Attached files
| file | filename |
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| 8-K - FORM 8-K - Highpower International, Inc. | v417650_8k.htm |
Exhibit 99.1
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 | % | ||||||||||||||||
| 2 |
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 $2.7 million for the six months ended June 30, 2014.
| 3 |
A table reconciling EBITDA, a non-GAAP (Generally Accepted Accounting Principles) financial measure, to the appropriate GAAP measure is included with the Company’s financial information below.
Balance Sheet Highlights
| ($ 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.
| 4 |
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
| 5 |
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 | ||||||||||||
| 6 |
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 | ||||||
| 7 |
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 | ||||||
| 8 |
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.
| 9 |
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 | ||||||||||||
| 10 |