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SHENZHEN, China, Nov. 17 /PRNewswire-Asia-FirstCall/ -- China Ritar Power Corp. (Nasdaq: CRTP - News; 'China Ritar' or the 'Company'), a leading Chinese manufacturer of lead acid batteries, today reported its fiscal 2009 third quarter results for the period ended 30 September, 2009.
Third Quarter 2009 Highlights
-- Revenue was $33.9 million
-- Sales volume increased approximately 6% over third quarter 2008
-- Gross profit was $6.3 million with 18.7% gross margin
-- Net income was $3.3 million with 9.6% profit margin
-- Fully diluted earnings per share were $0.17
-- China Ritar's common shares began trading on the NASDAQ Global Market
-- Raised $12.9 million in registered direct offering
"We are extremely pleased with the strong results in the third quarter of 2009 as the overall economic environment is rebounding from the global crisis. Moreover, during the quarter we successfully raised $12.9 million, a portion of which will be used to expand our production capacity," commented Mr. Jiada Hu, China Ritar's Chairman and CEO. "We believe the long term growth opportunities remain positive as China's economic stimulus package accelerates development of transportation and alternative energy markets."
Revenue in the third quarter of 2009 was $33.9 million, down 6.6% from revenue of $36.3 million in the third quarter of 2008. The decrease in revenue was mainly attributable to a decline in the average selling price (ASP) as a result of approximately 18% drop in the price of lead. The decline in ASP was offset by approximately 6% increase in sales volume. Batteries used for telecom, uninterruptable power supply (UPS), renewable energy storage and light electronic vehicles (LEV) accounted for 30%, 35%, 25% and 10% of total sales of the third quarter of 2009, respectively. International sales represented 58% of total sales with domestic sales representing the balance of 42%.
Gross profit for the quarter decreased 14.7% to $6.4 million from $7.5 million in the same period of 2008. Gross margin for third quarter of 2009 was 18.7% compared to 20.5% in the third quarter of 2008.
Operating expenses were $2.1 million or 6.3% of sales, compared to $4.0 million or 11.0% of sales in the third quarter of 2008. Adjusting for $0.96 million in non-cash, stock-based compensation recognized under salaries in the third quarter of 2008, non-GAAP operating expenses were $3.0 million or 8.3% of sales. The non-cash, stock-based compensation relates to the release of shares of the Company's common stock to the Company's CEO from escrow pursuant to a make good agreement to meet the net income target for 2008 of $8.2 million entered into by the Company in connection with its private placement financing in February 2007. The decline in operating expenses is primarily due increased operating efficiencies.
Operating income for the third quarter was $4.2 million compared to $3.5 million in the third quarter of 2008. Adjusting for the previously mentioned non-cash, stock-based compensation, non-GAAP operating income was $4.4 million in the third quarter of 2008.
Net income was $3.3 million in the third quarter of 2009 for fully diluted earnings per share of $0.17 compared to $2.4 million in net income and fully diluted earnings per share of $0.12 in the third quarter of 2008. Excluding the non-cash, stock-based compensation, non-GAAP net income for the third quarter of 2008 was $3.4 million. Non-GAAP fully diluted earnings per share for the first quarter of 2008 were $0.17.
Nine Months Financial Results
Revenue for the first nine months of fiscal 2009 was $72.8 million, down 15.8% from revenue in the first nine months of fiscal 2009 of $86.4 million. Gross profit for the period was $13.7 million, down 21.5% from gross profit of $17.5 million in the same period a year ago. Gross margin was 18.9% compared to 20.3% for the first nine months of 2008. Operating profit for the period was $7.3 million, down 3.7% from income from operating profit of $7.6 million. Net income for the first nine months of 2009 was $5.6 million, up 19.8% from net income of $4.7 million in the first nine months of 2008. Fully diluted earnings per share for the period were $0.29 compared to $0.24 in the same period a year ago.
Financial Condition
As of September 30, 2009, China Ritar had $13.3 million in cash and equivalents and restricted cash, $28.5 million in working capital and $38.3 million in total liabilities. Shareholders' equity stood at $40.2 million, up from $34.4 million at year end 2008.
Recent Developments
On August 3, 2009, China Ritar Power's common stock began trading on the NASDAQ Global Market under the symbol CRTP.
In October, 2009, China Ritar raised $12.9 million in a registered direct offering for 2,150,000 shares of common stock at a purchase price of $6.00 per share. With the gross proceeds from the direct offering, China Ritar intends to add 10 new lead acid battery production lines bringing the Company's total number of production lines to 29.
Business Outlook
China Ritar Power has been granted a new industrial park by the Hengyang government. The industrial park is expected to be completed by the first quarter of 2010, at which time China Ritar will begin installing equipment. The Company is adding an additional 10 production lines increasing total number of production lines from 19 to 29. The new production lines are expected to be completed by the third quarter of 2010. China Ritar expects capital expenditures to be about $6 million for the purchase and instillation of the new equipment.
"We are ramping up our production capacity as we expand our market penetration in China and internationally. Demand for lead acid batteries continues to increase as new technology makes emerging markets such as alternative energy mainstream," Mr. Hu commented. "Moreover, we have established a solid competitive position with a reputation for manufacturing high quality batteries with consistent performance at lower prices than our international competitors."
Conference Call
China Ritar will host a conference call at 8:00 am EST on Tuesday, November 17, 2009 to discuss the third quarter fiscal 2009 results. To participate in the conference call, please dial the following number fifteen minutes prior to the scheduled conference call time: 888-419-5570. International callers should dial 617-896-9871. The pass code for the call is 461 227 51. If you are unable to participate in the call at this time, a replay will be available for 14 days starting on Tuesday, November 17, 2009 at 10:00 AM EST. To access the replay, dial 888-286-8010, international callers should dial 617-801-6888. The conference pass code is 65 975 63. 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.
Use of Non-GAAP Financial Measures
To supplement China Ritar's condensed consolidated financial statements presented on a GAAP basis, China Ritar is providing certain income statement information that is not calculated according to GAAP. China Ritar believes that its non-GAAP disclosures are useful in evaluating its operating results as this information supplies the user with another view of the matching of costs and expenses. A reconciliation of the adjustments to GAAP results for the three month and nine month periods ended September 30, 2008 is included below. The non-GAAP information presented is supplemental and is not purported to be a substitute for information prepared in accordance with GAAP.
Non-GAAP financial results for the three month and nine month periods ended September 30, 2008 discussed in this release reflect operating results excluding the impact of the non-cash, stock-based compensation recognized under salaries in relation to the release of shares of the Company's common stock to the Company's CEO from escrow pursuant to a make good agreement to meet the net income target for 2008 of $8.2 million entered into by the Company in connection with its private placement financing in February 2007.
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 renewable 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 TO FOLLOW --
CHINA RITAR POWER CORP. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2008
For the three months For the nine months
ended ended
Adjusted Net income September 30, 2008 September 30, 2008
Net Income (Loss) and
Diluted EPS Net Income Diluted EPS Net Income Diluted EPS
Adjusted Amount
Non-GAAP 3,373,415 0.17 7,571,341 0.39
Adjustments
Non-cash compensation
adjustment (1) 963,350 0.05 2,890,050 0.15
Amount per consolidated
statement of operations 2,410,065 0.12 4,681,291 0.24
(1) Non cash compensation expense in connection with the release from
escrow to certain employees of shares of common stock that had
been deposited into escrow to certain China Ritar employees in
connection with the Company's private placement in February 2007
CHINA RITAR POWER CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2009 2008
(Unaudited) (Audited)
ASSETS
Current assets:
Cash and cash equivalents $9,788,967 $8,300,472
Accounts receivable, net of
allowances of $1,312,835 and
$1,311,759 28,093,385 20,015,989
Inventory 15,919,169 14,578,230
Advance to suppliers 2,945,857 1,340,107
Other current assets 3,246,184 3,564,793
Restricted cash 3,549,277 4,387,679
Total current assets 63,542,839 52,187,270
Non-current assets:
Property, plant and equipment, net 14,302,416 10,905,369
Construction in progress 84,394 3,089,854
Intangible assets, net 10,581 17,088
Land use right 470,631 476,687
Rental and utility deposits 82,430 82,801
Total assets $78,493,291 $66,759,069
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $16,930,797 $13,483,218
Income and other taxes payable 3,517,617 2,941,267
Accrued salaries 255,891 447,022
Bills payable 5,191,198 4,321,915
Derivative instruments -- 236,898
Other current liabilities 1,541,836 2,808,483
Current portion of long term loans 1,479,964 877,886
Short-term loans 6,128,276 3,596,955
Total current liabilities 35,045,579 28,713,644
Long-term loans 3,219,724 3,657,859
Total liabilities 38,265,303 32,371,503
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.001 par value,
10,000,000 shares authorized, none
issued and outstanding -- --
Common stock, $.001 par value,
100,000,000 shares authorized,
19,266,821 and 19,134,992 shares
issued and outstanding 19,267 19,135
Additional paid-in capital 19,339,505 19,222,727
Retained earnings 17,653,209 12,053,205
Accumulated other comprehensive
income 3,233,749 3,092,499
Total China Ritar shareholders'
equity 40,245,730 34,387,566
Non-controlling interest (17,742) --
Total equity 40,227,988 34,387,566
Total liabilities and stockholders'
equity $78,493,291 $66,759,069
CHINA RITAR POWER CORP. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
Nine months ended Three months ended
September 30, September 30,
2009 2008 2009 2008
Revenue $72,770,220 $86,394,684 $33,909,554 $36,321,897
Cost of sales 59,033,209 68,893,115 27,555,365 28,868,390
Gross profit 13,737,011 17,501,569 6,354,189 7,453,507
Operating expenses:
Salaries 1,401,032 3,946,743 411,598 1,469,858
Sales commission 1,137,101 875,854 210,519 419,499
Shipping and handling
cost 843,499 1,166,326 336,022 463,794
Other selling and
administrative
expenses 3,040,517 3,914,333 1,169,705 1,633,578
6,422,149 9,903,256 2,127,844 3,986,729
Operating profit 7,314,862 7,598,313 4,226,345 3,466,778
Other income and
(expenses):
Interest income 71,984 128,398 5,419 49,260
Other income 40,649 963 31,097 744
Interest expenses (500,512) (749,610) (187,018) (403,439)
Foreign currency
exchange gain (loss) (18,008) (457,690) (22,165) 74,433
Other expenses (11,444) (8,739) (5,536) (3,425)
Other expenses, net (417,331) (1,086,678) (178,203) (282,427)
Income before income
taxes 6,897,531 6,511,635 4,048,142 3,184,351
Income taxes (1,315,258) (1,850,361) (786,779) (777,491)
Net income 5,582,273 4,661,274 3,261,363 2,406,860
Net loss attributable
to non-controlling
interest 17,731 20,017 2,009 3,205
Net income attributable
to China Ritar
shareholders 5,600,004 4,681,291 3,263,372 2,410,065
Other comprehensive
income
Foreign currency
translation adjustment 141,239 1,995,085 23,271 352,424
Other comprehensive
loss attributable
to non-controlling
interest 11 -- 8 --
141,250 1,995,085 23,279 352,424
Comprehensive income
attributable to China
Ritar shareholders 5,741,254 $6,676,376 $3,286,651 $2,762,489
Earnings per share:
- Basic $0.29 $0.24 $0.17 $0.13
- Diluted $0.29 $0.24 $0.17 $0.12
Weighted average number
of shares outstanding:
- Basic 19,169,619 19,125,115 19,237,745 19,134,992
- Diluted 19,588,589 19,479,221 19,378,936 19,519,730
CHINA RITAR POWER CORP. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine months ended September 30,
2009 2008
Operating activities
Net income attributable to China Ritar
shareholders $5,600,004 $4,681,291
Adjustments to reconcile net income to
net cash provided by (used in) operating
activities:
Depreciation of property, plant and
equipment 1,010,531 653,925
Amortization of intangible assets and
land use right 9,968 2,264
Allowance of bad debts -- 546,908
Gain on disposal on property, plant and
equipment (365) --
Allowance for inventory valuation and
slow moving items -- 117,198
Stock based compensation-make good
provision -- 2,890,050
Non-controlling interests (17,731) (20,017)
Changes in operating working capital
items:
Accounts receivable (8,056,264) (12,103,486)
Inventory (1,328,206) (10,061,890)
Advance to suppliers (1,603,712) 1,546,540
Other current assets 321,343 (836,721)
Rental and utility deposits 439 --
Accounts payable 3,434,527 9,542,377
Income and other taxes payable 573,601 1,132,426
Accrued salaries (191,385) 97,431
Bills payable 865,232 (2,656,342)
Other current liabilities (1,197,733) 131,190
Net cash used in operating activities (579,751) (4,336,856)
Investing activities
Loan to related parties -- 216,761
Purchase of property, plant and
equipment (1,394,445) (6,615,432)
Sales proceeds of disposal of property,
plant and equipment 4,390 --
Net cash used in investing activities (1,390,055) (6,398,671)
Financing activities
Proceeds from exercises of warrants 116,910 26,105
Proceeds from other loan borrowings -- 85,812
Proceeds from bank borrowings 9,091,188 23,609,767
Repayment of bank borrowings (6,402,592) (17,102,702)
Restricted cash 841,507 2,724,036
Net cash provided by financing
activities 3,647,013 9,343,018
Effect of exchange rate changes in cash (188,712) 340,912
Net increase (decrease) in cash and
cash equivalents 1,488,495 (1,051,597)
Cash and cash equivalents, beginning of
period 8,300,472 4,775,562
Cash and cash equivalents, end of
period $9,788,967 $3,723,965
Supplemental disclosure of cash flow
information
Interest paid $71,984 $283,715
Income taxes paid $735,365 $629,901
Non-cash financing activities
Issuance of common stock for cashless
exercise of warrants $90 $125
For more information, please contact:
Elite IR
John Marco, Partner
Tel: +1-310-819-2948
Email:
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Elite IR
Leslie J. Richardson, Partner
Tel: +852-3183-0283
Email:
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