-- Q2 2009 sales expected to exceed average 2008 level of $5.8 million
-- First quarter low level attributed to temporary impact of economic downturn
-- 2009 annual performance expected to be an improvement on 2008
SHANGHAI, China, May 17 /PRNewswire-Asia-FirstCall/ -- China Energy Recovery, Inc. (BULLETIN BOARD: CGYV) (ISIN: US16943V2060; "CER"), a leader in waste heat energy recovery and industrial energy efficiency, today announced financial results for the three months ended March 31, 2009.
Revenues in the three months ended March 31, 2009 were $1.26 million. The relevantly low revenue level was due mainly to a reduction in order completion in terms of number and size between quarters as a result of the company's order-based business model and the temporary impact of the recent economic downturn.
Gross profit was $0.06 million for the three months ended March 31, 2009. Selling, general and administrative expenses were $1.54 million for the three months ended March 31, 2009 of which an aggregate of $0.64 million were related to public company operations, including $0.40 million of share-based, non-cash expenses. Non-operating expenses were $0.16 million for the period, including $0.13 million non-cash expenses related to changes in the fair value of warrants.
Net loss was $1.47 million for the first quarter of 2009.
"It was a bit challenging for us in the past quarter as a result of quarterly fluctuations due to our order-based business model and with the temporary impact of the economic downturn," commented Mr. Qinghuan Wu, Chairman and CEO of China Energy Recovery. "With the completion of the Papua New Guinea order of roughly $4.85 million in contract value announced in early May among others, we anticipate the second quarter results will be much improved and exceed the average level of 2008. Our current order book also provides a positive indication of our top line performance for the next several quarters. Further, the emerging market recovery and the continuously strong emphasis of governments on energy efficiency and pollution reduction, especially in China, will continue to help enhance our order pipeline for 2009 and 2010."
What is Waste Heat Energy Recovery?
Industrial facilities release significant amounts of excess heat into the atmosphere in the form of hot exhaust gases or high-pressure steam. Energy recovery is the process of recovering vast amounts of that wasted energy and converting it into usable heat energy or electricity, dramatically lowering energy costs. Energy recovery systems are also capable of capturing harmful pollutants that would otherwise be released into the environment. It is estimated that if energy currently wasted by all the U.S. industrial facilities could be recovered, it could produce power equivalent to 20% of U.S. electricity generation capacity without burning any additional fossil fuel, and could help many industries to meet stringent environmental regulations.
About China Energy Recovery, Inc.
CER is an international leader in designing, manufacturing and installing waste heat energy recovery systems which provide facilities with greater energy efficiency. The company's primary focus is on the Chinese market. CER's technology captures industrial waste energy to produce low-cost electrical power, enabling industrial manufacturers to reduce their energy costs, shrink their emissions footprint, and generate sellable emissions credits. CER has deployed its systems throughout China and in such international markets as Egypt, Korea, Vietnam and Malaysia. CER focuses on numerous industries in which a rapid payback on invested capital is achieved by its customers, including: chemical, paper manufacturing, refining (including methanol refining), etc. CER continues to invest in R&D and plans to build China's first state-of-the-art energy recovery system research and fabrication facility to allow it to meet the increased demand for its products and services. For more information on CER, please visit: http://www.chinaenergyrecovery.com/s/Home.asp. Information on CER's website does not comprise a part of this press release.
Forward-Looking Statement Disclaimer
This press release includes "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995, as amended. All statements, other than statements of historical fact, included in the press release that address activities, events or developments that CER believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made based on experience, expected future developments and other factors that CER believes are appropriate under the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of CER and may not materialize, including, without limitation, the efficacy and market acceptance of CER's products and services, CER's ability to execute on its business plan and strategies and CER's ability to successfully complete orders and collect revenues therefrom. Investors are cautioned that any such statements are not guarantees of future performance. Actual results or developments may differ materially from those projected in the forward-looking statements as a result of many factors. Furthermore, CER does not intend (and is not obligated) to update publicly any forward-looking statements, except as required by law. The contents of this release should be considered in conjunction with the warnings and cautionary statements contained in CER's filings with the Securities and Exchange Commission, including CER's Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 30, 2009.
Contact: Media Sean Mahoney Ph. 310.867.0670 seamah@gmail.com Investor Relations Jim Blackman Ph. 713.256.0369 jim@prfmonline.com
China Energy Recovery, Inc.
CONTACT: Sean Mahoney, Media, +1-310-867-0670, or seamah@gmail.com, Jim
Blackman, Investor Relations, +1-713-256-0369, or jim@prfmonline.com, both for
China Energy Recovery, Inc.
Web Site: http://www.chinaenergyrecovery.com/s/Home.asp
