China Automotive Systems Reports a 29.2% Increase in Diluted Earnings Per Share Growth in the Third Quarter of 2023
Third Quarter 2023 Highlights
- Net sales increased slightly to
$137.5 million , compared to$137.2 million in the third quarter of 2022. - Electric power steering ("EPS") product sales increased by 2.0% year-over-year to
$45.7 million . - Gross profit increased 18.7% to
$24.8 million and gross margin rose to 18.0%, compared to 15.2% in the third quarter of 2022. - Income from operations increased by 108.2% to
$10.2 million , compared to$4.9 million in the third quarter of 2022; - Net income attributable to parent company's common shareholders increased by 26.7% to
$9.5 million , or diluted income per share of$0.31 , compared to a net income attributable to parent company's common shareholders of$7.5 million , or diluted income per share of$0.24 , in the third quarter of 2022.
First Nine Months of 2023 Highlights
- Net sales rose by 4.1% to
$417.2 million , compared to$400.8 million in the first nine months of 2022. - Gross profit increased 18.3% to
$69.1 million and gross margin was 16.6%, compared to 14.6% in the first nine months of 2022. - Income from operations increased 144.8% to
$25.7 million , compared to income from operations of$10.5 million in the first nine months of 2022. - Net income attributable to parent company's common shareholders was
$26.8 million , or diluted income per share of$0.89 , compared to net income attributable to parent company's common shareholders of$16.8 million , or diluted income per share of$0.55 in the first nine months of 2022. - Cash and cash equivalents and pledged cash were
$135.1 million as ofSeptember 30, 2023 .
Mr. Qizhou Wu, the Chief Executive Officer of CAAS, commented, "Our EPS product sales and our Brazilian operations continued to grow as we face headwinds in the global auto markets. Sales of both traditional hydraulic and EPS steering products were stable in the third quarter of 2023. Sales into the
"Chinese GDP grew at 4.9% year-over-year in the third quarter of 2023 according to the Chinese National Bureau of Statistics, exceeding the consensus estimate. The Chinese auto industry has rebounded but various market segments are experiencing differing growth trends. The Chinese government has implemented favorable policies to further revitalize the economy including purchase exemptions for EVs, with local governments also providing auto purchase incentives. We have maintained our position in the Chinese and North American auto markets and are well positioned for future growth."
Mr. Jie Li, the Chief Financial Officer of CAAS, commented, "We continued to generate profits and positive cash flow in the third quarter of 2023 as we reduced our operating expenses. At
Third Quarter of 2023
In the third quarter of 2023, net sales increased slightly to
Gross profit increased by 18.7% to
Selling expenses declined by 5.0% to
General and administrative expenses ("G&A expenses") increased by 24.5% to
Research and development expenses ("R&D expenses") decreased by 27.4% to
Income from operations increased by 108.2% year-over-year to
Other income was
Net financial income was
Income before income tax expenses and equity in earnings of affiliated companies increased by 12.0% to
Income tax expense was
Net income attributable to parent company's common shareholders was
The weighted average number of diluted common shares outstanding was 30,189,363 in the third quarter of 2023, compared to 30,640,260 in the third quarter of 2022.
First Nine Months of 2023
Net sales for the first nine months of 2023 increased by 4.1% to
Net income attributable to parent company's common shareholders was
As of
Net cash provided by operating activities was
Business Outlook
Management reiterates its revenue guidance of
Conference Call
Management will conduct a conference call on
Phone Number: +1-888-506-0062 (
Phone Number: +1-973-528-0011 (International)
Mainland
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
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. 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 Annual Report on Form 10-K as filed with the Securities and Exchange Commission on
For further information, please contact:
Chief Financial Officer
China Automotive Systems, Inc.
Email: [email protected]
Kevin Theiss
Investor Relations
+1-212-510-8922
Email: [email protected]
- Tables Follow –
China Automotive Systems, Inc. and Subsidiaries | ||||||
Condensed Unaudited Consolidated Statements of Operations and Comprehensive Income | ||||||
(In thousands of USD, except share and per share amounts) | ||||||
Three Months Ended | ||||||
2023 | 2022 | |||||
Net product sales ( | $ | 137,541 | $ | 137,207 | ||
Cost of products sold ( | 112,784 | 116,289 | ||||
Gross profit | 24,757 | 20,918 | ||||
Gain on other sales | 2,177 | 2,290 | ||||
Less: Operating expenses | ||||||
Selling expenses | 3,803 | 3,978 | ||||
General and administrative expenses | 6,108 | 4,893 | ||||
Research and development expenses | 6,870 | 9,450 | ||||
Total operating expenses | 16,781 | 18,321 | ||||
Income from operations | 10,153 | 4,887 | ||||
Other income, net | 1,155 | 744 | ||||
Interest expense | (245) | (384) | ||||
Financial income, net | 163 | 4,760 | ||||
Income before income tax expenses and equity in earnings of affiliated companies | 11,226 | 10,007 | ||||
Less: Income taxes | 688 | 899 | ||||
Add: Equity in earnings/(loss) of affiliated companies | 706 | (1,101) | ||||
Net income | 11,244 | 8,007 | ||||
Less: Net income attributable to non-controlling interests | 1,749 | 529 | ||||
Accretion to redemption value of redeemable non-controlling interests | (7) | (8) | ||||
Net income attributable to parent company's common shareholders | $ | 9,488 | $ | 7,470 | ||
Comprehensive income: | ||||||
Net income | $ | 11,244 | $ | 8,007 | ||
Other comprehensive income: | ||||||
Foreign currency translation income/(loss), net of tax | 3,580 | (18,705) | ||||
Comprehensive income/(loss) | 14,824 | (10,698) | ||||
Less: Comprehensive income/(loss) attributable to non-controlling interests | 3,590 | (604) | ||||
Accretion to redemption value of redeemable non-controlling interests | (7) | (8) | ||||
Comprehensive income/(loss) attributable to parent company | $ | 11,227 | $ | (10,102) | ||
Net income attributable to parent company's common shareholders per share - | ||||||
Basic | $ | 0.31 | $ | 0.24 | ||
Diluted | $ | 0.31 | $ | 0.24 | ||
Weighted average number of common shares outstanding - | ||||||
Basic | 30,185,702 | 30,637,876 | ||||
Diluted | 30,189,363 | 30,640,260 | ||||
China Automotive Systems, Inc. and Subsidiaries | ||||||
Condensed Unaudited Consolidated Statements of Operations and Comprehensive Income | ||||||
(In thousands of USD, except share and per share amounts) | ||||||
Nine Months Ended | ||||||
2023 | 2022 | |||||
Net product sales ( | $ | 417,194 | $ | 400,764 | ||
Cost of products sold ( | 348,101 | 342,401 | ||||
Gross profit | 69,093 | 58,363 | ||||
Gain on other sales | 3,572 | 5,326 | ||||
Less: Operating expenses | ||||||
Selling expenses | 10,981 | 12,358 | ||||
General and administrative expenses | 16,132 | 15,309 | ||||
Research and development expenses | 19,866 | 25,473 | ||||
Total operating expenses | 46,979 | 53,140 | ||||
Income from operations | 25,686 | 10,549 | ||||
Other income, net | 4,620 | 7,067 | ||||
Interest expense | (770) | (1,156) | ||||
Financial income, net | 3,704 | 9,318 | ||||
Income before income tax expenses and equity in earnings of affiliated companies | 33,240 | 25,778 | ||||
Less: Income taxes | 3,004 | 5,013 | ||||
Add: Equity in earnings/(loss) of affiliated companies | 359 | (2,674) | ||||
Net income | 30,595 | 18,091 | ||||
Less: Net income attributable to non-controlling interests | 3,799 | 1,229 | ||||
Accretion to redemption value of redeemable non-controlling interests | (22) | (23) | ||||
Net income attributable to parent company's common shareholders | $ | 26,774 | $ | 16,839 | ||
Comprehensive income: | ||||||
Net income | $ | 30,595 | $ | 18,091 | ||
Other comprehensive income: | ||||||
Foreign currency translation loss, net of tax | (8,752) | (36,323) | ||||
Comprehensive income/(loss) | 21,843 | (18,232) | ||||
Less: Comprehensive income/(loss) attributable to non-controlling interests | 4,831 | (957) | ||||
Accretion to redemption value of redeemable non-controlling interests | (22) | (23) | ||||
Comprehensive income/(loss) attributable to parent company | $ | 16,990 | $ | (17,298) | ||
Net income attributable to parent company's common shareholders per share - | ||||||
Basic | $ | 0.89 | $ | 0.55 | ||
Diluted | $ | 0.89 | $ | 0.55 | ||
Weighted average number of common shares outstanding - | ||||||
Basic | 30,185,702 | 30,778,336 | ||||
Diluted | 30,190,660 | 30,779,883 | ||||
China Automotive Systems, Inc. and Subsidiaries | ||||||
Condensed Unaudited Consolidated Balance Sheets | ||||||
(In thousands of USD unless otherwise indicated) | ||||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 108,244 | $ | 121,216 | ||
Pledged cash | 26,877 | 37,735 | ||||
Accounts and notes receivable, net - unrelated parties | 227,946 | 214,308 | ||||
Accounts and notes receivable, net - related parties | 13,571 | 10,016 | ||||
Inventories | 103,187 | 112,236 | ||||
Other current assets | 29,127 | 25,207 | ||||
Total current assets | 508,952 | 520,718 | ||||
Non-current assets: | ||||||
Property, plant and equipment, net | 100,598 | 106,606 | ||||
Land use rights, net | 9,073 | 9,555 | ||||
Long-term investments | 60,866 | 59,810 | ||||
Other non-current assets | 28,604 | 17,663 | ||||
Total assets | $ | 708,093 | $ | 714,352 | ||
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' | ||||||
Current liabilities: | ||||||
Short-term loans | $ | 38,568 | $ | 45,671 | ||
Accounts and notes payable-unrelated parties | 211,788 | 218,412 | ||||
Accounts and notes payable-related parties | 10,283 | 16,695 | ||||
Accrued expenses and other payables | 47,573 | 48,311 | ||||
Other current liabilities | 34,439 | 35,106 | ||||
Total current liabilities | 342,651 | 364,195 | ||||
Long-term liabilities: | ||||||
Long-term tax payable | 8,781 | 15,805 | ||||
Other non-current liabilities | 7,402 | 6,937 | ||||
Total liabilities | $ | 358,834 | $ | 386,937 | ||
Commitments and Contingencies | ||||||
Mezzanine equity: | ||||||
Redeemable non-controlling interests | 605 | 582 | ||||
Stockholders' equity: | ||||||
Common stock, | $ | 3 | $ | 3 | ||
Additional paid-in capital | 63,731 | 63,731 | ||||
Retained earnings- | ||||||
Appropriated | 11,851 | 11,851 | ||||
Unappropriated | 273,948 | 247,174 | ||||
Accumulated other comprehensive income | (13,197) | (3,413) | ||||
Treasury stock – 2,152,600 and 2,152,600 shares as of | (7,695) | (7,695) | ||||
Total parent company stockholders' equity | 328,641 | 311,651 | ||||
Non-controlling interests | 20,013 | 15,182 | ||||
Total stockholders' equity | 348,654 | 326,833 | ||||
Total liabilities, mezzanine equity and stockholders' equity | $ | 708,093 | $ | 714,352 | ||
China Automotive Systems, Inc. and Subsidiaries | ||||||||
Condensed Unaudited Consolidated Statements of Cash Flows | ||||||||
(In thousands of USD unless otherwise indicated) | ||||||||
Nine Months Ended | ||||||||
2023 | 2022 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 30,595 | $ | 18,091 | ||||
Adjustments to reconcile net income from operations to net cash provided by | ||||||||
Depreciation and amortization | 13,666 | 17,402 | ||||||
(Reversal)/provision of credit losses | (450) | 602 | ||||||
Deferred income taxes | (1,017) | 2,880 | ||||||
Equity in earnings of affiliated companies | (359) | 2,674 | ||||||
Loss on fixed assets disposals | 79 | 35 | ||||||
(Increase)/decrease in: | ||||||||
Accounts and notes receivable | (24,315) | (21,616) | ||||||
Inventories | 6,070 | 115 | ||||||
Other current assets | (1,391) | (3,748) | ||||||
Other non-current assets | (517) | — | ||||||
Increase/(decrease) in: | ||||||||
Accounts and notes payable | (6,198) | 5,795 | ||||||
Accrued expenses and other payables | 849 | 3,004 | ||||||
Long-term taxes payable | (5,268) | (2,809) | ||||||
Other current liabilities | (1,004) | 9,252 | ||||||
Net cash provided by operating activities | 10,740 | 31,677 | ||||||
Cash flows from investing activities: | ||||||||
(Increase)/decrease in demand loans included in other non-current assets | — | 288 | ||||||
Cash received from property, plant and equipment sales | 664 | 1,143 | ||||||
Payments to acquire property, plant and equipment (including | (12,184) | (11,842) | ||||||
Payments to acquire intangible assets | (2,437) | (68) | ||||||
Investment under the equity method | (7,729) | (12,802) | ||||||
Purchase of short-term investments | (55,290) | (79,311) | ||||||
Proceeds from maturities of short-term investments | 48,281 | 55,944 | ||||||
Cash received from long-term investments | 3,115 | 3,986 | ||||||
Net cash used in investing activities | (25,580) | (42,662) | ||||||
Cash flows from financing activities: | ||||||||
Proceeds from bank loans | 42,828 | 43,616 | ||||||
Repayments of bank loans | (48,147) | (41,465) | ||||||
Repayments of the borrowing for sale and leaseback transaction | — | (1,130) | ||||||
Repurchase of common shares | — | (1,567) | ||||||
Net cash used in financing activities | (5,319) | (546) | ||||||
Effects of exchange rate on cash, cash equivalents and pledged cash | (3,671) | (16,223) | ||||||
Net decrease in cash, cash equivalents and pledged cash | (23,830) | (27,754) | ||||||
Cash, cash equivalents and pledged cash at beginning of the period | 158,951 | 159,499 | ||||||
Cash, cash equivalents and pledged cash at end of the period | $ | 135,121 | $ | 131,745 | ||||
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SOURCE China Automotive Systems, Inc.