- Fiscal year 2006 total net sales grew 51% and net income increased by 45% -
WUHAN, Hubei, China, April 3 /Xinhua-PRNewswire/ -- China Automotive
Systems, Inc. (Nasdaq: CAAS), a leading power steering components and systems
supplier in China, today announced 2006 Fourth Quarter and Full Year financial
results.
2006 Fourth Quarter Highlights:
-- Net sales increased to US$27.7 million, reflecting 49% year-over-year
growth;
-- Net income was US$1.4 million, reflecting a 65% year-over-year growth;
and
-- Diluted earnings per share was US$0.06 reflecting a 50% year-over-year
growth
2006 Full Year Highlights:
-- Net sales increased to US$95.8 million, reflecting a 51% year-over-year
growth;
-- Net sales from steering components for passenger and light-duty
vehicles increased to $60.3 million, reflecting a 51% year-over-year
growth;
-- Net sales from steering components for commercial vehicles increased to
$25.1 million, reflecting a 43% year-over-year growth;
-- Net income was US$4.8 million, reflecting a 45% year-over-year growth;
and
-- Diluted earnings per share was US$0.21 reflecting a 40% year-over-year
growth
"We are pleased to report strong fiscal year 2006 results as evidenced by
both top line and bottom line growth. China Automotive Systems has become a
reliable and key supplier to Chinese national automakers such as Chery Auto,
Geely Auto, Brilliance Auto and Beiqi Foton. Our quality products and
favorable pricing enable our customers to stay competitive and expand their
market share. The Chinese domestic auto industry celebrated a successful 2006.
There were four factors that propelled this robust growth: strong consumer
demand, highway infrastructure build-up, favorable vehicle pricing, and the
maturity of Chinese national OEMs. We believe that these factors will continue
to be the driving force behind the Chinese auto industry in 2007. In addition,
we see the growing export of both commercial and passenger vehicles and the
forthcoming Beijing Olympics Games as two other major catalysts that will
contribute to accelerate the growth of the Chinese auto industry. We continue
to focus on cost management, quality control, R&D, and strategic partnerships.
We are confident that we will continue to expand our market share in 2007. Our
goal is to become the largest power steering producer in China." said Mr.
Hanlin Chen, Chairman and Chief Executive Officer of China Automotive Systems.
Fourth Quarter 2006:
Total net sales for the fourth quarter of 2006 was $27.7 million as
compared with $18.6 million reported in the same period for 2005 and $22.4
million for the third quarter of 2006. This reflects 48.9% year-over-year
growth and 23.5% quarter-over-quarter growth, respectively.
Gross profit for the fourth quarter of 2006 increased to $8.6 million,
compared with $6.0 million reported in the same period for 2005 and $8.1
million for the third quarter of 2006, reflecting a 43.6% increase year-over-
year and a 5.3% quarter-over-quarter growth, respectively. Operating income
for the fourth quarter of 2006 was $3.6 million, compared with $2.3 million
reported in the same period of 2005 and $ 3.4 million for the third quarter of
2006, reflecting a 59.3% year-over-year growth and a 5.9% quarter-over-quarter
growth respectively.
Net income for the fourth quarter of 2006 was $1.4 million, or $0.06 per
diluted share as compared with $0.87 million, or $0.04 per diluted share in
the same period a year ago and $1.5 million, or $0.07 per diluted share, for
the third quarter of 2006. The net income was affected by a yearly adjustment
to depreciation which normally occurs in the fourth quarter, as well as
compensation related to an employee bonus program.
Fiscal Year 2006:
Increase
2006 2005 (Decrease)
Amount Amount Amount Percent
($m) ($m) ($m) age
Steering gears for
commercial vehicles 25.14 17.53 7.60 43.3 %
Steering gears for
passenger vehicles 60.25 40.04 20.20 50.5 %
Steering pumps 10.22 5.99 4.23 70.6 %
Others 0.16 - 0.16 -
Total Net sales 95.77 63.57 32.19 50.6 %
Net Income 4.81 3.32 1.50 45.1 %
Diluted earnings per share $0.21 $0.15 $0.06 40.0 %
Gross profit for the full year 2006 increased to $32.9 million, compared
with $22.5 million for the full year 2005, reflecting a 46.5% year-over-year
growth. Operating income for the full year 2006 was $12.8 million, compared
with $8.4 million for the full year 2005, reflecting a 52.3% year-over-year
growth.
Total cash and cash equivalents as of December 31, 2006 totaled $27.4
million as compared to $12.4 million as of December 31, 2005. Stockholder's
equity increased to $53.4 million as of December 31, 2006 from $36.9 million
as of December 31, 2005.
Key Establishments in 2006:
On May 4, 2006, China Automotive Systems announced that its wholly-owned
subsidiary, Great Genesis, entered a joint venture agreement with Chery
Technology Ltd., a wholly owned subsidiary of Chery Automobile Co. Ltd.
("Chery Auto"), the fastest-growing independent automobile manufacturer in
China, to focus on the R&D and manufacturing of power steering systems and
components.
The Chery Auto joint venture, with a total investment of approximately $6
million, is based in Wuhu, Anhui near Chery Auto's headquarters. China
Automotive Systems and Chery Auto have a 77.3% and 22.7% share, respectively,
in the joint venture. Upon the completion of the construction of the facility
in the third quarter of 2007, the total production capacity is estimated to
reach 300,000 sets of power steering systems and components annually. Most
products of the joint venture will be supplied to Chery Auto. With the new
facility in Wuhu, China Automotive Systems will also extend sales to China's
eastern market.
On June 29, 2006, China Automotive Systems announced the establishment of
a joint venture to manufacture electric power steering (''EPS'') systems and
components. This EPS joint venture, with registered capital of $6 million, is
based in Wuhan city, Hubei, one of the key auto manufacturing bases in China.
The EPS joint venture, 85% owned by China Automotive Systems, is expected to
commence production in the fourth quarter of 2007 and reach its full capacity
of 300,000 sets of electric power steering systems and components in 2011.
While global automakers are moving toward EPS in their new vehicles, a need
for EPS in the Chinese market is also emerging. EPS systems are attractive for
a variety of reasons, including lower fuel consumption, environmental
friendliness and higher profit margins as compared to hydraulic platforms.
Mr. Hanlin Chen said, "The establishment of the Chery Auto and EPS joint
ventures will help strengthen our market position, broaden our product
offerings, expand our production capacity and create a new competitive
advantage for us in the marketplace.''
Recent Development:
On February 6, 2007, the Company announced the establishment of its first
office in North America. The US based operation is based in Troy, Michigan and
will focus on market development, R&D and after sales service in North America.
The grand opening is expected to be in early May, 2007.
"The opening of our first office in the overseas market signifies our
ambition to enter the global market. We hope to leverage the resources
available in the US to upgrade our product quality, enhance new product R&D
and extend our leadership in the Chinese domestic market. Internationally, our
US presence will also enable us to shorten the communication gap between our
Chinese operation and US OEMs. Ultimately, we see tremendous technology
collaboration and growth opportunities between our new US office and our
existing Chinese operations." said Mr. Hanlin Chen, Chairman and Chief
Executive Officer of China Automotive Systems.
About CAAS
Based in Hubei Province, 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 seven Sino-foreign joint
ventures. The Company offers a full range of steering system parts for
passenger automobiles and commercial vehicles. The Company currently offers 4
separate series of power steering and 307 models of power steering with an
annual production capacity of 800,000 sets, steering columns, steering oil
pumps and steering hoses. Its customer base is comprised of leading Chinese
auto manufacturers such as China FAW Group, Corp., Donfeng Auto Group Co.,
Ltd., Brilliance China Automotive Holdings Ltd., Beiqi Foton Motor Co., Ltd.
and Chery Automobile Co., Ltd. etc. For more information, please visit:
http://www.caasauto.com
Safe Harbor Statement
This news release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. These forward-looking
statements are based on current expectations or beliefs, including, but not
limited to, statements concerning the Company's operations, financial
performance and, condition. For this purpose, statements that are not
statements of historical fact may be deemed to be forward-looking statements.
The Company cautions that these statements by their nature involve risks and
uncertainties, and actual results may differ materially depending on a variety
of important factors, including, among others, the impact of competitive
products, pricing and new technology; changes in consumer preferences and
tastes; and effectiveness of marketing; changes in laws and regulations;
fluctuations in costs of production, and other factors as those discussed in
the Company's reports filed with the Securities and Exchange Commission from
time to time.
For further information, please contact:
Mr. Jie Li, Investor Relations and Communications
China Automotive Systems, Inc.
Tel: +86-27-5981-8527
Email: jieli@chl.com.cn
Christopher Chu
The Global Consulting Group
Tel: +1-646-284-9426
Email: cchu@hfgcg.com
China Automotive Systems, Inc. and Subsidiaries
Consolidated Balance Sheets
December 31, 2006 and 2005
December 31,
2006 2005
ASSETS
Current assets:
Cash and cash equivalents $27,418,500 $12,374,944
Pledged cash deposits 3,484,335 1,185,660
Accounts and notes receivable, net,
including $1,770,933 and $1,829,075
from related parties at December 31,
2006 and 2005, net of an allowance for
doubtful accounts of $4,086,218 and
$2,856,025 at December 31, 2006 and
2005 57,234,383 41,580,320
Advance payments and other, including
$487,333 and $312,036 to related
parties at December 31, 2006 and 2005 837,014 1,029,892
Inventories 15,464,571 12,385,833
Total current assets $104,438,803 $68,556,649
Long-term Assets:
Property, plant and equipment, net $40,848,046 $39,796,033
Intangible assets, net 3,140,548 3,503,217
Other receivables, net, including
$738,510 and $3,966,509 from related
parties at December 31, 2006 and 2005,
net of an allowance for doubtful
accounts of $898,203 and $1,040,169 at
December 31, 2006 and 2005 966,715 6,503,629
Advance payment for property, plant
and equipment, including $488,873 and
$599,729 to related parties at
December 31, 2006 and 2005 2,640,708 1,096,121
Long-term investments 73,718 74,074
Total assets $152,108,538 $119,529,723
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank loans $15,384,615 $14,814,815
Accounts and notes payable, including
$640,405 and $383,578 to related
parties at December 31, 2006 and 2005 37,647,913 31,375,599
Customer deposits 146,171 157,919
Accrued payroll and related costs 1,506,251 1,418,093
Accrued expenses and other payables 11,078,186 5,191,617
Accrued pension costs 3,266,867 2,653,064
Taxes payable 5,914,362 4,172,212
Amounts due to shareholders/directors 358,065 766,642
Total current liabilities $75,302,430 $60,549,961
Long-term liabilities:
Advances payable 313,151 301,614
Total liabilities $75,615,581 $60,851,575
Minority interests $23,112,667 $21,751,043
Stockholders' equity:
Preferred stock, $0.0001 par value -
Authorized - 20,000,000 shares Issued
and outstanding - None $-- $--
Common stock, $0.0001 par value -
Authorized - 80,000,000 shares Issued
and Outstanding - 23,851,581 shares
and 22,574,543 shares at December 31, 2006
and 2005, respectively 2,385 2,257
Additional paid-in capital 28,651,959 18,146,722
Retained earnings-
Appropriated 6,209,909 4,923,262
Unappropriated 16,047,237 12,522,180
Accumulated other comprehensive income 2,468,800 1,332,684
Total stockholders' equity $53,380,290 $36,927,105
Total liabilities and stockholders'
equity $152,108,538 $119,529,723
China Automotive Systems, Inc. and Subsidiaries
Consolidated Statements of Operations
Years Ended December 31, 2006, 2005 and 2004
2006 2005 2004
Income from continuing operations
Net product sales, including
$3,278,444, $2,290,129 and
$1,682,625 to related parties at
December 31, 2006, 2005 and 2004 $95,766,439 $63,572,301 $58,185,845
Cost of product sold, including
$2,850,283, $1,667,685 and
$1,703,179 purchased from related
parties at December 31, 2006, 2005
and 2004 62,856,625 41,105,478 35,042,352
Gross profit $32,909,814 $22,466,823 $23,143,493
Add: Gain on other sales 279,216 359,986 794,621
Less: Operating expenses
Selling expenses 7,772,068 5,804,678 3,865,154
General and administrative expenses 7,810,187 5,094,388 6,142,634
R&D expenses 1,066,050 966,782 1,518,512
Depreciation and amortization 3,776,003 2,577,944 848,009
Total Operating expenses 20,424,308 14,443,792 12,374,309
Income from operations $12,764,722 $8,383,017 $11,563,805
Add: Other income, net 94,257 150,809 856,939
Financial (expenses) (832,844) (1,166,167) (730,962)
Income before income taxes 12,026,135 7,367,659 11,689,782
Less: Income taxes 1,669,081 1,371,863 618,400
Income before minority interests 10,357,054 5,995,796 11,071,382
Less: Minority interests 5,545,350 2,680,318 4,182,454
Net income from continuing
operations $4,811,704 $3,315,478 $6,888,928
Net loss from discontinued
operations - - (21,591)
Net income $4,811,704 $3,315,478 $6,867,337
Net income per common share
Net income from continuing
operations -
Basic and diluted $0.21 $0.15 $0.30
Net income from discontinued
operations -
Basic and diluted 0.00 0.00 (0.00)
Total net income per common share
Basic and diluted $0.21 $0.15 $0.30
Weighted average number of common
shares outstanding -
Basic 23,198,113 22,574,543 22,574,543
Diluted 23,210,675 22,588,713 22,582,494
China Automotive Systems, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income
Years Ended December 31, 2006, 2005 and 2004
2006 2005 2004
Net income $4,811,704 $3,315,478 $6,867,337
Other comprehensive income:
Foreign currency translation gain 1,136,116 1,329,624 7,210
Comprehensive income $5,947,820 $4,645,102 $6,874,547