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
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 - |
$ |
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 |
(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 |
$ |
119,308 |
$ |
116,854 |
||||
Cost of products sold ($7,363 and $6,875 purchased from related parties for the |
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 |
||||||||
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 |
(3,245) |
(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 |
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