WUHAN, China, May 14, 2015 /PRNewswire/ -- China Automotive
Systems, Inc. ("CAAS" or the "Company") (NASDAQ: CAAS), a
leading power steering components and systems supplier in
China, today announced its
unaudited financial results for the first quarter ended
March 31, 2015.
First Quarter 2015 Highlights
- Net sales increased by 8.0% to a first-quarter record of
$123.4 million, compared to
$114.3 million in the first quarter
of 2014.
- Gross margin was 17.6%, compared to 18.7% in the first quarter
of 2014 and 17.7% in the fourth quarter of 2014.
- Operating margin was 7.6%, compared to 8.5% in the first
quarter of 2014 and 6.9% in the fourth quarter of 2014.
- Net income attributable to parent company's common shareholders
increased 25.6% to $8.5 million, or
diluted earnings per share of $0.26,
compared to net income attributable to parent company's common
shareholders of $6.8 million, or
diluted earnings per share of $0.24,
in the first quarter of 2014.
- Cash and cash equivalents and short-term investments were
$105.0 million and $109.5 million as of March
31, 2015 and December 31,
2014, respectively.
Mr. Qizhou Wu, chief executive
officer of CAAS, commented, "We are pleased to report that we have
again exceeded the $100 million sales
mark in the first quarter of 2015 as we continued to capture market
shares in China and our sales
increased in North America.
Domestic sales were led by a 150% increase in sales of our electric
power steering ('EPS") products to approximately $25.0 million, representing 20.0% of our total
sales in the 2015 first quarter. Our 8.0% sales growth exceeded the
3.9% sales growth of vehicles in China in the first quarter of 2015.
"Sales to North America
increased by 9.5% year-over-year as our key customer Chrysler
reported its 60th consecutive month of year-over-year sales gains.
The JeepĀ® brand reported that March
2015 was its best sales month ever, with 23% growth compared
to March 2014 sales, and Wrangler
announced its best ever sales in the month of March. Jeep has
reported 18 consecutive months of year-over-year sales gains.
"In addition, we are further expanding our global reach with the
construction of our assembly facility in Brazil. Once it is operational later in 2015,
we will be positioned to better serve vehicle manufacturers in the
South American markets and capture market share. We also will be
supplying the emerging operations of our current Chinese customers
and a Tier 1 OEM in these additional markets," Mr. Wu
concluded.
Mr. Jie Li, chief financial
officer of CAAS, commented, "Positive cash flow was generated from
operations and we maintained over $100
million in cash, cash equivalents and short-term investments
in the first quarter of 2015. We are using our strong financial
position to increase our research and development. We have expanded
our electric power steering portfolio and are developing other new
steering technologies to improve our growth in domestic and
international markets. We are also positioning ourselves
financially to improve our growth in the future."
First Quarter of 2015
In the first quarter of 2015, net sales increased by 8.0% to a
first-quarter record of $123.4
million, compared to $114.3
million in the same quarter of 2014. The net sales increase
was mainly due to higher sales to the Chinese passenger vehicle
markets including an increase in the sale of higher-priced,
middle-level electric power steering units. EPS sales rose by
150.0% to $25.0 million in the first
quarter of 2015. Sales to the North American market continued to
increase in the first quarter of 2015 as well.
Gross profit increased by 1.9% to $21.7
million in the first quarter of 2015, compared to
$21.3 million in the first quarter of
2014. The gross margin was 17.6% in the first quarter of 2015,
versus 18.7% in the first quarter of 2014 and 17.7% in the fourth
quarter of 2014. The decrease in gross margin year-over-year was
primarily due to a 17.8% decline in CAAS sales to the commercial
vehicle market. Slower economic growth this year and higher
purchases of trucks with the less expensive National III emission
standards in last year's first quarter, reduced demand for trucks
in the 2015 first quarter. The decreased sales to commercial
vehicles lowered that factory's utilization resulting in a decline
in the gross margin. Nationwide enforcement of the more strict
National IV emission standards began on January 1, 2015.
Selling expenses increased by 20.0% to $3.6 million in the first quarter of 2015,
compared to $3.0 million in the first
quarter of 2014. Selling expenses represented 2.9% of net sales in
the first quarter of 2015, compared to 2.7% in the first quarter of
2014. The increase was mainly due to higher personnel compensation
and travel-related expenses.
General and administrative expenses ("G&A expenses")
increased by 25.7% to $4.4 million in
the first quarter of 2015, compared to $3.5
million in the same quarter of 2014. The increase was mainly
due to higher personnel costs and a rise in improvement expenses
for offices and facilities. G&A expenses represented 3.6% of
net sales in the first quarter of 2015 and 3.1% in the first
quarter of 2014.
Research and development expenses ("R&D expenses") amounted
to $5.9 million in the first quarter
of 2015, the same as those in the first quarter of 2014. R&D
expenses represented 4.8% of net sales in the first quarter of 2015
and 5.2% in the first quarter of 2014.
Income from operations was $9.4
million in the first quarter of 2015, compared to
$9.8 million in the same quarter of
2014. As a percentage of net sales, the operating margin was 7.6%
in the first quarter of 2015, compared to 8.5% in the first quarter
of 2014 and 6.9% in the fourth quarter of 2014.
Net financial income increased by $0.1
million to $0.3 million in the
first quarter of 2015, compared to $0.2
million in the first quarter of 2014.
Income before income tax expenses and equity in earnings of
affiliated companies was $9.7 million
in the first quarter of 2015, compared to $10.2 million in the first quarter of 2014. The
decrease in income before income tax expenses and equity in
earnings of affiliated companies of $0.5
million in the first quarter of 2015 was mainly due to a
decrease in operating income of $0.4
million.
Net income attributable to parent company's common shareholders
was $8.5 million in the first quarter
of 2015, compared to net income attributable to parent company's
common shareholders of $6.8 million
in the corresponding quarter of 2014. Diluted earnings per share
were $0.26 in the first quarter of
2015, compared to diluted earnings per share of $0.24 in the first quarter of 2014. The weighted
average number of diluted common shares outstanding was 32,134,732
in the first quarter of 2015, compared to 28,063,501 in the first
quarter of 2014.
As of March 31, 2015, total cash
and cash equivalents and short-term investments were $105.0 million, compared to $109.5 million as of December 31, 2014. Working capital was
$203.4 million as of March 31, 2015, compared to $198.1 million as of December 31, 2014.
Business Outlook
Management reiterates its revenue guidance of 10% year-over-year
growth for the full year 2015. This target is based on the
Company's current views on operating and market conditions, which
are subject to change.
Conference Call
Management will conduct a conference call on May 14, 2015 at 9:00 A.M.
EDT/9:00 P.M. Beijing Time to
discuss these results. A question and answer session will follow
management's presentation. To participate, please call the
following numbers 10 minutes before the call start time and ask to
be connected to the "China Automotive Systems" conference call:
Phone
Number:
|
+1-877-407-8031
(North America)
|
Phone
Number:
|
+1-201-689-8031
(International)
|
China Toll
Free:
|
864 001 202 840
|
A telephone replay of the call will be available after the
conclusion of the conference call through 11:59 P.M. EDT on June 14,
2015. The dial-in details for the replay are:
U.S. Toll Free
Number
|
+1-877-660-6853
|
International dial-in
number
|
+1-201-612-7415
|
Use Conference ID "13609142" to access the replay.
About China Automotive Systems, Inc.
Based in Hubei Province,
the People's Republic of China,
China Automotive Systems, Inc. is a leading supplier of power
steering components and systems to the Chinese automotive industry,
operating through its subsidiaries and Sino-foreign joint ventures.
The Company offers a full range of steering system parts for
passenger automobiles and commercial vehicles. The Company
currently offers four separate series of power steering with an
annual production capacity of over 5.0 million sets of steering
gears, columns and steering hoses. Its customer base is comprised
of leading auto manufacturers, such as China FAW Group, Corp.,
Dongfeng Auto Group Co., Ltd., BYD Auto Company Limited, Beiqi
Foton Motor Co., Ltd. and Chery Automobile Co., Ltd. in
China, and Fiat Chrysler North
America. For more information, please visit:
http://www.caasauto.com.
Forward-Looking Statements
This press release contains statements that are "forward-looking
statements" as defined under the Private Securities Litigation
Reform Act of 1995. Forward-looking statements represent our
estimates and assumptions only as of the date of this press
release. These forward-looking statements include statements
regarding the qualitative and quantitative effects of the
accounting errors, the periods involved, the nature of the
Company's review and any anticipated conclusions of the Company or
its management and other statements that are not historical facts.
Our actual results may differ materially from the results described
in or anticipated by our forward-looking statements due to certain
risks and uncertainties. As a result, the Company's actual results
could differ materially from those contained in these
forward-looking statements due to a number of factors, including
those described under the heading "Risk Factors" in the Company's
Form 10-K annual report filed with the Securities and Exchange
Commission on March 26, 2015, and in
documents subsequently filed by the Company from time to time with
the Securities and Exchange Commission. We expressly disclaim any
duty to provide updates to any forward-looking statements made in
this press release, whether as a result of new information, future
events or otherwise.
For further information, please contact:
Jie Li
Chief Financial Officer
China Automotive Systems, Inc.
Email: jieli@chl.com.cn
Kevin Theiss
Investor Relations
Grayling
Tel: +1-646-284-9409
Email: caas@grayling.com
China
Automotive Systems, Inc. and Subsidiaries
|
Condensed
Unaudited Consolidated Balance Sheets
|
(Unaudited, in
thousands of USD unless otherwise indicated)
|
|
|
|
|
|
|
|
|
March 31,
2015
|
|
|
December 31,
2014
|
|
|
|
|
|
(Audited)
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
65,909
|
|
|
$
|
68,505
|
Pledged cash
deposits
|
|
|
30,663
|
|
|
|
33,633
|
Short-term
investments
|
|
|
39,084
|
|
|
|
41,017
|
Accounts and notes
receivable, net - unrelated parties
|
|
|
295,215
|
|
|
|
282,348
|
Accounts and notes
receivable, net - related parties
|
|
|
25,678
|
|
|
|
22,760
|
Advance payments and
others - unrelated parties
|
|
|
3,561
|
|
|
|
2,124
|
Advance payments and
others - related parties
|
|
|
623
|
|
|
|
741
|
Inventories
|
|
|
68,747
|
|
|
|
64,419
|
Current deferred tax
assets
|
|
|
6,739
|
|
|
|
7,078
|
Total current
assets
|
|
|
536,219
|
|
|
|
522,625
|
Non-current
assets:
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
84,099
|
|
|
|
82,466
|
Intangible assets,
net
|
|
|
3,262
|
|
|
|
3,419
|
Other receivables,
net - unrelated parties
|
|
|
1,858
|
|
|
|
1,619
|
Other receivables,
net - related parties
|
|
|
8
|
|
|
|
76
|
Advance payment for
property, plant and equipment - unrelated parties
|
|
|
3,229
|
|
|
|
6,755
|
Advance payment for
property, plant and equipment - related parties
|
|
|
2,554
|
|
|
|
2,085
|
Long-term
investments
|
|
|
4,624
|
|
|
|
4,575
|
Goodwill
|
|
|
643
|
|
|
|
645
|
Non-current deferred
tax assets
|
|
|
5,293
|
|
|
|
4,896
|
Total
assets
|
|
$
|
641,789
|
|
|
$
|
629,161
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Bank and government
loans
|
|
$
|
41,187
|
|
|
$
|
43,988
|
Accounts and notes
payable - unrelated parties
|
|
|
226,248
|
|
|
|
213,090
|
Accounts and notes
payable - related parties
|
|
|
4,751
|
|
|
|
4,857
|
Customer
deposits
|
|
|
1,279
|
|
|
|
1,885
|
Accrued payroll and
related costs
|
|
|
7,227
|
|
|
|
7,554
|
Accrued expenses and
other payables
|
|
|
34,471
|
|
|
|
35,429
|
Accrued pension
costs
|
|
|
5,322
|
|
|
|
5,586
|
Taxes
payable
|
|
|
11,801
|
|
|
|
11,557
|
Amounts due to
shareholders/directors
|
|
|
378
|
|
|
|
380
|
Current deferred tax
liabilities
|
|
|
156
|
|
|
|
189
|
Total current
liabilities
|
|
|
332,820
|
|
|
|
324,515
|
Long-term
liabilities:
|
|
|
|
|
|
|
|
Advances
payable
|
|
|
3,691
|
|
|
|
6,156
|
Non-current deferred
tax liabilities
|
|
|
310
|
|
|
|
321
|
Total
liabilities
|
|
$
|
336,821
|
|
|
$
|
330,992
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
Common stock, $0.0001
par value - Authorized - 80,000,000 shares; Issuedā32,338,302
and 32,338,302 shares as of March 31, 2015 and December 31, 2014,
respectively
|
|
$
|
3
|
|
|
$
|
3
|
Additional paid-in
capital
|
|
|
64,522
|
|
|
|
64,522
|
Retained
earnings-
|
|
|
|
|
|
|
|
Appropriated
|
|
|
10,178
|
|
|
|
10,178
|
Unappropriated
|
|
|
187,945
|
|
|
|
179,435
|
Accumulated other
comprehensive income
|
|
|
34,927
|
|
|
|
36,119
|
Treasury stock ā
217,283 and 217,283 shares as of March 31, 2015 and December 31,
2014, respectively
|
|
|
(1,000)
|
|
|
|
(1,000)
|
Total parent company
stockholders' equity
|
|
|
296,575
|
|
|
|
289,257
|
Non-controlling
interests
|
|
|
8,393
|
|
|
|
8,912
|
Total stockholders'
equity
|
|
|
304,968
|
|
|
|
298,169
|
Total liabilities and
stockholders' equity
|
|
$
|
641,789
|
|
|
$
|
629,161
|
China
Automotive Systems, Inc. and Subsidiaries
|
Condensed
Unaudited Consolidated Statements of Operations and Comprehensive
Income
|
(Unaudited, in
thousands of USD, except share and per share
amounts)
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
|
2015
|
|
|
2014
|
Net product sales,
including $11,704 and $11,810 to related parties for the three
months
ended March 31, 2015 and 2014
|
|
$
|
123,443
|
|
|
$
|
114,306
|
Cost of products
sold, including $7,060 and $7,191 purchased from related parties
for
the three months ended March 31, 2015 and 2014
|
|
|
101,772
|
|
|
|
92,969
|
Gross
profit
|
|
|
21,671
|
|
|
|
21,337
|
Gain on other
sales
|
|
|
1,657
|
|
|
|
909
|
Less: Operating
expenses
|
|
|
|
|
|
|
|
Selling
expenses
|
|
|
3,624
|
|
|
|
3,042
|
General and
administrative expenses
|
|
|
4,448
|
|
|
|
3,545
|
Research and
development expenses
|
|
|
5,893
|
|
|
|
5,888
|
Total operating
expenses
|
|
|
13,965
|
|
|
|
12,475
|
Income from
operations
|
|
|
9,363
|
|
|
|
9,771
|
Other income,
net
|
|
|
94
|
|
|
|
239
|
Interest
expense
|
|
|
(474)
|
|
|
|
(278)
|
Financial income,
net
|
|
|
753
|
|
|
|
491
|
Income before income
tax expenses and equity in earnings of affiliated
companies
|
|
|
9,736
|
|
|
|
10,223
|
Less: Income
taxes
|
|
|
1,410
|
|
|
|
1,975
|
Equity in earnings of
affiliated companies
|
|
|
66
|
|
|
|
63
|
Net
income
|
|
|
8,392
|
|
|
|
8,311
|
Net income (loss)
attributable to non-controlling interests
|
|
|
(118)
|
|
|
|
1,537
|
Net income attributable
to parent company's common shareholders
|
|
$
|
8,510
|
|
|
$
|
6,774
|
Comprehensive
income:
|
|
|
|
|
|
|
|
Net income
|
|
$
|
8,392
|
|
|
$
|
8,311
|
Other comprehensive
income:
|
|
|
|
|
|
|
|
Foreign currency
translation gain, net of tax
|
|
|
(1,275)
|
|
|
|
(2,397)
|
Comprehensive
income
|
|
|
7,117
|
|
|
|
5,914
|
Comprehensive income
(loss) attributable to non-controlling interests
|
|
|
(201)
|
|
|
|
1,136
|
Comprehensive income
attributable to parent company
|
|
$
|
7,318
|
|
|
$
|
4,778
|
|
|
|
|
|
|
|
|
Net income
attributable to parent company's common shareholders per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic ā
|
|
$
|
0.26
|
|
|
$
|
0.24
|
|
|
|
|
|
|
|
|
Diluted-
|
|
$
|
0.26
|
|
|
$
|
0.24
|
Weighted average
number of common shares outstanding
|
|
|
|
|
|
|
|
Basic
|
|
|
32,121,019
|
|
|
|
28,043,019
|
Diluted
|
|
|
32,134,732
|
|
|
|
28,063,501
|
China
Automotive Systems, Inc. and Subsidiaries
|
Condensed
Unaudited Consolidated Statements of Cash Flows
|
(Unaudited, in
thousands of USD unless otherwise indicated)
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
2015
|
|
|
2014
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income
|
|
$
|
8,392
|
|
|
$
|
8,311
|
Adjustments to
reconcile net income from operations to net cash provided by
operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
3,965
|
|
|
|
3,713
|
Increase (decrease)
in allowance for doubtful accounts
|
|
|
(2)
|
|
|
|
2
|
Inventory write
downs
|
|
|
756
|
|
|
|
1,080
|
Deferred income
taxes
|
|
|
(145)
|
|
|
|
248
|
Equity in earnings of
affiliated companies
|
|
|
(66)
|
|
|
|
(63)
|
Gain on fixed assets
disposals
|
|
|
(10)
|
|
|
|
(35)
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
(Increase) decrease
in:
|
|
|
|
|
|
|
|
Pledged
deposits
|
|
|
2,843
|
|
|
|
1,223
|
Accounts and notes
receivable
|
|
|
(16,932)
|
|
|
|
(22,366)
|
Advance payments and
others
|
|
|
(1,330)
|
|
|
|
(839)
|
Inventories
|
|
|
(5,328)
|
|
|
|
(5,992)
|
Increase (decrease)
in:
|
|
|
|
|
|
|
|
Accounts and notes
payable
|
|
|
13,876
|
|
|
|
4,594
|
Customer
deposits
|
|
|
(602)
|
|
|
|
181
|
Accrued payroll and
related costs
|
|
|
(300)
|
|
|
|
(312)
|
Accrued expenses and
other payables
|
|
|
(236)
|
|
|
|
(56)
|
Accrued pension
costs
|
|
|
(242)
|
|
|
|
202
|
Taxes
payable
|
|
|
287
|
|
|
|
1,738
|
Net cash provided by
(used in) operating activities
|
|
|
4,926
|
|
|
|
(8,371)
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
(Increase) in other
receivables
|
|
|
(184)
|
|
|
|
(46)
|
Cash received from
property, plant and equipment sales
|
|
|
559
|
|
|
|
152
|
Payments to acquire
property, plant and equipment
|
|
|
(5,723)
|
|
|
|
(3,501)
|
Payments to acquire
intangible assets
|
|
|
(7)
|
|
|
|
(3)
|
Purchase of
short-term investments
|
|
|
(5,889)
|
|
|
|
(13,002)
|
Proceeds from
maturities of short-term investments
|
|
|
7,667
|
|
|
|
12,259
|
Dividends from
investment under cost method
|
|
|
-
|
|
|
|
11
|
Net cash used in
investing activities
|
|
|
(3,577)
|
|
|
|
(4,130)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from
government and bank loan
|
|
|
2,249
|
|
|
|
5,146
|
Repayments of bank
loan
|
|
|
(4,884)
|
|
|
|
(3,251)
|
Dividends paid to the
non-controlling interest holders
|
|
|
(814)
|
|
|
|
-
|
Dividends paid to the
holders of the Company's common stock
|
|
|
(252)
|
|
|
|
-
|
Increase in amounts
due to shareholders/directors
|
|
|
-
|
|
|
|
52
|
Net cash provided
by (used in) financing
activities
|
|
|
(3,701)
|
|
|
|
1,947
|
Effects of exchange
rate on cash and cash equivalents
|
|
|
(244)
|
|
|
|
(470)
|
Net decrease in cash and
cash equivalents
|
|
|
(2,596)
|
|
|
|
(11,024)
|
Cash and cash
equivalents at beginning of period
|
|
|
68,505
|
|
|
|
53,979
|
Cash and cash
equivalents at end of period
|
|
$
|
65,909
|
|
|
$
|
42,955
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
|
|
Three Months
Ended
March 31,
|
|
|
2015
|
|
|
2014
|
Cash paid for
interest
|
|
$
|
294
|
|
|
$
|
256
|
Cash paid for income
taxes
|
|
|
336
|
|
|
|
1,204
|
SUPPLEMENTAL
DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES:
|
|
|
Three Months
Ended
March 31,
|
|
|
2015
|
|
|
2014
|
Advance payments for
acquiring property, plant and equipment
|
|
$
|
2,203
|
|
|
$
|
5,337
|
Dividends payable to
non-controlling interest holders
|
|
|
318
|
|
|
|
34
|
Government subsidies
recorded as a reduction of property, plant and equipment
cost
|
|
|
1,628
|
|
|
|
-
|
Accounts payable for
acquiring property, plant and equipment
|
|
|
842
|
|
|
|
-
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/china-automotive-systems-reports-record-first-quarter-net-sales-and-256-increase-in-net-income-300083345.html
SOURCE China Automotive Systems, Inc.