SOURCE: Worldwide Energy & Manufacturing USA, Inc.

November 05, 2009 16:09 ET

Worldwide Energy and Manufacturing USA Announces Third Quarter 2009 Financial Results

Net Income up 67.1% Over Third Quarter 2008; Gross Profit up 106% Over Same Period of 2008; Nine Months Net Income up 13.6% Over Same Period of 2008; Nine Months Revenue up 25% Over Same Period of 2008

SOUTH SAN FRANCISCO, CA and SHANGHAI, CHINA--(Marketwire - November 5, 2009) - Worldwide Energy and Manufacturing USA, Inc. (OTCBB: WEMU), a U.S.-based solar module technology and China manufacturing company specializing in products for customers in the industries of solar energy, aerospace, wireless telecommunications, medical equipment and automotive industries, today announced financial results for the third quarter ended September 30, 2009. A conference call to discuss these results is scheduled for Thursday, November 5, 2009 at 4:05 p.m. Eastern time (1:05 p.m. Pacific time). Details on accessing the call follow below.

Highlights of Third Quarter Results

--  Shipments of solar modules increased by approximately 2.99 MW for the
    period ended September 30, 2009 compared to the same quarter of 2008.
--  Solar module revenues were $15.53 million compared to solar module
    sales of $15.78 million for the same quarter of 2008.
--  EBITDA was $0.42 per share or $1.53 million compared to $0.18 per
    share or $560,974 for the same period of 2008.
--  Net Income was $903,357 or $0.25 per share for the quarter compared to
    $540,608 or $0.17 per share in the September quarter of 2008, an increase
    of approximately 67%.
--  Net income before tax was $1.43 million compared to $555,237 in the
    quarter ended September 30, 2009 and September 30, 2008, respectively, an
    increase of $873,636 or approximately 157%.
    

Highlights of the Nine Months Ended September 30, 2009

--  Nine-month Revenue increased by approximately 25% to $39.22 million
    compared to net sales of $31.35 million in the same period of 2008.
--  Solar module revenue was $29.43 million compared to solar module sales
    of $21.57 million for the same period of 2008 or an increase of over 36%.
--  EBITDA was $0.70 per share or $2.52 million compared to $0.53 per
    share or $1.31 million.
--  Net Income was $1.36 million, or $0.38 cents per share, for the nine-
    month period compared to $1.2 million or $0.48 cents per share in the nine-
    month period of 2008.
    

Jimmy Wang, chief executive officer, stated: "Our Solar Division continues to drive our growth representing 83% of our sales for the third quarter 2009, and I am very pleased with our third quarter and nine months results. We expect a strong fourth quarter and continued growth in our solar division. I firmly believe our technology is better and that is a major reason why our solar division continues to grow while our larger competitors are experiencing shrinking sales. We expect 2010 to be a year of double-digit earnings and revenue growth."

Third Quarter Ended September 30, 2009

Net sales for the three months ended September 30, 2009 were $18.62 million, an increase of 87% over the second quarter of 2009. Though compared to the third quarter of 2008, sales were down slightly, due to due to a drop in market level pricing on Solar Modules the solar MW shipments actually increased by approximately 2.99 MW when comparing these periods. The decreased volume from the Company's Contract Manufacturing division brought about by lower overall consumption by the Company's customers due to the current economic conditions. The Company continues to focus on the sales and marketing of its solar modules by establishing sales teams in China, United States and European countries. Solar module revenues comprise approximately 83.4% of the Company's gross sales in the three month period ended September 30, 2009 compared to 82.6% in the same period of 2008.

Gross profit increased by $1.50 million, or 109.8% from $1.36 million in the quarter ended September 30, 2008 to $2,861,264 for the three months ended September 30, 2009. The gross profit from solar module sales was $1.8 million for the three months ended September 30, 2009 compared to $437,595 in the same period of 2008. This represents an increase of $1.36 million in gross profit for the Company's energy division or approximately 310%. The gross profit for Contract Manufacturing for the three months ended September 30, 2009 was $1.06 million compared to $926,337 in the same period of 2008, an increase of $138,198 or 14.9%.

Cost of goods sold for the three months ended September 30, 2009 was $15.76 million compared to $17.74 million for the same period in 2008. The decrease is $1.98 million, or approximately 11.2%, was primarily due to the softer sales from both of the Company's divisions and heavy reductions in the cost of materials for solar modules. The cost of goods for solar modules for quarter ended September 30, 2009 was $13.73 million compared to $15.34 million for the same period of 2008. The decrease of $1.60 million reflects the economies achieved by the Company's procurement teams in sourcing the solar components. The costs of goods sold for Contract Manufacturing was $2.02 million for the quarter ended September 30, 2009 compared to cost of goods sold of $2.40 million, a $377,851 reduction due to lower sales volume and aggressive cost reduction measures coming to fruition.

The gross margin was 15.4% for the three months ended September 30, 2009 compared to 7.1% in the same period in 2008 with the increase being attributed to the Company's heavy cost reduction efforts coming to fruition on higher volume. The gross margin for the Company's Solar Division for the quarter ended September 30, 2009 was approximately 11.6% compared to 2.8% for the same period of 2008. This increase is due to the aforementioned cost reductions. The gross margin for contract manufacturing for the quarter ended September 30, 2009 was 34.4% compared to 27.8% in the same period of 2008. The improvement of gross margin in contract manufacturing was due to improved margins at the Electro Mechanical division.

Net income before tax for the three months ended September 30, 2009 was $1.43 million compared to a profit of $555,237 for the three months ended September 30, 2008. The increase of $873,636, or approximately 157.3%, is primarily due to the higher gross profit driven by the Company's material cost reductions.

Net income for the three months ended September 30, 2009 was $903,357 compared to a net profit of $540,608 for the three months ended September 30, 2008. The increase of $362,749.00 or approximately 67.1% was driven by greater profitability of both the Solar and Contract Manufacturing divisions.

Nine Months Ended September 30, 2009

Net sales for the nine-month period ended September 30, 2009 was $39.22 million compared to sales of $31.35 million in the nine-month period ended September 30, 2008. The increase of $7.87 million, or approximately 25.1%, was the result of an increase in shipments from the Solar division. The Company continues to focus on market penetration for its PV Solar Modules. Solar modules revenues comprise approximately 75.1% of the Company's gross sales in the nine-month period ended September 30, 2009 compared to 68.8 % in the same period of 2008.

For the nine months ended September 30, 2009, gross profit was $6.56 million compared to gross profit of $3.85 million in the same period of 2008. This represents an increase of $2.71 million, or 70.3%, due primarily to robust sales in the Company's energy division for the period. The gross profit for the nine months ended September 30, 2009 for the solar division was $3.59 million compared to $1.15 million in the same period of 2008. This represents an increase of $2.44 million in gross profit in the nine months ended September 30, 2009, or an approximate increase of 212.2%. The gross profit for contract manufacturing for the nine months ended September 30, 2009 was $2.97 million compared to $2.70 million in the same period of 2008, an increase of $267,911 or approximately 9.9%.

Cost of goods sold for the nine months ended September 30, 2009 was $32.65 million compared to $27.49 million for the same period of 2008. The increase of $5.16 million, or approximately 18.8%, was the result of greater revenues in the energy division. The cost of goods for solar modules for nine months ended September 30, 2009 was $26.33 million compared to $20.42 million for the same period of 2008. The increase of $5.91 million, or 29%, was due to the higher sales. The costs of goods sold for contract manufacturing was $6.32 million for the nine months ended September 30, 2009 compared to cost of goods sold of $7.08 million in the same period of 2008.

The gross margin was 16.7% for the nine months ended September 30, 2009 compared to 12.3% in the same period of 2008. The increased is due to the planned cost reductions and economies brought about with higher sales volume, both in sales value and megawatts shipped from the Solar Division.

In the nine-month period ended September 30, 2009 there was stock-based compensation of $162,020 compared to $95,000 of stock-based compensation in 2008. Further the Company had depreciation expense of $246,366 in the nine-month period ended September 30, 2009 compared to $10,713 in the same period of 2008, due to the greater amount of depreciable assets owned by the Company.

For the nine-month period ended September 30, 2009, net income before tax was $2.25 million compared to net income of $1.21 million in the same period of 2008. The increase of $1.04 million, or approximately 85.7%, was the result of increase sales for the Company's solar modules and increased gross profit from cost reductions.

Balance Sheet

Cash and cash equivalents totaled $5.1 million on September 30, 2009, compared to $5.1 million at year end 2008. Accounts receivable increased to $15.0 million for the period ended September 30, 2009 compared to $4.79 million at year end 2008.

Total current assets and total assets were $27.99 million and $33.24 million on September 30, 2009. This compared to total current assets of $19.77 million and total assets of $26.01 million in the previous quarter ended June 30, 2009.

Total current liabilities and total liabilities totaled $19.53 million and $20.29 million on September 30, 2009 compared to total current liabilities and total liabilities of $13.35 million and $14.20 million in the previous quarter ended June 30, 2009.

Conference Call and Webcast
The call information follows:
Date: November 5, 2009
Time: 4:05 p.m. Eastern Standard Time
Dial-in number for US/Canada: (888) 549-7704 or (480) 629-9857 for
international calls
Live Webcast: http://www.wwmusa.com or alternately at http://viavid.net.

A replay of the call will be available for two weeks from 7:05 p.m. November 5, 2009, EST until 11:59 p.m. EST on November 19, 2009. The number for the replay is (800) 406-7325, or (303) 590-3030 for international calls; the passcode for the replay is 4181231. In addition, a recording of the call will be available via the Company's website at http://www.wwmusa.com for one year.

To participate in the call please dial (888) 549-7704, or (480) 629-9857 for international calls, approximately 10 minutes prior to the scheduled start time. Interested parties can also listen via a live Internet webcast, which can be found at the Company's website at http://www.wwmusa.com or alternately at http://viavid.net.

About Worldwide Energy and Manufacturing USA, Inc.

Worldwide Energy and Manufacturing USA, Inc. ("Worldwide"), headquartered in South San Francisco, California, is a 15-year-old engineering-oriented firm specializing in PV panel, mechanical, electronics and fiber optic products manufacturing. The Company's worldwide customer base includes the industries of solar energy, wireless telecommunications, aerospace, automobiles and medical equipment. Subsidiaries include Shanghai Intech Electro Mechanical Products Co. Ltd., Shanghai Intech Electronics Manufacturing Co. Ltd. and Shanghai Intech Precision Mechanical Products Manufacturing Co. Ltd., located in Shanghai, China.

For further information on Worldwide Energy and Manufacturing USA, Inc., please visit http://www.wwmusa.com. You may register to receive Worldwide Energy and Manufacturing USA, Inc.'s future press releases or request to be added to the Company's distribution list by contacting Jeff Watson.

Forward-looking statements:

The above news release contains forward-looking statements. The statements contained in this document that are not statements of historical fact, including but not limited to, statements identified by the use of terms such as "anticipate," "appear," "believe," "could," "estimate," "expect," "hope," "indicate," "intend," "likely," "may," "might," "plan," "potential," "project," "seek," "should," "will," "would," and other variations or negative expressions of these terms, including statements related to expected market trends and the Company's performance, are all "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. These statements are based on assumptions that management believes are reasonable based on currently available information, and include statements regarding the intent, belief or current expectations of the Company and its management. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performances, and are subject to a wide range of external factors, uncertainties, business risks, and other risks identified in filings made by the company with the Securities and Exchange Commission. Actual results may differ materially from those indicated by such forward-looking statements. The Company expressly disclaims any obligation or undertaking to update or revise any forward-looking statement contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances upon which any statement is based.


      WORLDWIDE ENERGY AND MANUFACTURING USA, INC. AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED BALANCE SHEETS
              AS OF SEPTEMBER 30, 2009 AND DECEMBER 31, 2008

                                                 September 30, December 31,
                                                      2009         2008
                                                  ------------ ------------
ASSETS                                            (Unaudited)
Current assets:
   Cash and cash equivalents                      $  5,067,638 $  5,092,476
   Restricted cash                                   1,417,356            -
   Accounts receivables, net of allowances of
    $281,000 and $46,000, respectively              14,985,055    4,790,506
   Notes receivables                                   354,263      269,507
   Inventories                                       4,926,189    3,754,765
   Income tax receivable                               186,157            -
   Advances to suppliers                               539,394       99,824
   Other receivable                                    111,006      185,400
   Prepaid and other current assets                    401,260      206,770
                                                  ------------ ------------
Total current assets                                27,988,318   14,399,248

   Property, plant and equipment, net                3,554,610    1,353,539
   Intangible assets                                 1,101,000    1,101,000
   Goodwill                                            285,714      285,714
   Investment at cost                                   51,892       51,892
   Deposits paid for contracts in process                    -    1,673,084
   Long term receivable - related party                253,996      260,973
   Other assets                                              -        7,559
                                                  ------------ ------------
Total assets                                      $ 33,235,530 $ 19,133,009
                                                  ============ ============

LIABILITIES AND EQUITY
Current liabilities:
   Accounts payable                               $ 14,481,008 $  3,400,253
   Accrued expenses                                  1,029,332      867,291
   Lines of credit                                   2,000,000            -
   Acquisition cost payable                                  -      285,714
   Tax payable                                         492,516      364,213
   Due to related parties                            1,351,276    1,243,024
   Customer deposits                                   175,723      964,998
                                                  ------------ ------------
Total current liabilities                           19,529,855    7,125,493

Non-current liabilities
   Line of credit                                      763,285      937,075
   Loan payable to stockholders                              -       60,024
                                                  ------------ ------------
Total non-current liabilities                          763,285      997,099
                                                  ------------ ------------
Total liabilities                                   20,293,140    8,122,592

Stockholders' equity
   Common stock (No Par Value; 100,000,000 shares
    authorized; 3,621,611 and 3,493,511 shares
    issued and outstanding, respectively)            6,270,399    6,108,379
   Retained earnings                                 5,160,166    3,801,921
   Accumulated other comprehensive income              665,510      487,478
                                                  ------------ ------------
Total equity attributable to Worldwide              12,096,075   10,397,778
Non-controlling interest                               846,315      612,639
                                                  ------------ ------------
Total stockholders' equity                          12,942,390   11,010,417
                                                  ------------ ------------
Total liabilities and stockholders' equity        $ 33,235,530 $ 19,133,009
                                                  ============ ============





      WORLDWIDE ENERGY AND MANUFACTURING USA, INC. AND SUBSIDIARIES
      UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
                           COMPREHENSIVE INCOME

                          For the Three Months      For the Nine Months
                                  Ended                     Ended
                              September 30,             September 30,
                            2009         2008         2009         2008
                        -----------  -----------  -----------  -----------
Revenue
   Sales                $18,618,508  $19,102,654  $39,217,288  $31,348,064
   Cost of goods sold    15,757,244   17,738,721   32,654,832   27,493,975
                        -----------  -----------  -----------  -----------
Gross profit              2,861,264    1,363,933    6,562,456    3,854,089

Operating Expenses
   Selling, general and
    administrative
    expenses              1,316,386      750,983    3,728,136    2,227,502
   Management and
    professional fees
    paid to shareholders     80,000       72,680      260,000      225,680
   Stock based
    compensation             46,800      (15,000)     162,020       95,000
   Depreciation              83,485        2,879      246,366       10,713
                        -----------  -----------  -----------  -----------
Total operating expenses  1,526,671      811,542    4,396,522    2,558,895

Net operating income      1,334,593      552,391    2,165,934    1,295,194

Other Income (expenses)
   Interest income            3,007        8,267       14,164       12,217
   Interest expenses        (20,114)      (1,287)     (40,923)     (74,375)
   Interest expense
    paid to shareholders          -       (9,838)           -      (27,284)
   Other income (expense)    13,391        5,704        6,399        5,704
   Exchange gain (loss)      97,996            -      103,421         (691)
                        -----------  -----------  -----------  -----------
Total other expenses         94,280        2,846       83,061      (84,429)
                        -----------  -----------  -----------  -----------

Income before income
 taxes                    1,428,873      555,237    2,248,995    1,210,765
   Income taxes            (427,497)      (8,514)    (670,121)     (16,813)
                        -----------  -----------  -----------  -----------
Income after taxes        1,001,376      546,723    1,578,874    1,193,952

Net income (loss) from
 discontinued
 operations, net of tax           -       (6,115)           -        2,017
                        -----------  -----------  -----------  -----------
Net income before non-
 controlling interest     1,001,376      540,608    1,578,874    1,195,969

Net income attributable
 to non-controlling
 interest                   (98,019)           -     (220,629)           -
                        -----------  -----------  -----------  -----------
Net income attributable
 to Worldwide               903,357      540,608    1,358,245    1,195,969

Other comprehensive
 income
   Foreign currency
    translation              83,423      146,017      191,079      102,835
   Comprehensive income
    (loss) attributable
    to non-controlling
    interest                    524            -      (13,047)           -
                        -----------  -----------  -----------  -----------
Total other
 comprehensive income   $   987,304  $   686,625  $ 1,536,277  $ 1,298,804
                        ===========  ===========  ===========  ===========

Basic and diluted
 earnings per share     $      0.25  $      0.17  $      0.38  $      0.48
                        ===========  ===========  ===========  ===========
Basic and diluted
 weighted average
 shares outstanding       3,621,611    3,170,906    3,578,014    2,471,384
                        ===========  ===========  ===========  ===========




      WORLDWIDE ENERGY AND MANUFACTURING USA, INC. AND SUBSIDIARIES
        UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                 For the Nine Months Ended
                                                        September 30,
                                                      2009         2008
                                                  -----------  -----------
Cash flows from operating activities:
  Net income attributable to Worldwide            $ 1,358,245  $ 1,195,969
  Net income attributable to non-controlling
   interest                                           220,629            -
Adjustments to reconcile net income to net cash
 used in operating activities:
  Depreciation                                        246,564       74,646
  Allowance for bad debts                             234,796      (20,000)
  Stock based compensation                            162,020       95,000
Changes in operating assets and liabilities:
  Accounts receivable                             (10,250,963)  (2,496,611)
  Notes receivable                                    (84,468)           -
  Inventories                                      (1,167,944)  (1,433,804)
  Income tax receivable                              (185,921)      (2,375)
  Advance to Suppliers                               (438,754)      (4,847)
  Related party payable                                 6,497            -
  Prepaid and other current assets                   (198,622)    (277,531)
  Accounts payable                                 11,155,323    1,308,977
  Accrued expense and acquisition cost payable       (123,636)     105,196
  Tax payable                                         128,152       14,105
  Customer deposits                                  (789,339)           -
                                                  -----------  -----------
Net cash provided by (used by) operating
 activities                                           272,579   (1,441,275)

Cash flows from investing activities:
  Loan to related parties                                   -     (207,130)
  Capital expenditures                               (744,218)    (648,887)
  Deposits paid for investment in subsidiaries              -     (772,692)
  Deposits to restricted account                   (1,417,356)           -
                                                  -----------  -----------
Net cash used by investing activities              (2,161,574)  (1,628,709)

Cash flows from financing activities:
  Proceeds from issuance of common stock                    -    4,578,494
  Repayment of  loans payable to shareholders         (60,024)    (438,788)
  Proceeds from related parties                       107,521            -
  Proceeds / (repayment) from line of credit        2,000,000    1,166,786
  Repayment of bank loans                            (173,790)           -
                                                  -----------  -----------
Net cash flows provided by financing activities:    1,873,707    5,306,492

Effect of exchange rate changes on cash and cash
 equivalents                                           (9,550)     114,411
                                                  -----------  -----------
Net (decrease)/increase in cash and cash
 equivalents                                          (24,838)   2,350,919
Cash and cash equivalents- beginning of period      5,092,476    2,111,825
                                                  -----------  -----------
Cash and cash equivalents- end of period          $ 5,067,638  $ 4,462,744
                                                  ===========  ===========

Supplemental disclosure of non cash activities:
Cash paid during the period for:
  Interest paid in cash                           $    40,923  $   101,659
                                                  ===========  ===========
  Income tax  paid in cash                        $   390,217  $    35,758
                                                  ===========  ===========

The accompanying notes in the Company's filings with the Securities and Exchange Commission are an integral part of these unaudited consolidated financial statements.

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