WUHAN, China, March 30, 2016 /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 fourth quarter and the
audited results for fiscal year ended December 31, 2015.
Fourth Quarter 2015 Highlights
- Net sales were $120.1 million,
compared to $135.3 million in the
fourth quarter of 2014.
- Gross margin was 16.8%.
- Net income attributable to parent company's common shareholders
was $6.9 million, or diluted earnings
per share of $0.22, compared to net
income attributable to parent company's common shareholders of
$9.0 million, or diluted earnings per
share of $0.28 in the fourth quarter
of 2014.
Fiscal Year 2015 Highlights
- Net sales were $443.5 million,
compared to $466.8 million in
2014.
- Gross margin was 17.9%.
- Diluted earnings per share attributable to parent company's
common shareholders was $0.85.
- Cash and cash equivalents, pledged cash and short-term
investments were $122.3 million as of
December 31, 2015.
- Net cash flow from operating activities was $39.3 million.
Mr. Qizhou Wu, chief executive
officer of CAAS, commented, "Our sales in 2015 reflected the
challenges of slower economic growth in China and changes in the demand for steering
in 2015. The 6.9 percent GDP growth in 2015 was the slowest since
2009, resulting in anticipated employment reductions in several
industries. This, combined with the effects of the volatility in
the Chinese stock markets, drove consumer confidence lower and
hindered new passenger car purchases, which recorded growth of only
7.3% for the 2015 year according to the Chinese Association of
Automobile Manufacturers ("CAAM"). Additionally, CAAM has reported
that commercial vehicle sales in China decreased by 9.0% in 2015."
"We reported lower sales of our traditional hydraulic power
steering units, as the sales of electric power steering units
("EPS") accelerated. Sales of our own EPS units continued to climb
in 2015 and we are making further investments in R&D and our
operations to speed our changeover to emphasize EPS sales in the
future. Several of our customers also delayed the launch of new
passenger vehicle models in 2015 which also impacted our sales. We
anticipate those new models will be introduced in 2016."
"Our Brazilian plant is now operating at commercial run rates
allowing us to accept larger orders and penetrate deeper into the
South American markets to serve global OEMs and Chinese operations
in these markets as well as local companies. Our overseas sales
increased as a percentage of total sales to 13.8% in 2015 compared
with 12.5% in 2014. We continue to increase our sales to Fiat
Chrysler North America and Ford in North
America and additional foreign markets hold promise for the
future."
Mr. Jie Li, chief financial
officer of CAAS, commented, "We continue to focus on maintaining a
strong balance sheet with positive cash flow even as we
invest to improve our operations and expand our product
portfolio in a competitive market. In early January of 2016, our
board of directors approved a stock repurchase plan as our stock is
trading at a low valuation based on our analysis. We plan to
proceed with stock repurchases as soon as the trading window opens
in the middle of May. These actions demonstrate our determination
to build long-term shareholder value."
Fourth Quarter of 2015
In the fourth quarter of 2015, net sales were $120.1 million, compared to $135.3 million in the same quarter of 2014,
reflecting an 11.2% year-over-year decline. The net sales decline
was mainly due to decreased auto sales in a weak economic
environment.
Gross profit was $20.2 million in
the fourth quarter of 2015, compared to $24.0 million in the fourth quarter of 2014. The
gross margin was 16.8% in the fourth quarter of 2015, versus 17.7%
in the fourth quarter of 2014. The decrease in gross margin was
mainly due to weaker unit volume sales and a lower average selling
price.
Gain on other sales was $1.2
million, compared with $1.6
million in the fourth quarter of 2014.
Selling expenses were $4.0 million
in the fourth quarter of 2015, compared to $4.6 million in the fourth quarter of 2014.
Selling expenses represented 3.3% of net sales in the fourth
quarter of 2015, compared to 3.4% in the fourth quarter of
2014.
General and administrative expenses ("G&A expenses") were
$5.7 million in the fourth quarter of
2015, compared to $5.1 million in the
same quarter of 2014. G&A expenses represented 4.7% of net
sales in the fourth quarter of 2015 and 3.8% in the fourth quarter
of 2014. The increase in G&A expenses and G&A
expenses as a percentage of net sales was mainly due to higher
employee insurance and increased depreciation on the office
buildings.
Research and development expenses ("R&D expenses") were
$4.6 million in the fourth quarter of
2015, down from $6.5 million in the
fourth quarter of 2014. R&D expenses represented 3.8% of net
sales in the fourth quarter of 2015 compared with 4.8% in the
fourth quarter of 2014.
Net financial income was $0.9
million in the fourth quarter of 2015 compared to net
financial income of $0.3 million in
the fourth quarter of 2014.
Income from operations was $7.1
million in the fourth quarter of 2015, compared to
$9.3 million in the same quarter of
2014. The decrease was mainly due to the reduced revenue and lower
gross margin in the 2015 fourth quarter compared with the same
quarter of 2014.
Income before income tax expenses and equity in earnings of
affiliated companies was $7.9 million
in the fourth quarter of 2015, compared to $9.9 million in the fourth quarter of 2014. The
decrease in income before income tax expenses and equity in
earnings of affiliated companies was mainly due to lower operating
income in the fourth quarter of 2015, compared with the fourth
quarter of 2014.
Net income attributable to parent company's common shareholders
was $6.9 million in the fourth
quarter of 2015, compared to net income attributable to parent
company's common shareholders of $9.0
million in the fourth quarter of 2014. Diluted earnings per
share were $0.22 in the fourth
quarter of 2015, compared to diluted earnings per share of
$0.28 in the fourth quarter of
2014.
The weighted average number of diluted common shares outstanding
was 32,131,453 in the fourth quarter of 2015, compared to
32,139,697 in the fourth quarter of 2014.
Fiscal Year 2015
Annual net sales were $443.5
million in 2015, compared to $466.8
million in 2014. The overall decrease was mainly due to the
economic slowdown in China which
impacted vehicle sales and led certain large customers to postpone
the launch of new models. The depreciation of the RMB against the
U.S. dollar in 2015 also negatively affected net sales, as more
than 80% of the Company's business is conducted in China and the Company's financial reporting is
in US dollars.
Gross profit in 2015 was $79.5
million, down from $87.5
million in 2014. Gross margin was 17.9% in 2015, compared to
18.7% in 2014. The decrease was primarily due to reduced sales
volume, different product mix, and a lower average selling price in
response to weak market demand.
Gain on other sales mainly consisted of the net amount retained
from the sales of materials, property, plant and equipment, land
use rights and scraps. For the year ended December 31, 2015, the gain on other sales
amounted to $4.4 million, compared to
$11.8 million in 2014. The decrease
was mainly due to the Company's recognition of a gain on the sale
of land use rights of $7.5 million in
2014 while there was no such gain in 2015.
Selling expenses were $15.0
million in 2015, slightly down from $15.7 million in 2014, which was mainly due to a
more competitive transportation provider used in 2015. Selling
expenses represented 3.4% of net sales in 2015, the same as in
2014.
G&A expenses were $17.0
million in 2015, up slightly from $16.2 million in 2014. Higher G&A expenses
were primarily due to increased labor insurance and a rise in
depreciation of office buildings. G&A expenses represented 3.8%
of net sales in 2015 compared to 3.5% in 2014.
R&D expenses were $22.3
million in 2015 from $23.0
million in 2014. R&D expenses are primarily associated
with the costs incurred with the Company's further development of
its EPS technology, improvement of machinery molds and compensation
for research staff and consultants. External technical support fees
declined during 2015 as the Company made greater usage of its
internal resources. R&D expenses represented 5.0% of net sales
in 2015, which was slightly higher from 4.9% of net sales in
2014.
Operating income was $29.7 million
in 2015, down from $44.4 million in
2014. The decrease is due to lower gross profit in 2015 and a
higher gain on other sales associated with land sales in 2014. The
operating margin was 6.7% in 2015, compared to 9.5% in 2014.
Net financial income was $2.9
million in 2015, compared to net financial income of
$2.4 million in 2014.
Income before income tax expenses and equity in earnings of
affiliated companies was $32.0
million for 2015 compared with $46.1
million for 2014. This decline was mainly due to a decrease
in income from operations.
Income tax expense was $4.5
million for 2015, compared to $6.8
million for 2014. This tax decrease was mainly due to lower
income before tax. The effective tax rate decreased to 14.0% for
the year ended December 31, 2015 from
14.7% for the year ended December 31,
2014. The Chinese government rewards high-tech companies
with favorable tax rates.
Net income attributable to parent company's common shareholders
was $27.4 million in 2015, compared
to $33.5 million in 2014. Diluted
earnings per share were $0.85 in
2015, compared to $1.15 in 2014. The
weighted average number of diluted common shares outstanding was
32,134,866 in 2015, compared to 29,082,809 in 2014.
Balance Sheet
As of December 31, 2015, total
cash and cash equivalents, pledged cash and short-term investments
were $122.3 million, total accounts
receivable including notes receivable were $276.3 million, accounts payable were
$203.5 million and bank and
government loans were $40.9 million.
Total parent company stockholders' equity was $299.0 million as of December 31, 2015, compared to $289.3 million as of December 31, 2014. Net cash flow from operating
activities was $39.3 million,
compared to $45.7 million in
2014.
Business Outlook
Management provided revenue guidance for the full year 2016 of
US$450 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 March 30, 2016 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)
|
A replay of the call will be available on the Company's website
under 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 5.0 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, Beijing Henglong Automotive
System Co., Ltd. (for 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, 2016, 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
Investor Relations
Email: caas@compassbell.com
-Tables Follow –
China Automotive
Systems, Inc. and Subsidiaries
|
Consolidated
Balance Sheets
|
(In thousands of
USD, except share and per share amounts)
|
|
December 31,
|
|
2015
|
|
2014
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
69,676
|
|
$
|
68,505
|
Pledged
cash
|
|
31,402
|
|
|
33,633
|
Short-term
investments
|
|
21,209
|
|
|
41,017
|
Accounts and notes
receivable, net - unrelated parties
|
|
254,397
|
|
|
282,348
|
Accounts and notes
receivable, net - related parties
|
|
21,918
|
|
|
22,760
|
Advance payments and
others - unrelated parties
|
|
4,381
|
|
|
2,124
|
Advance payments and
others - related parties
|
|
544
|
|
|
741
|
Inventories
|
|
65,570
|
|
|
64,419
|
Current deferred tax
assets
|
|
6,962
|
|
|
7,078
|
Total current
assets
|
|
476,059
|
|
|
522,625
|
Non-current
assets:
|
|
|
|
|
|
Long-term time
deposits
|
|
5,082
|
|
|
-
|
Property, plant and
equipment, net
|
|
84,151
|
|
|
82,466
|
Intangible assets,
net
|
|
2,793
|
|
|
3,419
|
Other receivables,
net - unrelated parties
|
|
3,882
|
|
|
1,619
|
Other receivables,
net - related parties
|
|
14
|
|
|
76
|
Advance payment for
property, plant and equipment - unrelated parties
|
|
15,192
|
|
|
6,755
|
Advance payment for
property, plant and equipment - related parties
|
|
8,863
|
|
|
2,085
|
Long-term
investments
|
|
6,152
|
|
|
4,575
|
Goodwill
|
|
608
|
|
|
645
|
Non-current deferred
tax assets
|
|
4,899
|
|
|
4,896
|
Total
assets
|
$
|
607,695
|
|
$
|
629,161
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Bank and government
loans
|
$
|
40,929
|
|
$
|
43,988
|
Accounts and notes
payable - unrelated parties
|
|
197,105
|
|
|
213,090
|
Accounts and notes
payable - related parties
|
|
6,363
|
|
|
4,857
|
Customer
deposits
|
|
1,613
|
|
|
1,885
|
Accrued payroll and
related costs
|
|
6,332
|
|
|
7,554
|
Accrued expenses and
other payables
|
|
31,383
|
|
|
35,429
|
Accrued pension
costs
|
|
4,664
|
|
|
5,586
|
Taxes
payable
|
|
9,284
|
|
|
11,557
|
Amounts due to
shareholders/directors
|
|
345
|
|
|
380
|
Current deferred tax
liabilities
|
|
194
|
|
|
189
|
Total current
liabilities
|
|
298,212
|
|
|
324,515
|
Long-term
liabilities:
|
|
|
|
|
|
Advances
payable
|
|
1,922
|
|
|
6,156
|
Non-current deferred
tax liabilities
|
|
266
|
|
|
321
|
Total
liabilities
|
|
300,400
|
|
|
330,992
|
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 at December 31, 2015 and 2014,
respectively
|
|
3
|
|
|
3
|
Additional paid-in
capital
|
|
64,627
|
|
|
64,522
|
Retained
earnings-
|
|
|
|
|
|
Appropriated
|
|
10,379
|
|
|
10,178
|
Unappropriated
|
|
206,622
|
|
|
179,435
|
Accumulated other
comprehensive income
|
|
18,412
|
|
|
36,119
|
Treasury stock -
217,283 and 217,283 shares at December 31, 2015 and
2014, respectively
|
|
(1,000)
|
|
|
(1,000)
|
Total parent company
stockholders' equity
|
|
299,043
|
|
|
289,257
|
Non-controlling
interests
|
|
8,252
|
|
|
8,912
|
Total stockholders'
equity
|
|
307,295
|
|
|
298,169
|
Total liabilities and
stockholders' equity
|
$
|
607,695
|
|
$
|
629,161
|
China Automotive
Systems, Inc. and Subsidiaries
|
Consolidated
Statements of Income
|
(In thousands of
USD, except share and per share amounts)
|
|
Year Ended December 31,
|
|
2015
|
|
2014
|
|
|
|
|
Net product sales
($38,948 and $50,442 sold to related parties for the
years ended December 31, 2015 and 2014)
|
$
|
443,533
|
|
$
|
466,773
|
Cost of products sold
($25,294 and $23,506 purchased from related
parties for the years ended December 31, 2015 and 2014)
|
|
363,986
|
|
|
379,299
|
Gross
profit
|
|
79,547
|
|
|
87,474
|
Net gain on other
sales
|
|
4,417
|
|
|
11,821
|
Operating
expenses:
|
|
|
|
|
|
Selling
expenses
|
|
15,003
|
|
|
15,736
|
General and
administrative expenses
|
|
16,970
|
|
|
16,161
|
Research and
development expenses
|
|
22,339
|
|
|
22,966
|
Total operating
expenses
|
|
54,312
|
|
|
54,863
|
Operating
income
|
|
29,652
|
|
|
44,432
|
Other income,
net
|
|
844
|
|
|
1,021
|
Interest
expense
|
|
(1,337)
|
|
|
(1,788)
|
Financial income,
net
|
|
2,888
|
|
|
2,416
|
Income before income
tax expenses and equity in earnings of affiliated
companies
|
|
32,047
|
|
|
46,081
|
Less: Income
taxes
|
|
4,490
|
|
|
6,785
|
Add: Investment
income, net
|
|
340
|
|
|
298
|
Net income
|
|
27,897
|
|
|
39,594
|
Net income
attributable to noncontrolling interest
|
|
509
|
|
|
6,052
|
Net income attributable
to parent company's common shareholders
|
|
27,388
|
|
|
33,542
|
|
|
|
|
|
|
Net income
attributable to parent company's common shareholders per
share -
|
|
|
|
|
|
Basic
|
$
|
0.85
|
|
$
|
1.15
|
|
|
|
|
|
|
Diluted
|
$
|
0.85
|
|
$
|
1.15
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding -
|
|
|
|
|
|
Basic
|
|
32,121,019
|
|
|
29,062,519
|
Diluted
|
|
32,134,866
|
|
|
29,082,809
|
China Automotive
Systems, Inc. and Subsidiaries
|
Consolidated
Statements of Comprehensive Income
|
(In thousands of
USD unless otherwise indicated)
|
|
Year Ended December 31,
|
|
2015
|
|
2014
|
|
|
|
|
Net income
|
$
|
27,897
|
|
$
|
39,594
|
Other comprehensive
income:
|
|
|
|
|
|
Foreign currency
translation loss
|
|
(18,557)
|
|
|
(1,057)
|
Comprehensive
income
|
|
9,340
|
|
|
38,537
|
Comprehensive income
attributable to noncontrolling interest
|
|
(343)
|
|
|
5,680
|
Comprehensive income
attributable to parent company
|
$
|
9,683
|
|
$
|
32,857
|
China Automotive
Systems, Inc. and Subsidiaries
|
Consolidated
Statements of Cash Flows
|
(In thousands of
USD unless otherwise indicated)
|
|
Year Ended December 31,
|
|
2015
|
|
2014
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
Net income
|
$
|
27,897
|
|
$
|
39,594
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
Stock-based
compensation
|
|
105
|
|
|
193
|
Depreciation and
amortization
|
|
15,273
|
|
|
15,523
|
Deferred income
taxes
|
|
(655)
|
|
|
(1,684)
|
Inventory write
downs
|
|
2,554
|
|
|
3,908
|
Reversal of provision
for doubtful accounts
|
|
(144)
|
|
|
96
|
Equity in earnings of
affiliated companies
|
|
(311)
|
|
|
(260)
|
Gain on disposal of
fixed assets
|
|
-
|
|
|
(7,475)
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
(Increase) decrease
in:
|
|
|
|
|
|
Pledged
cash
|
|
364
|
|
|
195
|
Accounts and notes
receivable
|
|
11,835
|
|
|
(18,712)
|
Advance payments and
other
|
|
(3,176)
|
|
|
1,272
|
Inventories
|
|
(7,626)
|
|
|
(10,156)
|
Increase (decrease)
in:
|
|
|
|
|
|
Accounts and notes
payable
|
|
(2,578)
|
|
|
11,940
|
Customer
deposits
|
|
(225)
|
|
|
207
|
Accrued payroll and
related costs
|
|
(867)
|
|
|
526
|
Accrued expenses and
other payables
|
|
(739)
|
|
|
2,057
|
Accrued pension
costs
|
|
(620)
|
|
|
969
|
Taxes
payable
|
|
(1,813)
|
|
|
4,231
|
Advances
payable
|
|
-
|
|
|
3,273
|
Net cash provided by
operating activities
|
|
39,274
|
|
|
45,697
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
Purchase of
short-term investments and long-term time deposits
|
|
(12,395)
|
|
|
(46,419)
|
Proceeds from
maturities of short-term investments and long-term time
deposits
|
|
25,133
|
|
|
40,828
|
Increase in other
receivables
|
|
(1,420)
|
|
|
(43)
|
Cash received from
property, plant and equipment sales
|
|
729
|
|
|
7,048
|
Cash paid to acquire
property, plant and equipment
|
|
(41,704)
|
|
|
(18,038)
|
Cash paid to acquire
intangible assets
|
|
(978)
|
|
|
(1,376)
|
Acquisition of Fujian
Qiaolong, net of cash acquired
|
|
-
|
|
|
(2,976)
|
Investment under cost
method
|
|
(1,636)
|
|
|
(817)
|
Net cash used in
investing activities
|
|
(32,271)
|
|
|
(21,793)
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
Proceeds from bank
and government loans
|
|
11,420
|
|
|
19,922
|
Repayment of bank and
government loans
|
|
(11,822)
|
|
|
(15,501)
|
Dividends paid to the
holders of the Company's common stock
|
|
-
|
|
|
(4,291)
|
Dividends paid to the
non-controlling interest holders of joint venture
companies
|
|
(1,121)
|
|
|
(9,316)
|
Decrease (increase)
in amounts due to shareholders/directors
|
|
(252)
|
|
|
69
|
Net cash used in
financing activities
|
|
(1,775)
|
|
|
(9,117)
|
|
|
|
|
|
|
Cash and cash
equivalents affected by foreign currency
|
|
(4,057)
|
|
|
(261)
|
Net increase in cash
and cash equivalents
|
|
1,171
|
|
|
14,526
|
Cash and equivalents
at beginning of year
|
|
68,505
|
|
|
53,979
|
Cash and equivalents
at end of year
|
$
|
69,676
|
|
$
|
68,505
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/china-automotive-systems-reports-fourth-quarter-and-fiscal-2015-results-300243253.html
SOURCE China Automotive Systems, Inc.