WUHAN, China, May 14, 2024 /PRNewswire/ -- China Automotive Systems, Inc. (NASDAQ:CAAS) ("CAAS" or the "Company"), a leading power steering components and systems supplier in China, today announced its unaudited financial results for the first quarter ended March 31, 2024. First Quarter 2024 Highlights Net sales were $139.4 million Gross profit increased by 11.6% to $24.1 million with a gross margin of 17.3%, compared with $21.6 million of gross profit and a 15.2% gross margin in the first quarter of 2023 Income from operations increased by 26.0% to $9.7 million compared with $7.7 million in the first quarter of 2023 Diluted income per share increased by 17.4% to $0.27, compared to diluted income per share of $0.23 in the first quarter of 2023 Cash, cash equivalents, and short-term investments were $135.8 million as of March 31, 2024 Net cash provided by operating activities was $10.5 million in the first quarter of 2024 compared to net cash used of $1.4 million in the first quarter of 2023. Mr. Qizhou Wu, chief executive officer of CAAS, commented, "We are pleased with achieving higher gross profit, income from operations, diluted income per share and net cash flow from operating activities in the 2024 first quarter. We remain confident in our sales growth in 2024, despite a slight decline in the 2024 first quarter. Our electric power steering ("EPS") sales percentage remained consistent around 34.0% of total sales in the first quarter of 2024. International sales were mixed as sales in Brazil continued its growth trend with a 17.6% year-over-year sales rise, and North American sales were down by 12.4% year-over-year mainly due to temporary lower product sales to Stellantis N.V in the 2024 first quarter." "We continued to invest in our products as research and development ("R&D") expenses remained stable. Investments targeted improving performance of our traditional steering products continued even as we focus on expanding our EPS portfolio of products and enhance our Advanced Driver Assistance Systems ("ADAS") program with Sentient AB and our clients." Mr. Jie Li, chief financial officer of CAAS, commented, "We had total cash, cash equivalents, and short-term investments of $135.8 million and our current ratio was 1.6 to 1 as of March 31, 2024.  Cash flow from operating activities was $10.5 million in the first quarter of 2024 and gross margin increased primarily due to changes in the product mix sold combined with our ongoing cost controls." First Quarter of 2024 Net sales decreased by 2.0% to $139.4 million in the first quarter of 2024, compared to $142.2 million in the first quarter of 2023. Net sales of traditional steering products and parts were $92.0 million compared to $94.4 million for the first quarter of 2023. Net sales of electric power steering ("EPS") products and parts were $47.4 million for the three months ended March 31, 2024 compared with $47.8 million for the same period in 2023. EPS product sales for the first quarter of 2024 were approximately 34.0% of total net sales. North American net export sales were $30.4 million compared to $34.7 million in the first quarter of 2023, primarily due to lower demand of passenger vehicle products by Stellantis N.V. Brazil Henglong's net product sales increased by 17.6% to $12.7 million in the first quarter of 2024 compared to $10.8 million for the same period in 2023 due to higher sales to Fiat. Sales volumes to Chery Automobile Co., Ltd increased, and sales for other entities increased by 31.2% to $29.0 million mainly due to higher sales by Wuhan Jielong and Wuhan Hyoseong. Steering product sales to the commercial vehicle markets of $16.8 million were consistent with the sales in the 2023 first quarter. Gross profit increased by 11.6% to $24.1 million from $21.6 million in the first quarter of 2023. Gross margin in the first quarter of 2024 was 17.3%, compared with 15.2% gross margin in the first quarter of 2023, primarily due to changes in the product sales mix and the decrease in sales unit cost for the three months of March 31, 2024. Gain on other sales was $0.5 million, compared to $0.7 million in the first quarter of 2023. Selling expenses increased by 20.6% to $4.1 million from $3.4 million in the first quarter of 2023. This increase in selling expenses was primarily due to higher office expenses. Selling expenses represented 2.9% of net sales in the first quarter of 2024 compared to 2.4% in the first quarter of 2023. General and administrative expenses ("G&A expenses") increased to $5.5 million, compared with $4.8 million of the first quarter of 2023 mainly due to higher payroll related expenses and maintenance expenses. G&A expenses represented 3.9% of net sales in the first quarter of 2024 compared with 3.4% of net sales in the first quarter of 2023.   Research and development expenses ("R&D expenses") decreased by 17.2% to $5.3 million compared to $6.4 million in the first quarter of 2023, mainly due to decreased R&D activities for new projects of the traditional products. R&D expenses represented 3.8% of net sales in the first quarter of 2024 compared to 4.5% in the first quarter of 2023.  Other income was $2.4 million for the first quarter of 2024, compared to $1.5 million for the first quarter of 2023, mainly due to higher government subsidies in the first quarter of 2024. Income from operations was $9.7 million in the first quarter of 2024, compared to income from operations of $7.7 million in the first quarter of 2023. The 26.0% increase in 2024 first quarter income from operations was primarily due to higher gross profit partially offset by a smaller increase in operating expenses.    Interest expense was $0.3 million in the first quarter of 2024, compared to $0.2 million in the first quarter of 2023. Financial expense, net was $0.01 million in the first quarter of 2024, compared to $0.4 million in the first quarter of 2023. This change was primarily due to a decrease in foreign exchange loss due to foreign exchange volatility. Income before income tax expenses and equity in earnings of affiliated companies increased by 37.2% to $11.8 million in the first quarter of 2024 compared to $8.6 million in the first quarter of 2023. The increase in income before income tax expenses and equity in earnings of affiliated companies in the first quarter of 2024 was mainly due to higher income from operations and increased net other income. Equity in losses of affiliated companies was $0.8 million in the first quarter of 2024, compared with equity in income of affiliated companies of $0.1 million in the first quarter of 2023. Income tax expense was $1.7 million for the first quarter of 2024 as compared to $0.8 million for the first quarter of 2023. This higher tax was primarily due to an increase in the Global Intangible Low-Taxed Income ("GILTI") tax expenses. Net income attributable to parent company's common shareholders was $8.3 million in the first quarter of 2024, compared to $6.8 million in the first quarter of 2023.  Diluted income per share was $0.27 in the first quarter of 2024, compared to net income per share of $0.23 in the first quarter of 2023. The weighted average number of diluted common shares outstanding was 30,185,702 in the first quarter of 2024 compared to 30,193,082 in the first quarter of 2023. Balance Sheet As of March 31, 2024, total cash, cash equivalents, and short-term investments were $135.8 million, total accounts receivable including notes receivable were $266.7 million, accounts payable including notes payable were $243.0 million and short-term bank loans were $40.5 million. Working capital rose to $206.7 million as of March 31, 2024, compared to $180.3 million as of December 31, 2023. Total parent company stockholders' equity was $358.4 million as of March 31, 2024, compared to $344.5 million as of December 31, 2023.  Business Outlook Management has reiterated revenue guidance for the full fiscal year 2024 of $605.0 million. This target is based on the Company's current views on operating and market conditions, which are subject to change. Conference Call Management will conduct a conference call on May 14, 2024, at 8:00 A.M. EDT/8:00 P.M. Beijing Time to discuss these results. A question and answer session will follow management's presentation. To participate, please see the dial-in information below, enter the call 10 minutes before the aforementioned start time and ask to be connected to the "China Automotive Systems" conference call with pin number 144876: Phone Number: +1-888-506-0062 (North America) Phone Number: +1-973-528-0011 (International) Mainland China Toll Free: +86-400-120-3199 A replay of the call will be available on the Company's website under the investor relations section. About China Automotive Systems, Inc. Based in Hubei Province, the People's Republic of China, China Automotive Systems, Inc. is a leading supplier of power steering components and systems to the Chinese automotive industry, operating through eight Sino-foreign joint ventures. The Company offers a full range of steering system parts for passenger automobiles and commercial vehicles. The Company currently offers four separate series of power steering with an annual production capacity of over 8 million sets of steering gears, columns and steering hoses. Its customer base is comprised of leading auto manufacturers, such as China FAW Group, Corp., Dongfeng Auto Group Co., Ltd., BYD Auto Company Limited, Beiqi Foton Motor Co., Ltd. and Chery Automobile Co., Ltd. in China, and Stellantis N.V. and Ford Motor Company in North America. For more information, please visit: http://www.caasauto.com. Forward-Looking Statements This press release contains statements that are "forward-looking statements" as defined under the Private Securities Litigation Reform Act of 1995. Forward-looking statements represent our estimates and assumptions only as of the date of this press release. Our actual results may differ materially from the results described in or anticipated by our forward-looking statements due to certain risks and uncertainties. As a result, the Company's actual results could differ materially from those contained in these forward-looking statements due to a number of factors, including those described under the heading "Risk Factors" in the Company's Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 28, 2024, and in documents subsequently filed by the Company from time to time with the Securities and Exchange Commission. Any of these factors and other factors beyond our control, could have an adverse effect on the overall business environment, cause uncertainties in the regions where we conduct business, cause our business to suffer in ways that we cannot predict and materially and adversely impact our business, financial condition and results of operations. A prolonged disruption or any further unforeseen delay in our operations of the manufacturing, delivery and assembly process within any of our production facilities could continue to result in delays in the shipment of products to our customers, increased costs and reduced revenue. We expressly disclaim any duty to provide updates to any forward-looking statements made in this press release, whether as a result of new information, future events or otherwise. For further information, please contact: Jie LiChief Financial OfficerChina Automotive Systems, Kevin TheissAwaken -Tables Follow –   China Automotive Systems, Inc. and Subsidiaries Condensed Unaudited Consolidated Balance Sheets (In thousands of USD unless otherwise indicated)  March 31, 2024 December 31, 2023 ASSETS Current assets: Cash and cash equivalents $ 112,557 $ 114,660 Pledged cash 44,028 40,534 Accounts and notes receivable, net - unrelated parties 255,119 261,237 Accounts and notes receivable, net - related parties 11,599 8,169 Inventories 109,082 112,392 Other current assets 38,047 27,083 Total current assets 570,432 564,075 Non-current assets: Property, plant and equipment, net 99,395 101,359 Land use rights, net