omniture

China Automotive Systems Reports 2019 First Quarter Results

2019-05-09 18:15 6202

WUHAN, China, May 9, 2019 /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 first quarter ended March 31, 2019.

First Quarter 2019 Highlights

  • Net sales decreased 18.5% to $109.2 million from $134.0 million in the first quarter of 2018
  • Net sales of electric power steering ("EPS") products were $22.2 million, a 11.2% decrease year-over-year
  • Net income attributable to parent company's common shareholders was $1.5 million, or diluted earnings per share of $0.05, compared to $4.3 million, or diluted earnings per share of $0.14, in the first quarter of 2018
  • Total cash and cash equivalents and pledged cash were $91.7 million

Mr. Qizhou Wu, chief executive officer of CAAS, commented, "Our sales continue to reflect the challenges in the domestic Chinese market. We continue to invest in other advanced steering technologies to broaden our portfolio of steering products to provide a greater range of solutions for our customers."

First Quarter of 2019

In the first quarter of 2019, net sales were $109.2 million compared to $134.0 million in the same quarter of 2018, reflecting an 18.5% year-over-year decline. The decrease in net sales was mainly due to lower sales volume for legacy products in the domestic and North American passenger markets and the domestic heavy-duty vehicle market, as well as the effect of foreign currency exchange.

Gross profit was $14.0 million in the first quarter of 2019 compared with $21.6 million in the first quarter of 2018. The gross margin was 12.8% in the first quarter of 2019 compared to 16.1% in the first quarter of 2018 mainly due to the changes in the product mix.

Gain on other sales was $1.3 million in the first quarter of 2019 compared to $1.5 million in the first quarter of 2018, reflecting lower scrap volume.

Selling expenses were $3.1 million in the first quarter of 2019, compared to $5.8 million in the first quarter of 2018. The decrease was primarily due to reduced logistics fees reflecting lower sales volume and the use of lower-price shippers.  Selling expenses represented 2.8% of net sales in the first quarter of 2019 compared to 4.3% in the first quarter of 2018. 

General and administrative expenses ("G&A expenses") were $4.6 million in the first quarter of 2019, compared to $4.4 million in the same quarter of 2018. The increase primarily reflected higher personnel expenses. G&A expenses represented 4.2% of net sales in the first quarter of 2019 and 3.3% in the first quarter of 2018. 

Research and development expenses ("R&D expenses") were $6.6 million in the first quarter of 2019, compared to $8.3 million in the first quarter of 2018. R&D expenses represented 6.0% of net sales in the first quarter of 2019 compared to 6.2% in the first quarter of 2018. The reduction in R&D expenses was due to increased cost controls.  

Other income, net was $1.4 million for the three months ended March 31, 2019, compared to other income, net of $0.6 million for the three months ended March 31, 2018, representing an increase of $0.8 million, primarily due to an increase in the unspecific purpose subsidies being recognized in the first quarter of 2019.

Income from operations was $1.0 million in the first quarter of 2019, compared to $4.6 million in the same quarter of 2018. The decrease was primarily due to lower gross profit and gross margin.

Interest expense was $0.6 million in the first quarter of 2019 compared to $0.4 million in the same quarter of 2018. The increase was due to increased bank borrowings at higher interest rates.

Net financial expense was $0.7 million in the first quarter of 2019 compared to net financial income of $0.8 million in the first quarter of 2018. The decrease in net financial expense was primarily due to an increase in financial income in the first quarter of 2019.

Income before income tax expenses and equity in earnings of affiliated companies was $1.2 million in the first quarter of 2019, compared to $4.0 million in the first quarter of 2018. The decrease in income before income tax expenses and equity in earnings of affiliated companies was mainly due to lower income from operations. 

Net income attributable to parent company's common shareholders was $1.5 million in the first quarter of 2019, compared to $4.3 million in the first quarter of 2018. Diluted earnings per share were $0.05 per share in the first quarter of 2019, compared to $0.14 in the first quarter of 2018.  

The weighted average number of diluted common shares outstanding was 31,513,297 in the first quarter of 2019, compared to 31,644,044 in the first quarter of 2018.

Balance Sheet

As of March 31, 2019, total cash and cash equivalents and pledged cash were $91.7 million, total accounts receivable including notes receivable were $264.3 million, accounts payable were $193.3 million and short-term bank and government loans were $65.9 million. Total parent company stockholders' equity was $292.9 million as of March 31, 2019, compared to $285.9 million as of December 31, 2018.   

Business Outlook

Management reiterates its revenue guidance for the full year 2019 of US$510 million. This target is based on the Company's current views on operating and market conditions, which are subject to change.

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 nine 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 6 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 28, 2019, 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 
+1-212-521-4050
Email: Kevin.Theiss@awakenlab.com 

 

-Tables Follow -

 

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,


2019


2018

Net product sales ($12,836 and $10,846 sold to related parties for the
three months ended March 31, 2019 and 2018)

$

109,193


$

134,018

Cost of products sold ($5,504 and $8,249 purchased from related
parties for the three months ended March 31, 2019 and 2018)


95,148



112,379

Gross profit


14,045



21,639

Gain on other sales


1,269



1,513

Less: Operating expenses






Selling expenses


3,085



5,827

General and administrative expenses


4,590



4,424

Research and development expenses


6,602



8,307

Total operating expenses


14,277



18,558

Income from operations


1,037



4,594

Other income, net


1,407



621

Interest expense


(568)



(415)

Financial expense, net


(665)



(765)

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


1,211



4,035

Less: Income taxes


198



588

Equity in earnings of affiliated companies


211



585

Net income


1,224



4,032

Net loss attributable to non-controlling interests


(243)



(280)

Net income attributable to parent company's

   common shareholders

$

1,467


$

4,312

Comprehensive income:






Net income

$

1,224


$

4,032

Other comprehensive income:






Foreign currency translation gain, net of tax


6,363



13,242

Comprehensive income


7,587



17,274

Comprehensive income attributable to non-controlling interests


214



236

Comprehensive income attributable to parent company

$

7,373


$

17,038







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












Basic -

$

0.05


$

0.14







Diluted -

$

0.05


$

0.14

Weighted average number of common shares outstanding






Basic


31,507,487



31,644,004

Diluted


31,513,297



31,644,004

 

 

China Automotive Systems, Inc. and Subsidiaries

Condensed Unaudited Consolidated Balance Sheets

(In thousands of USD unless otherwise indicated)



March 31, 2019


December 31, 2018

ASSETS






Current assets:






Cash and cash equivalents

$

65,471


$

86,346

Pledged cash


26,205



29,623

Accounts and notes receivable, net - unrelated parties


242,574



237,519

Accounts and notes receivable, net - related parties


21,701



18,825

Inventories


90,202



88,021

Other current assets


34,076



35,094

Total current assets


480,229



495,428

Non-current assets:






Property, plant and equipment, net


137,033



129,853

Long-term investments


33,433



32,620

Other non-current assets


34,621



32,598

Total assets

$

685,316


$

690,499







LIABILITIES AND STOCKHOLDERS' EQUITY






Current liabilities:






Short-term loans

$

65,888


$

60,952

Accounts and notes payable - unrelated parties


187,612



205,643

Accounts and notes payable - related parties


5,668



4,477

Accrued expenses and other payables


45,897



47,032

Other current liabilities


24,181



23,196

Total current liabilities


329,246



341,300

Long-term liabilities:






Long-term government loan


297



291

Other long-term payable


7,977



8,726

Long-term tax payable


29,503



29,503

Other non-current liabilities


6,221



5,852

Total liabilities

$

373,244


$

385,672







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,
2019 and December 31, 2018, respectively

$

3


$

3

Additional paid-in capital


64,429



64,429

Retained earnings-






Appropriated


11,104



11,104

Unappropriated


212,906



211,439

Accumulated other comprehensive income


7,761



1,855

Treasury stock - 840,579 and 711,698 shares as of March 31, 2019
and December 31, 2018, respectively


(3,295)



(2,953)

Total parent company stockholders' equity


292,908



285,877

Non-controlling interests


19,164



18,950

Total stockholders' equity


312,072



304,827

Total liabilities and stockholders' equity

$

685,316


$

690,499

 

 

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,


2019


2018

Cash flows from operating activities:






Net income

$

1,224


$

4,032

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






Depreciation and amortization


3,987



4,342

(Reversal)/accrual of provision for doubtful accounts


(355)



275

Inventory write downs


1,112



1,543

Deferred income taxes


(84)



33

Equity in earnings of affiliated companies


(211)



(585)

Gain on fixed assets disposals


-



12

Changes in operating assets and liabilities






(Increase)/decrease in:






Accounts and notes receivable


(1,977)



559

Inventories


(1,233)



(6,592)

Other current assets


2,387



(128)

Increase/(decrease) in:






Accounts and notes payable


(21,299)



(11,950)

Accrued expenses and other payables


(2,208)



(4,031)

Other current liabilities


443



4,988

Net cash used in operating activities


(18,214)



(7,502)

Cash flows from investing activities:






(Decrease)/increase in other receivables


(249)



647

Cash received from property, plant and equipment sales


834



26

Payments to acquire property, plant and equipment
(including $760 and $5,224 paid to related parties for the
three months ended March 31, 2019 and 2018,
respectively)


(8,777)



(8,192)

Payments to acquire intangible assets


(1,194)



-

Purchase of short-term investments


(15,563)



(1,414)

Proceeds from maturities of short-term investments


14,901



19,108

Cash received from repayment of the loan to a related party


-



20,430

Net cash (used in)/provided by investing activities


(10,048)



30,605

Cash flows from financing activities:






Proceeds from bank loans


15,275



19,672

Repayments of bank loans


(11,881)



(31,037)

Repayments of the borrowing for sale and leaseback
transaction


(1,063)



-

Repurchase of common shares


(342)



-

Net cash provided by/(used in) financing activities


1,989



(11,365)

Effects of exchange rate on cash, cash equivalents and
pledged cash


1,980



3,595

Net (decrease)/increase in cash, cash equivalents and
pledged cash


(24,293)



15,333

Cash, cash equivalents and pledged cash at beginning of
the period


115,969



96,093

Cash, cash equivalents and pledged cash at end of the
period

$

91,676


$

111,426

 

 

Cision View original content:http://www.prnewswire.com/news-releases/china-automotive-systems-reports-2019-first-quarter-results-300847144.html

Source: China Automotive Systems, Inc.
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