Advanced Battery Technologies Announces Third Quarter 2010 Financial Results
Advanced Battery Technologies, Inc. announced financial results for the third quarter ended September 30, 2010. The company recorded total revenues of $25.9 million for the three months ended September 30, 2010, an increase of $8.2 million or 46.4% compared to $17.7 million for the three months ended September 30 2009. The increase in revenues was primarily due to the sales generated from the electric vehicle business, which the Company acquired on May 4, 2009. Sales of electric vehicles for the three months ended September 30, 2010 were $13.9 million, compared to $6.7million for the three months ended September 30, 2009.
In the three months ended September 30, 2010, our revenue increased by 46.4% and our cost of goods sold increased by 20.6%, from $10.1 million to $12.2 million, compared to the same period in 2009. Similarly, in the nine months ended September 30, 2010, our revenue increased by 62.0% and our cost of goods sold increased by 46.1%, from $23.2 million to $33.9 million, compared to the same period of 2009. This disparity in growth between revenue and cost of goods sold is mainly attributable to the higher average selling price of electric vehicles in 2010 than in 2009. In addition, since the acquisition of Wuxi ZQ in May 2009, we have worked aggressively to reduce unnecessary expenses at Wuxi ZQ. The overall result was an increase in our gross margin from 43.1% in the three months ended September 30 2009 to 53.1% in the same period of 2010. During the nine months ended September 30, 2010, our gross margin improved to 50.4% compared to 45.0% in the first nine months of 2009.
The company’s operating expenses decreased by 26.9%, from $2.4 million in the three months ended September 30, 2009 to $1.7 million in the same period of 2010. The company incurred operating expenses of $6.3 million during the nine months ended September 30, 2010, an increase of $0.4 million or 6.8%, compared to $5.9 million for the nine months ended September 30, 2009. The increase is primarily due to our expanded battery and electric vehicle operations.
During the three and nine months ended September 30 2010, the changes in the fair value of outstanding warrants were $128,176 and ($5,269,104) respectively, which were recognized as other expense (income). As a result, in part, of that disparity, our net pre-tax income for the three months ended September 30, 2010, $12.0 million, was not significantly different from our operating income, $12.0 million, but our net pre-tax income for the nine months ended September 30, 2010, $33.6 million, was substantially greater than operating income for the period, $28.1 million.
At September 30, 2010 the company had a strong balance sheet, with $74.3 million cash and cash equivalents. As of October 31, 2010 the company had a backlog of approximately $55.4 million for delivery throughout the next 12 months, including a battery backlog of approximately $41.6 million.
Mr. Zhiguo Fu, CEO of ABAT, stated, "We are pleased to report an increase in our revenue attributable to medium and large capacity batteries and electric vehicles. This has been beneficial to the profitability of our overall business. The margins that we are able to achieve in selling larger capacity batteries are significantly greater than the margins we achieve in selling smaller capacity batteries. In order to meet higher demand from both battery and electric scooter markets, the company intends to accelerate growth by both adding more facilities and pursuing acquisition opportunities."
