Eastern Environment Announces 1071% Year-Over-Year and 230% Sequential Increase in Revenue for the Second Quarter of 2010; Achieves Record $2.4 Million of Net Income for the Second Quarter of 2010

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| Source: Eastern Environment Solutions Corporation

NEW YORK and HARBIN, China, Aug. 17, 2010 (GLOBE NEWSWIRE) -- Eastern Environment Solutions Corp. (OTCBB:EESC), a leading provider of municipal solid waste (MSW) processing and disposal services in northeast China, today announced its results of the second quarter of 2010 and provided an update on its landfill operations and newly launched plastic bottle recycling business.

Second Quarter 2010 Financial Highlights (year-over-year):

  • Revenue increased 1071% to $5.2 million
  • Gross profit increased 706% to $2.9 million
  • Income from operations increased 1173% to $2.8 million
  • Operating margin increased 385 basis points to 53.3% from 49.5%
  • Net income increased to $2.4 million from $180,511 in Q2 2009
  • $7.2 million of working capital and shareholders' equity of $16.7 million

Ms. Feng Yan, Chairman and Chief Executive Officer, stated, "We are extremely pleased with our second quarter results, as illustrated by a dramatic increase in revenue, both sequentially and year-over-year. Our second quarter net income also reached a record $2.4 million, or $0.16 per diluted share.These strong quarterly results illustrate the success of our strategic plans, and we look forward to continued year-over-year revenue growth and improved profitability in the second half of 2010 and 2011."

Ms. Feng continued, "The major factor contributing to our strong sequential revenue growth was the shift in our strategy to include recycling polyethylene terephthalate (PET) plastic bottles and plastic bottle caps, which we implemented in the first quarter of this year and began generating substantial revenue in the second quarter. In addition to separating plastic bottles and plastic bottle caps from our own landfill, we have established relationship with local collection points which provide us with much larger and more stable supplies of plastic bottle waste than we had previously collected on our own."

Ms. Feng says, "In addition to providing a valuable new revenue stream, our PET recycling removes waste from our landfill and, in turn, increases our overall disposal capacity at the landfill. Looking ahead, we are focused on further expanding our waste processing operations by implementing additional recycling technologies that will provide new revenue streams from our landfill. At the same time, we are actively seeking new landfills we can either develop or acquire. Given the overwhelming growth of Harbin and other cities within Heilongjiang Province, there is enormous demand and government support for new landfills and recycling technologies."

Ms. Feng continued, "During the quarter, we also enhanced our leadership team with the addition of three new independent directors. These three new board members bring a wealth of industry experience as well as financing and accounting experience that will be instrumental as we prepare for the next phase of our growth. As a result of these board appointments, we believe we meet most of the qualifications to list on a senior exchange."

Revenue for the second quarter ended June 30, 2010 was $5.2 million, compared to $447,670 for the second quarter ended June 30, 2009. The increased revenue reflects the strong growth of the PET recycling business during the second quarter of 2010, coupled with the initial resumption of landfill operations in late 2009 and an increase in authorized tons of waste per day granted by the HMUAB in February 2010. Gross profit was $2.9 million for the three months ended June 30, 2010, as compared to $365,269 for the three months ended June 30, 2009. Operating income was $2.8 million for the three months ended June 30, 2010, as compared to $220,872 for the three months ended June 30, 2009. Net income for the three months ended June 30, 2010 was $2.4 million, or $0.16 per diluted share, compared to net income of $180,511, or $0.01 per diluted share, for the same period last year. 

As of June 30, 2010, the Company had cash and cash equivalents of $851,877, working capital of $7.2 million, and shareholders' equity of $16.7 million.

About Eastern Environment Solutions Corp.

Eastern Environment Solutions Corp. is the first regional environmental engineering company to operate under a Build-Operate-Transfer ("BOT") contract in China. The landfill is 17 km away from urban areas. The Harbin Municipal Urban Administrative Bureau, authorized by the Harbin Municipal Government, signed a franchise contract for 17 years with the company. The landfill can be used to dispose of 1,500 tons of MSW per day, or approximately 42% of the total municipal solid waste produced by the population of Harbin. Additional information about the Company is available at www.useesc.com/">www.useesc.com.

In addition to historical information, this press releases contains forward-looking statements, which are generally identifiable by use of the words "believes," "expects," "intends," "anticipates," "plans to," "estimates," "projects," or similar expressions. These forward-looking statements represent Management's belief as to the future of Eastern Environment Solutions, Corp. Whether those beliefs become reality will depend on many factors that are not under Management's control. Many risks and uncertainties exist that could cause actual results to differ materially from those reflected in these forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in the section entitled "Risk Factors." Readers are cautioned not to place undue reliance on these forward-looking statements. The Company undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements.


EASTERN ENVIRONMENT SOLUTIONS, CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS 
     
     
  June 30, December 31,
  2010 2009
  (Unaudited)  
ASSETS    
Current assets:    
Cash and cash equivalents  $ 851,877  $ 428,052
Accounts receivable   7,975,281  4,253,203
Inventory  13,882  42,650
Other receivables  783  440,208
Loans to related parties  65,949  42,828
Total Current Assets  8,907,772  5,206,941
     
Property and equipment, net of accumulated depreciation of $1,450,323 and $1,312,131,
respectively
 6,312,971  6,319,005
     
Other asset:    
Advance to suppliers  3,809,414  3,783,981
Total Other Asset  3,809,414  3,783,981
     
Total Assets  $19,030,157  $ 15,309,927
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
     
Current liabilities:    
Bank loan payable - current portion  $ 966,592  $ 966,592
Accounts payable  815  810
Taxes payable  665,887  174,375
Accrued expenses and other payables  78,733  92,192
Total Current Liabilities  1,712,027  1,233,969
     
Long-term liabilities:    
Bank loan payable - net of current portion  604,120  1,087,416
     
Total Liabilities  2,316,147  2,321,385
     
Commitments and Contingencies    
     
Stockholders' Equity    
Common stock, $0.0001 par value, 100,000,000 shares authorized; 14,970,186
shares issued and outstanding as of June 30, 2010 and December 31, 2009 
 1,497  1,497
Additional paid-in-capital  4,021,929  3,836,165
Accumulated other comprehensive income  1,964,023  1,945,261
Statutory reserves  186,156  186,156
Retained earnings - Unappropriated  10,540,405  7,019,463
Total Stockholders' Equity  16,714,010  12,988,542
     
Total Liabilities and Stockholders' Equity  $19,030,157  $ 15,309,927
 
 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
         
  SIX MONTHS ENDED JUNE 30, THREE MONTHS ENDED JUNE 30,
  2010 2009 2010 2009
         
Revenues  $ 6,831,506  $ 890,019  $ 5,243,752  $ 447,670
         
Cost of Revenues  2,507,747  185,630  2,297,916  82,401
         
Gross Profit  4,323,759  704,389  2,945,836  365,269
         
Selling, General and Administrative  294,925  282,026  149,007  144,397
         
         
Income from operations  4,028,834  422,363  2,796,829  220,872
         
Other Income (Expense)        
Interest income  23,547  8,215  321  714
Other expense  (112)  (50)  8  --
Total other income, net  23,435  8,165  329  714
         
Income from Operations before Income Taxes  $ 4,052,269  $ 430,528  $ 2,797,158  $ 221,586
         
Provision for Income Taxes  531,327  79,275  361,740  41,075
         
Net Income  3,520,942  351,253  2,435,418  180,511
         
Other Comprehensive Income (Loss) --        
Foreign currency translation Income (loss)  18,762  (26,999)  67,337  795
         
Comprehensive Income  $ 3,539,704  $ 324,254  $ 2,502,754  $ 181,306
         
         
Basic & Diluted Income Per Share        
Basic  $ 0.29  $ 0.03  $ 0.20  $ 0.02
Diluted  $ 0.24  $ 0.02  $ 0.16  $ 0.01
         
Weighted Average Number of Common Shares Outstanding      
Basic  12,078,791  11,210,717  12,186,074  11,318,660
Diluted  14,970,186  14,970,186  14,970,186  14,970,186
 
 
 
EASTERN ENVIRONMENT SOLUTIONS, CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
     
     
  SIX MONTHS ENDED JUNE 30,
  2010 2009
Cash Flows From Operating Activities:    
Net income  $ 3,520,942  $ 351,253
Adjustments to reconcile net income to net cash provided by (used in) operating activities:    
Depreciation and amortization  128,533  122,590
Amortization of stock-based compensation  185,764  191,376
     
Changes in operating assets and liabilities:    
Accounts receivable  (3,722,078)  (887,314)
Inventory  28,768  22,703
Accounts payable  5  (77)
Taxes payable  491,512  79,281
Accrued expenses and other payables  (13,459)  35,114
     
Net cash provided by (used in) operating activities  619,987  (85,074)
     
Cash Flows From Investing Activities:    
Purchase of property and equipment   (2,284)  --
Payment of capitalized interests for construction loan  (78,059)  (187,204)
Payments on loans to unrelated party  --  (343,815)
Collections on loans to unrelated party  439,425  211,909
Payments on loans to related party  (23,121)  --
     
Net cash provided by investing activities  335,961  (319,110)
     
Cash Flows From Financing Activities    
Repayment of bank loan payable  (483,296)  (48,330)
     
Net cash used in financing activities  (483,296)  (48,330)
     
Effect of exchange rate changes on cash and cash equivalents  (48,827)  (24,173)
     
Increase (decrease) in Cash and Cash Equivalents  423,825  (476,687)
     
Cash and Cash Equivalents - Beginning of period  428,052  1,112,487
     
Cash and Cash Equivalents - End of period  $ 851,877  $ 635,800
Crescendo Communications, LLC
David Waldman
Vivian Huo
(212) 671-1020