China TMK Battery Systems Inc. Reports Fiscal Year 2009 Financial Results
Fiscal year 2009 revenues increased 32.3% to $48.6 million
Fiscal year 2009 net income increased 32.5% to $7.5 million
SHENZHEN, China, May 17 /PRNewswire-Asia-FirstCall/ -- China TMK Battery Systems Inc. (OTC Bulletin Board: DFEL) ("TMK" or "the Company") (formerly, Deerfield Resources, Ltd.), a Chinese manufacturer and distributor of customized rechargeable battery solutions to global consumer product companies, today announced the Company's financial results for the fiscal year ending December 31, 2009.
Fiscal Year 2009 Results
2009 2008 CHANGE
Sales $48.6 million $36.8 million +32.3%
Gross Profit $12.1 million $8.6 million +40.5%
Net Income $7.5 million $5.7 million +32.5%
Fiscal Year 2009 Financial Results
For the year ending December 31st 2009, sales revenue increased 32.3% to $48.6 million, from the $36.8 million reported in 2008. International sales comprised 3.5% sales while 97.5% of sales emanated from the PRC.
For 2009, total cost of sales of batteries and other products from the Company increased by $8.3 million, or 29.4%, to $36.5 million which was directly related to increased sales. The Company's gross profit increased $3.5 million, or 40.5%, to $12 million in the fiscal year of 2009 and gross margins were 24.9% compared to 23.4% for 2008.
Operating expenses for 2009 were approximately $2.9 million, or 5.9% of total sales revenue in comparison to $2.6 million in 2008, or 7% of total sales revenue. Administrative expenses increased $0.3 million, or 31.1%, to $1.3 million primarily due to the expansion of the Company's business through acquisition of Leading Asia Ltd. in 2010. Operating Margins were 19.0% compared to 16.4%.
Net income for the Company in 2009 was approximately $7.5 million, an increase of $1.8 million, or 32.5%, from $5.7 million in 2008. The effective tax rate was 15% for 2009.
"We are very pleased with our financial results for the full year of 2009," stated Henian Wu, Chairman and President of the Company. "During 2009, we expanded our customer base and product portfolio for our Ni-MH multi-cell batteries while preparing to launch new products, such as intelligent battery solutions which provide controlled back-up power and address new market verticals, such as traffic technology and the telecommunication infrastructure grid. The rapid growth in consumer products which utilize "environmentally friendly" rechargeable batteries has created a $5 billion market plus market worldwide for Ni-MH batteries and contributed to the Company's robust revenue and earnings growth in 2009. We are currently doubling our production capacity to capitalize on this growth opportunity and expect to gain further market share in 2010."
Balance Sheet and Cash Flow
Net cash from operating activities was $9.2 million for the fiscal year of 2009, in comparison to $6.3 million provided by operating activities for 2008. The increase in net cash provided in operating activities was primarily due to an increase in net income and trade receivable. Total shareholders' equity is approximately $15.7 million, with total assets of $36 million versus total liabilities of $20.3 million. The cash balance on our balance as of December 31, 2009 does not include the recent $6.9 million capital raise completed in February 2010.
About China TMK Battery Systems Inc.
Based in Shenzhen, PRC and founded in 1999, TMK manufactures and distributes high rate discharge Nickel Metal Hydride ("Ni-MH") multi-cell batteries in its manufacturing facility located in Shenzhen, China. TMK maintains a diverse roster of large, consumer-focused clients with major production facilities in China. The Company works with its clients throughout the product design cycle to develop and integrate reliable and long-lasting rechargeable power solutions for widely used consumer products, which include home appliances, cordless power tools, medical devices, multiple personal communication devices and electric bicycles segments. The Company is also focused on becoming a supplier of back-up power solutions to the telecommunications industry and for traffic lighting applications. Corporate Information can be found at www.tmk-battery.com and investor information can be found at http://ir.stockpr.com/tmk-battery/
Cautionary Statement Regarding Forward Looking Information
This press release may contain certain "forward-looking statements" relating to the business of China TMK Battery Systems Inc., and its subsidiary companies. All statements, other than statements of historical fact included herein are "forward-looking statements" including statements regarding: the impact of the proceeds from the private placement on the Company's short term business and operations, including the ability of the Company to significantly increase its Ni-MH battery manufacturing capacity and meet its current backlog of orders; the ability of the Company to introduce new battery types into its product portfolio while developing Lithium-Ion battery production capabilities, sustain aggressive growth in the coming years relative to its peers and position the Company a vertically integrated rechargeable battery supply solution provider; the general ability of the Company to achieve its commercial objectives, including the ability of the Company to sustain growth; the business strategy, plans and objectives of the Company and its subsidiaries; and any other statements of non-historical information. These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. 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. 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 ( http://www.sec.gov ). 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.
For more information, please contact:
For the Company:
Mr. Jin Hu, CFO
Tel: +86-158-1043-1091
Email: [email protected]
Investor Relations:
HC International, Inc.
Ted Haberfield, Executive VP
Tel: +1-760-755-2716
Email: [email protected]
FINANCIAL TABLES
LEADING ASIA PACIFIC INVSTMENT LIMITED AND SUBSIDIARY
Consolidated Balance Sheets
(In US Dollars)
December 31,
2009 2008
Assets
Current Assets
Cash and cash equivalents $185,590 $186,463
Trade receivables, net 2,909,234 4,842,007
Advances to suppliers 215,689 68,853
VAT recoverable 34,660 55,791
Short-term loans receivable -- 1,173,520
Inventories, net 3,973,697 2,970,521
Due from related parties 15,204 10,806
Restricted cash 438,780 1,083,130
Total current assets 7,772,854 10,391,091
Property, equipment and construction
in progress, net 11,039,703 3,031,689
Advance for property and equipment
purchase 16,930,020 3,123,964
Restricted cash 263,268 132,021
Other Assets 50,804 77,039
Total Assets $36,056,649 $16,755,804
Liabilities & Stockholders' Equity
Current Liabilities
Accounts payable $1,792,414 $1,047,885
Customer deposits 179,272 100,660
Accrued liabilities and other
payable 511,676 415,103
Various taxes payable 7,453 4,113
Short-term bank loans 4,722,660 3,469,940
Current portion of long-term bank
loans 2,451,700 274,254
Wages payable 556,189 604,598
Bank notes payable -- 1,070,837
Corporate taxes payable 216,443 --
Due to related parties 17,691 8,610
Deferred revenue 36,854 --
Total current liabilities 10,492,352 6,996,000
Long term bank loans 9,236,953 --
Deferred Tax Liability 593,977 --
Total liabilities $20,323,282 $6,996,000
Commitments and contingencies -- --
Stockholders' Equity
Common Stock 50,000 50,000
Additional paid-in capital 1,168,451 1,168,451
Accumulated other comprehensive
income 365,187 408,157
Statutory surplus reserve fund 1,038,988 1,038,988
Retained earnings 13,110,741 7,094,208
Total Stockholders' Equity 15,733,367 9,759,804
Total Liabilities & Stockholders'
Equity $36,056,649 $16,755,804
LEADING ASIA PACIFIC INVSTMENT LIMITED AND SUBSIDIARY
Consolidated Statements of Operations
(In US Dollars)
For the Years Ended
December 31,
2009 2008
Revenues $48,627,436 $36,762,688
Other Sales 18,471 83,463
Cost of goods sold (36,547,011) (28,236,136)
Gross Profit 12,098,896 8,610,015
Operating Costs and Expenses
Selling expenses 979,174 872,441
Depreciation 114,642 22,676
Bad debts (recovery) (66,129) 40,010
Other general and administrative
expenses 1,349,298 1,029,314
Research and development 494,825 624,051
Total operating costs and expenses 2,871,810 2,588,492
Income from operations 9,227,086 6,021,523
Other income (expenses)
Loss on disposal of assets -- (17,644)
Interest income 40 53,335
Interest expense (581,920) (422,550)
Sundry income, net 76,032 22,381
Gain on acquisition of business 106,364 --
Total other income (expenses) (399,484) (364,478)
Income before income taxes 8,827,602 5,657,045
Income taxes (1,334,447) --
Net Income $7,493,155 $5,657,045
LEADING ASIA PACIFIC INVSTMENT LIMITED AND SUBSIDIARY
Consolidated Statements of Cash Flows
(In US Dollars)
For the Years Ended
December 31,
2009 2008
Cash Flows From Operating Activities
Net Income $7,493,155 $5,657,045
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 448,071 266,556
Bad debt (recovery) 66,496 40,010
Loss on disposal of assets -- 16,351
Gain on business acquisition (106,364) --
Deferred tax benefit (12,668) --
Write-down of inventory -- 26,346
Deferred income (18,471) --
Changes in operating assets and
liabilities:
Trade receivables 1,856,675 (961,062)
Advance to suppliers (147,389) 503,976
Inventories, net (1,014,305) 962,441
Prepaid expenses and other receivables 32,228 9,076
Accounts payable - trade 749,433 (263,442)
Customer deposit 72,939 (59,908)
Accrued liabilities and other payables (299,141) 84,545
Various taxes payable 241,339 (131,278)
Wages payable (46,748) 182,736
Other (77,188)
Net cash provided by operating
activities 9,238,062 6,333,392
Cash Flows From Investing Activities
Purchases and advance of property
and equipment (17,589,090) (3,623,733)
Purchase of Borou, Net of Cash
Acquired (3,499,868) --
Proceeds of disposal of fixed
assets -- 5,900
Collection of advances/loans - related
parties 10,800 22,044
Advances/loans - related parties (15,240) (10,806)
Change in restricted cash 515,738 620,971
Repayment of short-term loan
receivable 1,172,880 (1,173,520)
Net cash used in investing
activities (19,404,780) (4,159,144)
Cash Flows From Financing Activities
Borrowing from bank notes 2,932,200 1,070,837
Repayment of bank notes (4,002,453) (325,743)
Borrowing from bank loans 20,221,692 2,200,476
Repayment of bank loans (7,513,259) (4,188,084)
Proceeds from related parties loans 17,733 8,610
Repayment to related parties (8,605) --
Dividends declared to shareholders -- (2,013,625)
Distribution to owners (1,476,622) --
Net cash provided by (used in)
financing activities 10,170,686 (3,247,529)
Effect of exchange rate changes
on cash (4,841) (287,588)
Net increase (decrease) in cash
and cash equivalents (873) (1,360,869)
Cash and cash equivalents, beginning
of period 186,463 1,547,332
Cash and cash equivalents, end of
period $185,590 $186,463
Supplemental disclosure information:
Interest expense paid $581,920 $422,550
Income taxes paid $1,130,154 $--
SOURCE China TMK Battery Systems Inc.
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