CDT Environmental Technology Reports 2024 Unaudited Interim Financial Results and Provides Business Updates

About this update from Cdt Environmental Technology Investment Holdings Limited

Revenue of $12.7 million and earnings per share of $0.14 impacted by reduced project activity due to a slowdown in the PRC economy SHENZHEN, China , Dec. 27, 2024 (GLOBE NEWSWIRE) -- CDT Environmental Technology Investment Holdings Limited (NASDAQ: CDTG) (“CDT”, the “Company”, or “we”), a leading provider of waste treatment systems and services throughout China , today reports its unaudited interim financial results for the six months ended June 30, 2024 and provides updates on key business developments and outlook. All amounts are expressed in US dollars unless otherwise stated. 2024 Interim Financial Results and Business Updates Revenues decreased by approximately $2.8 million , or 18.1%, to approximately $12.7 million for the six months ended June 30, 2024 from approximately $15.5 million for the six months ended June 30, 2023 . This decrease was primarily attributed to ongoing work related to one new project during the six months ended June 30, 2024 , compared to two new projects in the same period of 2023, and fewer projects in progress or completed in 2024. The reduced project activity was largely driven by decreased demand for the Company’s services due to the economic downturn in the People’s Republic of China (the “PRC”). Gross profit decreased by approximately $0.3 million , or 6.7%, to approximately $4.5 million for the six months ended June 30, 2024 from approximately $4.8 million for the six months ended June 30, 2023 . The decrease in gross profit is primarily due to a decrease in sewage treatment systems revenue. For the six months ended June 30, 2024 and 2023, overall gross profit percentage was 35.5% and 31.2%, respectively. The increase in gross profit percentage of 4.3% was primarily due to the following: (1) a 3.6% increase from sewage treatment systems driven by a decrease in material costs resulting from temporary price fluctuations, and (2) a 17.2% increase in gross profit from sewage treatment services, mainly due to reduced labor costs following the disposal of two non-profitable subsidiaries. Total operating expenses increased by approximately $0.2 million , or 7.8%, to approximately $2.7 million for the six months ended June 30, 2024 from approximately $2.5 million for the six months ended June 30, 2023 . Net income decreased by approximately $0.4 million , or 21.6%, to approximately $1.4 million , or $0.14 per share, for the six months ended June 30, 2024 from approximately $1.8 million , or $0.22 per share, for the six months ended June 30, 2023 . The reduction in net income was primarily attributable to decreased demand for the Company’s services due to the economic downturn in the PRC. Yunwu Li, CEO of CDT, said “ Amidst the challenging economic and market conditions, our revenue declined in the first half of fiscal year 2024, primarily due to the overall slowing of the economy in the PRC and the delay in certain projects. The recent PRC economic data indicates that while many positive stimulus policies have been announced, they have yet to fully restore confidence in the general economy and for new infrastructure projects. Despite these challenges, we successfully maintained a relatively stable revenue stream from our core operations, which remains the backbone of our income. We are also pleased to report that we were able to sustain a gross margin of 35.5%, driven by our established business strategies and targeted restructuring efforts. Our ongoing cost reduction initiatives continue with a focus on further streamlining operations and enhancing efficiency. Looking ahead, we expect that revenue growth and profitability will inevitably face pressure due to the circumstances detailed in our first half 2024 results.” Yunwu Li, added, “We have continued to successfully navigate near-term challenges related to softening economic conditions by delivering excellent customer service and by driving productivity. Our focus remains on investing for the future and positioning ourselves to capitalize on opportunities associated with favorable, long-term secular trends including water conservation, safety and regulation. Looking forward, we remain confident in our business model and committed to translating our efforts into sustained growth and creating value for our shareholders.” Updated Full Year 2024 Outlook Based on current visibility, management expects full-year 2024 revenue to be in the range of $30.2 to $32.7 million , with net income in the range of $6.5 to $7.9 million . The change in guidance from the previous range of revenue of $42.5 to $47.0 million and net income of $8.7 to $10.2 million reflects the slowdown in the PRC economy and delay of certain projects. About CDT Environmental Technology Investment Holdings Limited CDT, headquartered in Shenzhen, China , is a leading national player in China’s waste treatment sector that designs, develops, manufactures, sells, installs, operates and maintains sewage treatment systems and provides sewage treatment services in China , and is dedicated to promoting sustainable development through innovative solutions. Founded by pioneers in waste treatment, CDT aims to advance next-generation technologies that directly address environmental challenges and promote sustainable solutions. CDT is a recognized brand in China and is committed to innovation and customer satisfaction. CDT’s mission is to help its customers achieve their critical infrastructure objectives while enabling positive change in technological environmental protection. It collaborates with industry leaders, environmental experts, and stakeholders to develop and implement advanced waste treatment solutions. Recently listed on the Nasdaq Capital Market, CDT is a prominent player in the waste treatment market, capable of providing comprehensive solutions to diverse customer needs, and has completed more than 150 plants across China . For more information, visit CDT’s website at https://www.cdthb.cn CDT ENVIRONMENTAL TECHNOLOGY INVESTMENT HOLDINGS LIMITED AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME For the Six Months Ended June 30 , 2024 2023 REVENUES Sewage treatment systems $ 12,066,255 $ 14,445,779 Sewage treatment services and others 620,453 1,018,024 Total revenues 12,686,708 15,463,803 COST OF REVENUES Sewage treatment systems 7,869,468 9,947,063 Sewage treatment services and others 315,405 692,580 Total cost of revenues 8,184,873 10,639,643 GROSS PROFIT 4,501,835 4,824,160 OPERATING EXPENSES: Selling 25,725 51,435 General and administrative 1,361,481 1,292,367 Research and development 34,706 42,829 Stock-based compensation 454,250 — Provision for credit loss, net 795,757 1,090,957 Total operating expenses 2,671,919 2,477,588 INCOME FROM OPERATIONS 1,829,916 2,346,572 OTHER INCOME (EXPENSE) Interest income 138 7,448 Interest expense (69,446 ) (47,301 ) Other (expense) income, net 58,212 (69,240 ) Total other expense, net (11,096 ) (109,093 ) INCOME BEFORE INCOME TAXES 1,818,820 2,237,479 INCOME TAXES EXPENSE 401,401 429,197 NET INCOME 1,417,419 1,808,282 Less: net loss attributable to noncontrolling interest (51,609 ) (225,703 ) NET INCOME ATTRIBUTABLE TO CDT ENVIRONMENTAL TECHNOLOGY INVESTMENT HOLDINGS LIMITED $ 1,469,028 $ 2,033,985 NET INCOME 1,417,419 1,808,282 FOREIGN CURRENCY TRANSLATION ADJUSTMENT (249,654 ) (1,011,712 ) TOTAL COMPREHENSIVE INCOME 1,167,765 796,570 Less: Comprehensive loss attributable to noncontrolling interest (54,451 ) (222,237 ) COMPREHENSIVE INCOME ATTRIBUTABLE TO CDT ENVIRONMENTAL TECHNOLOGY INVESTMENT HOLDINGS LIMITED $ 1,222,216 $ 1,018,807 WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES Basic and diluted 9,810,714 9,200,000 EARNINGS PER SHARE Basic and diluted $ 0.14 $ 0.22 CDT ENVIRONMENTAL TECHNOLOGY INVESTMENT HOLDINGS LIMITED AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS June 30 , December 31 , 2024 2023 (Unaudited) ASSETS CURRENT ASSETS Cash $ 96,324 $ 268,102 Accounts receivable, net 41,317,558 29,076,549 Other receivables, net 315,758 418,891 Other receivables - related parties 121,722 115,718 Contract assets 29,634,565 34,280,084 Prepayments and other current assets, net 461,749 582,149 Total current assets 71,947,676 64,741,493 OTHER ASSETS Property and equipment, net 1,403,927 1,695,348 Right-of-use assets, net 44,150 210,058 Intangible assets, net 10,987 16,397 Deferred tax assets, net 369,407 252,882 Contract assets, noncurrent 4,885,755 4,885,755 Prepaid initial public offering (“IPO”) costs — 989,628 Escrow receivable 600,000 — Total other assets 7,314,226 8,050,068 Total assets $ 79,261,902 $ 72,791,561 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES Accounts payable $ 27,129,736 $ 23,784,781 Short-term loans - banks 1,901,205 2,728,385 Short-term loans - third parties 773,980 312,028 Short-term loans - related parties 2,681,915 5,386,156 Other payables and accrued liabilities 1,827,424 2,466,501 Other payables - related parties 241,408 270,806 Contract liabilities 28,254 28,430 Taxes payable 7,042,632 5,423,955 Lease liabilities 53,900 118,833 Total current liabilities 41,680,454 40,519,875 OTHER LIABILITIES Long-term loan - bank 79,463 79,463 Lease liabilities, non-current 1,987 105,980 Total other liabilities 81,450 185,443 Total liabilities 41,761,904 40,705,318 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS’ EQUITY Ordinary shares, $0.0025 par value, 20,000,000 shares authorized, 10,825,000 and 9,200,000 shares issued and outstanding as of June 30, 2024 and December 31, 2023 , respectively 27,063 23,000 Additional paid-in capital 11,678,633 7,453,265 Statutory reserves 3,396,227 3,192,855 Retained earnings 24,508,602 23,242,946 Accumulated other comprehensive loss (2,256,233 ) (2,009,421 ) Total CDT Environmental Technology Investment Holdings Limited shareholders’ equity 37,354,292 31,902,645 Noncontrolling interests 145,706 183,598 Total shareholders’ equity 37,499,998 32,086,243 Total liabilities and shareholders’ equity $ 79,261,902 $ 72,791,561 Forward Looking Statements This press release contains forward-looking statements that are based on the beliefs and assumptions of the management of CDT and on information currently available to such management. These forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond CDT’s control. Words such as “will,” “future,” “expects,” “believes,” and “intends,” or similar expressions, are intended to identify forward-looking statements. All statements, other than statements of historical fact, contained in this press release, including statements regarding future events, future financial performance, business strategy and plans, and objectives of CDT for future operations, are forward-looking statements. Although CDT does not make forward-looking statements unless it believes it has a reasonable basis for doing so, CDT cannot guarantee their accuracy. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, which may cause the actual results, levels of activity, performance or achievements of CDT and its markets to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. In evaluating such statements, prospective investors should carefully review various risks and uncertainties identified in CDT’s filings with the SEC . You should not place undue reliance on any forward-looking statement. CDT undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable law. Investor and Media Contact United States TraDigital IR Kevin McGrath +1-646-418-7002 [email protected] Source: CDT Environmental Technology Investment Holdings Limited

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