SAN FRANCISCO and SHENZHEN, China, May
12, 2016 /PRNewswire/ -- Highpower International,
Inc. (NASDAQ: HPJ), ("Highpower International"
or "the Company") 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 2016 first quarter
ended March 31, 2016.
2016 First Quarter Financial Highlights (all
results are compared to prior year period)
- Net sales were $29.1 million
compared to $32.1 million primarily
due to decreased average selling prices of the Ni-MH batteries and
decreased volumes of lithium batteries as a result of a decline in
sales of iPhone backup power products.
- Gross margin improved to 20.2% from 17.3% as a result of
improved production efficiency.
- EBITDA was $1.1 million compared
to $1.3 million.
- Net loss attributable to the Company was $0.3 million, or $0.02 per diluted share, compared to a net loss
attributable to the Company of $0.1
million, or $0.01 per diluted
share; non-GAAP net loss attributable to the Company was
$0.4 million, or $0.02 per diluted share, compared to a non-GAAP
net loss attributable to the Company of $0.3
million, or $0.02 per diluted
share.
Management Commentary
Mr. George Pan, Chairman and CEO
of Highpower International, commented, "Despite challenging market
conditions in the first quarter of 2016, our Company delivered
solid results for the period. We faced pricing pressures from both
lithium and Ni-MH batteries, as well as a decline of sales of
iPhone backup power products. We continue to allocate resources to
enhancing our lithium battery technology and seek to expand and
develop new products and solutions in new and emerging technology
sectors, such as drones and robotics. We also continue to expand
our domestic sales channels and explore potential collaborations
with strategic partners with large scale enterprises in both
China and overseas markets."
2016 First Quarter Financial
Review
Net Sales
Net sales for the first quarter ended March 31, 2016 were $29.1
million compared to $32.1
million for the same period in 2015. The 9.5% decrease in
net sales was primarily due to decreased average selling prices of
the Ni-MH batteries and decreased volumes of lithium batteries sold
mainly as a result of a decline in sales of iPhone backup power
products.
Gross Profit
For the first quarter ended March 31,
2016, the Company's gross profit increased 5.8% to
$5.9 million from $5.6 million for the same period in 2015.
The increase was attributable to improved production
efficiency.
Gross Margin
Gross margin improved to 20.2% for the first quarter ended
March 31, 2016 compared to 17.3% in
the prior year period as a result of improved production
efficiency.
Research and Development (R&D)
R&D spending was $1.6 million,
or 5.6% of net sales, for the first quarter ended March 31, 2016, compared to $1.7 million, or 5.2% of net sales, for the same
period in 2015.
Selling & Distribution
Selling and distribution expenses were $1.5 million, or 5.3% of net sales, for the first
quarter ended March 31, 2016, as
compared with $1.8 million, or 5.6%
of net sales, for the same period in 2015.
General & Administrative
For the first quarter ended March 31,
2016, general and administrative expenses were $3.1 million, or 10.5% of net sales, compared to
$3.0 million, or 9.4% of net sales,
for the first quarter of 2015.
Net Loss
For the first quarter of 2016, net loss attributable to the
Company was $0.3 million, or
$0.02 per share based on 15.1 million
weighted average diluted shares outstanding, compared to a net loss
attributable to the Company of $0.1
million, or $0.01 per share
based on 15.1 million weighted average diluted shares outstanding,
in the prior year period. Non-GAAP net loss attributable to the
Company was $0.4 million, or
$0.02 per diluted share, compared to
Non-GAAP net loss attributable to the Company of $0.3 million, or $0.02 per diluted share, in the prior year
period.
EBITDA
EBITDA for the first quarter ended March
31, 2016 was to $1.1 million
compared to $1.3 million in the prior
year period.
A table reconciling EBITDA, a non-GAAP (Generally Accepted
Accounting Principles) financial measure, and Non-GAAP net loss
attributable to the Company to the appropriate GAAP measure is
included with the Company's financial information below.
Balance Sheet Highlights
($ in millions,
except per share data)
|
|
3/31/2016
|
|
12/31/2015
|
|
(Unaudited)
|
|
|
Cash and Cash
Equivalents
|
|
$6.7
|
|
$5.8
|
Total Current
Assets
|
|
$74.5
|
|
$80.7
|
Total
Assets
|
|
$128.3
|
|
$134.2
|
Total Current
Liabilities
|
|
$85.6
|
|
$91.2
|
Total
Liabilities
|
|
$85.6
|
|
$91.3
|
Shareholders'
Equity
|
|
$42.7
|
|
$42.9
|
Total Liabilities and
Shareholders' Equity
|
|
$128.3
|
|
$134.2
|
Book Value Per
Share
|
|
$2.83
|
|
$2.84
|
|
|
|
|
|
Conference Call Details
The Company announced that it will discuss financial results in
a conference call on May 12, 2016 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/q1-2016. This webcast
will be archived and accessible through the Company's website for
approximately 30 days following the 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 and change of fair value of
warrant liability. 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, economic
downturn and uncertainty in Asia
and Europe adversely affecting
demand for our products; 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; changes in
the laws of the PRC that affect our operations; the devaluation of
the U.S. Dollar relative to the Renminbi; 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 our exposure to product
liability, safety, and defect claims; rising labor costs, volatile
metal prices, and inflation; changes in foreign, political, social,
business and economic conditions that affect our production
capabilities or demand for our products; and various other matters,
many of which are beyond our control.. 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 LOSS
|
(Stated in US
Dollars except Number of Shares)
|
|
|
|
For three
months March 31,
|
|
|
2016
|
|
2015
|
|
|
(Unaudited)
|
|
(unaudited)
|
|
|
$
|
|
$
|
|
|
|
|
|
Net
sales
|
|
29,097,055
|
|
32,137,648
|
Cost of
sales
|
|
(23,220,016)
|
|
(26,581,934)
|
Gross
profit
|
|
5,877,039
|
|
5,555,714
|
|
|
|
|
|
Research and
development expenses
|
|
(1,622,883)
|
|
(1,674,124)
|
Selling and
distribution expenses
|
|
(1,535,036)
|
|
(1,798,722)
|
General and
administrative expenses
|
|
(3,069,714)
|
|
(3,024,751)
|
Foreign currency
transaction (loss) gain
|
|
(90,436)
|
|
370,311
|
Total operating
expenses
|
|
(6,318,069)
|
|
(6,127,286)
|
|
|
|
|
|
Loss from
operations
|
|
(441,030)
|
|
(571,572)
|
Gain on change of
fair value of warrant liability
|
|
119,469
|
|
346,299
|
Other
income
|
|
155,928
|
|
230,092
|
Interest
expenses
|
|
(274,992)
|
|
(268,642)
|
Loss before
taxes
|
|
(440,625)
|
|
(263,823)
|
|
|
|
|
|
Income taxes
(expenses) benefit
|
|
(35,504)
|
|
95,256
|
Net
loss
|
|
(476,129)
|
|
(168,567)
|
|
|
|
|
|
Less: net loss
attributable to non-controlling interest
|
|
(133,521)
|
|
(45,209)
|
Net loss attributable
to the Company
|
|
(342,608)
|
|
(123,358)
|
|
|
|
|
|
Comprehensive
loss
|
|
|
|
|
Net loss
|
|
(476,129)
|
|
(168,567)
|
Foreign currency
translation gain (loss)
|
|
250,146
|
|
(204,761)
|
Comprehensive
loss
|
|
(225,983)
|
|
(373,328)
|
|
|
|
|
|
Less: comprehensive
loss attributable to non-controlling interest
|
|
(128,822)
|
|
(49,173)
|
Comprehensive loss
attributable to the Company
|
|
(97,161)
|
|
(324,155)
|
|
|
|
|
|
Loss per share of
common stock attributable to the Company
|
|
|
|
|
-Basic and
Diluted
|
|
(0.02)
|
|
(0.01)
|
|
|
|
|
|
Weighted average
number of common stock outstanding
|
|
|
|
|
-Basic and
Diluted
|
|
15,101,679
|
|
15,086,169
|
HIGHPOWER
INTERNATIONAL, INC.AND SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
(Stated in US
Dollars except Number of Shares)
|
|
|
|
March
31,
|
|
December
31,
|
|
|
2016
|
|
2015
|
|
|
|
(Unaudited)
|
|
|
|
|
$
|
|
$
|
ASSETS
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
6,749,909
|
|
5,849,967
|
|
Restricted
cash
|
|
9,250,815
|
|
11,656,204
|
|
Accounts receivable,
net
|
|
30,004,722
|
|
36,139,866
|
|
Notes
receivable
|
|
1,795,942
|
|
1,757,709
|
|
Prepayments
|
|
5,979,026
|
|
5,354,552
|
|
Other
receivables
|
|
791,895
|
|
706,352
|
|
Inventories
|
|
19,922,932
|
|
19,218,331
|
|
|
|
|
|
|
|
Total Current
Assets
|
|
74,495,241
|
|
80,682,981
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
47,655,212
|
|
47,464,186
|
|
Land use right,
net
|
|
3,967,322
|
|
3,963,003
|
|
Intangible asset,
net
|
|
537,500
|
|
550,000
|
|
Deferred tax
assets
|
|
1,683,069
|
|
1,544,314
|
|
|
|
|
|
TOTAL
ASSETS
|
|
128,338,344
|
|
134,204,484
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
Accounts
payable
|
|
33,970,319
|
|
36,077,396
|
|
Deferred
income
|
|
861,369
|
|
879,944
|
|
Short-term
loan
|
|
15,406,054
|
|
13,839,341
|
|
Notes
payable
|
|
25,177,482
|
|
30,490,166
|
|
Other payables and
accrued liabilities
|
|
6,882,074
|
|
6,292,492
|
|
Income taxes
payable
|
|
1,885,389
|
|
1,783,013
|
|
Current portion of
long-term loan
|
|
1,393,512
|
|
1,845,245
|
|
|
|
|
|
|
|
Total Current
Liabilities
|
|
85,576,199
|
|
91,207,597
|
|
|
|
|
|
|
|
Warrant
Liability
|
|
21,080
|
|
140,549
|
|
|
|
|
|
|
TOTAL
LIABILITIES
|
|
85,597,279
|
|
91,348,146
|
|
|
|
|
|
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 March 31, 2016 and 15,101,679 shares issued and
outstanding at
December 31, 2015)
|
|
1,510
|
|
1,510
|
|
Additional paid-in
capital
|
|
11,338,689
|
|
11,227,979
|
|
Statutory and other
reserves
|
|
4,042,429
|
|
4,042,429
|
|
Retained
earnings
|
|
23,755,567
|
|
24,098,175
|
|
Accumulated other
comprehensive income
|
|
2,878,209
|
|
2,632,762
|
|
|
|
|
|
Total equity for the
Company's stockholders
|
|
42,016,404
|
|
42,002,855
|
|
|
|
|
|
Non-controlling
interest
|
|
724,661
|
|
853,483
|
|
|
|
|
|
TOTAL
EQUITY
|
|
42,741,065
|
|
42,856,338
|
|
|
|
|
|
TOTAL LIABILITIES
AND EQUITY
|
|
128,338,344
|
|
134,204,484
|
HIGHPOWER
INTERNATIONAL, INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(Stated in US
Dollars)
|
|
|
|
|
Three months
ended March 31,
|
|
|
|
2016
|
|
2015
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
$
|
|
$
|
Cash flows from
operating activities
|
|
|
|
|
|
Net loss
|
|
|
(476,129)
|
|
(168,567)
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
1,256,379
|
|
1,246,043
|
Allowance for
doubtful accounts
|
|
|
-
|
|
21
|
Loss on disposal of
property, plant and equipment
|
|
|
52,218
|
|
11,709
|
Deferred income
tax
|
|
|
127,117
|
|
(187,373)
|
Share based
payment
|
|
|
110,710
|
|
121,361
|
Loss on change of
fair value of warrant liability
|
|
|
(119,469)
|
|
(346,299)
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
Accounts
receivable
|
|
|
6,287,966
|
|
1,576,803
|
Notes
receivable
|
|
|
(25,833)
|
|
(2,309,732)
|
Prepayments
|
|
|
(582,543)
|
|
(1,434,905)
|
Other
receivable
|
|
|
(79,930)
|
|
33,367
|
Inventories
|
|
|
(566,489)
|
|
434,169
|
Accounts
payable
|
|
|
(2,600,952)
|
|
(5,404,188)
|
Other payables and
accrued liabilities
|
|
|
544,018
|
|
(127,282)
|
Income taxes
payable
|
|
|
89,225
|
|
39,612
|
Net cash flows
provided by (used in) operating activities
|
|
|
4,016,288
|
|
(6,515,261)
|
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
|
|
Acquisition of plant
and equipment
|
|
|
(1,059,030)
|
|
(1,664,663)
|
Net cash flows
used in investing activities
|
|
|
(1,059,030)
|
|
(1,664,663)
|
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
|
Proceeds from
short-term bank loans
|
|
|
1,457,726
|
|
-
|
Repayment of
long-term bank loans
|
|
|
(460,335)
|
|
(488,250)
|
Proceeds from notes
payable
|
|
|
9,482,054
|
|
16,882,947
|
Repayment of notes
payable
|
|
|
(14,956,180)
|
|
(12,237,353)
|
Proceeds from exercise of employee options
|
|
|
-
|
|
9,339
|
Change in restricted
cash
|
|
|
2,463,747
|
|
(609,041)
|
Net cash flows
used in (provided by) financing activities
|
|
|
(2,012,988)
|
|
3,557,642
|
Effect of foreign
currency translation on cash and cash equivalents
|
|
|
(44,328)
|
|
(66,650)
|
Net increase
(decrease) in cash and cash equivalents
|
|
|
899,942
|
|
(4,688,932)
|
Cash and cash
equivalents - beginning of period
|
|
|
5,849,967
|
|
14,611,892
|
Cash and cash
equivalents - end of period
|
|
|
6,749,909
|
|
9,922,960
|
|
|
|
|
|
|
Supplemental
disclosures for cash flow information:
|
|
|
|
|
|
Cash paid
for:
|
|
|
|
|
|
Income
taxes
|
|
|
73,396
|
|
52,505
|
Interest
expenses
|
|
|
274,992
|
|
268,642
|
Non-cash
transactions
|
|
|
|
|
|
Reduction of
property, plant and equipment cost by realizing deferred
income
|
|
|
20,892
|
|
-
|
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
|
|
|
March
31,
|
|
|
2016
|
|
2015
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
$
|
|
$
|
Net loss
attributable to the Company
|
|
(342,608)
|
|
(123,358)
|
Non-GAAP Net
Loss(1)
|
|
(351,367)
|
|
(348,296)
|
|
|
|
|
|
Interest expenses,
net
|
|
142,463
|
|
232,570
|
Income tax
expenses
|
|
35,504
|
|
(95,256)
|
Depreciation and
Amortization
|
|
1,256,379
|
|
1,246,043
|
|
|
|
|
|
EBITDA
|
|
1,091,738
|
|
1,259,999
|
Non-GAAP Adjusted
EBITDA(2)
|
|
1,082,979
|
|
1,035,061
|
|
|
|
|
|
(1) See
table below for reconciliation of net loss attributable to the
Company to Non-GAAP net loss 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)
|
|
Reconciliation of
Net Loss Attributable to the Company to Non-GAAP Net Loss
Attributable to the Company
|
|
|
|
Three months
ended
|
March
31,
|
|
|
2016
|
|
2015
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
$
|
|
$
|
Net loss attributable
to the Company
|
|
(342,608)
|
|
(123,358)
|
Stock-based
compensation expense
|
|
110,710
|
|
121,361
|
Gain on change of
fair value of warrant liability
|
|
(119,469)
|
|
(346,299)
|
Non-GAAP net loss
attributable to the Company
|
|
(351,367)
|
|
(348,296)
|
|
|
|
|
|
Basic net loss per
share of common stock attributable to the Company
|
|
(0.02)
|
|
(0.01)
|
Stock-based
compensation expense
|
|
0.01
|
|
0.01
|
Gain on change of
fair value of warrant liability
|
|
(0.01)
|
|
(0.02)
|
Non-GAAP net loss per
share of common stock attributable to the Company
|
|
(0.02)
|
|
(0.02)
|
|
|
|
|
|
Diluted net loss per
share of common stock attributable to the Company
|
|
(0.02)
|
|
(0.01)
|
Stock-based
compensation expense
|
|
0.01
|
|
0.01
|
Gain on change of
fair value of warrant liability
|
|
(0.01)
|
|
(0.02)
|
Non-GAAP net loss per
share of common stock attributable to the Company
|
|
(0.02)
|
|
(0.02)
|
|
|
|
|
|
Weighted average
number of common shares outstanding
|
|
|
|
|
-Basic and
Diluted
|
|
15,101,679
|
|
15,086,169
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/highpower-international-reports-financial-results-for-the-first-quarter-ended-march-31-2016-300267554.html
SOURCE Highpower International, Inc.