Back to CBAK
China BAK Reports Second Quarter Fiscal Year 2012 Financial Results

SHENZHEN, China, May 7, 2012 /PRNewswire-Asia/ -- China BAK Battery, Inc. ("China BAK", the "Company", or "we") (Nasdaq: CBAK), a leading global manufacturer of lithium-based battery cells, today announced its financial results for the second quarter of fiscal year 2012 ended March 31, 2012 ("Q2 2012").

Second Quarter Fiscal Year 2012 Highlights

    --  Revenue from high-power lithium-ion battery cells reached a record $2.3
        million, an increase of 197.3% year-over-year
    --  In March 2012, China BAK's polymer cells passed ZTE Corporation's
        certification process and will supply polymer cells to be used in
        smartphones
    --  China BAK reported another quarter of positive cash flow of $9.1 million
        from operating activities

"Historically, our second fiscal quarter is a slow quarter partly due to the Chinese New Year holidays, which significantly reduce overall sales volume. In addition, the continued weakness in the global economy and the slowdown in the replacement market also impacted our business. At the same time, we are pleased with the growth in revenue from our high-power lithium battery cells, which are supplied to EV customers," commented Mr. Xiangqian Li, Chairman, President and CEO of China BAK.

Second Quarter Fiscal Year 2012 Results

Net revenue for the three months ended March 31, 2012, decreased 54.3% to $32.8 million, from $71.8 million in the previous quarter and decreased 29.8% year-over-year from $46.7 million in the second quarter of fiscal 2011. The decline in revenue was largely due to reduced demand for the Company's prismatic cells and cylindrical cells.

Revenues from prismatic products, including aluminum-case cells and battery packs, which are used in mobile phones and certain personal electronic devices, were $20.5 million, down 62.8% from $55.1 million in the previous quarter and down 29.5% from $29.0 million in the second quarter of fiscal 2011.

Revenues from cylindrical cells, used in notebook computers, certain electronic devices and electric vehicles, were $7.6 million, down 41.3% from $13.0 million in the previous quarter and down 49.9% from $15.2 million in the second quarter of fiscal 2011.

Revenues from lithium polymer cells, used in personal electronic devices such as PDAs, MP3 players and Bluetooth devices, were $2.3 million, down 11.0% from $2.6 million in the previous quarter and up 39.7% from $1.7 million in the second quarter of fiscal 2011.

Revenues from high-power lithium battery cells, used in electric bicycles, other electric vehicles, power tools, and uninterruptible power supplies, and other applications, were $2.3 million, up 121% from $1.1 million in the previous quarter and up 197.3% from $0.8 million in the second quarter of fiscal 2011.

Gross loss for the second quarter of fiscal year 2012 was $3.9 million, compared to gross profit of $14.0 million in the previous quarter and gross profit of $4.4 million in the second quarter of fiscal 2011. The weakness in gross profit was largely due to a decrease in prismatic and cylindrical sales volume during the three months ended March 31, 2012, and a significant write down of obsolete inventory over the three months ended March 31, 2012.

Operating expenses totaled $10.7 million, or 32.7% of revenue, in the second quarter, down 8.4% from $11.7 million, or 16.3% of revenue, in the previous quarter, and up 70.6% from $6.3 million, or 13.4% of revenue, in the second quarter of fiscal 2011. Operating expenses in the second quarter of fiscal 2012 include no impairment charge, compared with an impairment charge of $2.7 million in the previous quarter, and no impairment charge in the second quarter of fiscal 2011. Research and development expenses were $1.8 million, or 5.6% of revenue, up 48.6% from $1.2 million, or 1.7% of revenue in the previous quarter, and down 4.3% from $1.9 million, or 4.1% of revenue, in the second quarter of fiscal 2011. Sales and marketing expenses were $1.8 million, or 5.3% of revenue, down 10.5% from $2.0 million, or 2.7% of revenue, in the previous quarter, and down 20.3% from $2.2 million, or 4.7% of revenue, in the second quarter of fiscal 2011. General and administrative (G&A) expenses were $7.1 million, or 21.7% of revenue, up 22.9% from $5.8 million, or 8.1% of revenue, in the previous quarter, and significantly up from $2.1 million, or 4.6% of revenue, in the second quarter of fiscal 2011. The significant increase in G&A expenses year-over-year was mainly due to increase in provision for bad debt expenses following an assessment of account collectability in the second quarter of 2012.

Operating loss was $14.6 million compared to operating income of $2.3 million in the previous quarter and operating loss of $1.8 million in the second quarter of fiscal 2011.

Net loss was $15.6 million, or diluted loss per share of $0.25, in the second quarter of fiscal 2012 compared to net loss of $1.8 million, or diluted loss per share of $0.03, in the previous quarter and net loss of $4.1 million, or diluted loss per share of $0.06, in the second quarter of fiscal 2011.

Financial Condition

On March 31, 2012, China BAK had $16.7 million in cash and cash equivalents. For the second quarter of fiscal year 2012, Days Sales Outstanding (DSO) increased to 275 days from 124 days last quarter and Days Sales of Inventory increased to 144 days from 96 days last quarter. Short-term bank loans and long-term bank loans totaled $164.5 million as compared to $178.2 million on December 31, 2011. Shareholders' equity totaled $120.2 million. China BAK had $47.4 million available for borrowing under its credit facilities. The Company generated $9.1 million from cash flow from operating activities in the second quarter of fiscal 2012.

Business Outlook

"Over the next few quarters, we expect our earnings performance to improve as we continue to transition from the replacement market to the OEM market. We have cooperative relationships with major tier 1 OEM customers in China and anticipate our revenues will recover as we expand in the OEM market. We were pleased that our high-power lithium ion battery cells reached record quarterly revenues nearly 200% higher than in the same quarter last year, and we expect that our cooperative relationship with Chery Automobile, among others, will contribute to greater earnings in this sector. We also expect our ongoing upgrades to our polymer cell production lines will further our transition toward servicing and generating profits from China's growing smartphone and tablet computer battery cell markets," commented Mr. Xiangqian Li, Chairman, President and CEO of China BAK.

Conference Call

China BAK will host a conference call at 8:00 a.m. ET on Monday, May 7, 2012 to discuss results for the second quarter of fiscal year 2012 ended March 31, 2012. To participate in the conference call, please dial the following number approximately fifteen minutes prior to the scheduled conference call time: 877-847-0047 or 212-444-0113. International callers should dial 852-3006-8101. The pass code for the call is 673-355. If you are unable to participate in the call at this time, a replay will be available from 11:00 a.m. ET on Monday, May 7, 2012 through 11:00 a.m. ET, Monday, May 21, 2012. To access the replay, please dial 866-572-7808. International callers should dial (852) 3012-8000. The pass code for the replay is 673-355. The conference call will be broadcast live over the Internet and can be accessed by all interested parties on the China BAK website at http://www.bak.com.cn/webcast.aspx. To listen to the live webcast, please go to China BAK's website at least fifteen minutes prior to the start of the call to register, download and install any necessary audio software. For those unable to participate during the live broadcast, after the call a replay will be available on China BAK's website for a period of one year.

About China BAK Battery Inc.

China BAK Battery, Inc. (NASDAQ: CBAK) is a leading global manufacturer of lithium-based battery cells. The Company produces battery cells that are the principal component of rechargeable batteries commonly used in cellular phones, smartphones, notebook computers, e-bikes, electric vehicles, power tools, uninterruptible power supplies, and portable consumer electronics such as portable media players, portable gaming devices, personal digital assistants, or PDAs, camcorders, digital cameras, and Bluetooth headsets. China BAK Battery, Inc.'s production facilities, located in Shenzhen and Tianjin, PRC, cover over three million square feet. For more information regarding China BAK Battery, Inc., please visit http://www.bak.com.cn.

Safe Harbor Statement

This press release contains forward-looking statements, which are subject to change. The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All "forward-looking statements" relating to the business of China BAK Battery, Inc. and its subsidiary companies, which can be identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties which could cause actual results to differ. These factors include but are not limited to: the financial outlook of the Company; the ability of the Company to secure future opportunities in the market by leveraging its R&D capabilities and reputation; the ability of the Company to develop new products and new markets successfully; the general ability of the Company to achieve its commercial objectives, including the Company's plan to sustain growth while creating shareholder value; the business strategy, plans and objectives of the Company and its subsidiaries; and risks related to China BAK's business and risks related to operating in China. Please refer to China BAK's Annual Report on Form 10-K for the fiscal year ended September 30, 2011, as well as China BAK's Quarterly Reports on Form 10-Q that have been filed since the date of such annual report, for specific details on risk factors. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements. China BAK's actual results could differ materially from those contained in the forward-looking statements. China BAK undertakes no obligation to revise or update its forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.

                                                  China BAK Battery, Inc. and Subsidiaries
                               Condensed Interim Consolidated Statements of Operations and Comprehensive Loss
                              For the Three Months Ended March 31, 2012, December 31, 2011 and March 31, 2011
                                                (Amounts in thousands, except per share data)

                                           Three Months Ended
                                           ------------------
                                      March 31, 2012                            December 31, 2011             March 31, 2011
                                      --------------                            -----------------             --------------
                                       (Unaudited)                                 (Unaudited)                 (Unaudited)

    Net Revenues                                    $32,781                                     $71,755                     $46,711
    Cost of revenues                                (36,651)                                    (57,724)                    (42,262)
                                                    -------                                     -------                     -------
    Gross (loss) / profit                            (3,870)                                     14,031                       4,449
                                                     ------                                      ------                       -----

    Operating expenses:
        Research and
         development expenses                        (1,848)                                     (1,244)                     (1,933)
        Sales and marketing
         expenses                                    (1,753)                                     (1,958)                     (2,199)
        General and
         administrative
         expenses                                    (7,112)                                     (5,789)                     (2,150)
    Impairment charge                                     -                                      (2,708)                          -
                                                        ---                                      ------                         ---
           Total operating
            expenses                                (10,713)                                    (11,699)                     (6,282)
                                                    -------                                     -------                      ------

    Operating (loss) /
     income                                         (14,583)                                      2,332                      (1,833)

    Finance costs, net                               (2,634)                                     (2,883)                     (2,512)
    Government grant
     income                                           1,185                                         825                          31
    Other income                                        412                                          20                          49
                                                        ---                                         ---                         ---
    (Loss) /income before
     income taxes                                   (15,620)                                        294                      (4,265)

    Income tax (expenses)
     /benefits                                           (8)                                     (2,114)                        182
                                                        ---                                      ------                         ---
    Net loss                                       $(15,628)                                    $(1,820)                    $(4,083)
                                                   ========                                     =======                     =======

    Other comprehensive
     income /(loss)                                      68                                       1,791

                                                                                                                              1,228
                                                                                                                              -----
     -Foreign currency
      translation
      adjustment
    Comprehensive loss                             $(15,560)                                       $(29)                    $(2,855)
                                                   ========                                        ====                     =======

    Net loss per share:
        Basic                                        $(0.25)                                     $(0.03)                     $(0.06)
                                                     ------                                      ------                      ------
        Diluted                                      $(0.25)                                     $(0.03)                     $(0.06)
                                                     ------                                      ------                      ------

    Weighted average
     shares outstanding:
        Basic                                        63,095                                      63,095                      62,895
                                                     ------                                      ------                      ------
        Diluted                                      63,095                                      63,095                      62,895
                                                     ------                                      ------                      ------

                                           China BAK Battery, Inc. and Subsidiaries
                                        Condensed Interim Consolidated Balance Sheets
                                         As of March 31, 2012 and September 30, 2011
                                                    (Amounts in thousands)

                                                      March 31,                       September 30,
                                                                      2012                              2011
                                                                      ----                              ----
                                                     (Unaudited)                        (Audited)
    Assets
    Current assets
    Cash and cash equivalents                                      $16,679                           $24,858
    Pledged deposits                                                 2,337                             5,726
    Trade accounts receivable,
     net                                                           100,339                            88,261
    Inventories, net                                                58,786                            67,141
    Prepayments and other
     receivables                                                    11,670                             5,243
    Deferred tax assets, net                                         3,992                             6,000
                                                                     -----                             -----
            Total current assets                                   193,803                           197,229

    Property, plant and
     equipment, net                                                240,618                           243,238
    Lease prepayments, net                                          32,648                            32,731
    Intangible assets, net                                             813                               295
    Deferred tax assets, net                                         1,734                             1,749
                                                                     -----                             -----
    Total assets                                                  $469,616                          $475,242
                                                                  ========                          ========

    Liabilities
    Current liabilities
    Short-term bank loans                                         $140,883                          $139,706
    Current maturities of long-
     term bank loans                                                     -                            23,495
    Accounts and bills payable                                     124,703                           118,423
    Accrued expenses and other
     payables                                                       38,349                            20,976
                                                                    ------                            ------
             Total current liabilities                             303,935                           302,600

    Long-term bank loans, less
     current maturities                                             23,618                            14,975
    Other long-term loan                                             2,492                             2,457
    Deferred revenue                                                 7,433                             7,456
    Other long-term payables                                        11,220                            11,732
    Deferred tax liabilities                                           758                               748
                                                                       ---                               ---
    Total liabilities                                              349,456                           339,968
                                                                   -------                           -------

    Commitments and
     contingencies

    Shareholders' equity:
    Ordinary shares US$ 0.001
     par value; 100,000,000
     authorized; 63,816,276
     issued and outstanding as
     of September 30, 2011 and
     March 31, 2012                                                     64                                64
    Donation Shares                                                 14,102                            14,102
    Additional paid-in-capital                                     126,610                           126,135
    Statutory reserves                                               7,786                             7,645
    Accumulated deficit                                            (61,999)                          (44,410)
    Accumulated other
     comprehensive income                                           37,664                            35,805
      Less: Treasury shares                                         (4,067)                           (4,067)
                                                                    ------                            ------
             Total shareholders' equity                            120,160                           135,274
                                                                   -------                           -------
    Total liabilities and
     shareholders' equity                                         $469,616                          $475,242
                                                                  ========                          ========

                                                 China BAK Battery, Inc. and Subsidiaries
                                          Condensed Interim Consolidated Statements of Cash Flows
                              For the Three Months Ended March 31, 2012, December 31, 2011 and March 31, 2011
                                                          (Amounts in thousands)

                                         Three Months Ended
                                         ------------------
                                     March 31, 2012                             December 31, 2011             March 31, 2011
                                     --------------                             -----------------             --------------
                                       (Unaudited)                                 (Unaudited)                  (Unaudited)
    Cash flow from
     operating activities
    Net loss                                        $(15,628)                                    $(1,820)                    $(4,084)
    Adjustments to
     reconcile net loss to
     net cash provided by
     operating activities:
    Depreciation and
     amortization                                      5,149                                       5,178                       4,656
    Provision for /
     (recovery of provision
     for) doubtful debts                               2,633                                       1,054                        (614)
    Provision for /
     (recovery of provision
     for) obsolete
     inventories                                       2,289                                        (322)                       (737)
    Impairment charge                                      -                                       2,708                           -
    Share-based
     compensation                                        219                                         255                         409
    Deferred income taxes                                  -                                       2,111                        (182)
    Deferred revenue                                     (63)                                        (63)                        (61)
    Exchange (loss) / gain                              (163)                                        165                        (135)
    Changes in operating
     assets and
     liabilities:
        Trade accounts
         receivable                                    6,421                                     (20,226)                      1,997
        Inventories                                   (5,481)                                     12,688                       1,657
        Prepayments and other
         receivables                                  (4,884)                                     (2,003)                      1,285
        Accounts and bills
         payable                                       5,556                                      (1,028)                     (1,273)
        Accrued expenses and
         other payables                               13,088                                       6,949                        (293)
                                                      ------                                       -----                        ----
    Net cash provided by
     operating activities                             $9,136                                      $5,646                      $2,625
                                                      ------                                      ------                      ------

    Cash flow from
     investing activities
    Purchases of property,
     plant and equipment                              (6,274)                                     (3,778)                     (6,349)
    Purchases of intangible
     assets                                                -                                        (464)                          -
    Net cash used in
     investing activities                            $(6,274)                                    $(4,242)                    $(6,349)
                                                     -------                                     -------                     -------

    Cash flow from
     financing activities
    Proceeds from
     borrowings                                       57,578                                      37,818                      66,874
    Repayment of borrowings                          (52,379)                                    (59,075)                    (72,954)
    Decrease in pledged
     deposits                                          2,648                                         808                      10,567
    Net cash provided by /
     (used in) financing
     activities                                       $7,847                                    $(20,449)                     $4,487
                                                      ------                                    --------                      ------

    Effect of exchange rate
     changes on cash and
     cash equivalents                                     95                                          62                         268
                                                         ---                                         ---                         ---
    Net increase /
     (decrease) in cash and
     cash equivalents                                 10,804                                     (18,983)                      1,031
    Cash and cash
     equivalents at the
     beginning of the
     period                                            5,875                                      24,858                      24,527
                                                       -----                                      ------                      ------
    Cash and cash
     equivalents at the end
     of the period                                   $16,679                                      $5,875                     $25,558
                                                     =======                                      ======                     =======

SOURCE China BAK Battery, Inc.

Copyright (2014) PR Newswire. All Rights Reserved.
Back to CBAK
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki