Cleantech Solutions International, Inc., a manufacturer of metal components and assemblies, primarily used in the wind power, solar, dyeing and finishing equipment and other clean technology industries, announced its financial results for the three months and year ended December 31, 2012.
Fourth Quarter 2012 Results
Revenue for the fourth quarter of 2012 increased 28.3% to $17.6 million, compared to $13.7 million for the same period of 2011. Revenue increased slightly compared to the third quarter of 2012.
Revenue from the sale of forged rolled rings to the wind power industry and other industries increased 2.6% to $8.3 million, or 47.2% of net revenue, compared to $8.1 million, or 59.1% of net revenue, in the same period last year.
The increase in revenue was mainly due to improving demand from existing customers in the wind power industry following several quarters of reduced order flow, which was counterbalanced by lower market demand for capital equipment related to the Company's forged rolled rings and related products for other industries.
Results for Full Year 2012
For the year ended December 31, 2012, revenues increased 2.9% to $57.2 million from $55.6 million in 2011. Gross profit decreased 1.3% to $13.1 million, compared to $13.3 million last year. Gross margin for the year ended December 31, 2012 was 23.0%, compared to 23.9% in 2011. Operating income decreased 22.5% to $6.3 million from $8.2 million in 2011. Adjusted operating income, a non GAAP measurement which adds back the impairment loss, was $8.5 million, up 4.5% from 2011.
Adjusted EBITDA, a non GAAP measurement which adds back to net income interest expense, income tax, warrant modification expense, impairment loss, depreciation and amortization, was $15.3 million, compared to $13.7 million last year. Net income was $4.2 million, or $1.58 per diluted share, a 27.1% decrease from $5.8 million, or $2.30 per diluted share, in 2011.
Adjusted net income, a non GAAP measurement which adds back impairment loss and warrant modification expense, was $6.6 million, or $2.51 per diluted share, in 2012. All share and per share information has been adjusted to reflect a one-for-ten reverse stock split effective March 6, 2012.
"The year 2012 was marked by a challenging environment in China that impacted capital spending and demand from customers in our key end markets, particularly during the first half of the year. Despite these challenges, we closed the year with 28.3% growth in revenue in the fourth quarter, driven by strong demand for our patented airflow dyeing machines and improving sales of forged products to customers in the wind power industry. Although we recorded a non-cash impairment loss related to equipment which we are no longer using and which is being held for sale during the fourth quarter, we were still profitable due to greater operational efficiencies and careful cost control," said Mr. Jianhua Wu, Chairman and CEO of Cleantech Solutions.
