HUBEI, China, May 5, 2005 (PRIMEZONE) -- China Automotive Systems, Inc. (Nasdaq:CAAS) today announced financial results for the quarter ended March 31, 2005, reflecting sales strength from the heavy duty and light truck market.
Net sales for the first quarter increased 22.7 percent to $14.0 million from $11.4 million a year earlier. Net income for the 2005 first quarter was $866,200, or $0.04 per diluted share, compared with $1.0 million, or $0.04 per share, a year ago, reflecting the continued impact of previously identified factors, such as raw materials and labor costs, that management is addressing.
"Highlights of the first quarter included increased sales within the heavy duty equipment and light truck market, as well the expansion of production for steering gears for passenger vehicles," said Hanlin Chen, chairman and chief executive officer of China Automotive Systems.
He highlighted increased sales to heavy duty vehicle customers Dongfeng Auto Group and Shanxi Heavy Auto Co., two of China Automotive's new heavy duty vehicle customers added in 2004, which climbed to16.1 percent and 5.5 percent in the 2005 first quarter from 10.9 percent and 2.8 percent in 2004, respectively.
Chen emphasized the success of the company's ongoing focus on expansion of its steering gears production capacity, which commenced in 2003. He noted that based on customer orders for March and early April, China Automotive expects current production output will reach 620,000 systems in 2005 compared with 450,000 a year earlier - representing a 37.8 percent increase in sales volume. He added that first quarter results reflect production of a record 18,822 steering units for Chery Automotive - representing a 75 percent increase over a year ago. Chen also said that the company achieved a new sales record of steering gears for the month of March, with revenue of $6,260,000 and sales volume of 45,010 units.
Chen highlighted the addition of a new customer in March with the signing of a development agreement for power steering gears for the Lioncel model produced by Southeast Motor.
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 four 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. 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.
China Automotive Systems, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)
Three Months Ended March 31,
----------------------------
2005 2004
------ ------
Net sales $13,976,450 $11,391,716
Cost of sales 8,946,109 6,831,898
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Gross profit 5,030,341 4,559,818
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Costs and expenses:
Selling 674,068 409,406
General and
administrative 2,562,151 2,127,479
Depreciation and
amortization 180,664 115,706
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Total costs and
expenses 3,416,883 2,652,591
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Income from operations 1,613,458 1,907,227
---------- ----------
Other income (expense):
Other non-operating
income 25,319 118,833
Financial expenses (283,233) (84,805)
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Other income (expense),
net (257,914) 34,028
---------- ----------
Income before income taxes 1,355,544 1,941,255
Income taxes 250,962 312,400
---------- ----------
Income before minority
interest 1,104,582 1,628,855
Minority interests 238,399 599,157
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Income from continued
operations 866,183 1,029,698
Loss from discontinued
operations -- (15,909)
---------- ----------
Net income $ 866,183 $ 1,013,789
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Net income per common share -
Basic $0.04 $0.04
Diluted $0.04 $0.04
Weighted average number of
common shares outstanding -
Basic 22,574,542 21,574,542
Diluted 22,597,042 21,574,542