A-Power Energy Generation Systems Ltd. Reports Unaudited Financial Results for First...

A-Power Energy Generation Systems Ltd. Reports Unaudited Financial Results for
First Quarter of 2009
- Teleconference to Be Held on Tuesday, June 16, 2009, at 8:00 a.m. EDT -

SHENYANG, China, June 16 /PRNewswire-Asia-FirstCall/ -- A-Power Energy
Generation Systems, Ltd. (Nasdaq: APWR) ("A-Power" or "the Company"), a
leading provider of distributed power generation ("DG") systems in China and a
fast-growing manufacturer of wind turbines, today announced its unaudited
financial results for the first quarter ended March 31, 2009.
Financial Highlights
-- Revenues were $31.2 million vs. $32.3 million in 1Q08
-- Gross margin was 12.6% vs. 11.9% in 1Q08
-- Cash flow from operations was $15.7 million vs. $2.8 million in 1Q08
-- Cash on hand at March 31, 2009 was $60.6 million vs. $43.5 million at
December 31, 2008
-- For the year 2009, A-Power raises its revenue guidance from $290
million to $320 million; and its net income guidance from $29 million
to $32 million

"The first quarter is typically slow for us due to seasonality and weather
conditions in the northeast region of China," said Mr. Jinxiang Lu, A-Power's
Chairman and CEO. "However, we managed to forge strategic partnerships,
including with GE Drivetrain Technologies, improve our cash flows and
strengthen our cash position during the slow winter months. As we are poised
for expansion, we have also been closely monitoring our G&A expenses."
Mr. Lu continued, "During the second quarter, we are continuing to sign DG
contracts and extending our track record in China's power market. And I am
very pleased to announce that we have arranged the shipment of the first two
units of the 2.7MW wind turbine, made with Fuhrlander's technology and main
components from Europe. They are expected to be completed for delivery by the
end of July. We are gradually ramping up our production to meet the growing
demand for the larger, more advanced, and more reliable wind turbines, as more
and more Chinese wind farm developers are looking to increase power generation
capacity. And our existing relations with GE, Fuhrlander, Norwin and several
domestic, emerging Chinese wind component makers like Jiangsu Miracle, plus
our experience and relationships in China's power market in general, position
us to benefit well from this emerging trend of bigger and better wind turbines
in China."
First Quarter 2009 Results
For the three months ended March 31, 2009, A-Power's revenues were $31.2
million, compared with $32.3 million in the first quarter of 2008. Revenues
were roughly flat because of seasonality and weather conditions in Northeast
China.
Gross profit was $3.9 million, about the same as the first quarter of
2008.
Gross margin was 12.6%, compared with 11.9% in the first quarter of 2008.
Gross margin in 1Q09 was affected by seasonality. A-Power expects its
long-term gross margin for its DG business to stay at 12%-14%.
General and administrative ("G&A") expenses were $2.6 million, compared
with $1.0 million in the first quarter of 2008. G&A as a percentage of
revenues was 8.2%, compared with 3.2% in the first quarter of 2008. A-Power
incurred higher G&A as a newly listed company, including professional
consulting fees, salaries, stock-based compensation, insurance, office
rentals,
and other miscellaneous costs associated with being a public company.
Operating income was $1.4 million, compared with $2.8 million in the first
quarter of 2008.
Net income was $1.5 million, compared with $2.9 million the first quarter
of 2008.
Diluted earnings per share were $0.04, compared with $0.14 in the first
quarter of 2008. For the first quarter of 2009, the weighted average number of
shares on a fully diluted basis was 34.7 million as compared to 20.3 million
in the same period of 2008.
Balance Sheet Highlights
As of March 31, 2009, A-Power had cash and cash equivalents of $60.6
million, compared with $43.5 million at December 31, 2008.
Total shareholders' equity rose to $157.5 million at March 31, 2009, from
$156.0 million at December 31, 2008.
As of March 31, 2009, the Company recorded no short-term or long-term bank
loans.
Recent Developments
On June 16, 2009, A-Power announced it has signed an agreement with
Jinzhou Jinxia New Energy Co., Ltd. to ship two units of A-Power's 2.7MW wind
turbines, with technology licensed from Germany's Fuhrlander AG and main
components sourced from Europe, by the end of July 2009. The turbines will be
installed in Daxinglong Mountain Wind Power Generation Plant in Jinzhou City,
Liaoning Province. These units will mark A-Power's first shipments in the wind
turbine business.
On June 16, 2009, A-Power announced it was briefed on a Shenyang
government plan to invest a total of $44 million (RMB 300 million) in seed
capital in Shenyang Power Group ("Shenyang Power"), the newly formed local DG
industry alliance spearheaded by A-Power and joined by power industry
conglomerates to pursue large-scale electricity-generation projects both
within and outside China. In addition, the Shenyang government will also
appoint a local Chinese bank and a local guaranty company to participate in
the Shenyang Power alliance. A-Power is the lead investor in Shenyang Power
and now owns 60% after today's investment by the Shenyang government.
On June 16, 2009, A-Power announced it has signed a contract with
Sanmenxia New Energy Bio-Electricity Co., Ltd. to build electricity-generation
systems using biomass as fuel in Henan Province of China. The project is
expected to be completed by October 2010 and the total value of the contract
is estimated to be $14.1 million (RMB 96 million).
Business Outlook
A-Power adjusted upward its revenue and after-tax net income guidance for
2009. The Company expects its revenue and after-tax net income to be at least
$320 million and $32 million, respectively, for the year 2009. The revenue and
after-tax net income guidance was revised from $290 million and $29 million,
respectively. These targets are based on the Company's current signed DG
contracts, which are subject to change based on customer payment and
construction schedules. A-Power expects that it will from time to time provide
periodic updates as additional major DG contracts, and wind turbine sales, are
confirmed. A-Power expects that it will from time to time provide period
updates when additional major DG contracts and wind turbine sales are
confirmed.
Mr. Lu concluded, "A-Power in the near term has a two-pronged approach to
growing its business: with the strong support from the Shenyang government, we
are working to fully utilize the resources afforded by the recently formed
industry alliance, Shenyang Power Group, to pursue large-scale,
technologically advanced and managerially sophisticated DG and micro-grid
systems both within China and overseas. Secondly, we are focused on rolling
out the largest wind turbine in China - the 2.7MW grade - and ensuring its
performance and its timely delivery to our customers. While we execute our
plans in these two growth areas, with the help of our newly appointed CFO and
COO, we are also aiming to smooth our revenues from quarter to quarter and
keep expenses under control."
Conference Call
A-Power will host a conference call, to be simultaneously Webcast, on
Tuesday, June 16, at 8:00 a.m. Eastern Daylight Time or 8:00 p.m. Beijing
Time.
Interested parties may participate in the call by dialing +1-866-272-9941
(North America) or +1-617-213-8895 (International), passcode: 56974649 (no
pre-registration required), approximately 10 minutes before the call start
time. A live Webcast of the conference call will be available on the Company's
Website at http://www.apowerenergy.com .
A replay of the call will be available starting on June 16, 2009, at 11:00
a.m. Eastern Daylight Time or 11:00 p.m. Beijing Time through July 15, 2009.
An archived Webcast of the conference call will be available on the Company's
Website at http://www.apowerenergy.com . Interested parties may access the
replay by dialing +1-888-286-8010 (North America) or +1-617-801-6888
(International) and entering passcode 57219536.
About A-Power
A-Power Energy Generation Systems Ltd. ("A-Power"), through its
China-based operating subsidiaries, is the largest provider of distributed
power generation systems in China, focusing on energy-efficient and
environmentally friendly projects of 25MW to 400MW. In 2008, A-Power entered
the wind energy market and has built China's largest wind turbine
manufacturing facility, located in Shenyang, Liaoning Province, with
technologies licensed from German FUHRLANDER AG and Denmark-based Norwin, and
a total annual production capacity of 1,125MW. In March 2009, A-Power entered
into an agreement to establish a Joint Venture partnership with GE Drivetrain
Technologies to produce wind turbine gearboxes in Shenyang. A-Power also has
strategic relationships with Tsinghua University in Beijing and the China
Academy of Sciences in Guangzhou to develop and commercialize other renewable
energy technologies. For more information, please visit
http://www.apowerenergy.com .
Safe Harbor Statement
This press release may contain forward-looking statements. Any such
statement is made within the 'safe harbor' provisions of the U.S. Private
Securities Litigation Reform Act of 1995. These forward-looking statements can
be identified by terminology such as "will," "expects," "anticipates,"
"future," "intends," "plans," "believes," "estimates," and other similar
statements. Statements that are not historical facts, including statements
relating to anticipated future earnings, margins, and other operating results,
future growth, construction plans and anticipated capacities, production
schedules and entry into expanded markets are forward-looking statements. Such
forward-looking statements, based upon the current beliefs and expectations of
our management, are subject to risks and uncertainties, which could cause
actual results to differ materially from the forward-looking statements,
including but not limited to, the risk that: inclement weather conditions
could adversely affect our operating results in particular quarters and/or
fiscal years; we may experience construction, manufacturing and development
delays on our projects which could adversely affect our financial condition
and operating results; the development of our wind turbine business will
depend on the efforts of others; development of our wind turbine business will
depend on our ability to efficiently source components; our limited operating
history and recent entrance into new markets and the wind turbine business may
make it difficult for you to evaluate our business and future prospects; the
expected benefits of supply and partnership agreements may not materialize to
the extent expected or at all; we expect to rely increasingly on our
proprietary products and systems and on technology developed by our licensors
and partners, and if we or our licensors or partners become involved in an
intellectual property dispute, we may be forced to spend considerable
resources resolving such dispute; a decrease in the rate of growth of China's
industry and economy may lead to a decrease in our revenues because industrial
companies in China are our principal source of revenues, as well as other
relevant risks detailed in our filings with the Securities and Exchange
Commission, including those set forth in our annual report filed on Form 20-F
for the fiscal year ended December 31, 2007. The information set forth herein
should be read in light of such risks. We assume no obligation to update the
information contained in this press release, except as required under
applicable law.
Notes to Unaudited Financial Information
This release contains unaudited financial information which is subject to
adjustment. In addition, we are in the process of conducting further
evaluations of our internal control over financial reporting for compliance
with the requirements of Section 404 under the Sarbanes-Oxley Act. We make no
representation of management's assessment regarding internal control over
financial reporting or include an attestation report of the Company's
independent auditors due to a transition period established by rules of the
SEC for newly public companies.
Adjustments to the financial statements may be identified when the audit
work is completed, which could result in significant differences between our
audited financial statements and this unaudited financial information.
For more information, please contact:

Mr. John S. Lin
Chief Operating Officer
A-Power Energy Generation Systems, Ltd.
Email: john@apowerenergy.com

Mr. Valentine Ding / Mr. Dixon Chen
Investor Relations
Grayling
Tel: +1-646-284-9412
Email: valentine.ding@us.grayling.com
dixon.chen@us.grayling.com

Financial Tables Follow

A-Power Energy Generation Systems, Ltd. and Subsidiaries
Unaudited Consolidated Balance Sheets
(In '000s of USD)

March 31 Dec. 31
2009 2008
Assets
Current assets
Cash and cash equivalents 60,560 43,518
Restricted cash 1,607 3,608
Accounts receivable, net of allowance for doubtful
accounts of $Nil (2008 - $Nil) 8,320 7,238
Prepayments, deposits, other receivables 80,366 79,845
Costs and estimated earnings in excess of billings on
uncompleted projects 2,016 2,094
Inventory 9,494 8,723
Due from related parties 105 105

Total current assets 162,468 145,131

Deferred income tax asset 364 364
Accounts receivable 6,825 3,646
Construction in progress 20,705 18,006
Property, plant and equipment, net 14,363 14,312
Intangible assets 12,545 12,564
Deposits on intangible assets 10,307 10,322

Total assets 227,577 204,345

Liabilities and Stockholder's Equity
Current liabilities
Accounts payable 17,310 12,909
Other payable and accrued liabilities 17,057 17,227
Customer deposits 26,853 13,350
Billings in excess of costs and estimated earnings on
uncompleted projects 4,240 4,022
Due to related parties 3,123 128
Income and business taxes payable 1,534 742

Total current liabilities 70,117 48,378

Stockholders' equity

Common shares, 100,000,000 authorized with par value
of $0.0001 per share, 33,706,938 shares issued 3 3
Additional paid-in capital 111,448 111,242
Accumulated other comprehensive income 6,367 6,578
Statutory reserves 4,155 4,155
Retained earnings 34,896 33,331
Noncontrolling interest 591 658
Total stockholders' equity 157,460 155,967

Total liabilities and stockholders' equity 227,577 204,345

A-Power Energy Generation Systems, Ltd and Subsidiaries
Unaudited Consolidated Statements of Income and Comprehensive Income
(In '000s of USD, Except per Share Amounts)

Three Months
Ended
March 31, March
31,
2009 2008

Revenues 31,199 32,337
Cost of sales and business taxes 27,266 28,478

Gross profit 3,933 3,859

Expenses
General and administrative expenses 2,564 1,039

Income from operations 1,369 2,820
Other income (expense)
Interest costs --
(160)
Finance costs --
(1)
Other income 139 171

Income before provision for income taxes 1,508 2,830
Provision for income taxes 10
(42)

Net Income 1,498 2,872
Net loss (income) in subsidiaries attributable to
noncontrolling interest 67
(6)

Net income attributable to A-Power Energy Generation
Systems Ltd. 1,565 2,866
Other comprehensive income
Foreign currency translation adjustment (211) --
Comprehensive income 1,353 2,866

Weighted average number of common shares
outstanding - basic 33,706,938 19,304,554
Weighted average number of common shares
outstanding - diluted 34,706,938 20,274,199
EARNINGS PER SHARE - BASIC 0.04 0.15
EARNINGS PER SHARE - DILUTED 0.04 0.14

A-Power Energy Generation Systems, Ltd. and Subsidiaries
Unaudited Consolidated Statements of Cash Flows
(In '000s of USD)

Three Months Ended
Mar. 31, Mar. 31,
2009 2008
Cash flows from operating activities
Net income 1,498 2,872
Items not affecting cash:
Stock-based compensation 206 --
Amortization 255 67
Changes in operating assets and liabilities:
Accounts receivable (4,346) 4,163
Inventories (785) --
Costs and estimated earnings in excess of billings on
uncompleted contracts 74 --
Prepayments, deposits and other receivables (58) (4,828)
Accounts payable and accrued liabilities 4,273 (3,065)
Customer deposits 13,518 2,209
Billings in excess of costs and estimated earnings
on uncompleted contracts 225 --
Income and business tax payable 793 1,341
Net cash provided by operating activities 15,653 2,759

Cash flows from investing activities
Decrease in restricted bank balances 2,000 --
Purchase of property, plant and equipment (327) (457)
Payment of intangible assets -- (5,875)
Construction in Progress (2,726) (70)
Loans to third party (500) --
Liability assumed from Chardan South upon RTO -- (1,008)
Net cash (used in) investing activities (1,553) (7,410)

Cash provided by (used in) financing
Proceeds from share capital, net of cost -- 59,330
Repayment of notes payable -- (15,000)
Repayment to bank loans -- (978)
Due to (from) related parties 3,000 1,814
Cash received from Chardan South upon RTO -- 31,748
Net cash provided by financing activities 3,000 76,914

Effect of exchange rate changes (58) (872)

Net increase in cash and cash equivalents 17,042 71,391

Cash and cash equivalents, beginning of period 43,518 35,832
Cash and cash equivalents, end of period 60,560 107,223

SOURCE A-Power Energy Generation Systems Ltd.

Mr. John S. Lin, Chief Operating Officer of A-Power Energy Generation Systems,
Ltd., or john@apowerenergy.com; Or Mr. Valentine Ding & Mr. Dixon Chen,
Investor Relations, Grayling, +1-646-284-9412, or
valentine.ding@us.grayling.com & dixon.chen@us.grayling.com