SOURCE: Sancon Resources Recovery Inc
August 18, 2010 08:00 ET
Sancon Announces 2010 Second Quarter Results
SHANGHAI, CHINA--(Marketwire - August 18, 2010) - Sancon Resources Recovery, Inc. (OTCBB: SRRY)
(or "Sancon"), a growing environmental services and waste recycling company with
operations in both China and Australia, announced today results for its 2010
second quarter ended June 30, 2010.
Financial highlights of 2010 second quarter:
-- Revenue of $3.07 million, an increase of 12% compare to the same period
in 2009.
-- Gross profit of $1.49 million, an increase of 5% compare to the same
period in 2009.
-- Gross margin stayed at around 50%.
-- EBITDA of $0.6 million, an increase of 2% compared to the same period
in 2009.
Results of Operations -- Comparison between the three months ended June 30, 2010
and the same periods in 2009
The Company generated revenue of $3.07 million in the 2010 second quarter,
representing $324,127 or 12% increase compared to $2.74 million in the 2009 Second
quarter. Revenue from China operation increased $176,274 or 8% from $2.21 million
in 2009 second quarter to $2.38 million in 2010 second quarter. Revenue from
Australia operation has increased by $147,893 or 28% from $536,019 in 2009 second
quarter to $683,912 in 2010 second quarter. The increase in revenue in China
operation is partially because of acquisition of the newly started waste paper
and cardboards collection business in June 2010. Although exports are still
suffering from the global economic crisis, our Australia operation business is
gradually recovering.
Gross profit increased $72,834 or 5% to $1.49 million in the second quarter 2010
from $1.42 million in the second quarter 2009. Gross profit of China operation
increased $49,169 or 5% from $1.09 million in 2009 second quarter to $1.13 million
in 2010 second quarter. In Australia, gross profit also increased by $23,665
or 7% from $333,352 in 2009 second quarter to $357,017 in 2010 second quarter.
Gross margin dropped slightly from 52% in the 2009 second quarter to 49% in the
2010 second quarter.
Net income for 2010 second quarter was $0.537 million, or $0.02 basic and diluted
earnings per share, compared to $0.535 million or $0.02 basic and diluted earnings
per share one year ago.
Results of Operations -- Comparison between the six months ended June 30, 2010
and the same periods in 2009
The Company generated revenue of $6.14 million in the 2010 half year, representing
$798,181 or 15% increase compared to $5.34 million in the 2009 half year. Revenue
from China operation increased $370,322 or 8% from $4.42 million in 2009 half
year to $4.79 million in 2010 half year. Revenue from Australia operation has
increased by $427,859 or 47% from $918,401 in 2009 half year to $1,346,260 in
2010 half year.
Gross profit increased $290,674 or 11% to $3.02 million for the six months period
ended June 30, 2010 from $2.73 million for the same period in 2009. Gross profit
of China operation increased by $119,614 or 6% from $2.16 million in 2009 half
year to $2.28 million in 2010 half year. In Australia, gross profit also increased
by $171,060 or 30% from $572,544 in 2009 half year to $743,604 for the same period
in 2010. Gross margin dropped slightly from 51% in the 2009 half year to 49%
in the 2010 half year.
Net income for 2010 half year was $1.1 million, or $0.05 basic and diluted earnings
per share, compared to $1.11 million, or $0.05 basic and diluted earnings per
share one year ago.
"The revenue and gross profit from our existing business continues to increase
in 2010 second quarter. We are still seeking and selecting consolidation
opportunities that will complement our existing business in the waste and
environmental services space," said Jack Chen, Sancon's Chief Executive Officer.
"Our new waste paper and cardboards collection business has started in June 2010.
We believe the new business will provide additional growth to our business forward.
We will be updating our shareholders on our expansion progress throughout the
year."
About Sancon Resources Recovery, Inc.
Sancon Resources Recovery, Inc. is an environmental service company specializing
in the collection, processing, and selling of the reprocessed waste material
such as plastic, metal, paper, cardboard, glass etc. The recycled materials are
re-used by Sancon's manufacturing clients to make a wide variety of new products
that include outdoor furniture, construction materials, building materials,
packaging materials, and various other products. The use of recycled raw materials
is both environmentally friendly and an important method to lower production
costs for manufacturers to stay competitive. Sancon also invests in the renewable
energy area by sponsoring the development of biofuel production technique that
thrives on the supplies of carbon dioxide. Sancon currently has recycling plants
based in Melbourne, Australia and China. For more information please visit:
www.sanconinc.com
Forward-looking statements:
The statements made in this press release, which are not historical facts, may
contain certain forward-looking statements concerning potential developments
affecting the business, prospects, financial condition and other aspects of the
company to which this release pertains. The actual results of the specific items
described in this release, and the company's operations generally, may differ
materially from what is projected in such forward-looking statements. Although
such statements are based upon the best judgments of management of the company
as of the date of this release, significant deviations in magnitude, timing and
other factors may result from business risks and uncertainties including, without
limitation, the company's dependence on third parties, general market and
economic conditions, technical factors, the availability of outside capital,
receipt of revenues and other factors, many of which are beyond the control of
the company. The company disclaims any obligation to update information contained
in any forward-looking statement.
SANCON RESOURCES RECOVERY, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
Assets
As at
------------------------
June 30, December 31,
2010 2009
----------- -----------
Current assets
Cash and cash equivalents $ 4,823,713 $ 3,703,716
Trade receivables, net 961,142 988,673
Inventory 42,654 16,013
Deferred Tax Asset 31,710 33,057
Other current assets 231,944 285,933
Advance and prepayment 132,677 49,502
Held to maturity securities 128,500 129,000
----------- -----------
Total current assets 6,352,340 5,205,894
Property, plant & equipment, net 1,190,846 958,041
Security deposit 25,944 9,824
Held to maturity securities-non current 129,489 129,993
Investment - 42,678
Goodwill 27,688 -
----------- -----------
Total Assets $ 7,726,307 $ 6,346,430
=========== ===========
Liabilities and Stockholders' Equity
Liabilities
Current liabilities
Trade payables $ 864,508 $ 886,034
Capital lease - current 10,103 15,925
Tax payables 75,732 97,779
Due to related parties 551,510 420,504
Loan Payable-current 27,322 26,199
Accrued expenses and other payables 376,147 371,593
----------- -----------
Total current liability 1,905,322 1,818,034
Long term liability
Capital lease 20,911 21,799
Loan Payable 42,427 56,117
----------- -----------
Total liability 1,968,660 1,895,950
----------- -----------
Stockholders' Equity
Share Capital
Authorized: 500,000,000 common shares, par
value $0.001 per share
Issued and Outstanding: 22,964,996 shares
as of June 30, 2010 and December 31, 2009 22,965 22,965
Additional paid-in capital 887,268 860,449
Deferred Compensation (117,000) (124,800)
Other comprehensive income 51,623 71,641
Retained Earnings 4,566,214 3,461,642
----------- -----------
Total 5,411,069 4,291,897
Non-controlling interest 346,577 158,583
----------- -----------
Total stockholders' equity 5,757,646 4,450,480
----------- -----------
Total liabilities & stockholders' equity $ 7,726,307 $ 6,346,430
=========== ===========
SANCON RESOURCES RECOVERY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
For the three months For the six months
periods ended June 30, periods ended June 30,
2010 2009 2010 2009
---------- ---------- ---------- ----------
Net Sales $3,067,299 $2,743,132 $6,135,808 $5,337,627
Cost of sales 1,575,990 1,324,657 3,144,096 2,606,589
---------- ---------- ---------- ----------
Gross profit 1,491,309 1,418,475 3,021,712 2,731,038
Operating Expenses
Depreciation 64,990 46,011 121,644 90,310
Selling, General and
Administrative 923,966 821,652 1,799,625 1,519,605
---------- ---------- ---------- ----------
Total operating expenses 988,956 867,663 1,921,269 1,609,915
---------- ---------- ---------- ----------
Operating Income 502,353 550,812 1,100,443 1,121,123
Other Income (Expense)
Other income
/(Expense),net 4,180 10,977 (9,014) 37,651
Investment loss prior to
acquisition (2,370) - (3,139) -
Gain on acquisition 34,805 - 34,805 -
Interest income
/(Expense),net 2,063 128 2,489 1,413
---------- ---------- ---------- ----------
Total other income (expense) 38,678 11,105 25,141 39,064
---------- ---------- ---------- ----------
Income from continued
operations before income
taxes and discontinued
Operation 541,031 561,917 1,125,584 1,160,187
Discontinued Operation
Loss from Discontinued
Operation - - - (50)
Loss on Disposal of a
subsidiary - - - (1,834)
---------- ---------- ---------- ----------
Loss on Discontinued
Operations - - - (1,884)
---------- ---------- ---------- ----------
Income before income taxes
and non-controlling
interest 541,030 561,917 1,125,584 1,158,303
Less:Income taxes 2,310 19,247 11,385 36,012
Less: Net income attributed
to non-controlling interest 1,459 7,945 9,627 14,849
---------- ---------- ---------- ----------
Net income 537,262 534,725 1,104,572 1,107,442
Other comprehensive item:
Foreign currency translation
gain/(loss) (19,222) 34,754 (20,018) 33,060
---------- ---------- ---------- ----------
Net comprehensive income $ 518,040 $ 569,479 $1,084,554 $1,140,502
========== ========== ========== ==========
Earnings per share:
Basic earnings per share
-continued operations $ 0.02 $ 0.02 $ 0.05 $ 0.05
========== ========== ========== ==========
Basic earnings per share
-discontinued operations $ - $ - $ - $ -
========== ========== ========== ==========
Basic earnings per share $ 0.02 $ 0.02 $ 0.05 $ 0.05
========== ========== ========== ==========
Basic weighted average
shares outstanding 22,964,996 22,918,329 22,964,996 22,766,663
========== ========== ========== ==========
Diluted earnings per share
-continued operations $ 0.02 $ 0.02 $ 0.05 $ 0.05
========== ========== ========== ==========
Diluted earnings per share
-discontinued operations $ - $ - $ - $ -
========== ========== ========== ==========
Diluted earnings per share $ 0.02 $ 0.02 $ 0.05 $ 0.05
========== ========== ========== ==========
Diluted weighted average
shares outstanding 23,039,996 22,918,329 23,083,417 22,766,663
========== ========== ========== ==========