China Automotive Systems Reports Third Quarter 2005 Results
Third Quarter 2005 Highlights:
* Net sales from steering components for light-duty vehicles and cars for
the quarter remained steady at $9.12 million compared with $9.30
million from the previous quarter;
* Net income rose to $1.08 million, or $0.05 per diluted share compared
with $0.5 million, or $0.02 per dilutes share for the previous quarter;
and
* Total cash flow increased by $2.97 million compared to a net decrease
of $1.92 million for the previous quarter.
WUHAN, Hubei, China, Nov. 14 /Xinhua-PRNewswire/ -- China Automotive Systems, Inc. , a leading power steering components and systems supplier in China, today announced its financial results for the third quarter ended, September 30, 2005. Total revenues for the third quarter 2005 was $14.26 million compared with $14.22 million reported in the same period in 2004 and $16.76 million for the second quarter of 2005. Net sales from steering components for light-duty vehicles and cars for the third quarter was $9.12 million compared with $5.88 million in the same period a year ago and $9.30 million for the second quarter of 2005. Net income for the third quarter of 2005 was $1.08 million, or $0.05 per diluted share versus $1.97 million, or $0.09 per diluted share in the same period a year ago and $0.50 million, or $0.02 per diluted share, for the second quarter of 2005.Gross margin for the third quarter was 39%, which is a slight decrease from 40% for the same period of 2004 but compared with gross margin of 36% for the second quarter of 2005. Operating income in the third quarter was $2.64 million compared with $3.37 million for the same period in 2004 and $1.67 million for the second quarter of 2005. Total cash flow increased by $2.97 million during the third quarter compared with a net decrease of $5.38 million in the same period a year ago and a net decrease of $1.92 million for the second quarter of 2005.
"We are pleased with our third quarter results. China Automotive Systems has strived to deliver stable revenue and sustainable development under general price pressure in the competitive automobile parts industry. We focused our efforts on cost control. Despite domestic pricing pressure and the global oil shortage, we continue to experience growth in light-duty vehicle and car-related products, which shows that the demand of our rack and pinions steering products remains strong," said Chairman and Chief Executive Officer of China Automotive Systems Mr. Hanlin Chen.
Mr. Chen stated, ''2005 has been a challenging year for most heavy industrial companies due to the global oil crisis. Despite this challenge, we were able to adjust our strategy and shift our focus from heavy-duty vehicles to light-duty vehicles, which included small trucks, SUVs, minivans and cars. We continue to produce high quality power steering systems to meet our customers' expectation and win contracts from high-profile automakers in China. We believe our third quarter can prepare China Automotive Systems to begin our momentum and we are working towards delivering a strong fourth quarter to maximize shareholder value.''
During the third quarter, China Automotive Systems announced that it was selected as a supplier of steering systems by BYD Automobiles Ltd. and Hainan Mazda. In October, the Company was also awarded ''Superior Supplier'' status by China's eighth largest automaker, Chery Automobile Co., which has recently announced its plans to export Chinese-made cars to the U.S. and European markets beginning in 2007.
The financial information in this press release is extracted from China Automotive Systems' 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.
Condensed Consolidated Statements of Operations (Unaudited)
Three Months Ended September 30
2005 2004
Net sales $ 14,262,933 $14,218,829
Cost of sales 8,754,017 8,568,811
Gross profit 5,508,916 5,650,018
Costs and expenses:
Selling 1,023,272 647,720
General and administrative 1,601,248 1,443,002
Depreciation and amortization 242,459 136,840
Stock-based compensation -- 55,125
Total costs and expenses 2,866,979 2,282,688
Income from operations 2,641,937 3,367,330
Other income (expense):
Other non-operating income 170,675 223,303
Financial expenses (333,885) (204,871)
Other income (loss), net (163,210) 18,432
Income before income taxes 2,478,727 3,385,761
Income taxes 597,427 376,730
Income before minority interest 1,881,300 3,009,031
Minority interests 804,388 1,048,625
Income from continuing operations 1,076,912 1,960,406
Income from discontinued operations
(Note 15) -- 14,067
Net income $ 1,076,912 $ 1,974,473
Net income per common share -
Basic and diluted from
continuing Operations $ 0.05 $ 0.09
Basic and diluted from
discontinued Operations $ 0.00 $ (0.00)
Basic $ 0.05 $ 0.09
Diluted $ 0.05 $ 0.09
Weighted average number of
common shares outstanding -
Basic 22,574,542 22,574,542
Diluted 22,575,207 22,575,637