LIANDI CLEAN TECHNOLOGY INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

		For the Three Months Ended June 30,
		2011			2010
		(Unaudited)			(Unaudited)
Net revenue:
Sales and installation of equipment	$	4,039,909		$	6,349,134
Sales of software		5,269,877			2,805,799
Services		246,112			3,101
Sales of industrial chemicals		7,156,538			-??
Total net revenues		16,712,436			9,158,034
Cost of revenue:
Cost of equipment sold		(3,359,849)			(5,031,416)
Amortization of intangibles		(156,897)			(149,484)
Cost of software		(1,670,046)			-??
Cost of industrial chemicals?		(6,435,672)			-??
Total cost of revenue		(11,622,464)			(5,180,900)
Gross profit		5,089,972			3,977,134
Operating expenses:
Selling expenses		(593,887)			(140,942)
General and administrative expenses		(842,919)			(546,373)
Research and development cost		(108,074)			(59,310)
Total operating expenses		(1,544,880)			(746,625)
Income from operations		3,545,092			3,230,509
Other income (expenses), net
Interest income		8,499			26,014
Interest and bank charges		(145,938)			(145,631)
Exchange losses, net		(366,175)			(69,768)
Value added tax refund		-??			369,183
Other		67,377			2,807
Total other income (expenses), net		(436,237)			182,605
Income before income tax		3,108,855			3,413,114
Income tax expense		(446,735)
NET INCOME		2,662,120			3,413,114
Income attributable to noncontrolling interests		(45,309)
Net income attributable to LianDi Clean stockholders	$	2,616,811		$	3,413,114
Preferred stock deemed dividend		-			(1,142,513)
Preferred stock dividend		(363,936)			(493,899)
Net income available to common stockholders	$	2,252,875			1,776,702
Net income attributable to LianDi Clean stockholders	$	2,616,811		$	3,413,114
Other comprehensive income attributable to LianDi Clean stockholders:
Foreign currency translation adjustment		755,868			154,889
Comprehensive income attributable to LianDi Clean stockholders:		3,372,679			3,568,003
Comprehensive income attributable to non-controlling interests		123,219
TOTAL COMPREHENSIVE INCOME	$	3,495,898		$	3,568,003
Earnings per share attributable to LianDi Clean stockholders:
Basic	$	0.07		$	0.06
Diluted	$	0.07		$	0.06
Weighted average number of shares outstanding:
Basic		31,236,783			29,369,761
Diluted		36,444,850			30,113,633

 

 

 

LIANDI CLEAN TECHNOLOGY INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

		For the Three Months Ended June 30,
		2011		2010
		(Unaudited)		(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	2,662,120	$	?3,413,114
Adjustments for:
Depreciation of property and equipment		348,459		?15,779
Amortization of intangible assets		169,774		?151,976
Loss on disposal of fixed assets		2,292		-
Deferred tax liability		(15,305)		-
Share-based compensation costs		95,755		-
Decrease (increase) in assets:				???
Accounts receivable		(5,105,199)		?1,901,965
Notes receivable		(153,587)		-
Inventories		203,351		?11,111
Prepayments to suppliers		(2,940,096)		(3,161,029)
Prepaid expenses and other current assets		390,177		(5,705,645)
Increase (decrease) in liabilities:
Accounts payable		2,593,185		?2,894
Deferred revenue and accruals		(1,704,253)		?(425,027)
Income tax payable		444,365		?-??
Net cash used in operating activities		(3,008,962)		?(3,794,862)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment		(541,658)		(61,282)
Prepayment for construction in progress		(429,347)		-
Deposits for fixed assets		(459,482)		-
Purchase of intangible assets		-		? (15,657)
Advance to other entities		-		(4,828,972)
Net cash used in investing activities		(1,430,487)		(4,905,911)
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in restricted cash		(263,648)		(1,466,596)
Repayment of short term bank loans		(695,392)		-
New bank loans		3,200,629		-
Repayment to non-controlling interests		(87,677)		-
Repayment to shareholders		(678,136)		(343,194)
Repayment to other entities		(6,090,809)		-
Payment of preferred stock dividend		(394,810)		-
Net cash used in financing activities		(5,009,843)		(1,809,790)
Effect of foreign currency translation on cash		568,766		127,673
Decrease in cash and cash equivalents		(8,880,525)		(10,382,890)
Cash and cash equivalents, beginning of period		73,242,735		59,238,428
CASH AND CASH EQUIVALENTS, end of period	$	64,362,210	$	48,855,538

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