CREG
$2.50
China Recycling Ener
($.19)
(7.06%)
Earnings Details
Quarter March 2020
Monday, June 29, 2020 9:30:00 AM
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Summary

China Recycling Ener (CREG) Recent Earnings

China Recycling Ener (CREG) reported a Quarter March 2020 loss of $0.28 per share on revenue of $0.0 million..

Results
Reported Earnings
($0.28)
Earnings Whisper
-
Consensus Estimate
Reported Revenue
Revenue Estimate
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

China Recycling Energy Corporation Reports Results for the First Quarter of 2020

XI'AN, China, June 29, 2020 (GLOBE NEWSWIRE) -- China Recycling Energy Corporation (NASDAQ: CREG) ("CREG" or "the Company"), an industrial waste-to-energy solution provider in China, today reported certain highlights of its operating results for the quarter ended March 31, 2020.

“As of March 31, 2020, we maintained a healthy cash and cash equivalents balance of approximately $55.0 million,” stated Mr. Guohua Ku, Chairman and CEO of the Company. In addition, we have accomplished significant cost cutting throughout our entire organization, evidenced by net loss narrowed by approximately 69.2% to approximately $(0.6) million in the first quarter ended March 31, 2020, as compared to approximately $(1.9) million in the same period of 2019. We are executing what we believe is a clear plan to manage our business efficiently and effectively through the coronavirus pandemic, prioritizing the health and safety of our customers and teams.  We believe our financial position and contingency plans will allow us to retain the financial flexibility to pursue the fast-growing smart power sector. We feel we are back on track to continue evaluating several exciting strategic opportunities to reinvest in innovative growth initiatives that we expect will reposition our energy sustainability business in direct relation to smart power integrated solutions to vastly improve climate change efficiency in China, which we believe will better serve our clients, employees and shareholders. As such, we will maintain our focus on expense and working capital discipline so that we move forward with a strengthened platform to attempt to capitalize on the significant opportunities we see for growth.” 

"Lastly, I want to thank all our employees for their service to the business and to our loyal customers.  I am confident we will emerge from this challenge even stronger, given the strength of our brand, our people and the new opportunities ahead of us."  

Financial Summary for the Full Year Ended December 31, 2019

  • Cash and cash equivalents were approximately $55.0 million as of March 31, 2020, an increase of approximately $38.8 million as compared to approximately $16.2 million as of December 31, 2019.
  • Net sales were nil as compared to $0.6 million for the same period of 2019 due to the shutdown of business during the COVID-19 pandemic.
  • Operating expenses were $154,178 for the three months ended March 31, 2020, compared to $2,699,990 for the three months ended March 31, 2019, a decrease of $2,545,812 or 94%. The decrease was mainly due to decreased bad debts expense by $108,396, decreased operating expense by $1,095,907 of Erdos TCH due to cease of the operation, and decreased loss on disposal of systems by $1,257,170. We disposed Chengli Boxing system, Xuzhou Huayu system, and Shenqiu Phase I & II systems during the three months ended March 31, 2019 for the repayment of entrusted loan.
  • Net loss for three months ended March 31, 2020 was $598,551 or $(0.28) per fully diluted share compared to $1,942,294 or $(1.61) per fully diluted share for the three months ended March 31, 2019, a decrease of loss of $1,343,743. This decrease in net loss was mainly due to the decrease operating expenses as described above.

About China Recycling Energy Corp.

China Recycling Energy Corporation (Nasdaq: CREG) ("CREG" or "the Company") is based in Xi'an, China and provides environmentally friendly waste-to-energy technologies to recycle industrial byproducts for steel mills, cement factories and coke plants in China. Byproducts include heat, steam, pressure, and exhaust to generate large amounts of lower-cost electricity and reduce the need for outside electrical sources. The Chinese government has adopted policies to encourage the use of recycling technologies to optimize resource allocation and reduce pollution. Currently, recycled energy represents only an estimated 1% of total energy consumption and this renewable energy resource is viewed as a growth market due to intensified environmental concerns and rising energy costs as the Chinese economy continues to expand. The Company’s management and engineering teams have over 20 years of experience in industrial energy recovery in China. For more information about CREG, please visit http://creg-cn.investorroom.com.

Safe Harbor Statement

This press release may contain certain "forward-looking statements" relating to the business of CREG and its subsidiary companies. 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, 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. Investors 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, but not limited to, the risks and uncertainties associated with market conditions and the satisfaction of customary closing conditions relating to the registered direct offering and those discussed in the Company's annual and periodic reports that are filed with the Securities and Exchange Commission and available on its website at 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.

CHINA RECYCLING ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS 

  MARCH 31,
2020
  DECEMBER 31,
2019
 
  (UNAUDITED)    
ASSETS      
       
CURRENT ASSETS      
Cash $55,028,489  $16,221,297 
Accounts receivable, net  40,010,739   42,068,760 
Interest receivable on sales type leases  -   5,245,244 
Prepaid expenses  51,038   52,760 
Other receivables  40,164   1,031,143 
         
Total current assets  95,130,430   64,619,204 
         
NON-CURRENT ASSETS        
Investment in sales-type leases, net  -   8,287,560 
Long term deposit  -   15,712 
Operating lease right-of-use assets, net  37,499   54,078 
Property and equipment, net  26,628,705   27,044,385 
Construction in progress  -   23,824,202 
         
Total non-current assets  26,666,204   59,225,937 
         
TOTAL ASSETS $121,796,634  $123,845,141 
         
LIABILITIES AND STOCKHOLDERS’ EQUITY        
         
CURRENT LIABILITIES        
Accounts payable $2,166,401  $2,200,220 
Taxes payable  4,589,662   4,087,642 
Accrued interest on notes  403,489   - 
Notes payable, net of unamortized OID  1,134,876   - 
Accrued liabilities and other payables  1,155,734   1,184,751 
Operating lease liability  40,794   56,755 
Due to related parties  28,723   41,174 
Interest payable on entrusted loans  8,389,311   8,200,044 
Entrusted loan payable  20,165,427   20,480,214 
         
Total current liabilities  38,074,417   36,250,800 
         
NONCURRENT LIABILITIES        
Accrued interest on notes  -   368,362 
Income tax payable  5,782,625   5,782,625 
Notes payable, net of unamortized OID  -   1,552,376 
Long term payable  423,424   430,034 
Entrusted loan payable  282,283   286,689 
Refundable deposit from customers for systems leasing  -   544,709 
         
Total noncurrent liabilities  6,488,332   8,964,795 
         
Total liabilities  44,562,749   45,215,595 
         
CONTINGENCIES AND COMMITMENTS (NOTE 17 &18)        
         
STOCKHOLDERS’ EQUITY        
Common stock, $0.001 par value; 10,000,000 shares authorized, 2,179,387 shares and 2,032,721 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively  2,179   2,033 
Additional paid in capital  117,226,394   116,682,374 
Statutory reserve  14,525,712   14,525,712 
Accumulated other comprehensive loss  (7,473,890)  (6,132,614)
Accumulated deficit  (47,046,510)  (46,447,959)
         
Total Company stockholders’ equity  77,233,885   78,629,546 
         
TOTAL LIABILITIES AND EQUITY $121,796,634  $123,845,141 

CHINA RECYCLING ENERGY CORPORATION
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED) 

  THREE MONTHS ENDED
MARCH 31,
 
  2020  2019 
       
Revenue        
Contingent rental income $-  $621,174 
         
Interest income on sales-type leases  -   174,235 
         
Total operating income  -   795,409 
         
Operating expenses        
Bad debts  -   108,396 
Loss on disposal of systems  -   1,257,170 
General and administrative  154,178   1,334,424 
         
Total operating expenses  154,178   2,699,990 
         
Loss from operations  (154,178)  (1,904,581)
         
Non-operating income (expenses)        
Loss on note redemption / conversion  (103,167)  (893,958)
Interest income  27,006   41,112 
Interest expense  (355,244)  (1,932,105)
Other income (expenses), net  (12,968)  356,367 
         
Total non-operating expenses, net  (444,373)  (2,428,584)
         
Loss before income tax  (598,551)  (4,333,165)
Income tax benefit  -   (2,390,871)
         
Net loss attributable to China Recycling Energy Corporation  (598,551)  (1,942,294)
         
Other comprehensive items        
Foreign currency translation loss  (1,341,276)  1,810,626 
         
Comprehensive loss attributable to China Recycling Energy Corporation $(1,939,827) $(131,668)
         
Basic and diluted weighted average shares outstanding  2,135,340   1,206,572 
         
Basic and diluted loss per share $(0.28) $(1.61)

?The accompanying notes are an integral part of these consolidated financial statements.

CHINA RECYCLING ENERGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED) 

  THREE MONTHS ENDED
MARCH 31,
 
  2020  2019 
       
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net Loss $(598,551) $(1,942,294)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:        
Amortization of OID and debt issuing costs of convertible note  12,500   59,661 
Stock compensation expense  10,999   - 
Operating lease expenses  16,374   - 
Bad debts expense  -   108,396 
Loss on disposal of 40% ownership of Fund Management Co  -   47,506 
Loss on transfer of Chengli Boxing system  -   638,167 
Loss on transfer of Xuzhou Huayu system  -   405,959 
Loss on transfer of Shenqiu Phase I & II systems  -   213,044 
Loss on disposal of fixed assets  -   293 
Loss on notes redemption / conversion  103,167   893,958 
Changes in deferred tax  -   (2,530,614)
Changes in assets and liabilities:        
Interest receivable on sales type leases  -   (174,235)
Collection of principal and interest on sales type leases  13,984,746   - 
Accounts receivable  25,791,539   (720,561)
Prepaid expenses  926   - 
Other receivables  911   (144,398)
Construction in progress  -   1,156,480 
Taxes payable  818   234,534 
Payment of lease liability  (15,705)  - 
Interest payable on entrusted loan  320,095   1,900,658 
Accrued liabilities and other payables  22,701   (430,025)
Refundable deposit for systems leasing  -   (489,123)
         
Net cash provided by (used in) operating activities  39,650,520   (772,594)
         
CASH FLOWS FROM INVESTING ACTIVITIES:        
Proceeds from disposal of property & equipment  -   5,188 
         
Net cash provided by investing activities  -   5,188 
         
CASH FLOWS FROM FINANCING ACTIVITIES:        
Issuance of notes payable  -   2,000,000 
Issuance of common stock  -   1,620,800 
         
Net cash provided by financing activities  -   3,620,800 
         
EFFECT OF EXCHANGE RATE CHANGE ON CASH AND EQUIVALENTS  (843,328)  1,023,068 
         
NET INCREASE IN CASH  38,807,192   3,876,462 
CASH, BEGINNING OF PERIOD  16,221,297   53,223,142 
         
CASH, END OF PERIOD $55,028,489  $57,099,604 
         
Supplemental cash flow data:        
Income tax paid $-  $- 
Interest paid $-  $- 
         
Supplemental disclosure of non-cash operating activities
Transfer of Tian’an project from construction in progress to accounts receivable.
 $23,814,532  $- 
         
Supplemental disclosure of non-cash financing activities
Conversion of long-term notes into common shares
 $430,000  $- 

Contact:

Investor Relations Inquiries:
Vivian Chen
vivianchen@irimpact.com

Media Inquiries:
Cathy Loos
cathyloos@irimpact.com


 


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Source: China Recycling Energy Corporation