Newater Technology, Inc. Announces Half Year 2020 Unaudited Financial Results | News

YANTAI, China, Dec. 18, 2020 /PRNewswire/ — Newater Expertise, Inc. (NASDAQ: NEWA) (“NEWA”, “we”, “our” or the “Firm”), a developer, service supplier and producer of membrane filtration merchandise and associated {hardware} and engineered programs which are used within the remedy, recycling and discharge of wastewater, at this time introduced its unaudited monetary outcomes for the half-year ended June 30, 2020.

Six Months Ended June 30, 2020 Monetary Highlights (all comparisons to the six months ended June 30, 2019 except famous)

• Revenues elevated by 16.80% from $8.73 million to $10.19 million, which resulted from: 1) Better gross sales drive allocation into new goal markets and current markets; 2) Extra challenge gross sales have been generated for the six months ended June 30, 2020.
• Price of revenues elevated by 6.13% from $4.50 million to $4.78 million because of the improve of revenues.
• Gross revenue elevated by 28.18% to $5.41 million in comparison with $4.22 million for a similar interval in 2019, whereas the gross revenue margin was 53.11%, in comparison with 48.39% for a similar interval in 2019. The rise was on account of increased income generated per unit of waste water processed for sure initiatives associated to the remedy of leachate from landfill, the place the Firm believes it possesses expertise benefits on this particular area.
• Operation expense decreased by 16.79% from $5.45 million to $4.53 million, and the share of operation expense in comparison with income decreased from 62.44% to 44.48%.
• Earnings from operations elevated from loss from operations of $1.23 million to earnings from operations of $0.88 million, because of the improve in gross margin and reduce in promoting, common and administrative bills.

“2021 will likely be our yr of administration effectivity.” commented Mr. Yuebiao Li, the Firm’s Chairman and Chief Government Officer, ” We plan to enhance administration effectivity and stay dedicated to analysis and improvement of DTRO expertise in addition to increasing the applying of DTRO expertise in new markets，we consider we are going to quickly see new income streams producing from these markets.”

Working Outcomes for Six Months Ended June 30, 2020

Revenues

We derive our revenues from (1) sale of merchandise corresponding to reverse osmosis and nano-filtration membrane gear and wastewater remedy gear (“product revenues”); (2) sale of wastewater remedy initiatives (“challenge revenues”); and (3) offering wastewater remedy providers to landfill leachates, briny wastewater from industrial parks and coal mines (“service revenues”). Revenues encompass the invoiced worth for the gross sales, internet of value-added tax (“VAT”), enterprise tax, relevant native authorities levies, rebates, reductions and returns.

For the six months ended June 30, 2020, revenues elevated by $1.47 million, or 16.80%, to $10.19 million from $8.73 million for a similar interval final yr. This improve was primarily attributable to the rise in challenge gross sales.

Our challenge revenues are acknowledged when our efficiency obligation below the phrases of a contract with the client are happy and management of the merchandise has been transferred to the client, which usually happens (i) when customer-issued formal acceptance is obtained or (ii) the Firm has demonstrated the gear meets the agreed-upon standards per the contract when formal acceptance just isn’t out there.

Our service revenues are acknowledged because the efficiency obligations are happy over time, as a result of our clients concurrently obtain and devour advantages because the providers are supplied by us. Particularly, the revenues have been acknowledged primarily based on the amount of wastewater purified multiplied by negotiated contract billing charges.

Price of revenues

Price of revenues consist primarily of (i) supplies and gear prices, (ii) compensation and associated overhead bills for personnel concerned within the customization of our merchandise, supply, set up and upkeep and providers, (iii) contractor prices, and (iv) depreciation of kit utilized in operations.

Price of revenues elevated by $0.28 million, or 6.13%, to $4.78 million for the six months ended June 30, 2020 from $4.50 million for a similar interval final yr. As a share of revenues, value of revenues was 46.89% for the six months ended June 30, 2020, in comparison with 51.61% for a similar interval final yr. The rise of value of revenues was because of the improve of revenues.

Gross revenue and gross margin

Gross revenue elevated barely by $1.19 million, or 28.18%, to $5.41 million for the six months ended June 30, 2020 from $4.22 million for a similar interval final yr. As well as, gross margin elevated to 53.11% for the six months ended June 30, 2020 from 48.39% for a similar interval final yr. The rise in gross margin was because of the information that: (1) increased income generated per unit of waste water processed for sure initiatives associated to the remedy of leachate from landfill, the place the Firm believes it possesses expertise benefits on this particular area; (2) extra membrane column merchandise have been offered for the six months ended June 30, 2020, which had a better gross margin.

Promoting, common and administrative bills

Promoting, common and administrative bills (“SG&A”) decreased by $0.91 million, or 16.79%, to $4.53 million for the six months ended June 30, 2020 from $5.45 million for a similar interval final yr. The lower was partially because of the lower in R&D expense, travelling expense, enterprise and leisure bills.

R&D bills decreased by 46.78% for the six months ended June 30, 2020 on account of decreased R&D investments into coal mine wastewater and municipal wastewater. Analysis and improvement bills accounted for 29.42% of the promoting, common and administrative bills for the six months ended June 30, 2020, in contrast with 47.98% for a similar interval of 2019.

Working earnings (loss) and working margin

Earnings from operations elevated by $2.11 million, to an earnings of $0.88 million for the six months ended June 30, 2020 from lack of $1.23 million for a similar interval final yr. Working margin was constructive 8.63% for the six months ended June 30, 2020, in comparison with adverse 14.04% for a similar interval final yr.

The numerous improve in working earnings and working margin primarily resulted from the rise in revenues, the rise in gross margin, and reduce in bills for the six months ended June 30, 2020.

Earnings Taxes

Provision for earnings taxes was $0.26 million for the six months ended June 30, 2020, a rise of $0.20 million, or 343.39%, from $0.06 million for a similar interval of final yr. We have been entitled to a preferential enterprise earnings tax (“EIT”) price of 15% in 2020 and 2019. The usual enterprise earnings tax price in China is 25%.

Web Earnings (loss)

Web earnings was $0.65 million for the six months ended June 30, 2020, in comparison with internet lack of 0.98 million for a similar interval final yr. Earnings per primary and diluted share was $0.06 for the six months ended June 30, 2020, in comparison with a loss per share of $0.09 for a similar interval final yr.

Monetary Circumstances

As of June 30, 2020, the Firm had money of $9.47 million, in comparison with $9.94 million at December 31, 2019. Complete working capital was $1.25 million as of June 30, 2020, in comparison with $1.34 million on the finish of 2019.

Web money utilized in working actions was $3.92 million for the six months ended June 30, 2020, in comparison with internet money utilized in working actions of $1.10 million for a similar interval final yr. Web money utilized in investing actions was $2.83 million for the six months ended June 30, 2020, in comparison with $1.07 million for a similar interval final yr. Web money supplied by financing actions was $2.47 million for the six months ended June 30, 2020, in comparison with $0.93 million for a similar interval of final yr.

Latest Developments

In January 2020, the Firm and Yantai Caijin Funding Holding Co., Ltd invested an extra RMB 20,000,000 (roughly $2,873,000) and RMB 30,000,000 (roughly $4,310,000), respectively, in Yantai Jincai Environmental Safety Expertise Co., Ltd. The fairness curiosity of Yantai Jincai Environmental Safety Expertise Co., Ltd owned by the Firm remained at 40%.

On Might 29, 2020, the Firm and Yantaishi Zhengda City Building Progress Co., Ltd. established Yantai Jinyu Eco-Expertise Co., Ltd. (“Yantai Jinyu”), an environmental expertise improvement firm. The Firm holds 40% fairness curiosity in Yantai Jinyu and intends to take a position RMB 20,000,000 (roughly $2,798,000) capital in Yantai Jinyu. The funding was not paid as of June 30, 2020.

The outbreak of the COVID-19 pandemic in China ranging from the top of 2019 has posed limitations to the Firm’s regular working routine. The Firm adopted the restrictive measures carried out in China, by suspending onsite operation till February 2020, when the Firm began to steadily resume regular operation. The Firm has skilled suspension of operations, interruption of provide chains and decline in demand by the Firm’s clients. At the moment, there are nonetheless sporadic new COVID-19 pandemic instances in China, however the general epidemic state of affairs is below management. Our Firm has resumed to regular operations, Because of the excessive uncertainty of the evolving state of affairs, the Firm has restricted visibility on the complete affect introduced upon by the COVID-19 pandemic and the associated monetary affect can’t be estimated presently.

About Newater Expertise, Inc.

Based in 2012 and headquartered in Yantai, China, Newater specializes within the improvement, manufacture and sale of DTRO (Disk Tube Reverse Osmosis) and DTNF (Disk Tube Nano-Filtration) membranes for wastewater remedy, recycling and discharge. Newater supplies built-in technical options in engineering assist and set up, technical recommendation and water purification providers, and different project-related options to show wastewater into useful clear water. Newater additionally supplies wastewater remedy providers, corresponding to landfill leachate remedy and purification providers.

The Firm’s merchandise can be utilized throughout a large spectrum of industries, together with:

• Reuse of top quality reclaimed water;
• Excessive-salt and high-polluting wastewater remedy and close to zero-liquid discharge;
• Extremely environment friendly remedy of Landfill leachate; and
• Utilization of acid or alkali-containing wastewater as assets.

Extra details about the Firm could be discovered at: www.dtnewa.com.

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Rounding quantities and percentages: Sure quantities and percentages included on this press launch have been rounded for ease of presentation. Share figures included on this press launch haven’t in all instances been calculated on the premise of such rounded figures, however on the premise of such quantities previous to rounding. Because of this, sure share quantities on this press launch could range from these obtained by performing the identical calculations utilizing the figures within the monetary statements. As well as, sure different quantities that seem on this press launch could not sum on account of rounding.

Ahead-Wanting Statements

This press launch comprises forward-looking statements as outlined by the Personal Securities Litigation Reform Act of 1995. Ahead-looking statements embrace statements regarding plans, aims, targets, methods, future occasions or efficiency, and underlying assumptions and different statements which are aside from statements of historic information. When the Firm makes use of phrases corresponding to “could”, “will”, “intend”, “ought to”, “consider”, “count on”, “anticipate”, “challenge”, “estimate” or comparable expressions that don’t relate solely to historic issues, it’s making forward-looking statements. Particularly, the Firm’s statements concerning: 1) its capability to enhance administration effectivity; 2) its capability to increase intp new markets and skill to generate income therefrom; 3) the continued enlargement of its analysis and improvement; 4) the affect of COVID-19 on the Firm’s enterprise operations, monetary situation and working outcomes; and 5) its continued development are forward-looking statements. Ahead-looking statements are usually not ensures of future efficiency and contain dangers and uncertainties which will trigger the precise outcomes to vary materially from the Firm’s expectations mentioned within the forward-looking statements. These statements are topic to uncertainties and dangers together with, however not restricted to, the next: the Firm’s targets and methods; the Firm’s future enterprise improvement; product and repair demand and acceptance; modifications in expertise; financial circumstances; the expansion of the water filtration business in China; fame and model; the affect of competitors and pricing; authorities rules; fluctuations typically financial and enterprise circumstances in China and assumptions underlying or associated to any of the foregoing and different dangers contained in studies filed by the Firm with the Securities and Trade Fee. For these causes, amongst others, traders are cautioned to not place undue reliance upon any forward-looking statements on this press launch. Further components are mentioned within the Firm’s filings with the U.S. Securities and Trade Fee, which can be found for evaluation at www.sec.gov. The Firm undertakes no obligation to publicly revise these forward-looking statements to mirror occasions or circumstances that come up after the date hereof.