Tri-Tech Holding Reports First Quarter 2013 Financial Results

        Tri-Tech Holding Reports First Quarter 2013 Financial Results

Conference Call Scheduled on May 15, 2013 at 8:00 PM EDT

PR Newswire

BEIJING, May 15, 2013

BEIJING, May 15, 2013 /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 the first quarter ended March 31,
2013. Highlights include the following:

  oIn the first quarter, the Company's revenues declined by 45.5% to $10.5
    million, compared to $19.2 million in first quarter 2012.
  oIn the first quarter, gross profit declined by 55.3% to $2.3 million
    compared to $5.2 million in first quarter 2012. Gross margin decreased to
    22.3% from 27.1% in the first quarter of 2012.
  oThe Company had a Loss from operations of $1.6 million, compared to income
    from operations of $1.5 million in first quarter of 2012.
  oNet loss was $1.1 million, compared to net income of $1.4 million in the
    same period of 2012.
  oWeighted average number of diluted shares outstanding was 8,238,406
    compared to 8,317,224 in the same period in 2012.
  oDiluted earnings per share was a loss of $0.13 compared to a gain of $0.17
    per share in the same period of 2012

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

Mr. Gavin Cheng, CEO of Tri-Tech Holding Inc. commented, "The Company has
experienced another quarter of loss due primarily to delays in implementing a
number of projects as clients required project design adjustments. These
delays in turn slowed project-related revenue recognition. As new competitors
entered the market and competed on pricing, our gross margin suffered. In an
effort to broaden its market coverage, the Company increased spending and
efforts in sales and marketing. The Company believes its strategies will
position the Company well for the long term and thanks our shareholders for
their continued confidence in these efforts and our Company."

FY2012 Financial Performance Metrics

Revenue

Revenue decreases were primarily attributable to a decrease of 50.7% in the
system integration category, from $18,532,662 in the first quarter of 2012 to
$9,137,158 in the same period for 2013. Of the system integration category,
revenue from the Ordos project decreased from $3,132,366 for the period ended
March 31, 2012 to $559,116 in the same period 2013 because the project was
primarily completed. In order to reduce cash flow pressures, we evaluated the
projects we planned to bid on and elected not to bid on domestic BT projects,
which typically require significant investments and feature slower client
payment periods. At the same time, these BT projects are typically
higher-value projects, so the absence of these projects from 2013 results
significantly reduced our revenues.

Gross Margin

Our gross margin decrease was largely a result of increases in material and
equipment costs and labor subcontracting costs. Shifting from BT projects,
which usually have higher gross margins, also contributed the lower gross
margin.

Selling and Marketing Expenses

Selling and marketing expenses consist primarily of compensation, marketing,
travel and business entertainment expenses. In the first quarter of 2013,
total selling and marketing expenses increased by 24.5%, from $838,993 in the
first quarter of 2012 to $1,044,526 in the same period of 2013 as a result of
the increased efforts required to drive revenue from a larger number of
lower-value projects in light of our move away from BT projects.

General 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 by $45,651 from $2,853,360 in the first
quarter of 2012 to $2,899,011 in the first quarter of 2013 due largely to
first quarter 2013 costs associated with reducing our headcount in the fourth
quarter of 2012.

Loss before Income Taxes

In the quarter ended March 31, 2013, our net loss before provision for income
taxes was $1,192,508, a decrease of $2,939,690 compared to net income before
income tax of $1,747,182 in the same period in 2012. The Company's provision
for income taxes decreased by 82.6%, from $314,493 in the first three months
of 2012 to $54,749 in the same period in 2013. Some of the entities were
income tax free because of loss while the others were taxable, so the Company
had income tax expenses in spite of overall net loss. In the period ended
March 31, 2013, net loss attributable to the shareholders of TRIT was
$1,098,773, a decrease of $2,536,898, from net income of $1,438,125 for the
same period in 2012.

Liquidity and Capital Resources

Our 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

As of March 31, 2013, our cash and cash equivalents amounted to $6,014,862.
The restricted cash as of March 31, 2013 and December 31, 2012 amounted to
$7,523,965 and $7,816,967, respectively, which are not included in the total
amount of cash and cash equivalents. The restricted cash consisted of deposits
as collateral for the issuance of letters of credit. Our subsidiaries that own
these deposits do not have material cash obligations to any third parties.
Therefore, the restriction does not impact our liquidity.

Operating Activities

Net cash used in operating activities was $693,046 for the three months ended
March 31, 2013, compared with $7,731,944 in the same period in 2012. The
decrease of $7,038,898 in operating cash outflow was caused by our strategic
adjustments and cost control efforts in 2012. Net accounts and notes
receivable increased from $18,598,110 on December 31, 2012 to $19,689,826 on
March 31, 2013, an increase of 5.9%. Current unbilled receivables increased
from $27,954,525 on December 31, 2012 to $28,267,776 on March 31, 2013, an
increase of 1.1%. The remaining portion was mainly due to the decreased
accounts payable and cost accruals, due to the drop in total revenue.

Investing Activities

Net cash used in investing activities was $177,287 during the three months
ended March 31, 2013, a decrease of $197,800 from net cash used in investing
activities of $375,087 in the same period of 2012.Currently we have no further
plan to add capital expenditure.

Financing Activities

The cash used in by financing activities was $1,365,888 in the three months
ended March 31, 2013, compared to cash provided by financing activities of
$3,317,057 in the same period of 2012. The decrease was due to paying back
bank borrowings and loans from third-party companies and a noncontrolling
shareholder.

Restricted Net Assets

As of both March 31, 2013 and December 31, 2012,restricted retained earnings
were $2,246,910, and restricted net assets were $4,878,975. Unrestricted
retained earnings as of March 31, 2013 and December 31, 2012 were $15,939,623
and $17,038,396, respectively, which were the amounts available for
distribution in the form of dividends or for reinvestment.

Working Capital and Cash Flow Management

As of March 31, 2013, our working capital was $24,916,099, with current assets
totaling $86,514,353 and current liabilities totaling $61,598,254. Of the
current assets, cash and cash equivalents was $6,014,862. We believe our
current assets are sufficient to meet our capital requirements for the next 12
months.

To support our operations, we plan to sell our real property in Baoding, along
with all construction including the costs of construction and operation
expended since acquisition for approximately $18 million. We acquired this
property on November 26, 2010. The sale is expected to close before the end of
2013 and we expect to break even on the sale. This fund will support our
operating cash flow and the corporate bond will be removed from financing cash
flow.

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 Company evaluates the ongoing projects regularly and updates the schedules
as appropriate.

The following table provides backlogs by segments for as of March 31, 2013 and
December 31, 2012, respectively.

           March 31, 2013                December 31, 2012
           USD Million % of Total Backlog USD Million % of Total Backlog
Segment 1: 37.8        60.2%              38.7        64.4%
Segment 2: 8.3         13.3%              6.7         11.1%
Segment 3: 16.6        26.5%              14.7        24.5%
Total      62.7        100.0%             60.1        100.0%

Our pipeline represents the values of projects we have been actively pursuing.
The pipeline by the ended of March 31, 2013 was $38.1 million in Segment 1,
$23.7 million in Segment 2 and $5.4 million in Segment 3.

Having a dynamic nature, the values of secured projects move from pipeline
into backlog and backlog to revenue based on percentage of completion,
sometimes simultaneously. The backlog increased by $2.6 million from December
31, 2012 to March 31, 2013, which is because we successfully bid for new
contracts.

Conference Call

Tri-Tech Chairman Warren Zhao, CEO Gavin Cheng, CFO & President Phil Fan and
COO Peter Dong will host a conference call at 8:00PM EDT, May 15, 2013,
(8:00AM Beijing/Hong Kong Time on May 16, 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- 8416approximately 10
minutes before the call. International callers, please dial1 (480) 629 -
9808.The conference ID number is4619281. A live and archived webcast of the
call will be available athttp://public.viavid.com/index.php?id=104728.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
                                            March 31,2013   December 31,2012
                                            (Unaudited)
ASSETS
Current assets
Cash                                      $ 6,014,862      $ 8,098,657
Restricted cash                             4,977,526        4,352,443
Accounts and notes receivable, net of
allowance for doubtful accounts
of $1,549,227 and $1,475,771 as of March    19,689,826       18,598,110
31, 2013 and December 31,
2012, respectively
Unbilled revenue                            28,267,776       27,954,525
Other current assets                        3,618,626        3,825,770
Inventories                                 9,677,020        8,459,073
Deposits on projects                        1,285,829        1,469,550
Prepayments to suppliers and                12,982,888       9,353,490
subcontractors
Total current assets                        86,514,353       82,111,618
Long-term unbilled revenue                  42,624,081       51,219,694
Long-term accounts receivable               517,748          413,770
Plant and equipment, net                    1,672,292        1,764,784
Construction in progress                    5,537,946        5,359,466
Intangible assets, net                      10,750,434       10,902,932
Long-term restricted cash                   2,546,439        3,464,524
Goodwill                                    1,441,278        1,441,278
Total Assets                              $ 151,604,571    $ 156,678,066
LIABILITIES AND EQUITY
Current liabilities
Accounts payable                          $ 4,732,420      $ 5,890,511
Costs accrual on projects                   22,165,069       23,637,751
Advance from customers                      865,281          1,157,247
Loans from third party companies and        4,619,651        6,400,659
individual
Amount due to noncontrolling interest       6,525,751        9,047,068
investor
Amount due to related party                 1,668,604        1,656,420
Other payables                              581,208          461,258
Taxes payable                               6,021,909        5,577,533
Accrued liabilities                         524,101          485,354
Payable on investment consideration         582,966          582,966
Deferred income taxes                       2,040,315        1,782,786
Deferred revenue                            264,386          289,485
Short-term bank borrowing (including VIE
short-term borrowing of the
consolidated VIEs without recourse to       11,006,593       8,150,041
Tri-Tech Holdings of $6,221,064
and $2,754,158 as of March 31, 2013 and
December 31, 2012, respectively)
Total current liabilities                  61,598,254       65,119,079
Noncurrent deferred income taxes            3,489,747        3,699,790
Long-term bank borrowings                   16,475           17,976
Corporate Bond                              7,935,122        7,935,122
Total Liabilities                           73,039,598       76,771,967
Equity
Tri-Tech Holding Inc. shareholders'
equity
Ordinary shares ($0.001 par value,
30,000,000 shares authorized;
8,259,506 and 8,259,506 shares issued as
of March 31, 2013 and
December 31, 2012, respectively;            8,259            8,259
8,238,406 and 8,238,406 shares
outstanding as of March 31, 2013 and
December 31, 2012,
respectively)
Additional paid-in-capital                  50,257,633       50,119,428
Statutory reserves                          2,246,910        2,246,910
Retained earnings                           15,939,623       17,038,396
Treasury shares (21,100 shares in
treasury as of March 31, 2013               (193,750)        (193,750)
and December 31, 2012, respectively)
Accumulated other comprehensive income      4,891,220        5,086,827
Total Tri-Tech Holding Inc. shareholders'   73,149,895       74,306,070
equity
Noncontrolling interests                    5,415,078        5,600,029
Total equity                                78,564,973       79,906,099
Total Liabilities and Equity              $ 151,604,571    $ 156,678,066



TRI-TECH HOLDING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
                                                                                                                     For The Three Months
                                                                                                                     Ended March 31,
                                                                                                                     2013          2012
                                                                                                                     (Unaudited)   (Unaudited)
Revenues:
 System integration                                                                                   $ 9,137,158   $ 18,532,662
 Hardware products                                                                                      1,341,670     688,650
 Total revenues                                                                  10,478,828    19,221,312
Cost of revenues
System integration                                                                                     7,180,386     13,584,217
 Hardware products                                                                                      963,749       419,595
 Total cost of revenues                                                          8,144,135     14,003,812
Grossprofit   2,334,693     5,217,500
Operating expenses:
 Selling and marketing expenses                                                                         1,044,526     838,993
 General and administrative expenses                                                                    2,899,011     2,853,360
 Research and development expenses                                                                      9,162         68,870
 Total operating expenses                                                        3,952,699     3,761,223
(Loss) Income from operations                                                                                        (1,618,006)   1,456,277
Other income (expense):
 Other income (expense), net                                                                            1,187,348     672,495
 Interest income                                                                                        10,268        41,774
 Interest expense                                                                                       (772,118)     (435,773)
 Investment gain                                                                                        -             5,409
 Fair Value change on contingent investment consideration                                               -             7,000
Total other income (expenses), net                                              425,498       290,905
(Loss) Income before provision for income taxes                                                                      (1,192,508)   1,747,182
Provision for income taxes                                                                                           54,749        314,493
Net (loss) income                                                                                                    (1,247,257)   1,432,689
Less: Net (loss) income attributable to noncontrolling interests                                                     (148,484)     (5,436)
Net (loss) income attributable to Tri-Tech Holding Inc. shareholders                                               $ (1,098,773) $ 1,438,125
Net (loss) income                                                                                                    (1,247,257)   1,432,689
Other comprehensive income
 Foreign currency translation adjustment                                                                (232,074)     193,353
Comprehensive (loss) income                                                                                          (1,479,331)   1,626,042
Less: Comprehensive (loss) income attributable to noncontrolling interests                                           (184,951)     8,429
Comprehensive (loss) income attributable to Tri-Tech Holding Inc.                                                  $ (1,294,380) $ 1,617,613
Net (loss) income attributable to Tri-Tech Holding Inc. shareholders
per share are:
 Basic                                                                                                $ (0.13)      $ 0.18
 Diluted                                                                                              $ (0.13)      $ 0.17
Weighted average number of ordinary shares outstanding:
 Basic                                                                                                  8,238,406     8,208,480
 Diluted                                                                                                8,238,406     8,317,224



TRI-TECH HOLDING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                                             For The Three Months
                                                                                                             Ended March 31,
                                                                                                             2013          2012
                                                                                                             (Unaudited)   (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income                                                                                          $ (1,247,257) $ 1,432,689
Adjustments to reconcile net (loss) income to cash used
 in operating activities:
Amortization of share-based compensation expense                                                             138,205       90,913
Depreciationandamortization   309,944       285,479
Provision for doubtful accounts                                                                              65,773        152,717
Loss on disposal of plant and equipment                                                                      12,003        -
Deferred income taxes                                                                                        54,749        314,493
Fair value change on contingent investment consideration                                                     -             (7,000)
Gain on investment in joint venture                                                                          -             (5,409)
Changes in operating assets and liabilities:
Accounts and notes receivable                                                                                (1,241,770)   (3,160,643)
Unbilled revenue                                                                                             8,289,666     (8,837,581)
Restricted cash                                                                                              316,761       280,518
Other current assets                                                                                         386,473       (1,258,278)
Inventories                                                                                                  (1,231,663)   762,767
Prepaid expenses                                                                                             (38,225)      (133,743)
Prepayments                                                                                                  (3,574,243)   (267,700)
Accounts payable                                                                                             (1,397,701)   (5,294,693)
Notes payable                                                                                                -             (59,248)
Cost accrual on projects                                                                                     (1,556,734)   10,693,084
Advance from customers                                                                                       (401,072)     (634,643)
Other payables                                                                                               (32,707)      (1,856,643)
Taxes payable                                                                                                427,581       (154,840)
Accrued liabilities                                                                                          53,717        (74,183)
Deferred revenue                                                                                             (26,546)      -
Net cash used in operating activities                                                                        (693,046)     (7,731,944)
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash proceeds from disposal of plant and equipment                                                           1,150         -
Payment to purchase plant and equipment                                                                      (27,718)      (118,550)
Cash paid for construction in progress                                                                       (150,719)     (41,125)
Payment in business acquisition                                                                              -             (75,159)
Payment of loan to joint venture                                                                             -             (250,000)
Payment of loan to third-party companies                                                                     -             (190,253)
Collection of loan to third-party companies                                                                  -             300,000
Net cash used in investing activities                                                                        (177,287)     (375,087)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from bank borrowings                                                                                4,243,848     3,408,695
Payment of bank borrowing                                                                                    (1,435,083)   -
Proceeds from loan from third-party companies                                                                -             215,620
Payment of loan from third-party companies                                                                   (1,291,799)   (307,258)
Payment of loan from non-controlling shareholders                                                            (2,882,854)   -
Net cash (used in) provided by financing activities                                                          (1,365,888)   3,317,057
EFFECTS OF EXCHANGE RATE CHANGE IN CASH                                                                      152,426       394,818
NET DECREASE IN CASH                                                                                         (2,083,795)   (4,395,156)
CASH, beginning of the period                                                                                8,098,657     11,935,746
CASH, end of the period                                                                                    $ 6,014,862   $ 7,540,590
Supplemental disclosure for cash flow information:
Income taxes paid                                                                                          $ 87,637      $ 154,361
Interest paid on debt                                                                                      $ 534,748     $ 151,606
Supplemental disclosure for noncash investing activity:
Fair value change on contingent consideration payable                                                        -             (7,000)
Gain on long-term investment to India Joint Venture                                                          -             5,409

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
Website: http://www.tri-tech.cn/ir
Website: http://www.tri-tech.cn/ir/info/request
 
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