SHENZHEN, China, April 1 /PRNewswire-Asia/ -- China Ritar Power Corp. (Nasdaq: CRTP) ('China Ritar' or the 'Company'), a leading Chinese manufacturer of lead acid batteries, today reported financial results for the fourth quarter and year ended December 31, 2009.
Fourth Quarter 2009 Highlights
-- Revenue was $25.9 million
-- Gross profit grew 8.6% year-over-year to $5.2 million
-- Net income was $3.1 million for fully diluted earnings per share of
$0.15
-- On October 15, 2009, China Ritar sold all of its ownership in Shanghai
Ritar
Full Year Highlights
-- Revenue was $98.6 million
-- Net income was $8.7 million for fully diluted earnings per share of
$0.43
-- Domestic sales increased to 34% of total revenues
-- Batteries for renewable energy storage increased to 25% of total sales,
compared to 15% in fiscal year 2008
"Demand in both domestic and international markets for our lead acid batteries remains healthy," Mr. Jiada Hu, China Ritar's Chairman and Chief Executive Director commented. "Our sales to alternative energy markets continue to grow as the Chinese government increases its investment in clean fuel. For the full year 2009, the dollar amount of sales for our renewable energy storage batteries increased 35%; representing 25% of total sales for the year."
Revenue in the fourth quarter of 2009 was $25.9 million, unchanged from revenue of $25.9 million in the fourth quarter of 2008. Batteries used for telecom, uninterruptable power supply (UPS), renewable energy storage and light electronic vehicles (LEV) accounted for 30%, 35%, 25% and 10% of total sales of the fourth quarter of 2009, respectively.
Gross profit for the quarter increased 8.6% to $5.2 million from $4.8 million in the same period of 2008. Gross margin for fourth quarter of 2009 was 20.1% compared to 18.5% in the fourth quarter of 2008. The increase in gross margin was mainly due to the stabilization in lead prices during the fourth quarter of fiscal 2009.
Operating expenses were $1.9 million compared to $3.3 million in the fourth quarter of 2008. Adjusting for $0.96 million in non-cash, stock-based compensation recognized under salaries in the fourth quarter of 2008, non-GAAP operating expenses were $2.3 million. The non-cash, stock-based compensation relates to the release of shares of the Company's common stock to the Company's CEO from escrow pursuant to a make good agreement to meet the net income target for 2008 of $8.2 million entered into by the Company in connection with its private placement financing in February 2007.
Operating income for the fourth quarter was $3.3 million, up 112.6% from $1.5 million in the fourth quarter of 2008. Adjusting for the previously mentioned non-cash, stock-based compensation, non-GAAP operating income increased 30.7% from $2.5 million in the fourth quarter of 2008.
Net income to shareholders was $3.1 million in the fourth quarter of 2009 for fully diluted earnings per share of $0.15 compared to $0.5 million in net income and fully diluted earnings per share of $0.02 in the fourth quarter of 2008. Excluding the non-cash, stock-based compensation, non-GAAP net income for the fourth quarter of 2008 was $1.4 million. Non-GAAP fully diluted earnings per share for the fourth quarter of 2008 were $0.07.
Full Year 2009 Financial Results
Revenue for the full year 2009 decreased 12.2% to $98.6 million, compared to $112.3 million in 2008. The decrease in revenue is mainly attributable to a 12% decline in the Company's average selling price as a result of the decline in the average price of lead from RMB 16,000 in 2008 to 13,500 in 2009. Batteries used for telecom, uninterruptable power supply (UPS), renewable energy storage and light electronic vehicles (LEV) accounted for 30%, 35%, 25% and 10% of total sales of the full year 2009, respectively. Gross profit was $19.0 million, down 15.0% from $22.3 million for the full year 2008. Gross margin was 19.2% in 2009 compared to 19.9% in 2008. Operating income for the year was $10.6 million, up 15.9% from operating income of $9.1 million in the full year 2008. Adjusting for the full year non-cash, stock-based compensation of $3.85 million in 2008, non-GAAP operating income for the year was $13.0 million. Net income to shareholders increased 68.3% to $8.7 million from $5.2 million in 2008. Fiscal 2008 non-GAAP net income was $9.0 million. Fully diluted earnings per share for 2009 were $0.43 compared to $0.27 for the full year 2008. Non-GAAP fully diluted earnings per share for 2008 were $0.47.
Financial Condition
As of December 31, 2009, China Ritar had $26.4 million in cash and equivalents and restricted cash, $41.2 million in working capital and $43.1 million in total liabilities. Net cash provided by operating activities for the year was $8.3 million. Shareholders' equity stood at $55.4 million, up from $34.4 million at year-end 2008.
Business Outlook
The construction on China Ritar Power's new industrial park is expected to be completed by the end of April, at which time China Ritar will begin installing equipment. The Company is adding an additional 10 production lines, which are expected to begin test run by July 2010. Total number of production lines will increase from 19 to 29. China Ritar expects capital expenditures to be about $6-8 million for the purchase and instillation of the new equipment.
"We are looking forward to the expanding market opportunities in 2010 as the global economies continue to rebound," Mr. Hu commented. "Our position as a leading lead battery manufacture is supported by our high quality batteries with consistent performance at lower prices than our international competitors. Moreover, with the new capacity we have coming online in the second half of 2010, we are well positioned to ramp up our lead acid battery sales in line with new demand."
Conference Call
China Ritar will host a conference call at 9:00 am EDT on Thursday, April 1, 2010 to discuss the 2009 fourth quarter and year-end financial results. To participate in the conference call, please dial the following number fifteen minutes prior to the scheduled conference call time: 800-688-0796. International callers should dial 617-614-4070. The pass code for the call is 313 281 09. If you are unable to participate in the call at this time, a replay will be available on Thursday, April 1, 2010 at 11:00 AM EDT through Thursday, April 15, 2010. To access the replay, dial 888-286-8010, international callers should dial 617-801-6888. The conference pass code is 65975630. This conference call will be broadcast live over the Internet and can be accessed by all interested parties by clicking on http://ir.ritarpower.com/en/ . Please access the link at least fifteen minutes prior to the start of the call to register, download, and install any necessary audio software. For those unable to participate during the live broadcast, a 90-day replay will be available shortly after the call by accessing the same link.
Use of Non-GAAP Financial Measures
To supplement China Ritar Power's condensed consolidated financial statements presented on a GAAP basis, China Ritar is providing certain income statement information that is not calculated according to GAAP. China Ritar believes that its non-GAAP disclosures are useful in evaluating its operating results as this information supplies the user with another view of the matching of costs and expenses. A reconciliation of the adjustments to GAAP results for the three and 12-month periods ended December 31, 2008 is included below. The non-GAAP information presented is supplemental and is not purported to be a substitute for information prepared in accordance with GAAP.
Non-GAAP financial results for the three and 12-month periods ended December 31, 2008 discussed in this release reflect operating results excluding the impact of the non-cash, stock-based compensation recognized under salaries in relation to the release of shares of the Company's common stock to the Company's CEO from escrow pursuant to a make good agreement to meet the net income target for 2008 of $8.2 million entered into by the Company in connection with its private placement financing in February 2007.
About China Ritar Corp.
China Ritar designs, develops, manufactures and markets environmentally friendly, lead acid batteries with a wide range of capacities and applications, including telecommunications, Uninterruptible power supply (UPS) devices, light electrical vehicles (LEV), and renewable energy systems (solar and wind power). China Ritar sells, markets and services six series and 197 models of Ritar-branded, cadmium-free valve-regulated lead-acid (VRLA) batteries. Products are sold worldwide with sales in 81 countries including China, India, and numerous markets in Europe and the Americas. Additional information can be found at the Company's website http://www.ritarpower.com .
Safe Harbor Statement
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Certain statements in this press release and oral statements made by China Ritar on its conference call in relation to this release, constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included herein are forward-looking statements. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with and available from the Securities and Exchange Commission. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.
-FINANCIAL TABLES TO FOLLOW -
CHINA RITAR POWER CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Audited
As of December 31
2009 2008
ASSETS
Current assets:
Cash and cash equivalents $20,459,361 $7,541,697
Restricted cash 5,900,649 4,387,679
Accounts receivable, net of allowances
of $1,115,321 and $1,114,276 24,920,825 17,314,082
Receivable from sale of a subsidiary 417,387 --
Due from a former subsidiary 3,925,348 --
Inventory 19,484,224 12,774,780
Advance to suppliers 2,477,449 1,328,694
Other current assets 3,915,605 4,138,236
Current assets of discontinued
operations -- 5,333,174
Total current assets 81,500,848 52,818,342
Non-current assets:
Property, plant and equipment, net 16,248,551 10,440,084
Construction in progress 136,443 3,089,854
Intangible assets, net 9,407 17,088
Land use right 468,265 476,687
Rental and utility deposits 82,439 82,801
Deferred income tax assets 115,064 --
Non-current assets of discontinued
operations -- 465,286
Total assets $98,561,017 $67,390,142
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $16,658,868 $11,968,901
Income and other taxes payable 3,986,935 2,898,082
Accrued salaries 502,978 437,954
Bills payable 13,498,001 4,321,915
Derivative instruments -- 236,898
Other current liabilities 2,800,879 2,497,498
Current portion of long term loans 1,342,473 877,886
Short-term loans 1,464,515 3,596,955
Current liabilities of discontinued
operations -- 2,508,628
Total current liabilities 40,254,649 29,344,717
Long-term loans 2,881,188 3,657,859
Total liabilities 43,135,837 33,002,576
Stockholders' equity:
Preferred stock, $.001 par value,
10,000,000 shares authorized, no shares
issued and outstanding -- --
Common stock at $.001 par value;
authorized 100,000,000 shares
authorized, 21,450,238 and 19,134,992
shares issued and outstanding 21,450 19,135
Additional paid-in capital 31,461,723 19,222,727
Retained earnings 20,745,985 12,053,205
Accumulated other comprehensive income 3,196,022 3,092,499
Total China Ritar stockholders' equity 55,425,180 34,387,566
Non-controlling interest -- --
Total equity 55,425,180 34,387,566
Total liabilities and stockholders'
equity $98,561,017 $67,390,142
CHINA RITAR POWER CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
Three Months Ended For the years ended
December 31, December 31,
2009 2008 2009 2008
CONTINUING Unaudited
OPERATIONS
Net revenue $25,859,956 $25,917,372 $98,630,176 $112,312,056
Cost of sales 20,651,234 21,120,304 79,684,443 90,013,419
Gross profit 5,208,722 4,797,068 18,945,733 22,298,637
Operating
expenses:
Salaries 638,262 1,278,230 2,039,294 5,224,973
Sales commission 460,088 690,323 1,597,189 1,566,177
Shipping and
handling cost 207,006 316,499 1,050,505 1,482,825
Other selling,
general and
administrative
expenses 631,640 973,075 3,672,157 4,887,408
Total operating
expenses 1,936,996 3,258,127 8,359,145 13,161,383
Operating profit 3,271,726 1,538,941 10,586,588 9,137,254
Other income and
(expenses):
Interest income 43,732 63,928 115,716 192,326
Other income 119,747 1,259 160,396 2,222
Interest expenses (216,014) 237,858 (716,526) (511,752)
Foreign currency
exchange loss (32,772) (99,698) (50,780) (557,388)
Other expenses 4,407 (242) (7,037) (8,981)
Total other
expenses, net (80,900) 203,105 (498,231) (883,573)
Income from
continuing
operations
before income
taxes 3,190,826 -- 10,088,357 8,253,681
Income taxes (633,064) (549,953) (1,948,322) (2,400,314)
Income from
continuing
operations 2,557,762 1,192,093 8,140,035 5,853,367
DISCONTINUED
OPERATIONS
Loss from
discontinued
operations,
net of taxes (376,916) (718,940) (376,916) (718,940)
Gain on disposal
of discontinued
operations,
net of taxes 910,817 -- 910,817 --
Income (loss) from
discontinued
operations,
net of taxes 533,901 (718,940) 533,901 (718,940)
Net income 3,091,663 473,153 8,692,780 5,134,427
Add: Loss from
discontinued
operations
attributable to
non-controlling
interest 1,113 9,616 18,844 29,633
Net income
attributable
to China Ritar
stockholders 3,092,776 482,769 8,692,780 5,164,060
Earnings per share
attributable to
China Ritar
stockholders:
Basic:
- Continuing
operations 0.13 0.06 0.41 0.31
- Discontinued
operations 0.03 (0.04) 0.03 (0.04)
- Net income $0.16 $0.03 0.44 0.27
Diluted:
- Continuing
operations 0.13 0.06 0.40 0.31
- Discontinued
operations 0.02 (0.04) 0.03 (0.04)
- Net income $0.15 $0.02 0.43 0.27
Weighted average
number of shares
outstanding:
- Basic 19,693,630 19,134,992 19,693,630 19,127,598
- Diluted 20,124,293 19,519,730 20,124,293 19,127,598
CHINA RITAR POWER CORP. AND SUBSIDIARIES
NON-GAAP CONSOLIDATED STATEMENT OF INCOME
Three Months Ended Year Ended
December 31, December 31,
2008 2008
CONTINUING OPERATIONS Unaudited
Net revenue 25,917,372 112,312,056
Cost of sales 21,120,304 90,013,419
Gross profit 4,797,068 22,298,637
Operating expenses:
Salaries 314,879 1,371,572
Sales commission 690,323 1,566,177
Shipping and handling cost 316,499 1,482,825
Other selling, general and
administrative expenses 973,075 4,887,408
Total operating
expenses 2,294,776 9,307,982
Operating profit 2,502,292 12,990,655
Other income and (expenses):
Interest income 63,928 192,326
Other income 1,259 2,222
Interest expenses 237,858 (511,752)
Foreign currency
exchange loss (99,698) (557,388)
Other expenses (242) (8,981)
Total other expenses, net 203,105 (883,573)
Income from continuing operations
before income taxes 2,705,397 12,107,082
Income taxes (549,953) (2,400,314)
Income from continuing
operations 2,155,444 9,706,768
DISCONTINUED OPERATIONS
Loss from discontinued
operations, net of taxes (718,940) (718,940)
Gain on disposal of discontinued
operations, net of taxes -- --
Income (loss) from discontinued
operations, net of taxes (718,940) (718,940)
Net income 1,436,504 8,987,828
Add: Loss from discontinued
operations attributable to
non-controlling interest 9,616 29,633
Net income attributable to China
Ritar stockholders 1,446,120 9,017,461
Earnings per share attributable to
China Ritar stockholders:
Basic:
- Continuing operations 0.11 0.51
- Discontinued operations (0.04) (0.04)
- Net income 0.08 0.47
Diluted:
- Continuing operations 0.11 0.51
- Discontinued operations (0.04) (0.04)
- Net income 0.07 0.47
Weighted average number of shares
outstanding:
- Basic 19,134,992 19,127,598
- Diluted 19,519,730 19,127,598
CHINA RITAR POWER CORP. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
FOR THE THREE MONTHS AND YEAR ENDED DECEMBER 31, 2008
For the year ended For the three months ended
Adjusted Net income 31-Dec-08 31-Dec-08
Net Income (Loss) and Diluted Diluted
Diluted EPS Net Income EPS Net Income EPS
Adjusted Amount Non-GAAP 9,017,461 0.47 1,446,120 0.07
Adjustments
Non-cash compensation
adjustment (1) 3,850,000 0.20 963,350 0.05
Amount per consolidated
statement of operations 5,164,060 0.27 482,769 0.02
(1) Non cash compensation expense in connection with the release from
escrow to certain employees of shares of common stock that had
been deposited into escrow to certain China Ritar employees in
connection with the Company's private placement in February 2007
CHINA RITAR POWER CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Audited
For the years ended December 31,
2009 2008
Cash Flows from Continuing
Operating Activities:
Net income $8,673,936 $5,134,427
(Income) loss from discontinued
operations, net of taxes (533,901) 718,940
Income from continuing operations 8,140,035 5,853,367
Adjustments to reconcile net income
to net cash provided by operating
activities:
Deferred income tax assets (115,017) --
Depreciation of property, plant and
equipment 1,177,408 774,856
Amortization of intangible assets
and land use right 16,560 12,352
Bad debts expenses -- 471,488
(Gain) loss on disposal of
property, plant and equipment (365) 2,494
Stock-based compensation - make --
good provision 3,853,401
Inventory write-down -- 282,589
Unrealized (loss) gain on
derivative instruments (237,022) 233,795
Changes in operating working
capital items:
Accounts receivable (7,587,403) (5,494,944)
Inventory (6,694,725) (2,929,690)
Advance to suppliers (1,147,038) 2,115,687
Other current assets (4,661,501) (4,803,688)
Rental and utility deposit 439 (81,717)
Accounts payable 4,676,850 1,866,118
Income and other tax payable 4,735,050 1,507,786
Accrued salaries 64,587 157,775
Bills payable 9,168,276 27,228
Other current liabilities 710,748 233,330
Net cash provided by operating
activities 8,264,882 4,082,227
Cash Flows from Continuing
Investing Activities:
Repayment of loan from related parties -- 217,750
Repayment from a former subsidiary
- Shanghai Ritar 705,070 --
Purchase of property, plant and
equipment (4,362,680) (8,177,816)
Purchase of intangible assets -- (3,760)
Sales proceeds of disposal of
property, plant and equipment 4,392 47,720
Net cash used in investing activities (3,653,218) (7,916,106)
Cash Flows from Continuing
Financing Activities:
Net proceeds from issuance of
common stock 12,059,449 --
Proceeds from stock issued for
warrant exercised 181,862 134
Proceeds from bank borrowings 8,684,270 33,213,856
Repayment of bank borrowings (11,135,412) (28,775,962)
Restricted cash (1,508,239) 1,851,001
Net cash provided by financing
activities 8,281,930 6,289,029
Cash Flows from Discontinued
Operations Activities:
Net cash used in discontinued
operating activities (94,628) 661,509
Net cash used in discontinued
investing activities (14,139) (30,772)
Net cash used in discontinued
financing activities -- --
Effect of exchange rate changes
on cash -- 9,338
Change in cash from discontinued
operations 108,767 (640,075)
Net cash used in discontinued
operations -- --
Effect of exchange rate changes
on cash and cash equivalents 24,070 429,684
Net increase in cash and cash
equivalents 12,917,664 2,884,834
Cash and cash equivalents,
beginning of year 7,541,697 4,656,863
Cash and cash equivalents,
end of year $20,459,361 $7,541,697
Supplemental disclosure of cash
flow information
Cash paid for interest $716,526 $511,752
Cash paid for income taxes $996,471 $623,299
Non-cash investing and financing
activities
Issuance of common stock for
cashless exercise of warrants $100 $125
Receivable from sale of Shanghai
Ritar $417,387 $--
For more information, please contact:
Elite IR
John Marco, Partner
Tel: +1-310-819-2948
Email: John.marco@elite-ir.com
Elite IR
Leslie J. Richardson, Partner
Tel: +852-3183-0283
Email: Leslie.richardson@elite-ir.com