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
|
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content:http://www.prnewswire.com/news-releases/china-automotive-systems-reports-2019-first-quarter-results-300847144.html
SOURCE China Automotive Systems, Inc.