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): |
November 12, 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 November 12, 2015, Highpower International, Inc.
(the “Company”) issued a press release announcing its financial results for the quarter ended November 12, 2015. A
copy of the press release is attached hereto as Exhibit 99.1 and the information therein is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
The information under Item 2.02 above 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, is being "furnished" and 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 November 12, 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: November 12, 2015 |
Highpower International, Inc. |
|
|
|
|
/s/ |
Henry Sun |
|
By: |
Henry Sun |
|
Its: |
Chief Financial Officer |
EXHIBIT INDEX
Exhibit
No. |
|
Description |
|
|
|
99.1 |
|
Press Release dated November 12, 2015. |
Exhibit 99.1
![](http://www.sec.gov/Archives/edgar/data/1368308/000114420415064392/image_001.jpg)
Highpower International Reports Financial
Results
For the Third Quarter and Nine Months
Ended September 30, 2015
Company to Hold
Conference Call on Thursday, November 12, 2015 at 10:00 a.m. Eastern Time / 7:00 a.m. Pacific Time
SAN FRANCISCO, USA and SHENZHEN, CHINA–November
12, 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 third quarter and nine months ended September 30, 2015.
2015 Third
Quarter Operating and Financial Highlights (all results are compared to prior year period)
| · | Net sales were $37.6 million compared
to $44.5 million. |
| · | Lithium battery net sales were $17.0 million
compared to $21.1 million. Nickel-metal hydride (Ni-MH) net sales were $20.1 million compared to $22.5 million. |
| · | Gross margin was 19.2% compared to 21.1%. |
| · | EBITDA was $3.9 million, an increase of
52.3%, from $2.6 million; Adjusted EBITDA was $3.6 million compared to $4.0 million. |
| · | Net income attributable to the Company
was $1.9 million, or $0.13 per diluted share, an increase of 122.3% from net income of $874,167, or $0.06 per diluted share; non-GAAP
net income attributable to the Company was $1.6 million, or $0.10 per diluted share, compared to $2.3 million, or $0.15 per diluted
share. |
| · | Highpower International expects its total
net sales for the full year of 2015 to be between $142.0 million and $146.0 million and both GAAP and non-GAAP net income
to be between $4.0 and 5.0 million. |
Management Commentary
Mr. George Pan,
Chairman and CEO of Highpower International, commented, “We were pleased to remain profitable and grow EBITDA during the
period despite an overall challenging environment of China’s economic slowdown and pricing pressure from competition and
the decline in commodity prices. We continue to see newer electronic products and modern wearable devices being introduced to the
market, with demand for more robust rechargeable batteries. In the meantime, lower commodity prices, especially in the oil industry,
have created a challenging environment for clean energy related industries. The recent devaluation of the Chinese currency RMB
also affected our US dollar denominated sales numbers. We remain confident in growing our business in the long term.”
2015 Third Quarter Financial Review
Net Sales
Net sales for the third quarter ended September
30, 2015 were $37.6 million compared to $44.5 million for the same period in 2014. The decrease of 15.6% in net sales compared
to the same period in 2014 was due to a $4.1 million decrease in net sales of lithium batteries, a $2.3 million decrease in net
sales of Ni-MH batteries and a $0.5 million decrease in revenue of the new material business.
Net sales for the nine months ended September
30, 2015 were $108.3 million, a decrease of 3.1%, compared to $111.8 million for the same prior year period. The decrease was due
to a $6.5 million decrease in net sales of Ni-MH batteries and a $0.9 million decrease in revenue from new material business, which
was offset by a $3.9 million increase in net sales of lithium batteries. The increase in lithium battery sales in the nine months
ended September 30, 2015 was primarily attributable to the growth in global demand for mobile and portable products, and electrical
buses in China.
Gross Profit
For the third quarter ended September 30,
2015, the Company’s gross profit was $7.2 million compared to $9.4 million for the same period in 2014.
For the nine months ended September 30,
2015, the Company’s gross profit was $21.3 million compared to $23.1 million for the same period in 2014.
Gross Margin
Gross margin was 19.2% for the third quarter
ended September 30, 2015 compared to 21.1% for the same period in 2014.
Gross margin for the nine months ended
September 30, 2015 was 19.7% compared to 20.6% for the same period in 2014. The decrease of gross profit and gross margin was due
to decrease in the average selling price of products because of competition and lower commodity prices.
Net sales by geography are as follows:
| |
Three months ended | | |
Nine months ended | |
| |
September 30, | | |
September 30, | |
| |
2015 | | |
2014 | | |
2015 | | |
2014 | |
| |
(Unaudited) | | |
(Unaudited) | | |
(Unaudited) | | |
(Unaudited) | |
Net sales | |
| | | |
| | | |
| | | |
| | |
China Mainland | |
| 39.7 | % | |
| 31.5 | % | |
| 44.5 | % | |
| 43.3 | % |
Asia, others | |
| 34.7 | % | |
| 39.7 | % | |
| 32.4 | % | |
| 28.6 | % |
Europe | |
| 22.4 | % | |
| 23.5 | % | |
| 18.5 | % | |
| 21.4 | % |
North America | |
| 2.5 | % | |
| 4.8 | % | |
| 3.9 | % | |
| 6.0 | % |
Others | |
| 0.7 | % | |
| 0.5 | % | |
| 0.7 | % | |
| 0.7 | % |
Total: | |
| 100.0 | % | |
| 100.0 | % | |
| 100.0 | % | |
| 100.0 | % |
Research and Development (R&D)
R&D expenses
were $2.0 million, or 5.2% of net sales, for the third quarter ended September 30, 2015 compared to $2.1 million, or 4.6% of net
sales, for the same period in 2014.
For the nine months
ended September 30, 2015, R&D expenses were $5.6 million, or 5.2% of net sales, compared to $5.8 million, or 5.2% of net sales,
for the same period in 2014.
Selling & Distribution
Selling and distribution
expenses were $1.7 million, or 4.6% of net sales, for the third quarter ended September 30, 2015, compared to $1.7 million, or
3.8% of net sales, for the same period in 2014.
For the nine months
ended September 30, 2015, selling and distribution expenses were $5.1 million, or 4.7% of the net sales, compared to $4.8 million,
or 4.3% of net sales, for the same period in 2014.
General & Administrative
General and administrative
expenses were $3.3 million, or 8.8% of net sales, for the third quarter ended September 30, 2015, compared to $3.3 million, or
7.4% of net sales, for the same period in 2014.
For the nine months
ended September 30, 2015, general and administrative expenses were $9.7 million, or 9.0% of net sales, compared to $10.2 million,
or 9.1% of net sales, for the same period in 2014.
Net Income
For the third
quarter of 2015, net income attributable to the Company was $1.9 million, or $0.13 per diluted share based on 15.1 million weighted
average diluted shares outstanding, an increase of 122.3% compared to net income of $874,167, or $0.06 per diluted share based
on 15.6 million weighted average diluted shares outstanding in the prior year period. Non-GAAP net income attributable to the Company
was $1.6 million, or $0.10 per diluted share, compared to a non-GAAP net income of $2.3 million, or $0.15 per diluted share, in
the prior year period.
For the nine months
ended September 30, 2015, net income attributable to the Company was $3.7 million, or $0.24 per diluted share based on 15.4 million
weighted average diluted shares outstanding, an increase of 390.6% compared to net income of $751,516, or $0.05 per diluted share
based on 15.0 million weighted average diluted shares outstanding in the prior year period. Non-GAAP net income attributable to
the Company was $3.3 million, or $0.21 per diluted share, compared to a non-GAAP net income of $3.0 million, or $0.20 per diluted
share, in the prior year period.
EBITDA
EBITDA for the
third quarter ended September 30, 2015 improved to $3.9 million from $2.6 million in the prior year period. EBITDA for the first
nine months of 2015 increased 60.1% to $8.5 million from $5.3 million for the nine months ended September 30, 2014.
A table reconciling
EBITDA, a non-GAAP (Generally Accepted Accounting Principles) financial measure, to the appropriate GAAP measure is included with
the Company’s financial information below.
Balance Sheet Highlights
| |
September 30, | | |
December 31, | |
($ in millions, except per share data) | |
2015 | | |
2014 | |
| |
(Unaudited) | | |
| |
| |
$ | | |
$ | |
Cash and Cash Equivalents | |
$ | 7.9 | | |
$ | 14.6 | |
Restricted cash | |
$ | 12.4 | | |
$ | 15.4 | |
Total Current Assets | |
$ | 85.4 | | |
$ | 89.2 | |
Total Assets | |
$ | 142.1 | | |
$ | 146.2 | |
| |
| | | |
| | |
Total Current Liabilities | |
$ | 97.7 | | |
$ | 101.4 | |
Total Liabilities | |
$ | 98.3 | | |
$ | 104.4 | |
| |
| | | |
| | |
Shareholders’ Equity | |
$ | 43.8 | | |
$ | 41.8 | |
Total Liabilities and Shareholders’ Equity | |
$ | 142.1 | | |
$ | 146.2 | |
Book Value Per Share | |
$ | 2.90 | | |
$ | 2.77 | |
Outlook for
2015
Based on the recent economic
slowdown and continued downward pressure for global commodity prices, and the depreciation pressure of RMB versus USD exchange
rate, the Company expects its total net sales for the full year of 2015 to be between $142.0 million and $146.0 million, and
both GAAP and non-GAAP net income to be between $4.0 and 5.0 million .
Chairman
Pan concluded, “Based on the current impact of the short-term pricing pressures, we have realigned our expectations for Highpower
for the year. We revised our 2015 net sales and non-GAAP net income guidance to take
account of the aforementioned change, but still feel confident in achieving our previously announced net income bottom line guidance.
We are focused on optimizing our customer base and seeking new business opportunities with multi-national customers. We feel that
Highpower is well positioned as we enter 2016.”
Conference Call Details
The Company announced that it will
discuss financial results in a conference call on Thursday, November 12, 2015 at 10:00 a.m. Eastern Time / 7:00a.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/q3-2015.
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 or (loss)
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; adverse economic conditions in China that may affect exchange rates and pricing of our products; 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 successfully commercialize portable energy storage systems in the international market by the end of year and 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, Senior Associate
+86-10-6587-6435
kyao@equityny.com
In U.S.
Adam Prior, Senior Vice President
+1 (212) 836-9606
aprior@equityny.com
HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
(Stated in US Dollars except Number of
Shares)
| |
Three months ended September 30, | | |
Nine months ended September 30, | |
| |
2015 | | |
2014 | | |
2015 | | |
2014 | |
| |
(Unaudited) | | |
(Unaudited) | | |
(Unaudited) | | |
(Unaudited) | |
| |
$ | | |
$ | | |
$ | | |
$ | |
| |
| | |
| | |
| | |
| |
Net sales | |
| 37,556,826 | | |
| 44,474,560 | | |
| 108,330,275 | | |
| 111,769,510 | |
Cost of sales | |
| (30,340,151 | ) | |
| (35,069,440 | ) | |
| (86,994,126 | ) | |
| (88,703,954 | ) |
Gross profit | |
| 7,216,675 | | |
| 9,405,120 | | |
| 21,336,149 | | |
| 23,065,556 | |
| |
| | | |
| | | |
| | | |
| | |
Research and development expenses | |
| (1,963,690 | ) | |
| (2,056,045 | ) | |
| (5,635,308 | ) | |
| (5,844,962 | ) |
Selling and distribution expenses | |
| (1,712,303 | ) | |
| (1,697,674 | ) | |
| (5,108,589 | ) | |
| (4,822,560 | ) |
General and administrative expenses | |
| (3,295,815 | ) | |
| (3,295,262 | ) | |
| (9,744,336 | ) | |
| (10,178,838 | ) |
Foreign currency transaction gain (loss) | |
| 1,458,363 | | |
| (15,369 | ) | |
| 1,902,220 | | |
| 334,326 | |
Gain (loss) on derivative instruments | |
| - | | |
| 59,785 | | |
| - | | |
| (56,349 | ) |
Total operating expenses | |
| (5,513,445 | ) | |
| (7,004,565 | ) | |
| (18,586,013 | ) | |
| (20,568,383 | ) |
| |
| | | |
| | | |
| | | |
| | |
Income from operations | |
| 1,703,230 | | |
| 2,400,555 | | |
| 2,750,136 | | |
| 2,497,173 | |
| |
| | | |
| | | |
| | | |
| | |
Gain (loss) on change of fair value of warrant liability | |
| 510,553 | | |
| (1,286,335 | ) | |
| 941,685 | | |
| (1,211,787 | ) |
Other income | |
| 154,904 | | |
| 590,117 | | |
| 742,051 | | |
| 1,493,491 | |
Interest expenses | |
| (246,563 | ) | |
| (458,534 | ) | |
| (790,681 | ) | |
| (1,528,077 | ) |
Income before taxes | |
| 2,122,124 | | |
| 1,245,803 | | |
| 3,643,191 | | |
| 1,250,800 | |
| |
| | | |
| | | |
| | | |
| | |
Income taxes expenses | |
| (270,622 | ) | |
| (439,659 | ) | |
| (194,206 | ) | |
| (628,872 | ) |
Net income | |
| 1,851,502 | | |
| 806,144 | | |
| 3,448,985 | | |
| 621,928 | |
| |
| | | |
| | | |
| | | |
| | |
Less: net loss attributable to non-controlling interest | |
| (91,843 | ) | |
| (68,023 | ) | |
| (238,126 | ) | |
| (129,588 | ) |
Net income attributable to the Company | |
| 1,943,345 | | |
| 874,167 | | |
| 3,687,111 | | |
| 751,516 | |
| |
| | | |
| | | |
| | | |
| | |
Comprehensive income | |
| | | |
| | | |
| | | |
| | |
Net income | |
| 1,851,502 | | |
| 806,144 | | |
| 3,448,985 | | |
| 621,928 | |
Foreign currency translation (loss) income | |
| (2,024,906 | ) | |
| 19,368 | | |
| (2,023,640 | ) | |
| (341,754 | ) |
Comprehensive (loss) income | |
| (173,404 | ) | |
| 825,512 | | |
| 1,425,345 | | |
| 280,174 | |
| |
| | | |
| | | |
| | | |
| | |
Less: comprehensive loss attributable to non-controlling interest | |
| (133,677 | ) | |
| (67,486 | ) | |
| (278,226 | ) | |
| (140,213 | ) |
Comprehensive (loss) income attributable to the Company | |
| (39,727 | ) | |
| 892,998 | | |
| 1,703,571 | | |
| 420,387 | |
| |
| | | |
| | | |
| | | |
| | |
Income per share of common stock attributable to the Company | |
| | | |
| | | |
| | | |
| | |
- Basic | |
| 0.13 | | |
| 0.06 | | |
| 0.24 | | |
| 0.05 | |
- Diluted | |
| 0.13 | | |
| 0.06 | | |
| 0.24 | | |
| 0.05 | |
| |
| | | |
| | | |
| | | |
| | |
Weighted average number of common stock outstanding | |
| | | |
| | | |
| | | |
| | |
- Basic | |
| 15,101,679 | | |
| 15,052,158 | | |
| 15,098,479 | | |
| 14,632,491 | |
- Diluted | |
| 15,148,887 | | |
| 15,590,142 | | |
| 15,367,542 | | |
| 15,045,776 | |
HIGHPOWER INTERNATIONAL, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Stated in US Dollars except Number of
Shares)
| |
September 30, | | |
December 31, | |
| |
2015 | | |
2014 | |
| |
(Unaudited) | | |
| |
| |
$ | | |
$ | |
ASSETS | |
| | | |
| | |
Current Assets: | |
| | | |
| | |
Cash and cash equivalents | |
| 7,910,185 | | |
| 14,611,892 | |
Restricted cash | |
| 12,424,799 | | |
| 15,396,827 | |
Accounts receivable, net | |
| 36,175,692 | | |
| 32,316,607 | |
Notes receivable | |
| 1,902,394 | | |
| 621,110 | |
Prepayments | |
| 4,243,902 | | |
| 3,283,520 | |
Other receivables | |
| 743,714 | | |
| 665,828 | |
Inventories | |
| 21,992,983 | | |
| 22,268,069 | |
| |
| | | |
| | |
Total Current Assets | |
| 85,393,669 | | |
| 89,163,853 | |
| |
| | | |
| | |
Property, plant and equipment, net | |
| 50,187,438 | | |
| 50,437,718 | |
Land use right, net | |
| 4,081,797 | | |
| 4,305,317 | |
Intangible asset, net | |
| 562,500 | | |
| 600,000 | |
Deferred tax assets | |
| 1,877,181 | | |
| 1,647,184 | |
| |
| | | |
| | |
TOTAL ASSETS | |
| 142,102,585 | | |
| 146,154,072 | |
| |
| | | |
| | |
LIABILITIES AND EQUITY | |
| | | |
| | |
| |
| | | |
| | |
LIABILITIES | |
| | | |
| | |
Current Liabilities: | |
| | | |
| | |
Accounts payable | |
| 36,921,440 | | |
| 44,562,647 | |
Deferred income | |
| 1,080,230 | | |
| 1,887,409 | |
Short-term loan | |
| 15,167,241 | | |
| 15,195,040 | |
Notes payable | |
| 34,429,238 | | |
| 29,903,248 | |
Other payables and accrued liabilities | |
| 6,655,287 | | |
| 5,896,547 | |
Income taxes payable | |
| 1,601,146 | | |
| 1,968,656 | |
Current portion of long-term loan | |
| 1,889,615 | | |
| 1,959,248 | |
| |
| | | |
| | |
Total Current Liabilities | |
| 97,744,197 | | |
| 101,372,795 | |
| |
| | | |
| | |
Warrant Liability | |
| 125,989 | | |
| 1,067,674 | |
Long-term loan | |
| 472,404 | | |
| 1,959,247 | |
| |
| | | |
| | |
TOTAL LIABILITIES | |
| 98,342,590 | | |
| 104,399,716 | |
| |
| | | |
| | |
COMMITMENTS AND CONTINGENCIES | |
| - | | |
| - | |
HIGHPOWER INTERNATIONAL, INC.AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (CONTINUED)
(Stated in US Dollars except Number of
Shares)
| |
September 30, | | |
December 31, | |
| |
2015 | | |
2014 | |
| |
(Unaudited) | | |
| |
| |
$ | | |
$ | |
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, 15,101,679 shares issued and outstanding at September 30, 2015 and 15,084,746 shares issued and outstanding at December 31, 2014) | |
| 1,510 | | |
| 1,508 | |
Additional paid-in capital | |
| 11,110,723 | | |
| 10,530,430 | |
Statutory and other reserves | |
| 3,611,501 | | |
| 3,611,501 | |
Retained earnings | |
| 24,362,131 | | |
| 20,675,021 | |
Accumulated other comprehensive income | |
| 3,645,117 | | |
| 5,628,657 | |
| |
| | | |
| | |
Total equity for the Company’s stockholders | |
| 42,730,982 | | |
| 40,447,117 | |
| |
| | | |
| | |
Non-controlling interest | |
| 1,029,013 | | |
| 1,307,239 | |
| |
| | | |
| | |
TOTAL EQUITY | |
| 43,759,995 | | |
| 41,754,356 | |
| |
| | | |
| | |
TOTAL LIABILITIES AND EQUITY | |
| 142,102,585 | | |
| 146,154,072 | |
HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Stated in US Dollars)
| |
Nine months ended September 30, | |
| |
2015 | | |
2014 | |
| |
(Unaudited) | | |
(Unaudited) | |
| |
$ | | |
$ | |
Cash flows from operating activities | |
| | | |
| | |
Net income | |
| 3,448,985 | | |
| 621,928 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |
| | | |
| | |
Depreciation and amortization | |
| 4,038,596 | | |
| 3,161,384 | |
Allowance for doubtful accounts | |
| 1,132 | | |
| 103 | |
Loss on disposal of property, plant and equipment | |
| 145,572 | | |
| 346,866 | |
Gain on derivative instruments | |
| - | | |
| 67,748 | |
Deferred income tax | |
| (294,943 | ) | |
| (830,413 | ) |
Share based payment | |
| 535,761 | | |
| 1,064,969 | |
(Gain) loss on change of fair
value of warrant liability | |
| (941,685 | ) | |
| 1,211,787 | |
Changes in operating assets and liabilities: | |
| | | |
| | |
Accounts receivable | |
| (4,671,730 | ) | |
| (4,404,612 | ) |
Notes receivable | |
| (1,339,122 | ) | |
| (1,453,621 | ) |
Prepayments | |
| (1,102,578 | ) | |
| 448,249 | |
Other receivable | |
| (104,336 | ) | |
| 339,411 | |
Inventories | |
| (530,357 | ) | |
| (989,237 | ) |
Accounts payable | |
| (6,233,405 | ) | |
| 10,701,057 | |
Deferred income | |
| 242,683 | | |
| 1,635,985 | |
Other payables and accrued liabilities | |
| 981,979 | | |
| (920,591 | ) |
Income taxes payable | |
| (305,698 | ) | |
| 777,753 | |
Net cash flows (used in) provided by operating activities | |
| (6,129,146 | ) | |
| 11,778,766 | |
| |
| | | |
| | |
Cash flows from investing activities | |
| | | |
| | |
Acquisitions of plant and equipment | |
| (7,250,757 | ) | |
| (5,864,112 | ) |
Net cash flows used in investing activities | |
| (7,250,757 | ) | |
| (5,864,112 | ) |
| |
| | | |
| | |
Cash flows from financing activities | |
| | | |
| | |
Proceeds from short-term bank loans | |
| 11,325,212 | | |
| 15,821,648 | |
Repayment of short-term bank loans | |
| (10,916,379 | ) | |
| (35,934,559 | ) |
Repayment of long-term bank loans | |
| (1,456,099 | ) | |
| (1,463,605 | ) |
Proceeds from notes payable | |
| 49,315,315 | | |
| 34,246,949 | |
Repayment of notes payable | |
| (43,573,196 | ) | |
| (32,308,636 | ) |
Proceeds from exercise of employee options | |
| 44,534 | | |
| - | |
Proceeds from issuance of capital stock, net | |
| - | | |
| 4,633,164 | |
Change in restricted cash | |
| 2,491,383 | | |
| 12,900,973 | |
Net cash flows provided by (used in) financing activities | |
| 7,230,770 | | |
| (2,104,066 | ) |
Effect of foreign currency translation on cash and cash equivalents | |
| (552,574 | ) | |
| 18,757 | |
Net (decrease) increase in cash and cash equivalents | |
| (6,701,707 | ) | |
| 3,829,345 | |
Cash and cash equivalents - beginning of period | |
| 14,611,892 | | |
| 7,973,459 | |
Cash and cash equivalents - end of period | |
| 7,910,185 | | |
| 11,802,804 | |
| |
| | | |
| | |
Supplemental disclosures for cash flow information: | |
| | | |
| | |
Cash paid for: | |
| | | |
| | |
Income taxes | |
| 794,846 | | |
| 681,533 | |
Interest expenses | |
| 822,257 | | |
| 1,489,796 | |
Non-cash transactions | |
| | | |
| | |
Accounts payable for construction in progress | |
| - | | |
| 648,385 | |
Reduction of property, plant and equipment cost by realizing deferred income | |
| 976,301 | | |
| 669,995 | |
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 | | |
Nine months ended | |
| |
September 30, | | |
September 30, | |
| |
2015 | | |
2014 | | |
2015 | | |
2014 | |
| |
(Unaudited) | | |
(Unaudited) | | |
(Unaudited) | | |
(Unaudited) | |
| |
$ | | |
$ | | |
$ | | |
$ | |
Net income (loss) attributable to the Company | |
| 1,943,345 | | |
| 874,167 | | |
| 3,687,111 | | |
| 751,516 | |
Non-GAAP Net Income (1) | |
| 1,556,249 | | |
| 2,309,227 | | |
| 3,281,187 | | |
| 3,028,272 | |
| |
| | | |
| | | |
| | | |
| | |
Interest expenses, net | |
| 224,991 | | |
| 166,573 | | |
| 567,823 | | |
| 759,073 | |
Income tax expenses | |
| 270,622 | | |
| 439,659 | | |
| 194,206 | | |
| 628,872 | |
Depreciation and Amortization | |
| 1,502,901 | | |
| 1,107,898 | | |
| 4,038,596 | | |
| 3,161,384 | |
| |
| | | |
| | | |
| | | |
| | |
EBITDA | |
| 3,941,859 | | |
| 2,588,297 | | |
| 8,487,736 | | |
| 5,300,845 | |
Non-GAAP EBITDA(2) | |
| 3,554,763 | | |
| 4,023,357 | | |
| 8,081,812 | | |
| 7,577,601 | |
| (1) | See table below for reconciliation of net income (loss)
attributable to the Company to Non-GAAP net income attributable to the Company. |
| (2) | Excludes share-based compensation expense and gain on
change of fair value of warrant liability as set forth in the following table. |
HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES (Unaudited)
(Stated in US Dollars except Number of
Shares)
Reconciliation of Net Income (Loss) Attributable to the Company to Non-GAAP Net Income Attributable to the Company
| |
Three months ended | | |
Nine months ended | |
| |
September 30, | | |
September 30, | |
| |
2015 | | |
2014 | | |
2015 | | |
2014 | |
| |
(Unaudited) | | |
(Unaudited) | | |
(Unaudited) | | |
(Unaudited) | |
| |
$ | | |
$ | | |
$ | | |
$ | |
Net income (loss) attributable to the Company | |
| 1,943,345 | | |
| 874,167 | | |
| 3,687,111 | | |
| 751,516 | |
Stock-based compensation expense | |
| 123,457 | | |
| 148,725 | | |
| 535,761 | | |
| 1,064,969 | |
Gain on change of fair value of warrant liability | |
| (510,553 | ) | |
| 1,286,335 | | |
| (941,685 | ) | |
| 1,211,787 | |
Non-GAAP net income attributable to the Company | |
| 1,556,249 | | |
| 2,309,227 | | |
| 3,281,187 | | |
| 3,028,272 | |
| |
| | | |
| | | |
| | | |
| | |
Basic net income (loss) per share of common stock attributable to the Company | |
| 0.13 | | |
| 0.06 | | |
| 0.24 | | |
| 0.05 | |
Stock-based compensation expense | |
| 0.01 | | |
| 0.01 | | |
| 0.04 | | |
| 0.07 | |
Gain on change of fair value of warrant liability | |
| (0.04 | ) | |
| 0.08 | | |
| (0.06 | ) | |
| 0.09 | |
Non-GAAP income per share of common stock attributable to the Company | |
| 0.10 | | |
| 0.15 | | |
| 0.22 | | |
| 0.21 | |
| |
| | | |
| | | |
| | | |
| | |
Diluted net income (loss) per share of common stock attributable to the Company | |
| 0.13 | | |
| 0.06 | | |
| 0.24 | | |
| 0.05 | |
Stock-based compensation expense | |
| 0.01 | | |
| 0.01 | | |
| 0.03 | | |
| 0.07 | |
Gain on change of fair value of warrant liability | |
| (0.04 | ) | |
| 0.08 | | |
| (0.06 | ) | |
| 0.08 | |
Non-GAAP income per share of common stock attributable to the Company | |
| 0.10 | | |
| 0.15 | | |
| 0.21 | | |
| 0.20 | |
| |
| | | |
| | | |
| | | |
| | |
Weighted average number of common shares outstanding | |
| | | |
| | | |
| | | |
| | |
-Basic | |
| 15,101,679 | | |
| 15,052,158 | | |
| 15,098,479 | | |
| 14,632,491 | |
-Diluted | |
| 15,148,887 | | |
| 15,590,142 | | |
| 15,367,542 | | |
| 15,045,776 | |
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