WUHAN, China, May 10, 2018 /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, 2018.
First Quarter 2018 Highlights
- Net sales increased 12.3% to $134.0
million from $119.3 million in
the first quarter of 2017
- Net income attributable to parent company's common shareholders
was $4.3 million, or diluted earnings
per share of $0.14, compared to
$5.7 million, or diluted earnings per
share of $0.18 in the first quarter
of 2017
- Total cash and cash equivalents, pledged cash and short-term
investments were $124.5 million
Mr. Qizhou Wu, chief executive
officer of CAAS, commented, "Our sales continue to benefit from
increased demand for our advanced products and exports. We are
pleased to report that our sales to North
America grew by 84.5% in the first quarter of 2018 compared
with the same quarter last year. As we continue to invest in
our electric power steering and other advanced steering
technologies to position the Company for the future, our broad
portfolio of steering products provides solutions to meet our
customers' needs across all automotive segments."
Mr. Jie Li, chief financial
officer of CAAS, commented, "We continue to focus on building our
financial strength to support our growing sales volume."
First Quarter of 2018
In the first quarter of 2018, net sales were $134.0 million compared to $119.3 million in the same quarter of 2017,
reflecting a 12.3% year-over-year growth. The increase in net sales
was mainly due to increased sales volume, especially for legacy
products for the North American and heavy-duty vehicle markets, and
the effect of foreign currency exchange. The Company adopted ASC
Topic 606 "Revenue from Contracts with Customer" as of January 1, 2018. Results for reporting
periods beginning after January 1,
2018 are presented under Topic 606, while prior period
amounts are not adjusted and continue to be reported in accordance
with our historic accounting under ASC Topic 605 "Revenue
Recognition". No significant impact to the consolidated financial
statements as a result of the adoption.
Gross profit was $21.6 million in
the first quarter of each 2018 and 2017. The gross margin was 16.1%
in the first quarter of 2018 compared to 18.1% in the first quarter
of 2017 due to changes in the product mix.
Gain on other sales was $1.5
million in the first quarter of 2018 compared to
$0.8 million in the first quarter of
2017, reflecting higher scrap volume.
Selling expenses were $5.8 million
in the first quarter of 2018, compared to $4.1 million in the first quarter of 2017. The
increase was primarily due to higher logistics fees reflecting
higher sales volume and increased marketing expenses. Selling
expenses represented 4.3% of net sales in the first quarter of 2018
compared to 3.4% in the first quarter of 2017.
General and administrative expenses ("G&A expenses") were
$4.4 million in the first quarter of
2018, compared to $4.4 million in the
same quarter of 2017. G&A expenses represented 3.3% of net
sales in the first quarter of 2018 and 3.7% in the first quarter of
2017.
Research and development expenses ("R&D expenses") were
$8.3 million in the first quarter of
2018, compared to $6.8 million in the
first quarter of 2017. R&D expenses represented 6.2% of net
sales in the first quarter of 2018 compared to 5.7% in the first
quarter of 2017. 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 $4.6
million in the first quarter of 2018, compared to
$7.2 million in the same quarter of
2017. The decrease was primarily due to lower gross margin and
higher selling and research and development expenses.
Interest expense was $0.4 million
in the first quarter of 2018 compared to $0.2 million, in the same quarter of 2017. The
increase was due to new bank borrowings at higher interest
rates.
Net financial expense was $0.8
million in the first quarter of 2018 compared to net
financial income of $0.3 million in
the first quarter of 2017. The increase of net financial expense
was primarily due to an increase in foreign exchange rates related
to higher export sales in the first quarter of 2018.
Income before income tax expenses and equity in earnings of
affiliated companies was $4.0 million
in the first quarter of 2018, compared to $7.1 million in the first quarter of 2017. 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 $4.3 million in the first quarter
of 2018, compared to $5.7 million in
the first quarter of 2017. Diluted earnings per share were
$0.14 per share in the first quarter
of 2018, compared to $0.18 in the
first quarter of 2017.
The weighted average number of diluted common shares outstanding
was 31,644,004 in the first quarter of 2018, compared to 31,649,908
in the first quarter of 2017.
Balance Sheet
As of March 31, 2018, total cash
and cash equivalents, pledged cash and short-term investments were
$124.5 million, total accounts
receivable including notes receivable were $304.7 million, accounts payable were
$237.6 million and short-term bank
and government loans were $63.2
million. Total parent company stockholders' equity was
$316.5 million as of March 31, 2018, compared to $299.4 million as of December 31, 2017.
Business Outlook
Management has raised its revenue guidance for the full year
2018 to US$520 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 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 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 29, 2018, 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,
|
|
|
|
2018
|
|
|
2017
|
|
Net product sales
($10,846 and $9,538 sold to related parties for
the three months ended March 31, 2018 and 2017)
|
|
$
|
134,018
|
|
|
$
|
119,308
|
|
Cost of products sold
($8,249 and $7,363 purchased from
related parties for the three months ended March 31, 2018 and
2017)
|
|
|
112,379
|
|
|
|
97,679
|
|
Gross
profit
|
|
|
21,639
|
|
|
|
21,629
|
|
Gain on other
sales
|
|
|
1,513
|
|
|
|
788
|
|
Less: Operating
expenses
|
|
|
|
|
|
|
|
|
Selling
expenses
|
|
|
5,827
|
|
|
|
4,068
|
|
General and
administrative expenses
|
|
|
4,424
|
|
|
|
4,354
|
|
Research and
development expenses
|
|
|
8,307
|
|
|
|
6,765
|
|
Total operating
expenses
|
|
|
18,558
|
|
|
|
15,187
|
|
Income from
operations
|
|
|
4,594
|
|
|
|
7,230
|
|
Other
income/(expense)
|
|
|
621
|
|
|
|
(254)
|
|
Interest
expense
|
|
|
(415)
|
|
|
|
(231)
|
|
Financial
(expense)/income, net
|
|
|
(765)
|
|
|
|
332
|
|
Income before income
tax expenses and equity in earnings of
affiliated companies
|
|
|
4,035
|
|
|
|
7,077
|
|
Less: Income
taxes
|
|
|
588
|
|
|
|
1,190
|
|
Equity in earnings of
affiliated companies
|
|
|
585
|
|
|
|
51
|
|
Net income
|
|
|
4,032
|
|
|
|
5,938
|
|
Net (loss)/income
attributable to non-controlling interests
|
|
|
(280)
|
|
|
|
224
|
|
Net income
attributable to parent company's common
shareholders
|
|
$
|
4,312
|
|
|
$
|
5,714
|
|
Comprehensive
income:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
4,032
|
|
|
$
|
5,938
|
|
Other comprehensive
income:
|
|
|
|
|
|
|
|
|
Foreign currency
translation gain, net of tax
|
|
|
13,242
|
|
|
|
1,629
|
|
Comprehensive
income
|
|
|
17,274
|
|
|
|
7,567
|
|
Comprehensive income
attributable to non-controlling interests
|
|
|
236
|
|
|
|
278
|
|
Comprehensive income
attributable to parent company
|
|
$
|
17,038
|
|
|
$
|
7,289
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to parent company's common
shareholders per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic -
|
|
$
|
0.14
|
|
|
$
|
0.18
|
|
|
|
|
|
|
|
|
|
|
Diluted -
|
|
$
|
0.14
|
|
|
$
|
0.18
|
|
Weighted average
number of common shares outstanding
|
|
|
|
|
|
|
|
|
Basic
|
|
|
31,644,004
|
|
|
|
31,644,004
|
|
Diluted
|
|
|
31,644,004
|
|
|
|
31,649,908
|
|
|
|
|
|
|
|
|
|
|
China Automotive
Systems, Inc. and Subsidiaries
Condensed
Unaudited Consolidated Balance Sheets
(In thousands of
USD unless otherwise indicated)
|
|
|
|
|
|
March 31,
2018
|
|
|
December 31, 2017
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
78,729
|
|
|
$
|
64,558
|
|
Pledged
cash
|
|
|
32,697
|
|
|
|
31,535
|
|
Short-term
investments
|
|
|
13,040
|
|
|
|
29,587
|
|
Accounts and notes
receivable, net - unrelated parties
|
|
|
282,072
|
|
|
|
274,989
|
|
Accounts and notes
receivable, net - related parties
|
|
|
22,661
|
|
|
|
19,086
|
|
Advance payments and
others - unrelated parties
|
|
|
12,208
|
|
|
|
12,790
|
|
Advance payments and
others - related parties
|
|
|
1,068
|
|
|
|
20,841
|
|
Inventories
|
|
|
87,370
|
|
|
|
79,217
|
|
Total current
assets
|
|
|
529,845
|
|
|
|
532,603
|
|
Non-current
assets:
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
132,899
|
|
|
|
126,033
|
|
Intangible assets,
net
|
|
|
632
|
|
|
|
661
|
|
Other receivables,
net - unrelated parties
|
|
|
1,624
|
|
|
|
2,188
|
|
Advance payment for
property, plant and equipment - unrelated
parties
|
|
|
8,406
|
|
|
|
9,657
|
|
Advance payment for
property, plant and equipment - related
parties
|
|
|
9,244
|
|
|
|
5,264
|
|
Long-term
investments
|
|
|
29,268
|
|
|
|
27,596
|
|
Deferred tax
assets
|
|
|
13,800
|
|
|
|
13,367
|
|
Total
assets
|
|
$
|
725,718
|
|
|
$
|
717,369
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Bank and government
loans
|
|
$
|
63,176
|
|
|
$
|
72,711
|
|
Accounts and notes
payable - unrelated parties
|
|
|
230,036
|
|
|
|
233,048
|
|
Accounts and notes
payable - related parties
|
|
|
7,544
|
|
|
|
7,168
|
|
Customer
deposits
|
|
|
1,398
|
|
|
|
1,128
|
|
Accrued payroll and
related costs
|
|
|
7,841
|
|
|
|
8,577
|
|
Accrued expenses and
other payables
|
|
|
38,952
|
|
|
|
40,127
|
|
Accrued pension
costs
|
|
|
4,786
|
|
|
|
4,051
|
|
Taxes
payable
|
|
|
9,902
|
|
|
|
5,927
|
|
Amounts due to
shareholders/directors
|
|
|
364
|
|
|
|
343
|
|
Advances payable
(current portion)
|
|
|
398
|
|
|
|
383
|
|
Total current
liabilities
|
|
|
364,397
|
|
|
|
373,463
|
|
Long-term
liabilities:
|
|
|
|
|
|
|
|
|
Long-term government
loan
|
|
|
318
|
|
|
|
306
|
|
Advances
payable
|
|
|
373
|
|
|
|
359
|
|
Long-term taxes
payable
|
|
|
32,719
|
|
|
|
32,719
|
|
Deferred tax
liabilities
|
|
|
4,508
|
|
|
|
4,393
|
|
Total
liabilities
|
|
$
|
402,315
|
|
|
$
|
411,240
|
|
|
|
|
|
|
|
|
|
|
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,
2018 and December 31, 2017, respectively
|
|
$
|
3
|
|
|
$
|
3
|
|
Additional paid-in
capital
|
|
|
64,406
|
|
|
|
64,406
|
|
Retained
earnings-
|
|
|
|
|
|
|
|
|
Appropriated
|
|
|
10,707
|
|
|
|
10,707
|
|
Unappropriated
|
|
|
213,771
|
|
|
|
209,459
|
|
Accumulated other
comprehensive income
|
|
|
30,506
|
|
|
|
17,780
|
|
Treasury stock
–694,298 and 694,298 shares as of March 31, 2018
and December 31, 2017, respectively
|
|
|
(2,907)
|
|
|
|
(2,907)
|
|
Total parent company
stockholders' equity
|
|
|
316,486
|
|
|
|
299,448
|
|
Non-controlling
interests
|
|
|
6,917
|
|
|
|
6,681
|
|
Total stockholders'
equity
|
|
|
323,403
|
|
|
|
306,129
|
|
Total liabilities and
stockholders' equity
|
|
$
|
725,718
|
|
|
$
|
717,369
|
|
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,
|
|
|
|
2018
|
|
|
2017
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
4,032
|
|
|
$
|
5,938
|
|
Adjustments to
reconcile net income from operations to net cash
provided by operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
4,342
|
|
|
|
4,189
|
|
Accrual/(reversal) of
provision for doubtful accounts
|
|
|
275
|
|
|
|
(19)
|
|
Inventory write
downs
|
|
|
1,543
|
|
|
|
813
|
|
Deferred income
taxes
|
|
|
33
|
|
|
|
(63)
|
|
Equity in earnings of
affiliated companies
|
|
|
(585)
|
|
|
|
(51)
|
|
Gain on fixed assets
disposals
|
|
|
12
|
|
|
|
17
|
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
|
|
|
(Increase)/decrease
in:
|
|
|
|
|
|
|
|
|
Pledged
cash
|
|
|
72
|
|
|
|
(2,618)
|
|
Accounts and notes
receivable
|
|
|
559
|
|
|
|
2,480
|
|
Advance payments and
others
|
|
|
(128)
|
|
|
|
52
|
|
Inventories
|
|
|
(6,592)
|
|
|
|
(1,444)
|
|
Increase/(decrease)
in:
|
|
|
|
|
|
|
|
|
Accounts and notes
payable
|
|
|
(11,950)
|
|
|
|
(1,592)
|
|
Customer
deposits
|
|
|
246
|
|
|
|
123
|
|
Accrued payroll and
related costs
|
|
|
(1,064)
|
|
|
|
(431)
|
|
Accrued expenses and
other payables
|
|
|
(4,031)
|
|
|
|
(1,467)
|
|
Accrued pension
costs
|
|
|
576
|
|
|
|
(247)
|
|
Taxes
payable
|
|
|
5,230
|
|
|
|
(3,318)
|
|
Net cash (used
in)/provided by operating activities
|
|
|
(7,430)
|
|
|
|
2,362
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Increase in other
receivables
|
|
|
647
|
|
|
|
20
|
|
Cash received from
property, plant and equipment sales
|
|
|
26
|
|
|
|
26
|
|
Payments to acquire
property, plant and equipment (including $5,224
and $493 paid to related parties for the three months ended March
31,
2018 and 2017, respectively)
|
|
|
(8,192)
|
|
|
|
(3,245)
|
|
Purchase of
short-term investments
|
|
|
(1,414)
|
|
|
|
-
|
|
Proceeds from
maturities of short-term investments
|
|
|
19,108
|
|
|
|
2,433
|
|
Loan to a related
party
|
|
|
-
|
|
|
|
(29,044)
|
|
Cash received from
repayment of the loan to a related party
|
|
|
20,430
|
|
|
|
-
|
|
Net cash provided
by/(used in) investing activities
|
|
|
30,605
|
|
|
|
(29,810)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from bank
loans
|
|
|
19,672
|
|
|
|
27,754
|
|
Repayments of bank
loans
|
|
|
(31,037)
|
|
|
|
(245)
|
|
Net cash (used
in)/provided by financing activities
|
|
|
(11,365)
|
|
|
|
27,509
|
|
Effects of exchange
rate on cash and cash equivalents
|
|
|
2,361
|
|
|
|
150
|
|
Net
(decrease)/increase in cash and cash equivalents
|
|
|
14,171
|
|
|
|
211
|
|
Cash and cash
equivalents at beginning of period
|
|
|
64,558
|
|
|
|
31,092
|
|
Cash and cash
equivalents at end of period
|
|
$
|
78,729
|
|
|
$
|
31,303
|
|
View original
content:http://www.prnewswire.com/news-releases/china-automotive-systems-reports-2018-first-quarter-results-300646022.html
SOURCE China Automotive Systems, Inc.