Advanced Battery Technologies Announces Second Quarter 2010 Financial Results


NEW YORK, Aug. 9, 2010 (GLOBE NEWSWIRE) -- Advanced Battery Technologies, Inc. (Nasdaq:ABAT), a leading developer, manufacturer and distributor of rechargeable Polymer Lithium-Ion (PLI) batteries as well as a manufacturer of electric vehicles, today announced financial results for the second quarter ended June 30, 2010.

Second Quarter Financial Highlights

-         Revenue increased 65.8% year-over-year to $22.8 million.

-          Gross profit increased 74.9% year-over-year to $11.0 million.

-          Net income increased 315.0% year-over-year to $12.5 million.

-          Earnings per diluted share increased 250.9% year-over-year to $0.18.

-          Strong balance sheet with $62.4 million in cash and cash equivalents as of June 30, 2010.

Mr. Zhiguo Fu, CEO of ABAT, stated, "We are pleased with our results during the second quarter. During the quarter, we experienced strong demand in both domestic and international markets for electric and hybrid electric vehicles as individuals and industries switch to alternate forms of transportation. We are still upgrading the capacity of two battery production lines and are aiming to complete the upgrade in the third quarter in order to meet the strong battery demand from customers."

Second Quarter 2010 Financial Results

The Company had total revenues of $22.8 million for the three months ended June 30, 2010, an increase of $9.1 million or 65.8%, compared to $13.8 million for the three months ended June 30, 2009. The increase in revenues was primarily due to the contribution of sales from the electric vehicle business, which the Company acquired on May 4, 2009. Sales of electric vehicles for the three months ended June 30, 2010 totaled $12.6 million, compared to $3.6 million in the three months ended June 30, 2009. Large capacity battery cells generated $4.1 million in sales, or 18.0% of total revenue in the second quarter of 2010. Medium capacity battery cells generated $2.7 million in sales, or 11.8% of total revenue in the second quarter of 2010. Small capacity battery cells generated $0.9 million in sales, or 3.8% of total revenue in the second quarter of 2010. Miner's lamp battery cells generated $2.5 million in sales, or 11.1% of total revenue in the second quarter of 2010.

During the three months ended June 30, 2010, gross profit was $11.0 million, an increase of 74.9% year-over year. Gross margin in the second quarter of 2010 was 48.3%, compared to 45.8% a year ago, mainly due to more electric vehicle sales in overseas markets with a higher price premium.

Operating income in the second quarter of 2010 was $9.0 million, an increase of 279.4% year-over-year, from $2.4 million in the prior year's period. Operating expenses decreased to $2.0 million in the second quarter of 2010 from $3.9 million in the second quarter of 2009. The decrease is primarily due to Wuxi ZQ's lower selling and administration expenses of approximately $1.4 million in the three months ended June 30, 2010 compared to approximately $2.4 million, including one-time bad debt allowance associated with the acquisition, in the same period of 2009, In addition, ABAT's U.S. office incurred lower administrative expenses in the second quarter of 2010.

Pre-tax income of $13.3 million in the second quarter of 2010, including a gain of $4.2 million from change in fair value of warrants, represents an increase of $6.2 million from $7.2 million in the same period of 2009. Pre-tax income in the second quarter of 2009, however, included a one-time gain on acquisition purchase of $9.9 million and a loss of $5.0 million from change in fair value of warrants. After taxes of $0.8 million accrued in the three months ended June 30, 2010, the Company's net income increased 315.0% to $12.5 million, or $0.18 per diluted share, from $3.0 million, or $0.05 per diluted share, in the same period of 2009.   

At July 31, 2010 we had a backlog of around $63.3 million for delivery throughout the next 12 months, including a battery backlog of approximately $50.5 million.

About Advanced Battery Technologies, Inc.

Advanced Battery Technologies, Inc. (Nasdaq:ABAT), founded in September 2002, develops, manufactures and distributes rechargeable Polymer Lithium-Ion (PLI) batteries. The Company's products include rechargeable PLI batteries for electric automobiles, motorcycles, mine-use lamps, notebook computers, walkie-talkies and other electronic devices. ABAT's batteries combine high-energy chemistry with state-of-the-art polymer technology to overcome many of the shortcomings associated with other types of rechargeable batteries. Early in 2009, the Company acquired Wuxi Angell Autocycle Co. Ltd., an electric vehicle business, and renamed it Wuxi Zhongqiang Autocycle Co., Ltd. ("Wuxi ZQ").  The Company has a New York office, with its executive offices and manufacturing facilities in China. 

Safe Harbor Statement

Certain statements in this release and other written or oral statements made by or on behalf of the Company are "forward-looking statements" within the meaning of the federal securities laws. Statements regarding future events and developments and our future performance, as well as management's expectations, beliefs, plans, estimates or projections relating to the future are forward-looking statements within the meaning of these laws. The forward-looking statements are subject to a number of risks and uncertainties including market acceptance of the Company's services and projects and the Company's continued access to capital and other risks and uncertainties. The actual results the Company achieves may differ materially from those contemplated by any forward-looking statements due to such risks and uncertainties. These statements are based on our current expectations and speak only as of the date of such statements.

ADVANCED BATTERY TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
     
ASSETS    
  June 30, December 31,
  2010 2009
  (Unaudited)  
Current assets:    
Cash and cash equivalents $62,416,290 $52,923,358
Accounts receivable, net 21,960,884 22,406,927
Inventories, net 6,232,248 3,680,098
Loan receivable, net 1,600,000 1,600,000
Other receivables 293,351 107,751
Advance to suppliers, net 4,854,838 7,940,129
Total Current Assets 97,357,612 88,658,263
     
Property, plant and equipment, net     
Total Fixed Assets 53,348,554 47,248,600
     
Other assets:    
Investment in unconsolidated entity 786,933 785,057
Investment advance 1,467,800 1,457,034
Deposit for long-term assets 2,794,323 2,860,882
Intangible assets, net 13,977,262 14,317,502
Goodwill 2,490,578 2,472,311
Other assets 51,236 26,705
Total other assets 21,568,132 21,919,491
     
Total Assets $172,274,298 $157,826,354
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
     
Current liabilities:    
Short-term loan  $ --  $2,916,071
Accounts payable 1,827,693 670,254
Advance from Customers 227,345 228,871
Accrued expenses and other payables 914,149 1,389,130
Total Current Liabilities 2,969,187 5,204,326
     
Long term liabilities:    
Deferred tax liability 3,468,262 3,468,262
Warrant liability 11,824,055 17,221,335
Total Liabilities 18,261,504 25,893,923
     
Stockholders' Equity    
Preferred stock, $0.001 face value, 5,000,000 shares authorized;   $ --   $-- 
2 shares issued and 2 shares outstanding as of June 30, 2010 and December 31, 2009    
Common stock, $0.001 par value, 150,000,000 shares authorized;  68,796 68,778
 68,796,720 shares issued and 68,602,139 shares outstanding as of June 30, 2010    
 and 68,778,112 shares issued and 68,583,531 shares outstanding as of December 31, 2009    
Additional paid-in-capital 74,928,865 74,114,122
Accumulated other comprehensive income 6,727,123 5,496,334
Retained earnings 72,787,500 52,752,687
Less: Cost of treasury stock (194,581 shares as of June 30,2010 and December 31, 2009 )  (499,490) (499,490)
Total Stockholders' Equity 154,012,794 131,932,431
     
Total Liabilities and Stockholders' Equity $172,274,298 $157,826,354
 
ADVANCED BATTERY TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
(UNAUDITED)
  For Three-month ended June 30, For Six Months ended June 30,
  2010 2009 2010 2009
    (Restated)   (Restated)
         
Revenues $22,835,358 $13,771,583 $42,384,375 $24,457,320
         
Cost of Goods Sold 11,796,140 7,458,600 21,729,456 13,109,789
         
Gross Profit 11,039,218 6,312,983 20,654,919 11,347,531
         
Operating Expenses        
Research & Development expenses  --  188,472  --  188,472
Selling, general and administrative 1,992,830 3,740,079 4,608,779 4,636,398
         
Operating income 9,046,388 2,384,432 16,046,140 6,522,661
         
Other Income (Expenses)        
Interest income 80,138 96,198 187,336 170,546
Interest (expense) (133) (206,219) (39,793) (206,219)
Equity gain (loss) from unconsolidated entity 3,315 (57,862) 1,876 (67,660)
Gain on bargain purchase  --  9,909,320  --  9,909,320
Change in fair value of warrants 4,191,406 (4,976,178) 5,397,280 (4,511,492)
Other income (expenses)  --  13,708  --  13,708
Total other income (expenses) 4,274,726 4,778,967 5,546,698 5,308,203
         
Income Before Income Taxes 13,321,114 7,163,399 21,592,837 11,830,864
         
Provision for Income Taxes (Benefit)        
Income tax-Current 810,875 681,211 1,558,027 1,283,693
Income tax-Deferred  --  3,468,262  --  3,468,262
         
Net income $12,510,240 $3,013,926 $20,034,811 $7,078,909
         
Other Comprehensive Income        
Foreign currency translation adjustment 811,204 68,288 1,230,789 (29,536)
         
Comprehensive Income $13,321,444 $3,082,214 $21,265,601 $7,049,373
         
Earnings per share        
Basic $0.20 $0.06 $0.33 $0.15
Diluted $0.18 $0.05 $0.29 $0.13
         
Weighted average number of common shares outstanding        
Basic 61,549,661 48,901,584 61,544,259 47,983,579
Diluted 68,661,790 58,056,619 68,656,388 56,553,099
 
ADVANCED BATTERY TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
  For the Six Months ended June 30,
  2010 2009
    (Restated)
Cash Flows From Operating Activities:    
Net income $20,034,811 $7,078,909
Adjustments to reconcile net income to net cash provided by (used in) operating activities:    
Gain on bargain purchase  --  (9,909,320)
Deferred income tax  --  3,468,262
Depreciation and amortization 2,210,253 854,137
Amortization of deferred consulting expenses 58,188 79,375
Amortization of stock based compensation expense 756,573 835,519
Equity gain (loss) of unconsolidated entity (1,876) 67,660
Provision for doubtful accounts and inventory valuation allowance 636,260 643,436
Gain on disposal of fixed asset (146)  -- 
Change in fair value of warrants (5,397,280) 4,511,492
     
Changes in operating assets and liabilities:    
Accounts receivable 62,213 (584,589)
Inventories (2,518,300) (1,621,165)
Other receivable & prepayments 3,291,081 (692,543)
Accounts payable, accrued expenses and other payables 578,670 (3,038,975)
Advances from Customer (3,211) (1,210,714)
     
Net cash provided by (used in) operating activities 19,707,236 481,484
     
Cash Flows From Investing Activities:    
Deposit for long-term assets (1,419,217) (4,596,962)
Purchase of property, plant and equipment  (6,102,708) (101,684)
Disposal of property, plant and equipment  5,127  -- 
Cash acquired from business combination  --  837,081
     
Net cash used in investing activities (7,516,797) (3,861,565)
     
Cash Flows From Financing Activities    
Repayment of bank loan (2,929,930)  -- 
Purchase of treasury stock  --  (203,788)
Proceeds from issuance of preferred stock, net  --  16,041,861
Loan receivable  --  (19,355)
Repayment of officer loan  --  (135,884)
     
Net cash provided by financing activities (2,929,930) 15,682,834
     
Effect of exchange rate changes on cash and cash equivalents 232,424 (12,365)
     
Increase in cash and cash equivalents  9,492,932 12,290,388
     
Cash and Cash Equivalents - Beginning of period 52,923,358 32,746,155
     
Cash and Cash Equivalents - End of period $62,416,290 $45,036,543
     
SUPPLEMENTAL CASH FLOW INFORMATION:    
 During the year cash was paid with the following:    
 Interest expense $47,323 $152,983
 Income taxes $2,409,719 $425,111
     
NON-CASH INVESTING AND FINANCING ACTIVITIES:    
 Common stock issued for stock-based compensation $72,030 $210,500
 Common stock issued for acquisition of Wuxi ZQ  $ --  $9,870,000
 Option issued to executives for service  $ --  $777,660


            

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