China BAK Battery Reports 60% Increase in Revenue and 83% Increase in Net Income for Fiscal 2005; Fourth-Quarter Revenue Increases 59%, Net Income Increases 189%.DALLAS Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. & SHENZHEN Shenzhen (shĕn`jŭn`), city (1994 est. pop. 695,600), S Guangdong prov., China, on the South China Sea, N of Hong Kong. Designated a special economic zone in 1979, the city's spectacular economic growth led China to create over a dozen more , China -- China BAK Bak Bak A member of the bcl-2 family expressed in a wide range of cells which, when overexpressed in NGF-deprived sympathetic neurons accelerates apoptosis, and counteracts Bcl-2's apoptosis-protecting effects. See Bcl-2. Battery, Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). : CBBT CBBT Chesapeake Bay Bridge Tunnel ), one of the largest manufacturers of Lithium Ion A rechargeable battery technology introduced in 1991 that provides greater charge per pound than nickel metal hydride. In 1993, Toshiba introduced the first notebook in the U.S. with a Li-ion battery. (Li-ion See lithium ion. ) batteries, today announced financial results for the fourth quarter and fiscal year ended September September: see month. 30, 2005. Financial Results For the fourth quarter of its fiscal year ended September 30, 2005, the Company reported revenue of $26.8 million, an increase of 59.2 percent compared to the $16.8 million reported for the fourth quarter of the 2004 fiscal year. Gross profits for the fourth quarter of the 2005 fiscal year were $8.8 million, or 32.8 percent of sales, compared to gross profit of $3.6 million, or 21.6 percent of sales for the fourth quarter of the 2004 fiscal year. Total operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the fourth quarter of the 2005 fiscal year were $3.2 million, or 11.9 percent of sales, compared to $1.4 million, or 8.2 percent of sales for the fourth quarter of the 2004 fiscal year. Net income for the fourth quarter of fiscal 2005 increased 188.8 percent to $4.6 million, or $0.11 per basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to net income of $1.6 million, or $0.05 per basic and diluted share, for the fourth quarter of fiscal 2004. The Company used 42.2 million diluted shares in the calculation for the fourth quarter of fiscal 2005 compared to 31.2 million diluted shares in the fourth quarter of fiscal 2004. For the full fiscal year ended September 30, 2005, the Company reported revenue of $101.9 million, an increase of 59.9 percent compared to the $63.7 million reported for the 2004 fiscal year. Gross profits were $25.7 million, or 25.2 percent of sales, for the fiscal year ended September 30, 2005 compared to $13.8 million, or 21.7 percent of sales, for fiscal 2004. Total operating expenses for the 2005 fiscal year were $10.4 million, or 10.2 percent of sales, compared to $5.7 million, or 8.9 percent of sales for the 2004 fiscal year. Net income for the 2005 fiscal year was $12.4 million, or $0.32 per basic and fully diluted share, an increase of 83.4 percent compared to net income of $6.7 million, or $0.22 per share reported in the 2004 fiscal year. Xiangqian Li, the Company's Chief Executive Officer, commented, "This was an outstanding year for China BAK Battery, as we exceeded $100 million in annual revenues for the first time with each quarter's revenues surpassing the prior quarter. We expanded our market opportunity by beginning lithium polymer A rechargeable battery technology introduced in the late 1990s that stores less energy per pound than lithium ion, but is more flexible. Lithium polymer uses a gelatinous electrolyte rather than liquid. battery manufacturing and grew our manufacturing capacity to meet growing demand for our products. The result of our growth initiatives in terms of products, market share growth and channel expansion combined with continued growth in our existing markets contributed to our increase in revenues, gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. and the over 80 percent increase in net income for the 2005 fiscal year versus the 2004 fiscal year." Management intends to conduct a conference call within the next month to update investors on the Company's progress and near-term near-term adj. Of, for, or involving a short period of time in the near future. strategy. The Company's cash balances increased during fiscal 2005, with cash and restricted cash totaling $52.4 million as of September 30, 2005 compared to $10.3 million as of September 30, 2004. The Company completed the 2005 fiscal year with a current ratio of 1.2 to 1 and $20 million in working capital. As a result of sales of common stock in private placements and the Company's retention of earnings, stockholder's equity Stockholder's equity The residual claims that stockholders have against a firm's assets, calculated by subtracting all current liabilities and debt liabilities from total assets. increased 357 percent to $88.0 million at the end of fiscal 2005 compared to $19.2 million at the end of fiscal 2004. About BAK China Battery China BAK Battery, Inc. is a commercial manufacturer of standard and customized Lithium Ion (Li-ion) rechargeable batteries A rechargeable battery, also known as a storage battery, is a group of two or more secondary cells. These batteries can be restored to full charge by the application of electrical energy. for use in various portable electronic applications, including cellular phones, MP3 players A digital music player that supports the MP3 format, which was the audio format that started a revolution in online music downloads and distribution. All portable music players, the iPod being the most popular, support MP3 along with one or more other audio formats. , laptop computers A portable computer that has a flat LCD screen and usually weighs less than eight pounds. Often called just a "laptop," it uses batteries for mobile use and AC power for charging the batteries and desktop use. Today's high-end laptops provide all the capabilities of most desktop computers. , electric bicycles, digital cameras, video camcorders, and general industrial applications. BAK is one of the largest Li-ion replacement battery manufacturers in the world. BAK operates a 62-acre, 1.9 million square foot manufacturing operation in Shenzen, PRC. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This press release contains certain statements that may include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact included herein are "forward-looking statements" including statements regarding China BAK Battery, Inc. and its subsidiary companies business strategy, plans and objective and statements of non-historical information. These forward-looking statements, often identified by the use of forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. terminology The terminology used in the computer and telecommunications field adds tremendous confusion not only for the lay person, but for the technicians themselves. What many do not realize is that terms are made up by anybody and everybody in a nonchalant, casual manner without any regard or such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. Although China BAK Battery, Inc. believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect Incorrect means to not be correct and may also refer to:
emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to China BAK Battery, Inc. or persons acting on its behalf are expressly qualified in their entirety The whole, in contradistinction to a moiety or part only. When land is conveyed to Husband and Wife, they do not take by moieties, but both are seised of the entirety. by these factors. Other than as required under the securities laws, China BAK Battery, Inc. does not assume a duty to update these forward-looking statements.
CHINA BAK BATTERY, INC.
Consolidated Balance Sheets
As of September 30, 2005 and 2004
(Amounts expressed in US Dollars, except number of shares)
Assets September 30, September 30,
------ 2005 2004
$ $
Current Assets
Cash 33,055,784 3,212,176
Cash - Restricted 19,392,280 7,120,069
Accounts Receivable, Net 43,379,754 20,999,561
Inventories 21,696,226 29,535,985
Prepaid Expenses 1,448,119 1,330,645
Notes Receivable 484,028 18,122
Accounts Receivable - Related Party 271,873 911,093
--------------- --------------
Total Current Assets 119,728,064 63,127,651
--------------- --------------
Long-Term Assets
Property, Plant and Equipment 52,160,610 19,875,583
Construction in Progress 17,804,181 23,656,190
Land Use Rights 3,246,791 4,029,038
Less Accumulated Depreciation (5,873,954) (2,370,774)
--------------- --------------
Long-Term Assets, Net 67,337,628 45,190,037
--------------- --------------
Other Assets
Other Assets 566,703 225,972
Intangible Assets, Net 53,379 58,362
--------------- --------------
Total Other Assets 620,082 284,334
--------------- --------------
Total Assets 187,685,774 108,602,022
=============== ==============
Liabilities and Stockholders' Equity
------------------------------------
Current Liabilities
Accounts Payable 17,836,561 23,570,087
Bank Loans, Short Term 39,545,230 27,304,162
Short-Term Loans -- 1,812,316
Notes Payable 29,577,308 20,772,559
Land Use Rights Payable 2,962,560 3,750,756
Construction Costs Payable 5,241,883 6,347,846
Customer Deposits 655,065 369,390
Accrued Expenses 3,196,594 5,247,656
Other Liabilities 712,506 181,223
--------------- --------------
Total Current Liabilities 99,727,707 89,355,995
--------------- --------------
Stockholders' Equity
Common Stock - $.001 Par Value;
100,000,000 Shares Authorized;
48,878,396 and 31,225,642 shares issued
and outstanding at September 30, 2005
and 2004, respectively 48,878 31,226
Additional Paid In Capital 68,012,808 12,052,845
Accumulated Comprehensive Income (Loss) 362,728 (144)
Reserves 3,688,989 1,724,246
Retained Earnings 15,844,664 5,437,854
--------------- --------------
Total Stockholders' Equity 87,958,067 19,246,027
--------------- --------------
Total Liabilities and Stockholders'
Equity 187,685,774 108,602,022
=============== ==============
CHINA BAK BATTERY, INC.
Consolidated Statements of Operations
For the Years Ended September 30, 2005 and 2004
(Amounts expressed in US Dollars, except number of shares)
2005 2004
$ $
Revenues, Net of Returns 101,921,583 63,746,202
Cost of Goods Sold 76,234,834 49,921,818
------------ -----------
Gross Profit 25,686,749 13,824,384
------------ -----------
Expenses:
Selling 4,023,582 1,877,878
General and Administrative 5,027,154 3,141,125
Research and Development 541,735 328,779
Bad Debts Expense 769,807 326,990
------------ -----------
Total Expenses 10,362,278 5,674,772
------------ -----------
Operating Income 15,324,471 8,149,612
Other Expenses
Finance Costs 2,395,137 1,006,056
Other Expenses 28,117 2,916
------------ -----------
Net Income Before Provision for Income Tax 12,901,217 7,140,640
Provision for Income Tax 526,840 394,333
------------ -----------
Net Income 12,374,377 6,746,307
============ ===========
Net Income Per Common and Common Equivalent
Share:
Basic 0.32 0.22
============ ===========
Diluted 0.32 0.22
============ ===========
Weighted Average Shares Outstanding:
Basic 38,288,874 31,225,642
============ ===========
Diluted 38,405,401 31,225,642
============ ===========
CHINA BAK BATTERY, INC.
Consolidated Statements of Operations
For the Three Months Ended September 30, 2005 and 2004
(Amounts expressed in US Dollars, except number of shares)
2005 2004
$ $
Revenues, Net of Returns 26,762,368 16,811,746
Cost of Goods Sold 17,993,367 13,178,237
----------- -----------
Gross Profit 8,769,001 3,633,509
----------- -----------
Expenses (Reversals):
Selling 1,097,080 560,667
General and Administrative 2,042,418 278,953
Research and Development 227,109 (16,692)
Bad Debts Expense (Reversal) (174,288) 554,141
----------- -----------
Total Expenses 3,192,319 1,377,069
----------- -----------
Operating Income 5,576,682 2,256,440
Other Expenses (Income):
Finance Costs 1,062,019 483,427
Other Income (5,507) (2,323)
----------- -----------
Net Income Before Provision for Income Tax 4,520,170 1,775,336
Provision for (Reversal of) Income Tax (123,674) 167,490
----------- -----------
Net Income 4,643,844 1,607,846
=========== ===========
Net Income Per Common and Common Equivalent
Share:
Basic 0.11 0.05
=========== ===========
Diluted 0.11 0.05
=========== ===========
Weighted Average Shares Outstanding:
Basic 42,116,280 31,225,642
=========== ===========
Diluted 42,247,042 31,225,642
=========== ===========
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