UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): |
August 10, 2015 |
HIGHPOWER INTERNATIONAL, INC.
_____________________________________________________
(Exact name of registrant as specified in
its charter)
Delaware |
001-34098 |
20-4062622 |
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
Building A1, Luoshan Industrial Zone, Shanxia,
Pinghu, Longgang, Shenzhen, Guangdong, 518111, China
(Address,
including zip code, of principal executive offices)
Registrant’s telephone number, including area code |
(86) 755-89686238 |
(Former
name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition.
On August 10, 2015, Highpower International, Inc.
(the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2015. A copy
of the press release is attached hereto as Exhibit 99.1 and the information therein is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
The information under Item 2.02 above is incorporated
herein by reference.
The information reported under Items 2.02 and 7.01
in this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, is being "furnished" and shall not be deemed
filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise
subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities
Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit No. |
|
Description |
|
|
|
99.1 |
|
Highpower International, Inc. Press Release dated August 10, 2015. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: August 10, 2015 |
Highpower International, Inc. |
|
|
|
|
/s/ |
Henry Sun |
|
By: |
Henry Sun |
|
Its: |
Chief Financial Officer |
EXHIBIT INDEX
Exhibit No. |
|
Description |
|
|
|
99.1 |
|
Press Release dated August 10, 2015. |
Exhibit 99.1
![](tex99-1logo.jpg)
Highpower
International Reports Financial Results
For
the Second Quarter And Six Months Ended June 30, 2015
Company to Hold
Conference Call on August 10, 2015 at 10:00 a.m. Eastern Time / 7:00 a.m. Pacific Time
SAN FRANCISCO, USA and SHENZHEN, CHINA
– August 10, 2015 - Highpower International, Inc. (NASDAQ: HPJ), a developer, manufacturer, and marketer of lithium and
nickel-metal hydride (Ni-MH) rechargeable batteries, and a battery management systems and battery recycling provider, today announced
its financial results for the second quarter and six months ended June 30, 2015.
2015 Second
Quarter Operating and Financial Highlights (all results are compared to prior year period)
| · | Net sales were $38.6 million, an increase
of 1.3% from $38.1 million. |
| · | Lithium battery net sales increased 26.0%
to $22.1 million from $17.5 million. Nickel-metal hydride (Ni-MH) net sales decreased 17.6% to $15.8 million from $19.2 million. |
| · | Gross margin was 22.2% compared to 20.3%. |
| · | EBITDA was $3.3 million, an increase of
36.6% from $2.4 million; Adjusted EBITDA improved to $3.5 million, compared to $2.8 million. |
| · | Net income attributable to the Company
was $1.9 million, or $0.12 per diluted share, an increase of 129.8% from net income of $0.8 million, or $0.05 per diluted share;
non-GAAP net income attributable to the Company was $2.1 million, or $0.13 per diluted share, compared to $1.3 million, or $0.08
per diluted share. |
| · | Received Best Design Award at the 5th
China International Energy Storage Conference and Exhibition. |
| · | Awarded 100 KWh energy storage project
from China Southern Power Grid. |
| · | Selected by Seiko for wearable battery
solutions. |
| · | Granted U.S. patent for new safety technology,
with a total of 149 patents. |
Management Commentary
Mr. George Pan,
Chairman and CEO of Highpower International, commented, "Revenue growth of lithium battery products was driven by continuous
global demand for mobile devices as well as the electric bus market in China, offset by a more challenging environment for nickel-metal
hydride business. We continue to leverage the flexibility of our operations to take advantage of these trends in the marketplace,
and our ability to manufacture lithium battery products to a wide variety of customers largely drove our double-digit increases
for the quarter. This led to overall top-line improvement despite lower Ni-MH sales as a result of commodity-driven pricing pressures.
We have made progress towards further improving the Company's profitability through lean manufacturing, and delivered improved
gross and operating margins. We also plan to commercialize portable energy storage systems in the international market by the end
of year, and to channel all of our attention on positioning Highpower for sustainable and profitable growth.”
2015 Second Quarter Financial Review
Net Sales
Net sales for the second quarter ended
June 30, 2015 were $38.6 million compared to $38.1 million for the same period in 2014. The 1.3% increase in net sales compared
to the same period in 2014 was mainly due to a $4.6 million improvement in net sales of Lithium batteries, offset by a decline
of $3.4 million in sales of Ni-MH batteries and $0.7 million in sales of new material business.
Net sales for the six months ended June 30,
2015 were $70.8 million, an increase of 5.2% compared to $67.3 million for the same prior year period. This increase was attributable
to an increase of $8.0 million in sales of Lithium batteries, offset by a $4.1 million decrease in net sales of Ni-MH batteries
and $0.4 million decrease in new material business.
Gross Profit
For the second quarter ended June 30,
2015, the Company’s gross profit was $8.6 million, an increase of 10.8% from $7.7 million for the same period in 2014.
For the six months ended June 30, 2015,
the Company’s gross profit was $14.1 million, an increase of 3.4% from $13.7 million for the same period in 2014.
Gross Margin
Gross margin was 22.2% for the second quarter
ended June 30, 2015, compared to 20.3% for the same period in 2014. This increase was attributed to a decrease in the average price
of battery materials (nickel) and higher sales of lithium batteries, offset by a negative gross profit from new materials as it
ramps up operations.
Gross margin for the six months ended June
30, 2015 was 20.0%, as compared with 20.3% for the same period in 2014. The decrease was due to decrease in the average selling
price of products.
Net sales, cost of sales, and gross profit
by segment is set out as follows:
| |
Three months ended June 30, | | |
| | |
Six months ended June 30, | | |
| |
| |
2015 | | |
2014 | | |
| | |
2015 | | |
2014 | | |
| |
| |
(Unaudited) | | |
(Unaudited) | | |
| | |
(Unaudited) | | |
(Unaudited) | | |
| |
| |
$ | | |
$ | | |
Changes in % | | |
$ | | |
$ | | |
Changes in % | |
Net sales | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Ni-MH Batteries | |
| 15,775,426 | | |
| 19,153,435 | | |
| -17.6 | % | |
| 30,534,896 | | |
| 34,640,938 | | |
| -11.9 | % |
Lithium Batteries | |
| 22,066,302 | | |
| 17,511,963 | | |
| 26.0 | % | |
| 38,886,930 | | |
| 30,902,207 | | |
| 25.8 | % |
New Materials | |
| 794,073 | | |
| 1,469,238 | | |
| -46.0 | % | |
| 1,351,623 | | |
| 1,751,805 | | |
| -22.8 | % |
Total | |
| 38,635,801 | | |
| 38,134,636 | | |
| 1.3 | % | |
| 70,773,449 | | |
| 67,294,950 | | |
| 5.2 | % |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Cost of Sales | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Ni-MH Batteries | |
| 11,850,483 | | |
| 15,224,391 | | |
| -22.2 | % | |
| 23,565,936 | | |
| 27,514,189 | | |
| -14.3 | % |
Lithium Batteries | |
| 17,307,091 | | |
| 13,877,599 | | |
| 24.7 | % | |
| 31,640,483 | | |
| 24,580,425 | | |
| 28.7 | % |
New Materials | |
| 914,467 | | |
| 1,303,155 | | |
| -29.8 | % | |
| 1,447,556 | | |
| 1,539,900 | | |
| -6.0 | % |
Total | |
| 30,072,041 | | |
| 30,405,145 | | |
| -1.1 | % | |
| 56,653,975 | | |
| 53,634,514 | | |
| 5.6 | % |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Gross Profit | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Ni-MH Batteries | |
| 3,924,943 | | |
| 3,929,044 | | |
| -0.1 | % | |
| 6,968,960 | | |
| 7,126,749 | | |
| -2.2 | % |
Lithium Batteries | |
| 4,759,211 | | |
| 3,634,364 | | |
| 31.0 | % | |
| 7,246,447 | | |
| 6,321,782 | | |
| 14.6 | % |
New Materials | |
| (120,394 | ) | |
| 166,083 | | |
| -172.5 | % | |
| (95,933 | ) | |
| 211,905 | | |
| -145.3 | % |
Total | |
| 8,563,760 | | |
| 7,729,491 | | |
| 10.8 | % | |
| 14,119,474 | | |
| 13,660,436 | | |
| 3.4 | % |
Net sales by geography is set out as follows:
| |
Three months ended | | |
Six months ended | |
| |
June 30, | | |
June 30, | |
| |
2015 | | |
2014 | | |
2015 | | |
2014 | |
| |
(Unaudited) | | |
(Unaudited) | | |
(Unaudited) | | |
(Unaudited) | |
Net sales | |
| | | |
| | | |
| | | |
| | |
China Mainland | |
| 49.9 | % | |
| 52.2 | % | |
| 47.1 | % | |
| 51.2 | % |
Asia, others | |
| 30.1 | % | |
| 22.8 | % | |
| 31.2 | % | |
| 21.2 | % |
Europe | |
| 14.9 | % | |
| 18.5 | % | |
| 16.3 | % | |
| 20.0 | % |
North America | |
| 4.6 | % | |
| 5.9 | % | |
| 4.7 | % | |
| 6.8 | % |
Others | |
| 0.5 | % | |
| 0.6 | % | |
| 0.7 | % | |
| 0.8 | % |
Total: | |
| 100.0 | % | |
| 100.0 | % | |
| 100.0 | % | |
| 100.0 | % |
Research and Development (R&D)
R&D expenses
were $2.0 million, or 5.2% of net sales, for both the second quarter ended June 30, 2015 and for the same period in 2014.
For the six months
ended June 30, 2015, R&D expenses were $3.7 million, or 5.2% of net sales, compared to $3.8 million, or 5.6% of net sales,
for the same period in 2014.
Selling & Distribution
Selling and distribution
expenses were $1.6 million, or 4.1% of net sales, for the second quarter ended June 30, 2015, compared to $1.6 million, or 4.2%
of net sales, for the same period in 2014.
For the six months
ended June 30, 2015, selling and distribution expenses were $3.4 million, or 4.8% of the net sales, compared to $3.1 million, or
4.6% of net sales, for the same period in 2014.
General & Administrative
General and administrative
expenses were $3.4 million, or 8.9% of net sales, for the second quarter ended June 30, 2015, compared to $3.3 million, or 8.7%
of net sales, for the same period in 2014.
For the six months
ended June 30, 2015, general and administrative expenses were $6.4 million, or 9.1% of net sales, compared to $6.9 million, or
10.2% of net sales, for the same period in 2014.
Net Income
For the second
quarter of 2015, net income attributable to the Company was $1.9 million, or $0.12 per diluted share based on 15.4 million weighted
average diluted shares outstanding, compared to net income of $0.8 million, or $0.05 per diluted share based on 15.3 million weighted
average diluted shares outstanding. Non-GAAP net income attributable to the Company was $2.1 million, or $0.13 per diluted share,
compared to a non-GAAP net income of $1.3 million, or $0.08 per diluted share, in the prior year period.
For the six months
ended June 30, 2015, net income attributable to the Company was $1.7 million, or $0.12 per diluted share based on 15.5 million
weighted average diluted shares outstanding, compared to net loss of $0.1 million, or $0.01 per diluted share based on 14.4 million
weighted average diluted shares outstanding. Non-GAAP net income attributable to the Company was $1.7 million, or $0.11 per diluted
share, compared to a non-GAAP net income of $0.7 million, or $0.05 per diluted share, in the prior year period.
EBITDA
EBITDA for the
second quarter ended June 30, 2015 improved to $3.3 million from $2.4 million in the prior year period. EBITDA for first half of
2015 increased 67.6% to $4.5 million from $2.7 million for the six months ended June 30, 2014.
A table reconciling
EBITDA, a non-GAAP (Generally Accepted Accounting Principles) financial measure, to the appropriate GAAP measure is included with
the Company’s financial information below.
Balance Sheet Highlights
($
in millions, except per share data) | |
June 30, | | |
December 31, | |
| |
2015 | | |
2014 | |
| |
(Unaudited) | | |
| |
| |
$ | | |
$ | |
Cash and Cash Equivalents | |
$ | 3.7 | | |
$ | 14.6 | |
Restricted cash | |
$ | 12.8 | | |
$ | 15.4 | |
Total Current Assets | |
$ | 84.0 | | |
$ | 89.2 | |
Total Assets | |
$ | 142.4 | | |
$ | 146.2 | |
| |
| | | |
| | |
Total Current Liabilities | |
$ | 97.0 | | |
$ | 101.4 | |
Total Liabilities | |
$ | 98.6 | | |
$ | 104.4 | |
| |
| | | |
| | |
Shareholders’ Equity | |
$ | 43.8 | | |
$ | 41.8 | |
Total Liabilities and Shareholders’ Equity | |
$ | 142.4 | | |
$ | 146.2 | |
Book Value Per Share | |
$ | 2.90 | | |
$ | 2.77 | |
Outlook for
2015
Based on current
expectations for global demand in the rechargeable battery market in 2015 and the continued trends toward mobile power sources,
higher-value energy storage systems and transportation products, the Company is reaffirming its 2015 guidance of revenues to be
between $160 million to $170 million, and non-GAAP net income of between $5.0 million and $6.0 million, and net income of between
$4.0 million and $5.0 million.
Conference Call Details
The Company announced that it will
discuss financial results in a conference call on August 10, 2015 at 10:00 a.m. Eastern Time / 7:00 a.m. Pacific time to discuss
these results.
The dial-in numbers are:
Live Participant Dial In (Toll Free): |
877-407-3108 |
Live Participant Dial In (International): |
201-493-6797 |
To listen to the live webcast, please go
to at www.highpowertech.com and click on the conference call link, or go to: http://highpowertech.equisolvewebcast.com/q2-2015.
This webcast will be archived and accessible through the Company’s website for approximately 30 days following the call.
The Company will also have an accompanying slide presentation available in PDF format on its homepage prior to the conference call.
About Highpower International, Inc.
Highpower International was founded in
2001 and produces high-quality Nickel-Metal Hydride (Ni-MH) and lithium-based rechargeable batteries used in a wide range of applications
such as electric buses, bikes, energy storage systems, power tools, medical equipment, digital and electronic devices, personal
care products, and lighting, etc. Highpower’s target customers are Fortune 500 companies and top 10 companies in each vertical
segment. With advanced manufacturing facilities located in Shenzhen, Huizhou, and Ganzhou of China, Highpower is committed to clean
technology, not only in the products it makes, but also in the processes of production. The majority of Highpower International's
products are distributed to worldwide markets mainly in the United States, Europe, China and Southeast Asia.
Use of Non-GAAP Measures
The Company has supplemented its reported
GAAP (generally accepted accounting principles) financial information with non-GAAP measures. EBITDA was derived by taking earnings
before interest expense (net), taxes, depreciation and amortization. Adjusted EBITDA and Non-GAAP (adjusted) net income or (loss)
exclude stock-based compensation expense. Adjusted EBITDA, as defined above, may not be similar to Adjusted EBITDA measures
used by other companies. The presentation of this additional information is not meant to be considered in isolation or as a substitute
for results prepared in accordance with U.S. GAAP. The Company believes these non-GAAP measures are useful to investors as
they provide a basis for evaluating the Company's operating results in the ordinary course of its operations.
These non-GAAP measures are not based on
any comprehensive set of accounting rules or principles. The Company believes that non-GAAP measures have limitations in that
they do not reflect all of the amounts associated with its results of operations as determined in accordance with U.S. GAAP and
that these measures should only be used to evaluate the Company's results of operations in conjunction with, and not in lieu of,
the corresponding GAAP measures. These non-GAAP financial measures are reconciled in the accompanying tables to the most directly
comparable measures as reported in accordance with GAAP.
Forward Looking Statements
This press release contains "forward-looking
statements" within the meaning of the “safe-harbor” provisions of the Private Securities Litigation Reform Act
of 1995 that are not historical facts. 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 thereof or comparable
terminology, and include discussions of strategy, and statements about industry trends and the Company's future performance, operations
and products. Such statements involve known and unknown risks, uncertainties and other factors that could cause the Company's actual
results to differ materially from the results expressed or implied by such statements, including, without limitation, fluctuations
in the cost of raw materials; our dependence on, or inability to attract additional, major customers for a significant portion
of our net sales; our ability to increase manufacturing capabilities to satisfy orders from new customers; our ability to maintain
increased margins; our dependence on the growth in demand for portable electronic devices and energy storage systems and transportation
products and the success of manufacturers of the end applications that use our battery products; our responsiveness to competitive
market conditions; our ability to successfully manufacture our products in the time frame and amounts expected; the market acceptance
of our battery products, including our lithium products; our ability to successfully develop products for and penetrate the electric
transportation market; our ability to successfully commercialize portable energy storage systems in the international market by
the end of year and our ability to continue R&D development to keep up with technological changes. For a discussion of these
and other risks and uncertainties see "Risk Factors" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the Company's public filings with the SEC. Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable, there can be no assurance that such expectations will
prove to be correct. The Company has no obligation to update the forward-looking information contained in this press release.
CONTACT:
Highpower International, Inc.
Henry Sun
CFO
+86-755-8968-6521
ir@highpowertech.com
INVESTOR RELATIONS:
The Equity Group Inc.
In China
Katherine Yao, Senior Associate
+86-10-6587-6435
kyao@equityny.com
In U.S.
Adam Prior, Senior Vice President
+1 (212) 836-9606
aprior@equityny.com
HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
(Stated in US Dollars except Number of
Shares)
| |
Three months ended | | |
Six months ended | |
| |
June 30, | | |
June 30, | |
| |
2015 | | |
2014 | | |
2015 | | |
2014 | |
| |
(Unaudited) | | |
(Unaudited) | | |
(Unaudited) | | |
(Unaudited) | |
| |
$ | | |
$ | | |
$ | | |
$ | |
Net sales | |
| 38,635,801 | | |
| 38,134,636 | | |
| 70,773,449 | | |
| 67,294,950 | |
Cost of sales | |
| (30,072,041 | ) | |
| (30,405,145 | ) | |
| (56,653,975 | ) | |
| (53,634,514 | ) |
Gross profit | |
| 8,563,760 | | |
| 7,729,491 | | |
| 14,119,474 | | |
| 13,660,436 | |
Research and development expenses | |
| (1,997,494 | ) | |
| (1,976,965 | ) | |
| (3,671,618 | ) | |
| (3,788,917 | ) |
Selling and distribution expenses | |
| (1,597,564 | ) | |
| (1,587,726 | ) | |
| (3,396,286 | ) | |
| (3,124,886 | ) |
General and administrative expenses | |
| (3,423,770 | ) | |
| (3,312,296 | ) | |
| (6,448,521 | ) | |
| (6,883,576 | ) |
Foreign currency translation gain | |
| 73,546 | | |
| 247,102 | | |
| 443,857 | | |
| 349,695 | |
Gain (loss) on derivative instruments | |
| - | | |
| 21,147 | | |
| - | | |
| (116,134 | ) |
Total operating expenses | |
| (6,945,282 | ) | |
| (6,608,738 | ) | |
| (13,072,568 | ) | |
| (13,563,818 | ) |
Income from operations | |
| 1,618,478 | | |
| 1,120,753 | | |
| 1,046,906 | | |
| 96,618 | |
Gain on change of fair value of warrant liability | |
| 84,833 | | |
| 74,548 | | |
| 431,132 | | |
| 74,548 | |
Other income | |
| 357,055 | | |
| 361,954 | | |
| 587,147 | | |
| 903,374 | |
Interest expenses | |
| (275,476 | ) | |
| (474,162 | ) | |
| (544,118 | ) | |
| (1,069,543 | ) |
Income before taxes | |
| 1,784,890 | | |
| 1,083,093 | | |
| 1,521,067 | | |
| 4,997 | |
Income taxes benefit (expenses) | |
| (18,840 | ) | |
| (281,364 | ) | |
| 76,416 | | |
| (189,213 | ) |
Net income (loss) | |
| 1,766,050 | | |
| 801,729 | | |
| 1,597,483 | | |
| (184,216 | ) |
Less: net loss attributable to non-controlling interest | |
| (101,074 | ) | |
| (10,769 | ) | |
| (146,283 | ) | |
| (61,565 | ) |
Net income (loss) attributable to the Company | |
| 1,867,124 | | |
| 812,498 | | |
| 1,743,766 | | |
| (122,651 | ) |
Comprehensive income (loss) | |
| | | |
| | | |
| | | |
| | |
Net income (loss) | |
| 1,766,050 | | |
| 801,729 | | |
| 1,597,483 | | |
| (184,216 | ) |
Foreign currency translation income (loss) | |
| 206,027 | | |
| (19,936 | ) | |
| 1,266 | | |
| (361,122 | ) |
Comprehensive income (loss) | |
| 1,972,077 | | |
| 781,793 | | |
| 1,598,749 | | |
| (545,338 | ) |
Less: comprehensive loss attributable to non-controlling interest | |
| (95,376 | ) | |
| (11,294 | ) | |
| (144,549 | ) | |
| (72,727 | ) |
Comprehensive income (loss) attributable to the Company | |
| 2,067,453 | | |
| 793,087 | | |
| 1,743,298 | | |
| (472,611 | ) |
Income (loss) per share of common stock attributable to the Company | |
| | | |
| | | |
| | | |
| | |
- Basic | |
| 0.12 | | |
| 0.05 | | |
| 0.12 | | |
| (0.01 | ) |
- Diluted | |
| 0.12 | | |
| 0.05 | | |
| 0.11 | | |
| (0.01 | ) |
Weighted average number of common stock outstanding | |
| | | |
| | | |
| | | |
| | |
- Basic | |
| 15,094,979 | | |
| 14,853,219 | | |
| 15,091,639 | | |
| 14,415,662 | |
- Diluted | |
| 15,441,576 | | |
| 15,277,743 | | |
| 15,469,274 | | |
| 14,415,662 | |
HIGHPOWER INTERNATIONAL, INC.AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Stated in US Dollars except Number of
Shares)
| |
June 30, | | |
December 31, | |
| |
2015 | | |
2014 | |
| |
(Unaudited) | | |
| |
| |
$ | | |
$ | |
ASSETS | |
| | | |
| | |
Current Assets: | |
| | | |
| | |
Cash and cash equivalents | |
| 3,739,259 | | |
| 14,611,892 | |
Restricted cash | |
| 12,826,121 | | |
| 15,396,827 | |
Accounts receivable, net | |
| 33,148,160 | | |
| 32,316,607 | |
Notes receivable | |
| 2,271,470 | | |
| 621,110 | |
Prepayments | |
| 5,587,678 | | |
| 3,283,520 | |
Other receivables | |
| 712,666 | | |
| 665,828 | |
Inventories | |
| 25,699,805 | | |
| 22,268,069 | |
Total Current Assets | |
| 83,985,159 | | |
| 89,163,853 | |
Property, plant and equipment, net | |
| 51,729,322 | | |
| 50,437,718 | |
Land use right, net | |
| 4,263,472 | | |
| 4,305,317 | |
Intangible asset, net | |
| 575,000 | | |
| 600,000 | |
Deferred tax assets | |
| 1,880,410 | | |
| 1,647,184 | |
| |
| 142,433,363 | | |
| 146,154,072 | |
| |
| | | |
| | |
LIABILITIES AND EQUITY | |
| | | |
| | |
Current Liabilities: | |
| | | |
| | |
Accounts payable | |
| 43,126,718 | | |
| 44,562,647 | |
Deferred income | |
| 1,890,464 | | |
| 1,887,409 | |
Short-term loan | |
| 9,147,609 | | |
| 15,195,040 | |
Notes payable | |
| 33,259,448 | | |
| 29,903,248 | |
Other payables and accrued liabilities | |
| 6,222,543 | | |
| 5,896,547 | |
Income taxes payable | |
| 1,396,467 | | |
| 1,968,656 | |
Current portion of long-term loan | |
| 1,962,420 | | |
| 1,959,248 | |
Total Current Liabilities | |
| 97,005,669 | | |
| 101,372,795 | |
Warrant Liability | |
| 636,542 | | |
| 1,067,674 | |
Long-term loan | |
| 981,209 | | |
| 1,959,247 | |
TOTAL LIABILITIES | |
| 98,623,420 | | |
| 104,399,716 | |
EQUITY | |
| | | |
| | |
Stockholders’ equity | |
| | | |
| | |
Preferred stock | |
| | | |
| | |
(Par value: $0.0001, Authorized: 10,000,000 shares, Issued and outstanding: none) | |
| - | | |
| - | |
Common stock | |
| | | |
| | |
(Par value: $0.0001, Authorized: 100,000,000 shares, 15,101,679 shares issued and outstanding at June 30, 2015 and 15,084,746 shares issued and outstanding at December 31, 2014) | |
| 1,510 | | |
| 1,508 | |
Additional paid-in capital | |
| 10,987,266 | | |
| 10,530,430 | |
Statutory and other reserves | |
| 3,611,501 | | |
| 3,611,501 | |
Retained earnings | |
| 22,418,787 | | |
| 20,675,021 | |
Accumulated other comprehensive income | |
| 5,628,189 | | |
| 5,628,657 | |
Total equity for the Company’s stockholders | |
| 42,647,253 | | |
| 40,447,117 | |
Non-controlling interest | |
| 1,162,690 | | |
| 1,307,239 | |
TOTAL EQUITY | |
| 43,809,943 | | |
| 41,754,356 | |
TOTAL LIABILITIES AND EQUITY | |
| 142,433,363 | | |
| 146,154,072 | |
HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Stated in US Dollars)
| |
Six months ended June 30, | |
| |
2015 | | |
2014 | |
| |
(Unaudited) | | |
(Unaudited) | |
| |
$ | | |
$ | |
Cash flows from operating activities | |
| | | |
| | |
Net income (loss) | |
| 1,597,483 | | |
| (184,216 | ) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |
| | | |
| | |
Depreciation and amortization | |
| 2,535,695 | | |
| 2,053,486 | |
Allowance for doubtful accounts | |
| 896 | | |
| 266 | |
Loss on disposal of property, plant and equipment | |
| 79,692 | | |
| 151,237 | |
Gain on derivative instruments | |
| - | | |
| 130,948 | |
Deferred income tax | |
| (230,050 | ) | |
| (549,140 | ) |
Share based payment | |
| 412,304 | | |
| 916,244 | |
Gain on change of fair value of warrant liability | |
| (431,132 | ) | |
| (74,548 | ) |
Changes in operating assets and liabilities: | |
| | | |
| | |
Accounts receivable | |
| (787,672 | ) | |
| 159,094 | |
Notes receivable | |
| (1,645,051 | ) | |
| (1,560,871 | ) |
Prepayments | |
| (2,292,844 | ) | |
| (1,200,028 | ) |
Other receivable | |
| (45,640 | ) | |
| 253,843 | |
Inventories | |
| (3,386,818 | ) | |
| (1,086,899 | ) |
Accounts payable | |
| (1,503,555 | ) | |
| 6,887,622 | |
Deferred income | |
| - | | |
| 1,009,295 | |
Other payables and accrued liabilities | |
| 315,942 | | |
| (2,175,844 | ) |
Income taxes payable | |
| (573,875 | ) | |
| 88,688 | |
Net cash flows (used in) provided by operating activities | |
| (5,954,625 | ) | |
| 4,819,177 | |
Cash flows from investing activities | |
| | | |
| | |
Acquisition of plant and equipment | |
| (4,047,717 | ) | |
| (3,503,027 | ) |
Net cash flows used in investing activities | |
| (4,047,717 | ) | |
| (3,503,027 | ) |
Cash flows from financing activities | |
| | | |
| | |
Proceeds from short-term bank loans | |
| - | | |
| 9,611,198 | |
Repayment of short-term bank loans | |
| (6,062,248 | ) | |
| (14,367,008 | ) |
Repayment of long-term bank loans | |
| (978,649 | ) | |
| (976,737 | ) |
Proceeds from notes payable | |
| 30,931,015 | | |
| 21,753,902 | |
Repayment of notes payable | |
| (27,631,861 | ) | |
| (25,195,047 | ) |
Proceeds from exercise of employee options | |
| 44,534 | | |
| - | |
Proceeds from issuance of capital stock, net | |
| - | | |
| 4,633,164 | |
Change in restricted cash | |
| 2,588,730 | | |
| 8,316,169 | |
Net cash flows (used in) provided by financing activities | |
| (1,108,479 | ) | |
| 3,775,641 | |
Effect of foreign currency translation on cash and cash equivalents | |
| 238,188 | | |
| (244,829 | ) |
Net (decrease) increase in cash and cash equivalents | |
| (10,872,633 | ) | |
| 4,846,962 | |
Cash and cash equivalents - beginning of period | |
| 14,611,892 | | |
| 7,973,459 | |
Cash and cash equivalents - end of period | |
| 3,739,259 | | |
| 12,820,421 | |
Supplemental disclosures for cash flow information: | |
| | | |
| | |
Cash paid for: | |
| | | |
| | |
Income taxes | |
| 727,509 | | |
| 649,665 | |
Interest expenses | |
| 615,363 | | |
| 1,061,904 | |
Non-cash transactions | |
| | | |
| | |
Accounts payable for construction in progress | |
| - | | |
| 794,356 | |
Offset of deferred income and property, plant and equipment | |
| - | | |
| 669,668 | |
HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES (Unaudited)
(Stated in US Dollars)
Reconciliation of Net Income to EBITDA
| |
Three months ended | | |
Six months ended | |
| |
June 30, | | |
June 30, | |
| |
2015 | | |
2014 | | |
2015 | | |
2014 | |
| |
(Unaudited) | | |
(Unaudited) | | |
(Unaudited) | | |
(Unaudited) | |
| |
$ | | |
$ | | |
$ | | |
$ | |
Net income (loss) attributable to the Company | |
| 1,876,124 | | |
| 812,498 | | |
| 1,743,766 | | |
| (122,651 | ) |
Non-GAAP Net Income (1) | |
| 2,073,234 | | |
| 1,253,248 | | |
| 1,724,938 | | |
| 719,045 | |
Interest expenses, net | |
| 110,262 | | |
| 270,351 | | |
| 342,832 | | |
| 592,500 | |
Income tax expenses | |
| 18,840 | | |
| 281,364 | | |
| (76,416 | ) | |
| 189,213 | |
Depreciation and Amortization | |
| 1,289,652 | | |
| 1,041,685 | | |
| 2,535,695 | | |
| 2,053,486 | |
EBITDA | |
| 3,285,878 | | |
| 2,405,898 | | |
| 4,545,877 | | |
| 2,712,548 | |
Non-GAAP EBITDA(2) | |
| 3,491,988 | | |
| 2,846,648 | | |
| 4,527,049 | | |
| 3,554,244 | |
(1) See table below for reconciliation of
net income (loss) attributable to the Company to Non-GAAP net income attributable to the Company.
(2) Excludes share-based compensation expense
and gain on change of fair value of warrant liability as set forth in the following table.
HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES (Unaudited)
(Stated in US Dollars except Number of
Shares)
Reconciliation of Net Income (Loss)
Attributable to the Company to Non-GAAP Net Income Attributable to the Company
| |
Three months ended | | |
Six months ended | |
| |
June 30, | | |
June 30, | |
| |
2015 | | |
2014 | | |
2015 | | |
2014 | |
| |
(Unaudited) | | |
(Unaudited) | | |
(Unaudited) | | |
(Unaudited) | |
| |
$ | | |
$ | | |
$ | | |
$ | |
Net income (loss) attributable to the Company | |
| 1,867,124 | | |
| 812,498 | | |
| 1,743,766 | | |
| (122,651 | ) |
Stock-based compensation expense | |
| 290,943 | | |
| 515,298 | | |
| 412,304 | | |
| 916,244 | |
Gain on change of fair value of warrant liability | |
| (84,833 | ) | |
| (74,548 | ) | |
| (431,132 | ) | |
| (74,548 | ) |
Non-GAAP net income attributable to the Company | |
| 2,073,234 | | |
| 1,253,248 | | |
| 1,724,938 | | |
| 719,045 | |
Basic net income (loss) per share of common stock attributable to the Company | |
| 0.12 | | |
| 0.05 | | |
| 0.12 | | |
| (0.01 | ) |
Stock-based compensation expense | |
| 0.02 | | |
| 0.03 | | |
| 0.03 | | |
| 0.06 | |
Gain on change of fair value of warrant liability | |
| - | | |
| - | | |
| (0.03 | ) | |
| - | |
Non-GAAP income per share of common stock attributable to the Company | |
| 0.14 | | |
| 0.08 | | |
| 0.12 | | |
| 0.05 | |
Diluted net income (loss) per share of common stock attributable to the Company | |
| 0.12 | | |
| 0.05 | | |
| 0.11 | | |
| (0.01 | ) |
Stock-based compensation expense | |
| 0.02 | | |
| 0.03 | | |
| 0.03 | | |
| 0.06 | |
Gain on change of fair value of warrant liability | |
| (0.01 | ) | |
| - | | |
| (0.03 | ) | |
| - | |
Non-GAAP income per share of common stock attributable to the Company | |
| 0.13 | | |
| 0.08 | | |
| 0.11 | | |
| 0.05 | |
Weighted average number of common shares outstanding | |
| | | |
| | | |
| | | |
| | |
-Basic | |
| 15,094,979 | | |
| 14,853,219 | | |
| 15,091,639 | | |
| 14,415,662 | |
-Diluted | |
| 15,441,576 | | |
| 15,277,743 | | |
| 15,469,274 | | |
| 14,415,662 | |
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