SAN FRANCISCO and SHENZHEN, China, May 8,
2015 /PRNewswire/ -- Highpower International, Inc.
(NASDAQ: HPJ), a developer, manufacturer, and
marketer of lithium and nickel-metal hydride (Ni-MH) rechargeable
batteries, and a battery management systems and battery recycling
provider, today announced its financial results for the 2015 first
quarter ended March 31, 2015.
2015 First Quarter Operating and Financial Highlights (all
results are compared to prior year period)
- Net sales were $32.1 million, an
increase of 10.2% compared to $29.2
million.
- Lithium battery net sales increased 25.6% from $13.4 million to $16.8
million.
- New materials net sales increased 97.3% from $282,567 to $557,550.
- Gross margin was 17.3% compared to 20.3%.
- EBITDA was $1.3 million, compared
to $0.3 million; Adjusted EBITDA
improved to $1.0 million, compared to
$0.7 million.
- Net loss attributable to the Company was $0.1 million, or $0.01 per diluted share, compared to net loss of
$0.9 million or $0.07 per diluted share; non-GAAP net loss
attributable to the Company was $0.3
million, or $0.02 per diluted
share, compared to $0.5 million, or
$0.06 per diluted share.
- Received multi-million dollar order from an international
customer for backup power products for iPhone 6.
- Installed large format lithium batteries on 74 hybrid electric
buses in addition to 81 buses installed in FY 2014.
Management Commentary
Mr. George Pan, Chairman and CEO
of Highpower International, commented, "We are pleased to see
strong year-over-year improvement in performance of sales in
lithium batteries and our new material business. This was a result
of growing global demand for mobile and portable products and
electrical vehicles and increasing awareness of our value-added
service from our customers. As we are reaching capacity of our
lithium battery production, we expect to further expand our lithium
battery facilities on our Huizhou
campus. We anticipate continued growth throughout the remainder of
2015."
2015 First Quarter Financial Review
Net Sales
Net sales for the first quarter ended March 31, 2015 were $32.1
million compared to $29.2
million for the same period in 2014. The 10.2% increase in
net sales compared to the same period in 2014 was mainly due to a
$3.4 million improvement in net sales
of Lithium batteries and $274,983
increase in net sales from new materials business, offset by a
decline of $0.7 million in sales of
Ni-MH batteries.
Gross Profit
For the first quarter ended March 31,
2015, the Company's gross profit was $5.6 million, as compared with $5.9 million for the same period in 2014.
Gross Margin
Gross margin was 17.3% for the first quarter ended March 31, 2015, compared to 20.3% in prior year
period. This decrease was attributable to decrease in the average
selling price of its batteries. The Company is taking measures to
control its production costs by reorganizing its production
structure to focus more attention on equipment automation and
greater efficiency.
Net sales by segments and by geography is set out as
follows:
|
|
Three months
ended
|
|
March
31,
|
|
|
2015
|
|
2014
|
Change in
%
|
|
|
(Unaudited)
|
|
|
|
|
|
$
|
|
$
|
|
Net
sales
|
|
|
|
|
|
Ni-MH
Batteries
|
|
14,759,470
|
|
15,487,503
|
-4.70%
|
Lithium
Batteries
|
|
16,820,628
|
|
13,390,244
|
25.62%
|
New
Materials
|
|
557,550
|
|
282,567
|
97.32%
|
Total
|
|
32,137,648
|
|
29,160,314
|
10.21%
|
|
|
|
|
|
|
By
Geography
|
|
|
|
|
|
China
|
|
43.6%
|
|
49.8%
|
|
Rest of Asia, incl.
H.K.
|
|
32.5%
|
|
19.1%
|
|
Europe
|
|
18.1%
|
|
21.9%
|
|
North
America
|
|
4.8%
|
|
8.0%
|
|
Rest of the
World
|
|
1.0%
|
|
1.2%
|
|
Total
|
|
100%
|
|
100%
|
|
Research and Development (R&D)
R&D spending was $1.7 million,
or 5.2% of net sales, for the first quarter ended March 31, 2015, compared to $1.8 million, or 6.2% of net sales, for the same
period in 2014.
Selling & Distribution
Selling and distribution expenses were $1.8 million, or 5.6% of net sales, for the first
quarter ended March 31, 2015, as
compared with $1.5 million, or 5.3%
of net sales for the same period in 2014. The increase was due to
the expansion of the sales force and marketing activities,
including participation in industry trade shows and international
travels to promote and sell products globally.
General & Administrative
For the first quarter ended March 31,
2015, general and administrative expenses were $3.0 million, or 9.4% of net sales, in comparison
to $3.6 million, or 12.2% of net
sales, for the first quarter of 2014. The decrease was due to
non-cash share-based compensation expense of $121,361, down from $400,946 in the prior year period.
Net Loss
For the first quarter of 2015, net loss attributable to the
Company was $0.1 million, or
$0.01 per basic and diluted share
based on 15.1 million weighted average diluted shares outstanding,
compared to net loss of $0.9 million,
or $0.07 per basic and diluted share
based on 14.0 million weighted average diluted shares outstanding.
Non-GAAP net loss attributable to the Company was $0.3 million, or $0.02 per diluted share, compared to a non-GAAP
net loss of $0.5 million, or
$0.06 per diluted share in the prior
year period.
EBITDA
EBITDA for the first quarter ended March
31, 2015 improved to $1.3
million from $0.3 million in
the prior year period.
A table reconciling EBITDA, a non-GAAP (Generally Accepted
Accounting Principles) financial measure, to the appropriate GAAP
measure is included with the Company's financial information
below.
Balance Sheet Highlights
($ in millions,
except per share data)
|
|
March
31,
|
|
December
31,
|
2015
|
|
2014
|
|
|
(Unaudited)
|
|
|
|
|
$
|
|
$
|
Cash and Cash
Equivalents
|
|
$9.9
|
|
$14.6
|
Total Current
Assets
|
|
$86.6
|
|
$89.2
|
Total
Assets
|
|
$143.9
|
|
$146.2
|
|
|
|
|
|
Total Current
Liabilities
|
|
$100.2
|
|
$101.4
|
Total
Liabilities
|
|
$102.4
|
|
$104.4
|
|
|
|
|
|
Shareholders'
Equity
|
|
$41.5
|
|
$41.8
|
Total Liabilities and
Shareholders' Equity
|
|
$143.9
|
|
$146.2
|
Book Value Per
Share
|
|
$2.75
|
|
$2.77
|
Outlook for 2015
Based on current expectations for global demand in the
rechargeable battery market in 2015 and the continued shift toward
mobile power sources, higher-value energy storage systems and
transportation products, the Company is reaffirming its 2015
guidance of revenues to be between $160
million to $170 million, and non-GAAP net income of between
$5.0 million and $6.0 million, and
net income of between $4.0 million and $5.0
million.
Conference Call Details
The Company announced that it will discuss financial results in
a conference call on May 8, 2015 at
10:00 a.m. Eastern time /
7:00 a.m. Pacific time to discuss
these results.
The dial-in numbers are:
Live Participant Dial In (Toll
Free):
877-407-3108
Live Participant Dial In (International):
201-493-6797
To listen to the live webcast, please go to at
www.highpowertech.com and click on the conference call link, or go
to: http://highpowertech.equisolvewebcast.com/q1-2015. This webcast
will be archived and accessible through the Company's website for
approximately 30 days following the call. The Company will also
have an accompanying slide presentation available in PDF format on
its homepage prior to the conference call.
About Highpower International, Inc.
Highpower International was founded in 2001 and produces
high-quality Nickel-Metal Hydride (Ni-MH) and lithium-based
rechargeable batteries used in a wide range of applications such as
electric buses, bikes, energy storage systems, power tools, medical
equipment, digital and electronic devices, personal care products,
and lighting, etc. Highpower's target customers are Fortune 500
companies and top 10 companies in each vertical segment. With
advanced manufacturing facilities located in Shenzhen, Huizhou, and Ganzhou of China, Highpower is committed to clean
technology, not only in the products it makes, but also in the
processes of production. The majority of Highpower International's
products are distributed to worldwide markets mainly in
the United States, Europe, China
and Southeast Asia.
Use of Non-GAAP Measures
The Company has supplemented its reported GAAP (generally
accepted accounting principles) financial information with non-GAAP
measures. EBITDA was derived by taking earnings before interest
expense (net), taxes, depreciation and amortization. Adjusted
EBITDA and Non-GAAP (adjusted) net income or (loss) exclude
stock-based compensation expense. Adjusted EBITDA, as defined
above, may not be similar to Adjusted EBITDA measures used by other
companies. The presentation of this additional information is not
meant to be considered in isolation or as a substitute for results
prepared in accordance with U.S. GAAP. The Company believes
these non-GAAP measures are useful to investors as they provide a
basis for evaluating the Company's operating results in the
ordinary course of its operations.
These non-GAAP measures are not based on any comprehensive set
of accounting rules or principles. The Company believes that
non-GAAP measures have limitations in that they do not reflect all
of the amounts associated with its results of operations as
determined in accordance with U.S. GAAP and that these measures
should only be used to evaluate the Company's results of operations
in conjunction with, and not in lieu of, the corresponding GAAP
measures. These non-GAAP financial measures are reconciled in the
accompanying tables to the most directly comparable measures as
reported in accordance with GAAP.
Forward Looking
Statements
This press release contains "forward-looking statements" within
the meaning of the "safe-harbor" provisions of the Private
Securities Litigation Reform Act of 1995 that are not
historical facts. These statements can be identified by the
use of forward-looking terminology such as "believe," "expect,"
"may," "will," "should," "project," "plan," "seek," "intend," or
"anticipate" or the negative thereof or comparable terminology, and
include discussions of strategy, and statements about industry
trends and the Company's future performance, operations and
products. Such statements involve known and unknown risks,
uncertainties and other factors that could cause the Company's
actual results to differ materially from the results expressed or
implied by such statements, including, without limitation,
fluctuations in the cost of raw materials; our dependence on, or
inability to attract additional, major customers for a significant
portion of our net sales; our ability to increase manufacturing
capabilities to satisfy orders from new customers; our ability to
maintain increased margins; our dependence on the growth in demand
for portable electronic devices and energy storage systems and
transportation products and the success of manufacturers of the end
applications that use our battery products; our responsiveness to
competitive market conditions; our ability to successfully
manufacture our products in the time frame and amounts expected;
the market acceptance of our battery products, including our
lithium products; our ability to successfully develop products for
and penetrate the electric transportation market; and our ability
to continue R&D development to keep up with technological
changes. For a discussion of these and other risks and
uncertainties see "Risk Factors" and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" in
the Company's public filings with the SEC. Although the Company
believes that the expectations reflected in such forward-looking
statements are reasonable, there can be no assurance that such
expectations will prove to be correct. The Company has no
obligation to update the forward-looking information contained in
this press release.
CONTACT:
Highpower International, Inc.
Henry Sun
CFO
+86-755-8968-6521
ir@highpowertech.com
INVESTOR RELATIONS:
The Equity Group Inc.
In China
Katherine Yao, Associate
+86-10-6587-6435
kyao@equityny.com
In U.S.
Adam Prior, Senior Vice
President
+1 (212) 836-9606
aprior@equityny.com
HIGHPOWER
INTERNATIONAL, INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
|
(Stated in US
Dollars except Number of Shares)
|
|
|
Three months
ended March 31,
|
|
|
2015
|
|
2014
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
$
|
|
$
|
|
|
|
|
|
Net sales
|
|
32,137,648
|
|
29,160,314
|
Cost of
sales
|
|
(26,581,934)
|
|
(23,229,369)
|
Gross
profit
|
|
5,555,714
|
|
5,930,945
|
|
|
|
|
|
Research and
development expenses
|
|
(1,674,124)
|
|
(1,811,952)
|
Selling and
distribution expenses
|
|
(1,798,722)
|
|
(1,537,160)
|
General and
administrative expenses
|
|
(3,024,751)
|
|
(3,571,280)
|
Foreign currency
transaction gain
|
|
370,311
|
|
102,593
|
Loss on derivative
instruments
|
|
-
|
|
(137,281)
|
Total operating
expenses
|
|
(6,127,286)
|
|
(6,955,080)
|
|
|
|
|
|
Loss from
operations
|
|
(571,572)
|
|
(1,024,135)
|
Gain on change of
fair value of warrant liability
|
|
346,299
|
|
-
|
Other
income
|
|
230,092
|
|
541,420
|
Interest
expenses
|
|
(268,642)
|
|
(595,381)
|
Income before
taxes
|
|
(263,823)
|
|
(1,078,096)
|
|
|
|
|
|
Income taxes
benefit
|
|
95,256
|
|
92,151
|
Net loss
|
|
(168,567)
|
|
(985,945)
|
|
|
|
|
|
Less: net loss
attributable to non-controlling interest
|
|
(45,209)
|
|
(50,796)
|
Net loss attributable
to the Company
|
|
(123,358)
|
|
(935,149)
|
|
|
|
|
|
Comprehensive
loss
|
|
|
|
|
Net loss
|
|
(168,567)
|
|
(985,945)
|
Foreign currency
translation loss
|
|
(204,761)
|
|
(341,186)
|
Comprehensive
loss
|
|
(373,328)
|
|
(1,327,131)
|
|
|
|
|
|
Less: comprehensive
loss attributable to non-controlling interest
|
|
(49,173)
|
|
(61,433)
|
Comprehensive loss
attributable to the Company
|
|
(324,155)
|
|
(1,265,698)
|
|
|
|
|
|
Earnings per share of
common stock attributable to the Company
|
|
|
|
|
-Basic and
Diluted
|
|
(0.01)
|
|
(0.07)
|
|
|
|
|
|
Weighted average
number of common stock outstanding
|
|
|
|
|
-Basic and
Diluted
|
|
15,086,169
|
|
13,978,106
|
HIGHPOWER
INTERNATIONAL, INC.AND SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
(Stated in US
Dollars except Number of Shares)
|
|
|
March
31,
|
|
December
31,
|
|
|
2015
|
|
2014
|
|
|
|
|
(Unaudited)
|
|
|
|
|
$
|
|
$
|
ASSETS
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
9,922,960
|
|
14,611,892
|
|
Restricted
cash
|
|
15,959,357
|
|
15,396,827
|
|
Accounts receivable,
net
|
|
30,678,992
|
|
32,316,607
|
|
Notes
receivable
|
|
2,929,338
|
|
621,110
|
|
Prepayments
|
|
4,709,013
|
|
3,283,520
|
|
Other
receivables
|
|
630,440
|
|
665,828
|
|
Inventories
|
|
21,766,434
|
|
22,268,069
|
|
Total Current
Assets
|
|
86,596,534
|
|
89,163,853
|
|
Property, plant and
equipment, net
|
|
50,663,432
|
|
50,437,718
|
|
Land use right,
net
|
|
4,267,987
|
|
4,305,317
|
|
Intangible asset,
net
|
|
587,500
|
|
600,000
|
|
Deferred tax
assets
|
|
1,829,661
|
|
1,647,184
|
TOTAL
ASSETS
|
|
143,945,114
|
|
146,154,072
|
LIABILITIES AND
EQUITY
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
Accounts
payable
|
|
39,024,814
|
|
44,562,647
|
|
Deferred
income
|
|
1,881,694
|
|
1,887,409
|
|
Short-term
loan
|
|
15,173,864
|
|
15,195,040
|
|
Notes
payable
|
|
34,459,062
|
|
29,903,248
|
|
Other payables and
accrued liabilities
|
|
5,751,960
|
|
5,896,547
|
|
Income taxes
payable
|
|
2,002,313
|
|
1,968,656
|
|
Current portion of
long-term loan
|
|
1,953,316
|
|
1,959,248
|
|
Total Current
Liabilities
|
|
100,247,023
|
|
101,372,795
|
|
Warrant
Liability
|
|
721,375
|
|
1,067,674
|
|
Long-term
loan
|
|
1,464,987
|
|
1,959,247
|
TOTAL
LIABILITIES
|
|
102,433,385
|
|
104,399,716
|
EQUITY
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
Preferred
stock
|
|
|
|
|
|
(Par value: $0.0001,
Authorized: 10,000,000 shares, Issued and outstanding:
none)
|
|
-
|
|
-
|
|
Common
stock
|
|
|
|
|
|
(Par value: $0.0001,
Authorized: 100,000,000 shares, 15,088,297 shares issued
and outstanding at
March 31, 2015 and 15,084,746 shares issued and
outstanding
at December 31,
2014)
|
|
1,509
|
|
1,508
|
|
Additional paid-in
capital
|
|
10,661,130
|
|
10,530,430
|
|
Statutory and other
reserves
|
|
3,611,501
|
|
3,611,501
|
|
Retained
earnings
|
|
20,551,663
|
|
20,675,021
|
|
Accumulated other
comprehensive income
|
|
5,427,860
|
|
5,628,657
|
|
Total equity for the
Company's stockholders
|
|
40,253,663
|
|
40,447,117
|
|
Non-controlling
interest
|
|
1,258,066
|
|
1,307,239
|
TOTAL
EQUITY
|
|
41,511,729
|
|
41,754,356
|
TOTAL LIABILITIES
AND EQUITY
|
|
143,945,114
|
|
146,154,072
|
|
|
|
|
|
|
|
HIGHPOWER
INTERNATIONAL, INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(Stated in US
Dollars)
|
|
|
Three months
ended March 31,
|
|
|
2015
|
|
2014
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
$
|
|
$
|
Cash flows from
operating activities
|
|
|
|
|
Net loss
|
|
(168,567)
|
|
(985,945)
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
1,246,043
|
|
1,011,801
|
Allowance for
doubtful accounts
|
|
21
|
|
-
|
Loss on disposal of
property, plant and equipment
|
|
11,709
|
|
37,244
|
Loss on derivative
instruments
|
|
-
|
|
137,281
|
Deferred income
tax
|
|
(187,373)
|
|
(418,906)
|
Share based
payment
|
|
121,361
|
|
400,946
|
Gain on change of
fair value of warrant liability
|
|
(346,299)
|
|
-
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accounts
receivable
|
|
1,576,803
|
|
5,681,371
|
Notes
receivable
|
|
(2,309,732)
|
|
(521,988)
|
Prepayments
|
|
(1,434,905)
|
|
(519,476)
|
Other
receivable
|
|
33,367
|
|
(24,811)
|
Inventories
|
|
434,169
|
|
(493,677)
|
Accounts
payable
|
|
(5,404,188)
|
|
3,911,914
|
Deferred
income
|
|
-
|
|
1,012,063
|
Other payables and
accrued liabilities
|
|
(127,282)
|
|
(237,561)
|
Income taxes
payable
|
|
39,612
|
|
319,409
|
Net cash flows
used in (provided by) operating activities
|
|
(6,515,261)
|
|
9,309,665
|
Cash flows from
investing activities
|
|
|
|
|
Acquisition of plant
and equipment
|
|
(1,664,663)
|
|
(2,403,047)
|
Net cash flows
used in investing activities
|
|
(1,664,663)
|
|
(2,403,047)
|
Cash flows from
financing activities
|
|
|
|
|
Proceeds from
short-term bank loans
|
|
-
|
|
295,426
|
Repayment of
short-term bank loans
|
|
-
|
|
(10,824,720)
|
Repayment of
long-term bank loans
|
|
(488,250)
|
|
(489,708)
|
Proceeds from notes
payable
|
|
16,882,947
|
|
6,192,247
|
Repayment of notes
payable
|
|
(12,237,353)
|
|
(12,159,236)
|
Proceeds from exercise of employee options
|
|
9,339
|
|
-
|
Change in restricted
cash
|
|
(609,041)
|
|
6,920,453
|
Net cash flows
provided by (used in) financing activities
|
|
3,557,642
|
|
(10,065,538)
|
Effect of foreign
currency translation on cash and cash equivalents
|
|
(66,650)
|
|
322,938
|
Net decrease in cash
and cash equivalents
|
|
(4,688,932)
|
|
(2,835,982)
|
Cash and cash
equivalents - beginning of period
|
|
14,611,892
|
|
7,973,459
|
Cash and cash
equivalents - end of period
|
|
9,922,960
|
|
5,137,477
|
Supplemental
disclosures for cash flow information:
|
|
|
|
|
Cash paid
for:
|
|
|
|
|
Income
taxes
|
|
52,505
|
|
7,346
|
Interest
expenses
|
|
268,642
|
|
595,381
|
Non-cash
transactions
|
|
|
|
|
Accounts payable for
construction in progress
|
|
-
|
|
797,753
|
HIGHPOWER
INTERNATIONAL, INC. AND SUBSIDIARIES
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES (Unaudited)
|
(Stated in
US Dollars)
|
Reconciliation of
Net loss to EBITDA
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
March
31,
|
|
|
2015
|
|
2014
|
|
|
(Unaudited)
|
|
|
|
|
$
|
|
$
|
Net loss
attributable to the Company
|
(123,358)
|
|
(935,149)
|
Non-GAAP Net Loss
(1)
|
|
(348,296)
|
|
(534,203)
|
|
|
|
|
|
Interest expenses,
net
|
|
232,570
|
|
322,149
|
Income tax
expenses
|
|
(95,256)
|
|
(92,151)
|
Depreciation and
Amortization
|
|
1,246,043
|
|
1,011,801
|
|
|
|
|
|
EBITDA
|
|
1,259,999
|
|
306,650
|
Non-GAAP
EBITDA(2)
|
|
1,035,061
|
|
707,596
|
(1) See table below
for reconciliation of net loss attributable to the Company to
Non-GAAP net loss attributable to the Company.
|
(2) Excludes
share-based compensation expense and gain on change of fair value
of warrant liability as set forth in the following
table.
|
|
|
HIGHPOWER
INTERNATIONAL, INC. AND SUBSIDIARIES
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES (Unaudited)
|
(Stated in US
Dollars)
|
Reconciliation of
Net Loss Attributable to the Company to Non-GAAP Net Loss
Attributable to the Company
|
|
|
|
|
|
|
|
Three months
ended
|
March
31,
|
|
|
2015
|
|
2014
|
|
|
(Unaudited)
|
|
|
|
|
$
|
|
$
|
Net loss attributable
to the Company
|
|
(123,358)
|
|
(935,149)
|
Stock-based
compensation expense
|
|
121,361
|
|
400,946
|
Gain on change of
fair value of warrant liability
|
|
(346,299)
|
|
-
|
Non-GAAP net loss
attributable to the Company
|
|
(348,296)
|
|
(534,203)
|
|
|
|
|
|
Basic net loss per
share of common stock attributable to the Company
|
|
(0.01)
|
|
(0.07)
|
Stock-based
compensation expense
|
|
0.01
|
|
0.03
|
Gain on change of
fair value of warrant liability
|
|
(0.02)
|
|
-
|
Non-GAAP loss per
share of common stock attributable to the Company
|
|
(0.02)
|
|
(0.04)
|
|
|
|
|
|
Diluted net loss per
share of common stock attributable to the Company
|
|
(0.01)
|
|
(0.07)
|
Stock-based
compensation expense
|
|
0.01
|
|
0.01
|
Gain on change of
fair value of warrant liability
|
|
(0.02)
|
|
-
|
Non-GAAP loss per
share of common stock attributable to the Company
|
|
(0.02)
|
|
(0.06)
|
|
|
|
|
|
Weighted average
number of common shares outstanding
|
|
|
|
|
-Basic and
Diluted
|
|
15,086,169
|
|
13,978,106
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/highpower-international-reports-financial-results-for-the-first-quarter-ended-march-31-2015-300080176.html
SOURCE Highpower International, Inc.