China Automotive Systems Reports Unaudited 2021 Third Quarter Results
China Automotive Systems, Inc. (Nasdaq: CAAS) reported its third quarter and nine months results for 2021, showing a 5.4% decline in net sales to $108.2 million compared to Q3 2020. However, electric power steering (EPS) sales surged by 76.0% to $29.4 million. Gross profit increased 23.5% to $16.8 million, with a gross margin up to 15.5%. For the nine months, net sales rose 32.4% to $359.2 million, and net income was $6.1 million, reversing a $1.8 million loss from last year. The company maintains a strong cash position with $115 million as of September 30, 2021.
- EPS sales increased by 76.0% to $29.4 million.
- Gross profit rose 23.5% to $16.8 million.
- Nine-month net sales grew 32.4% to $359.2 million.
- Net income for nine months reached $6.1 million, improving from a $1.8 million loss last year.
- Cash and cash equivalents totaled $115.0 million.
- Net sales decreased 5.4% in Q3 2021 compared to Q3 2020.
- Net loss attributable to common shareholders was $0.3 million compared to $2.4 million net income in Q3 2020.
- Sales of hydraulic products fell 19.3%.
- Net cash used in operating activities was $5.9 million compared to $52.7 million cash provided in the same period last year.
WUHAN, China, Nov. 12, 2021 /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 third quarter and nine months ended September 30, 2021.
Third Quarter 2021 Highlights
- Net sales decreased
5.4% to$108.2 million compared with$114.4 million in the third quarter of 2020; - Electric power steering ("EPS") product sales increased by
76.0% to$29.4 million ; - Gross profit increased
23.5% to$16.8 million and gross margin increased to15.5% from11.9% in the third quarter of 2020; - Income from operations was
$0.6 million compared with income from operations of$0.1 million in the third quarter of 2020; - Net loss attributable to parent company's common shareholders was
$0.3 million , or diluted loss per share of$0.01 , compared to net income attributable to parent company's common shareholders of$2.4 million , or diluted earnings per share of$0.08 , in the third quarter of 2020.
First Nine Months of 2021 Highlights
- Net sales rose by
32.4% to$359.2 million compared to$271.2 million in the first nine months of 2020; - Gross profit increased
60.8% to$52.4 million and gross margin increased to14.6% from12.0% in the first nine months of 2020; - Income from operations was
$4.9 million compared with loss from operations of$4.1 million in the first nine months of 2020; - Net income attributable to parent company's common shareholders was
$6.1 million , or diluted income per share of$0.20 , compared to net loss attributable to parent company's common shareholders of$1.8 million , or diluted loss per share of$0.06 , in the first nine months of 2020; - Cash and cash equivalents and pledged cash were
$115.0 million as of September 30, 2021.
Mr. Qizhou Wu, the Chief Executive Officer of CAAS, commented, "Passenger car sales declined by
"Our activity in Europe has accelerated. During the third quarter of 2021, we developed a new steering system for one of Europe's leading auto brands, Alfa Romeo. The 2021 Tonale is Alfa Romeo's first luxury plug-in-hybrid SUV model. Purchase orders for approximately 100,000 annual units are expected for this new CAAS steering system. In July 2021, we received the SGS TÜV ISO26262:2018 ASIL-D certification from SGS TUS, which is headquartered in Germany. The D certification is the highest and most stringent safety standard. And our related party, Swedish Sentient AB's technology is receiving significant interest especially for its autonomous driving capabilities."
"While both the Chinese and North American auto markets are temporarily disrupted due to the shortage of chips, our EPS sales are growing stronger and our South American operations are booming."
Mr. Jie Li, the Chief Financial Officer of CAAS, commented, "We maintained our strong financial position as cash and cash equivalents and pledged cash was
Third Quarter of 2021
In the third quarter of 2021, net sales decreased by
Gross profit was
Selling expenses were
General and administrative expenses ("G&A expenses") were
Research and development expenses ("R&D expenses") were
Income from operations was
Other income was
Financial expense, net was
Income before income tax expenses and equity in earnings of affiliated companies was
Income tax expense was
Net loss attributable to parent company's common shareholders was
The weighted average number of diluted common shares outstanding was 30,851,776 in the third quarter of 2021, compared to 31,113,374 in the third quarter of 2020.
First Nine Months of 2021
Net sales for the first nine months of 2021 increased by
Net income attributable to parent company's common shareholders was
As of September 30, 2021, total cash and cash equivalents and pledged cash deposits were
Net cash used in operating activities was
Business Outlook
Management reiterated its revenue guidance of
Conference Call
Management will conduct a conference call on November 12, 2021 at 8:00 A.M. EST/9:00 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:
Phone Number: +1-888-506-0062 (North America)
Phone Number: +1-973-528-0011 (International)
Mainland China Toll Free: +86-400-120-3199
A replay of the call will be available on the Company's website under 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, 2021, 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 a deteriorating market outlook for automobile sales, a 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.
Email: jieli@chl.com.cn
Kevin Theiss
Investor Relations
+1-212-521-4050
Email: Kevin@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 September 30, | |||||||||||
2021 | 2020 | ||||||||||
Net product sales ( | $ | 108,231 | $ | 114,417 | |||||||
Cost of products sold ( | 91,439 | 100,842 | |||||||||
Gross profit | 16,792 | 13,575 | |||||||||
Gain on other sales | 487 | 1,497 | |||||||||
Less: Operating expenses | |||||||||||
Selling expenses | 4,802 | 3,800 | |||||||||
General and administrative expenses | 6,174 | 5,142 | |||||||||
Research and development expenses | 5,712 | 6,072 | |||||||||
Total operating expenses | 16,688 | 15,014 | |||||||||
Income from operations | 591 | 58 | |||||||||
Other income | 2,407 | 350 | |||||||||
Interest expense | (255) | (403) | |||||||||
Financial expense, net | (821) | (2,313) | |||||||||
Income/(loss) before income tax expenses and equity in earnings of affiliated | 1,922 | (2,308) | |||||||||
Less: Income taxes expense/(benefit) | 2,441 | (189) | |||||||||
Add: Equity in earnings of affiliated companies | 251 | 3,632 | |||||||||
Net (loss)/income | (268) | 1,513 | |||||||||
Less: Net income/(loss) attributable to non-controlling interests | 42 | (848) | |||||||||
Accretion to redemption value of redeemable non-controlling interests | (7) | (3) | |||||||||
Net (loss)/income attributable to parent company's common shareholders | $ | (317) | $ | 2,358 | |||||||
Comprehensive income: | |||||||||||
Net (loss)/income | $ | (268) | $ | 1,513 | |||||||
Other comprehensive income: | |||||||||||
Foreign currency translation (loss)/income, net of tax | (1,338) | 12,774 | |||||||||
Comprehensive (loss)/income | (1,606) | 14,287 | |||||||||
Comprehensive (loss)/income attributable to non-controlling interests | (40) | 77 | |||||||||
Accretion to redemption value of redeemable non-controlling interests | (7) | (3) | |||||||||
Comprehensive (loss)/income attributable to parent company | $ | (1,573) | $ | 14,207 | |||||||
Net (loss)/income attributable to parent company's common shareholders per | |||||||||||
Basic | $ | (0.01) | $ | 0.08 | |||||||
Diluted | $ | (0.01) | $ | 0.08 | |||||||
Weighted average number of common shares outstanding - | |||||||||||
Basic | 30,851,776 | 31,112,076 | |||||||||
Diluted | 30,851,776 | 31,113,374 | |||||||||
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) | ||||||||
Nine Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
Net product sales ( | $ | 359,176 | $ | 271,156 | ||||
Cost of products sold ( | 306,807 | 238,598 | ||||||
Gross profit | 52,369 | 32,558 | ||||||
Gain on other sales | 2,528 | 2,935 | ||||||
Less: Operating expenses | ||||||||
Selling expenses | 14,857 | 8,895 | ||||||
General and administrative expenses | 16,852 | 13,330 | ||||||
Research and development expenses | 18,318 | 17,390 | ||||||
Total operating expenses | 50,027 | 39,615 | ||||||
Income/(loss) from operations | 4,870 | (4,122) | ||||||
Other income, net | 5,636 | 1,724 | ||||||
Interest expense | (892) | (1,214) | ||||||
Financial expense, net | (878) | (2,903) | ||||||
Income/(loss) before income tax expenses and equity in earnings of affiliated | 8,736 | (6,515) | ||||||
Less: Income taxes expense | 3,280 | 294 | ||||||
Add: Equity in earnings of affiliated companies | 435 | 3,454 | ||||||
Net income/(loss) | 5,891 | (3,355) | ||||||
Less: Net loss attributable to non-controlling interests | (219) | (1,590) | ||||||
Accretion to redemption value of redeemable non-controlling interests | (21) | (3) | ||||||
Net income/(loss) attributable to parent company's common shareholders | $ | 6,089 | $ | (1,768) | ||||
Comprehensive income: | ||||||||
Net income/(loss) | $ | 5,891 | $ | (3,355) | ||||
Other comprehensive income: | ||||||||
Foreign currency translation income, net of tax | 1,977 | 8,171 | ||||||
Comprehensive income | 7,868 | 4,816 | ||||||
Comprehensive loss attributable to non-controlling interests | (92) | (1,062) | ||||||
Accretion to redemption value of redeemable non-controlling interests | (21) | (3) | ||||||
Comprehensive income attributable to parent company | $ | 7,939 | $ | 5,875 | ||||
Net income/(loss) attributable to parent company's common shareholders per share - | ||||||||
Basic | $ | 0.20 | $ | (0.06) | ||||
Diluted | $ | 0.20 | $ | (0.06) | ||||
Weighted average number of common shares outstanding - | ||||||||
Basic | 30,851,776 | 31,153,162 | ||||||
Diluted | 30,855,967 | 31,153,162 | ||||||
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 Balance Sheets | ||||||||
(In thousands of USD unless otherwise indicated) | ||||||||
September 30, | December 31, | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 80,729 | $ | 97,248 | ||||
Pledged cash | 34,272 | 30,813 | ||||||
Accounts and notes receivable, net - unrelated parties | 200,221 | 216,519 | ||||||
Accounts and notes receivable - related parties | 27,055 | 17,621 | ||||||
Inventories | 106,427 | 88,325 | ||||||
Other current assets | 28,762 | 25,132 | ||||||
Total current assets | 477,466 | 475,658 | ||||||
Non-current assets: | ||||||||
Property, plant and equipment, net | 129,249 | 141,004 | ||||||
Land use rights, net | 10,623 | 10,774 | ||||||
Long-term investments | 40,742 | 49,766 | ||||||
Other non-current assets | 28,066 | 30,358 | ||||||
Total assets | $ | 686,146 | $ | 707,560 | ||||
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Short-term loans | $ | 42,210 | $ | 44,238 | ||||
Accounts and notes payable - unrelated parties | 203,132 | 212,522 | ||||||
Accounts and notes payable - related parties | 11,975 | 12,730 | ||||||
Accrued expenses and other payables | 52,293 | 55,607 | ||||||
Other current liabilities | 22,228 | 29,387 | ||||||
Total current liabilities | 331,838 | 354,484 | ||||||
Long-term liabilities: | ||||||||
Other long-term payable | - | 1,126 | ||||||
Long-term tax payable | 21,074 | 23,884 | ||||||
Other non-current liabilities | 6,437 | 8,151 | ||||||
Total liabilities | $ | 359,349 | $ | 387,645 | ||||
Mezzanine equity: | ||||||||
Redeemable non-controlling interests | 544 | 523 | ||||||
Stockholders' equity: | ||||||||
Common stock, | $ | 3 | $ | 3 | ||||
Additional paid-in capital | 63,731 | 64,273 | ||||||
Retained earnings- | ||||||||
Appropriated | 11,303 | 11,303 | ||||||
Unappropriated | 221,580 | 215,491 | ||||||
Accumulated other comprehensive income | 19,263 | 17,413 | ||||||
Treasury stock –1,486,526 and 1,486,526 shares as of September 30, 2021 and | (5,261) | (5,261) | ||||||
Total parent company stockholders' equity | 310,619 | 303,222 | ||||||
Non-controlling interests | 15,634 | 16,170 | ||||||
Total stockholders' equity | 326,253 | 319,392 | ||||||
Total liabilities, mezzanine equity and stockholders' equity | $ | 686,146 | $ | 707,560 | ||||
China Automotive Systems, Inc. and Subsidiaries | ||||||||
Condensed Unaudited Consolidated Statements of Cash Flows | ||||||||
(In thousands of USD unless otherwise indicated) | ||||||||
Nine Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
Cash flows from operating activities: | ||||||||
Net income/(loss) | $ | 5,891 | $ | (3,355) | ||||
Adjustments to reconcile net income/(loss) from operations to net cash (used in)/provided | ||||||||
Share-based compensation | 88 | - | ||||||
Depreciation and amortization | 19,686 | 15,935 | ||||||
Provision/(reversal) of credit losses | 1,644 | (360) | ||||||
Deferred income taxes | 2,573 | 464 | ||||||
Equity in gain of affiliated companies | (435) | (3,454) | ||||||
Government subsidy reclassified from government loans | - | 287 | ||||||
Loss on fixed assets disposals | 71 | 67 | ||||||
(Increase)/decrease in: | ||||||||
Accounts and notes receivable | 6,631 | 29,454 | ||||||
Inventories | (17,500) | 2,644 | ||||||
Other current assets | (129) | 1,214 | ||||||
Increase/(decrease) in: | ||||||||
Accounts and notes payable | (11,506) | 10,493 | ||||||
Accrued expenses and other payables | (2,325) | 2,451 | ||||||
Long-term taxes payable | (2,809) | (2,809) | ||||||
Other current liabilities | (7,462) | (289) | ||||||
Other non-current liabilities | (285) | - | ||||||
Net cash used in operating activities | (5,867) | 52,742 | ||||||
Cash flows from investing activities: | ||||||||
(Decrease)/increase in demand loans included in other non-current assets | (357) | 44 | ||||||
Repayment of loan from a related party | 154 | - | ||||||
Cash received from property, plant and equipment sales | 252 | 1,444 | ||||||
Payments to acquire property, plant and equipment (including | (5,344) | (8,879) | ||||||
Payments to acquire intangible assets | (505) | (422) | ||||||
Investment under the equity method | (308) | (5,360) | ||||||
Purchase of short-term investments and long-term time deposits | (46,212) | (42,716) | ||||||
Proceeds from maturities of short-term investments | 40,016 | 21,626 | ||||||
Cash received from long-term investment | 10,116 | 448 | ||||||
Net cash used in investing activities | (2,188) | (33,815) | ||||||
Cash flows from financing activities: | ||||||||
Proceeds from bank loans | 42,700 | 39,586 | ||||||
Repayments of bank loans | (44,854) | (50,550) | ||||||
Repayments of the borrowing for sale and leaseback transaction | (3,328) | (3,078) | ||||||
Cash received from capital contributions by non-controlling interest holder | - | 722 | ||||||
Deemed distribution to shareholders | - | (88) | ||||||
Acquisition of non-controlling interest | (538) | (81) | ||||||
Repurchase of common shares | - | (1,000) | ||||||
Net cash used in financing activities | (6,020) | (14,489) | ||||||
Effects of exchange rate on cash, cash equivalents and pledged cash | 1,015 | 2,647 | ||||||
Net (decrease)/increase in cash, cash equivalents and pledged cash | (13,060) | 7,085 | ||||||
Cash, cash equivalents and pledged cash at beginning of the period | 128,061 | 106,403 | ||||||
Cash, cash equivalents and pledged cash at end of the period | $ | 115,001 | $ | 113,488 | ||||
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SOURCE China Automotive Systems, Inc.
FAQ
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