China Ritar Power Announces Third Quarter Fiscal 2010 Results
SHENZHEN, China, Nov. 15, 2010 /PRNewswire-Asia-FirstCall/ -- China Ritar Power Corp. (Nasdaq: CRTP) ("China Ritar" or the "Company"), a leading Chinese manufacturer of innovative nano gel and environmentally friendly batteries, today announced its financial results for the third quarter of fiscal year 2010 ended on September 30, 2010.
Third Quarter Summary
- Revenue decreased 4.75% year-over-year to $31.55 million
- Domestic and international sales accounted for 32% and 68%, respectively, of total revenue
- Gross profit decreased 17.41% year-over-year to $5.16 million
- Net income decreased 48.2% year-over-year to $1.7 million
- Fully diluted earnings per share were $0.08
Revenue was $31.55 million for the third quarter of 2010, down 4.75% from revenue of $33.12 million in the third quarter of 2009. This decrease was mainly due to the delayed delivery to several large customers. Batteries used for Telecom, alternative energy, UPS and light electronic vehicles (LEV) markets accounted for 25%, 27%, 39% and 9% of total sales of the third quarter of 2010, respectively. International sales represented 68% of total sales with domestic sales representing the balance of 32%.
Gross profit for the quarter decreased 17.41% to $5.16 million from $6.25 million in the same period of 2009. Gross margin for third quarter of 2010 was 16.37% compared to 18.88% in the third quarter of 2009.
Operating expenses were $2.5 million or 8.0% of sales, compared to $2.0million or 6.0% of sales in the third quarter of 2009.
Operating income was $2.6 million or 8.3% of sales compared to $4.3 million or 12.9% in the third quarter of 2009.
Net income was $1.69 million in the third quarter of 2010, down 48.2% from $3.26 million in net income from the same period a year ago. Net profit margin was 5.4% compared to 9.9% in the third quarter of 2009. Fully diluted earnings per share were $0.08 compared to $0.17 in the third quarter of 2009.
Financial Condition
As of September 30, 2010, China Ritar had $16.1 million in cash and equivalents and restricted cash, $44.3 million in working capital and $43.5 million in total liabilities. Shareholders' equity stood at $62.3 million, up from $55.4 million at year end 2009.
Business Outlook
The second phase of Hengyang Industrial Park will be completed during the forth quarter of 2010 and the Company expects to begin installing equipment in the forth quarter of the year. Total number of production lines will increase from 19 to 29.
During the Third Quarter, the Company has announced the signing of Letter of Intent to acquire TDL Power Technology Co., Ltd. ("TDL"), a private-owned battery company in Zhuzhou, Hunan Province, China. The deal is expected to be accretive and to close by the end of 2010.
Also during the third quarter, the Company was awarded a new contract to supply VRLA batteries to American Power Conversion Corporation (APC), a global leader in the UPS (Uninterruptible Power Supply) markets. As per supply agreement, China Ritar Power will supply VRLA batteries to be used in APC's UPS products. The management expects to receive more orders from APC in the future as the strategic relationship between the 2 companies develops.
"We are not satisfied with our financial results for the quarter. Looking forward to 2011, we will implement measures to improve our operational efficiency, control our cost and improve the R&D efforts. The demand for stationary lead acid battery remains at a strong level, both in the developed and emerging markets. China Ritar is at a strong position to strengthen our market position in 2011 and beyond," Mr. Jiada Hu, China Ritar's Chairman and CEO commented.
Conference Call
China Ritar will host a conference call at 8:30 am EST on Monday, November 15, 2010 to discuss the 2010 third quarter results. To participate in the live conference call, please dial the following number fifteen minutes prior to the scheduled conference call time: +1.866.804.6929, international callers should dial +1.857.350.1675, or 800 96 3844 in Hong Kong, 10 800 130 0399 in South China, 10 800 152 1490 in North China; conference passcode is 70168288.
If you are unable to participate in the call at this time, a replay will be available for 7 days starting on Monday, November 15, 2010 at 11:00 AM ET. To access the replay, dial +1-888-286-8010 and enter the passcode 91404179. International callers should dial +1-617-801-6888 and enter the same passcode.
This conference call will be broadcast live over the Internet and can be accessed by all interested parties by clicking on http://ir.ritarpower.com/en/ . Please access the link at least fifteen minutes prior to the start of the call to register, download, and install any necessary audio software. For those unable to participate during the live broadcast, a 90-day replay will be available shortly after the call by accessing the same link.
About China Ritar Corp.
China Ritar designs, develops, manufactures and markets environmentally friendly, lead acid batteries with a wide range of capacities and applications, including telecommunications, Uninterruptible Power Supply (UPS) devices, Light Electrical Vehicles (LEV), and alternative energy systems (solar and wind power). China Ritar sells, markets and services six series and 197 models of Ritar-branded, cadmium-free valve-regulated lead-acid (VRLA) batteries. Products are sold worldwide with sales in 81 countries including China, India, and numerous markets in Europe and the Americas. Additional information can be found at the Company's website http://www.ritarpower.com .
Safe Harbor Statement
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Certain statements in this press release and oral statements made by China Ritar on its conference call in relation to this release, constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included herein are forward-looking statements. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. You 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 and available from the Securities and Exchange Commission. All forward-looking statements attributable to the Company or 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.
-FINANCIAL TABLES FOLLOW-
CHINA RITAR POWER CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||||||
September 30 |
December 31 |
||||||||||
2010 |
2009 |
||||||||||
(Unaudited) |
|||||||||||
ASSETS |
|||||||||||
Current assets: |
|||||||||||
Cash and cash equivalents |
$ |
10,679,930 |
$ |
20,459,361 |
|||||||
Restricted cash |
5,380,969 |
5,900,649 |
|||||||||
Accounts receivable, net of allowances of $1,136,475 and $1,115,321 |
33,966,052 |
24,920,825 |
|||||||||
Receivable from sale of a subsidiary |
- |
417,387 |
|||||||||
Due from a former subsidiary |
3,181,073 |
3,925,348 |
|||||||||
Inventory |
26,256,207 |
19,484,224 |
|||||||||
Advance to suppliers |
2,259,741 |
1,643,689 |
|||||||||
Other current assets |
4,104,517 |
3,915,605 |
|||||||||
Total current assets |
85,828,489 |
80,667,088 |
|||||||||
Non-current assets: |
|||||||||||
Property, plant and equipment, net |
17,075,726 |
16,248,551 |
|||||||||
Construction in progress |
95,945 |
136,443 |
|||||||||
Intangible assets, net |
5,991 |
9,407 |
|||||||||
Land use right |
470,576 |
468,265 |
|||||||||
Rental prepayment and deposits |
981,298 |
82,439 |
|||||||||
Deposit for purchase of property, plant and equipment |
1,227,295 |
833,760 |
|||||||||
Deferred income tax assets |
121,781 |
115,064 |
|||||||||
Total assets |
$ |
105,807,101 |
$ |
98,561,017 |
|||||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||||||
Current liabilities: |
|||||||||||
Accounts payable |
$ |
18,545,426 |
$ |
16,658,868 |
|||||||
Income and other taxes payable |
7,230,834 |
3,986,935 |
|||||||||
Accrued salaries |
571,706 |
502,978 |
|||||||||
Bills payable |
10,814,001 |
13,498,001 |
|||||||||
Other current liabilities |
1,749,461 |
2,800,879 |
|||||||||
Derivative instruments |
22,161 |
- |
|||||||||
Current portion of long term loans |
1,290,283 |
1,342,473 |
|||||||||
Short-term loans |
1,326,760 |
1,464,515 |
|||||||||
Total current liabilities |
41,550,632 |
40,254,649 |
|||||||||
Long-term loans |
1,989,723 |
2,881,188 |
|||||||||
Total liabilities |
43,540,355 |
43,135,837 |
|||||||||
Stockholders' equity: |
|||||||||||
Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstanding |
- |
- |
|||||||||
Common stock at $0.001 par value; authorized 100,000,000 shares , 21,858,925 and 21,450,238 shares issued and outstanding |
21,859 |
21,450 |
|||||||||
Additional paid-in capital |
31,721,124 |
31,461,723 |
|||||||||
Retained earnings |
26,296,472 |
20,745,985 |
|||||||||
Accumulated other comprehensive income |
4,227,291 |
3,196,022 |
|||||||||
Total stockholders' equity |
62,266,746 |
55,425,180 |
|||||||||
Total liabilities and stockholders' equity |
$ |
105,807,101 |
$ |
98,561,017 |
|||||||
CHINA RITAR POWER CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED) |
||||||||||||||||
Nine months ended September 30, |
Three months ended September 30, |
|||||||||||||||
2010 |
2009 |
2010 |
2009 |
|||||||||||||
CONTINUING OPERATIONS |
||||||||||||||||
Net revenue |
$ |
89,910,434 |
$ |
70,904,378 |
$ |
31,547,686 |
$ |
33,123,343 |
||||||||
Cost of sales |
74,484,047 |
57,295,863 |
26,383,879 |
26,871,015 |
||||||||||||
Gross profit |
15,426,387 |
13,608,515 |
5,163,807 |
6,252,328 |
||||||||||||
Operating expenses: |
||||||||||||||||
Salaries |
1,759,840 |
1,209,472 |
623,267 |
356,138 |
||||||||||||
Sales commission |
1,259,840 |
1,137,101 |
468,006 |
210,519 |
||||||||||||
Shipping and handling cost |
1,056,488 |
773,936 |
380,648 |
266,459 |
||||||||||||
Other selling and administrative expenses |
3,240,680 |
2,817,086 |
1,066,781 |
1,153,048 |
||||||||||||
7,316,848 |
5,937,595 |
2,538,702 |
1,986,164 |
|||||||||||||
Operating profit |
8,109,539 |
7,670,920 |
2,625,105 |
4,266,164 |
||||||||||||
Other income and (expenses): |
||||||||||||||||
Interest income |
85,110 |
71,268 |
22,295 |
5,419 |
||||||||||||
Other income |
15,969 |
34,374 |
9,567 |
31,097 |
||||||||||||
Interest expense |
(442,354) |
(500,512) |
(155,780) |
(187,018) |
||||||||||||
Foreign currency exchange loss |
(565,985) |
(16,677) |
(323,965) |
(21,766) |
||||||||||||
Other expenses |
(3,507) |
(7,200) |
(456) |
(5,536) |
||||||||||||
Other expenses, net |
(910,767) |
(418,747) |
(448,339) |
(177,804) |
||||||||||||
Income from continuing operations before income taxes |
7,198,772 |
7,252,173 |
2,176,766 |
4,088,360 |
||||||||||||
Income taxes |
(1,648,285) |
(1,315,258) |
(487,377) |
(786,779) |
||||||||||||
Income from continuing operations |
5,550,487 |
5,936,915 |
1,689,389 |
3,301,581 |
||||||||||||
DISCONTINUED OPERATIONS |
||||||||||||||||
Loss from discontinued operations, net of taxes |
- |
(354,642) |
- |
(40,218) |
||||||||||||
Net income |
5,550,487 |
5,582,273 |
1,689,389 |
3,261,363 |
||||||||||||
Add: Loss from discontinued operations attributable to noncontrolling interest |
- |
17,731 |
- |
2,009 |
||||||||||||
Net income attributable to China Ritar shareholders |
5,550,487 |
5,600,004 |
1,689,389 |
3,263,372 |
||||||||||||
Other comprehensive income attributable to noncontrolling interest |
- |
11 |
- |
8 |
||||||||||||
Foreign currency translation adjustment |
1,031,269 |
141,239 |
738,630 |
23,301 |
||||||||||||
Comprehensive income attributable to China Ritar shareholders |
6,581,756 |
5,741,254 |
2,428,019 |
3,286,681 |
||||||||||||
Comprehensive loss (income) attributable to non-controlling interest |
- |
(17,742) |
- |
(2,020) |
||||||||||||
Comprehensive income |
6,581,756 |
5,723,512 |
2,428,019 |
3,284,661 |
||||||||||||
Earnings per share attributable to China Ritar stockholders: |
||||||||||||||||
Basic: |
||||||||||||||||
- Income from continuing operations |
0.25 |
0.31 |
0.08 |
0.17 |
||||||||||||
- Income (loss) from discontinued operations |
- |
(0.02) |
- |
- |
||||||||||||
- Net income |
0.25 |
0.29 |
0.08 |
0.17 |
||||||||||||
Diluted |
||||||||||||||||
-Income from continuing operations |
0.25 |
0.30 |
0.08 |
0.17 |
||||||||||||
-Income (loss) from discontinued operations |
- |
(0.01) |
- |
- |
||||||||||||
- Net income |
0.25 |
0.29 |
0.08 |
0.17 |
||||||||||||
Weighted average number of shares outstanding: |
||||||||||||||||
- Basic |
21,811,357 |
19,169,619 |
21,858,925 |
19,237,745 |
||||||||||||
- Diluted |
21,811,357 |
19,588,589 |
21,858,925 |
19,378,936 |
||||||||||||
CHINA RITAR POWER CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
||||||||||||||
For the Nine Months Ended September 30, |
||||||||||||||
2010 |
2009 |
|||||||||||||
Cash Flows from Continuing Operating Activities: |
||||||||||||||
Net income |
$ |
5,550,487 |
$ |
5,582,273 |
||||||||||
Loss from discontinued operations, net of taxes |
- |
354,642 |
||||||||||||
Income from continuing operations |
5,550,487 |
5,936,915 |
||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||||||||
Deferred income tax assets |
(4,464) |
- |
||||||||||||
Depreciation of property, plant and equipment |
1,201,416 |
867,690 |
||||||||||||
Amortization of intangible assets and land use right |
10,006 |
9,968 |
||||||||||||
Loss (gain) on disposal of property, plant and equipment |
673 |
(365) |
||||||||||||
Loss (gain) on derivative instruments |
21,141 |
(213,947) |
||||||||||||
Changes in operating working capital items: |
||||||||||||||
Accounts receivable |
(8,438,937) |
(8,508,479) |
||||||||||||
Inventory |
(6,302,633) |
(1,625,320) |
||||||||||||
Advance to suppliers |
260,572 |
(1,603,712) |
||||||||||||
Notes receivable |
(40,739) |
(14,635) |
||||||||||||
Other current assets |
346,555 |
1,938 |
||||||||||||
Loan advance to a landlord |
(881,419) |
- |
||||||||||||
Accounts payable |
1,546,482 |
4,625,462 |
||||||||||||
Income and other taxes payable |
3,118,896 |
1,205,703 |
||||||||||||
Accrued salaries |
58,265 |
(182,316) |
||||||||||||
Bills payable |
(2,894,192) |
865,232 |
||||||||||||
Other current liabilities |
(1,198,630) |
(919,012) |
||||||||||||
Net cash (used in) provided by operating activities |
(7,646,521) |
445,122 |
||||||||||||
Cash Flows from Continuing Investing Activities: |
||||||||||||||
Repayment from (advance to) a former subsidiary – Shanghai Ritar |
805,966 |
(1,201,767) |
||||||||||||
Purchase of property, plant and equipment |
(1,682,472) |
(1,380,311) |
||||||||||||
Sales proceeds of disposal of property, plant and equipment |
11,899 |
4,390 |
||||||||||||
Payments for deposits for purchase of property, plant and equipment |
(1,210,056) |
- |
||||||||||||
Net cash used in investing activities |
(2,074,663) |
(2,577,688) |
||||||||||||
Cash Flows from Continuing Financing Activities: |
||||||||||||||
Proceeds from stock issued for warrants exercised |
259,810 |
116,910 |
||||||||||||
Proceeds from bank borrowings |
7,165,648 |
9,091,188 |
||||||||||||
Repayment of bank borrowings |
(8,336,408) |
(6,402,592) |
||||||||||||
Restricted cash |
621,753 |
841,507 |
||||||||||||
Net cash (used in) provided by financing activities |
(289,197) |
3,647,013 |
||||||||||||
Cash Flows from Discontinued Operations Activities: |
||||||||||||||
Net cash used in discontinued operating activities |
- |
(1,238,820) |
||||||||||||
Net cash provided by discontinued investing activities |
- |
1,187,633 |
||||||||||||
Net cash provided by discontinued financing activities |
- |
- |
||||||||||||
Effect of exchange rate changes on cash |
- |
590 |
||||||||||||
Change in cash from discontinued operations |
- |
50,597 |
||||||||||||
Net cash used in discontinued operations |
- |
- |
||||||||||||
Effect of exchange rate changes |
230,950 |
24,645 |
||||||||||||
Net (decrease) increase in cash and cash equivalents |
(9,779,431) |
1,539,092 |
||||||||||||
Cash and cash equivalents, beginning of period |
20,459,361 |
7,541,697 |
||||||||||||
Cash and cash equivalents, end of period |
$ |
10,679,930 |
$ |
9,080,789 |
||||||||||
Supplemental disclosure of cash flow information |
||||||||||||||
Cash paid for interest |
$ |
442,354 |
$ |
500,512 |
||||||||||
Cash paid for income taxes |
$ |
361,283 |
$ |
735,365 |
||||||||||
Non-cash investing and financing activities |
||||||||||||||
Issuance of common stock for cashless exercise of warrants |
$ |
316 |
$ |
90 |
||||||||||
Contact Information: |
|
Jigang Sun |
|
1 323 428 0002 (USA) |
|
139 1186 1878 (China) |
|
SOURCE China Ritar Power Corp.
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