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THT Heat Transfer Technology, Inc. Announces First Quarter 2013 Results

   THT Heat Transfer Technology, Inc. Announces First Quarter 2013 Results

PR Newswire

SIPING, China, May 14, 2013

SIPING, China, May 14, 2013 /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 first quarter ended March
31, 2013.

First Quarter 2013  Financial Highlights

  oSales revenue decreased by 30.9% year-over-year to US$7.9 million.
  oGross profit decreased by 35.1% year-over-year to US$3.0 million.
  oGross margin was 37.8%, compared to 40.2% for the first quarter 2012.
  oOperating income decreased by 16.1% year-over-year to US$0.7 million.
  oNet income attributable to common stockholders was US$0.3 million, a
    decrease compared with US$0.6 million for the first quarter 2012.
  oBasic and fully diluted net income per share was US$0.02, a decrease
    compared with US$0.03 for the first quarter 2012.

Chairman and Chief Executive Officer Guohong Zhao commented, "Amid a
challenging economic environment in China, we had sales revenue for the first
quarter in the middle of our guidance range. While labor costs and raw
materials continued to increase as expected, we did see our average unit
selling price increase by US$3,000 compared to the same quarter in 2012.
Additionally, we demonstrated the strategic flexibility of our operations by
lowering expenses largely in line with the decreased sales revenues. Even with
these bright spots, however, the macroeconomic headwinds that we continued to
face this quarter negatively impacted our gross margin.

"As we move into the next quarter and the year ahead, we expect industry and
macroeconomic downturns to continue to impact our business, with increasing
competition and production costs putting pressure on profit margins. In
response, we will continue to improve the quality of our products, invest in
R&D, and focus our sales and marketing efforts on opportunities such as
increasing our sales of heat exchange units. We continue to believe in our
business and expect this more diversified revenue stream to bolster our
strategic positioning for a return to growth when the broader economy
improves."

First Quarter 2013 Financial Results

Revenue

Sales revenue for the first quarter 2013 was US$7.9 million, a 30.9% decrease
from US$11.4 million during the same period of 2012. The decrease was
primarily attributable to lower sales revenue from heat exchange units, plate
heat exchangers (PHEs) and shell-and-tube heat exchangers. Sales volume of
heat exchange products totaled 383 units in the first quarter 2013, a decrease
of 277 units from 660 units in the same period of 2012. The decrease was
mainly caused by decreased market demand around the Chinese New Year of 2013
coupled with an overall economic slowdown in China.

For the first quarter 2013, sales revenue from PHEs was US$3.8 million, a
decrease of 26.2% compared with US$5.1 million in the same period of 2012.
Sales revenue from heat exchange units decreased by US$1.4 million, or 38.5%,
to US$2.3 million from US$3.7 million in the same period of 2012. Sales
revenue from shell-and-tube heat exchangers decreased by 94.9% to US$42,671
from US$0.8 million in the first quarter of 2012. During the first quarter
2013, sales revenue from air-cooled heat exchangers totaled US$0.7 million, an
increase of 45.4% as compared to US$0.5 million in the first quarter 2012.

Cost of Sales

Cost of sales for the first quarter 2013 decreased 28.1% to US$4.9 million
from US$6.8 million in first quarter 2012. The decrease largely reflected the
lower sales revenue.

Gross Profit and Gross Margin

Gross profit decreased 35.1% to US$3.0 million during the first quarter 2013,
from US$4.6 million in the same period of 2012, mainly due to the lower sales
revenue. Gross margin was 37.8% for the first quarter 2013, as compared to
40.2% during the same period of 2012. The decrease in gross margin was mainly
attributable to an increase in the Company's labor and raw material costs.

Operating Expenses

Administrative expenses decreased 17.7% to US$1.0 in the first quarter 2013,
from US$1.3 million for the same period of 2012. The decrease was primarily
due to decreases in the Company's audit fees and travelling expenses.

Research and development expenses decreased 17.8% year-over-year to US$0.2
million, from US$0.3 million in the first quarter 2012. The decrease was
primarily due to the lower number of new products currently under development.

Selling expenses decreased 53.8% to US$1.0 million for the first quarter 2013,
from US$2.3 million during the same period of 2012. The decrease was mainly
attributable to a decrease in travelling expenses incurred by the Company's
sales personnel.

This resulted in a 39.3% decrease in total operating expenses to US$2.3
million in the first quarter 2013 from US$3.8 million for the same period of
2012.

Income before Income Tax

Income before income taxes was US$0.4 million in the first quarter 2013, a
decrease of 41.8% compared with US$0.7 million in the same period of 2012. The
decrease was mainly due to a decrease in taxable income.

Income Tax

Income tax was US$60,388 in the first quarter 2013, compared with US$75,964 in
the same period of 2012.

Net Income

Net income attributable to common shareholders was US$0.3 million in the first
quarter 2013, a 43.7% decrease compared to US$0.6 million in the same period
of 2012.

Basic and fully diluted net income per share was US$0.02 in the first quarter
2013, compared with US$0.03 in the same period of 2012.

Liquidity

As of March 31, 2013, the Company had cash and cash equivalents of US$8.4
million and restricted cash of US$1.6 million. During the first quarter 2013,
there was a net cash outflow of US$2.3 million, compared with US$5.5 million
in the same period of 2012.

Net cash used in operating activities was US$2.6 million for the first quarter
2013, compared with US$5.2 million for the same period of 2012. The decrease
in net cash used in operating activities was mainly because the account
receivables decreased US$4.5 million in the first quarter of 2013 but
increased US$0.3 million in the same period in 2012 while the inventories
increased US$3.0 million in 2013 but decreased US$0.5 million in the same
period in 2012..

Net cash provided by investing activities was US$0.2 million for the first
quarter 2013, compared with net cash used in investing activities of US$0.4
million for the same period of 2012, primarily due to change in restricted
cash as requested by the banks in order to issue performance bonds.

No financing activities occurred for the three months ended March 31, 2013 and
2012.

Second Quarter 2013 Guidance

THT expects to generate sales revenue in the range of US$9 million to US$11
million in the second quarter 2013, compared with US$11.2 million in the same
period of 2012. This represents the Company's preliminary view, and is subject
to change.

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: +852 3196 3712
Email: tht@taylor-rafferty.com

Investor Relations (US):
Mahmoud Siddig
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 March 31, 2013 and December 31, 2012
(Stated in thousands of US Dollars)
                                                                                     March 31,   December
                                                                                     2013        31, 2012

                                                                                     (Unaudited) (Audited)
Assets
Current assets
Cash and cash equivalents                                                            8,380       10,703
Restricted cash                                                                      1,603       1,838
Accounts receivable, net                                                             33,667      37,683
Inventories, net                                                                     35,038      31,892
Other current assets                                                                 18,384      14,049
Total current assets                                                                 97,072      96,165
Long-term accounts receivable                                                        1,000       1,237
Other non-current assets                                                             13,852      14,067
Total assets                                                                         111,924     111,469
Liabilities
Current liabilities
Short-term bank loans                                                                18,807      18,705
Other current liabilities                                                            32,768      33,080
Total current liabilities                                                            51,575      51,785
Long-term loan                                                                       956         951
Total liabilities                                                                    52,531      52,736
Total shareholders' equity                                                           59,977      59,311
Noncontrolling interests                                                             (584)       (578)
Total liabilities and equity                                                         111,924     111,469



THT Heat Transfer Technology, Inc.
Unaudited Consolidated Statements of Income
(Stated in thousands of US Dollars, except number of shares and per share data)
                                                                              Three months ended
                                                                              March 31,
                                                                              2013       2012
Salesrevenue                                                                 7,910      11,449

Cost of sales                                                                 (4,919)    (6,844)
Gross profit                                                                  2,991      4,605
Operating expenses
 Administrative expenses                                                   1,031      1,253
 Research and development expenses                                         209        254
 Selling expenses                                                          1,043      2,254
Total operating expenses                                                      2,283      3,761
Operating income                                                              708        844
Interest income                                                               10         8
Other income                                                                  131        230
Financial costs                                                               (452)      (401)
Other expense                                                                 (1)
Income before income taxes                                                    396        681
Income taxes                                                                  (60)       (76)
Net income before noncontrolling interests                                    336        605
Net (loss) income attributable to noncontrolling interest                     (22)       (48)
Net income attributable to the equity stockholders                            314        557
Earnings per share attributable to THT Heat Transfer
 Technology Inc. common stockholders                                       $0.02      $0.03
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 three months ended March 31, 2013 and 2012
(Stated in thousands of US Dollars)
                                                  Three months ended March 31,
                                                  2013           2012
Net cash used in operating activities                 (2,621)        (5,172)
Net cash used in investing activities                 240            (360)
Net cash provided by (used in) financing              -              -
activities
Effect of exchange rate changes on cash and cash      58             55
equivalents
Net decrease in cash and cash equivalents             (2,323)        (5,477)
Cash and cash equivalents at beginning of the         10,703         7,340
period
Cash and cash equivalents at end of the period        8,380          1,863

SOURCE THT Heat Transfer Technology, Inc.

Website: http://www.tht.cn
 
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