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China Automotive Systems Reports 2017 First Quarter Results

2017-05-11 18:30
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WUHAN, China, May 11, 2017 /PRNewswire/ -- China Automotive Systems, Inc. (NASDAQ: CAAS) ("CAAS" or the "Company"), a leading power steering components and systems supplier in China, today announced its unaudited financial results for the unaudited first quarter ended March 31, 2017.

First Quarter 2017 Highlights

  • Net sales were $119.3 million, up 2.1% from $116.9 million in the first quarter of 2016
  • Gross margin was 18.1%, consistent with 18.0% in the first quarter of 2016
  • Net income attributable to parent company's common shareholders was $5.7 million, or diluted earnings per share of $0.18, in the first quarter of 2017 and 2016

Mr. Qizhou Wu, chief executive officer of CAAS, commented, "We have maintained our sales and earnings during this transition period as we build our electric power steering ("EPS") capabilities.  We have added more production capacity and introduced additional models of EPS to position us for stronger growth in the future. Our growing portfolio of advanced steering products will build our sales by providing more solutions to meet our customers' needs."

Mr. Jie Li, chief financial officer of CAAS, commented, "We continue to build our financial strength through strong cost controls, generating positive operational cash flow and improving our cost of invested capital."  

First Quarter of 2017

In the first quarter of 2017, net sales were $119.3 million, compared to $116.9 million in the same quarter of 2016, reflecting a 2.1% year-over-year growth. The increase of net sales was mainly due to the increased sales volume.   

Gross profit was $21.6 million in the first quarter of 2017, compared to $21.0 million in the first quarter of 2016. The gross margin was 18.1% in the first quarter of 2017, versus 18.0% in the first quarter of 2016.

Gain on other sales was $0.8 million in the first quarters of 2017 and 2016.

Selling expenses were $4.1 million in the first quarter of 2017, compared to $4.3 million in the first quarter of 2016. The decrease was primarily due to lower marketing expenses. Selling expenses represented 3.4% of net sales in the first quarter of 2017 versus 3.7% in the first quarter of 2016.  

General and administrative expenses ("G&A expenses") were $4.4 million in the first quarter of 2017, compared to $4.3 million in the same quarter of 2016. G&A expenses represented 3.7% of net sales in the first quarter of 2017 and 3.7% in the first quarter of 2016.  

Research and development expenses ("R&D expenses") were $6.8 million in the first quarter of 2017, compared to $6.1 million in the first quarter of 2016. R&D expenses represented 5.7% of net sales in the first quarter of 2017 compared to 5.2% in the first quarter of 2016. The increase in R&D expenses was due to increased investment in EPS product research and development such as brushless motor and Advanced Driver Assistance Systems (ADAS) related projects.

Income from operations was $7.2 million in the first quarter of 2017, compared to $7.1 million in the same quarter of 2016.

Interest expense was $0.2 million in the first quarter of 2017, consistent with the same quarter of 2016.

Net financial income was $0.3 million in the first quarters of 2017 and 2016.

Income before income tax expenses and equity in earnings of affiliated companies was $7.1 million in the first quarter of 2017, compared to $6.5 million in the first quarter of 2016. The increase in income before income tax expenses and equity in earnings of affiliated companies was mainly due to higher operating income and a decrease in other expenses.

Net income attributable to parent company's common shareholders was $5.7 million in the first quarter of 2017 and 2016. Diluted earnings per share were $0.18 in the first quarter of 2017 and 2016.   

The weighted average number of diluted common shares outstanding was 31,649,908 in the first quarter of 2017, compared to 32,123,588 in the first quarter of 2016.

Balance Sheet

As of March 31, 2017, total cash and cash equivalents, pledged cash and short-term investments were $93.1 million, total accounts receivable including notes receivable were $305.9 million, accounts payable were $223.1 million and short-term bank and government loans were $68.5 million. Total parent company stockholders' equity was $307.8 million as of March 31, 2017, compared to $300.5 million as of December 31, 2016. Net cash flow from operating activities was $2.3 million in the first quarter of 2017.   

Business Outlook

Management reiterated its revenue guidance for the full year 2017 of US$485 million. 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 11, 2017 at 8:00 A.M. EDT/8:00 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)

Phone Number: 

+864 001 202 840 (China Toll Free)

A replay of the call will be available on the Company's website under the investor relations section.

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 eight 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 5.5 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 Chrysler Group LLC in 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 30, 2017, 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
+1-646-726-6511
Email: Kevin.Theiss@awakenlab.com

- Tables Follow -

 

China Automotive Systems, Inc. and Subsidiaries

Condensed Unaudited Consolidated Balance Sheets

(In thousands of USD, except share and per share amounts)





March 31, 2017



December 31, 2016


ASSETS









Current assets:









Cash and cash equivalents


$

31,303



$

31,092


Pledged cash



33,586




30,799


Short-term investments



28,208




30,475


Accounts and notes receivable, net - unrelated parties



284,608




285,731


Accounts and notes receivable, net - related parties



21,308




20,984


Advance payments and others - unrelated parties



9,123




10,203


Advance payments and others - related parties



29,957




624


Inventories



69,051




68,050


Current deferred tax assets



7,872




7,946


Total current assets



515,016




485,904


Non-current assets:









Long-term time deposits



870




865


Property, plant and equipment, net



104,050




101,478


Intangible assets, net



576




617


Other receivables, net - unrelated parties



2,298




2,252


Advance payment for property, plant and equipment - unrelated parties



14,168




14,506


Advance payment for property, plant and equipment - related parties



2,326




5,005


Long-term investments



16,572




16,431


Non-current deferred tax assets



4,815




4,641


Total assets


$

660,691



$

631,699











LIABILITIES AND STOCKHOLDERS' EQUITY                                                    









Current liabilities:









Bank and government loans


$

68,536



$

40,820


Accounts and notes payable - unrelated parties



217,194




216,993


Accounts and notes payable - related parties



5,893




6,803


Customer deposits



824




700


Accrued payroll and related costs



6,577




6,971


Accrued expenses and other payables



34,848




35,882


Accrued pension costs



3,907




4,130


Taxes payable



7,623




11,674


Amounts due to shareholders/directors



315




312


Advances payable (current portion)



384




382


Current deferred tax liabilities



163




193


Total current liabilities



346,264




324,860


Long-term liabilities:









Long-term bank loan



627




608


Advances payable



341




339


Total liabilities


$

347,232



$

325,807











Commitments and Contingencies


















Stockholders' equity:









Common stock, $0.0001 par value - Authorized - 80,000,000 shares; Issued -
32,338,302 and 32,338,302 shares as of March 31, 2017 and December 31,
2016, respectively


$

3



$

3


Additional paid-in capital



64,764




64,764


Retained earnings-









Appropriated



10,549




10,549


Unappropriated



234,677




228,963


Accumulated other comprehensive income



683




(892)


Treasury stock - 694,298 and 694,298 shares as of March 31, 2017 and
December 31, 2016, respectively



(2,907)




(2,907)


Total parent company stockholders' equity



307,769




300,480


Non-controlling interests



5,690




5,412


Total stockholders' equity



313,459




305,892


Total liabilities and stockholders' equity


$

660,691



$

631,699


 

 

 

China Automotive Systems, Inc. and Subsidiaries

Condensed Unaudited Consolidated Statements of Operations and Comprehensive Income

(In thousands of USD, except share and per share amounts)





Three Months Ended March 31,




2017



2016


Net product sales ($9,538 and $8,585 sold to related parties for the three months
ended March 31, 2017 and 2016)


$

119,308



$

116,854


Cost of products sold ($7,363 and $6,875 purchased from related parties for the
three months ended March 31, 2017 and 2016)



97,679




95,842


Gross profit



21,629




21,012


Gain on other sales



788




801


Less: Operating expenses









Selling expenses



4,068




4,305


General and administrative expenses



4,354




4,315


Research and development expenses



6,765




6,139


Total operating expenses



15,187




14,759


Income from operations



7,230




7,054


Other expense, net



(254)




(644)


Interest expense



(231)




(196)


Financial income, net



332




322


Income before income tax expenses and equity in earnings of affiliated companies



7,077




6,536


Less: Income taxes



1,190




1,053


Equity in earnings of affiliated companies



51




62


Net income



5,938




5,545


Net income/(loss) attributable to non-controlling interests



224




(164)


Net income attributable to parent company's common shareholders


$

5,714



$

5,709


Comprehensive income:









Net income


$

5,938



$

5,545


Other comprehensive income:









Foreign currency translation gain, net of tax



1,629




1,650


Comprehensive income



7,567




7,195


Comprehensive income/(loss) attributable to non-controlling interests



278




(85)


Comprehensive income attributable to parent company


$

7,289



$

7,280











Net income attributable to parent company's common shareholders per share









Basic -


$

0.18



$

0.18


Diluted -


$

0.18



$

0.18


Weighted average number of common shares outstanding









Basic



31,644,004




32,121,019


Diluted



31,649,908




32,123,588


 

 

  

China Automotive Systems, Inc. and Subsidiaries

Condensed Unaudited Consolidated Statements of Cash Flows

(In thousands of USD unless otherwise indicated)





Three Months Ended March 31,




2017



2016


Cash flows from operating activities:









Net income


$

5,938



$

5,545


Adjustments to reconcile net income from operations to net cash provided
by operating activities:









Depreciation and amortization



4,189




3,805


Reversal of provision for doubtful accounts



(19)




(54)


Inventory write downs



813




1,414


Deferred income taxes



(63)




347


Equity in earnings of affiliated companies



(51)




(62)


(Gain)/loss on fixed assets disposals



17




(3)


Changes in operating assets and liabilities:









(Increase)/decrease in:









Pledged cash



(2,618)




8,089


Accounts and notes receivable



2,480




(23,347)


Advance payments and others



(52)




(3,145)


Inventories



(1,444)




(6,242)


Increase (decrease) in:









Accounts and notes payable



(1,592)




12,495


Customer deposits



123




(26)


Accrued payroll and related costs



(431)




(172)


Accrued expenses and other payables



(1,467)




91


Accrued pension costs



(247)




265


Taxes payable



(3,318)




(1,362)


Net cash provided by/(used in) operating activities



2,362




(2,362)


Cash flows from investing activities:









Increase in other receivables



20




94


Cash received from property, plant and equipment sales



26




515


Payments to acquire property, plant and equipment (including $493 and
$3,464 paid to related parties for three months ended March 31, 2017
and 2016, respectively)



(3,245)




 

 

(9,825)


Payments to acquire intangible assets



-




(3)


Purchase of short-term investments



-




(7,814)


Proceeds from maturities of short-term investments



2,433




553


Loan to a related party



(29,044)




-


Net cash used in investing activities



(29,810)




(16,480)


Cash flows from financing activities:









Proceeds from bank and government loans



27,754




6,500


Repayments of bank and government loans



(245)




(2,265)


Net cash provided by financing activities



27,509




4,235


Effects of exchange rate on cash and cash equivalents



150




330


Net increase/(decrease) in cash and cash equivalents



211




(14,277)


Cash and cash equivalents at beginning of period



31,092




69,676


Cash and cash equivalents at end of period


$

31,303



$

55,399


 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/china-automotive-systems-reports-2017-first-quarter-results-300455796.html

Source: China Automotive Systems, Inc.

Related stocks: NASDAQ-SMALL:CAAS

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