China Automotive Systems, Inc. Reports 2005 Second Quarter Results
Net Sales Up 9.4 Percent
WUHAN, Hubei, China, Aug. 9 /Xinhua-PRNewswire/ - China Automotive Systems, Inc. , a leading power steering components and systems supplier in China, today announced its unaudited financial results for the second quarter ended June 30, 2005.
Highlights for the second quarter 2005:
* Net sales for the quarter grew 9.4% year-over-year to $16.8 million;
* Net sales from steering for light-duty vehicles and cars for the
quarter increased 19% year-over-year; and
* Net income for the quarter was $502,054, or $0.02 per diluted share,
compared with $1.8 million, or $0.08 per diluted share a year ago.
"We are pleased to report a solid performance for the second quarter with a healthy growth in our net sales and a rapid growth in sales of our light-duty vehicle and car-related products which shows that the strong recovery of our rack and pinions steering business is on track," said Hanlin Chen, Chairman and CEO of CAAS.
Net sales for the three months ended June 30, 2005 totaled $16,763,309, as compared to $15,325,346 for the three months ended June 30, 2004, an increase of $1,437,963 or 9.4%. Gross margin was 36% for the three months ended June 30, 2005, a decrease of 8% from 44% for the same period of 2004. Net income for the second quarter of 2005 was $502,054, or $0.02 per diluted share, compared with $1.8 million, or $0.08 per diluted share a year ago.
''Thanks to our broad product spectrum which includes steering gears for heavy, light vehicles and cars, we can adjust our emphasis according to market demand in a timely fashion,'' Chen added.
In the second quarter of 2005, the Company adjusted its marketing strategy to take advantage of a higher demand for Chinese light duty vehicles and cars. As a result, sales from steering gears for light duty vehicles and cars during the three months ended June 30, 2005 increased 19% compared with the same period in 2004.
Mr. Chen highlighted sales to certain car manufacturers. ''We are pleased to see the Company sales to Chery Automotive continue to increase. We sold 27,967 steering units to Chery in the second quarter -- representing a 70 percent increase over a year ago,'' he added.
For the three months ended June 30, 2005, the gross profit was $5,966,751, as compared to $6,737,974 for the three months ended June 30, 2004, a decrease of $771,223 or 11.4%. The gross margin was 36%, a decrease of 8% from 44% for the same period of 2004, mostly due to the decrease of the product selling price in order to expand market share.
For the three months ended June 30, 2005, operating expenses totaled $4,295,384, an increase of 26% year-over-year, mainly due to increased market development activities and after-sale expenses.
''We plan to continue to reduce our costs, including labor costs, raw materials costs and manufacturing expenses, as well as operating expenses in order to meet our gross margin objective and improve our operating profit margin,'' Chen said.
He highlighted the Company's previously announced selection as a supplier of steering systems by Dongfeng Peugeot Citroen Automobiles Ltd. for its Peugeot 206, Citroen ZX and Elysee models, which expects to produce 100,000 units of these models in 2006.
''We will strengthen our market development efforts in the second half of 2005 both domestically and internationally, with the hope of adding several new domestic and international customers to our customer base,'' Chen said.
The financial information in this press release is extracted from CAAS' unaudited financial statements prepared in accordance with generally accepted accounting principles in the United States.
About CAAS
Based in Hubei Province, 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 four Sino-foreign joint ventures. The Company's product offering encompasses a full range of auto parts which are incorporated into steering systems for both passenger automobiles and commercial vehicles. The Company currently offers four separate series of power steering and 307 models of power steering with an annual capacity of 600,000 sets, steering columns, steering oil pumps and steering hoses. Its customer base comprises of leading Chinese auto manufacturers such as China FAW Group, Corp., Donfeng Auto Group Co., Ltd., Brilliance China Automotive Holdings Ltd., Beiqi Foton Motor Co., Ltd. and Chery Automobile Co., Ltd. etc.
China Automotive Systems, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)
Three Months Ended June 30
2005 2004
Net sales $ 16,763,309 $ 15,325,346
Cost of sales 10,796,558 8,587,372
Gross profit 5,966,751 6,737,974
Costs and expenses:
Selling 1,716,305 866,762
General and administrative 2,337,603 2,411,054
Depreciation and amortization 172,626 131,179
Stock-based compensation 68,850 --
Total costs and expenses 4,295,384 3,408,995
Income from operations 1,671,367 3,328,979
Other income (expense):
Other non-operating income 31,702 307,995
Financial expenses (324,368) (251,074)
Other income (loss), net (292,666) 56,921
Income before income taxes 1,378,701 3,385,900
Income taxes 302,361 452,988
Income before minority interest 1,076,340 2,932,912
Minority interests 574,286 1,107,804
Income from continuing operations 502,054 1,825,108
Loss from discontinued operations -- (19,750)
Net income $ 502,054 $ 1,805,358
Net income per common share -
Basic and diluted from continuing
operations $ 0.02 $ 0.08
Basic and diluted from discontinued
operations $ 0.00 $ (0.00)
Basic $ 0.02 $ 0.08
Diluted $ 0.02 $ 0.08
Weighted average number of
common shares outstanding -
Basic 22,574,542 22,574,542
Diluted 22,577,958 22,574,542
For further information, please contact:
Jie Li, Investor Relations and Communications,
China Automotive Systems, Inc.
Tel: +86-27-5981-8527
Email: jieli@chl.com.cn
Web: http://www.chinaautomotivesystems.com/