(Logo: http://photos.prnewswire.com/prnh/20100331/CNW006LOGO ) (Logo: http://www.newscom.com/cgi-bin/prnh/20100331/CNW006LOGO ) Second Quarter 2010 Financial Highlights -- Total revenue increased by 13.3% year-over-year to $25.3 million, compared to $22.3 million in the second quarter of 2009. -- 60.7% of revenue was from sales to original equipment manufacturers ("OEMs"). -- Gross profit increased by 22.9% year-over-year to $7.4 million versus $6.0 million in the second quarter of 2009. -- Operating income was $5.3 million, an 81.2% increase over operating income of $2.9 million in the second quarter of 2009. -- Net income was $4.1 million, a 93.2% increase compared to net income of $2.1 million in the second quarter of 2009. -- Basic and diluted earnings per share were $0.20 based on 20,744,743 and 20,832,957 weighted average shares outstanding, respectively, versus basic and diluted earnings per share of $0.18 and $0.17 in the second quarter of 2009, based on 12,125,842 and 12,510,623 weighted average shares outstanding, respectively. Six Months 2010 Financial Highlights -- Total revenue increased by 13.6% year-over-year to $46.8 million, compared to $41.2 million in the first six months of 2009. -- 62.7% of revenue was from sales to original equipment manufacturers ("OEMs"). -- Gross profit increased by 19.7% year-over-year to $13.6 million versus $11.3 million in the first six months of 2009. -- Operating income was $9.2 million, a 37.3% increase over operating income of $6.7 million in the first six months of 2009. -- Net income was $7.1 million, a 37.7% increase compared to net income of $5.1 million in the first six months of 2009. -- Basic and diluted earnings per share were $0.37 and $0.36, based on 19,378,648 and 19,420,586 weighted average shares outstanding, respectively, versus basic and diluted earnings per share of $0.44 in the first six months of 2009, based on 11,600,470 and 11,794,426 weighted average shares outstanding, respectively.
Mr. Yue Wang, Chief Executive Officer of China Electric, said, "Our strong
second quarter results, which exceeded our guidance, were fueled by growing
demand for our products and for home appliance motors in particular. We were
able to convert favorable industry trends and a robust macroeconomic
environment into a larger customer base, and I am pleased to report that we
are executing sales and attracting new customers in an increasingly efficient
manner. Our intention is to build the proportion of higher-margin sales in
He continued, "We believe that the strength of market demand is sustainable, and that the quality and flexibility of our products give us the opportunity to gain share and build a leadership position in the market. Therefore, we are building capacity in a phased manner in order to continue to expand our product offering and capture favorable trends in new industry verticals.
"Due to a delay in the expected government approval of our application for a tax reduction in 2010, we have updated our net income outlook for the year. We are confirming our full year revenue guidance," Mr. Wang concluded.
Second Quarter and Six Months 2010 Financial Results
Revenues
Total revenue for the second quarter 2010 increased year-over-year by
13.3% to
Total revenue for the six months ended
Cost of Goods Sold
Cost of goods sold in the second quarter 2010 increased year-over-year by
9.8% to
Cost of goods sold in the six months ended
Gross Profit and Gross Margin
Gross profit for the second quarter of 2010 increased year-over-year by
22.9% to
Gross profit for the first six months of 2010 increased year-over-year by
19.7% to
Operating Expenses
Research and development ("R&D") expenses for the second quarter 2010
increased year-over-year by 9.5% to
Selling expenses for the second quarter 2010 decreased year-over-year by
12.6% to
Total general and administrative ("G&A") expenses for the second quarter
2010 decreased year-over-year to
Accordingly, total operating expenses for the second quarter 2010
decreased year-over-year by 32.2%, to
Research and development ("R&D") expenses for the first six months of 2010
increased year-over-year by 7.6% to
Selling expenses for the first six months of 2010 decreased year-over-year
by 4.5% to
Total general and administrative ("G&A") expenses for the first six months
of 2010 decreased year-over-year to
Accordingly, total operating expenses for the first six months of 2010
decreased year-over-year by 5.6%, to
Earnings
Operating income for the second quarter 2010 was
Operating income for the first six months of 2010 was
Balance Sheet
Cash and cash equivalents were
Total accounts receivable as of
Business Outlook
The Company believes that strong gross domestic product growth in
Guidance for Third Quarter and Fiscal Year 2010
As of
Management estimates that revenue for the third quarter of 2010 will be in
the range of
Management confirms that it expects revenue for fiscal year 2010 to be in
the range of
The Company is constructing new production equipment, which management believes should be capable of producing up to approximately 24 million units of AC and DC motors annually at full capacity.
The Company is also installing new production lines for new products. The
first new product, which is expected to be launched in the third quarter of
2010, is a coreless motor for use in cell phones and remote control toys. Two
new production lines of coreless motors and two lines of AC motors have
already been installed, and pilot runs are underway. Management expects these
four lines to begin production in
In
Conference Call and Webcast
China Electric senior management will host a conference call at
A replay of the conference call will be available from
A live webcast of the conference call and replay will also be available on the investor relations page of the Company's website at: http://szmotor.investorroom.com .
About China Electric Motor, Inc.
China Electric Motor, Inc. (Nasdaq: CELM) is a
Forward-looking Statements
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of 1995: Certain of the statements made in the press release constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. 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
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the progress of new product or equipment development. Actual results could
differ materially from the expectations reflected in such forward-looking
statements as a result of a variety of factors, including our ability to
maintain and increase revenues and sales of our products, our ability to
develop and market new products, our ability to timely bring additional
production capacity on line, our ability to maintain and fill order backlog,
the success of our strategic investments and acquisitions, our ability to
timely develop new production equipment, compliance with and changes in the
laws of
For further information, please contact: China Electric Motor, Inc. Dexter Fong Tel: +86-136-6666-1663 Tel: +1-408-476-7139 Email: dexterfong@gmail.com Simon Ze Tel: +86-755-8257-7750 Email: ze_simon@hotmail.com Investor Relations (HK): Ruby Yim Taylor Rafferty Tel: +852-3196-3712 Email: ChinaElectricMotor@Taylor-Rafferty.com Investor Relations (US): Delia Cannan Taylor Rafferty Tel: +1-212-889-4350 Email: ChinaElectricMotor@Taylor-Rafferty.com Media Contact: Jason Marshall Taylor Rafferty Tel: +1-212-889-4350 Email: ChinaElectricMotor@Taylor-Rafferty.com China Electric Motor, Inc. and Subsidiaries Consolidated Balance Sheets (In US Dollars) June 30, December 31, 2010 2009 (Unaudited) Assets Current Assets Cash and cash equivalents $37,866,706 $10,633,518 Accounts receivable, net 9,868,346 8,526,451 Inventories, net 6,073,021 7,194,656 Total current assets 53,808,073 26,354,625 Property and equipment, net 10,872,848 7,936,284 Total Assets $64,680,921 $34,290,909 Liabilities and Shareholders' Equity Current Liabilities Accounts payable $2,509,820 $2,217,702 Accrued liabilities and other payable 264,269 463,185 Various taxes payable 35,418 28,962 Wages payable 462,834 465,119 Corporate tax payable 1,188,062 878,305 Due to related party -- 1,581,376 Due to affiliated companies -- 334,977 Total current liabilities 4,460,403 5,969,626 Total Liabilities 4,460,403 5,969,626 Commitments and Contingencies Shareholders' Equity Preferred stock, $0.0001 par value, 10,000,000 shares authorized, none issued Common stock, $0.0001 par value, 100,000,000 shares authorized, 20,744,743 and 14,083,030 shares issued and outstanding at June 30, 2010 and December 31, 2009, respectively. 2,074 1,408 Additional paid-in capital 28,625,196 3,899,125 Accumulated other comprehensive income 981,836 889,668 Statutory surplus reserve fund 1,177,075 1,177,075 Retained earnings (unrestricted) 29,434,337 22,354,007 Total Shareholders' Equity 60,220,518 28,321,283 Total Shareholders' Liabilities & Equity $64,680,921 $34,290,909 The accompanying notes are an integral part of these consolidated financial statements. China Electric Motor, Inc. and Subsidiaries Consolidated Statements of Operations (In US Dollars) (Unaudited) For Three Months Ended For Six Months Ended June 30, June 30, 2010 2009 2010 2009 Revenue $25,295,640 $22,319,384 $46,806,959 $41,212,530 Cost of Goods Sold (17,923,881) (16,323,353) (33,223,401) (29,862,858) Gross Profit 7,371,759 5,996,031 13,583,558 11,349,672 Selling Expenses 1,011,789 1,157,084 1,948,905 2,040,954 General and administrative Merger cost -- 938,152 -- 938,152 Research and development 459,444 419,415 847,735 787,995 Depreciation 6,877 5,383 11,515 10,804 Loss on disposal of assets -- -- 65,252 -- Others general and administrative 610,593 559,736 1,517,572 874,999 Total general and administrative 1,076,914 1,922,686 2,442,074 2,611,950 Total operating expenses 2,088,703 3,079,770 4,390,979 4,652,904 Income from operations 5,283,056 2,916,261 9,192,579 6,696,768 Other income (expenses) Interest income 21,642 6,844 35,239 12,880 Imputed interest -- (17,016) -- (34,032) Total other income (expenses) $21,642 $(10,172) $35,239 $(21,152) Income (loss) before income taxes 5,304,698 2,906,089 9,227,818 6,675,616 Income taxes (1,186,868) (774,715) (2,147,488) (1,532,024) Net income $4,117,830 $2,131,374 $7,080,330 $5,143,592 Basic earnings per share $0.20 $0.18 $0.37 $0.44 Weighed-average shares outstanding, Basic 20,744,743 12,125,842 19,378,648 11,600,470 Diluted earnings per share $0.20 $0.17 $0.36 $0.44 Weighed-average shares outstanding, Diluted 20,832,957 12,510,623 19,420,586 11,794,426 The accompanying notes are an integral part of these consolidated financial statements. China Electric Motor, Inc. and Subsidiaries Consolidated Statements of Cash Flows (In US Dollars) (Unaudited) For Six Months Ended June 30, 2010 2009 Cash Flows From Operating Activities Net Income (loss) $7,080,330 $5,143,592 Adjustments to reconcile net income to net cash provided by operating activities: Loss on dispose of assets 65,252 -- Imputed interest expense -- 34,032 Depreciation 451,554 305,405 Changes in operating assets and liabilities: (Increase) decrease in: Accounts receivable, net (1,341,895) (2,722,613) Inventories, net 1,121,635 (259,071) Accrued merger cost -- 625,000 Prepaid expenses and other receivables -- 15,103 Increase (decrease) in: Accounts payable (95,836) (178,882) Accrued liabilities and other payable (198,916) -- Various taxes payable 6,456 97,030 Wages payable (2,285) 77,893 Corporate tax payable 309,757 304,759 Net cash provided by operating activities 7,396,052 3,442,308 Cash Flows From Investing Activities Purchases of property and equipment (3,239,728) (1,533,415) Proceeds from disposal of fixed assets 174,312 -- Payment to related parties (634,559) (57,543) Net cash used in investing activities (3,699,975) (1,590,958) Cash Flows From Financing Activities Net proceeds from/(Repayments to) short-term loan -- 500,000 Net proceeds from issuance of shares 23,444,943 945,127 Net cash provided by financing activities 23,444,943 1,387,584 Effect of exchange rate changes on cash 92,168 4,992 Net increase (decrease) in cash and cash equivalents 27,233,188 3,301,469 Cash and cash equivalents, beginning of period 10,633,518 2,655,808 Cash and cash equivalents, end of period $37,866,706 $5,957,277 Supplemental disclosure information: Interest paid $-- $-- Income taxes paid $1,841,528 $1,226,684 The accompanying notes are an integral part of these consolidated financial statements.
SOURCE China Electric Motor, Inc.