WEB NEWS Notable Share Transactions
New York, Dec. 13, 2018 (GLOBE NEWSWIRE ) -- Yulong Eco-Materials Limited (NASDAQ: YECO) (the “Company”), announced today that it has received notice from The Nasdaq Stock Market (“Nasdaq”) that Nasdaq will delist the ordinary shares of the Company. The Company’s ordinary shares will be suspended at the open of business on Friday, December 14, 2018. Nasdaq will file a Form 25 with the Securities and Exchange Commission when all internal appeal periods have run.
Following the delisting, the Company will continue as a publicly-traded entity. It is expected that the Company’s ordinary shares will be quoted on OTC Pink market electronic quotation service under the symbol “YECO.” The Company is exploring its options to have its ordinary shares quoted on other securities exchanges or over-the-counter markets.
Acquisition Activity
New York, Dec. 13, 2018 (GLOBE NEWSWIRE ) -- Yulong Eco-Materials Limited (Nasdaq CM: YECO ) today announced that it has closed the acquisition for Michelangelo’s (Pieta) crucifixion masterpiece. YECO signed a Sale and Purchase Agreement to acquire Michelangelo’s Crucifixion painting for US$75 million on November 19th. The acquisition was acquired via the issuance of 7.5 million YECO restricted shares valued at $10.00 per share.
CEO and Chairman Daniel Mckinney, said “we are ecstatic to have acquired this rare Michelangelo masterpiece that until now has been largely hidden from public view. It is the dream of every art history professional or student to be involved in such a rare viewing and acquisition. With this latest acquisition, we have now a proven concept that our business model can create a new alternative asset class in fine art via the securitization our shares.”
The Millennium Sapphire, which is also owned by the Company, includes carvings depicting Michelangelo’s David and a bust of Michelangelo by Daniele da Volterra.
The Company’s art experts are traveling the globe over the next week inspecting several other masterpieces for possible acquisition, including works by Leonardo da Vinci, Michelangelo, Rubens, Raphael and Van Gogh.
Legal Insights
New York, Nov. 23, 2018 (GLOBE NEWSWIRE ) -- Yulong Eco-Materials Limited (Nasdaq CM: YECO) today announced that it has received an additional Determination Letter from Nasdaq dated November 19, 2018.
The Letter stating the following:
The Company does not comply with Nasdaq’s filing requirements for continued inclusion set forth in Listing Rule 5250(c)(1) (the “Rule”) because it has not filed its Form 20-F for the period ended June 30, 2018. Accordingly, this matter serves as an additional basis for delisting the Company’s securities from The Nasdaq Stock Market.
Under our rules, a Company that receives a delist determination for delinquency, can request an appeal to a Hearings Panel, pursuant to the procedures set forth in the Nasdaq Listing Rule 5800 Series. A request for a hearing regarding a delinquent filing will stay the suspension of the Company’s securities only for a period of 15 days from the date of the request. In that regard, since the Company is already before a Hearings Panel for its failure to comply with Listing Rule 5110(a), the Company will have seven days, or until November 26, 2018 to request a stay of the suspension, pending a Hearings Panel decision. The request should include an explanation of why an extended stay is appropriate. A Panel will review the request for an extended stay and notify the Company of its conclusion as soon as is practicable but in any event no later than 15 calendar days following the deadline to request a further stay.
The Company intends to promptly comply with this Nasdaq directive and has engaged a new auditor, G.C. & Associates CPA, PLLC on November 20, 2018.
“We will complete the audit and file our required 20F as soon as possible to regain Nasdaq compliance”, said CEO, Hoi Ming Chan.
Comments & Business Outlook
New York, Nov. 23, 2018 (GLOBE NEWSWIRE ) -- Yulong Eco-Materials Limited (Nasdaq CM: YECO) today announced that it has received its updated Certificate of Incorporation Name Change from Cayman Islands Registry of Companies.
The Company changed its name to reflect its new business model of using issuances of its Nasdaq stock to acquire rare works of fine art, to develop the value of these acquisitions with exhibitions and media exposure, and open the opportunity of shared ownership of its acquired masterpieces to anyone with a brokerage account. This will empower investors who have not had the independent financial ability to now share ownership of such works. Through the acquisition of YECO shares, the general public can have fractionalized ownership of a collection of extremely valuable art treasures that until now have been restricted to billionaires, museums and royalty. The company’s premium fine art asset is the Millennium Sapphire. On November 19, 2018 the Company announced that it has signed a Sale and Purchase Agreement to acquire Michelangelo’s Crucifixion painting for US$75 million. The acquisition will be paid via the issuance of 7.5 million YECO restricted shares valued at $10.00 per share.
“We like our business model of acquiring, accumulating and promoting fine art masterpieces”, said Chairman Daniel Mckinney. “While the various stock, oil and other commodity markets ride the rollercoaster, fine art just keeps appreciating.”
Bloomberg dubbed this past week a “monster week” for auctions. In the unrelenting contest between the two premier auction houses, Christies and Sotheby’s sold over $2 billion in art this week, according to Bloomberg.
Notable Share Transactions
NEW YORK, Nov. 09, 2018 (GLOBE NEWSWIRE ) -- Yulong Eco-Materials Limited (Nasdaq CM: YECO) today announced that it has closed $3 million in a private placement with an institutional investor.
As disclosed on Nov 7, 2018, the Company sold 1 million ordinary shares at a price of $3.00 per share for gross proceeds of $3 million dollars. In connection with the private placement, the Company issued a warrant to purchase up to 1 million shares at an exercise price of $5.00 per share. The warrants are immediately exercisable and expire five years from the date of issuance. In addition, the Company has agreed to file a registration statement registering the shares and the shares issuable upon exercise of the warrants for resale with the U.S. Securities and Exchange Commission.
Further, On Nov 7th, the Company disclosed that it had received a “Staff determination Letter” from Nasdaq pursuant to: (the “Business Combination”) constituted a business combination resulting in a “Change of Control” pursuant to Listing Rule 5110(a) (the “Rule”).1 Accordingly, the post-transaction entity was required to satisfy all of Nasdaq’s initial listing criteria and to complete Nasdaq’s initial listing process, including the payment of all applicable fees, prior to consummation of the transaction. The Company has filed its Appeal and has paid the $10,000 Hearing Fee to Nasdaq. Accordingly, the delisting action referenced in the Nasdaq Staff’s determination letter has been stayed, pending a final written decision by the Nasdaq Hearings Panel. The Hearing is scheduled for December 13, 2018 AT 10:00am.
Legal Insights
NEW YORK, Nov. 07, 2018 (GLOBE NEWSWIRE ) -- Yulong Eco-Materials Limited (Nasdaq CM: YECO) today announced that it received a Determination Letter from Nasdaq.
On November 1, 2018, the Company received a “Staff Determination Letter” from Nasdaq pursuant to: (the “Business Combination”) constituted a business combination resulting in a “Change of Control” pursuant to Listing Rule 5110(a) (the “Rule”).1 Accordingly, the post-transaction entity was required to satisfy all of Nasdaq’s initial listing criteria and to complete Nasdaq’s initial listing process, including the payment of all applicable fees, prior to consummation of the transaction. The Company must file an Appeal and therefore pay a $10,000 Hearing Fee to Nasdaq before November 12, 2018 or it will be delisted from Nasdaq.
1 Listing Rule 5110(a) states “A Company must apply for initial listing in connection with a transaction whereby the Company combines with a non-Nasdaq entity, resulting in a change of control of the Company and potentially allowing the non-Nasdaq entity to obtain a Nasdaq Listing. In determining whether a change of control has occurred, Nasdaq shall consider all relevant factors including, but not limited to, changes in the management, board of directors, voting power, ownership, and financial structure of the Company. Nasdaq shall also consider the nature of the businesses and the relative size of the Nasdaq Company and non-Nasdaq entity. The Company must submit an application for the post-transaction entity with sufficient time to allow Nasdaq to complete its review before the transaction is completed. If the Company’s application for initial listing has not been approved prior to consummation of the transaction, Nasdaq will issue a Staff Determination Letter as set forth in Rule 5810(a) and begin delisting proceedings pursuant to the Rule 5800 Series.”
The Company confirms that it will file an Appeal and pay the $10,000 Hearing Fee before November 12, 2018 while its new listing application for change of control is being processed.
Notable Share Transactions
NEW YORK, Nov. 07, 2018 (GLOBE NEWSWIRE ) -- Yulong Eco-Materials Limited (Nasdaq CM: YECO) today announced that it has entered into a definite purchase agreement with an institutional investor to raise gross proceeds of $3 million in a private placement.
Pursuant to the purchase agreement, the Company has agreed to sell 1 million ordinary shares at a price of $3.00 per share for gross proceeds of $3 million dollars. In connection with the private placement, the Company will issue a warrant to purchase up to 1 million shares at an exercise price of $5.00 per share. The warrants are immediately exercisable and expire five years from the date of issuance. In addition, the Company has agreed to file a registration statement registering the shares and the shares issuable upon exercise of the warrants for resale with the U.S. Securities and Exchange Commission.
The private placement is expected to close on or about November 9, 2018.
Executive Chairman Daniel Mckinney said, “We are extremely pleased to have raised funding which will cover our running expenses and some development costs for approximately 2-3 years. Our balance sheet now shows over $3 million in cash, $50 million in assets with zero debt. We are currently in discussions to acquire several significant art masterpieces including two masterpieces by Leonardo da Vinci, two masterpieces by Michelangelo, a Van Gogh, Raphael, and a work by Caravaggio.”
Comments & Business Outlook
New York and PINGDINGSHAN, China, Oct. 30, 2018 (GLOBE NEWSWIRE ) -- Yulong Eco-Materials Limited (Nasdaq CM: YECO) today announced that it will sell its China businesses back to the founders, the Yulong Zhu family.
The Company will file its 6K with details of the sale, including the Fairness Opinion, Shareholder approval form and Sale contract, on November 5th. The sale includes all assets and debts of the China businesses.
CEO Hoi Ming Chan said, “We are extremely pleased to have completed the sale of the China businesses on October 30th. We are currently in discussions to acquire several significant art masterpieces including two masterpieces by Leonardo da Vinci, a Monet, Van Gogh and a Picasso.”
The objective of YECO is to use issuances of its Nasdaq stock to acquire further rare works of fine art, develop the value of these acquisitions with exhibitions and media exposure, and open the opportunity of shared ownership of its acquired masterpieces to anyone with a brokerage account. It will empower investors who have not had the independent financial ability to now share ownership of such works. Through the acquisition of YECO shares, the general public can have fractionalized ownership of a collection of extremely valuable art treasures that until now have been restricted to billionaires, museums and royalty.
As disclosed on October 17th, the Company will move to a new Headquarters in New York City on November 1st to be located at: 387 Park Avenue South, 5/fl, New York City, 10016
Acquisition Activity
PINGDINGSHAN, China, Oct. 17, 2018 (GLOBE NEWSWIRE ) -- Yulong Eco-Materials Limited (Nasdaq CM: YECO) today announced that it has completed the acquisition of the Millennium Sapphire “MS”. Yulong announced on August 22, 2018 that it had signed a Sale and Purchase Agreement to acquire the Millennium Sapphire for US$50 million. The acquisition was acquired via the issuance of 25 million YECO restricted shares valued at $2.00 per share.
The Closing was contingent upon obtaining YECO shareholder and NASDAQ approval. YECO shareholders voted on September 3rd as disclosed in its 6K filing to approve the acquisition along with changing the name of the corporation to Millennium Enterprises Limited.
CEO Hoi Ming Chan said, “We are extremely pleased to have completed the purchase of this undervalued world class asset for $50 million. The most recent appraisal for the MS (September, 2018) was US$60 to $90 million. World wide news headlines of the then unnamed rough sapphire purported the value between $90 to $500 million in 1996 when it was discovered.”
Yulong is now in the process of the sale and spin off its China businesses in order to devote all it’s resources to the MS business. The Company plans to relocate its headquarters to New York this month and replace its officers and directors in order to manage and develop the new MS business. The Company will submit the application change its name after the sale of the China business.
CEO Hoi Ming Chan said, “We are extremely pleased to have completed the purchase of this world class, under valued asset. By spinning off the China businesses, we will divest ourselves of all the China assets and all the debts of the previous business. We will then move forward with the MS business debt free,”
Acquisition Activity
PINGDINGSHAN, China, Aug. 22, 2018 (GLOBE NEWSWIRE ) -- Yulong Eco-Materials Limited (Nasdaq CM: YECO) today announced that it has signed a Sale and Purchase Agreement to acquire the Millennium Sapphire for US$50 million. The acquisition will be paid via the issuance of 25 million YECO restricted shares valued at $2.00 per share.
The Closing will be contingent upon obtaining YECO shareholder and NASDAQ approval. The two parties have 60 days to complete the acquisition.
Comments & Business Outlook
PINGDINGSHAN, China, July 25, 2018 (GLOBE NEWSWIRE) -- Yulong Eco-Materials Limited (Nasdaq CM: YECO ) today announced that the Company has targeted the week of August 6th to file its December 31, 2017 financials and regain compliance with NASDAQ. YECO received of a notification from NASDAQ on July 16, 2018, indicating that as a result of the Company not timely filing with the Securities and Exchange Commission (“SEC”) its Annual Report on Form 6-K for the fiscal year ended December 31, 2017 (the “Annual Report”), the Company failed to comply with the periodic filing requirements in NASDAQ Listing Rule 5250(c)(1). Further, the Company was required to provide Nasdaq with the number of shares outstanding at the end of each quarter. The Company complied with this outstanding share confirmation requirement on July 20, 2018 via an electronic upload on the Nasdaq Listing Center website.
Further, in compliance with Rule IM-5620, the Company will hold its Annual General Meeting on August 20, 2018 at 10am at the Company’s head office: Eastern End of Xiwuzhuang Village
Under the new management of CEO Hoi Ming Chan and Jason Chan CFO, the Company is now working to complete its Annual Report and regain NASDAQ listing compliance.
CEO, Hoi Chan Ming said: “It is our commitment to keep the Company in full NASDAQ compliance and file on a timely basis from now on.”
Investor Alert
PINGDINGSHAN, China, July 20, 2018 (GLOBE NEWSWIRE ) -- Yulong Eco-Materials Limited (Nasdaq CM: YECO ) today announced its receipt of a notification from NASDAQ on July 16, 2018, indicating that, as a result of the Company not timely filing with the Securities and Exchange Commission (“SEC”) its Annual Report on Form 6-K for the fiscal year ended December 31, 2017 (the “Annual Report”), the Company failed to comply with the periodic filing requirements in NASDAQ Listing Rule 5250(c)(1). The Company has 45 days until August 30, 2018, to submit to the NASDAQ listing qualifications staff, pursuant to the request set forth in the notification, a plan to regain compliance with NASDAQ’s continued listing requirements. If the NASDAQ staff accepts the plan, it has discretion to grant up to 180 calendar days (i.e., until December 27, 2018) from the original non-compliance date of the Annual Report for the Company to regain compliance. Further, the Company is required to provide Nasdaq with the number of shares outstanding at the end of each quarter. The Company confirms that it complied with this outstanding share confirmation requirement today via an electronic upload on the Nasdaq Listing Center website.
Further, in compliance with Rule IM-5620, the Company will hold its Annual General Meeting on August 20, 2018 at 10am at the Company’s head office: Eastern End of Xiwuzhuang Village
Under the management of new CEO Hoi Ming Chan and Jason Chan CFO, the Company expects to timely submit its plan to NASDAQ, and is working diligently to complete the Annual Report and regain NASDAQ listing compliance. However, there can be no assurance regarding the timing or ultimate outcome of this process or the ability of the Company to successfully maintain its NASDAQ listing.
The Company is making this announcement in compliance with NASDAQ Listing Rule 5810(b), which requires prompt disclosure of receipt of a noncompliance letter.
Comments & Business Outlook
PINGDINGSHAN, China, Nov. 30, 2017 /
PRNewswire / -- Yulong Eco-Materials Limited (YECO) ("Yulong" or "the Company"), a leading vertically integrated manufacturer of eco-friendly building products and a leading producer of fly-ash bricks and concrete announced on November 30, 2017, that the Nasdaq Hearings Panel has determined that the Company has demonstrated compliance with the $1.00 bid price requirement and all other applicable requirements for continued listing. As a result, the Nasdaq hearing file has been closed.
Investor Alert
PINGDINGSHAN, China, March 21, 2017 /PRNewswire / -- Yulong Eco-Materials Ltd. (YECO) ("Yulong" or the "Company"), a vertically integrated manufacturer of eco-friendly building products located in Henan Province, today announced that on March 15, 2015 the Company received a letter from the NASDAQ Stock Market stating that due to the resignation of two directors, the Company failed to meet the requirement of a minimum of three independent directors in the audit committee pursuant to NASDAQ Marketplace Rule 5605(c)(2) (the "Independent Audit Committee Rule"). The NASDAQ letter has no immediate effect on the listing of the Company's shares.
In accordance with NASDAQ Marketplace Rule 5605(c)(4) and 5810(c)(3)(E), the Company has been provided with a cure period to regain compliance as follow:
until the earlier of the Company's next annual shareholders' meeting or February 11, 2018; or
The Company intends to evaluate available options to resolve the deficiency and regain compliance with the Independent Audit Committee Rule.
Investor Alert
PINGDINGSHAN, China, March 3, 2017 /PRNewswire / -- Yulong Eco-Materials Limited (YECO) ("Yulong" or the "Company"), vertically integrated manufacturer of eco-friendly building products located in the city of Pingdingshan in Henan Province, China, today announced that it has received a letter from the NASDAQ Stock Market ("NASDAQ") notifying the Company that it is not in compliance with NASDAQ Listing Rule 5250(c)(1) because it has not filed its Quarterly Report on Form 10-Q for the period ended December 31, 2016 in a timely manner with the Securities and Exchange Commission (the "SEC"). NASDAQ Listing Rule 5250(c)(1) requires listed companies to timely file all required periodic financial reports with the SEC. This delinquency serves as an additional basis for delisting the Company's securities from the Nasdaq Stock Market.
Previously, NASDAQ Staff had granted the Company an exception until April 12, 2017 to file its delinquent Form 10-K for the period ended June 30, 2016 (the "Initial Delinquent Filing") and delinquent Form 10-Q for the period ended September 30, 2016.
Investor Alert
PINGDINGSHAN, China , Oct. 19, 2016 /PRNewswire / -- Yulong Eco-Materials Limited (NasdaqCM: YECO ), today announced its receipt of a notification from NASDAQ on October 14, 2016, indicating that, as a result of the Company not timely filing with the Securities and Exchange Commission ("SEC") its Annual Report on Form 10-K for the fiscal year ended June 30, 2016 (the "Annual Report"), the Company failed to comply with the periodic filing requirements in NASDAQ Listing Rule 5250(c)(1). The Company has until December 13, 2016, to submit to the NASDAQ listing qualifications staff, pursuant to the request set forth in the notification, a plan to regain compliance with NASDAQ's continued listing requirements. If the NASDAQ staff accepts the plan, it has discretion to grant up to 180 calendar days (i.e., until April 11, 2017) from the original non-compliance date of the Annual Report for the Company to regain compliance.
The Company expects to timely submit its plan to NASDAQ, and is working diligently to complete the Annual Report and regain NASDAQ listing compliance. However, there can be no assurance regarding the timing or ultimate outcome of this process or the ability of the Company to successfully maintain its NASDAQ listing.
The Company is making this announcement in compliance with NASDAQ Listing Rule 5810(b), which requires prompt disclosure of receipt of a noncompliance letter.
Comments & Business Outlook
PINGDINGSHAN, China, Aug. 3, 2016 /PRNewswire / --
Highlights:
Yulong is now one of the leading Construction Waste Management (CWM) companies in Henan Province with exclusive CWM licenses in Pingdingshan and Shangqiu
Yulong Zhu, the company's CEO noted, "Building upon and leveraging our technical experience we gained over the years from operating our profitable, cash flow generating fly-ash brick and concrete businesses - within a very short period we have been able to expand our breadth of eco-friendly offering into a new, highly profitable business - the construction waste management segment, which provides integrated solutions to solve China's construction waste problem. We are extremely proud of our achievements. Yulong today is a vertically integrated, eco-friendly and well-structured business, well positioned to take advantage of the tremendous opportunities in the Henan Province and beyond."
Since mid-2015, supported by its fly-ash brick and concrete business segments, Yulong has achieved many milestones and is now one of the leading CWM companies in Henan Province, offering local and provincial governments a cost-effective and technically advanced solution to manage and reduce construction waste and related pollution. The company's CWM operations were featured in a video news-story on Bloomberg TV: http://www.bloomberg.com/news/videos/2015-10-22/turning-china-s-demolition-trash-to-treasure.
Since April 2015, when its new waste processing plant in Pingdingshan first became operational, Yulong's CWM business has taken off. For the first nine months of fiscal 2016, this segment generated a total $5.5 million in revenue, and is expected to contribute over 15% of total revenue for fiscal 2016. Management is confident that the CWM business has a strong potential to significantly improve Yulong's future financial performance and is expected to be a continued catalyst for future growth.
The company has secured several long-term, multi-million-dollar CWM contracts which should provide substantial revenues for several years to come. Milestones for the last 12-months include:
A 20-year exclusive CWM license in Pingdingshan
Hauling: several government contracts to haul waste from construction sites.
Mr. Zhu also noted, "We will continue to execute our business plan to:
Maintain our leading market position for our concrete and fly-ash brick businesses to continue generating cash flow to support our growth initiatives;
Comments & Business Outlook
PINGDINGSHAN, China, June 1, 2016 /PRNewswire / -- Yulong Eco-Materials Limited (NasdaqCM: YECO), an eco-friendly building products and construction waste management company, today announced that it received four new assignments to recycle construction waste in four villages in Zhengdong New District of Zhengzhou City, the provincial capital of Henan Province.
As the original agreement signed with the district's Municipal Construction Office in 2015 intends, Yulong is to provide construction waste recycling service for all the District's 28 administrative villages.
Yulong expects to recycle approximately 1.55 million cubic meters of construction waste with the new assignments, and generate approximately $3 million in revenue, in 6 months. To service the assignments, the Company is utilizing 3 mobile recycling stations, each with designed annual processing capacity of two million metric tons.
Once recycled, the Company estimates to generate approximately $3 million of additional revenue from the sale of the recycled aggregates to local construction companies. Of note, the recently published new technical code by the provincial authority, which standardizes the use of recycled construction waste for roadbed construction, gives Yulong a great opportunity to sell its recycled aggregates as roadbed materials for highways, expressways and other high quality road paving projects in Henan.
The district's Municipal Construction Office expects all its 28 villages to generate more than 15 million cubic meters of construction waste. If all 28 villages are assigned to and serviced by Yulong, this project can potentially generate over $35 million in revenue from waste recycling, plus additional revenue from the sale of the recycled aggregate. Thus far, the Company has recycled approyeco
dximately 1.1 million metric tons of construction waste from three villages where the recycling services have been completed.
Yulong Zhu, the Company's CEO noted, "When we signed the agreement with the district's Municipal Construction Office in 2015, our goal was to receive assignments to provide recycling services to six of the district's villages before the end of fiscal 2016. We have now obtained assignments to recycle construction waste from seven villages, one more than our original plan, and we have already completed our recycling work in three of these villages. We will continue to offer local government very cost effective and environmental friendly solutions to manage and reduce construction waste that is taking up land resources, polluting underground water and affecting quality of life."
Comments & Business Outlook
Third Quarter 2015 Financial Results
Revenue for the third quarter was $11.2 million vs. last years same quarter of $10.4 million
EPS was $0.21 vs last years $0.26.
Announces Guidance for Fiscal 2016
Fiscal 2016 Q4 is expected to be another strong quarter in terms of revenue and net income, thus for fiscal 2016, the Company expects:
Revenue of between $49 million and $52 million, representing an increase of 7% to 12% vs. fiscal 2015. The CWM segment, which commenced operations in April 2015, has become the catalyst of top and bottom line growth. For fiscal 2016, we expect this segment to continue to grow and to represent over 15% of Yulong's total revenue, while our brick and cement businesses are expected to remain stable.
Comments & Business Outlook
PINGDINGSHAN, China, May 4, 2016 /PRNewswire / -- Yulong Eco-Materials Limited (YECO), an eco-friendly building products and construction waste management company, today announced that the Department of Transportation of Henan Province (the "Department") has published the technical code governing the use of recycled construction waste materials in building roadbed in the province. Yulong has been instrumental in preparing the code with Henan Communication Science and Technology Research Institute, Ltd.
With its publication, the technical code is now the standard for the road construction industry in Henan Province, and will allow the Company to begin selling its recycled waste as roadbed material for highways, expressways and other road paving projects in Henan.
Currently the Company is working closely with two municipal agencies in Zhengzhou, the Highway Bureau and the Urban and Rural Construction Committee, to set up procedures by which road and highway builders will use recycled waste in place of sand and stone to build roadbeds within the city limit. Several companies are already in the process of adopting recycled waste for their current and new road construction projects.
Additionally, the Company is actively negotiating with several large local road and highway builders, and currently expects to announce the signing of contracts to sell its recycled waste to these builders.
Mr. Yulong Zhu, Yulong's CEO, noted, "The ability to sell our recycled construction waste for use in roadways is a significant step forward for our business. We have been recycling construction waste in the cities of Zhengzhou and Shangqiu and have currently stored over 5 million cubic meters of recycled materials. With the publication of the technical code, we estimate that we can generate at least $6 million annually for the next five years from the sale of the recycled materials.
"It is estimated that Zhengzhou alone will build over 340 kilometers of new highways and over 1,000 kilometers of new main roads, and upgrade over 1,000 kilometers of existing roads, over the next 5 years. We estimate that over 50 million cubic meters of recycled materials will be required to complete these projects, which could potentially generate over $100 million in revenue. Based on our current construction waste processing capacity, we expect to produce approximately 6 million cubic meters of recycled waste annually. As previously announced, we plan to expand our recycling capacity to keep up with the anticipated demand."
Comments & Business Outlook
PINGDINGSHAN, China, April 25, 2016 /PRNewswire / -- Yulong Eco-Materials Limited (NasdaqCM: YECO), an eco-friendly building products and construction waste management company, today announced that it has signed a new contract with one of the 13 administrative offices of the Zhengzhou City Airport Zone (Zhengzhou Comprehensive Experimental Zone for Airport-based Economy), to provide construction waste management (CWM) services for over 1,000 homesteads to be demolished in the Wangzhuang and Wangdao villages.
The contract requires the Company to complete processing the construction waste within 6 months which, when completed, is expected to generate approximately $600,000 in revenue with a gross margin of over 70%. To service the contract, Yulong is currently using 3 mobile recycling stations, each with an annual designed processing capacity of two million metric tons. The Company may deploy additional stations in the area, as new assignments are received.
To date, the Company has signed contracts with five out of 13 administrative offices in the zone, and is negotiating with the other administrative offices. As a result, the Company is processing waste from approximately 3,300 demolished homesteads and expects to report strong fiscal 2016 third quarter revenue for its CWM segment.
As previously announced, over 20,000 homesteads were demolished in 2015 in the airport zone, and it is estimated that around 12,000 homesteads will be demolished every year for the next 3 years.
Yulong Zhu, the Company's Chief Executive Officer, noted, "We commenced CWM services one year ago and today this segment has become a major contributor of revenue for our Company. We believe that once our technical code is published by Henan's Department of Transportation, we will generate additional high margin revenue from the sale of recycled materials and further improve our bottom line. Thus, we plan to increase our waste processing capacity by purchasing additional mobile recycling stations to handle additional projects we expects to receive in the near future."
Mr. Yulong continued, "Our success is a demonstration of our sound business growth strategy to expand our activities in new geographies where we see that CWM services are needed. We are very proud of our achievements over the last year. We will continue our efforts to strengthen our existing and also develop new strategic partnerships to expand our business in other cities in our province."
Comments & Business Outlook
PINGDINGSHAN, China--(BUSINESS WIRE)--
Yulong Eco-Materials Limited (NasdaqCM: YECO), an eco-friendly building products and construction waste management company, today announced that it has signed new contract with one of the 13 administrative offices of the Zhengzhou City Airport Zone (Zhengzhou Comprehensive Experimental Zone for Airport-based Economy), to provide construction waste management (CWM) service for 500 homesteads to be demolished in the Wangzhuang village.
The contract requires the Company to complete its processing of construction waste within 6 months which, when completed, is expected to generate approximately $300,000 in revenue. To service the contract, Yulong is currently using 2 mobile recycling stations each with an annual designed processing capacity of two million metric tons, while additional stations may be deployed in the area, as needed.
The company is also negotiating with the administrative office to provide CWM service to nine other villages under its administration with estimated 4,000 homesteads in total to be demolished.
To date, the company has signed contracts with three out of the 13 administrative offices in the zone, and is processing waste from approximately 2,300 demolished homesteads in four villages. The company projects these contracts to generate approximately $1.4 million in revenue in this fiscal year.
In 2015, there were over 20,000 homesteads demolished in the airport zone, and it is estimated that around 12,000 homesteads will be demolished every year for the next 3 years.
Yulong Zhu, the Company’s Chief Executive Officer, noted, “Although we have thus far completed all of our recycling assignments ahead of schedule, we believe that there are much more work waiting for us as the only CWM service provider in Zhengzhou. Furthermore, we are working to complete several projects in Pingdingshan and Shangqiu, and are exploring several opportunities to expand our CWM segment into other cities in Henan Province. We are currently exploring ways to increase our waste processing capacity such as by purchasing additional mobile recycling stations and developing strategic partnerships for future contracts.
“Our CWM business has already become a major contributor of revenue. For the first six months of fiscal 2016, the CWM segment generated revenue of approximately $4 million, or 15% of total revenue for the period. Going forward, CWM segment is expected to continue to generate significant revenue from hauling and recycling of construction waste and also from the sale of recycled construction waste as raw material to contractors constructing major roads and highways in Henan Province, once our technical code is published by Henan’s Department of Transportation.”
Comments & Business Outlook
Second Quarter 2016 Financial Results
Revenue $12.6 million vs last years same quarter $11.5 million
EPS was $0.18 vs. last years same quarter of $0.23.
As expected, for fiscal 2016 6M we reported record revenue and net income due to approximately $3.9 million incremental revenue generated by the company’s high margin construction waste management (CWM) division, which commenced operations in April 2015. While our CWM business is still in its infancy, it has already become a major contributor of revenue growth in the recent quarters. The CWM division generated approximately $0.7 million in fiscal 2015 Q4 and over $1.9 million in each subsequent quarter. We expect this positive trend for the CWM segment to continue in the coming quarters while our brick and cement business is expected to remain stable. Of note, our total revenue was affected by the depreciation of the RMB against the US dollar as compared to a year ago.
The company’s total gross margin for fiscal 2016 6M improved to 39.5% mainly due to the 60% gross margin generated by our CWM division. Total G&A expenses increased by 33.9% mainly due expenses associated with costs related to our public company status, fees which were not incurred in the same period of fiscal 2015, and also due to other expenses related to business development. Regardless, income from operations for fiscal 2016 6M period improved by 24.2%, and net income increased by 36.5%.
Mr. Zhu added, “We are exploring several opportunities to expand our CWM segment in other cities within Henan Province. Looking forward to report our progress in the coming months.”
Comments & Business Outlook
PINGDINGSHAN, China--(BUSINESS WIRE)--
Yulong Eco-Materials Limited (NasdaqCM: YECO), an eco-friendly building products and construction waste management company, today announced that the Department of Transportation of Henan Province (the �Department�) gave final approval for the Company�s provincial technical code established to govern the use of recycled construction waste materials in the production of roadbed � a road�s foundation.
Following this approval, the code will be revised according to the Department�s recommendation and is expected to be published within two months. Once published, the code will become the standard code for the road construction industry in Henan Province, and will allow the Company to begin the sale of its recycled waste as roadbed material for highways, expressways and other road paving projects in Henan Province. Currently the Company is actively negotiating with large local road and highway builders, and expects to announce the signing of several contracts shortly after the code is published.
Mr. Yulong Zhu, Yulong�s CEO, noted, �To date, we have received positive feedback from all road and highway construction companies we are negotiating with, and I believe that we can sell all of our current recycled waste inventory before 2016 fiscal year-end. We estimate that revenue generated from the sale of the recycled construction waste in fiscal 2016 will contribute more than $5 million to our top line, in addition to revenue we are already generating from the hauling and recycling of construction waste. Combined revenue generated from our overall construction waste management (�CWM�) business, which includes the sale of recycled waste, and the hauling and recycling of construction waste, is expected to represent over 20% of Yulong�s total revenue in fiscal 2016. Furthermore, because CWM is a high margin segment of our business, with approximate gross margins of over 70%, we expect our bottom line for fiscal 2016 to substantially improve as compared to fiscal 2015. Specifically, for fiscal 2016, the sale of recycled waste alone is expected to contribute over $4 million to our bottom line. We expect the same trend to continue in fiscal 2017, due to several long-term construction waste management projects we recently commenced. We are also looking to expand our business, especially the CWM segment in other cities within Henan Province in this calendar year.�
Comments & Business Outlook
PINGDINGSHAN, China--(BUSINESS WIRE)--
Yulong Eco-Materials Limited (NasdaqCM:YECO), an eco-friendly building products and construction waste management company, today announced that it has received two new assignments to provide construction waste recycling services in two additional villages within the Zhengzhou City Airport Zone, formally known as the Zhengzhou Comprehensive Experimental Zone for Airport-based Economy. The Zone is a 160 square mile area currently undergoing development as both a modernized air, railway and highway transportation hub and an airport-based metropolitan center.
Yulong has already commenced servicing over 1000 demolished homesteads of both the villages of Daliuhe and Longgou. The Company expects to complete recycling of waste in both villages within 6-months and is expected to generate total revenue of over $600,000.
To service these projects, Yulong is using several of its mobile recycling stations deployed in the area from other completed jobsites, each with an annual processing capacity of two million metric tons, while additional stations may be deployed as more assignments are received.
These assignments are pursuant to a master agreement Yulong signed with one of the Zone�s Administrative Offices in September 2015 to provide construction waste recycling services in various villages within the Zone. There are 165 villages, averaging about 550 homesteads each, within the Zone.
To date, Yulong has received three assignments to recycle construction waste in the Zone and three more in Zheng Dong New District of Zhengzhou City. The Company has already completed three of these assignments within a period of four months. Revenue from all six assignments in fiscal 2016 would add up to approximately $3.8 million, if all projects are completed on time. For fiscal 2016, Yulong expects to generate approximately $7 million in total revenue from its waste management business, which also includes projects in the cities of Pingdingshan and Shangqiu.
Yulong Zhu, the Company�s Chief Executive Officer, noted, �We continue to make great progress in our construction waste management operations in Zhengzhou City. We have completed three of our assignments ahead of schedule, and have sufficient available recycling capacity to handle these two new assignments quickly, further reinforcing our belief that we will retain our status as the only construction waste management services provider within the Zone.�
Mr. Zhu concluded, �We expect to receive new assignments to service additional villages in both the Zone and Zheng Dong New District in the coming months. We believe that these two areas have the potential to generate for the Company up to $55 million over a period of five years (the Zone), and $35 million over a period of four years (Zheng Dong New District), from the recycling of construction waste and also a significant amount of incremental revenue from the sale of recycled construction waste as raw material to local construction companies. Our business plan calls for the purchase of several new mobile recycling stations, and we are confident that the market for construction waste management services, especially in Zhengzhou City, will grow fast.�
Contract Awards
PINGDINGSHAN, China--(BUSINESS WIRE Yulong Eco-Materials Limited (NasdaqCM: YECO), a vertically-integrated manufacturer of eco-friendly building products, today announced it has signed an agreement to process and recycle construction waste in Zheng Dong New District of Zhengzhou City -- the provincial capital of Henan Province -- and has commenced work on the project in the District�s Gaozhuang administrative village.
As a result of the agreement, signed with the District�s Municipal Construction Office, Yulong � on a timetable set by the Construction Office � will service each of the District�s 28 administrative villages as may be assigned by the Construction Office, and will receive approximately $2.35 (15RMB) per cubic meter of construction waste processed.
In Gaozhuang, Yulong expects to recycle roughly 586,000 cubic meters of construction waste, generating nearly $1.4 million in revenue.
According to the Construction Office, all 28 villages are expected to produce more than 15 million cubic meters of construction waste over the next four years, equating to total potential revenue to Yulong of over $35 million, if all 28 villages are assigned to and serviced by the company.
In addition to revenue received from its recycling services in the District, Yulong shall also have the right to sell its processed waste to local construction companies as recycled raw materials, which would produce additional incremental revenue.
To date, Yulong is the only company appointed to process construction waste in the District. Although the company�s agreement with the Construction Office does allow for the possibility that other recycling providers may become involved, Yulong�s CEO, Mr. Yulong Zhu said he is positioning the company to be able to service as many of the villages as may be assigned by the Construction Office, and expects to be working in at least six villages by the end of next June.
To service these villages, the company plans to utilize up to five mobile recycling stations -- including four that Yulong is in the process of acquiring -- each with an annual processing capacity of two million metric tons.
One of these stations is currently in use in Gaozhuang, and the other four stations will be deployed across the District as additional villages are assigned to Yulong.
In each village Yulong will be required to complete processing of the waste within a specified length of time, to be determined by the total volume of waste at hand.
Mr. Zhu noted, �We are very proud to have signed this agreement � our second in a new city within two months, and one of the largest contracts we have signed to date. We strongly believe this agreement further validates our growth strategy of expanding our recycling business beyond our base in Pingdingshan and offering other local and provincial governments a cost-effective and technically advanced solution to manage and reduce their construction waste and related pollution.�
The company is currently submitting additional contract bids in several of these areas, added Mr. Zhu, and hopes to provide an update on this progress in the near future
Comments & Business Outlook
First Quarter 2016 Financial Results
TOTAL REVENUES were $13,350,868 vs. last years same quarterly results of $11,676,915.
EARNINGS PER SHARE Basic and diluted was $0.30 vs. last years same quarter of $0.29.
As expected, fiscal 2016 Q1 top and bottom line improved substantially as compared to fiscal 2015 Q1 due to incremental revenue of $2 million contributed by the company�s construction waste management (CWM) division, which commenced commercial operations in April 2015. This CWM revenue more than offset the slight decreases in Yulong�s brick and concrete products� revenue compared to the same period of fiscal 2015. Of note, Yulong�s CWM division generated approximately $0.7 million in fiscal 2015 Q4. We expect this positive trend to continue in the coming quarters and generate significant revenue from our recently signed CWM contracts.
The company�s CWM division posted a gross margin of 63.4%, the highest rate ever achieved by a company division and the primary catalyst for Yulong�s improved bottom line performance in the quarter.
Business update
Stable traditional fly-ash brick and concrete divisions
CWM operations started in April 2015 with a 20-year exclusive license in Pingdingshan City
Expanded CWM service to Shangqiu City with a contract worth up to $3.9 million related to a high speed train project, in July 2015
Commenced CWM service in Zhengdong New District in Zhengzhou City with a contract potentially worth up to $35 million, in September 2015
Commenced CWM service in Zhengzhou Airport Zone in Zhengzhou City with a contract potentially worth up to $55 million, in September 2015
Obtained a 25-year exclusive license of CWM service in Shangqiu City with total potential revenue of up to $170 million, in September 2015
Commenting on the company�s improved performance in the first quarter of fiscal 2016, chief executive Yulong Zhu said, �The CWM division played an essential role in helping us expand our operations to additional cities, and added nearly $2 million in high margin revenue while tapping into a new market with enormous growth possibilities.
"Currently, the CWM division is providing recycling services to the Zhengzhou City Airport Zone -- a contract potentially worth $55 million in revenue over five years -- as well as processing and recycling construction waste in Shangqiu, an exclusive 25- year contract worth about $7 million in revenue per year."
Mr. Zhu continued, "By the third quarter of fiscal 2016, we expect the CWM division to begin selling its recycled waste materials to contractors constructing major roads and highways in Henan Province. We project these sales to generate between $7.0 million and $9.5 million per year, with gross margin of over 50%."
Mr. Zhu concluded, "At September 30, 2015, Yulong had cash and cash equivalents of about $30 million. During fiscal 2016 Q1, the company generated approximately $4 million in cash from operations, mainly from its traditional fly-ash brick and concrete divisions, which continue to generate stable cash flow."
Comments & Business Outlook
PINGDINGSHAN, China--(BUSINESS WIRE )--
Yulong Eco-Materials Limited (NasdaqCM:YECO), an eco-friendly building products and construction waste management company, today announced it expects to report that its fiscal 2016 Q1 net income for the three months ended September 30, 2015 will increase by about 50 percent to approximately $3.5 million, compared to the $2.3 million in net income reported in the same quarter last year.
The main reason for this anticipated improvement is the estimated $2 million in fiscal 2016 Q1 revenue contributed by the company�s waste hauling and recycling division, which commenced operations in the fourth quarter of fiscal 2015. The gross margin on this revenue is about 60 percent, the highest of all company divisions.
Yulong expects to report that its overall fiscal 2016 Q1 revenue grew by about 14 percent to over $13 million.
The company will issue its full fiscal 2016 Q1 financial results on or around November 16, 2015.
Shareholder Letters
PINGDINGSHAN, China--(BUSINESS WIRE)--
Yulong Eco-Materials Limited (NasdaqCM:YECO) , an eco-friendly building products and construction waste recycling company, today released its first Letter to Shareholders from Yulong Zhu, Chief Executive Officer, addressing the Company’s achievements in fiscal 2015, recent developments, expectations for fiscal 2016 and its outlook over the longer-term.
Dear Fellow Shareholders,
Fiscal 2015 was a highly successful and productive year for Yulong Eco-Materials. I am proud to report that during the year we achieved many key goals and laid the groundwork for becoming one of the leading companies of its kind in all of China.
Founded in 2004 in the City of Pingdingshan, Henan Province, Yulong processes and recycles solid waste into construction materials that are eco-friendly, efficient and highly profitable; and currently we are Pingdingshan’s leading manufacturer of fly-ash bricks and ready-mixed concrete.
In early 2010, we made the strategic decision to focus on expanding our recycling business to take advantage of the tremendous new business opportunities created by the strong demand for waste collection and recycling services, and to address critical environmental issues created by China’s ongoing modernization.
In 2012, we received a 20-year exclusive license to deploy construction waste management services in the built-up area of Pingdingshan. That same year, we started construction of a waste processing center that became operational in April 2015 and today we are an exclusive hauler and processor of construction waste for the city of Pingdingshan and Shangqiu. Our hauling and recycling operations now offer both local and provincial governments a cost-effective and technically advanced solution to manage and reduce their construction waste and related pollution.
In conjunction with our recycling center, we constructed a new brick production line in the city to convert the recycled material into bricks used in many industrial and commercial applications. Heated by a solar panel system and built to sharply reduce the pollution caused from burning coal, this production line opened this year and is currently cited as one of the ten most important projects in Henan Province.
Additionally, we recently completed a state-of-the-art research center that will be instrumental in developing new eco-friendly products and increase the efficiency of our existing construction waste products.
Profitably Growing our Business -Well Positioned to Support Future Growth
For fiscal 2015 we reported revenue of $46.2 million and net profit of $8.7 million, or $1.08 per diluted share.
With the commencement of the recycling operations in April 2015, fiscal 2015 results included some revenue from that business. Although the contribution from recycling to fiscal 2015’s performance was not significant, this business segment is expected to become a material contributor to both top and bottom lines in fiscal 2016.
We closed fiscal 2015 with $16.5 million in cash, and the IPO then contributed an additional $10.9 million in early July. Our cash position is now sufficient to support our R&D and marketing initiatives and other expansion efforts.
Additionally, our short-term debt was significantly reduced by converting roughly $10 million of this debt into about 1.6 million shares at our IPO price of $6.25.
Recent Contracts
With a strong base established in Pingdingshan, in mid-July we began to expand our recycling business to other cities in Henan Province. Recently, we won several contracts as follows:
An agreement worth up to $3.9 million, over 18-months, to clean and process construction waste at a section of a new high-speed railway in the Lingyuan District of the City of Shangqiu.
An agreement potentially worth up to $35 million, over the next four years, to recycle construction waste for the Zheng Dong New District of Zhengzhou City.
An agreement potentially worth up to $55 million for a period of five years to provide recycling services to the Zhengzhou City Airport Zone.
A 25-year exclusive waste hauling and recycling contract, with potential revenue of $7 million annually or $170 million over the life of the contract, for the city of Shangqiu.
To service our hauling contracts in Pingdingshan and other cities in Henan Province, we currently use our fleet of 50 trucks, while for our recycling contracts we are utilize our newly built recycling center in Pingdingshan and five portable recycling stations deployed in Zhengzhou and Shangqiu.
Expanding Our Capabilities
Our business plan calls for significant investments to increase our fleet to over 300 hauling trucks in fiscal 2016 through the purchase of additional trucks (70 already contracted) or the acquisition of local hauling companies. We also plan to purchase six new portable recycling stations and build a new recycling center in Shangqiu, to service our 25-year exclusive recycling contract in this city.
Most recently, we announced the signing of two cooperation agreements with a leading scientific institute in Henan Province. This will help us produce a technical code governing the use of recycled construction waste materials in the production of roadbed -- a road’s surface -- in the Province. This government-approved code will enable us to sell our recycled waste materials to contractors constructing major roads and highways in Henan Province.
Expectations for Fiscal 2016
Based on these recent developments, contracts already in place, and new contracts in the pipeline, we expect our hauling and recycling business to be the catalyst for our top and bottom line growth for fiscal 2016 and beyond. Supported by our solid fly ash brick and concrete business segments, we expect our waste management operations to generate approximately 20% of our total revenue for fiscal 2016 and over 30% in subsequent years.
Looking Ahead: Well Positioned for a Bright Future
As a public company cognizant of maximizing value for our shareholders, we have also been stepping up efforts to secure the attention of major media across the globe. Since going public this past summer, Yulong has thus far received excellent media coverage from BusinessWeek, U.S. China Daily and South China Morning Post. Most recently, the company was featured in a video news-story on Bloomberg TV: http://www.bloomberg.com/news/videos/2015-10-22/turning-china-s-demolition-trash-to-treasure.
Going forward, I am highly optimistic that, as we continue to expand our business into new cities both in and out of Henan Province, our successes of fiscal 2015 will multiply during this current fiscal year. Due to our sound strategy and solid business plan, Yulong is well-positioned to further grow its business and increase shareholder value.
Longer-term, as our resources and capabilities grow, I couldn’t be more optimistic about the company’s future. I believe we can and will achieve full nationwide expansion over the next decade.
In conclusion, on behalf of our management and Board, I extend our heartfelt thanks to you, our Shareholders, for your support and contributions to helping make our company a success. Together, I believe that our vision, hard work and ongoing commitment to excellence will bring on an increasingly bright and prosperous future. Our best days are still ahead of us.
Thank you
Yulong Zhu
Contract Awards
PINGDINGSHAN, China--(BUSINESS WIRE Yulong Eco-Materials Limited (NasdaqCM: YECO), a vertically-integrated manufacturer of eco-friendly building products, today announced it has signed an agreement to process and recycle construction waste in Zheng Dong New District of Zhengzhou City -- the provincial capital of Henan Province -- and has commenced work on the project in the District�s Gaozhuang administrative village.
As a result of the agreement, signed with the District�s Municipal Construction Office, Yulong � on a timetable set by the Construction Office � will service each of the District�s 28 administrative villages as may be assigned by the Construction Office, and will receive approximately $2.35 (15RMB) per cubic meter of construction waste processed.
In Gaozhuang, Yulong expects to recycle roughly 586,000 cubic meters of construction waste, generating nearly $1.4 million in revenue.
According to the Construction Office, all 28 villages are expected to produce more than 15 million cubic meters of construction waste over the next four years, equating to total potential revenue to Yulong of over $35 million, if all 28 villages are assigned to and serviced by the company.
In addition to revenue received from its recycling services in the District, Yulong shall also have the right to sell its processed waste to local construction companies as recycled raw materials, which would produce additional incremental revenue.
To date, Yulong is the only company appointed to process construction waste in the District. Although the company�s agreement with the Construction Office does allow for the possibility that other recycling providers may become involved, Yulong�s CEO, Mr. Yulong Zhu said he is positioning the company to be able to service as many of the villages as may be assigned by the Construction Office, and expects to be working in at least six villages by the end of next June.
To service these villages, the company plans to utilize up to five mobile recycling stations -- including four that Yulong is in the process of acquiring -- each with an annual processing capacity of two million metric tons.
One of these stations is currently in use in Gaozhuang, and the other four stations will be deployed across the District as additional villages are assigned to Yulong.
In each village Yulong will be required to complete processing of the waste within a specified length of time, to be determined by the total volume of waste at hand.
Mr. Zhu noted, �We are very proud to have signed this agreement � our second in a new city within two months, and one of the largest contracts we have signed to date. We strongly believe this agreement further validates our growth strategy of expanding our recycling business beyond our base in Pingdingshan and offering other local and provincial governments a cost-effective and technically advanced solution to manage and reduce their construction waste and related pollution.�
The company is currently submitting additional contract bids in several of these areas, added Mr. Zhu, and hopes to provide an update on this progress in the near future.
Comments & Business Outlook
PINGDINGSHAN, China--(BUSINESS WIRE )--
Yulong Eco-Materials Limited (NasdaqCM:YECO), an eco-friendly building products and construction waste recycling company, today said it has signed two cooperation agreements expected to speed the company�s ability to sell its recycled waste materials for use in major road and highway construction projects in Henan Province.
As per the agreements, signed with the Henan Communication Science and Technology Research Institute, Ltd., the parties expect to produce and submit to Henan Province authorities by November 30 a technical code governing the use of recycled construction waste materials in the production of roadbed -- a road�s surface -- in the Province. This code would include such parameters as the type and amount of recycled construction waste used in the roadbed, as well as the roadbed�s thickness, strength and other qualities affecting overall roadbed quality and safety.
Yulong will subsequently file this code with the National Bureau of Quality and Technical Supervision, after which the company will be able to sell its recycled construction waste to road contractors performing major projects such as highways, expressways, and other high quality road projects in Henan Province.
These sales could commence as early as February, said the company.
Yulong currently owns over one million cubic meters of recycled construction waste in Henan Province, which the company expects to sell at 15 to 20 RMB, or about $2.35 to $3.15, per cubic meter, thus generating revenue of 15 to 20 million RMB, or approximately $2.35 to $3.15 million, in calendar 2016.
Going forward, Yulong expects to sell about three million cubic meters of recycled waste materials per year, representing further potential annual revenue of about 45 to 60 million RMB, or about $7.1 to $9.5 million.
�Recycled waste sales represent a new revenue and profit center for us,� said chief executive Mr. Yulong Zhu. �We expect that, once this revenue stream begins, it will augment our total annual revenue by 15 to 20 percent.�
In addition, said the CEO, the use of recycled waste for road and highway construction would help Henan Province reduce the use of environmentally harmful components such as sand, stone and similar materials, whose manufacture causes significant greenhouse gas emissions.
Contract Awards
PINGDINGSHAN, China--(BUSINESS WIRE )--
Yulong Eco-Materials Limited (NasdaqCM:YECO), an eco-friendly building products and construction waste recycling company, today said it has signed an agreement to provide construction waste recycling services in various villages within the Zhengzhou City Airport Zone, formally known as the Zhengzhou Comprehensive Experimental Zone for Airport-based Economy. The Zone is a 160 square mile area currently undergoing development as both a modernized air, railway and highway transportation hub and an airport-based metropolitan center.
As per the agreement, signed with one of the Zone�s Administrative Offices, Yulong has commenced servicing the 757 homesteads of Xiaoli Village. For this project, the company will receive 3800 RMB, or about $600, per homestead. Half of this fee shall be remitted upon processing of the homestead�s waste and the other half upon cleaning of the homestead. Yulong expects to complete its work in the village by early next month.
Additional assignments within the Zone are likely forthcoming, said Yulong, and have total potential revenue to the company of up to $55 million over five years. This estimate is based upon the Zone�s total of 165 villages averaging about 550 homesteads each.
In addition, Yulong shall have the right to sell its processed waste within the Zone to local construction companies as recycled raw materials, a process that should generate �significant incremental revenue.�
Yulong is currently deploying two mobile recycling stations in the Zone, each with an annual processing capacity of two million metric tons, and is preparing to deploy additional stations, as necessary, to process all construction waste under the contract.
Although the contract is not exclusive, Yulong is currently the Zone�s only recycling service provider.
�This is our fourth recycling contract outside of our base in Pingdingshan within the last three months,� said chief executive officer Mr. Yulong Zhu. �We are especially excited about this agreement and its great revenue potential to our company, and believe we will retain our status as the only recycling provider within this area.�
Mr. Zhu said he expects the company to announce further assignments within the Zone �in the coming weeks.�
Contract Awards
PINGDINGSHAN, China--(BUSINESS WIRE Yulong Eco-Materials Limited (NasdaqCM:YECO) , an eco-friendly building products and construction waste recycling company, today announced it has received an exclusive 25-year contract from Shangqiu City in Henan Province to haul and recycle construction waste within a 77 square-mile section of that city�s metro area, and that it expects to commence work on the contract this month.
Under the contract, signed with the City Management Bureau of Shangqiu City, Yulong is entitled to receive from the Bureau a fee of 22 RMB, or approximately $3.45, for each metric ton of waste the company collects. According to the Bureau, the contract area is expected to generate over two million metric tons of construction waste per year for the foreseeable future, giving potential revenue to Yulong of about $7 million annually or $170 million over 25 years.
As per the contract, Yulong shall also have the right to sell all recycled waste materials to third parties for use in local construction projects, a process that is expected to generate significant incremental revenue for the company over the life of the contract.
Also per the contract, the Bureau will help Yulong apply for all applicable Central Government subsidies available for those companies furthering the use of recycled building materials in city construction projects. In addition, the Bureau will help Yulong promote the sale of its recycled waste materials to local third parties.
The agreement stipulates that in order to maintain its role as Shangqiu�s exclusive service provider, Yulong must 1) have the land for recycling the construction waste fully secured and ready for use by March 18, 2016; 2) provide hauling trucks and have a recycling production line and necessary auxiliary facilities ready by March 18, 2017; and 3) process at least 90% of the construction waste generated within the contract area during each year of the contract.
As directed by the Bureau, Yulong is currently in the process of establishing a locally registered subsidiary, under its Yulong Renewable division, to which the Bureau will issue the relevant licenses required by the contract. This process, though required to be completed by March 18, 2016, will likely be completed within 60 days and will not delay or prevent the company from commencing work on the contract this month.
Today�s news follows Yulong�s August announcement that it had secured an agreement to provide waste hauling and recycling operations on a high-speed rail project in Shangqiu, and a September announcement that the company had landed a construction waste agreement for Zhengzhou City.
Those two agreements have combined potential project revenue of $39 million over four years.
�We are excited to have secured this newest hauling and recycling agreement in Shangqiu,� said Yulong CEO Mr. Yulong Zhu. �This 25-year contract is not only an endorsement of our company�s skill and resources in efficiently hauling and recycling urban construction waste, it is also further evidence that we are successfully branching out from our base in Pingdingshan and securing substantial long-term agreements that should steadily improve our top and bottom line performance for this fiscal year and others to come.�
Comments & Business Outlook
YULONG ECO-MATERIALS LIMITED AND SUBSIDIARIES
For the Years Ended
2015
2014
REVENUES
Bricks
$
15,586,654
$
14,956,906
Concrete
29,967,622
29,499,530
Recycling
676,108
-
TOTAL REVENUES
46,230,384
44,456,436
COST OF REVENUES
Bricks
6,139,759
5,773,533
Concrete
22,883,040
21,729,928
Recycling
340,186
-
TOTAL COST OF REVENUES
29,362,985
27,503,461
GROSS PROFIT
16,867,399
16,952,975
OPERATING EXPENSES:
Selling
634,390
930,470
General and administrative
3,374,557
806,037
Total operating expenses
4,008,947
1,736,507
INCOME FROM OPERATIONS
12,858,452
15,216,468
OTHER INCOME (EXPENSE), net
Interest income
70,065
18,186
Interest expense
(1,297,102
)
(1,183,580
)
Other finance expense
(1,094
)
(16,628
)
Other expense, net
(52,731
)
(83,125
)
Total other expense, net
(1,280,862
)
(1,265,147
)
INCOME BEFORE INCOME TAXES
11,577,590
13,951,321
PROVISION FOR INCOME TAXES
2,898,019
3,259,147
NET INCOME
8,679,571
10,692,174
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustments
326,188
94,109
COMPREHENSIVE INCOME
$
9,005,759
$
10,786,283
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
Basic and diluted*
8,000,000
8,000,000
EARNINGS PER SHARE
Basic and diluted*
$
1.08
$
1.34
Management Discussion and Analysis
Revenue
Our revenue increased by $1,773,948 or 4.0% to $46,230,384, as compared to a year ago.
One cause for the revenue increase is higher brick sales volume from customer demand for fly-ash bricks. The other cause is the revenue from our recycling operation which formally commenced in April 2015. Recycling revenue is generated from hauling construction wastes and from sales of recycled aggregates and recycled bricks. Such revenue, however, was immaterial as a percentage of our total revenue.
Net income for the year ended June 30, 2015 was $8,679,571, as compared to $10,692,174 for the same period last year.
Comments & Business Outlook
PINGDINGSHAN, China--(BUSINESS WIRE Yulong Eco-Materials Limited (NasdaqCM: YECO), a vertically-integrated manufacturer of eco-friendly building products, today announced it has signed an agreement to process and recycle construction waste in Zheng Dong New District of Zhengzhou City -- the provincial capital of Henan Province -- and has commenced work on the project in the District�s Gaozhuang administrative village.
As a result of the agreement, signed with the District�s Municipal Construction Office, Yulong � on a timetable set by the Construction Office � will service each of the District�s 28 administrative villages as may be assigned by the Construction Office, and will receive approximately $2.35 (15RMB) per cubic meter of construction waste processed.
In Gaozhuang, Yulong expects to recycle roughly 586,000 cubic meters of construction waste, generating nearly $1.4 million in revenue.
According to the Construction Office, all 28 villages are expected to produce more than 15 million cubic meters of construction waste over the next four years, equating to total potential revenue to Yulong of over $35 million, if all 28 villages are assigned to and serviced by the company.
In addition to revenue received from its recycling services in the District, Yulong shall also have the right to sell its processed waste to local construction companies as recycled raw materials, which would produce additional incremental revenue.
To date, Yulong is the only company appointed to process construction waste in the District. Although the company�s agreement with the Construction Office does allow for the possibility that other recycling providers may become involved, Yulong�s CEO, Mr. Yulong Zhu said he is positioning the company to be able to service as many of the villages as may be assigned by the Construction Office, and expects to be working in at least six villages by the end of next June.
To service these villages, the company plans to utilize up to five mobile recycling stations -- including four that Yulong is in the process of acquiring -- each with an annual processing capacity of two million metric tons.
One of these stations is currently in use in Gaozhuang, and the other four stations will be deployed across the District as additional villages are assigned to Yulong.
In each village Yulong will be required to complete processing of the waste within a specified length of time, to be determined by the total volume of waste at hand.
Mr. Zhu noted, �We are very proud to have signed this agreement � our second in a new city within two months, and one of the largest contracts we have signed to date. We strongly believe this agreement further validates our growth strategy of expanding our recycling business beyond our base in Pingdingshan and offering other local and provincial governments a cost-effective and technically advanced solution to manage and reduce their construction waste and related pollution.�
The company is currently submitting additional contract bids in several of these areas, added Mr. Zhu, and hopes to provide an update on this progress in the near future.
Contract Awards
PINGDINGSHAN, China--(BUSINESS WIRE Yulong Eco-Materials Limited (NasdaqCM: YECO), a vertically-integrated manufacturer of eco-friendly building products, today announced it has signed an agreement to process and recycle construction waste in Zheng Dong New District of Zhengzhou City -- the provincial capital of Henan Province -- and has commenced work on the project in the District�s Gaozhuang administrative village.
As a result of the agreement, signed with the District�s Municipal Construction Office, Yulong � on a timetable set by the Construction Office � will service each of the District�s 28 administrative villages as may be assigned by the Construction Office, and will receive approximately $2.35 (15RMB) per cubic meter of construction waste processed.
In Gaozhuang, Yulong expects to recycle roughly 586,000 cubic meters of construction waste, generating nearly $1.4 million in revenue.
According to the Construction Office, all 28 villages are expected to produce more than 15 million cubic meters of construction waste over the next four years, equating to total potential revenue to Yulong of over $35 million, if all 28 villages are assigned to and serviced by the company.
In addition to revenue received from its recycling services in the District, Yulong shall also have the right to sell its processed waste to local construction companies as recycled raw materials, which would produce additional incremental revenue.
To date, Yulong is the only company appointed to process construction waste in the District. Although the company�s agreement with the Construction Office does allow for the possibility that other recycling providers may become involved, Yulong�s CEO, Mr. Yulong Zhu said he is positioning the company to be able to service as many of the villages as may be assigned by the Construction Office, and expects to be working in at least six villages by the end of next June.
To service these villages, the company plans to utilize up to five mobile recycling stations -- including four that Yulong is in the process of acquiring -- each with an annual processing capacity of two million metric tons.
One of these stations is currently in use in Gaozhuang, and the other four stations will be deployed across the District as additional villages are assigned to Yulong.
In each village Yulong will be required to complete processing of the waste within a specified length of time, to be determined by the total volume of waste at hand.
Mr. Zhu noted, �We are very proud to have signed this agreement � our second in a new city within two months, and one of the largest contracts we have signed to date. We strongly believe this agreement further validates our growth strategy of expanding our recycling business beyond our base in Pingdingshan and offering other local and provincial governments a cost-effective and technically advanced solution to manage and reduce their construction waste and related pollution.�
The company is currently submitting additional contract bids in several of these areas, added Mr. Zhu, and hopes to provide an update on this progress in the near future.
