China TMK Battery Systems Inc. Reports Third Quarter 2011 Financial Results
China TMK Battery Systems Inc. announced the company’s financial results for the third quarter ended September 30, 2011.
"During our third quarter of 2011 we continued to see solid revenue growth across our battery product lines," said Henian Wu, Chairman and President of TMK. "The demand for batteries to power consumer electronics, household products, and power tools in both China and globally continues to escalate. Our recent capacity expansion enables us to meet this robust demand while continuing to increase market share. We are also working closely with government to get approval on our acquisition of lithium battery producer Dongfang Hualian, which will expand our product line and enter a multi-billion dollar, rapidly growing global market."
For the third quarter of 2011, revenues increased 54% to $24.4 million due primarily due to an increase of new customers, increased demand from existing customers, supported by increased production. Total cost of sales increased by 62% to $20.1 million for the third quarter of 2011, compared to the same period in 2010. Gross profit increased 30% to $5.3 million with gross margin of 20.8% in the third quarter, compared to $4.1 million and gross margin of 24.6% in 2010.
Operating expenses for the third quarter of 2011 were approximately $1.2 million in comparison to $1.0 million in the third quarter of 2010. Selling expenses remained consistent at $0.5 million compared to the previous year’s period.
Income from operations was $4.1 million for the third quarter of 2011, up 35% from $3.0 million from the prior year’s period and operating margins were 16.2% compared to 18.5% in 2010.
Net income for TMK in the third quarter of 2011 was approximately $3.7 million, up from $3.1 million in the same period last year. Adjusted net income for the quarter was $3.1 million, up 28% from $2.4 million in 2010. Excluding changes in the fair value of derivative liabilities, adjusted diluted earnings per share were $0.08 and $0.07 in the third quarter of 2011 and 2010, respectively, based on 36.9 million and 36.9 million weighted average shares outstanding.
For the nine months of 2011, revenues increased 52% to $70.7 million due primarily to the increase in customer demand, supported by higher production capacity. Total cost of sales increased by 53% to $51.8 million for the first nine months of 2011, compared to $35.9 million in the same period in 2010. Gross profit increased 50% to $15.9 million with gross margin of 22.5% in the nine months ending September 30, 2011, compared to $10.6 million and gross margin of 22.8% in 2010.
Operating expenses for the nine months ended September 30, 2011 were approximately $3.5 million in comparison to $4.9 million in the first nine months of 2010. The decrease is primarily due to $1.77 million of merger cost incurred in second quarter in 2010 in connection with the Company’s reverse acquisition.
Income from operations was $12.5 million for the first nine months of 2011, up 121% from $5.6 million from the prior year’s period and operating margins were 17.7% compared to 12.2% in 2010. Excluding the one-time reverse merger expenses, operating margins were 15.5% in the nine months ended September 30, 2010.
Net income for TMK in the first nine months of 2011 was $10.7 million, up from $5.4 million in the same period last year. Adjusted net income for the nine months was $9.6 million, up 75% from $5.5 million in 2010, excluding changes in the fair value of derivative liabilities and merger cost. Adjust diluted earnings per share were $0.26 and $0.16 in the first nine months of 2011 and 2010, respectively.
