Part I [Unaudited Financial Statements](index=4&type=section&id=Item%201.%20Unaudited%20Financial%20Statements.) The unaudited financial statements for the period ended June 30, 2023, show a year-over-year increase in net product sales and net income for both the three and six-month periods, with a slight decrease in total assets primarily due to reduced cash and cash equivalents [Condensed Unaudited Consolidated Statements of Operations and Comprehensive Income](index=4&type=section&id=Condensed%20Unaudited%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) For Q2 2023, net product sales increased by 8.1% to $137.4 million, and net income attributable to shareholders rose by 11.0% to $10.5 million, while H1 2023 saw net sales grow by 6.1% to $279.7 million and net income increase by 84.5% to $17.3 million Q2 2023 vs Q2 2022 Performance (Three Months Ended June 30) | Metric | Q2 2023 (in thousands USD) | Q2 2022 (in thousands USD) | Change (%) | | :--- | :--- | :--- | :--- | | Net Product Sales | 137,410 | 127,161 | +8.1% | | Gross Profit | 22,718 | 22,711 | +0.03% | | Income from Operations | 7,789 | 7,200 | +8.2% | | Net Income Attributable to Parent | 10,466 | 9,428 | +11.0% | | Diluted EPS | $0.35 | $0.31 | +12.9% | H1 2023 vs H1 2022 Performance (Six Months Ended June 30) | Metric | H1 2023 (in thousands USD) | H1 2022 (in thousands USD) | Change (%) | | :--- | :--- | :--- | :--- | | Net Product Sales | 279,653 | 263,557 | +6.1% | | Gross Profit | 44,336 | 37,445 | +18.4% | | Income from Operations | 15,533 | 5,662 | +174.3% | | Net Income Attributable to Parent | 17,286 | 9,369 | +84.5% | | Diluted EPS | $0.57 | $0.30 | +90.0% | [Condensed Unaudited Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Unaudited%20Consolidated%20Balance%20Sheets) As of June 30, 2023, total assets decreased to $684.6 million from $714.4 million at year-end 2022, primarily due to reductions in cash and inventories, while total liabilities also decreased to $350.1 million from $386.9 million Consolidated Balance Sheet Highlights (in thousands USD) | Account | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | 487,906 | 520,718 | | Cash and cash equivalents | 95,620 | 121,216 | | Total Assets | 684,577 | 714,352 | | **Total Current Liabilities** | 334,600 | 364,195 | | Short-term loans | 38,457 | 45,671 | | Total Liabilities | 350,142 | 386,937 | | **Total Stockholders' Equity** | 333,837 | 326,833 | [Condensed Unaudited Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2023, net cash used in operating activities was $0.05 million, a significant shift from the $14.5 million provided in the prior year, while net cash used in investing activities remained stable and financing activities increased cash usage due to higher loan repayments Cash Flow Summary (Six Months Ended June 30, in thousands USD) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash (used in)/provided by operating activities | (52) | 14,484 | | Net cash used in investing activities | (24,046) | (24,443) | | Net cash (used in)/provided by financing activities | (5,556) | 1,610 | | **Net decrease in cash, cash equivalents and pledged cash** | **(33,410)** | **(15,676)** | [Notes to Condensed Unaudited Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Unaudited%20Financial%20Statements) The notes detail the company's organizational structure, including a new subsidiary, Hubei Zhirong, established in June 2023, and cover significant accounting policies, customer concentration, segment performance, and related party transactions - In June 2023, the company established a new wholly-owned subsidiary, Hubei Zhirong Automobile Technology Co., Ltd., which engages in the inspection and testing of automotive products[28](index=28&type=chunk)[114](index=114&type=chunk) - For the six months ended June 30, 2023, the company's five largest customers accounted for **41.7%** of consolidated net product sales, with one single customer representing **20.0%** of sales[38](index=38&type=chunk) - The company operates through **16 product sectors**, with six main segments (Henglong, Jiulong, Wuhu, Henglong KYB, Hubei Henglong, and Brazil Henglong) being the principal profit makers[101](index=101&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=31&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management attributes the 6.1% year-over-year revenue growth for the first six months of 2023 to a 21.8% increase in electric power steering (EPS) systems sales, which now constitute 32.0% of total net sales, with improved gross margin and reduced operating expenses contributing to higher operating and net income [Results of Operations - Q2 2023 vs Q2 2022](index=34&type=section&id=Results%20of%20Operations%20-%20Three%20Months%20Ended%20June%2030%2C%202023%20and%202022) In Q2 2023, net product sales increased by 8.1% to $137.4 million, driven by a 28.4% surge in electric power steering (EPS) sales, which now represent 30.3% of total sales, while gross margin slightly decreased to 16.5% and net income attributable to shareholders grew by 11.0% to $10.5 million - Net sales of electric power steering (EPS) systems increased by **28.4%** to **$41.6 million** in Q2 2023, accounting for **30.3%** of total net sales, up from 25.5% in Q2 2022[123](index=123&type=chunk) - Gross margin decreased by **1.4 percentage points** to **16.5%** in Q2 2023, mainly due to a change in product mix[131](index=131&type=chunk) - Operating expenses decreased, with selling expenses down **6.7%**, G&A down **6.9%**, and R&D expenses down **16.2%** year-over-year[132](index=132&type=chunk) [Results of Operations - H1 2023 vs H1 2022](index=39&type=section&id=Results%20of%20Operations%20-%20Six%20Months%20Ended%20June%2030%2C%202023%20and%202022) For the first half of 2023, net sales grew 6.1% to $279.7 million, propelled by a 21.8% increase in EPS sales, with gross margin improving significantly to 15.9% due to a better product mix, and net income attributable to shareholders rising sharply by 84.5% to $17.3 million - Net sales of EPS systems increased by **21.8%** to **$89.4 million** in H1 2023, making up **32.0%** of total net sales, compared to 27.8% in H1 2022[141](index=141&type=chunk) - Gross margin increased by **1.7 percentage points** to **15.9%** in H1 2023, primarily due to a change in product mix[150](index=150&type=chunk) - R&D expenses decreased by **18.9%** to **$13.0 million**, mainly due to decreased R&D activities for new projects[150](index=150&type=chunk) [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2023, the company had working capital of $153.3 million and cash and short-term investments of $111.1 million, with primary capital sources being bank loans and acceptance facilities totaling $140.2 million in available credit, of which $68.3 million was utilized Working Capital and Cash Position (in millions USD) | Metric | June 30, 2023 (in millions USD) | December 31, 2022 (in millions USD) | | :--- | :--- | :--- | | Working Capital | 153.3 | 156.5 | | Cash, Cash Equivalents & Short-term Investments | 111.1 | 134.1 | Credit Facilities as of June 30, 2023 (in thousands USD) | Facility Type | Amount Available | Amount Used | | :--- | :--- | :--- | | Comprehensive credit facilities | 140,193 | 68,291 | - Net cash used in operating activities was **$0.1 million** for H1 2023, compared to net cash provided of **$14.5 million** in H1 2022, a decrease of **$14.6 million** primarily due to unfavorable movements in working capital[171](index=171&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) The company reports that there have been no material changes to its market risk disclosures since its Annual Report on Form 10-K for the year ended December 31, 2022 - There were no material changes to the market risk disclosures from the Company's 2022 Annual Report on Form 10-K[177](index=177&type=chunk) [Controls and Procedures](index=53&type=section&id=Item%204.%20Controls%20and%20Procedures.) The company's management, including the CEO and CFO, evaluated the disclosure controls and procedures and concluded they were effective as of June 30, 2023, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of June 30, 2023[178](index=178&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal controls[179](index=179&type=chunk) Part II — Other Information [Legal Proceedings](index=54&type=section&id=Item%201.%20Legal%20Proceedings.) The company is not a party to any pending or threatened legal proceedings, and no director, officer, affiliate, or major security holder is involved in litigation adverse to the company - The Company is not a party to any pending or threatened legal proceedings[181](index=181&type=chunk) [Risk Factors](index=54&type=section&id=Item%201A.%20Risk%20Factors.) There have been no material changes from the risk factors that were previously disclosed in Item 1A of the company's 2022 Annual Report on Form 10-K - No material changes have occurred regarding the risk factors previously disclosed in the 2022 Annual Report on Form 10-K[182](index=182&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=54&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) The company reported no unregistered sales of equity securities or use of proceeds during the period - None[182](index=182&type=chunk) [Defaults Upon Senior Securities](index=54&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities.) The company reported no defaults upon senior securities - None[183](index=183&type=chunk) [Mine Safety Disclosures](index=54&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) This item is not applicable to the company - Not applicable[183](index=183&type=chunk) [Other Information](index=54&type=section&id=Item%205.%20Other%20Information.) The company reported no other information for this item - None[183](index=183&type=chunk) [Exhibits](index=55&type=section&id=Item%206.%20Exhibits.) This section lists the exhibits filed with the quarterly report, including CEO and CFO certifications (Rule 13a-14(a) and Section 1350) and XBRL interactive data files - Exhibits filed include Rule 13a-14(a) Certifications, Section 1350 Certifications, and various XBRL documents[185](index=185&type=chunk)

China Automotive Systems, Inc. (NASDAQ:CAAS) Q1 2023 Earnings Conference Call May 12, 2023 8:00 AM ET Company Participants Kevin Theiss - Investor Relations Jie Li - Chief Financial Officer Conference Call Participants William Gregozeski - Greenridge Global Operator Greetings. Welcome to the China Automotive Systems First Quarter 2023 Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please no ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 Or ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | --- | --- | |-----------------------------------------------------------------------------|------------------|-------|--------------------------------------------- ...

China Automotive Systems, Inc. (NASDAQ:CAAS) Q4 2022 Earnings Conference Call March 30, 2023 8:00 AM ET Company Participants Kevin Theiss - Investor Relations Jie Li - Chief Financial Officer Conference Call Participants William Gregozeski - Greenridge Global Operator Good morning everyone and welcome to the China Automotive Systems' Fourth Quarter and Fiscal Year 2022 Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation ...

Table of Contents | --- | --- | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------| | (State or other jurisdiction of incorporation or organization) \nNo. 1 Henglong Road, Yu Qiao Development Zone \nShashi District, Jing Zhou City, Hubei Province | (I.R.S. Employer Identification No.) | | The People's ...

China Automotive Systems, Inc. (NASDAQ:CAAS) Q3 2022 Earnings Conference Call November 14, 2022 8:00 AM ET Company Participants Kevin Theiss - Investor Relations Jie Li - Chief Financial Officer Conference Call Participants William Gregozeski - Greenridge Global Operator Good morning ladies and gentlemen and welcome to the China Automotive Systems' Third Quarter 2022 Conference Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Mr. Kevin Theiss, Investor Relations. Kevi ...

[Part I — Financial Information](index=4&type=section&id=Part%20I%20%E2%80%94%20Financial%20Information) This part presents the company's unaudited financial statements, management's analysis, and market risk disclosures [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Unaudited condensed consolidated financial statements show significant net income growth driven by higher sales and favorable foreign exchange movements [Condensed Unaudited Consolidated Statements of Operations and Comprehensive Income](index=4&type=section&id=Condensed%20Unaudited%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) The company reported a significant turnaround in Q3 2022 net income, driven by a 26.8% increase in net product sales Key Operating Results (Three Months Ended Sep 30) | Financial Metric | Three Months Ended Sep 30, 2022 (in thousands) | Three Months Ended Sep 30, 2021 (in thousands) | | :--- | :--- | :--- | | Net product sales | $137,207 | $108,231 | | Gross profit | $20,918 | $16,792 | | Income from operations | $4,887 | $591 | | Net income/(loss) attributable to parent | $7,470 | $(317) | | Diluted EPS | $0.24 | $(0.01) | Key Operating Results (Nine Months Ended Sep 30) | Financial Metric | Nine Months Ended Sep 30, 2022 (in thousands) | Nine Months Ended Sep 30, 2021 (in thousands) | | :--- | :--- | :--- | | Net product sales | $400,764 | $359,176 | | Gross profit | $58,363 | $52,369 | | Income from operations | $10,549 | $4,870 | | Net income attributable to parent | $16,839 | $6,089 | | Diluted EPS | $0.55 | $0.20 | [Condensed Unaudited Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Unaudited%20Consolidated%20Balance%20Sheets) Total assets and liabilities decreased as of September 30, 2022, compared to the end of the previous fiscal year Key Balance Sheet Items (in thousands) | Balance Sheet Item | Sep 30, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $100,712 | $131,695 | | Total current assets | $488,180 | $501,380 | | Total assets | $674,893 | $716,762 | | **Liabilities & Equity** | | | | Total current liabilities | $334,775 | $351,816 | | Total liabilities | $357,252 | $379,321 | | Total stockholders' equity | $317,066 | $336,888 | [Condensed Unaudited Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities improved significantly, while investing activities saw increased cash usage for the nine-month period Summary of Cash Flows (in thousands) | Cash Flow Activity (Nine Months Ended) | Sep 30, 2022 | Sep 30, 2021 | | :--- | :--- | :--- | | Net cash provided by/(used in) operating activities | $31,677 | $(5,867) | | Net cash used in investing activities | $(42,662) | $(2,188) | | Net cash used in financing activities | $(546) | $(6,020) | | Net decrease in cash, cash equivalents and pledged cash | $(27,754) | $(13,060) | [Notes to Condensed Unaudited Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Unaudited%20Consolidated%20Financial%20Statements) Notes detail customer concentration, a significant long-term investment in Sentient AB, and segment sales performance - In Q3 2022, the company's five largest customers accounted for **41.9%** of consolidated net product sales, with one single customer representing **17.8%** of sales[41](index=41&type=chunk) - The company completed a transaction in March 2022 to purchase **40%** of Sentient AB's share capital for approximately **$24.5 million**, with **$21.62 million** paid as of September 30, 2022[48](index=48&type=chunk) Net Product Sales by Segment (Q3, in thousands) | Segment | Net Product Sales (Q3 2022) | Net Product Sales (Q3 2021) | | :--- | :--- | :--- | | Henglong | $62,590 | $39,937 | | Jiulong | $16,986 | $17,127 | | Hubei Henglong | $29,525 | $31,023 | | Henglong KYB | $36,995 | $19,095 | | Brazil Henglong | $11,510 | $7,576 | | **Total** | **$137,207** | **$108,231** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes strong performance to increased electric power steering (EPS) product sales and favorable foreign exchange gains [Results of Operations - Three Months Ended September 30, 2022 and 2021](index=34&type=section&id=Results%20of%20Operations%20-%20Three%20Months%20Ended%20September%2030%2C%202022%20and%202021) Q3 2022 net sales rose 26.8% driven by EPS products, while net income was boosted by significant foreign exchange gains - Net product sales increased by **$29.0 million (26.8%)** YoY in Q3 2022, primarily due to increased sales of electric power steering (EPS)[125](index=125&type=chunk) - Sales of EPS products grew by **$15.4 million (52.4%)** and accounted for **32.6%** of net sales in Q3 2022, up from 27.2% in Q3 2021[125](index=125&type=chunk) - Research and development expenses increased by **$3.8 million (65.4%)** due to increased R&D activities for new projects[143](index=143&type=chunk) - Net financial income was **$4.8 million**, compared to a net expense of $0.8 million in the prior year, primarily due to foreign exchange gains[146](index=146&type=chunk) [Results of Operations - Nine Months Ended September 30, 2022 and 2021](index=39&type=section&id=Results%20of%20Operations%20-%20Nine%20Months%20Ended%20September%2030%2C%202022%20and%202021) Net sales grew 11.6% over nine months, with net income increasing 176.5% due to EPS sales and foreign exchange gains - Net product sales for the nine-month period increased by **$41.6 million (11.6%)** YoY, with EPS sales growing by **$40.8 million (52.8%)**[151](index=151&type=chunk) - Gross margin for the nine-month period was stable at **14.6%**, consistent with the same period in 2021[167](index=167&type=chunk) - Net income attributable to parent company's common shareholders increased by **176.5% to $16.8 million** for the nine months ended September 30, 2022[172](index=172&type=chunk) [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained solid liquidity with increased working capital and significantly improved operating cash flow - As of September 30, 2022, the company had working capital of **$153.5 million**, an increase of **2.6%** from December 31, 2021[173](index=173&type=chunk) - The company has comprehensive credit facilities totaling **$143.7 million**, with **$64.7 million** used as of September 30, 2022[179](index=179&type=chunk)[180](index=180&type=chunk) - Net cash provided by operating activities was **$31.7 million** for the first nine months of 2022, a significant improvement from a $5.9 million use of cash in the prior-year period[194](index=194&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to market risk disclosures were reported since the last annual report - No material changes to market risk disclosures were reported for the period[197](index=197&type=chunk) [Controls and Procedures](index=51&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal controls over financial reporting were effective as of September 30, 2022 - The company's management concluded that disclosure controls and procedures were **effective** as of September 30, 2022[198](index=198&type=chunk) - **No material changes** to the company's internal control over financial reporting occurred during the third quarter of 2022[199](index=199&type=chunk) [Part II — Other Information](index=53&type=section&id=Part%20II%20%E2%80%94%20Other%20Information) This part details legal proceedings, risk factors, share repurchases, and filed exhibits [Legal Proceedings](index=53&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any pending or threatened legal proceedings - The company is **not involved** in any pending or threatened legal proceedings[200](index=200&type=chunk) [Risk Factors](index=53&type=section&id=Item%201A.%20Risk%20Factors) Key risks include Chinese government oversight, potential new overseas listing regulations, and evolving data security requirements - The business is subject to **significant oversight and discretion from the Chinese government**, which may intervene in operations at any time[201](index=201&type=chunk) - The company may be subject to **new filing requirements** with the China Securities Regulatory Commission (CSRC) for future overseas offerings[206](index=206&type=chunk)[207](index=207&type=chunk) - New **cybersecurity and data transfer regulations** from the Cyberspace Administration of China (CAC) could impose additional compliance burdens[216](index=216&type=chunk)[220](index=220&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=59&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 382,418 shares in Q3 2022 under its approved share repurchase program - On March 29, 2022, the Board approved a share repurchase program for up to **$5.0 million** of common stock through March 30, 2023[227](index=227&type=chunk) Share Repurchase Activity (Q3 2022) | Period (2022) | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | July | 85,633 | $2.8705 | | August | 128,525 | $3.4589 | | September | 168,260 | $4.0479 | | **Total Q3** | **382,418** | **$3.5863** | [Exhibits](index=60&type=section&id=Item%206.%20Exhibits) This section indexes the exhibits filed with the Form 10-Q, including CEO and CFO certifications

China Automotive Systems, Inc. (NASDAQ:CAAS) Q2 2022 Results Conference Call August 12, 2022 8:00 AM ET Company Participants Kevin Theiss - IR Chen Hanlin - Chairman Qizhou Wu - CEO Jie Li - CFO Conference Call Participants William Gregozeski - Greenridge Global Operator Good morning, ladies and gentlemen, and welcome to the China Automotive Systems' Second Quarter 2022 Conference Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Mr. Kevin Theiss. Kevin, over to you. K ...

China Automotive Systems, Inc. (NASDAQ:CAAS) Q1 2022 Results Earnings Conference Call May 23, 2022 8:00 AM ET Company Participants Kevin Theiss - Investor Relations Jie Li - Chief Financial Officer Conference Call Participants William Gregozeski - Greenridge Global Operator Good morning, ladies and gentlemen, and welcome to China Automotive Systems First Quarter 2022 Conference Call. At this time, all participants have been placed on a listen-only mode and the floor will be open for questions and comments a ...