Deli Solar (USA), Inc. Announces Record Second Quarter 2007 Financial Results

Deli Solar (USA), Inc. Announces Record Second Quarter 2007 Financial Results

August 13, 2007

    -- Second Quarter Revenue Increases 33% to $9.4 million

    -- Second Quarter Net Income Increases 118% to $646,820

    -- Company Makes Further Progress on Completing its New
Flat Plate
       Collector Production and Water Tank Assembly Lines

    LOS ANGELES and BEIJING, Aug. 13
/Xinhua-PRNewswire-FirstCall/ -- Deli Solar (USA), Inc.
(OTC Bulletin Board: DLSL), an established significant
seller of solar water heaters and space heating devices in
the People's Republic of China (the "PRC"),
announced its results for the second quarter which ended
June 30, 2007.

    Sales for the second quarter of 2007 increased 33% to
$9.4 million compared to $7.1 million for the same quarter
in 2006. Revenues were comprised of over 63,000 solar water
heaters and 37,000 boilers sold during the quarter. Gross
profit for the three months ended June 30, 2007 was $1.9
million, an increase of approximately 30% from the second
quarter of 2006. Gross margins were 20.5% to 21.1% for the
second quarter of 2007 and 2006 respectively.

    Operating expenses for the three months ended June 30,
2007 decreased 4% to $1.1 million compared to the same
period in 2006 and a result of prudent management of
general and administrative expenses despite a 32% increase
in advertising expenses focused on gaining market share.

    Operating income for the second quarter of 2007 totaled
$0.8 million compared to $0.3 million for the same period in
2006, representing a 163% increase. Net income for the 2007
second quarter increased 113% to $0.6 million, representing
earnings per share of $.10, from $0.3 million in net income,
or $.04 per share during the second quarter of 2006.
Calculations were based upon 6.6 million and 8 million
shares outstanding respectively.

    "Revenue growth was driven by higher unit sales of
solar water heaters and residential boilers which benefited
from continued investment in brand marketing, sales
promotions and further expansion of our sales distribution
network," commented Mr. Deli Du, President and Chief
Executive Officer. ''While margins were slightly impacted
by competition and pricing pressure, our ability to
prudently manage raw material and organizational costs
enabled us to dramatically increase operating
profitability. In addition, we made further progress
installing our new flat plate collector production and
water assembly line, which we expect to be fully
operational during September 2007. We expect this to
enhance our production efficiencies and improve the quality
of our products while contributing a positive impact on
future operating margins,'' continued Mr. Du.

    Six Month Results

    Sales increased approximately 32% to $12.4 million for
six months ended June 30, 2007 as compared to $9.4 million
for the same period last year resulting from continued
investment in brand marketing, sales promotion and
development of a sales distribution network. Operating
expenses for the six months ended June 30, 2007 were $1.6
million as compared to $1.5 million for the same period in
2006, an increase of 4%. Operating income for the six
months ended June 30, 2007 was $1.1 million, increased 109%
as compared to $0.5 million for the six months ended June
30, 2006.

    Net income was $0.9 million in the six months ended
June 30, 2007, compared with $0.5 million in the same
period last year, an increase of $0.4 million, or
approximately 84%. This equated to earnings of $.14 per
share compared to $.06 per share for the first six months
of 2006 based on 6.4 million and 8 million fully diluted
shares respectively.

    Balance Sheet and Cash Flow Discussion

    The Company reported $5.7 million in cash and
equivalents on June 30, 2007, a current ratio of 12.3 to 1
and was debt free. The Company completed a $2.5 million
financing in June 2007. Net cash flow from operations was
$0.3 million for the six months ended June 30, 2007, a
slight increase from the same year ago period. In addition,
the Company incurred approximately $0.4 million in capital
expenditures on new facilities and assembly lines at its
Bazhou factory during the first six months of 2007.

    "We continue to make further progress on our
acquisition strategy as we signed a purchase agreement on
May 18, 2007 to buy 51% of Tianjin Huaneng Energy Equipment
Company, which manufactures energy saving boilers and
environmental protection equipment for industrial
customers. As part of the acquisition we paid approximately
$1.6 million in July 2007 with approximately $100,000
balance due and a separate finders' fee. We also agreed to
invest approximately $2.5 million into the new company to
expand production capabilities and operations. With an
effective accounting date of July 1, 2007, we anticipate
this purchase will contribute to both revenues and
profitability during the balance of this year. Separately,
we continue to pursue the purchase of a 60% equity stake in
Shenzhen Xiongri Solar Power Co., Ltd., which provides solar
water heaters for commercial customers and multi-family
developers throughout Shenzhen,'' Mr. Du concluded.

    About Deli Solar (USA), Inc. 

    Deli Solar (USA) Inc. operates through its wholly owned
subsidiaries Bazhou Deli Solar Energy Heating Co. Ltd.
("Deli Solar (Bazhou)") and Beijing Deli Solar
Technology Development Co., Ltd. ("Deli Solar
(Beijing)"), both located in the PRC. The Company
sells and distributes hot water and space heating devices
to customers in the PRC. For more information, please visit
http://www.delisolar.com .

    Safe Harbor Statement:

    Certain statements in this news release may contain
forward-looking information about Deli Solar (USA) and its
subsidiaries business and products within the meaning of
Rule 175 under the Securities Act of 1933 and Rule 3b-6
under the Securities Exchange Act of 1934, and are subject
to the safe harbor created by those rules. The actual
results may differ materially depending on a number of risk
factors including, but not limited to, the general economic
and business conditions in the PRC, market and customer
acceptance and demand for products, ability to market
products, fluctuations in foreign currency markets, the use
of estimates in the preparation of financial statements, the
impact of competitive products and pricing, the ability to
develop and launch new products on a timely basis, the
regulatory environment, fluctuations in operating results,
and various other factors beyond its control. All forward-
looking statements are expressly qualified in their
entirety by this Cautionary Statement and the risks factors
detailed in the Company's reports filed with the Securities
and Exchange Commission. Deli Solar (USA) undertakes no
duty to revise or update any forward-looking statements to
reflect events or circumstances after the date of this
release.



                    Consolidated Balance Sheets (unaudited)

                   Assets                   June 30, 2007  
December 31, 2007
    Current assets
     Cash and cash equivalents             $    5,711,503  
$    3,212,065
     Trade accounts receivable                  1,295,211  
       986,809
     Allowances for doubtful accounts            (119,244) 
      (116,363)
     Net trade accounts receivable              1,175,967  
       870,446
     Advance to suppliers                         883,995  
     1,007,709
     Prepaid expenses                              47,213  
        58,203
     Inventories                                1,105,550  
       315,765
     Total current assets                       8,924,228  
     5,464,188

    Plant and equipment
     Buildings                                  3,615,556  
     3,528,180
     Machinery and equipment                       72,893  
        71,131
     Vehicles                                      78,063  
        76,176
     Computer equipment                            12,938  
        12,625
     Office equipment                              67,704  
        65,749
     Construction in progress                   3,022,756  
     2,580,031
     Total property, plant and equipment        6,869,910  
     6,333,892
     Accumulated depreciation                    (496,610) 
      (407,424)
     Net property, plant and equipment          6,373,300  
     5,926,468

    Other receivables                             124,582  
       321,999
     Deposit                                      258,592  
            --
     Prepaid land lease                         1,019,467  
     1,003,530
     Total other assets                         1,402,641  
     1,325,529

    Total assets                               16,700,169  
    12,716,185


    Liabilities and stockholders' equity      June 30, 2007
 December 31, 2006
    Current liabilities
     Trade accounts payable                       164,588  
       147,901
     Related party payable                            500  
        22,528
     Other payables                               155,918  
        35,934
     Accrued expenses                              24,729  
        22,080
     Customer deposits                            377,900  
       262,269
    Total current liabilities                     723,635  
       490,712

    Stockholders' equity
     Preferred stock: par value $0.001;
      25,000,000 shares authorized,
      2,674,197 shares issued and
      outstanding                                   2,674  
            --
     Common stock: par value $0.001;
      66,666,667 shares authorized,
      6,205,290 shares issued and
      outstanding                                   6,205  
         6,205
     Additional paid in capital                 8,283,900  
     5,705,574
     Retained earnings                          6,901,887  
     5,979,785
     Accumulated other comprehensive
      income                                      781,868  
       533,909
    Total stockholders' equity                 15,976,534  
    12,225,473

    Total Liabilities and stockholders'
     equity                                    16,700,169  
    12,716,185



    Consolidated Statements of Operations and Comprehensive
Income (unaudited)

                                 Three       Three
                                 months      months   Six
months  Six months
                              ended June  ended June  ended
June  ended June
                               30, 2007    30, 2006    30,
2007    30, 2006

    Sales revenues             $9,418,160 $7,063,189
$12,414,023 $9,416,475

    Cost of goods sold          7,490,129  5,576,033  
9,739,044  7,358,705
    Gross profit                1,928,031  1,487,156  
2,674,979  2,057,770

    Operating expenses
     Advertising                  518,619    393,128    
660,093    498,904
     Selling expense              237,502    149,426    
281,532    185,328
     Salaries and benefits        109,641     72,352    
148,993    106,204
     Depreciation                  35,630     33,963     
70,966     59,265
     Other general and
      administrative              241,824    539,643    
454,955    701,630
     Total operating expenses   1,143,216  1,188,512  
1,616,539  1,551,331

    Net operating income          784,815    298,644  
1,058,440    506,439

    Other income (expense)
     Interest income                   78         --      
1,735         --
     Interest expense                 (97)    (2,408)      
 (97)    (6,210)
    Total other income
     (expense)                        (19)    (2,408)     
1,638     (6,210)

    Net income before taxes       784,796    296,236  
1,060,078    500,229

    Taxes                         137,976         --    
137,976         --

    Net income                    646,820    296,236    
922,102    500,229

    Foreign currency
     translation adjustment       142,824     46,962    
247,959     91,540

    Comprehensive Income          789,644    343,198  
1,170,061    591,769

    Basic earnings per share    $    0.10  $    0.05   $   
0.15  $    0.08
    Denominator for basic EPS   6,205,290  6,205,290  
6,205,290  6,205,290

    Fully diluted earnings per
     share                      $    0.10  $    0.04   $   
0.14  $    0.06
    Denominator for diluted EPS 6,594,567  8,031,009  
6,399,929  8,031,009



    For more information, please contact:

     Jianmin Li
     Deli Solar (USA), Inc.
     Tel:   [phone]
     Email: [e-mail]

     Matthew Hayden
     HC International, Inc.
     Tel:   [phone]
     Email: [e-mail]