THT Heat Transfer Technology, Inc. Announces First Quarter 2014 Results

   THT Heat Transfer Technology, Inc. Announces First Quarter 2014 Results  PR Newswire  SIPING, China, May 15, 2014  SIPING, China, May 15, 2014 /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, 2014.  First Quarter 2014  Financial Highlights    oSales revenue increased by 4.8% year-over-year to US$8.3 million.   oGross profit decreased by 15.6% year-over-year to US$2.5 million.   oGross margin was 30.5%, compared with 37.8% for the first quarter 2014.   oOperating income decreased by 5.5% year-over-year to US$0.7 million.   oNet income attributable to common stockholders was US$0.5 million,     compared with US$0.3 million for the first quarter 2013.   oBasic and fully diluted net income per share was US$0.02, compared with     US$0.02 for the first quarter 2013.  Comment from Zhao Guohong, Chairman and CEO  Chairman and Chief Executive Officer Guohong Zhao commented, "Against a challenging economic environment in China, we delivered a steady financial performance in the first quarter with revenues exceeding our guidance. Demands for our heat exchange units and shell-and-tube heat exchangers maintained steady growth, and our total unit sales increased by approximately 30%. Due to the increased labor costs and raw material costs, however, our gross profit decreased about 16% and our gross profit margin dropped to 31% from 38%."  "Along with ongoing macroeconomic uncertainty in China, we expect to face continuing headwinds in the second quarter of 2014. However, we believe that our total solutions business model and ongoing investment in high technology and high added value products will enable us to continuously increase our competitiveness and remain sustained growth."  First Quarter 2014 Financial Results  Revenue  Sales revenue for the first quarter of 2014 was US$8.3 million, a 4.8% increase from US$7.9 million during the same period of 2013. The increase was primarily attributable to higher sales revenue from heat exchange units and shell-and-tube heat exchangers. Sales volume of heat exchange products totaled 496 units in the first quarter of 2014, an increase of 113 units from 383 units in the same period of 2013. The increase was due to the increased demand of our products in consequence of more projects and economy recovery of China in the first quarter of 2014 compared with previous years.  For the first quarter of 2014, sales revenue from heat exchange units was US$3.2 million, an increase of 41.1% compared with US$2.3 million in the same period of 2013. Sales revenue from shell-and-tube heat exchangers was US$1.1 million, an increase of 2500.0% compared to the same period of 2013. During the first quarter of 2014, sales revenue from plate heat exchangers totaled US$2.9 million, a decrease of 24.0% as compared to the same period of 2013.  Cost of Sales  Cost of sales for the first quarter of 2014 increased 17.2% to US$5.8 million from US$4.9 million in the first quarter 2013. The increase was mainly attributable to an increase in the Company's labor costs and raw material costs.  Gross Profit and Gross Margin  Gross profit decreased 15.6% to US$2.5 million during the first quarter of 2014, from US$3.0 million in the same period of 2013, mainly due to the increased cost of sales. Gross margin was 30.5% for the first quarter of 2014, as compared with 37.8% during the same period of 2013. The decrease in gross margin was mainly attributable to an increase in the Company's labor costs and raw material costs.  Operating Expenses  Administrative expenses decreased 47.1% to US$0.55 million in the first quarter 2014, from US$1.0 million for the same period of 2013. The decrease was primarily owing to the increase in reversal of allowance for doubtful accounts in the first quarter of 2014 as a result of measures we adopted to improve the collection of overdue receivable.  Research and development expenses increased 62.9% year-over-year to US$0.3 million, from US$0.2 million in the first quarter 2013. The increase was primarily due to an increase in the costs of research and development of new products.  Selling expenses decreased 7.0% to US$0.97 million for the first quarter of 2014, from US$1.04 million during the same period of 2013. The decrease was mainly attributable to a decrease in salary of and travelling expenses incurred by the Company's sales personnel.  This resulted in an 18.7% decrease in total operating expenses to US$1.9 million in the first quarter of 2014 from US$2.3 million for the same period of 2013.  Income before Income Tax  Income before income tax was US$0.6 million in the first quarter of 2014, an increase of 43.1% compared with US$0.4 million in the same period of 2013. The increase was mainly due to a decrease in our total expenses.  Income Tax  Income tax was US$0.08 million in the first quarter of 2014, compared with US$0.06 million in the same period of 2013. The increase was mainly attributable to the increased taxable income.  Net Income  Net income attributable to common shareholders was US$0.48 million in the first quarter of 2014, a 53.5% increase compared with US$0.3 million in the same period of 2013. The increase was due to the cumulative effect of the foregoing factors.  Basic and fully diluted net income per share was US$0.02 in the first quarter of 2014, compared with US$0.02 in the same period of 2013.  Liquidity  As of March 31, 2014, the Company had cash and cash equivalents of US$5.0 million and restricted cash of US$1.5 million. During the first three months of 2014, there was a net cash outflow of US$4.1 million, compared with US$2.3 million in the same period of 2013.  Net cash used in operating activities was US$1.9 million for the first three months of 2014, compared with US$2.6 million for the same period of 2013. The decrease in net cash used in operating activities was mainly attributable to (1) increased net income; (2) less increase of other receivables, prepayments and deposits; (3) less money used to purchase inventory (4) more decrease of trade payables, other payables and accrued expenses and (5) less decrease of receivables.  Net cash provided by investing activities was US$0.21 million for the first three months of 2014, compared with net cash used in investing activities of US$0.24 million for the same period of 2013.  Net cash used in financing activities was US$2.4 million for the first three months of 2014, compared with net cash provided by financing activities of US$0 for the same period of 2013. The increase in net cash used in financing activities resulted from bank loan payments in the amount of US$2.4 million.  Outlook for Second Quarter 2014  THT expects to generate sales revenue in the range of US$12 million to US$14 million in the second quarter of 2014, compared with US$10.9 million in the same period of 2013. 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:  Mr. Jack Xiao  Investor Relations Manager  THT Heat Transfer Technology, Inc.  Tel:+86 (434) 326 6779  Email: IR@tht.cn    Robie Li  Investor Relations Department  THT Heat Transfer Technology, Inc.  Tel: +65 9235 1765  Email: lirubing@tht.cn    THT Heat Transfer Technology, Inc. Consolidated Balance Sheets As of March 31, 2014 and December 31, 2013 (Stated in thousands of US Dollars)                               March 31, 2014 December 31, 2013                                (Unaudited)    (Audited) Assets Current assets Cash and cash equivalents     4,949          9,082 Restricted cash               1,106          1,728 Accounts receivable, net      40,523         44,316 Inventories, net              23,838         25,304 Other current assets          18,721         16,621 Total current assets          89,137         97,051 Long-term accounts receivable 2,152          2,209 Other non-current assets      13,968         13,562 Total assets                  105,257        112,822 Liabilities Current liabilities Short-term bank loans         14,278         16,038 Other current liabilities     27,113         32,825 Total current liabilities     41,391         48,863 Long-term loan                568            573 Total liabilities             41,959         49,436 Total shareholders' equity    63,298         63,386 Noncontrolling interests      -              - Total liabilities and equity  105,257        112,822    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,                                                   2014           2013 Sales revenue                                     8,289          7,910 Cost of sales                                     (5,765)        (4,920) Gross profit                                      2,524          2,991 Operating expenses  Administrative expenses                         545            1,031  Research and development expenses               340            209  Selling expenses                                970            1,043 Total operating expenses                          1,855          2,283 Operating income                                  669            708 Interest income                                   4              10 Other income                                      224            131 Financial costs                                   (331)          (452) Income before income taxes                        566            396 Income taxes                                      (85)           (60) Net income before noncontrolling interests        481            335 Net (loss) income attributable to noncontrolling  -              22 interest Net income attributable to the equity             481            314 stockholders Earnings per share attributable to THT Heat Transfer  Technology Inc. common stockholders             $0.02          $0.02 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, 2014 and 2013 (Stated in thousands of US Dollars)                                                    three months ended March 31                                                    2014           2013 Net cash used in operating activities                  (1,903)       (2,621) Net cash provided by (used in) investing               211           240 activities Net cash provided by (used in) financing               (2,370)       - activities Effect of exchange rate changes on cash and cash       (71)          58 equivalents Net decrease in cash and cash equivalents              (4,133)       (2,323) Cash and cash equivalents at beginning of the          9,082         10,703 period Cash and cash equivalents at end of the period         4,949         8,380  SOURCE THT Heat Transfer Technology, Inc.  Website: http://www.tht.cn