Monday, November 17, 2008

China Industrial Waste Management Inc. (CIWT.OB) Reports 3rd Quarter 2008 Financial Results and Posts Revised Fiscal Year 2008 Guidance

China Industrial Waste Management, Inc. (CIWM) released its 3rd Quarter 2008 financial results today for the period ending September 30, 2008. Among the highlights, total revenues increased by $3,434,442 or 53 % for the nine months ended September 30, 2008 as compared to the nine months ended September 30, 2007. Revenues for the three months ended September 30, 2008 increased by $870,538 or 37 % over the comparable period in 2007. CIWM said the gain in revenues was because of an increase in its customer base and increased demand for its services among its existing clients along with a growing sales network for the company’s recycled products.

Although the Summer Olympics hurt business, the company says the impact was short and that its prospects continue to improve. “We continu[e] to experience positive momentum in all aspects of our business,” said Jinqing Dong, Chairman and CEO. “Our municipal waste water treatment facility came online and began contributing to revenues during the third quarter. In addition, we completed construction for the Zhuorui project, which utilizes patented plasma technology to recycle waste catalyst for the oil industry.”

CIWM expects to bring the Zhuorui project online shortly and that the recycled waste from that project will boost its profit margin in upcoming periods. Finally, Mr. Dong noted, the company decided to hold “an inventory of recycled commodities rather than sell them at currently deflated prices and expect[s] this will positively impact future net income”

Additional points of interest in the results are that quarterly gross profit for the third quarter of 2008 was $1.9 million. This is a slight improvement from the $1.6 million for the same period last year, yielding gross margins of 58.3% and 67.5% respectively. The company improved its hold on operating expenses during the third quarter. These expenses came in at $0.67 million compared to $0.71 million for the same period last year. Operating margins were 37.3% compared to 36.9% for the third quarter of 2008 and 2007, respectively.

Also, net income for the third quarter of 2008 increased 2.4% to $0.83 million from $0.81 million in the same year ago period. Corresponding net profit margins were 26.1% for the quarter. After assessing the 3rd Quarter 2008 results, CIWM believes its year-end earnings for 2008 will be in the range of $4.5 million, down from its prior projection of $7.8 million.

CIWM is an environmental services provider in China that operates through its 5 mainland subsidiaries. The company collects, stores, treats, disposes of, and recycles industrial wastes. CIWM also provides metal extraction and recycling services, municipal sewage plant operation, municipal sludge treatment, environmental protection equipment manufacturing and environmental protection consultation. The company currently serves more than 600 customers including some Fortune 500 companies such as Pfizer, Canon and Panasonic.

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