ZHEJIANG, China, Aug. 14, 2012
/PRNewswire-Asia-FirstCall/ -- SORL Auto Parts, Inc.
(NASDAQ: SORL) ("SORL" or the "Company"), a leading manufacturer
and distributor of automotive brake systems as well as other key
safety-related auto parts in China, announced today its financial results
for the second quarter ended June 30,
2012.
Second Quarter 2012 Financial Highlights
- Revenues for the second quarter of 2012 were $52.1 million;
- Gross margin was 27.2% in the second quarter of 2012, up from
27.1% in the second quarter of 2011;
- Net Income attributable to shareholders was $3.0 million, or $0.16 per diluted share, in the second quarter of
2012;
- In the first six months, cash flow from operating activities
was $10.2 million and free cash flow
of $9.8 million was generated.
Mr. Xiaoping Zhang, SORL's Chief
Executive Officer and Chairman, stated, "We produced a strong
quarter in a very difficult global commercial vehicle market. While
our revenue in the domestic OEM, domestic aftermarket and
international market all experienced different levels of
year-over-year declines, we managed to hold our market shares and
protect our gross margin. Despite the negative sentiment in the
marketplace, there is also a bright side to the story. The large
and increasing base of commercial vehicles in operation in
China, stricter safety measures
and the expiration of OEM warranties helped SORL's aftermarket
sales, as braking systems are one of the most critical controls of
a vehicle's safety. In addition, the continuing growth of
China's many large urban centers,
new school bus regulations and the Chinese government's increased
support for public transportation supports the bus aftermarket and
OEM markets. Internationally, we also see opportunities as
Chinese-made product quality has reached the same level of global
counterparts, but with a better pricing advantage, especially in
the standard product category."
Ms. Jinrui Yu, SORL's Chief
Operating Officer, commented, "In a market with excess capacity,
our balanced revenue sources enable us to stay competitive
financially and operationally. We continue to execute our product
strategy by introducing new products with new features, which
helped to stabilize sales in the OEM market and aftermarket and
defend our gross margin. Our penetration into the bus and
light-duty vehicle OEM markets helped offset the sales decline in
the medium-duty and heavy-duty OEM truck market in the second
quarter of 2012. We increased our receivables and inventory
management and improved our balance sheet through much stronger
free cash flow generation in the quarter. Due to our improved cash
flow in the first half of 2012, we have also significantly reduced
our bank loans and lowered our financial expenses."
Financial Performance
For the second quarter of 2012, net sales were $52.1 million, compared to $61.1 million for the second quarter of 2011.
Revenues from the Company's domestic OEM customers were
$25.6 million, compared to
$32.6 million for the second quarter
of 2011. Revenues from China's
domestic aftermarket were $11.7
million, a 7.9% decrease over the previous year's second
quarter. Revenues from international markets were $14.8 million, compared to $15.7 million from the same period in 2011.
China's macroeconomic climate
resulted in lower GDP growth of 7.6%, the lowest quarterly rate in
the past three years, and commercial vehicle sales were affected.
According to the China Association of Automobile Manufacturers
(CAAM), commercial vehicle sales declined by 10.2% during the 2012
second quarter and sales of heavy-duty truck and trailers were
35.2% lower in the 2012 second quarter as compared with the same
quarter last year. For the first time since China entered its industrialization and
urbanization business phase, the growth rate of automotive vehicle
sales declined in China over the
first six month periods in two consecutive years. International
sales decreased by 5.7% to $14.8
million for the second quarter of 2012. The decrease in
international sales has several causes. The ongoing European debt
crisis and currency depreciation in certain markets continued to
cause some international customers to lower their inventory levels.
Unstable situations in the Middle Eastern countries restricted some
customers' purchases from those countries.
The gross profit for the second quarter of 2012 was $14.2 million, compared with the gross profit of
$16.6 million, for the second quarter
of 2011. Gross margin was 27.2%, slightly higher than the 27.1%
gross margin in the second quarter of 2011. The stability of the
gross margin was primarily the result of increasing production
efficiency, improving the technologies of products, and improving
the Company's product portfolio, especially in the passenger
vehicle braking segment. The Company believes that its focus on
improving production efficiencies and increasing the sales of
higher-profit, higher-technology new products will help maintain or
improve its gross profit margin.
Operating expenses decreased by 4.8% to $9.8 million in the second quarter of 2012 from
$10.3 million in the second quarter
of 2011.
Selling and distribution expenses were $3.52 million, or 6.8% of quarterly revenue
compared with $3.46 million, or 5.7%
of revenues in the same quarter of 2011.The higher expenses were
mainly due to higher travel and wage expenses in an effort to
enhance the Company's marketing campaigns in both domestic OEM and
aftermarket sectors.
General and administrative (G&A) expenses in the second
quarter of 2012 were $3.5 million, or
6.7% of revenue, compared with $3.8
million, or 6.2%, in the second quarter of 2011. The higher
percentage of G&A expenses to revenues in the second quarter of
2012 was mainly due to lower sales.
Research and development (R&D) expenses were $2.3 million, or 4.4% of revenue in the second
quarter of 2012 compared with $2.2
million, or 3.6% in the second quarter of 2011. The R&D
program was mainly focused on developing higher-margin,
electronically controlled mechatronic products, upgrades to the
Company's traditional valve products to capture market share, and
improvement in production techniques.
Operating income was $4.3 million
for the second quarter of 2012 compared to $6.2 million for the same quarter of 2011. The
reduced operating income reflects lower sales and gross profit. The
operating margin percentage was 8.3% in the second quarter of 2012,
lower than 10.2% in the second quarter of 2011, but higher than
7.5% in the first quarter of 2012.
Income tax expense was $1.3
million and $1.0 million
for the quarters ended June 30, 2012
and 2011, respectively. For the quarter ended June 30, 2012, the effective income tax rate was
25%. However, the Company is in the process of renewing its
"High-Tech Enterprise" certificate. When this renewal is completed,
the effective income tax rate will be reduced to 15% later in 2012.
Upon receiving High-Tech Enterprise certificate, the company will
expect a tax refund of partial tax payment in the previous
quarters, adjusting to the new tax rate.
Net income attributable to stockholders for the second quarter
of 2012 was $3.0 million, or
$0.16 per basic and diluted share,
compared with $5.0 million, or
$0.26 per basic and diluted share, in
the second quarter of 2011.
First Six Months Financial Results
SORL's net sales for the first six months of 2012 were
$96.7 million, compared with
$113.1 million during the same period
in 2011.
For the six months ended June 30,
2012, domestic OEM sales were $51.4
million, a 20.4% decrease from the same period in 2011.
Aftermarket sales were $21.5 million
reflecting a slight increase from a year ago. International sales
declined 12.2% to $23.8 million
compared with last year's first six month period.
SORL's gross profit declined to $26.4
million from $31.2 million
during the first six months in 2011. Gross margin was 27.3% in 2012
compared with 27.6% for the first six months of 2011.
Income from operations declined to $7.7
million from $12.3 million for
the first six months of 2011. Operating margin was 7.9% versus
10.9% in the year ago same period.
The net income attributable to stockholders was $5.3 million, compared with $9.8 million in the first six months of 2011,
with basic and diluted earnings per share ("EPS") of $0.28 and $0.51,
respectively.
Balance Sheet
As of June 30, 2012, the Company
had cash and cash equivalents of $21.3
million compared with $17.1
million on December 31, 2011.
Bank acceptance notes from customers decreased to $11.7 million from $18.0
million at December 31, 2011.
Short term bank loans were reduced to $12.1
million from $18.4 million at
the end of 2011. Total equity increased to $179.3 million at the end of June 2012 compared with $174.1 million at December
31, 2011. The Company had working capital of $122.6 million as compared to working capital of
$115.1 million at December 31, 2011. The current ratio was 3.76 to
1 at June 30, 2012. Net cash flow
from operating activities was $10.2
million for the first six months of 2012, compared with
$10.6 million in the year ago same
period. Capital expenditures in the first six months of 2012 were
$0.4 million as compared to
$4.9 million in the same period of
2011.
Recent Developments
On July 20, 2012, SORL announced
that a large retail auto parts and service retail chain in the U.S.
is now offering SORL hydraulic replacement brake parts to its
customers. In 2011, SORL's international sales increased by 17.7%
as its products were sold into more than 104 countries and regions
in the world and accounted for 26.3% of sales. Three of the top 7
international customers in 2011 were located in the United States.
On July 18, 2012, Company
announced it had launched a new generation of electric air brake
compressors to be used in electric buses. Air brake
compressors used in traditional vehicles are powered by an internal
combustion engine. SORL's new generation of electric air brake
compressors are powered by an electric motor, thereby increasing
fuel conservation and reducing pollution. The new compressors have
an extended life span as it is far easier to make them start or
stop working. An electric air compressor is a necessity for all
electric buses with an air brake system. The new compressors
have completed all quality and performance tests and are currently
being evaluated by the major electric bus manufacturers. The State
Council issued the "energy-saving and new energy automotive
industry development plan (2012-2020)" directive identifying that
pure electric drive is the main strategic orientation of new energy
vehicles. SORL's mission is to help industrialize pure electric and
plug-in hybrid vehicles, promote and popularize non-plug-in hybrid
vehicles, and enhance energy-saving combustion engine vehicles, to
increase the overall technological level of China's automotive industry.
On July 2, 2012, the Company
announced it had recently qualified as a supplier to Beijing Foton
Daimler Automotive Co., Ltd. ("BFDA") after passing a number of
rigorous on-site inspections and evaluations. In May 2012, BFDA's assessment panel conducted a
two-day, on-site inspection at SORL to determine the Company's
qualifications to become a potential domestic supplier. The
assessment process included various elements such as evaluations of
the Company & Management, Project & Supplier Management,
Engineering, Quality, Production, and Supply & Logistics. SORL
successfully met all requirements, and entered into BFDA's supplier
system to become a potential supplier.
Business Outlook
For the fiscal year 2012, management revised their expectations
for net sales to be approximately $198
million and net income to be approximately $11.1 million. The net income guidance is
currently based upon 25% tax rate which is subject to change upon
the renewal approval of High-Tech Enterprise status. These targets
are based on the Company's current views on the operating and
market conditions, which are subject to change.
"Going into second half of the year, there remains uncertainties
in many markets. However, we remain confident that we will increase
our market share domestically and internationally. With our
improved understanding of global market coupled with an increased
number of SKUs, we will continue to increase our penetration into
more developed and emerging markets. On the cost control side, we
will reduce headcounts and continue to focus on productivity
improvement by utilizing more automated equipment. We also expect
to continue to generate solid free cash flow. We believe that with
our strong financial discipline, solid product execution and
invaluable experience throughout the 2008-2009 periods, we are well
positioned to weather another storm and build strength for the next
wave of growth in coming years." Ms. Yu concluded.
Conference Call
Management will host a conference call on Tuesday, August 14, 2012 at 8:00 a.m. EDT / 8:00
p.m. Beijing Time to discuss its 2012 second quarter
financial results. Listeners may access the call by dialing U.S.
toll free number +1-877-407-0778, or +1-201-689-8565 for
international callers, and China
toll free 00-800-4626-6666. A live web cast of the conference call
will also be available at http://www.sorl.cn.
A replay of the call will be available shortly after the conference
call through 11:59 p.m. EDT on
September 14, 2012. The replay
dial-in numbers are: U.S. toll free number +1-877-660-6853,
or the international number is +1-201-612-7415; using Account "286"
and Conference ID "398776" to access the replay.
About SORL Auto Parts, Inc.
As a global tier one supplier of brake and control systems to
the commercial vehicle industry, SORL Auto Parts, Inc. is the
market leader for commercial vehicles brake system, such as trucks
and buses in China. The Company
distributes products both within China and internationally under the SORL
trademark. SORL is listed among the top 100 auto component
suppliers in China, with a product
range that includes 65 categories with over 2000 specifications in
brake system and others. The Company has four authorized
international sales centers in UAE, India, the United
States and Europe. SORL is
working to establish a broader global sales network. For more
information, please visit http://www.sorl.cn.
Safe Harbor Statement
This press release may include certain statements that are not
descriptions of historical facts, but are forward-looking
statements. Forward-looking statements can be identified by the use
of forward-looking terminology such as "will", "believes",
"expects" or similar expressions. These forward-looking statements
may also include statements about the Company's proposed
discussions related to its business or growth strategy, which are
subject to change. Such information is based upon expectations of
the Company's management that were reasonable when made but may
prove to be incorrect. All of such assumptions are inherently
subject to uncertainties and contingencies beyond the Company's
control and upon assumptions with respect to future business
decisions, which are subject to change. The Company does not
undertake to update the forward-looking statements contained in
this press release. For additional information regarding known
material factors that could cause the Company's results to differ
from its projected results, please see its filings with the SEC,
including its Annual Report on Form 10-K, Quarterly Reports on
Form 10-Q, and Current Reports on Form 8-K. Copies
of filings made with the SEC are available through the SEC's
electronic data gathering analysis retrieval system (EDGAR) at
http://www.sec.gov.
Contact Information
Raymond Lin
86+13967776556
86+577+65817721
Email: ljf@sorl.com.cn
Phyllis Huang
86+15167705972
86+577+65817721
Email: Phyllis@sorl.com.cn
Kevin Theiss
Grayling
+1-646-284-9409
Email: kevin.theiss@grayling.com
- Tables follow –
SORL
Auto Parts, Inc. and Subsidiaries
|
Consolidated Balance Sheets
|
June
30, 2012 and December 31, 2011
|
|
|
|
|
|
|
|
|
|
June
30, 2012
|
|
December 31, 2011
|
|
|
|
(Unaudited)
|
|
|
|
Assets
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
Cash and
Cash Equivalents
|
US$
|
21,349,583
|
US$
|
17,116,692
|
|
Accounts
Receivable, Net of Provision
|
|
69,124,181
|
|
65,344,441
|
|
Bank
acceptance notes from customers
|
|
11,691,305
|
|
17,980,145
|
|
Inventory
|
|
54,863,701
|
|
56,377,556
|
|
Prepayments
|
|
7,145,345
|
|
2,484,026
|
|
Other
current assets
|
|
2,022,219
|
|
4,960,061
|
|
Deferred
tax assets
|
|
792,496
|
|
605,539
|
|
Total Current Assets
|
|
166,988,830
|
|
164,868,460
|
Fixed
Assets
|
|
|
|
|
|
Machinery
|
|
51,338,974
|
|
49,879,491
|
|
Molds
|
|
1,379,570
|
|
1,384,825
|
|
Office
equipment
|
|
1,507,432
|
|
1,439,305
|
|
Vehicle
|
|
1,977,931
|
|
1,853,111
|
|
Building
|
|
8,854,995
|
|
8,888,723
|
|
Machinery
held under capital lease
|
|
18,097,156
|
|
18,166,087
|
|
Construction in progress
|
|
153,336
|
|
1,503,200
|
|
Less:
Accumulated Depreciation
|
|
(34,309,286)
|
|
(30,905,671)
|
|
Property,
Plant and Equipment, Net
|
|
49,000,108
|
|
52,209,071
|
|
Leasehold
Improvements in Progress
|
|
366,912
|
|
375,604
|
|
|
|
|
|
|
Land
Use Rights, Net
|
|
14,870,156
|
|
15,111,078
|
|
|
|
|
|
|
Other
Non-Current Assets
|
|
|
|
|
|
|
|
|
|
|
|
Intangible
Assets
|
|
175,203
|
|
175,871
|
|
Less:
Accumulated Amortization
|
|
(100,226)
|
|
(92,237)
|
|
Intangible Assets, Net
|
|
74,977
|
|
83,634
|
|
Security
Deposits On Lease Agreement
|
|
1,872,757
|
|
1,879,890
|
|
Other
assets
|
|
9,046
|
|
-
|
|
Total
Other Non-Current Assets
|
|
1,956,780
|
|
1,963,524
|
|
Total
Assets
|
US$
|
233,182,786
|
US$
|
234,527,737
|
|
|
|
|
|
|
|
Liabilities and Shareholders'
Equity
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
Accounts
Payable, including $50,495 and $524,148 due
to related parties at June 30, 2012 and December 31, 2011,
respectively.
|
US$
|
10,418,339
|
US$
|
10,772,396
|
|
Bank
acceptance notes to vendors
|
|
3,320,211
|
|
5,589,678
|
|
Deposit
Received from Customers
|
|
5,012,252
|
|
5,074,532
|
|
Short term
bank loans
|
|
12,080,097
|
|
16,448,527
|
|
Income tax
payable
|
|
1,240,240
|
|
273,781
|
|
Accrued
Expenses
|
|
9,660,623
|
|
8,808,788
|
|
Current
Portion Of Capital Lease Obligations
|
|
2,389,159
|
|
2,305,125
|
|
Other
Current Liabilities, including $118,659 and $143,950 due to related
parties at June 30, 2012 and December 31, 2011,
respectively.
|
|
241,852
|
|
467,850
|
|
Total Current Liabilities
|
|
44,362,773
|
|
49,740,677
|
|
|
|
|
|
|
Non-Current Liabilities
|
|
|
|
|
|
Non-Current Portion Of Capital Lease
Obligations
|
9,211,306
|
|
10,469,265
|
|
Deferred
tax liabilities
|
|
263,192
|
|
236,385
|
|
Total Non-Current Liabilities
|
|
9,474,498
|
|
10,705,650
|
|
|
|
|
|
|
|
Total
Liabilities
|
US$
|
53,837,271
|
US$
|
60,446,327
|
|
|
|
|
|
|
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
Stock - No Par Value; 1,000,000 authorized; none issued
and outstanding as of June 30, 2012 and December
31, 2011
|
|
-
|
|
-
|
|
Common
Stock - $0.002 Par Value; 50,000,000 authorized,
|
|
|
|
19,304,921
and 19,304,921 issued and outstanding as of
|
|
|
|
June 30,
2012 and December 31, 2011
|
|
38,609
|
|
38,609
|
|
Additional
Paid In Capital
|
|
42,199,014
|
|
42,199,014
|
|
Reserves
|
|
8,919,810
|
|
8,375,392
|
|
Accumulated other comprehensive income
|
|
21,359,374
|
|
21,910,957
|
|
Retained
Earnings
|
|
89,395,858
|
|
84,610,260
|
|
Total
SORL Auto Parts, Inc. stockholders' equity
|
161,912,665
|
|
157,134,232
|
|
Noncontrolling Interest In
Subsidiaries
|
|
17,432,850
|
|
16,947,178
|
|
Total
Equity
|
|
179,345,515
|
|
174,081,410
|
|
Total
Liabilities and Stockholders' Equity
|
US$
|
233,182,786
|
US$
|
234,527,737
|
SORL
Auto Parts, Inc. and Subsidiaries
|
Consolidated Statements of Income and
Comprehensive Income
|
Three
Months and Six Months Ended June 30, 2012 and 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Month Ended June 30,
|
|
Six
Months Ended June 30,
|
|
|
|
|
|
|
2012
|
2011
|
|
2012
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
US$
|
52,092,172
|
61,106,892
|
US$
|
96,690,413
|
113,099,857
|
Include:
sales to related parties
|
|
|
|
393,384
|
388,169
|
|
1,458,611
|
1,293,116
|
Cost of
Sales
|
|
|
|
|
37,912,979
|
44,524,512
|
|
70,294,923
|
81,928,458
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
|
|
|
14,179,193
|
16,582,380
|
|
26,395,490
|
31,171,399
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
Selling
and Distribution Expenses
|
|
|
|
3,523,498
|
3,459,526
|
|
6,694,400
|
6,528,754
|
General
and Administrative Expenses
|
|
|
3,493,009
|
3,813,274
|
|
7,350,766
|
6,679,722
|
Research
and development expenses
|
|
|
2,296,820
|
2,198,707
|
|
3,563,976
|
4,177,608
|
Financial
Expenses
|
|
|
|
|
532,722
|
872,846
|
|
1,127,619
|
1,440,198
|
|
|
|
|
|
|
|
|
|
|
|
Total
Expenses
|
|
|
|
|
9,846,049
|
10,344,353
|
|
18,736,761
|
18,826,282
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income
|
|
|
|
|
4,333,144
|
6,238,027
|
|
7,658,729
|
12,345,117
|
|
|
|
|
|
|
|
|
|
|
|
Other
Income
|
|
|
|
|
412,975
|
259,109
|
|
764,820
|
464,357
|
Non-Operating Expenses
|
|
|
|
|
(192,296)
|
(31,790)
|
|
(253,192)
|
(39,927)
|
|
|
|
|
|
|
|
|
|
|
|
Income
(Loss) Before Provision for Income Taxes
|
|
4,553,823
|
6,465,346
|
|
8,170,357
|
12,769,547
|
|
|
|
|
|
|
|
|
|
|
|
Provision
for Income Taxes
|
|
|
|
1,279,762
|
973,077
|
|
2,298,418
|
1,922,820
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
|
|
|
|
US$
|
3,274,061
|
5,492,269
|
US$
|
5,871,939
|
10,846,727
|
|
|
|
|
|
|
|
|
|
|
|
Other
Comprehensive Income - Foreign Currency
Translation Adjustment
|
(873,696)
|
2,080,892
|
|
(607,834)
|
3,615,068
|
|
|
|
|
|
|
|
|
|
|
|
Total
Comprehensive Income
|
|
|
|
2,400,365
|
7,573,161
|
|
5,264,105
|
14,461,795
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Noncontrolling Interest
In Subsidiaries
|
278,034
|
522,072
|
|
541,923
|
1,022,207
|
|
|
|
|
|
|
|
|
|
|
|
Other
Comprehensive Income Attributable to
Non-controlling Interest's Share
|
(86,950)
|
208,209
|
|
(56,251)
|
361,627
|
|
|
|
|
|
|
|
|
|
|
|
Total
Comprehensive Income Attributable to
Non-controlling Interest's Share
|
191,084
|
730,281
|
|
485,672
|
1,383,834
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
Attributable to Stockholders
|
|
US$
|
2,996,027
|
4,970,197
|
US$
|
5,330,016
|
9,824,520
|
|
|
|
|
|
|
|
|
|
|
|
Other
Comprehensive Income Attributable
to Stockholders
|
(786,746)
|
1,872,683
|
|
(551,583)
|
3,253,441
|
|
|
|
|
|
|
|
|
|
|
|
Total
Comprehensive Income Attributable
to Stockholders
|
US$
|
2,209,281
|
6,842,880
|
US$
|
4,778,433
|
13,077,961
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average common share – Basic
|
|
|
19,304,921
|
19,304,921
|
|
19,304,921
|
19,304,921
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average common share – Diluted
|
|
|
19,304,921
|
19,304,921
|
|
19,304,921
|
19,304,921
|
|
|
|
|
|
|
|
|
|
|
|
EPS –
Basic
|
|
|
|
|
|
0.16
|
0.26
|
|
0.28
|
0.51
|
|
|
|
|
|
|
|
|
|
|
|
EPS –
Diluted
|
|
|
|
US$
|
0.16
|
0.26
|
US$
|
0.28
|
0.51
|
SORL
Auto Parts, Inc. and Subsidiaries
|
Consolidated Statements of Cash
Flows
|
Six
Months Ended June 30, 2012 and 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
|
2012
|
2011
|
|
|
|
|
|
Cash
Flows from Operating Activities
|
|
|
|
|
Net
Income
|
US$
|
|
5,330,016
|
9,824,519
|
Adjustments to reconcile net income (loss) to net
cash
|
|
|
|
|
from operating
activities:
|
|
|
|
|
Noncontrolling Interest In
Subsidiaries
|
|
|
541,923
|
1,022,207
|
Bad
Debt Expense
|
|
|
27,775
|
578,855
|
Depreciation and Amortization
|
|
|
3,787,576
|
3,431,967
|
Loss on disposal of Fixed Assets
|
|
|
2,333
|
-
|
Changes in Assets and
Liabilities:
|
|
|
|
|
Account Receivables
|
|
|
(3,517,570)
|
(16,957,484)
|
Bank acceptance notes from customers
|
|
|
6,248,483
|
12,686,597
|
Other Currents Assets
|
|
|
2,420,536
|
(952,670)
|
Inventory
|
|
|
1,308,149
|
(9,270,332)
|
Prepayments
|
|
|
(4,688,661)
|
(645,702)
|
Deferred tax assets
|
|
|
(189,870)
|
(187,706)
|
Accounts Payable and Bank acceptance notes to vendors
|
|
|
(2,587,357)
|
12,203,405
|
Income Tax Payable
|
|
|
966,078
|
195,517
|
Deposits Received from Customers
|
|
|
(43,080)
|
(2,752,132)
|
Other Current Liabilities and Accrued Expenses
|
|
|
577,231
|
1,347,385
|
Deferred tax liabilities
|
|
|
27,798
|
26,746
|
Net Cash Flows from Operating Activities
|
|
|
10,211,360
|
10,551,172
|
|
|
|
|
|
Cash
Flows from Investing Activities
|
|
|
|
|
Acquisition of Property and Equipment
|
|
|
(415,296)
|
(4,855,872)
|
Sales
proceeds of disposal of fixed assets
|
|
|
3,096
|
-
|
Leasehold
Improvements in Progress
|
|
|
(31,069)
|
-
|
|
|
|
|
|
Net Cash Flows from Investing Activities
|
|
|
(443,269)
|
(4,855,872)
|
|
|
|
|
|
Cash
Flows from Financing Activities
|
|
|
|
|
Proceeds from (Repayment of) Bank
Loans
|
|
|
(4,325,512)
|
1,532,234
|
Repayment of capital lease
|
|
|
(1,129,247)
|
-
|
|
|
|
|
|
|
|
|
|
|
Net Cash flows from Financing Activities
|
|
|
(5,454,759)
|
1,532,234
|
|
|
|
|
|
Effects
on changes in foreign exchange rate
|
|
|
(80,441)
|
261,553
|
|
|
|
|
|
Net Change
in Cash and Cash Equivalents
|
|
|
4,232,891
|
7,489,087
|
|
|
|
|
|
Cash and
Cash Equivalents- Beginning of the year
|
|
|
17,116,692
|
6,691,078
|
|
|
|
|
|
Cash
and cash Equivalents - End of the period
|
US$
|
|
21,349,583
|
14,180,165
|
|
|
|
|
|
|
|
|
|
|
Supplemental Cash Flow Disclosures:
|
|
|
|
|
Interest Paid
|
|
|
690,117
|
1,319,871
|
Tax
Paid
|
|
|
1,489,636
|
1,888,263
|
SOURCE SORL Auto Parts, Inc.