WUHAN,
China, May 12, 2023 /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, 2023.
First Quarter 2023 Highlights
- Net sales increased by 4.3% to $142.2
million from $136.4 million in
the first quarter of 2022
- Gross profit increased by 46.9% to $21.6
million with a gross margin of 15.2%, compared with
$14.7 million of gross profit and a
10.8% gross margin in the first quarter of 2022
- Income from operations was $7.7
million compared with a loss from operations of $1.5 million in the first quarter of 2022
- Net income attributable to parent company's common shareholders
was $6.8 million, or diluted income
per share of $0.23, compared to net
loss attributable to parent company's common shareholders of
$0.1 million, or diluted loss per
share of nil in the first quarter of 2022
- Cash and cash equivalents, pledged cash and short-term
investments were $164.3 million as of
March 31, 2023
- Net cash used in operating activities was $1.4 million in the first quarter of 2023
compared to $4.3 million used in the
first quarter of 2022.
Mr. Qizhou Wu, chief executive
officer of CAAS, commented, "Passenger vehicle unit sales declined
by 7.3% year-over-year and commercial vehicle unit sales decreased
by 2.9% in China according to
statistics from the China Association of Automobile Manufacturers.
However, we are pleased to report a 4.3% year-over-year growth in
sales in the first quarter of 2023 with much stronger margins and
profits in this unsettled automotive environment. Our electric
power steering ("EPS") products continue to gain market share and
our traditional hydraulic steering products' market share grew
as well. In addition to a better product mix, our margins
benefitted from stricter cost controls in the first quarter of
2023."
"We anticipate de-regulation of strict COVID restrictions aided
by more governmental growth policies, will help the Chinese
economy recover over the next several quarters. We look
forward to the Chinese economy and automotive markets resuming
normal activities in the future."
Mr. Jie Li, chief financial
officer of CAAS, commented, "We had cash and cash equivalents,
pledged cash and short-term investments of $164.3 million at the quarter end. Lower
unit costs improved margins and profits in this quarter, and our
cost controls will continue to be diligent in the
future."
First Quarter of 2023
Net sales increased by 4.3% to $142.2 million in the first quarter of 2023,
compared to $136.4 million in the
first quarter of 2022. The net sales increase was mainly due to the
gradual recovery of the Chinese economy post-COVID-19. Net sales of
traditional steering products and parts
were $94.4 million for the first quarter of 2023, which
is consistent with $95.4 million for the same period in 2022.
Net sales of electric power steering ("EPS") products rose 16.6% to
$47.8 million from $41.0 million for the same period in 2022.
Henglong KYB sales of passenger vehicle EPS products surged by
24.8% year-over-year to $37.2 million. EPS product sales were 33.6%
of the total net sales for the first quarter of 2023,
compared with 30.1% for the same period in 2022. North American net
export sales rose by 5.5% to $34.7
million in the first quarter of 2023 compared with
$32.9 million in the first quarter of
2022. Steering product sales to the commercial vehicle markets
declined slightly year-over-year in the 2023 first quarter.
Gross profit climbed by 46.9% to $21.6 million from $14.7 million in the first quarter of 2022. Gross
margin in the first quarter of 2023 was 15.2% compared to 10.8% for
the first quarter of 2022, mainly due to a change in the
Company's product mix and an increase in average selling price for
the three months ended March 31,
2023.
Gain on other sales was $0.7 million, compared to $0.9 million in the first quarter of 2022.
Selling expenses declined 20.9% to $3.4 million from $4.3 million in the first quarter of 2022. This
decline in selling expenses was primarily due to lower
transportation, marketing and office expenses and the impact
from appreciation of the USD against the RMB. Selling expenses
represented 2.4% of net sales in the first quarter of 2023 compared
to 3.2% in the first quarter of 2022.
General and administrative expenses ("G&A expenses")
were $4.8 million, which is consistent with $4.8 million of the first quarter of 2022.
G&A expenses represented 3.4% of net sales in the first quarter
of 2023 compared with 3.5% of net sales in the first quarter of
2022.
Research and development expenses ("R&D expenses") decreased
by 21.0% to $6.4 million
compared to $8.1 million in the first
quarter of 2022, mainly due to a decrease of tooling charges and
the depreciation of the RMB against the USD. R&D expenses
represented 4.5% of net sales in the first quarter of
2023 compared to 6.0% in the first quarter of 2022.
Net other income was $1.5 million
for the first quarter of 2023, compared to $3.5 million for the first quarter
of 2022. This decrease was mainly due to less government
subsidies received in the first quarter of 2023.
Income from operations was $7.7
million in the first quarter of 2023, compared to loss from
operations of $1.5 million in the
first quarter of 2022. The 2023 first quarter income was primarily
due to higher gross profits and lower operating expenses compared
with the first quarter of 2022.
Interest expense was $0.2
million in the first quarter of 2023, compared to
$0.4 million in the first
quarter of 2022.
Net financial loss was $0.4
million in the first quarter of 2023 compared with a net
financial income of $2.0 million in
the first quarter of 2022. The net financial loss in the first
quarter of 2023 was primarily due to foreign exchange losses.
Income before income tax expenses and equity in earnings of
affiliated companies was $8.6 million in the first quarter of 2023
compared to $3.6 million in the first
quarter of 2022. The increase in income before income tax expenses
and equity in earnings of affiliated companies in the first quarter
of 2022 was mainly due to higher income from operations partially
offset by a loss in net financial loss.
Equity in income of affiliated companies was $0.1 million in the first quarter of
2023, compared with equity in loss of affiliated companies of
$2.5 million in the first quarter of
2022.
Net income attributable to parent company's common shareholders
was $6.8 million in the first quarter
of 2023, compared to a net loss attributable to parent company's
common shareholders of $0.1 million in the first quarter of 2022.
Diluted income per share was $0.23 in the first quarter of 2023, compared
to net loss per share of nil in the first quarter of 2022.
The weighted average number of diluted common shares outstanding
was 30,193,082 in the first quarter of 2023 compared to 30,851,776
in the first quarter of 2022.
Balance Sheet
As of March 31, 2023, total cash
and cash equivalents, pledged cash and short-term investments were
$164.3 million, total accounts
receivable including notes receivable were $244.9 million, accounts payable including
notes payable were $239.6 million and short-term
bank loans were $45.7 million. Total parent company
stockholders' equity was $322.8 million as of March 31, 2023, compared to $311.7 million as of December 31, 2022.
Business Outlook
Management has reiterated revenue guidance for the full fiscal
year 2023 of $560.0 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 12, 2023 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 see the dial-in
information below, enter the call 10 minutes before the
aforementioned start time and ask to be connected to the
"China Automotive Systems" conference call with pin number
677473:
Phone Number: +1-877-545-0523 (North
America)
Phone Number: +1-973-528-0016 (International)
Mainland China Toll Free:
+86-400-120-3199
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 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 Fiat Chrysler Automobiles ("FCA")
and Ford Motor Company 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. 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 Annual Report on Form 10-K as filed with the
Securities and Exchange Commission on March
30, 2023, and in documents subsequently filed by the Company
from time to time with the Securities and Exchange Commission. Any
of these factors and other factors beyond our control, could have
an adverse effect on the overall business environment, cause
uncertainties in the regions where we conduct business, cause our
business to suffer in ways that we cannot predict and materially
and adversely impact our business, financial condition and results
of operations. A prolonged disruption or any further unforeseen
delay in our operations of the manufacturing, delivery and assembly
process within any of our production facilities could continue to
result in delays in the shipment of products to our customers,
increased costs and reduced revenue. 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.
jieli@chl.com.cn
Kevin Theiss
Awaken Advisors
+1-212-510-8922
Kevin@awakenlab.com
-Tables Follow -
China Automotive
Systems, Inc. and Subsidiaries
|
Condensed Unaudited
Consolidated Balance Sheets
|
(In thousands of USD
unless otherwise indicated)
|
|
|
|
|
|
|
|
|
|
March 31, 2023
|
|
December 31, 2022
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
99,244
|
|
$
|
121,216
|
Pledged cash
|
|
|
43,639
|
|
|
37,735
|
Accounts and notes
receivable, net - unrelated parties
|
|
|
232,593
|
|
|
214,308
|
Accounts and notes
receivable, net - related parties
|
|
|
12,302
|
|
|
10,016
|
Inventories
|
|
|
105,498
|
|
|
112,236
|
Other current
assets
|
|
|
35,334
|
|
|
25,207
|
Total current
assets
|
|
|
528,610
|
|
|
520,718
|
Non-current
assets:
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
104,931
|
|
|
106,606
|
Land use rights,
net
|
|
|
9,616
|
|
|
9,555
|
Long-term
investments
|
|
|
64,634
|
|
|
59,810
|
Other non-current
assets
|
|
|
19,282
|
|
|
17,663
|
Total assets
|
|
$
|
727,073
|
|
$
|
714,352
|
|
|
|
|
|
|
|
LIABILITIES, MEZZANINE
EQUITY AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Short-term
loans
|
|
$
|
45,684
|
|
$
|
45,671
|
Accounts and notes
payable-unrelated parties
|
|
|
224,111
|
|
|
218,412
|
Accounts and notes
payable-related parties
|
|
|
15,530
|
|
|
16,695
|
Accrued expenses and
other payables
|
|
|
46,153
|
|
|
48,311
|
Other current
liabilities
|
|
|
32,799
|
|
|
35,106
|
Total current
liabilities
|
|
|
364,277
|
|
|
364,195
|
Long-term
liabilities:
|
|
|
|
|
|
|
Long-term tax
payable
|
|
|
15,805
|
|
|
15,805
|
Other non-current
liabilities
|
|
|
7,168
|
|
|
6,937
|
Total liabilities
|
|
$
|
387,250
|
|
$
|
386,937
|
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mezzanine
equity:
|
|
|
|
|
|
|
Redeemable
non-controlling interests
|
|
|
561
|
|
|
582
|
|
|
|
|
|
|
|
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, 2023 and December
31, 2022, respectively
|
|
$
|
3
|
|
$
|
3
|
Additional paid-in
capital
|
|
|
63,731
|
|
|
63,731
|
Retained
earnings-
|
|
|
|
|
|
|
Appropriated
|
|
|
11,851
|
|
|
11,851
|
Unappropriated
|
|
|
253,994
|
|
|
247,174
|
Accumulated other
comprehensive income
|
|
|
875
|
|
|
(3,413)
|
Treasury stock –
2,152,600 and 2,152,600 shares as of March 31, 2023 and December
31,
2022, respectively
|
|
|
(7,695)
|
|
|
(7,695)
|
Total parent company
stockholders' equity
|
|
|
322,759
|
|
|
311,651
|
Non-controlling
interests
|
|
|
16,503
|
|
|
15,182
|
Total stockholders'
equity
|
|
|
339,262
|
|
|
326,833
|
Total liabilities, mezzanine
equity and stockholders' equity
|
|
$
|
727,073
|
|
$
|
714,352
|
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,
|
|
|
2023
|
|
2022
|
Net product sales
($13,576 and $11,004 sold to related parties for the three months
ended March 31, 2023 and
2022)
|
|
$
|
142,243
|
|
$
|
136,396
|
Cost of products sold
($7,015 and $7,540 purchased from related parties for the three
months ended March 31, 2023
and 2022)
|
|
|
120,625
|
|
|
121,662
|
Gross profit
|
|
|
21,618
|
|
|
14,734
|
Gain on other
sales
|
|
|
653
|
|
|
931
|
Less: Operating
expenses
|
|
|
|
|
|
|
Selling
expenses
|
|
|
3,384
|
|
|
4,312
|
General and
administrative expenses
|
|
|
4,753
|
|
|
4,754
|
Research and
development expenses
|
|
|
6,390
|
|
|
8,137
|
Total operating
expenses
|
|
|
14,527
|
|
|
17,203
|
Income/(loss) from
operations
|
|
|
7,744
|
|
|
(1,538)
|
Other income,
net
|
|
|
1,502
|
|
|
3,519
|
Interest
expense
|
|
|
(249)
|
|
|
(402)
|
Financial
(expense)/income, net
|
|
|
(422)
|
|
|
2,015
|
Income before income
tax expenses and equity in earnings of affiliated
companies
|
|
|
8,575
|
|
|
3,594
|
Less: Income
taxes
|
|
|
829
|
|
|
958
|
Add: Equity in
earnings/(loss) of affiliated companies
|
|
|
137
|
|
|
(2,487)
|
Net income
|
|
|
7,883
|
|
|
149
|
Less: Net income
attributable to non-controlling interests
|
|
|
1,055
|
|
|
200
|
Accretion to redemption
value of redeemable non-controlling interests
|
|
|
(8)
|
|
|
(8)
|
Net income/(loss)
attributable to parent company's common shareholders
|
|
$
|
6,820
|
|
$
|
(59)
|
Comprehensive
income:
|
|
|
|
|
|
|
Net income
|
|
$
|
7,883
|
|
$
|
149
|
Other comprehensive
income:
|
|
|
|
|
|
|
Foreign currency
translation income, net of tax
|
|
|
4,554
|
|
|
1,437
|
Comprehensive
income
|
|
|
12,437
|
|
|
1,586
|
Comprehensive income
attributable to non-controlling interests
|
|
|
1,321
|
|
|
289
|
Accretion to redemption
value of redeemable non-controlling interests
|
|
|
(8)
|
|
|
(8)
|
Comprehensive income
attributable to parent company
|
|
$
|
11,108
|
|
$
|
1,289
|
|
|
|
|
|
|
|
Net income/(loss)
attributable to parent company's common shareholders per share
-
|
|
|
|
|
|
|
Basic
|
|
$
|
0.23
|
|
$
|
(0.00)
|
Diluted
|
|
$
|
0.23
|
|
$
|
(0.00)
|
|
|
|
|
|
|
|
Weighted average number
of common shares outstanding -
|
|
|
|
|
|
|
Basic
|
|
|
30,185,702
|
|
|
30,851,776
|
Diluted
|
|
|
30,193,082
|
|
|
30,851,776
|
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,
|
|
|
|
2023
|
|
|
2022
|
|
Cash
flows
from operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
7,883
|
|
|
$
|
149
|
|
Adjustments to
reconcile net income from operations to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
4,856
|
|
|
|
6,207
|
|
(Reversal)/provision of
credit losses
|
|
|
(217)
|
|
|
|
100
|
|
Deferred income
taxes
|
|
|
1,019
|
|
|
|
286
|
|
Equity in
(earnings)/loss of affiliated companies
|
|
|
(137)
|
|
|
|
2,487
|
|
Loss on fixed assets
disposals
|
|
|
15
|
|
|
|
37
|
|
(Increase)/decrease
in:
|
|
|
|
|
|
|
|
|
Accounts and notes
receivable
|
|
|
(17,383)
|
|
|
|
(11,184)
|
|
Inventories
|
|
|
8,285
|
|
|
|
2,532
|
|
Other current
assets
|
|
|
(1,206)
|
|
|
|
(1,281)
|
|
Increase/(decrease)
in:
|
|
|
|
|
|
|
|
|
Accounts and notes
payable
|
|
|
1,360
|
|
|
|
(1,407)
|
|
Accrued expenses and
other payables
|
|
|
(2,868)
|
|
|
|
(2,041)
|
|
Other current
liabilities
|
|
|
(3,023)
|
|
|
|
(135)
|
|
Net cash used in
operating activities
|
|
|
(1,416)
|
|
|
|
(4,250)
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
(Increase)/decrease in
demand loans included in other non-current assets
|
|
|
(14)
|
|
|
|
242
|
|
Cash received from
property, plant and equipment sales
|
|
|
31
|
|
|
|
95
|
|
Payments to acquire
property, plant and equipment (including $2,376 and
$794 paid to related
parties for the three months ended March 31, 2023 and
2022, respectively)
|
|
|
(3,160)
|
|
|
|
(1,024)
|
|
Payments to acquire
intangible assets
|
|
|
-
|
|
|
|
(40)
|
|
Investment under the
equity method
|
|
|
(5,841)
|
|
|
|
(4,724)
|
|
Purchase of short-term
investments
|
|
|
(34,795)
|
|
|
|
(44,693)
|
|
Proceeds from
maturities of short-term investments
|
|
|
26,541
|
|
|
|
1,801
|
|
Cash received from
long-term investment
|
|
|
557
|
|
|
|
2,704
|
|
Net cash used in
investing activities
|
|
|
(16,681)
|
|
|
|
(45,639)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from bank
loans
|
|
|
20,135
|
|
|
|
16,088
|
|
Repayments of bank
loans
|
|
|
(20,534)
|
|
|
|
(15,701)
|
|
Repayments of the
borrowing for sale and leaseback transaction
|
|
|
-
|
|
|
|
(1,130)
|
|
Net cash used in
financing activities
|
|
|
(399)
|
|
|
|
(743)
|
|
Effects of exchange
rate on cash, cash equivalents and pledged cash
|
|
|
2,428
|
|
|
|
583
|
|
Net decrease in cash,
cash equivalents and pledged cash
|
|
|
(16,068)
|
|
|
|
(50,049)
|
|
Cash, cash equivalents
and pledged cash at beginning of the period
|
|
|
158,951
|
|
|
|
159,498
|
|
Cash, cash
equivalents and pledged cash at end of the period
|
|
$
|
142,883
|
|
|
$
|
109,449
|
|
View original
content:https://www.prnewswire.com/news-releases/china-automotive-systems-unaudited-diluted-income-per-share-climbs-to-0-23-in-the-first-quarter-of-2023--301823019.html
SOURCE China Automotive Systems, Inc.