ZHEJIANG, China, April 1, 2005 (PRIMEZONE) -- SORL Auto Parts, Inc. (OTCBB:SAUP) announced today its financial results for the year and three months ended December 31, 2004.
SORL reported net income of $1.3 million or $0.21 per share for the fourth quarter 2004. For the full year, SORL recorded net income of $4.8 million or $0.76 per share, compared to net income of $1.1 million for 2003.
Sales for the year ended December 31, 2004 increased $13.7 million or 41.4%, to $46.8 million from $33.1 million a year ago, primarily due to the increase in the volume of the Company's products shipped. Fourth quarter net sales increased $3.9 million or 40.0%, to $13.8 million, compared to a year ago.
Gross profit for the year increased $4.1 million or 59.1%, to $11.0 million in 2004 from $6.9 million in 2003. As a percentage of net sales, gross margin increased to 23.3% in 2004 from 20.7% in 2003. Fourth quarter gross profit increased $1.3 million or 66.0% in 2004, to $3.1 million from $1.9 million in 2003. Improved gross profit margin was mainly attributable to a modest increase in the selling price, effective cost management such as optimizing the production process, and enhanced structural design of the Company's products.
Selling, general and administrative expenses for the year totaled $5.2 million or 11.2% of sales, compared to $3.2 million or 9.5% of sales in 2003.
Year-end cash and cash equivalents totaled $729,875. There was surplus working capital of $6.1 million at year end.
The Company continues to enjoy strong results due to the growing demand of its products and the overall expansion of the market, both domestically and for export. According to the Company's Chairman and Chief Executive Officer, Mr. Xiao Ping Zhang, the increase in sales is due to an increase in export sales by 105.1% from $6,143,016 at year end 2003 to $12,601,492 at year end 2004. In addition, there was an increase in domestic auto sales in China due to the increase demand from the repair market and from OEM manufacturers. Total sales from the domestic market increased 26.9% from $26,966,082 in 2003 to $34,213,545 in 2004.
"We are pleased to file our first Form 10-K as a public company with a full year of financial results," said Xiao Ping Zhang. Mr. Zhang continued that, "Part of SORL's mission is to create awareness of our strong financial performance to investors and the US financial community."
About SORL Auto Parts, Inc.
SORL Auto Parts, Inc. is engaged in the manufacture and distribution of automotive air brake valves and hydraulic break valves primarily for the commercial vehicle market for vehicles weighting more than three tons, such as trucks, vans and buses in the People's Republic of China (PRC). The Company distributes products both in China and internationally under SORL trademarks. The Company's product range includes 36 types of brake valves with over 800 different specifications. The Company is rated as one of the top 100 auto component suppliers in China. The Company has two international sales centers in Australia and Dubai, with additional new offices slated for opening in the U.S. and other locations in the near future.
FORWARD-LOOKING STATEMENTS
The information contained herein includes forward-looking statements. These statements relate to future events or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. The safe harbor for forward-looking statements contained in the Securities Litigation Reform Act of 1995 protects companies from liability for their forward looking statements if they comply with the requirements of the Act.
SORL AUTO PARTS, INC.
(Formerly Known as The Enchanted Village, Inc.)
Ruian City, Zhejiang Province,
People's Republic of China
CONSOLIDATED BALANCE SHEETS
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December 31,
2004 2003
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ASSETS
Current Assets
Cash and Cash Equivalents $ 729,875 $ --
Trade Receivables, Net of Provisions 12,595,905 3,157,000
Notes Receivable 129,675 --
Inventory 1,875,300 1,837,000
Prepayments 1,404,710 2,602,000
Current Assets - Discontinued Operations -- 42,807,000
Other Taxes 393,300 --
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Total Current Assets 17,128,765 50,403,000
Other Assets
Intangible Assets 38,720 10,000
Property, Plant and Equipment, Net 5,352,654 5,297,000
Long Term Assets - Discontinued Operations -- 36,848,000
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Total Assets $22,520,139 $92,558,000
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 4,717,655 $ --
Deposit Received from Customers 861,624 --
Bank Loans 4,830,918 4,591,000
Accrued Expenses 625,769 --
Other Current Liabilities
- Discontinued Operations -- 36,408,000
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Total Current Liabilities 11,035,966 40,999,000
Long Term Liabilities
Bank Loans -- 1,208,000
Other Long Term Liabilities
- Discontinued Operations -- 22,047,000
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Total Liabilities 11,035,966 64,254,000
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Minority Interest 1,148,418 --
Shareholders' Equity
Convertible Preferred Stock -
$1 Par Value; 5,000,000 Authorized,
0 Issued and Outstanding -- --
Common Stock - $.002 Par Value;
50,000,000 Authorized, 13,282,253 and
328,533 Issued and Outstanding at
December 31, 2004 and 2003, Respectively 26,565 657
Additional Paid-in Capital 4,082,246 26,883,343
Retained Earnings 6,226,944 1,420,000
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Total Shareholders' Equity 10,335,755 28,304,000
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Total Liabilities and Shareholders' Equity $22,520,139 $92,558,000
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SORL AUTO PARTS, INC.
(Formerly Known as The Enchanted Village, Inc.)
Ruian City, Zhejiang Province,
People's Republic of China
CONSOLIDATED STATEMENTS OF INCOME
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December 31,
2004 2003
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Sales $46,815,037 $33,121,000
Cost of Sales 35,904,232 26,263,000
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Gross Profit 10,910,805 6,858,000
Selling and Distribution Expenses 2,737,652 1,609,980
General and Administrative Expenses 2,489,604 1,546,845
Finance Costs 287,433 292,175
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Income from Operations 5,396,116 3,409,000
Other Income -- 435,000
Other Expenses 55,067 --
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Income from Continuing Operations
Before Income Taxes 5,341,049 3,844,000
Income Taxes - Current -- 546,000
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Income from Continuing Operations 5,341,049 3,298,000
Loss from Discontinued Operations -- 2,148,000
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Net Income Before Minority Interest 5,341,049 1,150,000
Minority Interest (534,105) --
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Net Income Attributable to Shareholders $ 4,806,944 $ 1,150,000
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Net Income Per Share - Basic $ 0.76 $ 3.50
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Net Income Per Share - Diluted $ 0.76 $ 3.50
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Weighted Average Common Shares
Outstanding - Basic 6,309,896 328,533
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Weighted Average Common Shares
Outstanding - Diluted 6,309,896 328,533
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