Tri-Tech Holding Reports Fiscal Year 2012 Financial Results

         Tri-Tech Holding Reports Fiscal Year 2012 Financial Results

Conference Call Scheduled on April 2, 2013 at 9:00 AM EDT

PR Newswire

BEIJING, April 1, 2012

BEIJING, April 1, 2012 /PRNewswire-FirstCall/ --Tri-Tech Holding Inc.
(Nasdaq: TRIT), which provides turn-key water resources management, water and
wastewater treatment, industrial safety and pollution control solutions,
announced its financial performance for fiscal year ended December 31, 2012.
Highlights include the following:

(Logo: http://photos.prnewswire.com/prnh/20100603/CNTH016LOGO)

  oIn 2012, Total Revenues declined by 15.4% to $72.6 million compared to
    $85.9 million in FY 2011.

       oRevenue from the Water, Wastewater Treatment and Municipal
         Infrastructure ("WWTM") declined by 55.3% to $26.0 million from $58.1
         million;
       oRevenue from the Water Resource Management System and Engineering
         Service ("WRME") increased by 72.6% to $22.3 million from $12.9
         million; and,
       oRevenue from Industrial Pollution Control and Safety ("IPCS")
         increased by 64.2% to $24.3 million from $14.8 million;

  oIn 2012, Gross Profit declined by 19.9% to $17.5 million compared to $21.9
    million in FY 2011. Gross Margin dropped to 24.1% from 25.5% from a year
    ago.
  oIncome From Operations declined to a loss of $0.8 million compared to a
    gain of $10.7 million from a year ago.
  oNet Income declined to a loss of $2.3 million compared to a gain of $8.1
    million in 2011.
  oWeighted average number of diluted shares outstanding was 8,211,089
    compared to 8,238,291 from FY2011.
  oDiluted Earnings Per Share was a loss of $0.28 compared to a gain of $0.98
    from 2011.

Mr. Gavin Cheng, CEO of Tri-Tech Holding Inc. commented, "Overall, we
experienced deteriorations in our fiscal 2012 operating results compared with
that of 2011. Despite a noteworthy increase in sales in both the WRME and IPCS
segments, we sustained significant reduction in sales in WWTM segment which
hindered our performances. The reduction was partially due to our decision to
avoid Build & Transfer projects to ease cash pressures. The deviation led us
to focus on Engineering Procurement & Construction ("EPC") projects which
usually feature a lower profit margin compared to that of BT projects.
Furthermore, we saw delays in implementation in major projects in the WWTM
segment which further impacted our revenues.

Our gross margin overall dropped by about 1percentage point, but our operating
related expenses grew by 64.7%. These expenses increased because we increased
headcount to compete for more business early in the year. As we encountered
challenges in the WWTM segment, we shifted expenditures to grow revenues in
the WRME and IPCS segments.

To address the underlying reasons believed to cause the loss, we have taken
the following steps:

  oStreamline the corporate structure to increase the operating efficiency;
  oRecalibrate sales related strategies and budget management based on
    profitability analysis; and,
  oEnforce project implementation related methods and cost management.

In 2013 we plan to devote our energy to:

  oManage our cash flows by increasing oversight of capital-sensitive
    projects to improve our cash position;
  oAlign the Company with established partners in the WWTM segment to
    maintain competitiveness and to fuel a sustained growth; and,
  oImprove our gross margin especially in WWTM and WRME segment through
    perfected marking strategies.

With our devotions to a better environment, we believe our business benefits
people in millions and our industry continues to thrive. While invigorating
our strength, we shall dynamically act upon presented opportunities by
exploring business endeavors with creativities. As always, we are devoted to
grow the company to its potentials."

FY2012 Financial Performance Metrics

Revenue

The 15.4% decrease in revenues noted above is primarily attributable to a
significant decrease in the system integration revenues, from $82,401,473 for
the year ended December 31, 2011 to $67,961,198 in 2012. Although the Company
increased revenues in two of its three operating segments, the decrease in
WWTM revenues overshadowed those increases.

Gross Margin

The gross margin decrease noted above is a result of several factors,
including increases in material and equipment costs and labor subcontracting
costs. The rapid expansion into overseas market also had a direct impact on
the increase of cost of sales. These factors all contributed to the lower
gross margin.

Total Operating Expenses

The Company's total operating expenses increased to $18,310,880 in the year
ended December 31, 2012 from $11,116,205 in the same period of 2011, an
increase of 64.7%. The increase is attributable to increased selling and
marketing expenses and general and administration expenses. Research and
development expenses decreased from $179,396 in 2011 to $174,726 in 2012.

  oSelling and Marketing Expenses
    Selling and marketing expenses increased from $2,164,363 in the year ended
    December 31, 2011 to $4,148,861 in the same period of 2012, an increase of
    91.7%. Increased sales staff headcount elevated the total amount of every
    related expense such as travel expenses, compensation-related expenses,
    and entertainment expenses.
  oGeneral and Administrative Expenses
    General and administrative expenses consist primarily of compensation
    costs, rental expenses, professional fees, and other overhead expenses.
    General and administrative expenses increased from $8,772,446 in 2011 to
    $13,987,293 in 2012, an increase of 59.4% largely due to significant
    increases in salary expenses, transnational professional fees as we have
    expended internationally and amortization and depreciation expenses.

    General and administrative expenses for 2012 and 2011 took up
    approximately 19.3% and 10.2% of total revenues, respectively.

Loss before Income Taxes

In the year ended December 31, 2012, the Company's net loss before provision
for income taxes was $943,457, a decrease of 108.8% compared to income
$10,729,428 in 2011. The Company's provision for income taxes decreased by
7.7%, from $1,958,864 in 2011 to $1,808,415 in 2012. The decrease in income
taxes for 2012 was primarily caused as some subsidiaries experienced losses
from ordinary business operations. In the year ended December 31, 2012, net
loss attributable to the shareholders of TRIT was $2,264,074, a decrease of
128.0%, from income of $8,088,374 for the year ended December 31, 2011.

Net loss and EPS

Diluted EPS was a loss of $0.28, based on net loss of $2.3 million and
8,211,089 weighted average of diluted shares outstanding for the year ended
December 31, 2012, compared to earnings of $0.98 in 2011, based on net income
of $8.1 million and 8,238,291 weighted average diluted shares outstanding.

Liquidity and Capital Resources

As highlighted in the consolidated statements of cash flows, the Company's
liquidity and available capital resources are impacted by four key components:
(i) cash and cash equivalents, (ii) operating activities, (iii) financing
activities and (iv) investing activities.

Cash and Cash Equivalents

The Company's cash and cash equivalents of $8,098,657 at December 31, 2012
decreased by 32.1%, from $11,935,746 on December 31, 2011, mainly due to
rapid overseas expansion and the implementation of the current projects. The
current portion of restricted cash as of December 31, 2012 and 2011 amounted
to $5,283,541 and $2,087,920, respectively, which is not included in the total
of cash and cash equivalents. The restricted cash was on deposit as collateral
for the issuance of letters of credit for project financing. Our subsidiaries
that own the deposits do not have material cash obligations to any third
parties. Therefore, the restriction does not impact the liquidity of the
Company.

Operating Activities

Net cash used for operating activities was $20,254,517 in the year ended
December 31, 2012, compared with that of $24,418,947 in same period of 2011.
The decrease of 17.1% in operating cash outflow was mainly due to the new
acquired bank borrowings and corporate bond to fund the Company's operations
in 2012. Net accounts receivable increased from $19,888,084 on December 31,
2011 to $18,598,110 on December 31, 2012, a decrease of 6.5%. Current unbilled
receivables increased from $7,254,830 on December 31, 2011 to $27,954,525 on
December 31, 2012, an increase of 285.3%, mainly from the Company's increasing
BT projects and several overseas projects. The remaining portion was mainly
due to the decreased inventory and prepayments to suppliers, due to the total
revenue decline.

Investing Activities

Net cash used for investing activities was $1,381,911 in the year ended
December 31, 2012, compared to $3,563,836 in the same period of 2011.
Currently we have no further plan to add capital expenditure on the
construction of Baoding as it is close to completion.

Financing Activities

The cash provided by financing activities was $18,138,246 in 2012, compared to
$17,152,767 in the same period of 2011. The increase was due to increased bank
borrowings and the corporate bond issued in September 2012.

Effect of Change in Exchange Rate Changes on Cash and Cash Equivalents

Net cash loss due to currency exchange was $338,906 in the year ended December
31, 2012, compared to a loss of $629,233 in the same period of 2011.

Restricted Net Assets

As of December 31, 2012 and 2011, restricted retained earnings were $2,246,910
and $1,866,994, respectively, and restricted net assets were $4,878,975 and
$4,553,729, respectively. The unrestricted retained earnings as of December
31, 2012 and 2011 were $17,038,396 and $19,682,386, respectively, which were
the amounts ultimately available for distribution if we were to pay dividends.

Working Capital and Cash Flow Management

As of December 31, 2012, the Company's working capital was $17,923,637, with
current assets totaling $83,042,716 and current liabilities totaling
$65,119,079. Of the current assets, cash and cash equivalents were
$13,382,198.

Recent Business Updates and Development

Domestic Market

By the end of 2012, the initial phase of the Ordos project was 97.5% completed
and started trial operation. The expansion phase, which was awarded in June
2011 was 90% complete.

In January 2012, we secured a Build-Transfer contract for the construction of
a wastewater treatment plant and a wastewater pipeline network in Dawangdian
Industrial Park in Xushui County, Hebei Province. The project was one of our
initiatives in the industrial wastewater treatment sector in China. To
implement the project, we established a project company in Xushui County. We
have completed the major construction and most of the equipment purchasing.
The Xushui project contributed more than 13.8% of revenues during 2012.

Overseas Market

The wastewater treatment plant projects in Bihar India contributed 13.2% of
revenues during 2012. Although dealing with a delay in implementation, we have
already completed the design and redesign per client's request, land
preparation and a portion of equipment purchasing.

Order Backlog and Pipelines

The Company's backlog represents the amount of contract work remaining to be
completed, that is, revenues from existing contracts and work in progress
expected to be recognized in current period, based on the assumption that
these projects will be completed on time according to the project schedules.

The following table provides backlog by segment as of December 31, 2012, in
comparison to that of December 31, 2011. The percentage of change shows how
much of our backlog became revenue in 2012. Backlog decreased significantly in
Segments 1 and 2 and moderately in Segment 3. This reflects both (i) the
recognition of revenue in projects in Segments 1 and 2 in 2012 and (ii) that
such recognized revenues were not replaced with an equivalent amount of new
projects in such Segments. Based on remaining backlog, we expect much higher
revenues in Segment 1 than in Segments 2 or 3 in 2013.

                  December 31, 2012              December 31, 2011
                  USD Million % of Total Backlog USD Million % of Total
                                                             Backlog
Segment 1 (WWTM): 38.7        64.4%              63.1        66.8%
Segment 2 (WRME): 6.7         11.1%              16.1        17.0%
Segment 3 (IPCS): 14.7        24.5%              15.3        16.2%
Total             60.1        100.0%             94.5        100.0%

Pipeline represents the values of projects we have been actively pursuing. Our
pipeline as of December 31, 2012 was $50.7 million in Segment 1, $2.5 million
in Segment 2 and $34.8 million in Segment 3.

Having a dynamic nature, the value of projects moves from pipeline into
backlog when we secure the project and from backlog to revenue based on
percentage of completion.

Conference Call

Tri-Tech Chairman Warren Zhao, CEO Gavin Cheng, CFO & President Phil Fan and
COO Peter Dong will host a conference call at 9:00AM EDT, April 2, 2013,
(9:00PM Beijing/Hong Kong Time on April 2, 2013) to review the company's
financial results and outlook of operations, to discuss our growth strategies
and to respond to questions and comments.

To participate, call U.S. toll free number(877) 941-2068approximately 10
minutes before the call. International callers, please dial1 (480)
629-9712.The conference ID number is4609352. A live and archived webcast of
the call will be available athttp://public.viavid.com/index.php?id=103960.An
MP3 file will be available one hour after the call and will be archived for 90
days atwww.tri-tech.cn/ir.

-FINANCIAL TABLES -

TRI-TECH HOLDING INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
                                                                            December      December
                                                                            31,           31,
                                                                            2012          2011
ASSETS
Current assets
Cash                                                                      $ 8,098,657   $ 11,935,746
Restricted cash                                                             4,352,443     2,087,920
Accountsandnotesreceivable,netofallowancefordoubtfulaccountsof   18,598,110    19,888,084
$1,475,771and$619,062asof December 31, 2012 and 2011, respectively
Unbilled revenue                                                            27,954,525    7,254,830
Other receivables                                                           3,825,770     2,761,548
Inventories                                                                 8,459,073     7,705,752
Deposits on projects                                                        1,469,550     1,212,691
Prepayments to suppliers and subcontractors                                 9,353,490     4,908,697
 Total current assets                                          82,111,618    57,755,268
Long-term unbilled revenue                                                  51,219,694    59,298,740
Long-term accounts receivables                                              413,770       -
Plant and equipment, net                                                    1,764,784     1,436,838
Construction in progress                                                    5,359,466     4,566,934
Intangible assets, net                                                      10,902,932    11,609,662
Long-term restricted cash                                                   3,464,524     2,541,958
Goodwill                                                                    1,441,278     1,441,278
 Total Assets                                        $ 156,678,066 $ 138,650,678
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities
Accounts payable                                                          $ 5,890,511   $ 11,401,187
Notes payable                                                               -             1,176,197
Costs accrual on projects                                                   23,637,751    19,402,047
Advance from customers                                                      1,157,247     1,886,607
Loans from third party companies and individual                             6,400,659     972,196
Amount due to related party                                                 1,656,420     0
Amount due to noncontrolling interest investor                              9,047,068     6,557,548
Other payables                                                              461,258       187,038
Taxes payable                                                               5,577,533     3,221,869
Accrued liabilities                                                         485,354       379,357
Payable on investment consideration                                         582,966       895,000
Deferred income taxes                                                       1,782,786     358,519
Deferred revenue                                                            289,485
Short-term bank borrowing (including VIE short-term borrowing of the
consolidated VIEswithout recourse to Tri-Tech Holdings of $2,754,158       8,150,041     8,010,365
and $2,296,895 as of December 31, 2012 and 2011, respectively)
Total current liabilities                                     65,119,079    54,447,930
Long-term bank borrowing                                                    17,976        -
Corporate Bond                                                              7,935,122     -
Noncurrent deferred income taxes                                            3,699,790     3,455,823
 Total Liabilities                                      76,771,967    57,903,753
Shareholders' equity
Tri-Tech Holding Inc. shareholders' equity
Ordinary shares ($0.001 par value, 30,000,000 shares authorized;
8,259,506 and 8,203,299 shares issued as of December 31, 2012               8,259         8,203
and 2011, respectively)
Additional paid-in-capital                                                  50,119,428    48,772,307
Statutory reserves                                                          2,246,910     1,866,994
Retained earnings                                                           17,038,396    19,682,386
Treasury shares (21,100 shares in treasury as of December 31,               (193,750)     (193,750)
2012 and 2011, respectively)
Accumulated other comprehensive income                                      5,086,827     4,593,046
 Total Tri-Tech Holding Inc. shareholders' equity                        74,306,070    74,729,186
Noncontrolling interests                                                    5,600,029     6,017,739
Total shareholders' equity                                   79,906,099    80,746,925
Total liabilities and shareholders' equity                          $ 156,678,066 $ 138,650,678



TRI-TECH HOLDING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                                                                                      For the Years Ended
                                                                                      December 31,
                                                                                      2012          2011
Revenues:
 System integration                                                      67,961,198    82,401,473
 Hardware products                                                       4,668,354     3,460,610
 Software products                                                       -             10,838
 Total revenues                                               72,629,552    85,872,921
Cost of revenues
 System integration                                                      51,800,856    61,677,449
 Hardware products                                                       3,328,662     2,338,269
 Software products                                                       -             1,734
 Total cost of revenues                                       55,129,518    64,017,452
Gross profit                                                                          17,500,034    21,855,469
Operating expenses:
 Selling and marketing expenses                                          4,148,861     2,164,363
 General and administrative expenses                                     13,987,293    8,772,446
 Research and development expenses                                       174,726       179,396
 Total operating expenses                                     18,310,880    11,116,205
(Loss) Income from operations                                                         (810,846)     10,739,264
Other expense:
 Other income (expense)                                                  1,958,119     607,674
 Interest income                                                         230,920       284,950
 Interest expense                                                        (2,407,209)   (695,475)
 Investment gain                                                         -             (6,985)
 Fair Value change on contingent investment consideration                 85,558        (200,000)
 Total other expenses                                               (132,612)     (9,836)
(Loss) Income before provision for income taxes                                       (943,458)     10,729,428
Provision for income taxes                                                            1,808,415     1,958,864
Net (loss) income                                                                     (2,751,873)   8,770,564
Less: Net (loss) income attributable to noncontrollinginterests                      (487,799)     682,190
Net (loss) income attributable to Tri-Tech Holding Inc.shareholders                $ (2,264,074) $ 8,088,374
Net (loss) income                                                                     (2,751,873)   8,770,564
Other comprehensive income
Foreign currency translation adjustment                                       527,672       3,052,049
Comprehensive (loss) income                                                           (2,224,201)   11,822,613
Less:Comprehensive(loss)incomeattributabletononcontrollinginterests            (487,799)     880,992
Comprehensive (loss) income attributable to Tri-Tech Holding Inc.                   $ (1,736,402) $ 10,941,621
Net(loss)incomeattributabletoTriTechHoldingInc.shareholderspershareare:
Basic                                                                        $ (0.28)      $ 0.99
Diluted                                                                      $ (0.28)      $ 0.98
Weighted average number of ordinary shares outstanding:
Basic                                                                          8,211,089     8,142,867
Diluted                                                                        8,211,089     8,238,291





 TRI-TECH HOLDING INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the Years Ended December 31,
                                        2012             2011
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net (loss) income                      $            $      8,770,564
                                        (2,751,873)
 Adjustments to reconcile net income to cash provided by
 operating activities:
 Amortization of share-based            1,117,227        371,003
 compensation expense
 Amortization of warrants               -                60,962
 Depreciation and amortization          1,224,646        773,604
 Provision for doubtful accounts        855,302          163,575
 Fair value change on contingent        (85,558)         200,000
 investment consideration
 Loss on disposal of plant and          9,756            8,645
 equipment
 Gain on investment in joint venture    -                6,985
 Deferred income taxes                  1,634,308        1,423,523
 Changes in operating assets and
 liabilities::
 Accounts receivable                    22,835           (881,733)
 Unbilled revenue                       (12,837,189)     (45,295,256)
 Restricted cash                        (3,174,767)      (2,785,325)
 Other current assets                   (1,022,956)      (186,440)
 Inventories                            (752,618)        (1,021,897)
 Prepaid expenses                       (203,302)        (157,307)
 Prepayments                            (4,723,440)      (3,225,525)
 Accounts payable                       (5,695,882)      5,877,391
 Notes payable                          (1,174,203)      1,147,442
 Cost accrual on projects               4,440,666        9,484,981
 Advance from customers                 (756,745)        (29,143)
 Other payables                         1,568,225        565,736
 Taxes payable                          1,739,367        204,546
 Accrued liabilities                    22,681           104,722
 Deferred revenue                       289,003          -
 Net cash used in operating             (20,254,517)     (24,418,947)
 activities
CASH FLOWS FROM INVESTING ACTIVITIES:
 Payment in business acquisition        (114,910)        (488,000)
 Cash paid on investment                -                829,802
 consideration
 Cash proceeds from disposal of PP&E    -                4,804
 Payment to purchase plant and          (643,607)        (268,532)
 equipment
 Payment in investment in joint         -                (6,985)
 venture
 Cash paid to acquire intangible        (128,681)        (165,279)
 asset
 Cash paid for construction in          (814,293)        (2,319,370)
 progress
 Payment of loan to third-party         (158,438)        (1,150,276)
 companies
 Collection of loan to third-party      704,494          -
 companies
 Net cash used in investing             (1,155,435)      (3,563,836)
 activities
CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from the exercise of          -                454,009
 options into ordinary shares
 Payment of installment of purchasing   -                (15,374)
 vehicle
 Proceeds from bank borrowings          18,831,078       7,814,533
 Payment of bank borrowing              (18,693,584)     -
 Proceeds from the issuance of          230,937          -
 ordinary shares
 Proceeds from the Issuance of          8,052,449        -
 corporate bond
 Capital injection by shareholders     477,247          -
 Capital injection by noncontrolling    -                1,737,115
 shareholders
 Proceeds from amount due from          31,373           -
 shareholder
 Payment of amount due from             (52,891)         -
 shareholder
 Proceeds from loan from third-party    8,130,386        715,776
 companies
 Payment of loan from third-party       -                -
 companies
 Proceeds from loan from                (475,315)        6,446,708
 non-controlling shareholders
 Payment of loan from non-controlling   1,606,566        -
 shareholders
 Net cash provided by financing         18,138,246       17,152,767
 activities
EFFECTS OF EXCHANGE RATE CHANGE IN      (565,383)        (629,233)
CASH
NET DECREASE IN CASH                    $            $    
                                        (3,837,089)     (11,459,249)
CASH, beginning of the period           11,935,746       23,394,995
CASH, end of the period                 8,098,657        11,935,746

About Tri-Tech Holding Inc.

Tri-Tech is an innovative provider of consulting, engineering, procurement,
construction and technical services. The Company supports government, state
owned entities and commercial clients by providing efficiency oriented
solutions focused on treatment of water and waste water, management of water
resources and water-efficient irrigation, as well as industrial emission and
safety controls. With software copyrights, product patents, and capable
employees in China, the U.S. and India, Tri-Tech's capabilities span the cycle
of innovation. Please visit www.tri-tech.cn for more information.

An online investor kit including a company profile, presentations, press
releases, current price quotes, stock charts and other valuable information
for investors is available at http://www.tri-tech.cn/ir. To subscribe to
future releases via e-mail alert, visit http://www.tri-tech.cn/ir/info/request
.

This press release contains forward-looking statements. These statements are
made under the "safe harbor" provisions of 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. These statements are subject to uncertainties and risks
including, but not limited to, product and service demand and acceptance,
changes in technology, economic conditions, the impact of competition and
pricing, government regulation, and other risks contained in reports filed by
the company with the Securities and Exchange Commission. All such
forward-looking statements, whether written or oral, and whether made by or on
behalf of the company, are expressly qualified by the cautionary statements
and any other cautionary statements which may accompany the forward-looking
statements. In addition, the company disclaims any obligation to update any
forward-looking statements to reflect events or circumstances after the date
hereof.

For more information, please contact:

Tri-Tech Holding Inc.
www.tri-tech.cn
IR Department
+86 10 57323666
ir@tri-tech.cn



SOURCE Tri-Tech Holding Inc.

Website: http://www.Tri-Tech.cn
 
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