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Newater Technology, Inc. Announces Year 2020 Audited Financial Results


NEW YORK, May 3, 2021 /PRNewswire/ — Newater Technology, Inc. (NASDAQ: NEWA) (”NEWA,” ”we,” ”our” or the ”Company”), a leading company specializing in development, production and application of DTRO equipment and systems used in waste water filtration, today announced its financial results for the year ended December 31, 2020.

The year ended December 31, 2020 Financial Highlights (all comparisons to the year ended December 31, 2019):

Revenues increased by 36% from $37.6 million to $51.16 million in 2020, our revenue growth in the year 2020 resulted primarily from increased demand for our systems. These increases can be evidenced in the total revenue from project sales, number of end customers, and number of large-scale projects.

Cost of revenues increased by 43% from $21.7 million to $30.99 million in 2020, the increase in cost of revenues directly corresponded to the increase in revenue during the same year.

Gross profit increased by 27% from $15.9 million to $20.2 million in 2020, while the gross profit margin was 39% in 2020.

Net income (before currency translation loss) increased by 29% from $4.3 million to $5.6 million in 2020, and the net profit margin in 2020 was 11%.

Total assets increased by 19% from $78 million to $93 million in 2020 mainly driven by the purchasing of more inventories and prepayment made for a land use right.

Basic earnings per share was $0.51 in 2020, compared to $0. 40 in 2019 and $0. 67 in 2018.

Mr. Yuebiao Li, the Company’s CEO, commented “We are pleased with our accomplishments in 2020, we overcame the impact of COVID-19 epidemic. In the depressed market, we overcame difficulties and exploited the huge market in coal mine drainage treatment by using the company’s patented process package and we completed the construction and production of the project in the same year. We are pleased with the expansion of our business in the field of steel coking wastewater treatment as well.”

In 2021, we will continue to make more efforts to skillfully apply our products to more wastewater treatment fields and undertake larger projects, in order to achieve company’s eternal goal of “renewable resources (New Water) recycling.”

About Newater Technology, Inc.

Founded in 2012 and headquartered in Yantai, China, Newater, operating its business through its wholly owned subsidiary Yantai Jinzheng Eco-Technology Co. Ltd., specializes in the development, manufacture and sale of DTRO (Disk Tube Reverse Osmosis) and DTNF (Disk Tube Nano-Filtration) membranes for waste water treatment, recycling and discharge. Newater provides integrated technical solutions in engineering support and installation, technical advice and services, and, and other project-related solutions to turn wastewater into valuable clean water. Newater also provides wastewater treatment services, such as landfill leachate treatment and purification services.

More information about the Company can be found at www.dtNEWA.com.

The Company’s products can be used across a wide spectrum of industries, including:

  • Landfill leachate;
  • Wastewater from coal mines;
  • Industrial park common effluent; and
  • Briny wastewater.

More information about the Company can be found at: www.dtNEWA.com

Notice

Rounding amounts and percentages: Certain amounts and percentages included in this press release have been rounded for ease of presentation. Percentage figures included in this press release have not in all cases been calculated on the basis of such rounded figures, but on the basis of such amounts prior to rounding. For this reason, certain percentage amounts in this press release may vary from those obtained by performing the same calculations using the figures in the financial statements. In addition, certain other amounts that appear in this press release may not sum due to rounding.

Forward-Looking Statements

This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. When the Company uses words such as “may”, “will”, “intend”, “should”, “believe”, “expect”, “anticipate”, “project”, “estimate” or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Specifically, the Company’s statements regarding its ability to apply its products to more industries and obtain larger projects are forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the actual results to differ materially from the Company’s expectations discussed in the forward-looking statements. These statements are subject to uncertainties and risks including, but not limited to, the following: the Company’s goals and strategies; the Company’s future business development; product and service demand and acceptance; changes in technology; economic conditions; the growth of the water filtration industry in China; reputation and brand; the impact of competition and pricing; government regulations; fluctuations in general economic and business conditions in China and assumptions underlying or related to any of the foregoing and other risks contained in reports filed by the Company with the Securities and Exchange Commission. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company’s filings with the U.S. Securities and Exchange Commission, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

For more information, please contact:

Newater Technology, Inc.


Zhuo Zhang (CFO)

Phone: +86 (535) 801-2997

Email: [email protected]

Victor Liu (Corporate Manager)

Phone : +86 150-6383-7878

Email : [email protected]

 

F1-2

NEWATER TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS




December 31,



December 31,




2020



2019









ASSETS

Current assets







Cash and cash equivalents


$

4,462,530



$

9,944,765


Restricted cash






4,021,177


Accounts receivable, net



18,038,582




11,293,625


Accounts receivable – related parties, net



8,806,238




2,392,087


Notes receivable



107,235




360,505


Inventories



21,737,156




13,715,369


Deferred cost of revenue






221,737


Advance to suppliers and other current assets, net



6,196,694




4,515,435


Advance to suppliers and other current asset – related parties



1,678,462





Total current assets



61,026,897




46,464,700











Retentions receivable, non-current



4,651




734,140


Property, plant and equipment, net



22,538,664




24,611,862


Land use rights, net



2,093,873




2,008,096


Intangible asset, net



151,677





Operating lease right-of-use assets, net



93,848




141,016


Deposit on loan agreement






918,643


Long-term investments



1,074,142




2,997,419


Long-term prepaid expenses



6,252,109




184,320


Total assets


$

93,235,861



$

78,060,196











LIABILITIES AND SHAREHOLDERS’ EQUITY









Current liabilities









Accounts payable and bank acceptance notes to vendors


$

8,922,232



$

8,099,529


Accounts payable – related parties



3,100,923




5,225,004


Loans due within one year



27,268,410




11,809,449


Due to related parties



5,785,045





Advances from customers



2,876,306




5,522,913


Advances from customers – related parties



23,898




7,254,968


Income tax payables



798,991




322,419


Accrued expenses and other payables



5,414,379




6,971,505


Operating lease liabilities, current



35,419




56,852


Deferred income, current



45,958




43,061


Total current liabilities



54,271,561




45,305,700











Deferred income, non-current






43,061


Deferred tax liabilities



75,204




288,687


Operating lease liabilities, non-current



37,604




68,420


Long-term loans, less current portion and unamortized debt issuance costs






1,377,217


Total non-current liabilities



112,808




1,777,385


Total liabilities



54,384,369




47,083,085











Shareholders’ equity









Common shares ($0.001 par value, 200,000,000 shares

authorized,10,809,000 shares issued and outstanding as of

December 31, 2020 and December 31, 2019)



10,809




10,809


Additional paid-in capital



26,303,348




26,303,348


Statutory reserves



2,941,715




2,267,219


Retained earnings



8,834,286




3,946,021


Accumulated other comprehensive income (loss)



761,334




(1,550,286)


Total shareholders’ equity



38,851,492




30,977,111


Total liabilities and shareholders’ equity


$

93,235,861



$

78,060,196


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

 

  F-3

NEWATER TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME




For the Years ended December 31,




2020



2019



2018












Net revenues


$

26,350,543



$

23,716,978



$

25,973,963


Net revenues from related parties



24,808,223




13,857,014




21,066,741


Total revenues



51,158,766




37,573,992




47,040,704


Cost of revenues



30,284,897




20,233,998




20,474,072


Cost of revenues from related parties



706,401




1,450,627




5,669,252


Total cost of revenues



30,991,298




21,684,625




26,143,324


Gross profit



20,167,468




15,889,367




20,897,380


Operating expenses:













Selling, general and administrative expenses



13,143,993




10,148,039




12,025,924


Total operating expenses



13,143,993




10,148,039




12,025,924


Income from operations



7,023,475




5,741,328




8,871,456


Interest expense



1,757,396




1,087,051




658,290


Interest income



(73,344)




(38,328)




(26,632)


Government grants



(1,985,061)




(946,164)




(627,748)


Loss from equity investments



560,969




17,023





Other expenses (income)



215,501




(153,546)




(1,162)


Total other expenses (income)



475,461




(33,964)




2,748


Income before income taxes provisions



6,548,014




5,775,292




8,868,708


Income tax provisions



985,253




1,463,745




1,657,279


Net income



5,562,761




4,311,547




7,211,429


Other comprehensive income (loss)













Foreign currency translation adjustment



2,311,620




(378,069)




(1,159,084)


Total comprehensive income


$

7,874,381



$

3,933,478



$

6,052,345















Earnings per common share













Basic


$

0.51



$

0.40



$

0.67


Diluted


$

0.51



$

0.40



$

0.67


Weighted average common shares outstanding













Basic



10,809,000




10,809,000




10,809,000


Diluted



10,809,000




10,809,000




10,809,000


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

 

F-4

NEWATER TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY




Number of Shares


Common Shares


Additional Paid-in Capital


Retained

Earnings

(Deficit)


Statutory Reserves


Accumulated Other Comprehensive Income

(Loss)


Total Shareholder’s Equity

Balance, December 31, 2017



10,809,000


$

10,809


$

15,059,181


$

5,228,733


$

705,698


$

(13,133)


$

20,991,288

Net income












7,211,429









7,211,429

Statutory reserves












(1,060,013)



1,060,013






Foreign currency translation adjustment


















(1,159,084)



(1,159,084)

Balance, December 31, 2018



10,809,000


$

10,809


$

15,059,181


$

11,380,149


$

1,765,711


$

(1,172,217)


$

27,043,633

Net income












4,311,547









4,311,547

Statutory reserves












(501,508)



501,508






Capital increase from retained earnings









11,244,167



(11,244,167)









Foreign currency translation adjustment


















(378,069)



(378,069)

Balance, December 31, 2019



10,809,000


$

10,809


$

26,303,348


$

3,946,021


$

2,267,219


$

(1,550,286)


$

30,977,111

Net income












5,562,761









5,562,761

Statutory reserves












(674,496)



674,496






Foreign currency translation adjustment


















2,311,620



2,311,620

Balance, December 31, 2020



10,809,000


$

10,809


$

26,303,348


$

8,834,286


$

2,941,715


$

761,334


$

38,851,492

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

 

F-5

NEWATER TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS




For the Years Ended December 31,



2020



2019



2018

Cash flows from operating activities









Net income


$

5,562,761



$

4,311,547



$

7,211,429

Adjustments to reconcile net income to net cash used in operating activities:












Loss from equity method investments, net



560,969




17,023




Depreciation and amortization expense



2,159,715




1,549,296




558,327

Deferred income taxes



(220,332)




892,548




(118,199)

Allowance for credit losses



796,800




1,243,709




280,228

Amortization of debt issuance costs



161,911




324,221




103,772

Noncash lease expense



61,260




41,935




Loss on disposal of property, plant and equipment



35,587




1,367




13,256

Changes in operating assets and liabilities:












Accounts receivable, net



(6,683,358)




(1,509,728)




(5,327,278)

Accounts receivable – related parties, net



(5,915,753)




(1,103,104)




(1,427,078)

Notes receivable



262,542




(356,648)




(7,276)

Inventories



(3,791,230)




(2,923,465)




(5,762,750)

Deferred cost of revenue



223,880




117,910




383,382

Deferred cost of revenue – related party









1,765,856

Advances to suppliers and other current assets, net



(564,652)




(311,090)




(2,035,701)

Advances to suppliers and other current asset – related parties



(1,587,875)







Retentions receivable, non-current



736,837




(397,157)




(358,505)

Deposit – related party






10,134




(10,583)

Other non-current assets









Accounts payable and bank acceptance notes to vendors



247,588




2,839,752




996,619

Accounts payable – related parties



(2,341,946)




1,896,054




3,269,238

Deferred income






43,433




Advances from customers



(2,855,229)




2,630,143




2,420,363

Advances from customers – related parties



(7,302,490)




6,733,465




(125,099)

Deferred income, non-current



(43,478)




43,433




Operating lease liabilities



(111,195)




(76,752)




Income tax payables



430,333




(404,231)




267,988

Accrued expenses and other payables



(2,455,366)




(2,322,199)




(4,481,539)

Net cash provided by (used in) operating activities



(22,632,721)




13,291,596




(2,383,550)













Cash flows from investing activities












Cash paid for long-term investment



(2,873,522)




(3,015,119)




Proceeds from disposal of long-term investment



4,574,914







Purchase of intangible asset



(143,491)








Purchase of property, plant and equipment



(1,355,101)




(2,316,967)




(5,511,732)

Proceeds from sale of property, plant and equipment



40,805




427,261




22,072

Prepayment for property, plant and equipment



(5,862,026)







(73,227)

Deposit on acquisition of subsidiary









(200,000)

Net cash provided by (used in) investing activities



(5,618,421)




(4,904,825)




(5,762,887)













Cash flows from financing activities












Proceeds from related parties



5,386,618







Repayment to related parties









(9,703)

Deposit on loan agreements






(503,939)




(473,698)

Collection of deposits on loan agreements



911,809







Proceeds from loans due within one year



25,405,697




7,454,711




11,493,557

Repayment of loans due within one year



(7,601,156)




(8,046,350)




(11,952,224)

Proceeds from long-term loans






6,376,169




8,631,493

Payment of debt issuance costs






(335,938)




(284,219)

Repayment of long-term loans



(5,762,171)




(7,736,415)




(730,595)

Net cash provided by (used in) financing activities



18,340,797




(2,791,762)




6,674,611













Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash



406,933




(124,050)




(404,956)













Net change in cash, cash equivalents and restricted cash



(9,503,412)




5,470,959




(1,876,782)

Cash, cash equivalents and restricted cash, beginning of the year



13,965,942




8,494,983




10,371,765

Cash, cash equivalents and restricted cash, end of the year


$

4,462,530



$

13,965,942



$

8,494,983













Supplemental cash flow information












Cash paid for interest


$

1,555,485



$

608,431



$

689,867

Cash paid for income taxes


$

775,240



$

977,755



$

1,507,489













Non-cash investing and financing activities:












Properties acquired with loans


$



$



$

52,161

Liabilities assumed in connection with purchase of property, plant and equipment


$

158,806



$

2,980,582



$

2,636,770

Operating expenses paid by related parties


$



$



$

9,703

Property, plant and equipment transferred from inventories


$

548,058



$

2,791,339



$

1,566,314

Transfer from prepayments to property, plant and equipment


$

72,850



$



$













Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheets












Cash and cash equivalents


$

4,462,530



$

9,944,765



$

2,461,501

Restricted cash






4,021,177




6,033,482

Total cash, cash equivalents and restricted cash


$

4,462,530



$

13,965,942



$

8,494,983

 

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SOURCE Newater Technology, Inc.





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