QualityStocks would like to highlight China Wind Systems, Inc. (NASDAQ: CWS), a profitable, rapidly growing supplier of precision forged components primarily to the wind industry in China - the world's leading wind-power market. The company also supplies forged and other components and fabricated products to other industries.
In the company’s news yesterday,
China Wind Systems announced its financial results for the fourth quarter and full year ended December 31, 2010.
Fourth-quarter revenue for 2010 increased 41.5 percent to $22.5 million, compared to $15.9 million in the same period of 2009.
Gross profit for the fourth quarter of 2010 increased 41.0 percent to $6.1 million, compared to $4.3 million for the same period in 2009. Gross margin remained similar at 27.2 percent during the fourth quarter of 2010 compared to 27.3 percent for the same period a year ago.
Operating expenses increased 194.7 percent to $1.7 million, compared to $0.6 million in the comparable period last year, as a result of higher selling, general, and administrative expenses related to increased payroll expenses, stock-based compensation, traveling expenses and shipping expenses. The company also significantly increased its bad debt allowance based on its evaluation of its account receivable balances.
Operating income increased 17.9 percent to $4.4 million, compared to $3.8 million for the same period of 2009. Operating margin was 19.7 percent compared to 23.7 percent in the fourth quarter last year.
Net income increased 16.6 percent to $3.1 million, or $0.17 basic earnings per share, compared to $2.7 million, or $0.17 basic earnings per share in the comparable period last year. Diluted earnings per share were $0.13, compared to $0.11 in the same period of 2009.
“In the fourth quarter of 2010, we continued to expand our market presence in the wind sector. We reported strong year-over-year and quarter-over-quarter revenue growth from our business selling forged products to the wind industry,” Jianhua Wu, chairman and CEO of China Wind Systems stated in the press release. “During the quarter, we delivered precision forged products from our newly built electro-slag remelting facility while maintaining output from our traditional forged rolled ring facility. … In addition, our next generation, energy efficient and environmentally friendly dyeing machines continue to gain increased traction and we are receiving strong customer interest.”
For the year ended December 31, 2010, revenues increased 48.8 percent to $79.5 million from $53.5 million in 2009. Gross profit increased 61.9 percent to $20.9 million, compared to $12.9 million last year. Operating income increased 44.8 percent to $15.5 million from $10.7 million in 2009. Net income was $11.1 million, or $0.62 basic earnings per share, a 45.5 percent increase from $7.6 million, or $0.37 basic earnings per share, reported last year. earnings per share in 2010 and 2009 were $0.44 and $0.24, respectively.
As of December 31, 2010, China Wind Systems held cash and cash equivalents of $0.9 million, accounts receivable of $8.2 million, and total current assets of $15.7 million. The company reported $1.8 million in short-term loans payable, no long-term debt and stockholders’ equity stood at $62.6 million.
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Forward-Looking Statement:
This release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. Risks and uncertainties applicable to the company and its business could cause the company's actual results to differ materially from those indicated in any forward-looking statements.
