Tri-Tech (NASDAQ:TRIT)

• Revenues declined by 45.5% to $10.5 million, compared to$19.2 million in first quarter 2012.
• Gross profit declined by 55.3% to $2.3 million compared to $5.2 million in first quarter 2012. Gross margin decreased to 22.3% from 27.1% in the first quarter of 2012.  
• Net loss was $1.1 million, compared to net income of $1.4 million in the same period of 2012.
• Diluted earnings per share was a loss of $0.13 compared to a gain of $0.17 per share in the same period of 2012

Mr. Gavin Cheng, CEO of Tri-Tech Holding Inc. commented, "The Company has experienced another quarter of loss due primarily to delays in implementing a number of projects as clients required project design adjustments. These delays in turn slowed project-related revenue recognition. As new competitors entered the market and competed on pricing, our gross margin suffered. In an effort to broaden its market coverage, the Company increased spending and efforts in sales and marketing. The Company believes its strategies will position the Company well for the long term and thanks our shareholders for their continued confidence in these efforts and our Company."

• , Total Revenues declined by 15.4% to $72.6 million compared to $85.9 million in FY 2011.
  • Revenue from the Water, Wastewater Treatment and Municipal Infrastructure ("WWTM") declined by 55.3% to $26.0 million from $58.1 million;
  • Revenue from the Water Resource Management System and Engineering Service ("WRME") increased by 72.6% to$22.3 million from $12.9 million; and,
  • Revenue from Industrial Pollution Control and Safety ("IPCS") increased by 64.2% to $24.3 million from $14.8 million;
• In 2012, Gross Profit declined by 19.9% to $17.5 million compared to $21.9 million in FY 2011. Gross Margin dropped to 24.1% from 25.5% from a year ago.
• Income From Operations declined to a loss of $0.8 million compared to a gain of $10.7 million from a year ago.
• Net Income declined to a loss of $2.3 million compared to a gain of $8.1 million in 2011.
• Weighted average number of diluted shares outstanding was 8,211,089 compared to 8,238,291 from FY2011.
• Diluted Earnings Per Share was a loss of $0.28 compared to a gain of $0.98 from 2011.

Mr. Gavin Cheng, CEO of Tri-Tech Holding Inc. commented, "Overall, we experienced deteriorations in our fiscal 2012 operating results compared with that of 2011. Despite a noteworthy increase in sales in both the WRME and IPCS segments, we sustained significant reduction in sales in WWTM segment which hindered our performances. The reduction was partially due to our decision to avoid Build & Transfer projects to ease cash pressures. The deviation led us to focus on Engineering Procurement & Construction ("EPC") projects which usually feature a lower profit margin compared to that of BT projects. Furthermore, we saw delays in implementation in major projects in the WWTM segment which further impacted our revenues.

Our gross margin overall dropped by about 1percentage point, but our operating related expenses grew by 64.7%. These expenses increased because we increased headcount to compete for more business early in the year. As we encountered challenges in the WWTM segment, we shifted expenditures to grow revenues in the WRME and IPCS segments.

BEIJING, January 5, 2013 /PRNewswire-FirstCall/ -- Tri-Tech Holding Inc. (Nasdaq: TRIT), which provides turn-key water resources management, water and wastewater treatment, industrial safety and pollution control solutions, announced changes to its internal management designed to improve corporate governance and allocate resources to streamline the Company's operations.

Mr. Gavin Cheng, CEO of the Company, said, "As our investors know, Tri-Tech has recently completed several challenging quarters. We have looked not only at developing new sources of revenue but also at controlling expenses and improving operational efficiency in order to strengthen the Company over the long term. In reviewing operations, we determined that the Company needed to have a manager in charge of company-wide operations. Our ideal candidate would be familiar with our Company's various operations and would be experienced with finances. We are pleased that our current Chief Financial Officer, Peter Dong, has agreed to become our new Chief Operating Officer.

"Once Peter stepped down as CFO, we knew we needed a new CFO who was experienced with financial markets and could communicate well with our investors in the US and throughout the world. Our current President, Phil Fan, has been communicating with investors on behalf of the Company since our initial public offering and has studied finance and accounting at Northwestern University's Kellogg School of Management and DeVry's Keller Graduate School of Management."

To help the Company weather the current industry challenges, both the COO and CFO will cooperate on cost control efforts, including potential restructuring, downsizing and cash flow management and budgeting. The COO will oversee the Company's existing lines of business of its four Chinese subsidiaries and the Department of Human Resources. The CFO will focus on improving cash flow management and strategic planning and will manage the Department of Accounting Management.

Mr. Warren Zhao, Chairman of the Board of Directors of the Company added, "In addition to these operational changes, I have resigned as Joint Chief Executive Officer because we believe shareholders will benefit from separating the roles of CEO and Chairman of the Board of Directors. Gavin will be the Company's CEO, and I will serve as the Chairman, in addition to overseeing the Company's research facility."

The Chairman of the Board will focus on leading the Board and enhancing corporate governance. The CEO will formulate a new strategy to battle the current setbacks and seek future opportunities to fuel growth

Key Financial Results of Q3 2012

• Total revenues $16.3 million vs last years $23.7 million.Income from Operations
• Loss from operations totaled $282 thousand, a 109.0% decrease from $3.1 million in Q3 2011.
• Net Income and EPS Diluted net loss per share was $0.08, based on net loss of $677 thousand and weighted average number of diluted shares outstanding for the quarter ended September 30, 2012 of 8,215,536, compared to $0.24 in Q3 2011, based on net income of $1.9 million and weighted average number of diluted shares outstanding of 8,160,407 in Q3 2011.

Mr. Warren Zhao, Joint CEO of the Company, commented on the operating results, "While we continued to grow in two of our three operating segments, the third quarter of 2012 was a challenging one for our company as a whole. This was because overall revenues decreased and expenses grew in our historically largest segment, resulting in net losses for our company. These challenges primarily related to (i) difficulties driving revenues in the municipal water, wastewater and industrial markets, largely due to reduced local government spending and uncertain economic growth in our industry; (ii) unanticipated customer-driven delays in evaluating project bids; (iii) slowed revenue recognition from several of our large projects, resulting from regulatory requirements and customers' changed engineering requirements, which made us extend our projects schedule; and (iv) substantial increases in operating expenses, mainly due to headcount, which increased by 59% to 474 by the end of the third quarter from 299 a year ago.

"Although we are striving to diversify our customer base beyond our core of government-related or state-owned entities, these efforts will take time. Uncertain industrial economic growth and delayed and more restrained fiscal expenditure plans in sectors we focus on (due in part to the central government transition in China), rising labor and raw materials costs, and intense market competition presented unprecedented challenges to our profit growth.

"To address these challenges and improve profitability, we will focus on completing existing projects to convert our backlog into revenues as efficiently as possible. While we will continue to seek new projects, we will seek to reduce our sales expense growth rate and control overall operating expenses. In addition, we will continue striving to grow our market share in the three lines of business by adjusting our strategies to current market conditions, such as, for example, focusing on projects that tie up less of our resources, projects in smaller, less well-developed areas and projects that benefit from government fiscal support."

Fiscal 2012 Guidance Update

Based on the performance in the third quarter of 2012 and the estimate for the fourth quarter, the Company expects revenues to be around $80 million. Assuming the weighted average number of diluted shares remains the same, we expect our EPS to be around $0.04. These are the Company's targets, not predictions of the actual performance. The foregoing statements regarding targets are forward-looking and actual results may differ materially.

Second fiscal quarter ended June 30, 2012 

• Net income for the quarter was $1.4 million, a 22.2% decrease from that of $1.8 million in Q2 2011.
• Gross profit was $5.8 million for the quarter, slightly higher than that for Q2 2011.
• Gross margin for the quarter declined slightly from 26.3% for the second quarter of 2011 to 25.3% for the same period this year.
• Diluted EPS was $0.17 compared to that of $0.21 in Q2 2011.

Fiscal 2012 Guidance Reaffirmation

Based on the performance in the second quarter of 2012 and the estimate for the remaining quarters, the Company reaffirms its previously announced guidance for fiscal 2012. Revenues are expected to be between$103 million to $128 million. Net income will likely be between $9.7 million and $12.1 million. Assuming the weighted average number of diluted shares remains the same, we expect our EPS to be between $1.18 and $1.47. These are the Company's targets, not predictions of actual performance. The foregoing statements regarding targets are forward-looking and actual results may differ materially.

Mr. Warren Zhao, Joint CEO of the Company, commented, "We continued to accomplish a moderate growth in the second quarter 2012. Although we reported stronger-than-expected results from our water resources management and industrial pollution control and safety segments, our municipal water and wastewater treatment business declined due to the slow progress on several key projects. The impact from the macroeconomic environment, including rising financing, labor and raw materials costs, as well as the weakened market demands, presented unprecedented challenges to our sales in the second quarter.

"To address the challenges, we are improving our profitability through enhanced corporate governance and cost efficiency. On the other hand, we also emphasize strategic market development where our core technological advantages allow us a competitive edge over our competitors. In addition, we will grow our market share in the water and wastewater treatment segment overseas in order to diversify our revenue stream portfolio."

Performance Highlights in First Quarter of 2012

• Revenue from Water Resource Management Systems and Engineering Services increased 281.1% to $6.2 million from $1.6 million in Q1 2011
• Revenue from Industrial Pollution Control and Safety increased 51.6% to $4.6 million from $3 million in Q1 2011
• Gross profit was $5.2 million, slightly above $5 million in Q1 2011
• Gross margin decreased slightly to 27.1%, compared to 28.5% for Q1 2011 but marked the first improvement in a quarter since the quarter ended June 30, 2011
• Weighted average number of diluted shares outstanding was 8,317,224 for Q1 2012, compared to 8,155,222 for Q1 2011

The decrease in net income and EPS was due to several factors in the first quarter: relatively sluggish revenue recognition from several of the Company's largest projects such as the expansion phase of the Odors water processing plant and India wastewater system projects; delays between project awards and implementation, and a substantial increase in operating expenses mainly due to continued hiring of staff for business development and project execution to meet aggressive market expansion goals. As occurs each year, the company's revenues, net income and EPS decreased from the fourth quarter of 2011 to the first quarter of 2012, as winter weather and long holiday periods adversely affected sales.

Year 2012 Guidance Reaffirmation

Based on the performance in the first quarter of 2012 and the estimate for the remaining quarters, the Company reaffirms the previously announced guidance for the year 2012. Revenue is expected to be between $103 million to $128 million. Net income will likely be between $9.7 million and $12.1 million. Assuming the number of total shares outstanding remains at 8,317,224, excluding the 21,100 shares held in treasury, we expect our earnings-per-share ("EPS") to range from $1.18 to $1.47. These are the Company's targets, not predictions of actual performance. The foregoing statements regarding targets are forward-looking and actual results may differ materially.

Mr. Warren Zhao, Joint CEO of Tri-Tech Holding commented, "We are pleased to report a quarter with solid revenue growth and operational performance, including stronger-than-expected results from our water resources management business and achievements from our international projects in India, Qatar, Canada and Mexico, despite the challenge of the increased project execution costs and market expansion expenses. We are also excited about the strong order backlog and project pipeline we are pursuing, which make us much more confident with the remaining quarters and feel more comfortable to deliver the projected earnings for 2012. Here I would like to review some recent key business developments:

BEIJING, March 27, 2012 /PRNewswire-Asia-FirstCall/ -- Tri-Tech Holding Inc. (Nasdaq: TRIT), which provides turn-key water resources management, water and wastewater treatment, industrial safety and pollution control solutions, announced today that its subsidiary, Tri-Tech Infrastructure LLC ("Tri-Tech U.S."), was awarded a contract from Ambbio, a Mexican water company, to provide a pre-concentrator Mechanical Vapor Compression (MVC) evaporator system and final MVC concentrator for a Mexican steel plant located in Monterrey, Mexico is one of customers of Ambbio who is providing other water processing equipment like Reverse Osmosis (RO) and Ultra-Filtration (UF) systems to the plant. The contract is valued at $3.63 million.

The concentrator unit will concentrate all of the treated water from the RO units to produce pure distillate that can be reused as process water and concentrate the reject water from our unit to zero liquid discharge. The evaporator unit is used to eliminate the discharge of any liquid from the steel making plant. Under the terms of the contract, Tri-Tech U.S. will provide design, engineering, fabrication, supervision of installation, commissioning, performance testing and on-site training service. Tri-Tech U.S. expects to deliver the complete water processing unit by early April 2013.

Mr. Jim Schwartz, General Manager of J&Y Water Division of Tri-Tech U.S. said, "We were confident with our unique technologies while we competed with several global water players for the project. The water treatment unit we will provide to the steel works will use our customized, energy efficient MVC concentrator and evaporator system designs."

Mr. Phil Fan, President of Tri-Tech Holding, Inc. commented, "We are pleased with our first zero liquid discharge unit contract for industrial water treatment in Mexico. Mexico is a brand new market for us. Our successful contract bid fits our strategy of business development in overseas markets perfectly as we emphasize marketing our technical specialties, such as zero liquid discharge for industrial wastewater treatment as well as seawater desalination. We will continue to improve our competitiveness in industrial sector technologies and products and plan to seek more such opportunities in North America and Asia."

Fourth Quarter 2011 Results

• Total revenues for the fourth quarter of 2011 increased by 68.4% to $24.1 million from $14.3 million in the fourth quarter of 2010.
• Gross profit was $5.5 million for the fourth quarter of 2011, approximately equal to $5.5 million in the fourth quarter of 2010.
• Fourth quarter 2011 gross margin decreased from 38.3% to 22.6% in the corresponding period in 2010.
• Income from operations decreased by 35.9% to $2.1 million from $3.3 million in the fourth quarter of 2010.
• Net income slightly increased by 3.7% to $2.7 million from $2.6 million in the fourth quarter of 2010.
• Diluted EPS was $0.32 (based on 8.2 million weighted average diluted shares outstanding), equal to $0.32 in the fourth quarter of 2010 (based on 8.1 million weighted average diluted shares outstanding).

Mr. Warren Zhao, CEO of Tri-Tech Holding, commented, "We are pleased to report solid growth in 2011. Our successful Ordos water treatment plant project continued to contribute considerable revenue last year, and our flash flood monitoring and forecasting projects helped propel the company to record revenue levels. . Beyond the domestic market, we also expanded internationally in 2011, with three sewage water system projects in India, a hotel water treatment project in Canada and a seawater desalination project in Qatar.

"With a strong start already this year, 2012 looks to be another exciting year for Tri-Tech. Although we expect the Chinese economy's growth rate is likely to slow in 2012, we expect that the Chinese government will increase its focus on infrastructure and public health improvements. At the beginning of the year, the Chinese government issued a number of regulations and policies to motivate further development of environmental industries, where measures on pollution control and water conservancy were specified and regulatory standards were raised. We believe these changes will present growing business opportunities for Chinese water companies.

"In view of economic climate changes and the industry trends, we will continue to pursue diversified growth based on geographical expansion, development of broad customer bases across our business segments and flexible business models, such as build-operate-transfer ("BOT"), build-own-operate-subsidy-transfer ("BOOST") and other models like providing turnkey solutions and specialty products. In addition to project deployments in the West and the Northwest of China, we will focus on India, the Middle East and North America. Based on our established relationships with municipalities and government agencies, we will continue to develop opportunities from private and overseas state-owned entity industries particularly in fields such as oil, gas, petrochemical and power. To diversify and improve our revenue portfolio, we will further position ourselves as a provider of engineering, procurement and construction, build-operate-transfer, turnkey solutions, specialty products and facility management in water industry. In particular, some of specialty products, we plan to provide include emerging seawater evaporator technology and zero liquid discharge solution for industrial wastewater treatment. We believe our strategy of pursuing diversified growth in these ways will position us for continued profitability, while making our company even more resilient and less reliant on a limited number of markets and industries."

Order Backlog and Pipeline

As of December 31, 2011, we had a total order backlog of $94.5 million. This included $63.1 million in water treatment services, $16.1 million in water resource management services, and $15.3 million in industrial pollution control services.

In addition to our order backlog, we are currently pursuing prospective projects with a total expected value of $127.1 million, of which approximately $66.8 million is in wastewater treatment and municipal infrastructure, $15.7 million in water resource management and engineering services, and $44.6 million in industrial pollution control and safety. We have not been awarded any of these projects yet, and there are no guarantees that we will be selected for any such projects.

2012 Outlook

In 2012, the Company anticipates that its revenues will be in the range of $103 million to $128 million. Net income will likely be between $9.7 million and $12.1 million. Assuming the number of total outstanding shares remains at 8.26 million without any additional share issuance in 2012, the Company expects earnings-per-share to range from $1.18 to $1.47. These are the company's targets, not predictions of actual performance. The foregoing statements regarding targets are forward-looking and actual results may differ materially.

According to the contracts, the company will establish flash flood monitoring and forecasting systems in five counties in Fujian Province, two counties in Sichuan Province and three total counties and cities spread across Jilin, Hubei and Shanxi provinces. Each system includes an information collection sub-system, an early warning sub-system and an information dissemination platform. The project involves production or procurement of equipment, software development, integration and installation of the system and after-sales service. These projects should be completed at different points in time from late December 2011 to March 2012.

Third Quarter 2011 Results

Second Quarter 2011 Results

• Net revenue for the quarter was $20.2 million, an increase of $12.1 million, or 149.3%, compared to revenue of $8.1 million in the same period of 2010.
• Net income attributable to TRIT shareholders was $1.76 million, an increase of $0.34 million, or 23.9%, from $1.42 million in the same period of 2010.
• Diluted EPS was $0.21, based on net income of $1.76 million and weighted average number of diluted shares outstanding of 8,202,784 for the quarter ended June 30, 2011, compared to $0.19 in the second quarter of 2010, based on net income of $1.42 million and weighted average number of diluted shares outstanding of 7,413,836.

BEIJING, May 13, 2011 /PRNewswire-Asia-FirstCall/ -- Tri-Tech Holding Inc., a premier Chinese company that provides leading turn-key solutions in China for the water resources, water and wastewater treatment, industrial safety and pollution control markets, announced today that

• revenue for the first fiscal quarter ended March 31, 2011 increased 314% to $17.6 million from $4.2 million in Q1 2010.
• Net income for the quarter was $1.7 million or a 108% increase over net income of $0.8 million in Q1 2010.
• Diluted EPS was $0.21 per diluted share compared to that of $0.15 in Q1 2010.

The Company reaffirms the previously announced guidance for the year 2011.  Revenue will reach the range of $69 million to $80 million. Net income will likely be between $11.0 million and $12.8 million. These are the Company's targets, not predictions of actual performance. The foregoing statements regarding targets are forward-looking and actual results may differ materially.

Chief Executive Officer Warren Zhao said, "Tri-Tech's solid first quarter results reflected expected growth in our three lines of businesses, Water/Wastewater Treatment and Municipal Infrastructure, Water Resource Management and Engineering Services and Industrial Pollution Control and Safety. These results provide us with an excellent start to 2011 and bode well for our future. We believe Tri-Tech will continue to maintain rapid growth by providing reliable and workable solutions to complex environmental challenges faced by China's national and local governments and enterprises and addressed in the 12th Five-Year Plan. Our businesses are poised to directly benefit from the increased investment in water and environmental protection infrastructure as China focuses on the sustainability of its economic growth.

TRI-TECH HOLDING INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

FY2010 Highlights

• Revenue for FY 2010 increased 159% to $43.5 million from $16.8 million in FY 2009.
• Revenue from the Water, Wastewater Treatment and Municipal Infrastructure segment increased 113% to $19.1 million.
• Revenue from the Water Resource Management System and Engineering Service segment declined 30% to $5.5 million.
• Revenue from the new segment, Industrial Pollution Control and Safety, was $19.0 million in FY 2010.
• Gross profit (exclusive of depreciation and amortization) increased 123% to $14.8 million for FY 2010 from $6.6 million in FY 2009.
• Gross margin for FY 2010 was 34% vs 39% for FY 2009.
• Income from operations increased 113% to $8.7 million from $4.1 million in FY 2009.
• Net income increased 83.8% to $7.1 million from $3.9 million in FY 2009.
• Diluted earnings per share increased to $0.98 from $0.92 in 2009.
• Weighted average number of diluted shares outstanding was 7,208,969 for FY2010 compared to 4,170,879 for FY 2009.
• A follow-on public offering was completed on April 20, 2010 for the issuance of 2,366,833 ordinary shares at an offering price of $14.00 per share. This included the additional issuance of 224,083 ordinary shares from an over-allotment option exercised by the underwriters on May 5, 2010. The company netted $30.3 million from the offering.

Fourth Quarter 2010 Highlights

• Revenue for Q4 2010 increased 143% to $14.3 million from $5.9 million in Q4 2009.
• Gross profit (exclusive of depreciation and amortization) increased 144% to $5.5 million for Q4 2010 from $2.3 million in Q4 2009.
• Q4 2010 gross margin was 38%, equal to that of Q4 2009
• Income from operations increased 188% to $3.3 million from $1.1 million in Q4 2009.
• Net income increased 96% to $2.6 million from $1.3 million in Q4 2009.
• Diluted earnings per share increased to $0.32, from $0.24 in Q4 2009.
• Weighted average number of diluted shares outstanding was 8.11 million as of the quarter ended December 31, 2010 compared with 5.54 million as of the quarter ended December 31, 2009.

Acquisitions

The company is selectively targeting acquisitions that will add significant value and further enhance its growth. Using a disciplined and conservative approach, the company is studying several prospects and expects to close one or two deals in the near future. The company continues to pursue MBR membrane technology, forward osmosis membrane technology and the latest ecological engineering for wastewater treatment along with advanced solid-liquid separation technology.

Order Backlog and Pipelines

As of December 31, 2010, the company had a total backlog of $59.6 million to be collected in 2011, including $52.3 million in the Water, Wastewater Treatment and Municipal Infrastructure segment. The remaining $7.3 million is in the Water Resource Management ($1 million) and Industrial Pollution Control and Safety segment ($6.3 million).

The company is currently tracking potential projects with a total expected value of $89.7 million, about $58.1 million of which is in the Water, Wastewater Treatment and Municipal Infrastructure segment, $18.3 million in the Water Resource Management segment and $13.3 million in the Industrial Pollution Control and Safety segment.

2011 Outlook

In 2010, Tri-Tech exceeded the company's guidance for total revenue of $40.6 million and net income of $7.0 million. For the year of 2011, the company anticipates

• revenue will reach the range of $69 to $80 million.
• Net Income will likely be between $11.0 and $12.8 million.
• Assuming a number of total outstanding shares of 8,124,433, the company expects EPS will be within the range of $1.35 to $1.57.

These are the company's targets, not predictions of actual performance. The foregoing statements regarding targets are forward-looking and actual results may differ materially.

"We ended 2010 with cash reserves of $24.9 million and receivables of $19.4 million. In addition, we have a $15 million line of credit from the Bank of Hangzhou and we are in active negotiations with other major Chinese banks for additional lines of credit. We believe we will have sufficient funds to continue our growth in 2011.

Development that  investors need to be cognizant of:

Cost of Revenue Our cost of revenue was $12,382,112 in the quarter ended September 30, 2010, an increase of $9,392,023, or 314.1%, compared to cost of revenue of $2,990,089 in the quarter ended September 30, 2009. The increase in our cost of revenue resulted directly from the increased amount of projects during the period. The increase in cost of revenue in the quarter ended September 30, 2010 was more than the increase in revenue because during the period, the proportion of revenue attributable to software sales with high gross margin declined. Meanwhile, due to the impact of the Chinese governmental stimulus plan, the basic materials and equipment price escalation caused the increase in costs, which in turn offset the increase of the revenues, resulting in the lower gross margin. The Company plans to minimize the negative impact of the increase in costs through optimization of product and system design, leveraging our purchasing bargain power, and locally sourcing equipment. As for the existing longer term projects, with a more prudent estimate, the Company foresees the impact being a continuous increase in material costs. Taking these factors into account, the Company is going to adjust its financial forecast in a timely manner to reflect more reliable cost estimates during the course of contract execution.

Third Quarter 2010 Financial Performance

• Revenue was $16.9 million in the quarter ended September 30, 2010, an increase of $12.0 million, or 244%, compared to revenue of $4.9 millionin the same period of 2009.

• Net income attributable to the shareholders of TRIT was $2.2 million, an increase of $1.17 million, or 109%, compared to net income attributable to the shareholders of TRIT of $1.1 million in the same period of 2009.

• Diluted EPS was $0.28 based on net income of $2.24 million and diluted shares outstanding of 7.93 million as of September 30, 2010. This compares with net income of $1.1 million or $0.27 diluted EPS based on diluted shares outstanding of 3.95 million in Q3' 2009.

Chief Executive Officer Warren Zhao said, "Strong results from our Water/Wastewater Treatment and Municipal Infrastructure segment contributed to our strong financial performance in the quarter. We also realized excellent results from our Industrial Pollution Control and Safety business segment and continuing growth from our Water Resources, Management Systems and Engineering Services segment. This growth will likely enable us to meet our performance expectations for the year. We experienced a strong increase in our growing pipeline of projects and increasing opportunities for new business are very visible.

"We are actively working with local Chinese banks to provide us with financial support. We have been granted a total line of credit for RMB100 million (approximately US$15 million) by the Bank of Hangzhou, Beijing Branch. We are also working with other major Chinese banks and expect to acquire more lines of credit to enable us to bid on more and larger projects. The line of credit provides us with the ability to expand and grow our business in a non-dilutive manner. It also strengthens our financial flexibility and optimizes our capital structure," Mr. Zhao said.

Order Backlog

As of October 29, 2010, the Company had a total backlog of $54.9 million, most likely to be collected by the end of 2011. This included $50.5 million in Municipal Water and Wastewater Services, $0.4 million in Water Resources Services and $4.0 million in Industrial Sector Services.

Updated 2010 Outlook

For 2010, the Company now anticipates revenues will reach $40.6 million. Net income is expected to reach $7 million. These are the Company's targets, not predictions of actual performance. The foregoing statements regarding targets are forward-looking and actual results may differ materially.

GeoTeam Note:

TRIT's guidance is at the low end of its previous guidance and appears to be well short of analyst 2010 fourth quarter EPS estimates of $0.44. We calculate that fourth quarter EPS will now come in at around $0.23. Unfortunately, the press release did not address the reasons for the low end guidance, an oversight we put squarely on the shoulders of the investor relation firm.  We are assuming that the light guidance is a result of the lumpy nature of TRIT's business and that revenues will be pushed into 2011, but we need to listen to the conference call tomorrow morning to confirm this thought. We had pointed out this risk in our most recent note.  The one positive from the release and what could regain investor confidence is the inference that TRIT is close to securing debt financing. If this comes to fruition TRIT can bid on much more projects in 2011.

Second Quarter 2010 Financial Performance:

Order Backlog

As of August 13, 2010, the company had a total backlog of $20.9 million, including $15 million in municipal water and wastewater services, $1.1 million in water resources services and $4.8 million in industrial sector services.

Updated 2010 Outlook

For 2010, the company reaffirms its previously announced guidance:

• Revenues will range between $40.6 million and $50.5 million.
• Net income is expected to reach between $7 million and $9.2 million.

Management Comment

Chief Executive Officer Warren Zhao said, "Strong results from our Water/Wastewater Treatment and Municipal Infrastructure, Water Resources, Management Systems and Engineering Services and our newly formed Industrial Pollution Control and Safety business segments have provided a solid foundation toward meeting our performance expectations for the year. We have a large pipeline of projects as well as increasing opportunities for new business.

"As a result of our successful capital raise, our company is financially strong enough to execute our plans with over $31 million in cash and working capital of over $50 million.