Form 8-K CHINA AUTOMOTIVE SYSTEMS For: Mar 30

March 30, 2021 6:18 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 30, 2021

 

China Automotive Systems, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware 000-33123 33-0885775
(State or other jurisdiction of incorporation) (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 0027

 

(Former name or former address, if changed since last report)

 

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:

 

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

 

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

 

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

 

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

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class Trading Symbol Name of each exchange on which registered
Common Stock, $0.0001 par value CAAS The Nasdaq Capital Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in 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 30, 2021, China Automotive Systems, Inc. (the “Company”) issued a press release announcing financial results for the year ended December 31, 2020. 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 30, 2021.

 

 

 

 

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 30, 2021   By:  /s/ Hanlin Chen  
      Hanlin Chen  
      Chairman  

 

 

 

Exhibit 99.1

 

China Automotive Systems Reports Fourth Quarter
and Fiscal Year 2020 Results

 

WUHAN, China, March 30, 2021 -- 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, 2020.

  

Fourth Quarter 2020 Highlights

 

·Net sales rose 26.4% to $146.5 million from $115.9 million in the fourth quarter of 2019
·Gross profit increased 35.7% to $22.8 million from $16.8 million in the fourth quarter of 2019; gross margin increased to 15.6% compared with 14.5% in the fourth quarter of 2019
·An increase in general and administrative expenses was primarily due to a one-time, non-recurring $6.4 million expected credit loss provision related to the bankruptcy and reorganization proceedings of the Company’s customer, Brilliance Auto
·Net loss attributable to parent company's common shareholders was $3.2 million, or diluted loss per share of $0.10, compared to net income of $1.7 million, or diluted income per share of $0.06, in the fourth quarter of 2019. Included in the net loss for the fourth quarter of 2020 was a non-recurring $4.5 million expected credit loss provision, net of minority interests.

  

Fiscal Year 2020 Highlights

 

·Net sales were $417.6 million compared to $431.4 million in 2019
·Net loss attributable to parent company's common shareholders was $5.0 million in 2020 compared to net income attributable to parent company's common shareholders of $10.0 million in 2019. Included in the net loss for the 2020 year was a $6.4 million one-time, non-recurring expected credit loss provision for all outstanding account and notes receivables related to the bankruptcy and reorganization of its customer, Brilliance Auto
·Cash and cash equivalents, pledged cash and short-term investments were $138.2 million as of December 31, 2020
·Net cash flow provided by operating activities was $57.4 million in 2020 compared to $30.3 million for 2019
·Approximately 322,269 shares of common stock were repurchased during 2020.

 

Mr. Qizhou Wu, chief executive officer of CAAS, commented, "The automobile industry in China suffered in the first half of 2020 due to the COVID-19 pandemic. Nevertheless, with a strong rebound beginning in the late second quarter, the world’s largest auto market staged a remarkable comeback with total annual automobile sales down only 1.9% for the full year 2020. Passenger vehicles sales declined by 6.0% year-over-year while the commercial vehicle market achieved an 18.7% year-over-year growth including a 21.7% increase in truck sales due to higher infrastructure spending and the introduction of a new emission standard. We have participated in the commercial vehicle growth as we registered a record monthly sales of 70,000 units of commercial vehicle steering systems in November alone. Our growth in the Chinese commercial vehicle market remains strong in early 2021. We continued to maintain strong relationships with our large North American OEMs and in South America and believe 2021 will be an even better year.”

 

“New energy vehicle (NEV) sales in China grew by approximately 11.0% to nearly 1.4 million vehicles in 2020 and the government's target is to have NEVs account for 20% of auto sales by 2025. We shipped over 120,000 units of our electric power steering (“EPS”) for Chinese new energy vehicles. The major Chinese OEMs used our EPS products in 2020, including Great Wall Motors, Chery Automobile, BAIC, JAC Motors and Dongfeng Motor as well as emerging full-electric vehicle OEM Hozon Motors, which laid a solid foundation for our EPS products to gain greater market share in China.”

 

 

 

 

“We continue to emphasize new technologies and products. To improve penetration into the Chinese new energy vehicle space, our Henglong KYB joint venture is further advancing our EPS technology to better empower the Chinese electric vehicle market. And our Hyoseong (Wuhan) joint venture with Hyoseong Electric Co. Ltd. began manufacturing small electric motors which will further improve the capabilities of our EPS to address the needs of electric vehicles. To embrace the future of autonomous-driven commercial vehicles, our proprietarily designed intelligent RCB steering systems ("iRCB") are being mass-produced and undergoing testing, and they have drawn interest from a list of large Chinese OEMs,” Mr. Wu concluded.

 

Mr. Jie Li, chief financial officer of CAAS, commented, “Despite of pandemic induced challenges, we increased our cash flow from operations by almost 90% in 2020 compared with 2019. We continued to maintain our financial strength as we increased our cash, cash equivalent and short-term investments, and controlled inventory and receivable levels. During 2020, we purchased 322,269 of our common shares in the public market to enhance our shareholder value.”

 

Fourth Quarter of 2020

 

Net sales increased by 26.4% to $146.5 million in the fourth quarter of 2020 compared to $115.9 million in the same quarter of 2019. The net sales increase was mainly due to a change in the product mix and higher demand for Chinese domestic-branded automobiles in the fourth quarter of 2020 compared with the fourth quarter of 2019.

 

Gross profit rose by 35.7% to $22.8 million compared to $16.8 million in the fourth quarter of 2019. Gross margin in the fourth quarter of 2020 was 15.6% compared to 14.5% in the fourth quarter of 2019. The increase in gross profit and gross margin was primarily due to higher volume of sales, a change in the product mix and reduced costs compared with the fourth quarter of 2019.

 

Gain on other sales was $1.4 million, compared to $0.2 million in the fourth quarter of 2019.

 

Selling expenses were $5.6 million compared to $3.8 million in the fourth quarter of 2019. Selling expenses represented 3.8% of net sales in the fourth quarter of 2020 compared to 3.3% in the fourth quarter of 2019.

 

General and administrative expenses ("G&A expenses") were $14.3 million compared to $6.5 million in the fourth quarter of 2019. G&A expenses represented 9.8% of net sales in the fourth quarter of 2020 compared to 5.6% of net sales in the fourth quarter of 2019. The significantly higher G&A expenses in the fourth quarter were mainly attributable to a one-time, non-recurring expected credit loss provision of $6.4 million related to Brilliance Auto’s bankruptcy reorganization proceeding. Based upon conservative accounting practices, this charge, although non-cash in nature, accounted for all of the outstanding account receivables and note receivables from Brilliance Auto. The Company continues to work with Brilliance Auto on the receivables collection.

 

Research and development expenses ("R&D expenses") were $8.3 million compared to $8.6 million in the fourth quarter of 2019. R&D expenses represented 5.7% of net sales in the fourth quarter of 2020 compared to 7.4% in the fourth quarter of 2019.

 

Loss from operations was $4.0 million in the fourth quarter of 2020 compared with a loss from operations of $1.9 million in the fourth quarter of 2019. The higher loss was mainly due to the one-time, non-recurring expected loss provision related to Brilliance Auto’s bankruptcy reorganization proceeding.

 

Interest expense was $0.4 million in the fourth quarter of 2020, compared to $0.9 million in the fourth quarter of 2019.

 

 

 

 

Net loss attributable to parent company's common shareholders was $3.2 million in the fourth quarter of 2020 compared to net income attributable to parent company's common shareholders of $1.7 million in the fourth quarter of 2019. The net loss in the fourth quarter of 2020 was mainly due to a one-time, non-recurring $4.5 million expected credit loss provision for Brilliance Auto, net of minority interests. Diluted loss per share was $0.10 in the fourth quarter of 2020 compared to diluted income per share of $0.06 in the fourth quarter of 2019.

 

The weighted average number of diluted common shares outstanding was 31,077,196 in the fourth quarter of 2020 compared to 31,333,740 in the fourth quarter of 2019.

  

Fiscal Year 2020

 

Net sales decreased by 3.2% to $417.6 million in 2020 compared to $431.4 million in 2019. The decrease was mainly due to a 27.1% decrease in net sales in the first half of 2020 due to the COVID-19 pandemic’s impact on automobile sales in China and North America. In 2020, sales of hydraulic products increased 1.9% while total EPS systems declined by 24.8%. EPS sales represented 14.8% of total revenue in 2020 compared with 19.1% in 2019. Net sales of vehicle steering systems to the Company’s North American customers decreased by 4.7% in 2020 compared with 2019.

  

Gross profit in 2020 was $55.3 million compared to $63.4 million in 2019. The gross margin decreased to 13.3% from 14.7% in 2019 mainly due to a change in product mix and lower average selling prices.

 

Gain on other sales mainly consisted of the net amount retained from rental income, gain on disposal of intangible assets and the sales of property, plant and equipment and technical service revenue. For the year ended December 31, 2020, gain on other sales amounted to $4.3 million compared to $5.1 million in 2019. This decline was primarily due to a decrease in gain on disposal of property, plant and equipment.

 

Selling expenses were $14.5 million in 2020 compared to $14.3 million in 2019, mainly due to higher marketing expenditures. Selling expenses represented 3.5% of net sales in 2020 compared to 3.3% in 2019.

 

G&A expenses were $27.6 million compared with $20.0 million in 2019. The increase was mainly due to a one-time, non-recurring expected credit loss provision of $6.4 million reflecting all accounts and notes receivables. CAAS took the full provision in accordance with a conservative accounting practice, but will continue to spend effort on collection as the bankruptcy reorganization proceeding of Brilliance Auto is still underway. G&A expenses represented 6.6% of net sales in 2020 compared to 4.6% of net sales in 2019.

 

R&D expenses were $25.7 million in 2020 compared to $28.0 million in 2019. The decrease was due primarily to reduced activity from the impact of the COVID-19 earlier in the 2020, and tighter cost controls. R&D expenses represented 6.2% of net sales in 2020, compared to 6.5% of net sales in 2019.

 

Operating loss was $8.1 million in 2020 compared to operating income of $6.2 million in 2019. The loss was mainly due to lower sales and the one-time, non-recurring expected credit loss provision related to Brilliance Auto’s bankruptcy reorganization proceeding.

 

Interest expense was $1.6 million in 2020 compared with $3.0 million in 2019 as a result of decreased loans and lower interest rates.

 

 

 

 

Net financial expense was $4.9 million in 2020 compared with net financial income of $2.5 million in 2019 primarily due to an increase in foreign exchange losses because of exchange rate fluctuations.

 

Loss before income tax expenses and equity in earnings of affiliated companies was $12.2 million compared to income before income tax expenses and equity in earnings of affiliated companies of $7.6 million in 2019.

 

Net loss attributable to parent company's common shareholders was $5.0 million in 2020 compared to net income attributable to parent company's common shareholders of $10.0 million in 2019. The loss was mainly due to lower sales and a one-time, non-recurring $4.5 million expected credit loss provision with Brilliance Auto, net of minority interests. Diluted net loss per share was $0.16 in 2020 compared to diluted income per share of $0.32 in 2019.

 

The weighted average number of diluted common shares outstanding was 31,077,196 in 2020 compared to 31,458,926 in 2019.

 

Balance Sheet

 

As of December 31, 2020, total cash and cash equivalents, pledged cash and short-term investments were $138.2 million, total accounts receivable including notes receivable were $234.1 million, accounts payable including notes payable were $225.3 million and short-term bank and government loans were $44.2 million. Total parent company stockholders' equity was $303.2 million as of December 31, 2020, compared to $289.3 million as of December 31, 2019. During 2020, a total of 322,269 shares were repurchased for aggregate consideration of approximately $1.0 million under a repurchase program approved on August 13, 2020. Net cash flow from operating activities was $57.4 million in 2020.

 

Business Outlook

  

Management provides revenue guidance for the full year 2021 of $470 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 30, 2021 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 30, 2021, 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. 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@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, 
   2020   2019 
ASSETS        
Current assets:          
Cash and cash equivalents  $97,248   $76,715 
Pledged cash   30,813    29,688 
Short-term investments   10,139    5,832 
Accounts and notes receivable, net - unrelated parties (Allowance for credit losses of $9,853 and $2,379, respectively)   216,519    211,841 
Accounts and notes receivable, net - related parties (Allowance for credit losses of $1 and nil, respectively)   17,621    21,164 
Advance payments and others, net - unrelated parties (Allowance for credit losses of $58 and $73, respectively)   14,471    11,855 
Advance payments and others - related parties   522    1,287 
Inventories   88,325    82,931 
Total current assets   475,658    441,313 
Non-current assets:          
Property, plant and equipment, net   141,004    140,481 
Land use rights, net   10,774    10,346 
Intangible assets, net   1,730    1,352 
Operating lease assets   257    376 
Long-term time deposits   4,688    - 
Other receivables, net (Allowance for credit losses of $58 and $89, respectively)   179    307 
Advance payment for property, plant and equipment - unrelated parties   3,615    6,157 
Advance payment for property, plant and equipment - related parties   3,284    2,311 
Long-term investments   49,766    39,642 
Deferred tax assets   13,846    15,291 
Other non-current assets   2,759    2,580 
Total assets  $707,560   $660,156 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current liabilities:          
Bank and government loans  $44,238   $46,636 
Accounts and notes payable - unrelated parties   212,522    180,175 
Accounts and notes payable - related parties   12,730    6,492 
Customer deposits   1,482    1,303 
Accrued payroll and related costs   10,213    8,400 
Accrued expenses and other payables   55,607    45,341 
Accrued pension costs   3,192    3,161 
Taxes payable   13,149    11,493 
Operating lease liabilities - current portion   122    116 
Amounts due to shareholders/directors   344    309 
Advances payable (current portion)   885    353 
Total current liabilities   354,484    303,779 
Long-term liabilities:          
Long-term government loan   -    7,167 
Advances payable   3,722    3,486 
Operating lease liabilities - non-current portion   149    271 
Other long-term payable   1,126    4,948 
Deferred tax liabilities   4,280    4,253 
Long-term taxes payable   23,884    26,693 
           
Total liabilities   387,645    350,597 
           
           
Mezzanine equity:          
Redeemable non-controlling interests   523    - 
           
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, 2020 and 2019, respectively   3    3 
Additional paid-in capital   64,273    64,466 
Retained earnings-          
Appropriated   11,303    11,265 
Unappropriated   215,491    221,298 
Accumulated other comprehensive income/(loss)   17,413    (3,462)
Treasury stock - 1,486,526 and 1,164,257 shares at December 31, 2020 and 2019, respectively   (5,261)   (4,261)
Total parent company stockholders’ equity   303,222    289,309 
Non-controlling interests   16,170    20,250 
Total stockholders’ equity   319,392    309,559 
Total liabilities, mezzanine equity and stockholders’ equity  $707,560   $660,156 

 

 

 

 

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, 
   2020   2019 
         
Net product sales ($53,222 and $50,740 sold to related parties for the years ended December 31, 2020 and 2019)  $417,636   $431,427 
Cost of products sold ($23,879 and $23,814 purchased from related parties for the years ended December 31, 2020 and 2019)   362,295    368,076 
Gross profit   55,341    63,351 
Net gain on other sales   4,320    5,067 
Operating expenses:          
Selling expenses   14,506    14,270 
General and administrative expenses   27,581    19,976 
Research and development expenses   25,723    27,986 
Total operating expenses   67,810    62,232 
Operating (loss)/income   (8,149)   6,186 
Other income, net   2,438    1,957 
Interest expense   (1,592)   (3,034)
Financial (expense)/income, net   (4,897)   2,456 
(Loss)/income before income tax expenses and equity in earnings of affiliated companies   (12,200)   7,565 
Less: Income taxes   2,163    586 
Add: Equity in earnings of affiliated companies   4,092    1,406 
Net (loss)/income   (10,271)   8,385 
Net loss attributable to non-controlling interest   (5,300)   (1,577)
Accretion to redemption value of redeemable non-controlling interests   (9)   - 
Net (loss)/income attributable to parent company’s common shareholders   (4,980)   9,962 
           
Net (loss)/income attributable to parent company’s common shareholders per share -          
Basic  $(0.16)  $0.32 
           
Diluted  $(0.16)  $0.32 
           
Weighted average number of common shares outstanding -          
Basic   31,077,196    31,456,828 
Diluted   31,077,196    31,458,926 

  

 

 

 

China Automotive Systems, Inc. and Subsidiaries

 

Consolidated Statements of Comprehensive Income or Loss

 

(In thousands of USD unless otherwise indicated)

  

   Year Ended December 31, 
   2020   2019 
         
Net (loss)/income   (10,271)   8,385 
Other comprehensive loss:          
Foreign currency translation gain/(loss)   22,386    (5,736)
Comprehensive income   12,115    2,649 
Comprehensive loss attributable to non-controlling interest   (3,780)   (1,997)
Comprehensive income attributable to parent company  $15,895   $4,646 

 

 

 

 

China Automotive Systems, Inc. and Subsidiaries

 

Consolidated Statements of Changes in Stockholders’ Equity

 

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

 

   2020   2019 
         
Common Stock          
Balance at January 1, 2020 and 2019 - 32,338,302 and 32,338,302 shares, respectively  $3   $3 
Balance at December 31, 2020 and 2019 - 32,338,302 and 32,338,302 shares, respectively  $3   $3 
           
Additional Paid-in Capital          
Balance at January 1  $64,466   $64,466 
Acquisition of the non-controlling interest in USAI   (29)   - 
Acquisition of the non-controlling interest in Changchun Hualong   (76)   - 
Deemed distribution to shareholders   (88)   - 
Balance at December 31  $64,273   $64,466 
           
Retained Earnings - Appropriated          
Balance at January 1  $11,265   $11,104 
Appropriation of retained earnings   38    161 
Balance at December 31  $11,303   $11,265 
           
Unappropriated          
Balance at January 1  $221,298   $211,497 
Net (loss)/income attributable to parent company   (4,971)   9,962 
Accretion of redeemable non-controlling interests   (9)   - 
Cumulative effect of accounting change - credit loss   (789)   - 
Appropriation of retained earnings   (38)   (161)
Balance at December 31  $215,491   $221,298 
           
Accumulated Other Comprehensive (Loss)/Income          
Balance at January 1  $(3,462)  $1,855 
Net foreign currency translation adjustment attributable to parent company   20,875    (5,317)
Balance at December 31  $17,413   $(3,462)
           
Treasury Stock          
Balance at January 1, 2020 and 2019 - 1,164,257 and 711,698 shares, respectively  $(4,261)  $(2,953)
Repurchase of common stock in 2020 and 2019 - 322,269 shares and 452,559 shares, respectively   (1,000)   (1,308)
Balance at December 31, 2020 and 2019 - 1,486,526 and 1,164,257 shares, respectively  $(5,261)  $(4,261)
           
Total parent company stockholders’ equity  $303,222   $289,309 
           
Non-controlling Interest          
Balance at January 1  $20,250   $19,037 
Net foreign currency translation adjustment attributable to non-controlling interest   1,511    (419)
Net loss attributable to non-controlling interest   (5,300)   (1,577)
Cumulative effect of accounting change - credit loss   (102)   - 
Acquisition of the non-controlling interest in USAI   29    - 
Acquisition of the non-controlling interest in Changchun Hualong   (5)   - 
Contribution by non-controlling shareholder of Wuhu Hongrun   217    - 
Contribution by non-controlling shareholder of Wuhan Hyoseong   -    3,542 
Dividends declared to non-controlling interest holders of non-wholly owned subsidiaries   (430)   (333)
Balance at December 31  $16,170   $20,250 
           
Total stockholders' equity  $319,392   $309,559 

 

 

 

 

China Automotive Systems, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In thousands of USD unless otherwise indicated)

 

   Year Ended December 31, 
   2020   2019 
         
Cash flows from operating activities:          
Net income  $(10,271)  $8,385 
Adjustments to reconcile net income to net cash provided by operating activities:          
Depreciation and amortization   22,057    17,852 
Deferred income taxes   2,205    16 
Allowance for credit losses   6,238    (441)
Equity in net earnings of affiliates   (4,092)   (1,406)
Loss/(gain) on disposal of fixed assets   129    (632)
Government subsidy reclassified from government loans   287    - 
(Increase)/decrease in:          
Accounts and notes receivable   7,295    21,044 
Advance payments and others   1,176    4,733 
Inventories   (109)   3,992 
Increase/(decrease) in:          
Accounts and notes payable   27,248    (22,138)
Customer deposits   93    561 
Accrued payroll and related costs   1,239    1,115 
Accrued expenses and other payables   7,069    (1,353)
Accrued pension costs   (166)   (96)
Taxes payable   (3,474)   (1,326)
Advances payable   502    - 
Net cash provided by operating activities   57,426    30,306 
           
Cash flows from investing activities:          
Purchase of short-term investments and long-term time deposits   (60,055)   (19,647)
Proceeds from maturities of short-term investments   53,393    31,268 
Decrease in demand loans and employee housing loans included in other receivables   165    1,504 
Loan to a related party   (151)   - 
Cash received from property, plant and equipment sales   1,495    1,561 
Government subsidy received for purchase of property, plant and equipment   -    1,898 
Cash paid to acquire property, plant and equipment and land use rights (including $2,668 and $5,238 paid to related parties for the years ended December 31, 2020 and 2019, respectively)   (15,825)   (34,409)
Cash paid to acquire intangible assets   (741)   (1,505)
Cash received from long-term investment   3,322    579 
Investment under equity method   (5,360)   (6,018)
Cash prepaid for acquisition of a subsidiary   -    (2,560)
Net cash used in by investing activities   (23,757)   (27,329)
           
Cash flows from financing activities:          
Proceeds from bank and government loans   39,813    57,101 
Repayment of bank loans   (53,046)   (65,576)
Payment to broker agents for repurchase of common stock   (2,990)   (1,308)
Repayments of the borrowing for sale and leaseback transaction   (4,163)   (4,164)
Deemed distribution to shareholders   (88)   - 
Acquisition of non-controlling interest   (81)   - 
Dividends paid to the non-controlling interest holders of non-wholly owned subsidiaries   -    (333)
Cash received from capital contributions by non-controlling interest holder   722    3,542  
Net cash used in financing activities   (19,833)   (10,738)
           
Cash and cash equivalents affected by foreign currency   7,822    (1,813)
Net increase/(decrease) in cash and cash equivalents   21,658    (9,574)
Cash, cash equivalents and pledged cash at beginning of year   106,403    115,977 
Cash, cash equivalents and pledged cash at end of year  $128,061   $106,403 

 

 

 

  

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

 

    Year Ended December 31,  
    2020     2019  
             
Cash paid for interest   $ 2,751     $ 3,390  
Cash paid for income taxes   $ 3,229     $ 4,607  

 

 

SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:

  

Non-cash investing activities:

  

   Year Ended December 31, 
   2020   2019 
         
Property, plant and equipment recorded during the year which previously were advance payments  $11,838   $13,964 
Accounts payable for acquiring property, plant and equipment  $2,024   $782 
Accounts receivable in exchange for short-term investments  $223   $- 
Property, plant and equipment and inventories used for investment in an associated company  $-   $492 

 

 



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