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
 
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