SHENZHEN, China, May 16, 2012 /PRNewswire-Asia-FirstCall/ -- New
Energy Systems Group (NYSE Amex: NEWN) ("New Energy" or the
"Company"), a vertically integrated original design manufacturer
and distributor of Anytone® and MeePower® braned consumer backup
power systems for mobile devices and solar panels and related solar
application products to service municipal power applications, today
announced financial results for the first quarter ended
March 31, 2012.
Mr. Jack Yu, Chairman of New
Energy stated, "We took additional actions we deemed necessary to
make New Energy more focused and efficient. Since we divested our
battery components business in the fourth quarter of last year, we
have focused all of our efforts on growing the consumer products
and solar businesses. This comprehensive transformation includes
developing new products, expanding our distribution channels and
consolidating our fixed overhead. While this will take several
quarters to gain traction, we believe this is the right strategy to
pursue in order to maximize shareholder value."
For the Three Months
Ended March 31,
|
|
2012
|
2011
|
CHANGE
|
Net Sales
|
$5.0 million
|
$12.5 million
|
-60%
|
Gross Profit
|
$0.2 million
|
$5.3 million
|
-96%
|
Net Income (Loss) from
Continued Operations
|
-$1.7 million
|
$2.6 million
|
N/A
|
Adjusted Net Income
(Loss)* from Continued Operations
|
-$1.0 million
|
$3.3 million
|
N/A
|
GAAP EPS (Diluted) from
Continued Operations
|
-$0.11
|
$0.18
|
N/A
|
Adjusted EPS (Diluted)*
from Continued Operations
|
-$0.07
|
$0.23
|
N/A
|
|
*Adjusted net income
and adjusted EPS exclude $0.2 million of non-cash stock-based
compensation expenses and 0.5 million of amortization
expenses during Q1 2012 and Q1 2011, respectively.
Fully dilued shares on March 31, 2012 were 14.6 million versus 14.6
million on March 31,2011.
|
Revenues declined 60% year-over-year to $5 million due to lower demand for batteries in
China and price reductions as a
result of competitive pricing pressures. Solar panel and related
solar product sales were down 65% to $2
million due to the downturn pressure of the entire solar
market and the formal market competition.
Anytone® consumer products division sold 306,380 units in the
first quarter of 2012, down 50% from the same period last year.
Anytone introduced three new products during the quarter, including
products for Apple and Andorid series devices.
Gross profit in the first quarter of 2012 was $0.2 million compared to $5.3 million, a 96% decrease compared to
the same period last year. Consolidated gross margin
fell to 4% from 43% in the first quarter of 2011 as a result
of higher raw materials costs and a significant decrease in
production and sales volumes.
Operating expenses for the three months ended March 31, 2012 were $2.1
million representing approximately 42% of sales
compared to $1.7 million and 14% of
sales in the same period last year. The increase was primarily a
result of higher labor costs and marketing expenses.
The Company incurred $0.2 million
of non-cash stock-based compensation expenses and 0.5 million
amortization expenses during the first three months of 2012 and
2011. Excluding these expenses, operating loss was $1.0 million for the first quarter of 2012.
Net income from continuing operations was a net loss of
$1.7 million compared to net income
of $2.6 million in the first quarter
of 2011. GAAP net loss per share were was $0.11 compared to earnings per share of
$0.18 in the first quarter of 2012
and 2011, respectively. Non-GAAP adjusted net loss and net loss per
share were $1.0 million and
$0.07, respectively, in the first
three months of 2012.
Balance Sheet and Cash Flow Summary
As of March 31, 2012, cash and
equivalents of the Company stood at $8.5
million, up from $4.5 million
as of December 31, 2011. Working
capital was approximately $23.4
million at March 31, 2012;
accounts receivable was $5.6 million,
compared to $6.6 million as of
December 31, 2011. New Energy
generated $0.3 million of cash flow
from operations during the three months ended March 31, 2012 versus $3.6
million in the same period a year ago.
Business Update:
Effective on January 13, 2012,
Kim Fai's business, including all
the assets and liabilities, has been transferred into Shenzhen
Anytone to maximize operations efficiency and save cost. All
of Kim Fai's products will be sold
under "Anytone" brand name.
Anytone signed an agreement with New Trent Corporation ("New
Trent") to begin selling products in the U.S. starting in the
second quarter of 2012. The agreement will initially focus on
Anytone's mobile power products. The two parties expect this
agreement to generate at least $1
million in sales during the first full year.
On March 6, 2012, the Company
launched two online stores in China. Consumers nationwide are now able to
purchase Anytone's mobile power devices and accessories for their
laptops, mobile phones and tablets through www.taobao.com and
www.paipai.com. The online expansion is a part of Anytone's
strategic efforts to expand into the retail segment.
Conference Call
To attend the call, please use the dial-in information
below. When prompted, ask for the "New Energy Call "
and/or be prepared to provide the conference ID.
Date:
|
May 18th,
2012
|
Time:
|
9:00 a.m. Eastern Time,
US.
|
Conference Line
Dial-In (U.S.):
|
1-877-317-6776
|
International
Dial-In:
|
1-412-317-6776
|
Conference
ID:
|
10014483 "New
Energy"
|
Webcast
link:
|
http://webcast.mzvaluemonitor.com/Home/Login/1738279b-58f5-4125-9cdb-3fd6672e9090
|
Please dial in at least 10 minutes before the call to ensure
timely participation. A playback will be available through
May 27, 2012. To listen, please call
1-877-870-5176 within the United
States or 1-858-384-5517 if calling internationally. Utilize
the pass code 4440646 for the replay.
About New Energy Systems Group
New Energy Systems Group is a vertically integrated original
design manufacturer and distributor of lithium ion batteries and
backup power systems for mobile phones, laptops, digital cameras,
MP3s and a variety of other portable electronics. The company's
end-user consumer products are sold under the Anytone® brand in
China, and the company has begun
expanding its international sales efforts. The fast pace of new
mobile device introductions in China combined with a growing middle class
make it fertile ground for New Energy's end-user consumer products,
as well as its high powered, light weight lithium ion batteries. In
addition to historically strong organic growth, New Energy is
expected to benefit from economies of scale, broader distribution,
and higher production capacity and higher profit margins.
Additional information about the company is available at:
www.newenergysystemsgroup.com
Forward Looking Statements
This release contains certain "forward-looking statements"
relating to the business of the Company and its subsidiary and
affiliated companies. These forward looking statements are often
identified by the use of forward-looking terminology such as
"believes," "expects" or similar expressions. Such forward looking
statements involve known and unknown risks and uncertainties that
may cause actual results to be materially different from those
described herein as anticipated, believed, estimated or expected.
Investors should not place undue reliance on these forward-looking
statements, which speak only as of the date of this press release.
The Company's actual results could differ materially from those
anticipated in these forward-looking statements as a result of a
variety of factors, including those discussed in the Company's
periodic reports that are filed with the Securities and Exchange
Commission and available on its website
(www.sec.gov). All forward-looking statements
attributable to the Company or to persons acting on its behalf are
expressly qualified in their entirety by these factors other than
as required under the securities laws. The Company does not assume
a duty to update these forward-looking statements.
For more information, please contact:
COMPANY
New Energy Systems Group
Ken Lin, VP of Investor
Relations
Tel:
+1-917-573-0302
Email: klin1330@hotmail.com
INVESTOR RELATIONS
John Mattio, SVP
HC International, Inc.
Tel: US +1-212-301-7130
Email: john.mattio@mzgroup.us
Web: http://www.mz-ir.com
NEW ENERGY SYSTEMS
GROUP AND SUBSIDIARIES
|
CONSOLIDATED BALANCE
SHEETS
|
|
|
March 31, 2012
(Unaudited)
|
|
December 31, 2011
|
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and
equivalents
|
|
$
|
8,540,268
|
|
$
|
4,528,731
|
Accounts
receivable
|
|
|
5,644,163
|
|
|
6,614,814
|
Inventory
|
|
|
829,823
|
|
|
1,661,515
|
Prepayments
|
|
|
324,631
|
|
|
554,375
|
Other
receivables
|
|
|
9,802,811
|
|
|
14,121,556
|
Taxes
receivable
|
|
|
251,930
|
|
|
217,106
|
Due from
shareholders
|
|
|
284,636
|
|
|
284,337
|
Prepaid
expense
|
|
|
100,000
|
|
|
-
|
Deferred
compensation
|
|
|
683,838
|
|
|
686,979
|
|
|
|
|
|
|
|
Total
current assets
|
|
|
26,462,100
|
|
|
28,669,413
|
|
|
|
|
|
|
|
Noncurrent
assets
|
|
|
|
|
|
|
Property and
equipment
|
|
|
196,959
|
|
|
208,271
|
Deferred compensation -
noncurrent
|
|
|
254,742
|
|
|
423,493
|
Goodwill
|
|
|
39,888,807
|
|
|
39,888,807
|
Intangible assets,
net
|
|
|
10,533,645
|
|
|
11,051,910
|
|
|
|
|
|
|
|
Total
noncurrent assets
|
|
|
50,874,153
|
|
|
51,572,481
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
77,336,253
|
|
$
|
80,241,894
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
1,991,134
|
|
$
|
2,837,889
|
Accrued expenses and
other payables
|
|
|
996,981
|
|
|
818,452
|
Taxes payable
|
|
|
121,112
|
|
|
21,103
|
Loans payable to related
parties
|
|
|
-
|
|
|
571,347
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
3,109,227
|
|
|
4,248,791
|
|
|
|
|
|
|
|
Deferred tax
liability
|
|
|
2,635,005
|
|
|
2,764,571
|
|
|
|
|
|
|
|
Total
Liabilities
|
|
|
5,744,232
|
|
|
7,013,362
|
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
Preferred stock, $.001
par value, 60,000,000 shares authorized, 0 shares issued and
outstanding
|
|
|
-
|
|
|
-
|
Common stock, $.001 par
value, 140,000,000 shares authorized, 14,571,731 shares issued and
outstanding
|
|
|
14,571
|
|
|
14,571
|
Additional paid in
capital
|
|
|
74,261,543
|
|
|
74,255,585
|
Statutory
reserves
|
|
|
2,410,573
|
|
|
2,410,573
|
Other comprehensive
income
|
|
|
3,301,907
|
|
|
3,292,074
|
Accumulated
deficit
|
|
|
(8,396,573)
|
|
|
(6,744,271)
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
|
71,592,021
|
|
|
73,228,532
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
|
77,336,253
|
|
$
|
80,241,894
|
NEW ENERGY SYSTEMS
GROUP AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS)
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
2012
|
|
2011
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
NET SALES
|
|
|
|
|
Battery
|
|
$
|
2,996,861
|
|
$
|
6,968,898
|
Solar panel
|
|
|
1,958,404
|
|
|
5,514,918
|
Total
revenue
|
|
|
4,955,265
|
|
|
12,483,816
|
|
|
|
|
|
|
|
COST OF SALES
|
|
|
|
|
|
|
Battery
|
|
|
2,875,569
|
|
|
3,279,195
|
Solar panel
|
|
|
1,862,693
|
|
|
3,876,878
|
Total cost
of sales
|
|
|
4,738,262
|
|
|
7,156,073
|
|
|
|
|
|
|
|
GROSS PROFIT
|
|
|
217,003
|
|
|
5,327,743
|
|
|
|
|
|
|
|
OPERATING
EXPENSE
|
|
|
|
|
|
|
Selling
|
|
|
395,355
|
|
|
321,863
|
General and
administrative
|
|
|
1,665,598
|
|
|
1,382,432
|
Total
operating expenses
|
|
|
2,060,953
|
|
|
1,704,295
|
|
|
|
|
|
|
|
INCOME (LOSS) FROM
OPERATIONS
|
|
|
(1,843,950)
|
|
|
3,623,448
|
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSES)
|
|
|
|
|
|
|
Other expense
(income)
|
|
|
(259)
|
|
|
2,614
|
Interest
income
|
|
|
7,178
|
|
|
1,275
|
Total other
income, net
|
|
|
6,919
|
|
|
3,889
|
|
|
|
|
|
|
|
INCOME (LOSS) BEFORE
INCOME TAXES
|
|
|
(1,837,031)
|
|
|
3,627,337
|
|
|
|
|
|
|
|
INCOME TAX BENEFIT
(EXPENSE)
|
|
|
184,729
|
|
|
(987,101)
|
|
|
|
|
|
|
|
INCOME (LOSS) FROM
CONTINUED OPERATIONS
|
|
|
(1,652,302)
|
|
|
2,640,236
|
INCOME FROM DISCONTINUED
OPERATIONS, NET OF TAX
|
|
|
-
|
|
|
2,820,319
|
|
|
|
|
|
|
|
NET INCOME
(LOSS)
|
|
|
(1,652,302)
|
|
|
5,460,555
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE
INCOME
|
|
|
|
|
|
|
Foreign
currency translation
|
|
|
9,833
|
|
|
114,851
|
|
|
|
|
|
|
|
COMPREHENSIVE INCOME
(LOSS)
|
|
$
|
(1,642,469)
|
|
$
|
5,575,406
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE
SHARES OUTSTANDING
|
|
|
|
|
|
|
Basic
|
|
|
14,571,731
|
|
|
14,286,511
|
Diluted
|
|
|
14,571,731
|
|
|
14,558,566
|
|
|
|
|
|
|
|
NET INCOME (LOSS) PER
SHARE FROM CONTINUING OPERATIONS
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.11)
|
|
$
|
0.18
|
Diluted
|
|
$
|
(0.11)
|
|
$
|
0.18
|
|
|
|
|
|
|
|
NET INCOME (LOSS) PER
SHARE FROM DISCONTINUING OPERATIONS
|
|
|
|
|
|
|
Basic
|
|
$
|
-
|
|
$
|
0.20
|
Diluted
|
|
$
|
-
|
|
$
|
0.19
|
|
|
|
|
|
|
|
NET INCOME (LOSS) PER
SHARE
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.11)
|
|
$
|
0.38
|
Diluted
|
|
$
|
(0.11)
|
|
$
|
0.37
|
NEW ENERGY SYSTEMS
GROUP AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
2012
|
|
2011
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
Net income
(loss)
|
|
$
|
(1,652,302)
|
|
$
|
5,460,555
|
Adjustments to reconcile
net income (loss) to net cash
|
|
|
|
|
|
|
provided by operating
activities:
|
|
|
|
|
|
|
Depreciation
and amortization
|
|
|
529,770
|
|
|
768,370
|
Changes in
deferred taxes
|
|
|
(129,566)
|
|
|
(167,641)
|
Deferred
stock compensation
|
|
|
171,892
|
|
|
168,750
|
Stock
options and warrant expense
|
|
|
5,958
|
|
|
10,071
|
(Increase) / decrease in
current assets:
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
1,124,971
|
|
|
(5,840,687)
|
Inventory
|
|
|
831,703
|
|
|
(2,341,718)
|
Prepaid
expenses, deposits and other receivables
|
|
|
129,846
|
|
|
790
|
Increase/(decrease) in
current liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
|
(997,380)
|
|
|
4,325,793
|
Accrued
expenses and other payables
|
|
|
178,374
|
|
|
61,580
|
Taxes
payable
|
|
|
65,256
|
|
|
1,131,689
|
|
|
|
|
|
|
|
NET CASH PROVIDED BY
OPERATING ACTIVITIES
|
|
|
258,522
|
|
|
3,577,552
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
|
Cash
of disposed subsidiaries
|
|
|
3,739,666
|
|
|
-
|
Acquisition
of property and equipment
|
|
|
-
|
|
|
(12,456)
|
|
|
|
|
|
|
|
NET CASH PROVIDED BY
(USED IN) INVESTING ACTIVITIES
|
|
|
3,739,666
|
|
|
(12,456)
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
Repayment of
acquisition liability for subsidiaries
|
|
|
-
|
|
|
(6,714,060)
|
Cash
proceeds from warrant exercise
|
|
|
-
|
|
|
87,500
|
|
|
|
|
|
|
|
NET CASH USED IN
FINANCING ACTIVITIES
|
|
|
-
|
|
|
(6,626,560)
|
|
|
|
|
|
|
|
EFFECT OF EXCHANGE RATE
CHANGE ON CASH AND EQUIVALENTS
|
|
|
13,349
|
|
|
118,251
|
|
|
|
|
|
|
|
NET INCREASE (DECREASE)
IN CASH AND EQUIVALENTS
|
|
|
4,011,537
|
|
|
(2,943,213)
|
|
|
|
|
|
|
|
CASH AND EQUIVALENTS,
BEGINNING OF PERIOD
|
|
|
4,528,731
|
|
|
13,065,008
|
|
|
|
|
|
|
|
CASH AND EQUIVALENTS,
END OF PERIOD
|
|
$
|
8,540,268
|
|
$
|
10,121,795
|
|
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURES:
|
|
|
|
|
|
|
Cash paid during the
period for:
|
|
|
|
|
|
|
Income
taxes
|
|
$
|
-
|
|
$
|
1,396,883
|
Interest
|
|
$
|
-
|
|
$
|
-
|
SOURCE New Energy Systems Group