China Automotive Systems(US:CAAS)2021-08-11 16:00Financial Performance - Net product sales for the three months ended June 30, 2021, were $120.6 million, an increase of $37.4 million or 45.0% compared to $83.2 million in the same period in 2020[124]. - Net sales of traditional steering products and parts reached $97.4 million, up $29.7 million or 43.9% from $67.7 million in the same period last year[124]. - Net sales of electric power steering (EPS) were $23.2 million, representing an increase of $7.7 million or 49.7% compared to $15.5 million in the same period in 2020[124]. - Total net product sales for the six months ended June 30, 2021, reached $250.9 million, a 60.1% increase from $156.7 million in the same period of 2020[146]. - Net product sales for the six months ended June 30, 2021, were $250.9 million, an increase of $94.2 million or 60.1% compared to $156.7 million for the same period in 2020, primarily due to market recovery from COVID-19[149]. - Net sales of traditional steering products and parts reached $203.0 million, up $69.9 million or 52.5% from $133.1 million in the same period of 2020[149]. - Net sales of electric power steering (EPS) increased to $47.9 million, a rise of $24.3 million or 103.0% compared to $23.6 million in the same period of 2020, with EPS accounting for 19.1% of net sales[149]. Cost and Expenses - The cost of products sold for the three months ended June 30, 2021, was $104.8 million, an increase of $29.4 million or 39.0% from $75.4 million in the same period in 2020[122]. - The cost of products sold for the six months ended June 30, 2021, was $215.4 million, an increase of $77.6 million or 56.3% from $137.8 million in the same period of 2020[157]. - Selling expenses increased by $1.5 million or 49.3% to $4.4 million for the three months ended June 30, 2021, compared to $3.0 million in the same period in 2020[122]. - Selling expenses rose to $10.1 million, an increase of $5.0 million or 98.0% compared to $5.1 million for the same period in 2020, driven by increased sales volume and higher air freight charges[164]. - General and administrative expenses rose by $1.3 million or 27.4% to $6.1 million for the three months ended June 30, 2021, compared to $4.8 million in the same period in 2020[122]. - General and administrative expenses increased to $10.7 million, up $2.5 million or 30.5% from $8.2 million in the same period of 2020, mainly due to higher payroll expenses[164]. - Research and development expenses for the three months ended June 30, 2021, were $5.9 million, a slight decrease of $0.2 million or 3.2% from $6.1 million in the same period in 2020[122]. - Research and development expenses were $12.6 million, an increase of $1.3 million or 11.5% compared to $11.3 million for the same period in 2020, primarily due to increased expenditures on EPS product development[165]. Profitability - The company reported a net income of $2.9 million for the three months ended June 30, 2021, compared to a net loss of $4.2 million in the same period in 2020, representing a turnaround of $7.2 million[122]. - Net income attributable to parent company's common shareholders was $3.1 million for the three months ended June 30, 2021, compared to a net loss of $4.1 million in the same period of 2020, an increase of $7.2 million[144]. - Net income attributable to parent company's common shareholders increased by $10.5 million, reaching $6.4 million for the six months ended June 30, 2021, compared to a net loss of $4.1 million for the same period in 2020[167]. Cash Flow and Financial Position - The company reported cash and cash equivalents and short-term investments of $100.9 million as of June 30, 2021, a decrease of $6.5 million, or 6.0%, from $107.4 million as of December 31, 2020[168]. - Working capital increased by $16.6 million, or 13.7%, to $137.8 million as of June 30, 2021, compared to $121.2 million as of December 31, 2020[168]. - Net cash provided in operating activities decreased by $25.9 million to $5.5 million for the six months ended June 30, 2021, compared to $31.4 million for the same period in 2020[185]. - The company had short-term loans of $36.4 million and bankers' acceptances of $82.9 million as of June 30, 2021[170]. - The total outstanding principal under the company's credit facilities and lines of credit was $173 million, with $81.7 million used as of June 30, 2021[173]. - The company expects a reduction in the value of mortgages securing bank loans and acceptances by approximately $16.6 million over the next 12 months[171]. - The company has complied with financial covenants as of June 30, 2021, and expects to meet its anticipated cash needs for at least twelve months following the report[169]. - The company intends to indefinitely reinvest funds from its PRC subsidiaries, except for expected dividend distributions to fund a one-time transition tax due to U.S. Tax Reform[169]. - The company has pledged assets with an aggregate assessed value of $138.5 million to secure its credit facilities as of June 30, 2021[174]. - Net cash used in investing activities for the six months ended June 30, 2021 was $6.7 million, a decrease of $23.9 million compared to $30.6 million for the same period in 2020[186]. - Net cash used by financing activities for the six months ended June 30, 2021 was $10.8 million, an increase of $11.0 million compared to net cash provided of $0.2 million for the same period in 2020[187]. Other Information - The company aims to improve overall margins and long-term operating profitability by leveraging its innovative technology and geographic strengths[111]. - The company has business relationships with over sixty vehicle manufacturers, including major domestic and foreign automobile manufacturers[110]. - Henglong's net product sales increased to $49.1 million for the three months ended June 30, 2021, up 37.5% from $35.7 million in the same period of 2020[128]. - Jiulong's net product sales decreased to $25.4 million for the three months ended June 30, 2021, down 3.4% from $26.3 million in the same period of 2020[129]. - Hubei Henglong's net product sales surged to $31.9 million for the three months ended June 30, 2021, representing a 179.8% increase from $11.4 million in the same period of 2020[132]. - Gross margin improved to 13.1% for the three months ended June 30, 2021, compared to 9.4% for the same period in 2020, an increase of 3.7%[141]. - Gross margin improved to 14.2% for the six months ended June 30, 2021, compared to 12.1% for the same period in 2020, reflecting a 2.1% increase[163]. - Other income, net was $1.5 million for the three months ended June 30, 2021, consistent with $1.3 million for the same period in 2020[143]. - Other income, net was $3.2 million, an increase from $1.4 million in the same period of 2020, mainly due to government subsidies[166]. - Interest expense decreased to $0.6 million for the six months ended June 30, 2021, compared to $0.8 million for the same period in 2020[166]. - There were no significant off-balance sheet arrangements as of June 30, 2021 and December 31, 2020[188]. - No material changes were reported regarding market risk disclosures from the Company's Annual Report on Form 10-K for the year ended December 31, 2020[189].