Click here to close now.


Microsoft Cloud Authors: Jordan Sanders, Carmen Gonzalez, Pat Romanski, Keith Mayer, Jayaram Krishnaswamy

News Feed Item

New Energy Systems Group Reports Third Quarter 2012 Financial Results

Cash and cash Equivalents Improved to $10.3 Million, or $0.71 per Share; Non-GAAP Adjusted Net Income and EPS of $0.8 Million and $0.06, Respectively

SHENZHEN, CHINA -- (Marketwire) -- 11/16/12 -- New Energy Systems Group (NYSE MKT: NEWN) ("New Energy" or the "Company"), a vertically integrated original design manufacturer and distributor of Anytone® and MeePower®-branded consumer backup power systems for mobile devices and solar panels and related solar application products to service municipal power applications, today announced financial results for the third quarter ended September 30, 2012.

Mr. Jack Yu, Chairman of New Energy, stated, "Over the past year, other than operations, we have generated $5.7 million of cash from selling non-core assets that were losing substantial amount of money. With over $10 million of cash, no debt and valuable intellectual property related to our Anytone consumer electronic and solar businesses, we are looking for those strategies to stable and regrow our shareholder value."

For the Three Months Ended September 30,
                                             2012           2011      CHANGE
Net Sales                                $3.6 million   $6.7 million   -46%
Gross Profit                             $0.2 million   $1.2 million   -80%
Net Income (Loss) from Continued        $(7.6) million ($0.5) million  N/A
Adjusted Net Income (Loss)* from         $0.8 million   $0.2 million  +455%
Continued Operations
GAAP EPS (Diluted) from Continued          $(0.52)        $(0.04)      N/A
Adjusted EPS (Diluted)* from Continued      $0.06          $0.01      +452%

*Adjusted net income and adjusted EPS exclude $0.2 million of non-cash
stock-based compensation expenses and $0.5 million of amortization expenses
during Q3 2012 and Q3 2011, respectively. Q3 2012 reported net income and
EPS includes a $7.7 million non-cash goodwill and intangible assets
impairment charge. Fully diluted shares on September 30, 2012 were 14.6
million versus 14.6 million on September 30,2011.

Revenues declined 46% year-over-year to $3.6 million due to lower demand for batteries in China and increased competition. Solar panel and related solar product sales were down 62% to $1.9 million due to the downturn pressure of the entire solar market and intense market competition.

Cost of sales decreased 38% to $3.4 million from $5.5 million in the third quarter of 2011 due to lower sales and production volumes. Gross profit in the third quarter of 2012 was $0.2 million compared to $1.2 million, a 80% decline compared to the same period last year.

Consolidated gross margin fell to 7% from 18% in the third quarter of 2011 as a result of higher raw materials and labor costs and a significant decrease in production and sales volumes.

Selling, general and administrative expenses ("SG&A") for the three months ended September 30, 2012 were $1.8 million, essentially unchanged from the same period last year.

The Company incurred $0.2 million of non-cash stock-based compensation expenses and $0.5 million amortization expenses during the third quarter of 2012 and 2011. New Energy recorded a non-cash goodwill and intangible assets impairment charge of $7.7 million in the third quarter of 2012 related to its Anytone and Kim Fai solar businesses. Excluding these expenses, operating income was $0.8 million for the third quarter of 2012.

Net income from continuing operations was a net loss of $7.6 million compared to a net loss of $0.5 million in the third quarter of 2011. GAAP net loss per share was was $0.52 in the third quarter of 2012 compared to a net loss per share of $0.04 in 2011. Non-GAAP adjusted net income and earnings per share were $0.8 million and $0.06, respectively, in the third quarter of 2012.

For the Nine months Ended September 30,
                                             2012           2011      CHANGE
Net Sales                               $12.2 million  $30.3 million   -60%
Gross Profit                             $0.8 million  $10.5 million   -93%
Net Income (Loss) from Continued
Operations                             $(19.1) million  $3.9 million   N/A
Adjusted Net Income (Loss)* from
Continued Operations                    $(0.9) million  $5.9 million   N/A
GAAP EPS (Diluted) from Continued
Operations                                 $(1.31)         $0.27       N/A
Adjusted EPS (Diluted)* from Continued
Operations                                 $(0.06)         $0.41       N/A

*Adjusted net income and adjusted EPS exclude $0.5 million and 0.5 million
of non-cash stock-based compensation expenses and $1.6 million and $1.5
million of amortization expenses during YTD 2012 and YTD 2011, respectively.
YTD 2012 reported net income and EPS includes a $16.1 million non-cash
goodwill and intangible assets impairment charge. Fully diluted shares on
September 30, 2012 were 14.6 million versus 14.5 million on September

Consolidated net sales for the nine months ended September 30, 2012 were $12.2 million, a decrease of 60% compared to $30.3 million in the corresponding period in 2011. Sales of Anytone batteries and Kim Fai solar products were $6.7 million and $5.5 million, respectively, in the first nine months of 2012.

Cost of sales was $11.4 million, down 42% from $19.8 million in the first nine months of 2011. Gross profit and gross margin were $0.8 million and 6%, respectively, in the nine months ended September 30, 2012.

Selling, general and administrative expenses increased 13% to $5.7 million. Loss from continuing operations was a net loss $21.1 million compared to a net income of $5.5 million in the same period a year ago.

Non-GAAP adjusted net loss and EPS were $0.9 million loss and $0.06 loss per share in the first nine months of 2012, respectively. The weighted average diluted shares outstanding were 14.6 million.

Balance Sheet and Cash Flow Summary

As of September 30, 2012, New Energy Systems Group had cash and equivalents of approximately $10.3 million, up from $4.5 million as of December 31, 2011. The Company received $5.7 million for sale of disposed subsidiaries and generated $0.3 million of cash from operations.

Working capital was approximately $19.1 million at September 30, 2012; accounts receivable was $4.3 million compared to $6.6 million as of December 31, 2011.

Business Update:

During the last quarter, through reduced sales prices of certain products, continuing marketing efforts and exploration of other potential market, the Company managed to control the loss brought by piracy and counterfeit to our mobile power products. In addition to searching for potential partners in the global market, the Company also starts to sell its products directly on the large E-Commence websites such as Amazon and eBay. Also, the Company plans to sell its products directly from its official website to foreign customers in the near future. Moreover, the Company will aggressively participate in domestic and international trade shows for any potential business opportunity, including the recent solar energy show in South Africa and CES 2013 in Las Vegas. Finally, the Company has also developed compatible mobile power products for the popular consumer electronic products such as iPhone 5 and Galaxy S3.

About New Energy Systems Group

New Energy Systems Group is a vertically integrated original design manufacturer and distributor of lithium ion batteries and backup power systems for mobile phones, laptops, digital cameras, MP3s and a variety of other portable electronics. The company's end-user consumer products are sold under the Anytone® brand in China, and the company has begun expanding its international sales efforts. The fast pace of new mobile device introductions in China combined with a growing middle class make it fertile ground for New Energy's end-user consumer products, as well as its high powered, light weight lithium ion batteries. In addition to historically strong organic growth, New Energy is expected to benefit from economies of scale, broader distribution, and higher production capacity and higher profit margins. Additional information about the company is available at:

Forward Looking Statements

This release contains certain "forward-looking statements" relating to the business of the Company and its subsidiary and affiliated companies. These forward looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions. Such forward looking statements involve known and unknown risks and uncertainties that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website ( All forward-looking statements attributable to the Company or to persons acting on its behalf are expressly qualified in their entirety by these factors other than as required under the securities laws. The Company does not assume a duty to update these forward-looking statements.

                         CONSOLIDATED BALANCE SHEETS
                                               September 30,  December 31,
                                                    2012           2011
                                               -------------  -------------
                    ASSETS                      (Unaudited)
Current assets
Cash and equivalents                           $  10,349,517  $   4,528,731
Accounts receivable                                4,253,457      6,614,814
Inventory                                            479,829      1,661,515
Prepayments                                           50,946        554,375
Other receivables                                  5,520,000      5,520,000
Taxes receivable                                           -        217,106
Due from shareholders                                282,540        284,337
Deferred compensation                                607,087        686,979

  Total current assets                            21,543,376     20,067,857

Noncurrent assets
Property and equipment, net                          330,465        208,271
Other receivables                                  2,322,500      8,030,209
Deferred compensation                                      -        423,493
Goodwill                                          29,830,694     39,888,807
Intangible assets, net                             3,412,640     11,051,910

  Total noncurrent assets                         35,896,299     59,602,690

TOTAL ASSETS                                   $  57,439,675  $  79,670,547


Current liabilities
Accounts payable                               $   1,542,990  $   2,837,889
Accrued expenses and other payables                  873,070        818,452
Taxes payable                                         71,404         21,103

  Total current liabilities                        2,487,464      3,677,444

Deferred tax liability                               853,160      2,764,571

TOTAL LIABILITIES                                  3,340,624      6,442,015

Commitments and Contingencies

Stockholders' equity
Preferred stock, $.001 par value, 60,000,000
 shares authorized, 0 shares issued and
 outstanding                                               -              -
Common stock, $.001 par value, 140,000,000
 shares authorized, 14,631,731 and 14,571,731
 shares issued and outstanding at September
 30, 2012 and December 31, 2011, respectively         14,631         14,571
Additional paid in capital                        74,298,859     74,255,585
Statutory reserves                                 2,410,573      2,410,573
Other comprehensive income                         3,249,413      3,292,074
Accumulated deficit                              (25,874,425)    (6,744,271)

TOTAL STOCKHOLDERS' EQUITY                        54,099,051     73,228,532

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY     $  57,439,675  $  79,670,547

The accompanying notes are an integral part of these consolidated financial

                          Nine Months Ended          Three Months Ended
                            September 30,               September 30,
                     --------------------------  --------------------------
                         2012          2011          2012          2011
                     ------------  ------------  ------------  ------------

  Battery            $  6,687,091  $ 13,657,611  $  1,698,783  $  1,703,729
  Solar panel           5,494,777    16,649,096     1,937,476     4,973,124
    Total sales        12,181,868    30,306,707     3,636,259     6,676,853

  Battery               6,191,309     6,546,438     1,551,795       800,633
  Solar panel           5,235,908    13,220,831     1,845,789     4,667,322
    Total cost of
     sales             11,427,217    19,767,269     3,397,584     5,467,955

GROSS PROFIT              754,651    10,539,438       238,675     1,208,898

  Selling                 892,253       881,257       173,520       283,284
  General and
   administrative       4,839,943     4,197,889     1,597,636     1,541,875
  Patent impairment     6,086,840             -     6,086,840             -
   impairment          10,058,113             -     1,638,017             -
    Total operating
     expenses          21,877,149     5,079,146     9,496,013     1,825,159

 OPERATIONS           (21,122,498)    5,460,292    (9,257,338)     (616,261)

  Other expense
   (income)                  (810)        1,983          (204)         (341)
  Interest income          26,288        10,254         9,005         5,791
    Total other
     income, net           25,478        12,237         8,801         5,450

 INCOME TAXES         (21,097,020)    5,472,529    (9,248,537)     (610,811)
 (EXPENSE)              1,966,866    (1,570,786)    1,667,253        85,269

 OPERATIONS           (19,130,154)    3,901,743    (7,581,284)     (525,542)
 TAX                            -   (12,147,523)            -   (16,327,666)

NET LOSS              (19,130,154)   (8,245,780)   (7,581,284)  (16,853,208)

  Foreign currency
   translation           (278,743)      659,551      (241,737)      298,160

COMPREHENSIVE LOSS   $(19,408,897) $ (7,586,229) $ (7,823,021) $(16,555,048)

  Basic                14,595,600    14,381,065    14,631,731    14,551,731
  Diluted              14,595,600    14,548,462    14,631,731    14,551,731

  Basic              $      (1.31) $       0.27  $      (0.52) $      (0.04)
  Diluted            $      (1.31) $       0.27  $      (0.52) $      (0.04)

  Basic              $          -  $      (0.84) $          -  $      (1.12)
  Diluted            $          -  $      (0.83) $          -  $      (1.12)

  Basic              $      (1.31) $      (0.57) $      (0.52) $      (1.16)
  Diluted            $      (1.31) $      (0.57) $      (0.52) $      (1.16)

The accompanying notes are an integral part of these consolidated financial

                                            Nine Months Ended September 30,
                                                 2012             2011
                                           ---------------  ---------------

  Net loss                                 $   (19,130,154) $    (8,245,780)
  Adjustments to reconcile net loss to net
   cash provided by operating activities:
    Depreciation and amortization                1,618,413        2,328,860
    Changes in deferred taxes                   (1,911,410)        (509,557)
    Deferred stock compensation                    533,985          506,250
    Stock options and warrant expense               29,534           33,828
    Goodwill impairment                         10,058,113       13,564,691
    Patent impairment                            6,086,840                -
  (Increase) / decrease in current assets:
    Accounts receivable                          2,477,524          755,306
    Inventory                                    1,175,628       (1,177,906)
    Prepaid expenses, deposits and other
     receivables                                   502,024         (868,679)
  Increase/(decrease) in current
    Accounts payable                            (1,430,992)      (1,736,844)
    Accrued expenses and other payables             55,738          193,518
    Taxes payable                                  267,180       (1,969,979)

NET CASH PROVIDED BY OPERATING ACTIVITIES          332,423        2,873,708

    Cash from sale of disposed
     subsidiaries                                5,728,957                -
    Acquisition of property and equipment         (189,964)         (84,771)

 ACTIVITIES                                      5,538,993          (84,771)

    Repayment of acquisition liability for
     subsidiaries                                        -       (6,802,616)
    Cash from warrant exercise                           -           87,500

NET CASH USED IN FINANCING ACTIVITIES                    -       (6,715,116)

 EQUIVALENTS                                       (50,630)         457,787

 EQUIVALENTS                                     5,820,786       (3,468,392)

CASH AND EQUIVALENTS, BEGINNING OF PERIOD        4,528,731       13,065,008

CASH AND EQUIVALENTS, END OF PERIOD        $    10,349,517  $     9,596,616

  Cash paid during the period for:
    Income taxes                           $             -  $     4,745,614
    Interest                               $             -  $             -

The accompanying notes are an integral part of these consolidated financial

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

@ThingsExpo Stories
The Internet of Things (IoT) is growing rapidly by extending current technologies, products and networks. By 2020, Cisco estimates there will be 50 billion connected devices. Gartner has forecast revenues of over $300 billion, just to IoT suppliers. Now is the time to figure out how you’ll make money – not just create innovative products. With hundreds of new products and companies jumping into the IoT fray every month, there’s no shortage of innovation. Despite this, McKinsey/VisionMobile data shows "less than 10 percent of IoT developers are making enough to support a reasonably sized team....
Internet of @ThingsExpo, taking place June 7-9, 2016 at Javits Center, New York City and Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 18th International @CloudExpo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world and ThingsExpo New York Call for Papers is now open.
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York and Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound cha...
Just over a week ago I received a long and loud sustained applause for a presentation I delivered at this year’s Cloud Expo in Santa Clara. I was extremely pleased with the turnout and had some very good conversations with many of the attendees. Over the next few days I had many more meaningful conversations and was not only happy with the results but also learned a few new things. Here is everything I learned in those three days distilled into three short points.
DevOps is about increasing efficiency, but nothing is more inefficient than building the same application twice. However, this is a routine occurrence with enterprise applications that need both a rich desktop web interface and strong mobile support. With recent technological advances from Isomorphic Software and others, rich desktop and tuned mobile experiences can now be created with a single codebase – without compromising functionality, performance or usability. In his session at DevOps Summit, Charles Kendrick, CTO and Chief Architect at Isomorphic Software, demonstrated examples of com...
As organizations realize the scope of the Internet of Things, gaining key insights from Big Data, through the use of advanced analytics, becomes crucial. However, IoT also creates the need for petabyte scale storage of data from millions of devices. A new type of Storage is required which seamlessly integrates robust data analytics with massive scale. These storage systems will act as “smart systems” provide in-place analytics that speed discovery and enable businesses to quickly derive meaningful and actionable insights. In his session at @ThingsExpo, Paul Turner, Chief Marketing Officer at...
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
In his General Session at 17th Cloud Expo, Bruce Swann, Senior Product Marketing Manager for Adobe Campaign, explored the key ingredients of cross-channel marketing in a digital world. Learn how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects).
The Internet of Everything is re-shaping technology trends–moving away from “request/response” architecture to an “always-on” Streaming Web where data is in constant motion and secure, reliable communication is an absolute necessity. As more and more THINGS go online, the challenges that developers will need to address will only increase exponentially. In his session at @ThingsExpo, Todd Greene, Founder & CEO of PubNub, exploreed the current state of IoT connectivity and review key trends and technology requirements that will drive the Internet of Things from hype to reality.
Two weeks ago (November 3-5), I attended the Cloud Expo Silicon Valley as a speaker, where I presented on the security and privacy due diligence requirements for cloud solutions. Cloud security is a topical issue for every CIO, CISO, and technology buyer. Decision-makers are always looking for insights on how to mitigate the security risks of implementing and using cloud solutions. Based on the presentation topics covered at the conference, as well as the general discussions heard between sessions, I wanted to share some of my observations on emerging trends. As cyber security serves as a fou...
Continuous processes around the development and deployment of applications are both impacted by -- and a benefit to -- the Internet of Things trend. To help better understand the relationship between DevOps and a plethora of new end-devices and data please welcome Gary Gruver, consultant, author and a former IT executive who has led many large-scale IT transformation projects, and John Jeremiah, Technology Evangelist at Hewlett Packard Enterprise (HPE), on Twitter at @j_jeremiah. The discussion is moderated by me, Dana Gardner, Principal Analyst at Interarbor Solutions.
With all the incredible momentum behind the Internet of Things (IoT) industry, it is easy to forget that not a single CEO wakes up and wonders if “my IoT is broken.” What they wonder is if they are making the right decisions to do all they can to increase revenue, decrease costs, and improve customer experience – effectively the same challenges they have always had in growing their business. The exciting thing about the IoT industry is now these decisions can be better, faster, and smarter. Now all corporate assets – people, objects, and spaces – can share information about themselves and thei...
Too often with compelling new technologies market participants become overly enamored with that attractiveness of the technology and neglect underlying business drivers. This tendency, what some call the “newest shiny object syndrome” is understandable given that virtually all of us are heavily engaged in technology. But it is also mistaken. Without concrete business cases driving its deployment, IoT, like many other technologies before it, will fade into obscurity.
The Internet of Things is clearly many things: data collection and analytics, wearables, Smart Grids and Smart Cities, the Industrial Internet, and more. Cool platforms like Arduino, Raspberry Pi, Intel's Galileo and Edison, and a diverse world of sensors are making the IoT a great toy box for developers in all these areas. In this Power Panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists discussed what things are the most important, which will have the most profound effect on the world, and what should we expect to see over the next couple of years.
Discussions of cloud computing have evolved in recent years from a focus on specific types of cloud, to a world of hybrid cloud, and to a world dominated by the APIs that make today's multi-cloud environments and hybrid clouds possible. In this Power Panel at 17th Cloud Expo, moderated by Conference Chair Roger Strukhoff, panelists addressed the importance of customers being able to use the specific technologies they need, through environments and ecosystems that expose their APIs to make true change and transformation possible.
The cloud. Like a comic book superhero, there seems to be no problem it can’t fix or cost it can’t slash. Yet making the transition is not always easy and production environments are still largely on premise. Taking some practical and sensible steps to reduce risk can also help provide a basis for a successful cloud transition. A plethora of surveys from the likes of IDG and Gartner show that more than 70 percent of enterprises have deployed at least one or more cloud application or workload. Yet a closer inspection at the data reveals less than half of these cloud projects involve production...
Microservices are a very exciting architectural approach that many organizations are looking to as a way to accelerate innovation. Microservices promise to allow teams to move away from monolithic "ball of mud" systems, but the reality is that, in the vast majority of organizations, different projects and technologies will continue to be developed at different speeds. How to handle the dependencies between these disparate systems with different iteration cycles? Consider the "canoncial problem" in this scenario: microservice A (releases daily) depends on a couple of additions to backend B (re...
Growth hacking is common for startups to make unheard-of progress in building their business. Career Hacks can help Geek Girls and those who support them (yes, that's you too, Dad!) to excel in this typically male-dominated world. Get ready to learn the facts: Is there a bias against women in the tech / developer communities? Why are women 50% of the workforce, but hold only 24% of the STEM or IT positions? Some beginnings of what to do about it! In her Day 2 Keynote at 17th Cloud Expo, Sandy Carter, IBM General Manager Cloud Ecosystem and Developers, and a Social Business Evangelist, wil...
PubNub has announced the release of BLOCKS, a set of customizable microservices that give developers a simple way to add code and deploy features for realtime apps.PubNub BLOCKS executes business logic directly on the data streaming through PubNub’s network without splitting it off to an intermediary server controlled by the customer. This revolutionary approach streamlines app development, reduces endpoint-to-endpoint latency, and allows apps to better leverage the enormous scalability of PubNub’s Data Stream Network.
Apps and devices shouldn't stop working when there's limited or no network connectivity. Learn how to bring data stored in a cloud database to the edge of the network (and back again) whenever an Internet connection is available. In his session at 17th Cloud Expo, Ben Perlmutter, a Sales Engineer with IBM Cloudant, demonstrated techniques for replicating cloud databases with devices in order to build offline-first mobile or Internet of Things (IoT) apps that can provide a better, faster user experience, both offline and online. The focus of this talk was on IBM Cloudant, Apache CouchDB, and ...