China Automotive Systems Reports Q3 2006 Results
Third Quarter 2006 Highlights: --Total net sales for the period increased to US$22.7 million, reflecting a 54% year-over-year growth;
WUHAN, Hubei, China, Nov. 13 /Xinhua-PRNewswire/ -- China Automotive Systems, Inc. (NASDAQ: CAAS), a leading power steering components and systems supplier in China, today announced 2006 third quarter financial results.
Total net sales for the third quarter of 2006 was $22.7 million, compared with $14.8 million reported in the same period of 2005 and $ 24.7 million for the second quarter of 2006, reflecting a 54% year-over-year growth and an 8% quarter-over-quarter decline respectively. Net income for the third quarter of 2006 was $1.5 million, or $0.07 per diluted share, compared with $1.1 million, or $0.05 per diluted share in the same period last year and $0.75 million, or $0.03 per diluted share, for the second quarter of 2006, reflecting a 40% year-over-year growth and a 104% quarter-over-quarter increase, respectively.
Net sales from steering products for passenger and light-duty vehicles for the third quarter of 2006 increased to $13.6 million, compared with $9.1 million reported in the same period of 2005 and $ 15.8 million for the second quarter of 2006, reflecting a 49% year-over-year growth and a 14% quarter- over-quarter decline respectively. Net sales from steering products for commercial vehicles for the third quarter of 2006 increased to $6.4 million as compared with $3.7 million reported in the same period of 2005 and $6.0 million for the second quarter of 2006, reflecting a 73% increase year-over- year and a 7% quarter-over-quarter increase, respectively.
"Third quarter is normally a slow season in Chinese passenger vehicle market due to the summer. However, we see little sign of slow-down in the sedan market. Our key customers, Chery Auto and Geely Auto continue to gain market share in China's domestic market with their economy cars. Due to the roll-out of consumption taxes, luxury and mid size sedan sector experienced further pricing pressure while the economy cars held in the third quarter. On the export front, we are excited to report that our products have been installed in Geely and Chery's exported vehicles. With the further economic development and growing export, the commercial vehicle sector is also experiencing further recovery. Our sales to commercial vehicle sector rose to 30% of our total revenue in this quarter." said Mr. Hanlin Chen, Chairman and Chief Executive Officer of China Automotive Systems.
Gross profit for the third quarter of 2006 increased to $8.2 million, compared with $5.7 million reported in the same period for 2005 and $9.3 million for the second quarter of 2006, reflecting a 45% increase year-over- year and a 12% quarter-over-quarter decline, respectively. Operating income for the third quarter of 2006 was $3.4 million, compared with $2.8 million reported in the same period of 2005 and $ 3.0 million for the second quarter of 2006, reflecting a 22% year-over-year growth and a 12% quarter-over-quarter growth respectively.
Total cash and cash equivalents as of September 30, 2006 totaled $18.4 million as compared to $12.4 million as of December 31, 2005. Stockholder's equity increased to $46.1 million as of September 30, 2006 from $36.9 million as of December 31, 2005.
Mr. Daming Hu, Chief Financial Officer stated, "During this quarter, we incurred higher Selling, General and Administrative expenses (SG&A) as compared to the same period last year. Our rapid sales growth and facility expansion triggered higher SG&A expenses including selling expenditure, doubtful debt provision and depreciation. We carefully measure the expenses in accordance with our top line growth. With the solid relationship with our customers, we are confident that we will be able to collect the payment. Meanwhile, as we increase technology investment, government raised subsidy to our interest payment to the local commercial banks. As a result, our non-operating income increased as compared to the same period last year."
