Consolidated Results Reflect Performance of Wuxi ZhongQiang
Enhanced Battery Production Capacity Fully Operational
Battery Sales Backlog Stands At $53 Million
NEW YORK, Aug. 11, 2009 (GLOBE NEWSWIRE) -- Advanced Battery Technologies, Inc. (Nasdaq:ABAT), a leading developer, manufacturer and distributor of rechargeable Polymer Lithium-Ion (PLI) batteries, today announced its financial results for the second quarter ended June 30, 2009.
Revenue for the second quarter of 2009 was $13.8 million, a 17.2% increase from $11.7 million in the second quarter of 2008. The increase in revenue was driven by the contribution of sales of electric vehicles by our wholly-owned subsidiary, Wuxi Zhongqiang Autocycle Co., Ltd. ("Wuxi ZQ"). In the second quarter of 2009, sales of electric vehicles from Wuxi ZQ were $3.6 million or 26.3% of total revenue. Large capacity battery cells generated $3.8 million in sales, or 27.3% of total revenue in the second quarter of 2009. Medium capacity battery cells generated $2.8 million in sales, or 20.5% of total revenue in the second quarter of 2009. Small capacity battery cells generated $1.3 million in sales, or 9.2% of total revenue in the second quarter of 2009. Miner's lamp battery cells generated $2.3 million in sales, or 16.8% of total revenue in the second quarter of 2009. Sales from medium capacity battery cells in the second quarter of 2009 exclude intercompany sales of approximately $1.2 million to Wuxi ZQ. Sales to Wuxi ZQ were previously categorized as medium capacity cell battery sales.
Gross profit for the second quarter of 2009 was $6.3 million, a 5.7% increase from $6.0 million in the second quarter of 2008. Gross margin was 45.8% in the second quarter 2009, compared to 50.8% in the second quarter of 2008. Lower gross margin performance was a result of sales of electrical vehicles, a lower margin product, offset by a higher proportion of battery sales from higher margin battery products, primarily large capacity battery cells and miner's lamps.
Operating income for the second quarter of 2009 was $2.4 million, a 55.8% decrease from $5.4 million during the second quarter of 2008. Operating expenses increased to $3.9 million in the second quarter of 2009 from $579,974 in the second quarter of 2008. The increase reflects increased selling and administrative expenses at Wuxi ZQ and a one-time bad debt allowance associated with the acquisition. In addition, ABAT's U.S. office incurred higher administrative expenses such as salaries, legal fees and marketing expenses in the second quarter of 2009. The Company also recognized higher non-cash stock and option compensation amortization expense in the second quarter of 2009.
Net income in the second quarter of 2009 was $8.0 million, or $0.14 per diluted share, a 70.9% increase from $4.7 million, or $0.09 per diluted share in the second quarter of 2008. The increase in net income reflected a one-time gain on purchase of $9.9 million and a related $3.5 million deferred tax provision associated with the acquisition of Wuxi ZQ on May 4, 2009. The gain on purchase was realized due to the fair value of the net assets of Wuxi ZQ, estimated at $19.8 million, exceeding the total purchase consideration of $9.9 million.
Commenting on the results, Mr. Zhiguo Fu, Chairman and CEO of Advanced Battery Technologies, stated, "We are pleased with our results during the second quarter. During the quarter, we successfully completed the acquisition of Wuxi ZQ and began integrating their operations with those of Advanced Battery. We expanded assembly capacity in our Harbin facility and it became fully operational late in the second quarter of 2009.
"ABAT is experiencing strong demand in both domestic and international markets for electric and hybrid electric vehicles as individuals and industries switch to alternate forms of transportation. Following the completion of our acquisition of Wuxi ZQ, ABAT now has the manufacturing capability to produce vehicles, batteries and many key vehicle parts, meaning Wuxi and ABAT can produce high quality vehicles with margins that are superior to its competition."
Balance Sheet
As of June 30, 2009, the Company had $45.0 million of cash and cash equivalents, compared to $32.7 million of cash and cash equivalents at December 31, 2008. The Company's working capital on June 30, 2009 totaled $55.6 million.
Battery backlog is approximately $53 million as of August 3, 2009, all of which is expected to be delivered in the next 12 months.
Conference Call
Management will host a conference call at 8:30 am ET, on Wednesday August 12, 2009 to discuss its second quarter 2009 financial results. Listeners may access the call by dialing 1-888-211-4542 or 1-913-312-1414 for international callers.
A replay of the call will be available from August 12, 2009 through August 19, 2009. Listeners may access the replay by dialing 1-888-203-1112 or 1-719-457-0820 for international callers; passcode: 5475547.
About Advanced Battery Technologies, Inc.
Advanced Battery Technologies, Inc., founded in September 2002, develops, manufactures and distributes rechargeable Polymer Lithium-Ion (PLI) batteries. The Company's products include rechargeable PLI batteries for electric automobiles, motorcycles, mine-use lamps, notebook computers, walkie-talkies and other electronic devices. ABAT's batteries combine high-energy chemistry with state-of-the-art polymer technology to overcome many of the shortcomings associated with other types of rechargeable batteries. Wuxi Zhongqiang Autocycle Co., Ltd, founded in 2002, develops and manufactures various types of electric vehicles. Wuxi Zhongqiang owns three types of products listed in the E-Bike directory, with more than 20 varieties: electric bikes; agricultural transport vehicles for practical transportation; sport utility e-vehicles such as scooters, off-road vehicles, go-karts, snow scooters, sea scooters, as well as underwater propeller vehicles. Wuxi Zhongqiang products are exported to countries and regions in Europe, the United States and Asia. The Company has a New York office, with its executive offices and manufacturing facilities in China. For more information about Advanced Battery Technologies, Inc. (ABAT), please visit: http://www.abat.com.cn.
Safe Harbor Statement
Certain statements in this release and other written or oral statements made by or on behalf of the Company are "forward-looking statements" within the meaning of the federal securities laws. Statements regarding future events and developments and our future performance, as well as management's expectations, beliefs, plans, estimates or projections relating to the future are forward-looking statements within the meaning of these laws. The forward-looking statements are subject to a number of risks and uncertainties including market acceptance of the Company's services and projects and the Company's continued access to capital and other risks and uncertainties. The actual results the Company achieves may differ materially from those contemplated by any forward-looking statements due to such risks and uncertainties. These statements are based on our current expectations and speak only as of the date of such statements.
ADVANCED BATTERY TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OTHER
COMPREHENSIVE INCOME
(UNAUDITED)
For Three-month ended For Six-month ended
June 30, June 30,
2009 2008 2009 2008
----------- ----------- ----------- -----------
Revenues $13,771,583 $11,748,284 $24,457,320 $21,780,253
Cost of Goods
Sold 7,458,600 5,776,054 13,109,789 10,765,796
----------- ----------- ----------- -----------
Gross Profit 6,312,983 5,972,230 11,347,531 11,014,457
Operating Expenses
Research &
Development
expenses 188,472 -- 188,472 4,325
Selling, general
and admini-
strative 3,740,079 579,974 4,636,398 1,147,539
----------- ----------- ----------- -----------
Operating
income 2,384,432 5,392,256 6,522,661 9,862,593
----------- ----------- ----------- -----------
Other Income
(Expenses)
Interest income 96,198 -- 170,546 --
Interest
(expenses) (206,219) -- (206,219) --
Equity loss from
unconsolidated
entity (57,862) -- (67,660) --
Gain on bargain
purchase 9,909,320 -- 9,909,320 --
Other income
(expenses) 13,708 8,526 13,708 16,113
----------- ----------- ----------- -----------
Total other
income
(expenses) 9,755,145 8,526 9,819,695 16,113
----------- ----------- ----------- -----------
Income Before
Income Taxes 12,139,577 5,400,783 16,342,356 9,878,706
Provision for
Income Taxes
Current 681,211 725,511 1,283,693 1,354,956
Deferred 3,468,262 -- 3,468,262 --
----------- ----------- ----------- -----------
Net income $ 7,990,104 $ 4,675,272 $11,590,401 $ 8,523,750
Other
Comprehensive
Income
Foreign
currency
translation
adjustment 68,288 1,043,721 (29,536) 2,634,700
----------- ----------- ----------- -----------
Comprehensive
Income $ 8,058,392 $ 5,718,993 $11,560,865 $11,158,450
=========== =========== =========== ===========
Earnings per
share
Basic $ 0.16 $ 0.11 $ 0.24 $ 0.21
=========== =========== =========== ===========
Diluted $ 0.14 $ 0.09 $ 0.21 $ 0.17
=========== =========== =========== ===========
Weighted average
number of
common shares
outstanding
Basic 48,901,584 41,531,286 47,983,579 41,520,892
=========== =========== =========== ===========
Diluted 58,056,619 49,709,786 56,553,099 49,699,392
=========== =========== =========== ===========
ADVANCED BATTERY TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS June 30, December 31,
------ 2009 2008
(Unaudited)
------------ ------------
Current assets:
Cash and cash equivalents $ 45,036,543 $ 32,746,155
Accounts receivable, net 16,375,343 14,708,078
Inventories, net 5,047,878 1,748,115
Loan receivable, net 2,148,114 1,600,000
Other receivables 235,706 240,726
Advance to suppliers, net 2,343,876 246,163
------------ ------------
Total Current Assets 71,187,460 51,289,237
------------ ------------
Property, plant and equipment,
net of accumulated depreciation
of $8,979,803 as of June 30, 2009
and $2,803,788 as of December 31,
2008 44,100,031 16,635,843
------------ ------------
Total Fixed Assets 44,100,031 16,635,843
------------ ------------
Other assets:
Investment in unconsolidated entity 969,890 1,037,550
Investment advance -- 3,000,000
Deposit for long-term assets 117,000 1,748,363
Intangible assets, net 14,739,116 1,548,158
Goodwill 2,485,750 2,487,080
Other assets 41,850 6,000
------------ ------------
Total other assets 18,353,606 9,827,151
------------ ------------
Total Assets $133,641,097 $ 77,752,231
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
-------------------------------------
Current liabilities:
Short-term loans $ 7,324,773 --
Accounts payable 4,800,396 415,850
Advance from Customers 184,094 80,479
Accrued expenses and other payables 2,288,350 784,070
Loan from officers -- 17,236
Taxes payable 952,573 --
------------ ------------
Total Current Liabilities 15,550,186 1,297,635
Long term liabilities
Deferred tax liability 3,468,262 --
------------ ------------
Total Liabilities 19,018,448 1,297,635
------------ ------------
Commitments and Contingencies
Stockholders' Equity
Preferred stock, $0.001 par value,
5,000,000 shares authorized;
17,000 shares issued and 17,000
shares outstanding as of June 30,
2009 and - 0 - shares issued and
outstanding as of December 31, 2008 17 --
Common stock, $0.001 par value,
150,000,000 shares authorized;
57,821,577 shares issued and
57,626,996 shares outstanding as
of June 30, 2009 and 54,781,577
shares issued and 54,662,067 shares
outstanding as of December 31, 2008 57,822 54,782
Additional paid-in-capital 66,097,910 39,289,991
Accumulated other comprehensive income 5,982,939 6,012,475
Retained earnings 42,983,451 31,393,050
Less: Cost of treasury stock
(194,581 and 119,510 shares as of
June 30,2009 and December 31, 2008) (499,490) (295,702)
------------ ------------
Total Stockholders' Equity 114,622,649 76,454,596
------------ ------------
Total Liabilities and Stockholders'
Equity $133,641,097 $ 77,752,231
------------ ------------