US$0.8 million. During the third quarter 2012, sales revenue from
plate heat exchangers totaled US$4.4 million, a decrease of 5.1% compared with
US$4.6 million in the third quarter 2011. In addition, sales revenue from
air-cooled heat exchangers was US$0.1 million, an 87.9% decrease from US$1.1
million compared to the same period of 2011.

Cost of Sales

Cost of sales for the third quarter 2012 increased 26.3% year-over-year to
US$7.3 million from US$5.8 million in the third quarter 2011, reflecting the
increase in the Company's sales revenue.

Gross Profit and Gross Margin

Gross profit increased 14.9% to US$5.2 million during the third quarter 2012,
from US$4.5 million in the same period of 2011, mainly due to increased sales
revenue. Gross margin was 41.4% for the third quarter 2012, compared with
43.8% during the year-earlier period, mainly due to an increase in labor costs
and raw material costs.

Operating Expenses

Administrative expenses increased 44.8% to US$2.4 million in the third quarter
2012, from US$1.6 million for the same period of 2011, primarily due to an
increase in allowance for doubtful accounts.

Research and development expenses decreased 13.6% year-over-year to US$0.3
million, from US$0.4 million in the third quarter 2011, mainly due to the
fewer number of new products currently under development.

Selling expenses decreased 28.8% to US$1.6 million for the third quarter 2012,
compared with US$2.3 million during the same period of 2011, mainly due to a
decrease in travelling expenses incurred by the Company's sales personnel.

This resulted in total operating expenses of US$4.3 million in the third
quarter 2012, in line with US$4.3 million in the same period of 2011.

Other Income

Other income amounted to US$0.3 million in the third quarter 2012, a 354.1%
increase from approximately US$0.1 million in the same period of 2011.

Income before Income Tax

Income before income tax was US$0.7 million in the third quarter 2012,
compared with a loss before income taxes of approximately US$0.1 million in
the same period of 2011.

Income Tax

Income tax increased 38.6% to US$123,732 in the third quarter 2012 from
US$89,283 in the same period of 2011. The increase was mainly due to an
increase in taxable income.

Net Income

Net income attributable to common shareholders was US$0.5 million in the third
quarter 2012, a 312.7% increase compared with US$0.1 million in the same
period in 2011.

Basic and fully diluted net income per share was US$0.02 in the third quarter
2012, compared with US$0.01 in the same period of 2011.

Liquidity

As of September 30, 2012, the Company had cash and cash equivalents of US$7.2
million and restricted cash of US$1.7 million. During the first nine months of
2012, there was a net cash outflow of US$0.1 million, compared with a net cash
outflow of US$15.1 million in the same period of 2011.

Net cash used in operating activities was US$4.3 million for the first nine
months of 2012, compared with US$14.2 million for the same period of 2011. Net
cash used in operating activities during the first nine months of 2012
decreased compared to the same period in 2011, mainly attributable to the fact
that collections from trade customers were relatively high in the 2012 period
which was a result of installment payments being made by the Company's
customers, credit sales granted to customers decreasing as a result of
decreased turnover, and other receivables prepayment and deposits decreasing
due to reduced cash advances to staff and prepayment to trade suppliers for
the nine month period ended in September 30, 2012.

Net cash used in investing activities was US$1.1 million for the first nine
months of 2012, compared with US$5.6 million for the same period in 2011.

Net cash provided by financing activities was US$5.3 million for the first
nine months of 2012, compared with net cash used in financing activities of
US$4.4 million for the same period in 2011.

Fourth Quarter 2012 Guidance

THT expects to generate sales revenue in the range of US$11 million to US$13
million in the fourth quarter 2012, compared with US$19.2 million in the
fourth quarter 2011. This represents the Company's preliminary view, and is
subject to change.

Recent Developments

The Company has received comments from the Securities and Exchange Commission
on its accounting treatment of the Make Good Escrow Agreement (the "Make Good
Agreement") entered on November 2, 2010 in connection with the Company's
issuance of 4,453,500 shares to certain accredited investors for approximately
$14,251,200. The Company is in the process of evaluating whether the treatment
of the Make Good Agreement as liability would have had a material effect on
the Company's financial statements for the period between November 2, 2010 and
February 2013 when the make good pledger eventually releases the make good
shares to the investors.

Conference Call

THT senior management will host a conference call on Thursday, November 15,
2012 at 8:00 a.m. (Eastern) / 5:00 a.m. (Pacific) / 9:00 p.m. (Beijing / Hong
Kong) to discuss the Company's third quarter 2012 financial results and recent
business activity. The conference call may be accessed by calling:

US Toll Free:            1-800-860-2442
International Toll:      +1-412-858-4600
Canada Toll Free:        1-866-605-3852
China (North) Toll Free: 10-800-712-2304
China (South) Toll Free: 10-800-120-2304
Hong Kong Toll Free:     800-962475
Passcode:                THT Heat Transfer Technology

A telephone replay will be available shortly after the call until November 26,
2012 by dialing the following numbers:

US Toll Free:       1-877-344-7529
International Toll: +1-412-317-0088
Passcode:           10021145

A live webcast of the conference call and replay will be available on the
investor relations page of THT's website at http://www.tht.cn/ir.asp.

About THT Heat Transfer Technology, Inc.

Through its Chinese operating subsidiaries, THT Heat Transfer Technology, Inc.
designs, manufactures and sells plate heat exchangers, shell-and-tube heat
exchangers, heat exchanger units and other heat exchanger products with total
heat exchange solutions. Heat exchangersplayan integral part in
helpingcustomers improve energy efficiency.Used in a number of industries,
THT's products focus on energy conservation, emission reduction and other
environmentally friendly applications.Its six major product categories are
plate heat exchangers, shell-and-tube heat exchangers, air-cooled heat
exchangers, weld plate heat exchangers, heat exchanger units and
plate-and-shell heat exchangers. The Company also offers comprehensive heat
exchange solutions.

THT's in-house R&D capabilities enable it to deliver tailored products that
better meet the changing demands of its customers. The Company has a strong
record of delivering high-quality products and services to leading domestic
and international customers. THT has completed over 3,000 projects and has
provided heat exchange solutions to several Fortune 500 companies. The Company
is headquartered in Siping City, Jilin Province, China. For more information,
please visit the Company's website at www.tht.cn.

Safe Harbor Statement

This press release contains certain statements that may include "forward
looking statements". All statements other than statements of historical fact
included herein are "forward-looking statements". These forward-looking
statements are often identified by the use of forward-looking terminology such
as "believes," "expects" or similar expressions, and involve known and unknown
risks and uncertainties. Although the Company believes that the expectations
reflected in these forward-looking statements are reasonable, they do involve
assumptions, risks and uncertainties, and these expectations may prove to be
incorrect. You should not place undue reliance on these forward-looking
statements, which speak only as of the date of this press release. The
Company's actual results could differ materially from those anticipated in
these forward-looking statements as a result of a variety of factors,
including those discussed in the risk factor sections of the Company's
periodic reports that are filed with the Securities and Exchange Commission
and are available on its website (http://www.sec.gov). All forward-looking
statements attributable to the Company or persons acting on its behalf are
expressly qualified in their entirety by these factors. Other than as required
under the securities laws, the Company does not assume a duty to update these
forward-looking statements.

Contact:

The Company:

Mr. Jack Xiao

Investor Relations Manager

THT Heat Transfer Technology, Inc.

Tel:+86 (434) 326 6779

Email: IR@tht.cn


Investor Relations (Beijing):

Xiaoyan Su

Taylor Rafferty

Tel: +86 (10) 8588 6722

Email: tht@taylor-rafferty.com


Investor Relations (US):

Bryan Degnan

Taylor Rafferty

Tel: +1 (212) 889 4350

Email: tht@taylor-rafferty.com

- FINANCIAL TABLES FOLLOW -

THT Heat Transfer Technology, Inc.
Consolidated Balance Sheets
As of September 30, 2012 and December 31, 2011
(Stated in US Dollars thousands)
                              September 30, 2012 December 31, 2011

                              (Unaudited)        (Audited)
Assets
Current assets
Cash and cash equivalents     $7,234             $7,340
Restricted cash               1,653              1,726
Accounts receivable, net      34,089             33,573
Inventories, net              38,358             32,531
Other current assets          18,168             9,763
Total current assets          99,502             84,933
Long-term accounts receivable 735                1,184
Other non-current assets      14,018             13,693
Total assets                  $114,255           $99,810
Liabilities
Current liabilities
Short-term bank loans         $22,438            $16,183
Other current liabilities     32,015             25,748
Total current liabilities     54,453             41,931
Long-term loan                1,895              2,828
Total liabilities             56,348             44,759
Total shareholders' equity    58,398             55,616
Noncontrolling interests      (491)              (565)
Total liabilities and equity  $114,255           $99,810



THT Heat Transfer Technology, Inc.
Unaudited Consolidated Statements of Income
(Stated in US Dollars thousands, except earnings per share)
                                              Three months ended September 30,
                                              2012             2011
Sales revenue                                 $12,508          $10,310
Cost of sales                                 (7,326)          (5,799)
Gross profit                                  5,182            4,511
Operating expenses
 Administrative expenses                   2,383            1,646
 Research and development expenses         315              365
 Selling expenses                          1,637            2,301
Total operating expenses                      4,335            4,312
Operating income                              847              199
Interest income                               7                11
Other income                                  283              62
Finance costs                                 (475)            (361)
Income (loss) before income taxes             662              (89)
Income taxes                                  (124)            (89)
Net income (loss) before noncontrolling       538              (178)
interests
Net (income) loss attributable to             (34)             300
noncontrolling interest
Net income attributable to the equity         $504             $122
stockholders
Earnings per share attributable to THT Heat
Transfer
 Technology, Inc. common stockholders      $0.02            $0.01
Weighted average number of shares outstanding
- Basic and diluted                           20,453,500       20,453,500



THT Heat Transfer Technology, Inc.
Unaudited Consolidated Statements of Cash Flows
For the nine months ended September 30, 2012 and 2011
(Stated in US Dollars thousands)
                                               Nine months ended September 30,
                                               2012            2011
Net cash used in operating activities          $    (4,338)    $    (14,163)
Net cash used in investing activities               (1,121)         (5,587)
Net cash provided for financing activities          5,311           4,362
Effect of exchange rate changes on cash and         42              254
cash equivalents
Net decrease in cash and cash equivalents           (106)           (15,134)
Cash and cash equivalents at beginning of the       7,340           18,438
period
Cash and cash equivalents at end of the period $    7,234      $    3,304



SOURCE THT Heat Transfer Technology, Inc.

Website: http://www.tht.cn
Website: http://www.tht.cn/ir.asp
 
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