ZHEJIANG, China, May 15, 2015 /PRNewswire/ -- 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 unaudited financial
results for the first quarter ended March
31, 2015.
First Quarter 2015 Financial Highlights
- Revenues for the first quarter of 2015 increased by 4.4% to
$52.2 million;
- International sales rose by 27.5% and aftermarket sales rose by
18.0%;
- Gross margin declined to 26.3% in the first quarter of
2015;
- Net Income increased by 10.1% to $3.1
million, or $0.16 per diluted
share;
- Cash, cash equivalents and short-term investments totaled
$49.6 million with a current ratio of
3.7 to 1.
Mr. Xiaoping Zhang, SORL's Chief
Executive Officer and Chairman, stated, "We are pleased to report
revenue and net income growth in a very difficult market for
commercial vehicles during the first quarter of 2015. The
production and sales of commercial vehicles declined by 18.4% and
19.5% year-over-year respectively in the first quarter of 2015.
Truck production and sales were down a deeper 21.8% and 22.7%
year-over-year, respectively for the 2015 first quarter. Our strong
positions in the aftermarket and growing international customer
base offset weakness in the Chinese OEM market. Truck sales were
especially impacted by the 'pre-buy' of less expensive National III
emission standard trucks in the year ago same quarter and before
the January 1, 2015 nationwide
enforcement of the stricter National IV emission standards."
"Our growing portfolio of advanced products, strong customer
relationships and more efficient production positions us well to
capture additional market share," Mr. Zhang concluded.
First Quarter 2015 Financial Performance
For the first quarter of 2015, net sales were $52.2 million, compared with $50.0 million for the first quarter of 2014.
Revenues from the Company's domestic OEM customers decreased by
9.4% to $25.9 million, compared with
$28.6 million for the first quarter
of 2014. The Company's domestic aftermarket revenues rose by 18.0%
to $12.4 million, compared with
$10.5 million in the first quarter of
2014. Aftermarket sales increased as the Company's expanded line of
advanced products serviced a larger number of recently sold
vehicles which exceeded their warranty period. Revenues from
international markets increased by 27.5% to $13.9 million, compared with $10.9 million in the first quarter in 2014,
mainly due to our expanding customer base in international
markets.
The gross profit for the first quarter of 2015 decreased by
10.8% to $13.7 million, from
$15.4 million for the first quarter
of 2014. Gross margin in the first quarter of 2015 was 26.3%. The
gross margin decreased primarily due to temporary price promotions
to increase sales and market share.
Operating expenses decreased to $9.8
million in the first quarter of 2015 from $11.5 million in the first quarter of 2014. The
decrease in operating expenses reflected lower expenditures in the
selling and distribution and general and administrative sectors,
partially offset by an increase in research and development. As a
percentage of revenue, operating expenses were 18.7% in the first
quarter of 2015, compared with 23.0% in the first quarter of
2014.
- Selling and distribution expenses were $5.4 million, or 10.3% of quarterly revenues,
compared with $5.7 million, or 11.4%
in the first quarter of 2014. The 6.2% decrease in expenses was
mainly due to lower freight and labor expenses.
- General and administrative expenses in the first quarter of
2015 were $2.7 million, or 5.2% of
revenue compared with $4.3 million,
or 8.6% in the first quarter of 2014. The decline was due to cost
controls implemented in the first quarter of 2015.
- Research and development expenses ("R&D") were $1.7 million, or 3.3% of revenue in the first
quarter of 2015 compared with $1.5
million, or 3.0% of revenue in the first quarter of 2014.
The Company continues to invest in the development of new products,
especially higher-margin electronically controlled products, and
upgrades of older products.
Financial expenses decreased to $0.2
million from $0.5 million due
to decreased interest rate and decreased amount of average loans
outstanding.
Income before provision for income taxes increased by 17.4% to
$4.2 million for the first quarter of
2015 compared to $3.6 million for the
first quarter of 2014. The higher income reflected increased sales
and controlled expenses during the first quarter of 2015. The
pretax income margin percentage was 8.0% in the first quarter of
2015, compared with 7.2% in the first quarter of 2014.
The provision for income taxes was $1.0
million, or a 23.8% tax rate, in the first quarter of 2015,
which compared with $0.5 million, or
a 14.3% tax rate in the first quarter in 2014.
Net income attributable to stockholders for the first quarter of
2015 was $3.1 million, or
$0.16 per basic and diluted share,
compared with $2.8 million, or
$0.14 per basic and diluted share, in
the first quarter of 2014.
Balance Sheet
As of March 31, 2015, the Company
had cash, cash equivalents and short-term investments that totaled
$49.6 million. Total equity increased
to $222.6
million at March 31,
2015 compared with $220.2
million at December 31, 2014.
At March 31, 2015, working capital
increased to $166.0 million with a
current ratio of 3.7 to 1.
Recent Developments
- On January 5, 2015, SORL
announced that it won its first "Excellent Supplier" award from
Shaanxi HANDE Axle Co., Ltd. ("HANDE"). As a high-technology
enterprise, HANDE has been recognized as one of the Top 500 China
Machinery Enterprises and China's
100 Best Auto Parts Enterprises for many years. This award is a
further testament to our ability to produce large quantities of
global-quality braking products that meet the strictest
requirements.
Business Outlook
For the fiscal year 2015, management reiterates that the net
sales will be approximately $256.0
million and net income to be approximately $15.0 million. These targets are based on the
Company's current views on the operating and market conditions,
which are subject to change.
"Our higher sales and net income in the first quarter of 2015
reflect both our new cost controls and pricing to gain additional
market leadership in a difficult environment. We are maintaining
our strong cash and financial position to provide the resources to
develop new products and support further growth," commented Ms.
Jinrui Yu, SORL's Chief Operating
Officer.
Conference Call
Management will host a conference call on Friday, May 15, 2015 at 8:00 a.m. EDT (8:00
p.m. Beijing Time) to discuss its 2015 first quarter
financial results. Listeners may access the call by dialing U.S.
toll free number +1-877-407-0778, +1-201-689-8565 for international
callers, or China toll free
+86-400-120-2840. A live webcast 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 June 15, 2015
(11:59 a.m. Beijing Time on
June 16, 2015). The replay dial-in
numbers are: U.S. toll free number +1-877-660-6853, or the
international number +1-201-612-7415. After dial-in, listeners may
use Conference ID "13609502" 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 systems, 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 systems and others. The Company has four authorized
international sales centers in UAE, 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 within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements can be identified by
the use of forward-looking terminology such as "expects,"
"anticipates," "believes," "targets," "goals," "projects,"
"intends," "plans," "seeks," "estimates," "may," "will," "should"
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. These
risks and uncertainties may include, but are not limited to general
political, economic and business conditions which may impact the
demand for commercial vehicles or passenger vehicles in
China and the other significant
markets where the Company's products are sold, uncertainty
regarding such political, economic and business conditions, trends
in consumer debt levels and bad debt write-offs, general
uncertainty related to possible recessions, natural disasters, the
political stability of China and
the impact of any of those events on demand for commercial or
passenger vehicles, changes in consumer confidence, new product
development and introduction, competitive products and pricing,
seasonality, availability of alternative sources of supply in the
case of the loss of any significant supplier or any supplier's
inability to fulfill the Company's orders, cost of labor and raw
materials, the loss of or curtailed sales to significant customers,
the Company's dependence on key employees and officers, the ability
to secure and protect trademarks, patents and other intellectual
property rights, potential effects of competition in the Company's
business, the dependency of the Company upon the normal operation
of its sole manufacturing facility, potential effect of the
economic and currency instability in China and countries to which the Company sold
its products, the ability of the Company to successfully manage its
expenses on a continuing basis, the continued availability to the
Company of financing and credit on favorable terms, business
disruptions, disease, general risks associated with doing business
in China or other countries
including, without limitation, foreign trade policies, import
duties, tariffs, quotas, political and economic stability, and the
other factors discussed in the Company's Annual Report on Form 10-K
and other filings with the Securities and Exchange Commission. 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
+86.139.6777.6556
+86.577.6581.7721
ljf@sorl.com.cn
Phyllis Huang
+86.151.6770.5972
+86.577.6581.7721
phyllis@sorl.com.cn
Kevin Theiss
Grayling
+1.646.284.9409
kevin.theiss@grayling.com
- Tables Follow -
SORL Auto Parts,
Inc. and Subsidiaries
|
Consolidated
Balance Sheets
|
March 31, 2015 and
December 31, 2014
|
|
|
|
|
|
|
|
|
|
March 31, 2015
|
|
December 31, 2014
|
|
|
|
(Unaudited)
|
|
|
|
Assets
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
Cash and cash
equivalents
|
US$
|
4,727,453
|
US$
|
14,009,597
|
|
Accounts receivable,
net
|
|
72,785,233
|
|
68,171,387
|
|
Bank acceptance notes
from customers
|
|
16,840,791
|
|
17,626,704
|
|
Short-term
investments
|
|
44,845,698
|
|
34,838,757
|
|
Inventories
|
|
79,941,795
|
|
84,186,766
|
|
Prepayments,
including $15,992
and $83,206 due from related parties at
March 31, 2015 and December 31, 2014,
respectively.
|
|
4,494,755
|
|
4,663,002
|
|
Current portion of
prepaid capital lease interest
|
|
235,612
|
|
282,280
|
|
Other current
assets
|
|
1,833,224
|
|
1,282,182
|
|
Deferred tax
assets
|
|
2,023,880
|
|
1,868,371
|
|
Total Current
Assets
|
|
227,728,441
|
|
226,929,046
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
43,189,388
|
|
43,550,927
|
|
Land use rights,
net
|
|
14,272,734
|
|
14,421,729
|
|
Intangible assets,
net
|
|
34,444
|
|
37,661
|
|
Security deposits on
lease agreement
|
|
1,860,664
|
|
1,867,719
|
|
Non-current portion
of prepaid capital
lease interest
|
|
57,003
|
|
99,180
|
|
Total Non-Current
Assets
|
|
59,414,233
|
|
59,977,216
|
|
Total
Assets
|
US$
|
287,142,674
|
US$
|
286,906,262
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
Accounts payable,
including $283,021
and $136,609 due to related parties at
March 31, 2015 and December 31, 2014,
respectively.
|
US$
|
9,196,839
|
US$
|
13,867,316
|
|
Deposit received from
customers
|
|
20,686,281
|
|
19,045,172
|
|
Short-term bank
loans
|
|
12,648,031
|
|
9,539,476
|
|
Income tax
payable
|
|
1,491,189
|
|
1,101,103
|
|
Accrued
expenses
|
|
11,541,927
|
|
13,561,163
|
|
Current portion of
capital lease obligations
|
|
3,721,328
|
|
3,735,438
|
|
Other current
liabilities, including
$213,060 and $17,681 due to related
parties at March 31, 2015 and December
31, 2014, respectively.
|
|
2,487,172
|
|
2,131,527
|
|
Total Current
Liabilities
|
|
61,772,767
|
|
62,981,195
|
|
|
|
|
|
|
|
Non-Current
Liabilities
|
|
|
|
|
|
Non-current portion
of capital lease obligations
|
|
2,790,996
|
|
3,735,437
|
|
Total Non-Current
Liabilities
|
|
2,790,996
|
|
3,735,437
|
|
Total
Liabilities
|
|
64,563,763
|
|
66,716,632
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock - no
par value; 1,000,000
authorized; none issued and outstanding
as of March 31, 2015 and December 31,
2014
|
|
-
|
|
-
|
|
Common stock - $0.002
par value;
50,000,000 authorized,19,304,921 issued
and outstanding as of March 31, 2015
and December 31, 2014
|
|
38,609
|
|
38,609
|
|
Additional paid-in
capital
|
|
42,199,014
|
|
42,199,014
|
|
Reserves
|
|
12,335,365
|
|
12,019,532
|
|
Accumulated other
comprehensive income
|
|
26,766,638
|
|
27,516,206
|
|
Retained
earnings
|
|
119,669,501
|
|
116,935,053
|
|
Total SORL Auto
Parts, Inc. Stockholders' Equity
|
|
201,009,127
|
|
198,708,414
|
|
Noncontrolling
Interest In Subsidiaries
|
|
21,569,784
|
|
21,481,216
|
|
Total
Equity
|
|
222,578,911
|
|
220,189,630
|
|
Total Liabilities
and Equity
|
US$
|
287,142,674
|
US$
|
286,906,262
|
|
|
|
|
|
|
|
SORL Auto Parts,
Inc. and Subsidiaries
|
Consolidated
Statements of Income and Comprehensive Income
|
For The Three
Months Ended March 31, 2015 and 2014 (Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
2015
|
|
2014
|
|
|
|
|
|
Net sales
|
US$
|
52,197,966
|
US$
|
49,993,289
|
Include: sales to
related parties
|
|
1,011,924
|
|
290,077
|
Cost of
sales
|
|
38,466,892
|
|
34,606,353
|
Gross
profit
|
|
13,731,074
|
|
15,386,936
|
|
|
|
|
|
Expenses:
|
|
|
|
|
Selling and
distribution expenses
|
|
5,350,998
|
|
5,705,494
|
General and
administrative expenses
|
|
2,719,372
|
|
4,316,154
|
Research and
development expenses
|
|
1,712,621
|
|
1,491,199
|
Total operating
expenses
|
|
9,782,991
|
|
11,512,847
|
|
|
|
|
|
Other operating
income
|
|
585,717
|
|
376,132
|
|
|
|
|
|
Income from
operations
|
|
4,533,800
|
|
4,250,221
|
|
|
|
|
|
Other
income
|
|
93,391
|
|
38,304
|
Interest
expenses
|
|
(166,656)
|
|
(485,756)
|
Other
expenses
|
|
(259,733)
|
|
(226,034)
|
|
|
|
|
|
Income before
provision for income taxes
|
|
4,200,802
|
|
3,576,735
|
|
|
|
|
|
Provision for income
taxes
|
|
998,278
|
|
513,235
|
|
|
|
|
|
Net income
|
US$
|
3,202,524
|
US$
|
3,063,500
|
|
|
|
|
|
Net income
attributable to noncontrolling interest in subsidiaries
|
|
152,243
|
|
293,197
|
|
|
|
|
|
Net income
attributable to common stockholders
|
US$
|
3,050,281
|
US$
|
2,770,303
|
|
|
|
|
|
Comprehensive
income:
|
|
|
|
|
|
|
|
|
|
Net income
|
US$
|
3,202,524
|
US$
|
3,063,500
|
|
|
|
|
|
Foreign currency
translation adjustments
|
|
(813,243)
|
|
4,357,991
|
|
|
|
|
|
Comprehensive
income
|
|
2,389,281
|
|
7,421,491
|
|
|
|
|
|
Comprehensive income
attributable to noncontrolling interest in subsidiaries
|
88,568
|
|
697,996
|
|
|
|
|
|
Comprehensive income
attributable to common stockholders
|
US$
|
2,300,713
|
US$
|
6,723,495
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common share - basic
|
|
19,304,921
|
|
19,304,921
|
|
|
|
|
|
Weighted average
common share - diluted
|
|
19,304,921
|
|
19,304,921
|
|
|
|
|
|
EPS -
basic
|
US$
|
0.16
|
US$
|
0.14
|
|
|
|
|
|
EPS -
diluted
|
US$
|
0.16
|
US$
|
0.14
|
SORL Auto Parts,
Inc. and Subsidiaries
|
Consolidated
Statements of Cash Flows
|
For The Three
Months Ended March 31, 2015 and 2014 (Unaudited)
|
|
|
|
Three Months Ended
March 31,
|
|
|
2015
|
|
2014
|
|
|
|
|
|
Cash Flows From
Operating Activities
|
|
|
|
|
Net Income
|
US$
|
3,202,524
|
US$
|
3,063,500
|
Adjustments to
reconcile net income to net cash
|
|
|
|
|
used in operating
activities:
|
|
|
|
|
|
|
|
|
|
Allowance for
doubtful accounts
|
|
(338,319)
|
|
299,798
|
Depreciation and
amortization
|
|
1,937,064
|
|
1,853,310
|
Deferred income
tax
|
|
(162,875)
|
|
(89,345)
|
Loss on disposal of
property and equipment
|
|
-
|
|
(8,217)
|
Changes in assets
and liabilities:
|
|
|
|
|
Account
receivable
|
|
(4,556,747)
|
|
(4,438,919)
|
Bank acceptance notes
from customers
|
|
720,695
|
|
7,375,687
|
Other currents
assets
|
|
(557,779)
|
|
117,457
|
Inventories
|
|
3,937,590
|
|
(1,279,739)
|
Prepayments
|
|
(492,545)
|
|
(2,254,068)
|
Prepaid capital lease
interest
|
|
87,570
|
|
131,368
|
Accounts
payable
|
|
(4,765,769)
|
|
(5,252,230)
|
Income tax
payable
|
|
394,992
|
|
(109,066)
|
Deposits received
from customers
|
|
1,716,287
|
|
(524,065)
|
Other current
liabilities and accrued expenses
|
|
(1,608,205)
|
|
308,876
|
Net Cash Flows
Used In Operating Activities
|
|
(485,517)
|
|
(805,653)
|
|
|
|
|
|
Cash Flows From
Investing Activities
|
|
|
|
|
Change in short-term
investments
|
|
(10,157,715)
|
|
-
|
Acquisition of
property and equipment
|
|
(859,313)
|
|
(966,568)
|
Proceeds of disposal
of property and equipment
|
|
-
|
|
14,472
|
Net Cash Flows
Used In Investing Activities
|
|
(11,017,028)
|
|
(952,096)
|
|
|
|
|
|
Cash Flows From
Financing Activities
|
|
|
|
|
Proceeds from bank
loans
|
|
8,643,266
|
|
20,196,632
|
Repayment of bank
loans
|
|
(5,470,663)
|
|
(10,566,433)
|
Repayment of capital
lease
|
|
(932,092)
|
|
(918,873)
|
Net Cash Flows
Provided By Financing Activities
|
|
2,240,511
|
|
8,711,326
|
|
|
|
|
|
Effects on changes in
foreign exchange rate
|
|
(20,110)
|
|
629,376
|
|
|
|
|
|
Net change in cash
and cash equivalents
|
|
(9,282,144)
|
|
7,582,953
|
|
|
|
|
|
Cash and cash
equivalents- beginning of the period
|
|
14,009,597
|
|
28,241,983
|
|
|
|
|
|
Cash and cash
equivalents - end of the period
|
US$
|
4,727,453
|
US$
|
35,824,936
|
|
|
|
|
|
Supplemental Cash
Flow Disclosures:
|
|
|
|
|
Interest
paid
|
US$
|
191,154
|
US$
|
485,756
|
Income taxes
paid
|
US$
|
766,161
|
US$
|
707,103
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/sorl-auto-parts-reports-increased-sales-and-net-income-in-the-first-quarter-of-2015-300084024.html
SOURCE SORL Auto Parts, Inc.