HUBEI, China, Aug. 16, 2004 (PRIMEZONE) -- China Automotive Systems, Inc. (OTCBB:CAAS) today announced financial results for the second quarter ended June 30, 2004, reflecting continued growth and traction in the Chinese automotive market.
Net sales for the second quarter of 2004 climbed 27.6 percent to $16.2 million from $12.7 million a year earlier. Net income for the same period increased 19.5 percent to $1.8 million, or $0.08 per diluted share, from $1.5 million, or $0.07 per diluted share, a year earlier.
Net sales for the six months increased 22.0 percent to $29.1 million from $23.8 million in fiscal 2003. For the first half of 2004, net income jumped 91 percent to $2.8 million, or $0.12 per diluted share, from $1.5 million, or $0.07 per diluted share, a year earlier.
"Results for the quarter reflect continued growth of the Chinese automobile market and the company's position as a premier supplier of power steering systems and components to OEM manufacturers," said Hanlin Chen, chief executive officer.
He highlighted the strong sales performance during the quarter of two of the company's five Sino-foreign joint ventures, Jiulong and Zhejiang -- representing an 81 percent-ownership and a 51 percent-ownership, respectively. These joint ventures are primarily focused on producing integral ball and nut components and pumps for power steering systems.
Chen noted that while automobile sales activity in China slowed somewhat during the second quarter, industry observers are still enthusiastic about the long-term prospects. He added that the company expects to achieve sales growth of approximately 25 percent for the full year, while continuing to focus on expanding its core-products, technology and manufacturing capabilities to include a variety of other automotive-related offerings.
Chen highlighted the recent signing of a letter of intent for a joint venture to produce automobile sensors for a variety of electronic control system applications as an example of the company's focus on product-line expansion.
ABOUT THE COMPANY
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 five Sino-foreign joint ventures.
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward- looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning the company's operations, financial performance and condition, the signing of a definitive joint venture agreement with ACSI and meeting its production and sales expectations for the joint venture. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. The company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others, the impact of competitive products, pricing and new technology; changes in consumer preferences and tastes; and effectiveness of marketing; changes in laws and regulations; fluctuations in costs of production, and other factors as those discussed in the Company's reports filed with the Securities and Exchange Commission from time to time.
(Financial Table Follows)
CHINA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
----------- ----------- ----------- -----------
Net sales $16,249,817 $12,733,793 $29,083,573 $23,835,864
Cost of sales 9,476,427 7,047,257 17,722,177 12,949,367
----------- ----------- ----------- -----------
Gross profit 6,773,390 5,686,536 11,361,396 10,886,497
----------- ----------- ----------- -----------
Costs and
expenses:
Selling 878,922 375,535 1,287,356 655,326
General and
administrative 2,480,948 1,802,424 4,666,020 3,516,767
Depreciation and
amortization 132,231 80,956 250,615 165,295
Stock-based
compensation -- -- -- 1,300,000
----------- ----------- ----------- -----------
Total costs and
expenses 3,492,101 2,258,915 6,203,991 5,637,388
----------- ----------- ----------- -----------
Income from
operations 3,281,289 3,427,621 5,157,405 5,249,109
----------- ----------- ----------- -----------
Other income
(expenses):
Other non-
operating
income 326,600 109,445 445,433 347,921
Financial
expenses (260,714) (63,554) (345,602) (122,659)
----------- ----------- ----------- -----------
Other income net 65,886 45,891 99,831 225,262
----------- ----------- ----------- -----------
Income before
income taxes 3,347,175 3,473,512 5,257,236 5,474,371
Income taxes 452,988 534,803 765,388 980,331
----------- ----------- ----------- -----------
Income before
minority
interest 2,894,187 2,938,709 4,491,848 4,494,040
Minority
interests 1,088,829 1,428,357 1,672,701 3,017,786
----------- ----------- ----------- -----------
Net income $ 1,805,358 $ 1,510,352 $ 2,819,147 $ 1,476,254
=========== =========== =========== ===========
Net income per
common share --
Basic $ 0.08 $ 0.07 $ 0.12 $ 0.07
Diluted $ 0.08 $ 0.07 $ 0.12 $ 0.07
Weighted average
number of common
shares
outstanding --
Basic 22,574,542 22,015,000 22,574,542 21,648,083
Diluted 22,574,542 22,490,450 22,574,542 21,971,592