China Automotive Systems Reports 2018 First Quarter Results

China Automotive Systems Reports 2018 First Quarter Results

PR Newswire

WUHAN, China, May 10, 2018 /PRNewswire/ -- China Automotive Systems, Inc. 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



Cision View original content:http://www.prnewswire.com/news-releases/china-automotive-systems-reports-2018-first-quarter-results-300646022.html

SOURCE China Automotive Systems, Inc.

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Date
ticker
name
Actual EPS
EPS Surprise
Actual Rev
Rev Surprise
Posted In: EarningsPress ReleasesautomotiveBanking/Financial ServicesTransportation/Trucking/Railroad
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!