UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): |
March 24, 2015 |
HIGHPOWER INTERNATIONAL, INC.
(Exact name of registrant as specified in
its charter)
Delaware |
001-34098 |
20-4062622 |
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
Building A1, Luoshan Industrial Zone, Shanxia, Pinghu, Longgang, Shenzhen, Guangdong, 518111, China |
(Address, including zip code, of principal executive offices) |
Registrant’s telephone number, including area code |
(86) 755-89686238 |
(Former name or former address, if changed since last report.) |
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition.
On March 24, 2015, Highpower International, Inc. (the
“Company”) issued a press release announcing its financial results for the three months and year ended December 31,
2014. A copy of the March 24, 2015 press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and the information
therein is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On March 24, 2015, the Company issued a press release
announcing its financial results for the three months and year ended December 31, 2014. A copy of the March 24, 2015 press release
is attached to this Current Report on Form 8-K as Exhibit 99.1 and the information therein is incorporated herein by reference.
The information reported under Items 2.02 and 7.01
in this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, shall not be deemed filed for purposes of Section 18
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of
that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the
Exchange Act, regardless of any general incorporation language in such filing.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit No. |
Description |
|
|
99.1 |
Highpower International, Inc. Press Release dated March 24, 2015. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: March 24, 2015 |
Highpower International, Inc. |
|
|
|
|
|
/s/ |
Henry Sun |
|
|
By: |
Henry Sun |
|
|
Its: |
Chief Financial Officer |
|
Exhibit 99.1
Highpower International Reports Financial
Results
for the Fourth Quarter and Year Ended
December 31, 2014
Record Annual
Sales, Net Income Increased 89.7%, Lithium Battery Sales Increased 18.1%, Compared to Prior Year
SAN FRANCISCO, USA and SHENZHEN, CHINA–March
24, 2015 - Highpower International, Inc. (NASDAQ: HPJ), a developer, manufacturer, and marketer of lithium and nickel-metal
hydride (Ni-MH) rechargeable batteries, and a battery management systems and battery recycling provider, today announced its financial
results for the fourth quarter and fiscal year ended December 31, 2014.
2014 Fiscal
Year Operating and Financial Highlights (all results are compared to prior year period)
| · | Net
sales were $147.1 million, an increase of 10.7% compared to $132.8 million. |
| · | Lithium
battery net sales increased 18.1% from $57.9 million to 68.4 million. |
| · | Gross
margin was 20.5% compared to 19.9%. |
| · | Adjusted
EBITDA increased 55.9% to $10.6 million, compared to $6.8 million; EBITDA increased 47.8% to $9.4 million, compared to $6.3 million. |
| · | Adjusted
net income attributable to the Company increased 109.2% to $3.9 million, or $0.26 per diluted share, compared to $1.9 million,
or $0.14 per share; Net income attributable to the company increased 89.7% to $2.8 million, or $0.18 per share, compared to $1.5
million or $0.11 per diluted share. |
| · | Major
customer additions include Phillips, Sony, Costco, Timex, Acer and VTech. |
| · | Huizhou
facility was successfully qualified by Samsung, and was certified as Sony’s Green Partner. |
Management Commentary
Mr. George Pan,
Chairman and CEO of Highpower International, commented, "We are pleased to report record sales, and solid operating results
in 2014, with considerable improvement on net income. We are very excited with the new world-class customers we have acquired during
2014, and the quality of these customers is a real reflection of Highpower’s value to our investors and market influence
around the world. In the meantime, we have advanced our R&D initiatives throughout the year to continuously improve our lithium
batteries. In 2015, with the ramp-up of our Huizhou Lithium Battery facility, we are confident we will continue to monetize on
the explosive demand for mobile devices with our valuable and long-term customer base. We plan to launch new product lines in the
energy storage area, and progress in electrical transportation. We anticipate higher revenue growth and continued earnings improvement,
and are committed to building a healthy business for sustainable growth.”
2014 Fourth Quarter and Year-end Financial
Review
Net Sales
Net sales for the fourth quarter ended
December 31, 2014 were $35.3 million compared to $38.4 million for the same period in 2013. The decrease in net sales was mainly
due to a $1.2 million increase in net sales of Ni-MH batteries, a $0.7 million increases from new material business, and a decline
of $4.9 million in sales of Lithium batteries in comparison to the same period in 2013. The decrease was primarily attributable
to the temporary delay in certain orders in the fourth quarter.
Net sales for FY 2014 were $147.1 million,
compared to $132.8 million at December 31, 2013. The increase was due to a $10.5 million increase in net sales of lithium batteries,
a $2.1 million increase in net sales of Ni-MH batteries, and a $1.7 million increase from new material business.
Gross Profit
For the fourth quarter ended December 31,
2014, the Company’s gross profit was $7.1 million, as compared with $8.6 million for the same period in 2013.
Gross profit for the year end of 2014 increased
to $30.2 million, as compared with $26.4 million at December 31, 2013. The increase was due to improved manufacturing efficiency
along with the increase of production automation.
Gross Margin
Gross margin was 20.1% for the fourth quarter
ended December 31, 2014, compared to 22.5% in 2013 fourth quarter.
For the year end of 2014, gross margin
was 20.5%, as compared with 19.9% 2013. The increase was due to improved manufacturing efficiency along with the increase of production
automation.
Net sales, cost of sales, and gross profit
by segments is set out as follows:
| |
Three months ended | | |
| | |
For the years ended , | | |
| |
| |
December 31, | | |
| | |
December 31, | | |
| |
| |
2014 | | |
2013 | | |
Change in % | | |
2014 | | |
2013 | | |
Change in % | |
| |
(Unaudited) | | |
(Unaudited) | | |
| | |
(Audited) | | |
(Audited) | | |
| |
| |
$ | | |
$ | | |
| | |
$ | | |
$ | | |
| |
Net sales | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Ni-MH Batteries | |
| 17,861,942 | | |
| 16,690,430 | | |
| 7.02 | % | |
| 74,971,144 | | |
| 72,886,102 | | |
| 2.86 | % |
Lithium Batteries | |
| 16,463,190 | | |
| 21,393,639 | | |
| -23.05 | % | |
| 68,434,832 | | |
| 57,935,104 | | |
| 18.12 | % |
New Materials | |
| 993,524 | | |
| 335,787 | | |
| 195.88 | % | |
| 3,682,190 | | |
| 2,028,616 | | |
| 81.51 | % |
Total | |
| 35,318,656 | | |
| 38,419,856 | | |
| -8.07 | % | |
| 147,088,166 | | |
| 132,849,822 | | |
| 10.72 | % |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Cost of Sales | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Ni-MH Batteries | |
| 14,188,788 | | |
| 13,639,607 | | |
| 4.03 | % | |
| 59,546,738 | | |
| 59,131,594 | | |
| 0.70 | % |
Lithium Batteries | |
| 13,136,921 | | |
| 15,850,608 | | |
| -17.12 | % | |
| 54,072,611 | | |
| 45,515,519 | | |
| 18.80 | % |
New Materials | |
| 907,700 | | |
| 286,225 | | |
| 217.13 | % | |
| 3,318,014 | | |
| 1,818,667 | | |
| 82.44 | % |
Total | |
| 28,233,409 | | |
| 29,776,440 | | |
| -5.18 | % | |
| 116,937,363 | | |
| 106,465,780 | | |
| 9.84 | % |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Gross Profit | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Ni-MH Batteries | |
| 3,673,154 | | |
| 3,050,823 | | |
| 20.40 | % | |
| 15,424,406 | | |
| 13,754,508 | | |
| 12.14 | % |
Lithium Batteries | |
| 3,326,269 | | |
| 5,543,031 | | |
| -39.99 | % | |
| 14,362,221 | | |
| 12,419,585 | | |
| 15.64 | % |
New Materials | |
| 85,824 | | |
| 49,562 | | |
| 73.16 | % | |
| 364,176 | | |
| 209,949 | | |
| 73.46 | % |
Total | |
| 7,085,247 | | |
| 8,643,416 | | |
| -18.03 | % | |
| 30,150,803 | | |
| 26,384,042 | | |
| 14.28 | % |
Research and Development (R&D)
R&D spending
was $1.9 million, or 5.3% of net sales, for the fourth quarter ended December 31, 2014, compared to $1.7 million, or 4.5% of net
sales, for the same period in 2013.
R&D spending
was $7.7 million, or 5.2% of the revenue for fiscal year 2014, as compared to $5.7 million, or 4.3% of the revenue in 2013. The
increase of 35% in R&D spending was due to R&D activities in high end power batteries and systems in transportation and
industrial energy storage areas, and the expansion of workforce to improve research in basic materials and electrochemical system
to increase battery energy density.
Selling & Distribution
Selling and distribution
expenses were $1.7 million, or 4.9% of net sales, for the fourth quarter ended December 31, 2014, as compared with $1.8 million,
or 4.7% of net sales for the same period in 2013.
For fiscal year
2014, selling and distribution expenses were $6.6 million, or 4.5% of the revenue, compared to $6.2 million, or 4.7% of the revenue,
at December 31, 2013. The increase was due to the expansion of the increased sales and marketing activities, including participation
in industry trade shows and international travels to promote and sell products abroad.
General & Administrative
For the fourth
quarter ended December 31, 2014, general and administrative expenses were $2.7 million, or 7.7% of net sales, in comparison to
$3.7 million, or 9.7% of net sales, for the fourth quarter of 2013.
General and administrative
expenses in fiscal year 2014 were $12.9 million, or 8.8% of the revenue, compared with $12.1 million, or 9.1% of the revenue, in
2013. The increase was mainly due to the increase of $859,137 in share based compensation.
Net Income
For the fourth
quarter of 2014, net income attributable to the Company was $2.0 million, or $0.13 per diluted share based on 15.5 million weighted
average diluted shares outstanding, compared to net income of $1.2 million, or $0.09 per diluted share based on 13.9 million weighted
average diluted shares outstanding.
Net income attributable
to the Company for the fiscal year 2014 was $2.8 million, or $0.18 per diluted share based on 15.2 million weighted average diluted
shares outstanding, compared to net income of $1.5 million, or $0.11 per share based on 13.7 million, both basic and diluted, in
the same period of 2013.
EBITDA
EBITDA for the
fourth quarter ended December 31, 2014 increased 30.1% to $3.3 million from $2.5 million in the prior year period.
For fiscal year
2014, EBITDA increased 47.8% to $9.4 million from $6.3 million in 2013.
A table reconciling
EBITDA, a non-GAAP (Generally Accepted Accounting Principles) financial measure, to the appropriate GAAP measure is included with
the Company’s financial information below.
Balance Sheet Highlights
| |
12/31/2014 | | |
12/31/2013 | |
($ in millions, except
per share data) | |
(Audited) | | |
(Audited) | |
Cash and Cash Equivalents | |
$ | 14.6 | | |
$ | 8.0 | |
Total Current Assets | |
$ | 89.2 | | |
$ | 97.3 | |
Total Assets | |
$ | 146.2 | | |
$ | 151.8 | |
Total Current Liabilities | |
$ | 101.4 | | |
$ | 113.2 | |
Total Liabilities | |
$ | 104.4 | | |
$ | 117.1 | |
Shareholders’ Equity | |
$ | 41.8 | | |
$ | 34.7 | |
Total Liabilities and Shareholders’ Equity | |
$ | 146.2 | | |
$ | 151.8 | |
Book Value Per Share | |
$ | 2.77 | | |
$ | 2.48 | |
Outlook for
2015
Mr. Pan continued,
“We were particularly pleased to announce the multi-million dollar order for backup power products for smart phones in February,
which is a rapidly growing segment of the consumer market. We feel Highpower is well-positioned for growth in the coming year due
to the growing market need for our battery products in a wide array of customer applications. We intend to leverage our strong
financial position and operating flexibility to meet the needs of our customer base.”
Based on current
expectations for global demand in the rechargeable battery market in 2014 and the continued shift toward mobile power sources,
higher-value energy storage systems and transportation products, the Company expects 2015 revenues to be between $160 million to
$170 million, and non-GAAP net income of between $5.0 million and $6.0 million, and net income of between $4.0 million and $5.0
million.
Conference Call Details
The Company announced that it will
discuss financial results in a conference call on March 24, 2015 at 10:00 a.m. Eastern time / 7:00 a.m. Pacific time to discuss
these results.
The dial-in numbers are: |
|
Live Participant Dial In (Toll Free): |
877-407-3108 |
Live Participant Dial In (International): |
201-493-6797 |
To listen to the live webcast, please
go to at www.highpowertech.com and click on the conference call link, or go to: http://highpowertech.equisolvewebcast.com/q4-2014.
This webcast will be archived and accessible through the Company’s website for approximately 30 days following the call.
The Company will also have an accompanying slide presentation available in PDF format on its homepage prior to the conference
call.
About Highpower International, Inc.
Highpower International was founded in
2001 and produces high-quality Nickel-Metal Hydride (Ni-MH) and lithium-based rechargeable batteries used in a wide range of applications
such as electric buses, bikes, energy storage systems, power tools, medical equipment, digital and electronic devices, personal
care products, and lighting, etc. Highpower’s target customers are Fortune 500 companies and top 10 companies in each vertical
segment. With advanced manufacturing facilities located in Shenzhen, Huizhou, and Ganzhou of China, Highpower is committed to clean
technology, not only in the products it makes, but also in the processes of production. The majority of Highpower International's
products are distributed to worldwide markets mainly in the United States, Europe, China and Southeast Asia.
Use of Non-GAAP Measures
The Company has supplemented its reported
GAAP (generally accepted accounting principles) financial information with non-GAAP measures. EBITDA was derived by taking earnings
before interest expense (net), taxes, depreciation and amortization. Adjusted EBITDA and Non-GAAP (adjusted) net income exclude
stock-based compensation expense. Adjusted EBITDA, as defined above, may not be similar to Adjusted EBITDA measures used by
other companies. The presentation of this additional information is not meant to be considered in isolation or as a substitute
for results prepared in accordance with U.S. GAAP. The Company believes these non-GAAP measures are useful to investors as
they provide a basis for evaluating the Company's operating results in the ordinary course of its operations.
These non-GAAP measures are not based on
any comprehensive set of accounting rules or principles. The Company believes that non-GAAP measures have limitations in that
they do not reflect all of the amounts associated with its results of operations as determined in accordance with U.S. GAAP and
that these measures should only be used to evaluate the Company's results of operations in conjunction with, and not in lieu of,
the corresponding GAAP measures. These non-GAAP financial measures are reconciled in the accompanying tables to the most directly
comparable measures as reported in accordance with GAAP.
Forward Looking Statements
This press release contains "forward-looking
statements" within the meaning of the “safe-harbor” provisions of the Private Securities Litigation Reform Act
of 1995 that are not historical facts. These statements can be identified by the use of forward-looking terminology
such as “believe,” “expect,” “may,” “will,” “should,” “project,”
“plan,” “seek,” “intend,” or “anticipate” or the negative thereof or comparable
terminology, and include discussions of strategy, and statements about industry trends and the Company's future performance, operations
and products. Such statements involve known and unknown risks, uncertainties and other factors that could cause the Company's actual
results to differ materially from the results expressed or implied by such statements, including, without limitation, fluctuations
in the cost of raw materials; our dependence on, or inability to attract additional, major customers for a significant portion
of our net sales; our ability to increase manufacturing capabilities to satisfy orders from new customers; our ability to maintain
increased margins; our dependence on the growth in demand for portable electronic devices and energy storage systems and transportation
products and the success of manufacturers of the end applications that use our battery products; our responsiveness to competitive
market conditions; our ability to successfully manufacture our products in the time frame and amounts expected; the market acceptance
of our battery products, including our lithium products; our ability to successfully develop products for and penetrate the electric
transportation market; our ability to continue R&D development to keep up with technological changes. For a discussion of these
and other risks and uncertainties see "Risk Factors" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the Company's public filings with the SEC. Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable, there can be no assurance that such expectations will
prove to be correct. The Company has no obligation to update the forward-looking information contained in this press release.
CONTACT:
Highpower International, Inc.
Henry Sun
CFO
+86-755-8968-6521
ir@highpowertech.com
INVESTOR RELATIONS:
The Equity Group Inc.
In China
Katherine Yao, Associate
+86-10-6587-6435
kyao@equityny.com
In U.S.
Adam Prior, Senior Vice President
(212) 836-9606
aprior@equityny.com
HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
(Stated in US Dollars except Number of
Shares)
| |
For three months December 31, | | |
For the years ended December 31, | |
| |
2014 Q4 | | |
2013 Q4 | | |
2014 | | |
2013 | |
| |
$ | | |
$ | | |
$ | | |
$ | |
| |
| | |
| | |
| | |
| |
Net sales | |
| 35,318,656 | | |
| 38,419,856 | | |
| 147,088,166 | | |
| 132,849,822 | |
Cost of sales | |
| (28,233,409 | ) | |
| (29,776,440 | ) | |
| (116,937,363 | ) | |
| (106,465,780 | ) |
Gross profit | |
| 7,085,247 | | |
| 8,643,416 | | |
| 30,150,803 | | |
| 26,384,042 | |
| |
| | | |
| | | |
| | | |
| | |
Research and development expenses | |
| (1,864,656 | ) | |
| (1,726,327 | ) | |
| (7,709,618 | ) | |
| (5,711,269 | ) |
Selling and distribution expenses | |
| (1,729,195 | ) | |
| (1,801,801 | ) | |
| (6,551,755 | ) | |
| (6,188,176 | ) |
General and administrative expenses | |
| (2,714,540 | ) | |
| (3,716,995 | ) | |
| (12,893,378 | ) | |
| (12,092,708 | ) |
Foreign currency transaction gain (loss) | |
| (60,426 | ) | |
| (178,259 | ) | |
| 273,900 | | |
| (552,669 | ) |
Gain (loss) on derivative instruments | |
| 1,943 | | |
| 58,906 | | |
| (54,406 | ) | |
| 326,222 | |
Total operating expenses | |
| (6,366,874 | ) | |
| (7,364,476 | ) | |
| (26,935,257 | ) | |
| (24,218,600 | ) |
| |
| | | |
| | | |
| | | |
| | |
Income from operations | |
| 718,373 | | |
| 1,278,940 | | |
| 3,215,546 | | |
| 2,165,442 | |
| |
| | | |
| | | |
| | | |
| | |
Gain on change of fair value of warrant liability | |
| 1,318,065 | | |
| | | |
| 106,278 | | |
| - | |
Other income | |
| 214,025 | | |
| 561,845 | | |
| 1,707,516 | | |
| 1,538,518 | |
Interest expenses | |
| (310,078 | ) | |
| (501,037 | ) | |
| (1,838,155 | ) | |
| (1,647,155 | ) |
Income before taxes | |
| 1,940,385 | | |
| 1,339,748 | | |
| 3,191,185 | | |
| 2,056,805 | |
| |
| | | |
| | | |
| | | |
| | |
Income taxes expenses | |
| 38,554 | | |
| (138,664 | ) | |
| (590,318 | ) | |
| (718,016 | ) |
Net income | |
| 1,978,939 | | |
| 1,201,084 | | |
| 2,600,867 | | |
| 1,338,789 | |
| |
| | | |
| | | |
| | | |
| | |
Less: net loss attributable to non-controlling interest | |
| (22,781 | ) | |
| (7,497 | ) | |
| (152,369 | ) | |
| (112,429 | ) |
Net income attributable to the Company | |
| 2,001,720 | | |
| 1,208,581 | | |
| 2,753,236 | | |
| 1,451,218 | |
| |
| | | |
| | | |
| | | |
| | |
Comprehensive income | |
| | | |
| | | |
| | | |
| | |
Net income | |
| 1,978,939 | | |
| 1,201,084 | | |
| 2,600,867 | | |
| 1,338,789 | |
Foreign currency translation gain (loss) | |
| 184,828 | | |
| 291,457 | | |
| (156,926 | ) | |
| 822,600 | |
Comprehensive income | |
| 2,163,767 | | |
| 1,492,541 | | |
| 2,443,941 | | |
| 2,161,389 | |
| |
| | | |
| | | |
| | | |
| | |
Less: comprehensive loss attributable to non-controlling interest | |
| 51,120 | | |
| 1,796 | | |
| (89,093 | ) | |
| (88,824 | ) |
Comprehensive income attributable to the Company | |
| 2,112,647 | | |
| 1,490,745 | | |
| 2,533,034 | | |
| 2,250,213 | |
| |
| | | |
| | | |
| | | |
| | |
Earnings per share of common stock attributable to the Company | |
| | | |
| | | |
| | | |
| | |
- Basic | |
| 0.13 | | |
| 0.09 | | |
| 0.19 | | |
| 0.11 | |
- Diluted | |
| 0.13 | | |
| 0.09 | | |
| 0.18 | | |
| 0.11 | |
| |
| | | |
| | | |
| | | |
| | |
Weighted average number of common stock outstanding | |
| | | |
| | | |
| | | |
| | |
- Basic | |
| 15,055,346 | | |
| 13,657,930 | | |
| 14,739,073 | | |
| 13,671,169 | |
- Diluted | |
| 15,541,398 | | |
| 13,657,930 | | |
| 15,154,239 | | |
| 13,687,698 | |
HIGHPOWER INTERNATIONAL, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Stated in US Dollars except Number of
Shares)
| |
December 31, | | |
December 31, | |
| |
2014 | | |
2013 | |
| |
$ | | |
$ | |
ASSETS | |
| | | |
| | |
Current Assets: | |
| | | |
| | |
Cash and cash equivalents | |
| 14,611,892 | | |
| 7,973,459 | |
Restricted cash | |
| 15,396,827 | | |
| 28,586,121 | |
Accounts receivable, net | |
| 32,316,607 | | |
| 33,961,014 | |
Notes receivable | |
| 621,110 | | |
| 1,014,891 | |
Prepayments | |
| 3,283,520 | | |
| 4,969,743 | |
Other receivables | |
| 665,828 | | |
| 1,063,656 | |
Inventories | |
| 22,268,069 | | |
| 19,739,360 | |
Total Current Assets | |
| 89,163,853 | | |
| 97,308,244 | |
Property, plant and equipment, net | |
| 50,437,718 | | |
| 48,548,203 | |
Land use right, net | |
| 4,305,317 | | |
| 4,421,415 | |
Intangible asset, net | |
| 600,000 | | |
| 650,000 | |
Deferred tax assets | |
| 1,647,184 | | |
| 802,225 | |
Foreign currency derivatives assets | |
| - | | |
| 63,289 | |
TOTAL ASSETS | |
| 146,154,072 | | |
| 151,793,376 | |
LIABILITIES AND EQUITY | |
| | | |
| | |
Current Liabilities: | |
| | | |
| | |
Accounts payable | |
| 44,562,647 | | |
| 40,026,698 | |
Deferred income | |
| 1,887,409 | | |
| 675,521 | |
Short-term loan | |
| 15,195,040 | | |
| 36,142,105 | |
Notes payable | |
| 29,903,248 | | |
| 25,271,256 | |
Other payables and accrued liabilities | |
| 5,896,547 | | |
| 7,801,431 | |
Income taxes payable | |
| 1,968,656 | | |
| 1,279,658 | |
Current portion of long-term loan | |
| 1,959,248 | | |
| 1,967,536 | |
Total Current Liabilities | |
| 101,372,795 | | |
| 113,164,205 | |
Warrant Liability | |
| 1,067,674 | | |
| - | |
Long-term loan | |
| 1,959,247 | | |
| 3,935,071 | |
TOTAL LIABILITIES | |
| 104,399,716 | | |
| 117,099,276 | |
EQUITY | |
| | | |
| | |
Stockholders’ equity | |
| | | |
| | |
Preferred stock | |
| | | |
| | |
(Par value: $0.0001, Authorized: 10,000,000 shares, Issued and outstanding: none) | |
| - | | |
| - | |
Common stock | |
| | | |
| | |
(Par value: $0.0001, Authorized: 100,000,000 shares, 15,084,746 shares issued and outstanding at December 31, 2014 and 13,978,106 shares issued and outstanding at December 31, 2013) | |
| 1,508 | | |
| 1,398 | |
Additional paid-in capital | |
| 10,530,430 | | |
| 6,011,305 | |
Statutory and other reserves | |
| 3,611,501 | | |
| 3,142,411 | |
Retained earnings | |
| 20,675,021 | | |
| 18,390,875 | |
Accumulated other comprehensive income | |
| 5,628,657 | | |
| 5,848,859 | |
Total equity for the Company’s stockholders | |
| 40,447,117 | | |
| 33,394,848 | |
Non-controlling interest | |
| 1,307,239 | | |
| 1,299,252 | |
TOTAL EQUITY | |
| 41,754,356 | | |
| 34,694,100 | |
| |
| | | |
| | |
TOTAL LIABILITIES AND EQUITY | |
| 146,154,072 | | |
| 151,793,376 | |
HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Stated in US Dollars)
| |
For the years ended December 31, | |
| |
2014 | | |
2013 | |
| |
$ | | |
$ | |
Cash flows from operating activities | |
| | | |
| | |
Net income | |
| 2,600,867 | | |
| 1,338,789 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |
| | | |
| | |
Depreciation and amortization | |
| 4,201,533 | | |
| 2,523,583 | |
Allowance for doubtful accounts | |
| 768 | | |
| 483,586 | |
Loss on disposal of property, plant and equipment | |
| 227,264 | | |
| 263,454 | |
Loss on derivative instruments | |
| 62,801 | | |
| 194,892 | |
Deferred income tax | |
| (845,068 | ) | |
| (23,410 | ) |
Share based payment | |
| 1,288,916 | | |
| 426,779 | |
Gain on change of fair value of warrant liability | |
| (106,278 | ) | |
| - | |
Changes in operating assets and liabilities: | |
| | | |
| | |
Accounts receivable | |
| 1,472,589 | | |
| (8,511,464 | ) |
Notes receivable | |
| 388,137 | | |
| (605,229 | ) |
Prepayments | |
| 1,661,111 | | |
| (1,656,526 | ) |
Other receivable | |
| 391,965 | | |
| (239,801 | ) |
Inventories | |
| (2,602,659 | ) | |
| (2,618,611 | ) |
Accounts payable | |
| 5,672,372 | | |
| 14,566,891 | |
Deferred income | |
| 1,880,776 | | |
| - | |
Other payables and accrued liabilities | |
| (1,867,493 | ) | |
| 3,178,758 | |
Income taxes payable | |
| 691,949 | | |
| 72,509 | |
Net cash flows provided by operating activities | |
| 15,119,550 | | |
| 9,394,200 | |
Cash flows from investing activities | |
| | | |
| | |
Acquisition of plant and equipment | |
| (8,881,328 | ) | |
| (19,981,373 | ) |
Net cash flows used in investing activities | |
| (8,881,328 | ) | |
| (19,981,373 | ) |
Cash flows from financing activities | |
| | | |
| | |
Proceeds from short-term bank loans | |
| 20,346,228 | | |
| 34,088,599 | |
Repayment of short-term bank loans | |
| (41,122,204 | ) | |
| (18,770,730 | ) |
Repayment of long-term bank loans | |
| (1,952,362 | ) | |
| (1,937,987 | ) |
Proceeds from notes payable | |
| 52,258,487 | | |
| 45,285,470 | |
Repayment of notes payable | |
| (47,536,694 | ) | |
| (46,960,375 | ) |
Proceeds from issuance of capital stock and warrants, net | |
| 4,633,164 | | |
| - | |
Change in restricted cash | |
| 13,038,071 | | |
| (350,756 | ) |
Net cash flows provided by (used in) financing activities | |
| (335,310 | ) | |
| 11,354,221 | |
Effect of foreign currency translation on cash and cash equivalents | |
| 735,521 | | |
| 579,077 | |
Net increase in cash and cash equivalents | |
| 6,638,433 | | |
| 1,346,125 | |
Cash and cash equivalents - beginning of year | |
| 7,973,459 | | |
| 6,627,334 | |
Cash and cash equivalents - end of year | |
| 14,611,892 | | |
| 7,973,459 | |
Supplemental disclosures for cash flow information: | |
| | | |
| | |
Cash paid for: | |
| | | |
| | |
Income taxes | |
| 743,437 | | |
| 668,917 | |
Interest expenses | |
| 1,912,584 | | |
| 1,647,155 | |
Non-cash transactions | |
| | | |
| | |
Accounts payable for construction in progress | |
| - | | |
| 1294963 | |
Reduction of property, plant and equipment cost by realizing deferred income | |
| 672,675 | | |
| - | |
HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES (Unaudited)
(Stated in US Dollars)
Reconciliation of Net Income to EBITDA
| |
Three Months Ended December 31, | | |
For the years ended December 31, | |
| |
2014 | | |
2013 | | |
2014 | | |
2013 | |
| |
$ | | |
$ | | |
$ | | |
$ | |
Net Income attributable to the Company | |
| 2,001,720 | | |
| 1,208,581 | | |
| 2,753,236 | | |
| 1,451,218 | |
Non-GAAP Net Income (1) | |
| 907,602 | | |
| 1,479,008 | | |
| 3,935,874 | | |
| 1,880,997 | |
| |
| | | |
| | | |
| | | |
| | |
Interest expenses, net | |
| 310,078 | | |
| 501,037 | | |
| 1,838,155 | | |
| 1,647,155 | |
Income tax expenses | |
| (38,554 | ) | |
| 138,664 | | |
| 590,318 | | |
| 718,016 | |
Depreciation and Amortization | |
| 1,029,754 | | |
| 690,987 | | |
| 4,191,138 | | |
| 2,523,583 | |
| |
| | | |
| | | |
| | | |
| | |
EBITDA | |
| 3,302,998 | | |
| 2,539,269 | | |
| 9,372,847 | | |
| 6,339,972 | |
Non-GAAP EBITDA(2) | |
| 2,208,880 | | |
| 2,809,696 | | |
| 10,555,485 | | |
| 6,769,751 | |
(1) See table below for reconciliation of
net income attributable to the Company to Non-GAAP net income attributable to the Company.
(2) Excludes share-based compensation expense
as set forth in the following table.
HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES (Unaudited)
(Stated in US Dollars)
Reconciliation of Net Income Attributable to the Company to Non-GAAP Net Income Attributable to the Company
| |
Three months ended | | |
For the years ended | |
| |
December 31, | | |
December 31, | |
| |
2014 | | |
2013 | | |
2014 | | |
2013 | |
| |
$ | | |
$ | | |
$ | | |
$ | |
| |
| | |
| | |
| | |
| |
Net income attributable to the Company | |
| 2,001,720 | | |
| 1,208,581 | | |
| 2,753,236 | | |
| 1,451,218 | |
Stock-based compensation expense | |
| 223,947 | | |
| 270,427 | | |
| 1,288,916 | | |
| 429,779 | |
Loss on change of fair value of warrant liability | |
| (1,318,065 | ) | |
| - | | |
| (106,278 | ) | |
| - | |
Non-GAAP net income attributable to the Company | |
| 907,602 | | |
| 1,479,008 | | |
| 3,935,874 | | |
| 1,880,997 | |
| |
| | | |
| | | |
| | | |
| | |
Basic net income per share of common stock attributable to the Company | |
| 0.13 | | |
| 0.09 | | |
| 0.19 | | |
| 0.11 | |
Stock-based compensation expense | |
| 0.01 | | |
| 0.02 | | |
| 0.09 | | |
| 0.03 | |
Loss on change of fair value of warrant liability | |
| (0.09 | ) | |
| - | | |
| (0.01 | ) | |
| - | |
Non-GAAP income per share of common stock attributable to the Company | |
| 0.05 | | |
| 0.11 | | |
| 0.27 | | |
| 0.14 | |
| |
| | | |
| | | |
| | | |
| | |
Diluted net income per share of common stock attributable to the Company | |
| 0.13 | | |
| 0.09 | | |
| 0.18 | | |
| 0.11 | |
Stock-based compensation expense | |
| 0.01 | | |
| 0.01 | | |
| 0.09 | | |
| 0.03 | |
Loss on change of fair value of warrant liability | |
| (0.08 | ) | |
| - | | |
| (0.01 | ) | |
| - | |
Non-GAAP income per share of common stock attributable to the Company | |
| 0.06 | | |
| 0.10 | | |
| 0.26 | | |
| 0.14 | |
| |
| | | |
| | | |
| | | |
| | |
Weighted average number of common shares outstanding | |
| | | |
| | | |
| | | |
| | |
-Basic | |
| 15,055,346 | | |
| 13,863,306 | | |
| 14,739,073 | | |
| 13,671,169 | |
-Diluted | |
| 15,541,398 | | |
| 13,874,574 | | |
| 15,154,239 | | |
| 13,687,698 | |
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