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

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

PR Newswire

SIPING, China, Aug. 14, 2013

SIPING, China, Aug. 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 second quarter ended
June 30, 2013.

Second Quarter 2013  Financial Highlights

  oSales revenue decreased by 2.5% year-over-year to US$10.9 million.
  oGross profit decreased by 16.7% year-over-year to US$4.0 million.
  oGross margin was 36.8%, compared with 43.0% for the second quarter 2012.
  oOperating income decreased by 64.0% year-over-year to US$0.7 million.
  oNet income attributable to common stockholders was US$0.4 million,
    compared with US$1.4 million for the second quarter 2012.
  oBasic and fully diluted net income per share were US$0.02, compared with
    US$0.07 for the second quarter 2012.

Chairman and Chief Executive Officer Guohong Zhao commented, "We delivered
second quarter sales revenue near the high end of our guidance range as we
continued to navigate the challenging market environment in China. Demand for
our plate heat exchangers, shell-and-tube heat exchangers and other products
remained healthy, and our total unit sales increased by approximately 24%.
However, these gains were offset by a decrease in sales revenue from our heat
exchange units. Furthermore, ongoing macroeconomic headwinds and competitive
industry dynamics, as anticipated, resulted in a decrease in our unit price
and an increase in sales of lower margin products.

"In light of ongoing macroeconomic uncertainty in China, we expect to face
continuing headwinds in the second half of 2013. While we anticipate that
labor costs and raw material prices will remain at an elevated level, and that
competitive dynamics will continue to place pressure on our margins, we expect
a more stable pricing environment in the second half. Furthermore, we believe
that our total solutions business model, diversified and high quality product
portfolio and ongoing investment in product development will allow us to
remain competitively positioned and return to a growth trajectory as and when
market conditions improve."

Second Quarter 2013 Financial Results

Revenue

Sales revenue for the second quarter 2013 was US$10.9 million, a 2.5% decrease
from US$11.2 million during the same period of 2012. The decrease was
primarily attributable to lower sales revenue from heat exchange units,
offsetting the increase in sales revenue from plate heat exchangers,
shell-and-tube heat exchangers and other products. Sales volume of heat
exchange products totaled 599 units in the second quarter 2013, an increase of
116 units from 483 units in the same period of 2012. However, unit price
decreased in the quarter due to the challenging market environment, resulting
in an increased proportion of sales of lower margin products.

For the second quarter 2013, sales revenue from heat exchange units was US$2.8
million, a decrease of 24.1% compared with US$3.6 million in the same period
of 2012. Sales revenue from air-cooled heat exchangers increased by 50.2% to
US$0.8 million from US$0.5 million in the second quarter of 2012. Sales
revenue from shell-and-tube heat exchangers was US$1.3 million, an increase of
4.9% compared to the same period of 2012. During the second quarter 2013,
sales revenue from plate heat exchangers totaled US$3.9 million, an increase
of 0.9% as compared to the same period of 2012.

Cost of Sales

Cost of sales for the second quarter 2013 increased 8.1% to US$6.9 million
from US$6.4 million in the second quarter 2012. The increase was mainly
attributable to an increase in the Company's labor and raw material costs.

Gross Profit and Gross Margin

Gross profit decreased 16.7% to US$4.0 million during the second quarter 2013,
from US$4.8 million in the same period of 2012, mainly due to the decreased
sales revenue from heat exchange units. Gross margin was 36.8% for the second
quarter 2013, as compared with 43.0% 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 increased 87.1% to US$1.5 million in the second
quarter 2013, from US$0.8 million for the same period of 2012. The increase
was primarily due to an overall rise in administrative expenses in the second
quarter 2013, with especially significant increases in transportation costs
and allowance for doubtful accounts.

Research and development expenses increased 73.4% year-over-year to US$0.4
million, from US$0.2 million in the second quarter 2012. The increase was
primarily due to an increase in the costs of raw materials used in research
and development.

Selling expenses decreased 25.5% to US$1.5 million for the second quarter
2013, from US$2.0 million during the same period of 2012. The decrease was
mainly attributable to a decrease in salary and travelling expenses incurred
by the Company's sales personnel.

This resulted in a 12.3% increase in total operating expenses to US$3.4
million in the second quarter 2013 from US$3.0 million for the same period of
2012.

Income before Income Tax

Income before income tax was US$0.6 million in the second quarter 2013, a
decrease of 58.6% compared with US$1.5 million in the same period of 2012. The
decrease was mainly due to a decrease in taxable income.

Income Tax

Income tax was US$0.2 million in the second quarter 2013, compared with
US$34,934 in the same period of 2012. The increase was mainly attributable to
an adjustment of income tax rebates which requested the Company to pay back
adjusted amount of taxes for the period from 2008 to 2012 in the second
quarter 2013.

Net Income

Net income attributable to common shareholders was US$0.4 million in the
second quarter 2013, a 75.4% decrease compared with US$1.4 million in the same
period of 2012.

Basic and fully diluted net income per share were US$0.02 in the second
quarter 2013, compared with US$0.07 in the same period of 2012.

Liquidity

As of June 30, 2013, the Company had cash and cash equivalents of US$2.0
million and restricted cash of US$1.7 million. During the first six months of
2013, there was a net cash outflow of US$8.7 million, compared with US$2.6
million in the same period of 2012.

Net cash used in operating activities was US$4.5 million for the first six
months of 2013, compared with US$1.4 million for the same period of 2012. The
increase in net cash used in operating activities was mainly attributable to
(1) prepayment for the purchase of raw materials and staff advance in the
amount of US$6.0 million in anticipation of the production requirements for
the upcoming production schedule in the third quarter 2013; (2) the increase
in inventory by US$3.0 million; (3) the decrease in trade receivables by
US$2.0 million and (4) the decrease in other payables and accrued expenses.

Net cash provided by investing activities was US$59,730 for the first six
months of 2013, compared with net cash used in investing activities of US$1.8
million for the same period of 2012.

Net cash used in financing activities was US$4.3 million for the first six
months of 2013, compared with net cash provided by financing activities of
US$0.6 million for the same period of 2012. The increase in net cash used in
financing activities resulted from loan repayment in the amount of US$4.9
million.

Third Quarter 2013 Guidance

THT expects to generate sales revenue in the range of US$12.0 million to
US$13.5 million in the third quarter 2013, compared with US$12.5 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 June 30, 2013 and December 31, 2012
(Stated in thousands of US Dollars)
                              June 30, 2013 December 31, 2012

                              (Unaudited)   (Audited)
Assets
Current assets
Cash and cash equivalents     2,038         10,703
Restricted cash               1,731         1,838
Accounts receivable, net      36,234        37,683
Inventories, net              35,537        31,892
Other current assets          19,865        14,049
Total current assets          95,405        96,165
Long-term accounts receivable 650           1,237
Other non-current assets      13,922        14,067
Total assets                  109,977       111,469
Liabilities
Current liabilities
Short-term bank loans         15,856        18,705
Other current liabilities     33,841        33,080
Total current liabilities     49,697        51,785
Long-term loan                -             951
Total liabilities             49,697        52,736
Total shareholders' equity    60,280        59,311
Noncontrolling interests      -             (578)
Total liabilities and equity  109,977       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 June 30,
                                                   2013          2012
Sales revenue                                      10,912        11,195
Cost of sales                                      (6,900)       (6,380)
Gross profit                                       4,012         4,815
Operating expenses
 Administrative expenses                          1,474         787
 Research and development expenses                425           245
 Selling expenses                                 1,455         1,953
Total operating expenses                           3,354         2,985
Operating income                                   658           1,830
Interest income                                    5             4
Other income                                       162           138
Financial costs                                    (217)         (502)
Other expense                                      -             -
Income before income taxes                         608           1,470
Income taxes                                       (223)         (35)
Net income before noncontrolling interests         385           1,435
Net (loss) income attributable to noncontrolling   (31)          5
interest
Net income attributable to the equity stockholders 354           1,440
Earnings per share attributable to THT Heat
Transfer
 Technology Inc. common stockholders              $0.02         $0.07
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 six months ended June 30, 2013 and 2012
(Stated in thousands of US Dollars)
                                                     Six months ended June 30,
                                                     2013         2012
Net cash used in operating activities                   (4,499)      (1,449)
Net cash provided by (used in) investing activities     60           (1,799)
Net cash provided by (used in) financing activities     (4,328)      632
Effect of exchange rate changes on cash and cash        102          55
equivalents
Net decrease in cash and cash equivalents               (8,665)      (2,561)
Cash and cash equivalents at beginning of the period    10,703       7,340
Cash and cash equivalents at end of the period          2,038        4,779

SOURCE THT Heat Transfer Technology, Inc.

Website: http://www.tht.cn
 
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