WUHAN, China, May 23, 2022 /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, 2022.
First Quarter 2022 Highlights
- Net sales increased by 4.7% to $136.4
million from $130.3 million in
the first quarter of 2021
- Gross profit was $14.7 million
with a gross margin of 10.8%, compared with $19.7 million and a 15.1% gross margin in the
first quarter last year
- Loss from operations was $1.5
million compared with income from operations of $4.2 million in the first quarter of 2021
- Net loss attributable to parent company's common shareholders
was $0.06 million, or diluted loss
per share of nil, compared to net income attributable to parent
company's common shareholders of $3.2
million, or diluted income per share of $0.10 in the first quarter of 2021
- Cash and cash equivalents, and pledged cash were $109.4 million as of March
31, 2022
Mr. Qizhou Wu, chief executive
officer of CAAS, commented, "We continued to achieve sales growth
in a difficult market as our products target diversified markets in
China and abroad. In the first
quarter of 2022, Chinese passenger vehicle sales increased by 9.0%,
but commercial vehicle sales declined by 31.7%, according to
statistics from the China Association of Automobile
Manufacturers."
"Our sales to the Chinese passenger vehicle market increased in
the first quarter of 2022. Our sales to Chery Automobile increased
by 127.2% as they purchased more steering units. Sales of our
electric power steering ("EPS") products rose by 66.0% while our
Henglong KYB subsidiary's EPS sales increased by 63.7%.
EPS sales has now increased to 30.1% of our total sales, up
from 19.0% in the same quarter last year. While sales to North
American customers declined by 7.1%, our South American sales
continued to grow in the first quarter of 2022."
"The temporary COVID-19 lockdowns in China have created a challenging environment
in the near term. However, our products are well positioned in
their respective markets and our customer relationships are
excellent," Mr. Wu concluded.
Mr. Jie Li, chief financial
officer of CAAS, commented, "We had cash and cash equivalents, and
pledged cash of $109.4 million at
March 31, 2022. We announced a share
buyback of up to $5.0 million of
its outstanding common shares in open market transactions."
First Quarter of 2022
Net sales increased by 4.7% to $136.4 million in the first quarter of 2022,
compared to $130.3 million in the
first quarter of 2021. The net sales increase was mainly due to the
recovery of the Chinese economy post-COVID-19 and higher demand for
passenger vehicles in the first quarter of 2022. Net sales of
traditional steering products and parts decreased by 9.7% to
$95.4 million for the first
quarter of 2022, compared to $105.6
million for the same period in 2021. Net sales of electric
power steering ("EPS") products rose 66.0% to $41.0 million from $24.7 million for the same period in 2021. EPS
product sales were 30.1% of the total net sales for the first
quarter of 2022, compared with 19.0% for the same period
in 2021. Export net sales rose 7.7% to $43.4 million in the first quarter of 2022
compared with $40.3 million in
the first quarter of 2021.
Gross profit declined to $14.7 million compared to $19.7 million in the first quarter of 2021.
Gross margin in the first quarter of 2022 was 10.8% compared with
15.1% in the first quarter of 2021. The main causes in the decline
in gross profit and margin decline are increased raw material and
international transportation expenses, and a change in product
mix.
Gain on other sales was $0.9
million, compared to $1.3
million in the first quarter of 2021.
Selling expenses were $4.3 million compared to $5.6 million in the first quarter of 2021. This
decline in selling expenses was primarily due to lower
transportation expenses. Selling expenses represented 3.2% of net
sales in the first quarter of 2022 compared to 4.3% in the first
quarter of 2021.
General and administrative expenses ("G&A expenses") were
$4.8 million compared to $4.6
million in the first quarter of 2021. G&A expenses represented
3.5% of net sales in the first quarter of 2022 and in the first
quarter of 2021.
Research and development expenses ("R&D expenses") increased
20.9% to $8.1 million compared
to $6.7 million in the first quarter
of 2021. R&D expenses represented 5.9% of net sales in
the first quarter of 2022 compared to 5.1% in the first
quarter of 2021.
Net other income was $3.5 million
for the first quarter of 2022, compared to $1.7 million for the three months ended
March 31, 2021. The increase of
$1.8 million was mainly due to
increased government subsidies which totaled $3.0 million received in the first three months
of 2022.
Loss from operations was $1.5 million in the first quarter of 2022,
compared to income from operations of $4.2
million in the first quarter of 2021. The 2022 first quarter
loss was primarily due to a lower gross profits and higher
operating expenses in 2022 compared with the same quarter last
year.
Interest expense was $0.4
million in the first quarter of 2022, compared to
$0.3 million in the first
quarter of 2021.
Net financial income was $2.0
million in the first quarter of 2022 compared with a net
financial loss of $0.2 million
in the first quarter of 2021. The net financial income in the first
quarter of 2022 was due to foreign exchange gains.
Income before income tax expenses and equity in earnings of
affiliated companies was $3.6 million in the first quarter of 2022,
compared to $5.3 million in the first
quarter of 2021. The reduction in income before income tax expenses
and equity in earnings of affiliated companies in the first quarter
of 2022 was mainly due to a loss from operations offset by higher
other income, net and financial income.
Equity in loss of affiliated companies was $2.5 million in the first quarter of
2022, compared with equity in loss of affiliated companies of
$1.4 million in the first quarter of
2021.
Net loss attributable to parent company's common shareholders
was $0.06 million in the first
quarter of 2022, compared to a net income attributable to parent
company's common shareholders of $3.2
million in the first quarter of 2021. Diluted loss per share
was nil in the first quarter of 2022, compared to net income
per share of $0.10 in the first
quarter of 2021.
The weighted average number of diluted common shares outstanding
was 30,851,776 in the first quarter of 2022 compared to 30,857,736
in the first quarter of 2021.
Balance Sheet
As of March 31, 2022, total cash
and cash equivalents, and pledged cash were $109.4 million, total accounts receivable
including notes receivable were $222.4
million, accounts payable including notes payable were
$227.7 million and short-term
bank was $48.2 million. Total parent company
stockholders' equity was $322.3 million as of March 31, 2022, compared to $321.0 million as of December 31, 2021. Net cash used in
operating activities was $4.3 million
in the first quarter of 2022. The Company purchased $44.7 million of short-term investments in the
first quarter of 2022.
Business Outlook
Management has reduced revenue guidance for the full year
2022 to $490 million from
$510 million due to the economic
impact of COVID-19 and foreign exchange volatility. 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 23, 2022 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 call the
following numbers 10 minutes before the call start time and ask to
be connected to the "China Automotive Systems" conference call with
pin number 620256:
US Toll
Free:
|
+1-888-506-0062
|
International:
|
+1-973-528-0011
|
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 ten 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. 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 30, 2022, and in
documents subsequently filed by the Company from time to time with
the Securities and Exchange Commission. If the outbreak of COVID-19
is not effectively and timely controlled, our business operations
and financial condition may be materially and adversely affected as
a result of the deteriorating market outlook for automobile sales,
the slowdown in regional and national economic growth, weakened
liquidity and financial condition of our customers or other factors
that we cannot foresee. 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 (new)
+1-212-521-4050 (old)
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,
2022
|
December 31,
2021
|
ASSETS
|
|
|
|
|
|
(Audited)
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
79,402
|
|
$
|
131,695
|
|
Pledged
cash
|
|
|
30,047
|
|
|
27,804
|
|
Accounts and notes
receivable, net - unrelated parties
|
|
|
211,035
|
|
|
195,729
|
|
Accounts and notes
receivable, net - related parties
|
|
|
11,362
|
|
|
14,607
|
|
Inventories
|
|
|
114,483
|
|
|
116,493
|
|
Other current
assets
|
|
|
59,252
|
|
|
15,052
|
|
Total current
assets
|
|
|
505,581
|
|
|
501,380
|
|
Non-current
assets:
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
123,436
|
|
|
127,721
|
|
Land use rights,
net
|
|
|
10,705
|
|
|
10,732
|
|
Long-term
investments
|
|
|
60,660
|
|
|
36,966
|
|
Other non-current
assets
|
|
|
26,265
|
|
|
39,963
|
|
Total
assets
|
|
$
|
726,647
|
|
$
|
716,762
|
|
|
|
|
|
|
|
|
|
LIABILITIES,
MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Short-term
loans
|
|
$
|
48,185
|
|
$
|
47,592
|
|
Accounts and notes
payable-unrelated parties
|
|
|
215,892
|
|
|
214,590
|
|
Accounts and notes
payable-related parties
|
|
|
11,784
|
|
|
13,464
|
|
Accrued expenses and
other payables
|
|
|
58,340
|
|
|
50,332
|
|
Other current
liabilities
|
|
|
25,819
|
|
|
25,838
|
|
Total current
liabilities
|
|
|
360,020
|
|
|
351,816
|
|
Long-term
liabilities:
|
|
|
|
|
|
|
|
Long-term tax
payable
|
|
|
21,075
|
|
|
21,075
|
|
Other non-current
liabilities
|
|
|
6,525
|
|
|
6,430
|
|
Total
liabilities
|
|
$
|
387,620
|
|
$
|
379,321
|
|
|
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mezzanine
equity:
|
|
|
|
|
|
|
|
Redeemable
non-controlling interests
|
|
|
561
|
|
|
553
|
|
|
|
|
|
|
|
|
|
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, 2022 and December
31, 2021,
respectively
|
|
$
|
3
|
|
$
|
3
|
|
Additional paid-in
capital
|
|
|
63,731
|
|
|
63,731
|
|
Retained
earnings-
|
|
|
|
|
|
|
|
Appropriated
|
|
|
11,481
|
|
|
11,481
|
|
Unappropriated
|
|
|
226,304
|
|
|
226,363
|
|
Accumulated other
comprehensive income
|
|
|
26,065
|
|
|
24,717
|
|
Treasury stock –
1,486,526 and 1,486,526 shares as of March 31, 2022 and
December
31, 2021, respectively
|
|
|
(5,261)
|
|
|
(5,261)
|
|
Total parent company
stockholders' equity
|
|
|
322,323
|
|
|
321,034
|
|
Non-controlling
interests
|
|
|
16,143
|
|
|
15,854
|
|
Total stockholders'
equity
|
|
|
338,466
|
|
|
336,888
|
|
Total liabilities,
mezzanine equity and stockholders' equity
|
|
$
|
726,647
|
|
$
|
716,762
|
|
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,
|
|
|
|
2022
|
|
2021
|
|
Net product sales
($11,004 and $16,575 sold to related parties for the
three months ended
March 31, 2022 and 2021)
|
|
$
|
136,396
|
|
$
|
130,341
|
|
Cost of products sold
($7,540 and $8,214 purchased from related parties for the
three months
ended March 31, 2022 and 2021)
|
|
|
121,662
|
|
|
110,593
|
|
Gross
profit
|
|
|
14,734
|
|
|
19,748
|
|
Gain on other
sales
|
|
|
931
|
|
|
1,316
|
|
Less: Operating
expenses
|
|
|
|
|
|
|
|
Selling
expenses
|
|
|
4,312
|
|
|
5,609
|
|
General and
administrative expenses
|
|
|
4,754
|
|
|
4,615
|
|
Research and
development expenses
|
|
|
8,137
|
|
|
6,680
|
|
Total operating
expenses
|
|
|
17,203
|
|
|
16,904
|
|
(Loss)/income from
operations
|
|
|
(1,538)
|
|
|
4,160
|
|
Other income,
net
|
|
|
3,519
|
|
|
1,723
|
|
Interest
expense
|
|
|
(402)
|
|
|
(343)
|
|
Financial
income/(expense), net
|
|
|
2,015
|
|
|
(239)
|
|
Income before income
tax expenses and equity in earnings of affiliated
companies
|
|
|
3,594
|
|
|
5,301
|
|
Less: Income
taxes
|
|
|
958
|
|
|
641
|
|
Add: Equity in loss
of affiliated companies
|
|
|
(2,487)
|
|
|
(1,429)
|
|
Net
(loss)/income
|
|
|
149
|
|
|
3,231
|
|
Less: Net income
attributable to non-controlling interests
|
|
|
200
|
|
|
18
|
|
Accretion to
redemption value of redeemable non-controlling interests
|
|
|
(8)
|
|
|
(7)
|
|
Net (loss)/income
attributable to parent company's common shareholders
|
|
$
|
(59)
|
|
$
|
3,206
|
|
Comprehensive
income:
|
|
|
|
|
|
|
|
Net
(loss)/income
|
|
$
|
149
|
|
$
|
3,231
|
|
Other comprehensive
income:
|
|
|
|
|
|
|
|
Foreign currency
translation income/(loss), net of tax
|
|
|
1,437
|
|
|
(2,271)
|
|
Comprehensive
(loss)/income
|
|
|
1,586
|
|
|
960
|
|
Comprehensive
income/(loss) attributable to non-controlling interests
|
|
|
289
|
|
|
(118)
|
|
Accretion to
redemption value of redeemable non-controlling
interests
|
|
|
(8)
|
|
|
(7)
|
|
Comprehensive (loss)/
income attributable to parent company
|
|
$
|
1,289
|
|
$
|
1,071
|
|
|
|
|
|
|
|
|
|
Net (loss)/income
attributable to parent company's common shareholders per share
-
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.00)
|
|
$
|
0.10
|
|
Diluted
|
|
$
|
(0.00)
|
|
$
|
0.10
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding -
|
|
|
|
|
|
|
|
Basic
|
|
|
30,851,776
|
|
|
30,851,776
|
|
Diluted
|
|
|
30,851,776
|
|
|
30,857,736
|
|
|
|
|
|
|
|
|
|
Share-based
compensation included in operating expense above is as
follows:
|
|
|
|
|
|
|
|
General and
administrative expenses
|
|
|
-
|
|
|
88
|
|
|
|
|
|
|
|
|
|
|
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,
|
|
|
|
2022
|
|
|
2021
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net
income/(loss)
|
|
$
|
149
|
|
|
$
|
3,231
|
|
Adjustments to
reconcile net income from operations to net cash (used in)/provided
by
operating activities:
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
|
|
-
|
|
|
|
88
|
|
Depreciation and
amortization
|
|
|
6,207
|
|
|
|
6,544
|
|
Provision/(reversal)
of credit losses
|
|
|
100
|
|
|
|
(177)
|
|
Deferred income
taxes
|
|
|
286
|
|
|
|
(254)
|
|
Equity in loss of
affiliated companies
|
|
|
2,487
|
|
|
|
1,429
|
|
Loss on fixed assets
disposals
|
|
|
37
|
|
|
|
9
|
|
(Increase)/decrease
in:
|
|
|
|
|
|
|
|
|
Accounts and notes
receivable
|
|
|
(11,184)
|
|
|
|
(3,972)
|
|
Inventories
|
|
|
2,532
|
|
|
|
(1,934)
|
|
Other current
assets
|
|
|
(1,281)
|
|
|
|
(1,371)
|
|
Increase/(decrease)
in:
|
|
|
|
|
|
|
|
|
Accounts and notes
payable
|
|
|
(1,407)
|
|
|
|
1,595
|
|
Accrued expenses and
other payables
|
|
|
(2,041)
|
|
|
|
(4,135)
|
|
Other current
liabilities
|
|
|
(135)
|
|
|
|
(1,811)
|
|
Net cash
used in operating activities
|
|
|
(4,250)
|
|
|
|
(758)
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Increase in demand
loans included in other non-current assets
|
|
|
242
|
|
|
|
(33)
|
|
Repayment of loan
from a related party
|
|
|
-
|
|
|
|
154
|
|
Cash received from
property, plant and equipment sales
|
|
|
95
|
|
|
|
51
|
|
Payments to acquire
property, plant and equipment (including $794 and $137 paid to
related
parties for the three months ended March 31, 2022 and 2021,
respectively)
|
|
|
(1,024)
|
|
|
|
(3,267)
|
|
Payments to acquire
intangible assets
|
|
|
(40)
|
|
|
|
(112)
|
|
Investment under the
equity method
|
|
|
(4,724)
|
|
|
|
-
|
|
Purchase of
short-term investments
|
|
|
(44,693)
|
|
|
|
(14,661)
|
|
Proceeds from
maturities of short-term investments
|
|
|
1,801
|
|
|
|
9,873
|
|
Cash received from
long-term investment
|
|
|
2,704
|
|
|
|
2,237
|
|
Net cash used in
by investing activities
|
|
|
(45,639)
|
|
|
|
(5,758)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from bank
loans
|
|
|
16,088
|
|
|
|
12,569
|
|
Repayments of bank
loans
|
|
|
(15,701)
|
|
|
|
(10,086)
|
|
Repayments of the
borrowing for sale and leaseback transaction
|
|
|
(1,130)
|
|
|
|
(1,107)
|
|
Net cash (used
in)/provided by financing activities
|
|
|
(743)
|
|
|
|
1,376
|
|
Effects of exchange
rate on cash, cash equivalents and pledged cash
|
|
|
583
|
|
|
|
(884)
|
|
Net decrease in cash,
cash equivalents and pledged cash
|
|
|
(50,049)
|
|
|
|
(6,024)
|
|
Cash, cash
equivalents and pledged cash at beginning of the period
|
|
|
159,498
|
|
|
|
128,061
|
|
Cash, cash
equivalents and pledged cash at end of the period
|
|
$
|
109,449
|
|
|
$
|
122,037
|
|
View original
content:https://www.prnewswire.com/news-releases/china-automotive-systems-reports-unaudited-2022-first-quarter-301552647.html
SOURCE China Automotive Systems, Inc.