Form 8-K CHINA AUTOMOTIVE SYSTEMS For: Mar 28

March 28, 2019 6:50 AM EDT

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): March 28, 2019

 

China Automotive Systems, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

Delaware 000-33123 33-0885775

(State or other jurisdiction of

incorporation or organization)

(Commission File Number)

(I.R.S. Employer

Identification No.)

 

No. 1 Henglong Road, Yu Qiao Development Zone
Shashi District, Jing Zhou City
Hubei Province
The People’s Republic of China

(Address of principal executive offices, including zip code)

 

Registrant’s telephone number, including area code (86) 27-8757-0028

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

  o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

  o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

  o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

  o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

 

Item 2.02 Results of Operations and Financial Condition

 

On March 28, 2019, China Automotive Systems, Inc. (the “Company”) issued a press release announcing financial results for the year ended December 31, 2018. The press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

 

The information in this Item 2.02 and in Exhibit 99.1 attached to this Form 8-K is furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section.

 

 

Item 9.01 Financial Statements and Exhibits

 

  (d) Exhibits

 

Exhibit No   Description
   
99.1 Press Release of China Automotive Systems, Inc. dated March 28, 2019.

 

2

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

    China Automotive Systems, Inc.  
    (Registrant)  
         
Date: March 28, 2019   By:  /s/ Hanlin Chen  
      Hanlin Chen  
      Chairman  

 

3

 

 

Exhibit 99.1

 

China Automotive Systems Reports Fourth Quarter
and Fiscal 2018 Results

 

WUHAN, China, March 28, 2019 -- 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 fourth quarter and the audited results for the fiscal year ended December 31, 2018.

 

Fourth Quarter 2018 Highlights

·Net sales were $124.3 million compared to $143.7 million in the fourth quarter of 2017
·Net loss attributable to parent company's common shareholders was $3.2 million, or diluted loss per share of $0.10, compared to a net loss of $39.0 million, or diluted loss per share of $1.23, in the fourth quarter of 2017, reflected a one-time corporate tax accrual of $35.6 million recognized in the fourth quarter of 2017 as mandated by the 2017 U.S. tax reform.

 

Fiscal Year 2018 Highlights

·Net sales were $496.2 million compared to $499.1 million in 2017
·Diluted income per share attributable to parent company's common shareholders was $0.08 compared to a diluted loss per share attributable to parent company's common shareholders of $0.61 in 2017
·Cash and cash equivalents, pledged cash and short-term investments were $133.5 million as of December 31, 2018
·Net cash flow from operating activities was $12.5 million

 

Mr. Qizhou Wu, chief executive officer of CAAS, commented, "Our performance in 2018 reflected the slower growth of the automotive industry in China as the world’s largest automotive market experienced lower overall sales for the first time in more than two decades. Overall auto sales declined by 2.8% in 2018 with weakness in every month during the second half of the year. Car sales declined by 4.1% compared with a 5.1% increase in the much smaller commercial vehicle market in 2018.”

 

“Our sales continued to be buoyed by our advanced hydraulic steering products as we transitioned our electric power steering (“EPS”) products into our new Hubei KYB joint venture, which began operations during 2018. EPS sales comprised 21.7% of net sales in 2018.”

 

“We have entered into other new joint ventures and development contracts for future growth. In late 2018, we entered into a new joint venture agreement with Hyoseong Electric Co. Ltd. ("Hyoseong Electric") to establish a new joint venture company to design, manufacture and sell electric motors for automotive EPS. CAAS owns 51% of this new joint venture and it is expected to have an annual capacity of 4.5 million units upon completion. Due to our excellent record of new product development, one of our tier-1 customers in North America awarded CAAS a development program for a new recirculating-ball ("RCB") steering system ("i-RCB Program") for use in that company’s autonomous vehicle product development. We expect to begin mass production of this system in August 2019 with annual sales of approximately 45,000 units. Additionally, in March 2019, we also announced that Great Wall Motor Company Limited, one of China’s leading auto producers, has awarded an exclusive supply contract for CAAS to supply its EPS systems to steer its new all-electric small vehicle, model ORA R150. Total shipments are expected to reach 150,000 units in 2019.”

 

 

 

 

“Our export sales grew by 22.3% in 2018 compared with 2017, and represented approximately 28.5% of total sales in 2018. Most export sales were to the United States and represented sales to our two tier-1 OEM customers that supply vehicles in North America. In 2018, we received the Q1 Award from Ford North America. This is the highest honor for a supplier from Ford and it means we have met the most stringent quality management and execution standards. We remain well positioned with our broad line of advanced steering products and we have received supply awards from our customers.”

 

Mr. Jie Li, chief financial officer of CAAS, commented, “We continue to focus on generating cash flow from operations to further build our financial strength. Our joint ventures and product development contracts are solidifying relationships and enhancing our abilities to meet the current and future needs of our diverse customer base.”

 

Fourth Quarter of 2018

In the fourth quarter of 2018, net sales were $124.3 million compared to $143.7 million in the same quarter of 2017. The net sales decrease was mainly due to the weaker Chinese auto market in the fourth quarter of 2018 compared with the fourth quarter of 2017.

 

Gross profit was $11.4 million compared to $16.5 million in the fourth quarter of 2017. The decrease in gross profit was primarily due to the decrease in net sales and change of product mix. Gross margin in the fourth quarter of 2018 was 9.2%, compared to 11.4% in the fourth quarter of 2017.

 

Gain on other sales was $1.0 million, compared to $1.7 million in the fourth quarter of 2017.

 

Selling expenses were $4.9 million in the fourth quarter of 2018, compared to $6.8 million in the fourth quarter of 2017. The decline was primarily due to lower transportation expenses related to decreased volume. Selling expenses represented 3.9% of net sales in the fourth quarter of 2018 compared to 4.7% in the fourth quarter of 2017.

 

General and administrative expenses ("G&A expenses") increased to $7.2 million from $5.5 million in the fourth quarter of 2017. G&A expenses represented 5.8% of net sales in the fourth quarter of 2018 compared to 3.8% of net sales in the fourth quarter of 2017. The increase in G&A expenses and G&A expenses as a percentage of net sales in the fourth quarter of 2018 was mainly due to lower net sales and higher personnel costs.

 

Research and development expenses ("R&D expenses") were $10.2 million in the fourth quarter of 2018, compared to $9.9 million in the fourth quarter of 2017. R&D expenses represented 8.2% of net sales in the fourth quarter of 2018 compared to 6.9% in the fourth quarter of 2017.

 

Loss from operations was $9.9 million in the fourth quarter of 2018 compared to a loss of $4.0 million in the fourth quarter of 2017. The higher loss was mainly due to lower sales and a decline in the gross profit compared to the fourth quarter of 2017.

 

Net financial income was $1.2 million in the fourth quarter of 2018, compared to $0.2 million in the fourth quarter of 2017.

 

 

 

 

Net loss attributable to parent company's common shareholders was $3.2 million in the fourth quarter of 2018 compared to $39.0 million in the fourth quarter of 2017. The loss in the fourth quarter of 2017 was primarily due to a one-time accrued tax of $35.7 million mandated by the 2017 U.S. tax reform, and accrued withholding tax of $4.0 million related to the planned dividend distribution from PRC subsidiaries in order to fulfill the payment of a one-time accrued tax. Diluted loss per share was $0.10 in the fourth quarter of 2018, compared to diluted income per share of $1.23 in the fourth quarter of 2017.

 

The weighted average number of diluted common shares outstanding was 31,645,510 in the fourth quarter of 2018, compared to 31,646,897 in the fourth quarter of 2017.

 

Fiscal Year 2018

Annual net sales were $496.2 million in 2018 compared to $499.1 million in 2017. The overall decrease was mainly due to lower sales of EPS systems partially offset by higher sales of advanced legacy hydraulic products. EPS sales represented 21.7% of total revenue in 2017.

 

Gross profit in 2018 was $65.4 million compared to $84.6 million in 2017. The decrease in gross profit was primarily due to lower net sales, a change in product mix and higher raw material costs.

 

Gain on other sales mainly consisted of the net amount retained from the sales of materials, property, plant and equipment and scraps. For the year ended December 31, 2018, gain on other sales amounted to $3.9 million compared to $7.6 million in 2017. The decrease in gain on other sales was primarily due to the disposal of a building and higher scrap volume in 2017.

 

Selling expenses were $18.9 million compared to $19.9 million in 2017, which was mainly due to lower net sales resulting in decreased transportation expenses during the year. Selling expenses represented 3.8% of net sales in each of 2018 and in 2017.

 

G&A expenses were $19.8 million compared to $19.5 million in 2017. The increase was primarily due to higher personnel costs and professional service fees. G&A expenses represented 4.0% of net sales in 2018 compared to 3.9% of net sales in 2017.

 

R&D expenses were $33.6 million in 2018, generally consistent with $33.5 million in 2017. R&D expenses represented 6.8% of net sales in 2018, compared to 6.7% of net sales in 2017.

 

Operating loss was $2.9 million in 2018 compared to operating income of $19.3 million in 2017. The decrease was primarily due to lower gross profit in 2018.

 

Interest expense was $2.9 million in 2018, compared to interest expense of $1.8 million in 2017 due primarily to higher interest rates on loans in 2018.

 

Net financial income was $2.2 million in each of 2018 and 2017.

 

 

 

 

Loss before income tax expenses and equity in earnings of affiliated companies was $2.5 million for 2018, compared to income before income tax expenses and equity in earnings of affiliated companies of $20.4 million for 2017. This decrease was mainly due to the higher operating loss and higher interest rates.

 

Income tax benefit was $1.5 million for the year ended December 31, 2018, compared to income tax expense of $41.6 million for the year ended December 31, 2017. The income tax expense in 2017 resulted primarily from a one-time accrued tax of $35.6 million recognized in the fourth quarter of 2017 that represented management’s estimate of the amount of U.S. corporate income tax for the mandatory repatriation of the Company’s share of previously deferred earnings of certain non-U.S. subsidiaries of the Company as mandated by the recent U.S. tax reform. The Company elected to pay the one-time accrued tax over eight years commencing in April 2018. In addition, withholding tax of $3.9 million was accrued in the fourth quarter of 2017 in order to fund the payment of such one-time accrued tax since the Company plans to distribute dividends from its PRC subsidiaries to the Company. Excluding the one-time accrued tax and withholding tax discussed above, income tax expense was $1.9 million in 2017. The effective tax rate was 58.6% in 2018 and the effective tax rate (excluding the impact of the one-time transition tax) was approximately 10.0% in 2017. The increase in effective tax rate was mainly due to the decreased net income and additional R&D expense super-deductions allowed in 2018 according to China’s new tax regulation.

 

Net income attributable to parent company's common shareholders was $2.4 million in 2018 compared to a net loss attributable to parent company's common shareholders of $19.3 million in 2017. Diluted net income per share was $0.08 in 2018, compared to diluted loss per share of $0.61 in 2017.

 

The weighted average number of diluted common shares outstanding was 31,645,594 in 2018 compared to 31,646,897 in 2017.

 

Balance Sheet

 

As of December 31, 2018, total cash and cash equivalents, pledged cash and short-term investments were $133.5 million, total accounts receivable including notes receivable were $256.3 million, accounts payable were $210.1 million and bank and government loans were $61.2 million. Total parent company stockholders' equity was $285.9 million as of December 31, 2018, compared to $299.4 million as of December 31, 2017. To date, a total of 146,281 shares have been repurchased for consideration of $0.8 million under a repurchase program approved on December 5, 2018. Net cash flow from operating activities was $12.5 million in 2018.

 

Business Outlook

 

Management has provided revenue guidance for the full year 2019 of $510 million. This target is based on the Company's current views on operating and market conditions, which are subject to change.

 

Conference Call

 

Management will conduct a conference call on March 28, 2019 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:

 

US Toll Free: +1-877-407-8031

 

International: +1-201-689-8031

 

China (toll free): + 86 400 120 2840

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 nine 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 Chrysler Group LLC 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 28, 2019, and in documents subsequently filed by the Company from time to time with the Securities and Exchange Commission. 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

+1-212-521-4050

Kevin.Theiss@awakenlab.com

 

 

-Tables Follow –

 

 

 

 

China Automotive Systems, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands of USD, except share and per share amounts)

 

   December 31, 
   2018   2017 
ASSETS          
Current assets:          
Cash and cash equivalents  $86,346   $64,558 
Pledged cash   29,623    31,535 
Short-term investments   17,543    29,587 
Accounts and notes receivable, net - unrelated parties   237,519    274,989 
Accounts and notes receivable, net - related parties   18,825    19,086 
Advance payments and others - unrelated parties   16,270    12,790 
Advance payments and others - related parties   1,281    20,841 
Inventories   88,021    79,217 
     Total current assets   495,428    532,603 
Non-current assets:          
Property, plant and equipment, net   129,853    126,033 
Intangible assets, net   605    661 
Other receivables, net - unrelated parties   1,799    2,188 
Advance payment for property, plant and equipment - unrelated parties   6,135    9,657 
Advance payment for property, plant and equipment - related parties   8,723    5,264 
Long-term investments   32,620    27,596 
Deferred tax assets   15,336    13,367 
     Total assets  $690,499   $717,369 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current liabilities:          
Bank and government loans  $60,952   $72,711 
Accounts and notes payable - unrelated parties   205,643    233,048 
Accounts and notes payable - related parties   4,477    7,168 
Customer deposits   750    1,128 
Accrued payroll and related costs   7,346    8,577 
Accrued expenses and other payables   47,032    40,127 
Accrued pension costs   3,282    4,051 
Taxes payable   11,137    5,927 
Amounts due to shareholders/directors   317    343 
Advances payable (current portion)   364    383 
     Total current liabilities   341,300    373,463 
Long-term liabilities:          
Long-term government loan   291    306 
Advances payable   1,654    359 
Other long-term payable   8,726    - 
Deferred tax liabilities   4,198    4,393 
Long-term taxes payable   29,503    32,719 
     Total liabilities   385,672    411,240 
Commitments and Contingencies (Note 31)          
Stockholders’ Equity          
Common stock, $0.0001 par value - Authorized - 80,000,000 shares - Issued - 32,338,302 and 32,338,302 shares at December 31, 2018 and 2017, respectively   3    3 
Additional paid-in capital   64,429    64,406 
Retained earnings-          
Appropriated   11,104    10,707 
Unappropriated   211,439    209,459 
Accumulated other comprehensive income   1,855    17,780 
Treasury stock - 711,698 and 694,298 shares at December 31, 2018 and 2017, respectively   (2,953)   (2,907)
     Total parent company stockholders’ equity   285,877    299,448 
Non-controlling interests   18,950    6,681 
Total stockholders’ equity   304,827    306,129 
Total liabilities and stockholders’ equity  $690,499   $717,369 

 

 

 

 

China Automotive Systems, Inc. and Subsidiaries

Consolidated Statements of Income and Loss

(In thousands of USD, except share and per share amounts)

 

   Year Ended December 31, 
   2018   2017 
         
Net product sales ($37,606 and $37,583 sold to related parties for the years ended December 31, 2018 and 2017)  $496,158   $499,063 
Cost of products sold ($25,558 and $28,994 purchased from related parties for the years ended December 31, 2018 and 2017)   430,745    414,429 
     Gross profit   65,413    84,634 
Net gain on other sales   3,940    7,635 
Operating expenses:          
Selling expenses   18,949    19,912 
General and administrative expenses   19,761    19,543 
Research and development expenses   33,551    33,544 
Total operating expenses   72,261    72,999 
     Operating income   (2,908)   19,270 
Other income, net   1,173    678 
Interest expense   (2,928)   (1,753)
Financial income, net   2,162    2,180 
     (Loss)/income before income tax expenses and equity in earnings
      of affiliated companies
   (2,501)   20,375 
Less: Income taxes   (1,465)   41,633 
Add: Equity in net earnings of affiliates   1,115    2,619 
Net income/(loss)   79    (18,639)
Net (loss)/income attributable to non-controlling interest   (2,298)   707 
     Net income/(loss) attributable to parent company’s common
     shareholders
   2,377    (19,346)
           
Net income/(loss) attributable to parent company’s common shareholders per share -          
Basic  $0.08   $(0.61)
           
Diluted  $0.08   $(0.61)
           
Weighted average number of common shares outstanding -          
Basic   31,643,813    31,644,004 
Diluted   31,645,594    31,646,897 

 

 

 

  

China Automotive Systems, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income and Loss

(In thousands of USD unless otherwise indicated)

 

   Year Ended December 31, 
   2018   2017 
         
Net income/(loss)  $79   $(18,639)
Other comprehensive (loss)/income:          
Foreign currency translation (loss)/income   (16,548)   19,384 
Comprehensive (loss)/income   (16,469)   745 
Comprehensive (loss)/income attributable to non-controlling interest   (2,921)   1,352 
Comprehensive loss attributable to parent company  $(13,548)  $(607)

 

 

 

  

China Automotive Systems, Inc. and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity

(In thousands of USD, except share and per share amounts)

 

   2018   2017 
         
Common Stock          
Balance at January 1, 2018 and 2017 - 32,338,302 and 32,338,302 shares, respectively  $3   $3 
Balance at December 31, 2018 and 2017 - 32,338,302 and 32,338,302 shares, respectively  $3   $3 
           
Additional Paid-in Capital          
Balance at January 1  $64,406   $64,764 
Stock-based compensation   23    100 
Acquisition of the non-controlling interest in Brazil Henglong   -    (458)
Balance at December 31  $64,429   $64,406 
           
Retained Earnings – Appropriated          
Balance at January 1  $10,707   $10,549 
Appropriation of retained earnings   397    158 
Balance at December 31  $11,104   $10,707 
           
Unappropriated          
Balance at January 1  $209,459    228,963 
Net income/(loss) attributable to parent company   2,377    (19,346)
Appropriation of retained earnings   (397)   (158)
Balance at December 31  $211,439   $209,459 
           
Accumulated Other Comprehensive Income/(Loss)          
Balance at January 1  $17,780    (892)
Other comprehensive income related to the non-controlling interests acquired by the Company   -    (67)
Net foreign currency translation adjustment attributable to parent company   (15,925)   18,739 
Balance at December 31  $1,855   $17,780 
           
Treasury Stock          
Balance at January 1, 2018 and 2017 - 694,298 and 694,298 shares, respectively   (2,907)   (2,907)
Repurchase of common stock in 2018 and 2017 - 17,400 shares and nil shares, respectively   (46)   - 
Balance at December 31, 2018 and 2017 - 711,698 and 694,298 shares, respectively  $(2,953)   (2,907)
           
Total parent company stockholders’ equity  $285,877   $299,448 
           
Non-controlling Interest          
Balance at January 1  $6,681   $5,412 
Net foreign currency translation adjustment attributable to non-controlling interest   (623)   645 
Net (loss)/income attributable to non-controlling interest   (2,298)   707 
Other comprehensive income related to the non-controlling interests acquired by the Company   -    67 
Acquisition of the non-controlling interest in Brazil Henglong   -    458 
Contribution by non-controlling shareholder of Henglong KYB   15,728    - 
Distribution of retained earnings   (538)   (608)
Balance at December 31  $18,950   $6,681 
           
Total stockholders' equity  $304,827   $306,129 

 

 

 

  

China Automotive Systems, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In thousands of USD unless otherwise indicated)

 

   Year Ended December 31, 
   2018   2017 
         
Cash flows from operating activities:          
Net income/(loss)  $79   $(18,639)
Adjustments to reconcile net income to net cash provided by operating activities:          
Stock-based compensation   23    100 
Depreciation and amortization   16,816    15,358 
Deferred income taxes   (2,502)   4,143 
Inventory write downs   6,239    5,109 
Accrual of provision for doubtful accounts   887    887 
Equity in net (earnings) of affiliates   (1,115)   (2,617)
Gain on disposal of fixed assets   (445)   (2,184)
(Increase) decrease in:          
Accounts and notes receivable   27,526    30,908 
Advance payments and other   (3,790)   (529)
Inventories   (17,853)   (12,156)
Increase (decrease) in:          
Accounts and notes payable   (22,491)   2,533 
Customer deposits   (346)   411 
Accrued payroll and related costs   (964)   1,182 
Accrued expenses and other payables   8,893    560 
Accrued pension costs   (646)   (331)
Taxes payable   2,215    24,164 
     Net cash provided by operating activities   12,526    48,899 
           
Cash flows from investing activities:          
Purchase of short-term investments   (22,923)   (32,145)
Proceeds from maturities of short-term investments   34,175    35,780 
Increase in other receivables   337    198 
Cash received from property, plant and equipment sales   1,022    2,231 
Government subsidy received for purchase of property, plant and equipment   1,322    - 
Cash paid to acquire property, plant and equipment (including $9,207 and $9,791 paid to related parties for the years ended December 31, 2018 and 2017, respectively)   (25,764)   (27,096)
Cash paid to acquire intangible assets   (189)   (201)
Loan to a related party   -    (29,044)
Cash received from repayment of the loan to a related party   20,430    10,591 
Investment under equity method   (5,957)   (7,629)
     Net cash used in investing activities   2,453    (47,315)
           
Cash flows from financing activities:          
Proceeds from bank and government loans   78,917    72,237 
Repayment of bank and government loans   (92,215)   (43,154)
Proceeds from sale and leaseback transaction   11,758    - 
Payment to broker agents for repurchase of common stock   (300)   - 
Repayments of the borrowing for sale and leaseback transaction   (3,218)   - 
Dividends paid to the non-controlling interest holders of non-wholly owned subsidiaries   (524)   (623)
(Decrease) in amounts due to shareholders/directors   (26)   - 
Cash received from capital contributions by non-controlling interest holder   15,728    - 
     Net cash provided by financing activities   10,120    28,460 
           
Cash and cash equivalents affected by foreign currency   (5,223)   4,158 
Net increase in cash and cash equivalents   19,876    34,202 
Cash,  cash equivalents and pledged cash at beginning of year   96,093    61,891 
Cash, cash equivalents and pledged cash at end of year  $115,969   $96,093 

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

 

   Year Ended December 31, 
   2018   2017 
         
Cash paid for interest  $3,803   $654 
Cash paid for income taxes  $3,717   $4,643 

 

SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:

 

Non-cash investing activities:

 

   Year Ended December 31, 
   2018   2017 
         
Property, plant and equipment recorded during the year which previously were advance payments  $13,347   $19,879 
Accounts payable for acquiring property, plant and equipment  $1,046   $1,180 

 

 



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