New Energy Systems Group Reports Record 2009 Results
New Energy Systems Group, a design manufacturer and distributor of lithium ion batteries and backup power systems, announced financial results for the full year ended December 31, 2009.
Revenue increased 33.8% to $26.4 million for the twelve months ended December 31, 2009, as compared to $19.7 million in 2008. Revenue consisted of $19.9 million in battery revenue and $6.5 million in battery shell and cover revenue, as compared to $14.7 million and $5 million, respectively, in 2008. The improvement in revenue reflects a full year of revenue from the battery distribution business initiated in the second half of 2008 and increased demand for battery shells and caps. Revenue in 2009 also includes 24 days of revenue, or $3.4 million, from Anytone following completion of the acquisition on December 7, 2009, and does not include any revenue contribution from NewPower, which was acquired on January 13, 2010.
Gross profit for 2009 was $8.0 million, or 30.5% of net revenue, as compared to $5.7 million, or 28.9% of net revenue, for 2008. The improvement in both gross profit and gross margin was primarily due to the Company’s increased revenues from the battery segment. Compared to the existing battery shell and cover business, the battery segment generates higher gross margins due to the lower cost of sales.
In 2009, general and administrative expense included $251,507 of non-cash, stock-based compensation expense and $275,000 of non-cash amortization expense. Operating income was $6.7 million for 2009, as compared to $5 million for 2008.
For 2009, GAAP net income rose 31.1% to $5.8 million, or $0.82 per diluted share, from $4.5 million, or $0.72 per diluted share, in 2008. Excluding non-cash stock-based compensation expense and amortization expense, adjusted net income for 2009 was $6.4 million, or $0.89 per diluted share.
As of December 31, 2009, New Energy Systems Group had cash and cash equivalents of $3.7 million following a $3.0 million cash prepayment in 2009 related to the 2010 NewPower acquisition. In addition, included in the company’s accounts payables is a $5 million liability, which is scheduled to be paid in cash by June 30, 2010, as a final payment related to the acquisition of Anytone which was completed in December 2009.
Fushun Li, Chief Executive Officer, commented, "We moved to implement the second phase of our vertical integration strategy in late 2009 by acquiring Anytone and NewPower. I am pleased to report the integration of the two acquisitions is progressing seamlessly. In December 2009, we completed the acquisition of Anytone, a leading manufacturer of backup power systems, which provides us with the ability to touch the end-user customer in China with branded products, thus broadening our product offering and expanding our distribution channels. Anytone’s significant R&D capabilities and its ability to rapidly innovate to meet changing needs in the marketplace help position us to rapidly gain market share in the direct-to-consumer market. In January 2010 we completed the acquisition of NewPower. NewPower, a Chinese manufacturer of lithium ion batteries, is a captive source for components for finished battery products that will enable us to keep costs below competitors’ and improve margins in our own finished battery distribution business."