China Automotive Systems Reports Unaudited 2022 First Quarter
China Automotive Systems, Inc. (NASDAQ: CAAS) reported its Q1 2022 results, showcasing a 4.7% increase in net sales to $136.4 million compared to Q1 2021. However, gross profit fell to $14.7 million with a gross margin of 10.8%, down from 15.1% a year prior. The company experienced a loss from operations of $1.5 million, contrasting with $4.2 million in income from the same quarter in 2021. They revised their full-year revenue guidance down to $490 million from $510 million due to COVID-19 impacts and economic uncertainties.
- Net sales increased 4.7% to $136.4 million.
- EPS product sales rose by 66.0%, constituting 30.1% of total sales.
- Cash and cash equivalents totaled $109.4 million as of March 31, 2022.
- Increased government subsidies contributed to a net other income of $3.5 million.
- Gross profit declined to $14.7 million from $19.7 million.
- Loss from operations was $1.5 million compared to a $4.2 million income last year.
- Revenue guidance lowered from $510 million to $490 million for 2022.
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 of10.8% , compared with$19.7 million and a15.1% 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
"Our sales to the Chinese passenger vehicle market increased in the first quarter of 2022. Our sales to Chery Automobile increased by
"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
First Quarter of 2022
Net sales increased by
Gross profit declined to
Gain on other sales was
Selling expenses were
General and administrative expenses ("G&A expenses") were
Research and development expenses ("R&D expenses") increased
Net other income was
Loss from operations was
Interest expense was
Net financial income was
Income before income tax expenses and equity in earnings of affiliated companies was
Equity in loss of affiliated companies 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 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
Business Outlook
Management has reduced revenue guidance for the full year 2022 to
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, | $ | 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 | (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 ( | $ | 136,396 | $ | 130,341 | ||||||
Cost of products sold ( | 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 | ||||||||
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 | (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 | ||||
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SOURCE China Automotive Systems, Inc.
FAQ
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