Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 13, 2013 | |
Document Information [Line Items] | ' | ' |
Entity Registrant Name | 'CHINA AUTOMOTIVE SYSTEMS INC | ' |
Entity Central Index Key | '0001157762 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Trading Symbol | 'CAAS | ' |
Entity Common Stock, Shares Outstanding | ' | 28,043,019 |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2013 | ' |
Condensed_Unaudited_Consolidat
Condensed Unaudited Consolidated Statements of Operations and Comprehensive Income (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Net product sales | ' | ' | ' | ' |
Unrelated parties | $81,753 | $70,245 | $259,627 | $215,157 |
Related parties (Note 29) | 9,166 | 2,939 | 26,344 | 19,325 |
Revenue, Net | 90,919 | 73,184 | 285,971 | 234,482 |
Cost of product sold | ' | ' | ' | ' |
Unrelated parties | 63,894 | 56,231 | 208,525 | 176,834 |
Related parties (Note 29) | 10,500 | 4,452 | 23,171 | 14,137 |
Cost of Revenue | 74,394 | 60,683 | 231,696 | 190,971 |
Gross profit | 16,525 | 12,501 | 54,275 | 43,511 |
Gain on other sales | 5,030 | 704 | 6,762 | 2,625 |
Less: Operating expenses | ' | ' | ' | ' |
Selling expenses | 2,647 | 2,437 | 9,611 | 6,704 |
General and administrative expenses | 2,821 | 2,487 | 10,164 | 8,999 |
Research and development expenses | 5,117 | 2,818 | 13,134 | 10,060 |
Total operating expenses | 10,585 | 7,742 | 32,909 | 25,763 |
Income from operations | 10,970 | 5,463 | 28,128 | 20,373 |
Other income, net | 499 | 238 | 573 | 317 |
Financial income (expenses), net | 689 | -437 | 380 | -1,850 |
Loss on change in fair value of derivative | ' | ' | 0 | -449 |
Gain on redemption of convertible notes | ' | ' | 0 | 1,421 |
Income before income tax expenses and equity in earnings of affiliated companies | 12,158 | 5,264 | 29,081 | 19,812 |
Less: Income taxes | 1,854 | 891 | 5,172 | 3,666 |
Equity in earnings of affiliated companies | 125 | 27 | 251 | 139 |
Income from continuing operations | 10,429 | 4,400 | 24,160 | 16,285 |
Discontinued operations - net of income tax (Note 26) | ' | ' | 0 | 2,651 |
Net income | 10,429 | 4,400 | 24,160 | 18,936 |
Net income attributable to non-controlling interests | 1,805 | 996 | 4,616 | 3,279 |
Net income attributable to parent company | 8,624 | 3,404 | 19,544 | 15,657 |
Allocation to convertible notes holders | ' | ' | 0 | -925 |
Net income attributable to parent company’s common shareholders | 8,624 | 3,404 | 19,544 | 14,732 |
Comprehensive income: | ' | ' | ' | ' |
Income from continuing operations | 10,429 | 4,400 | 24,160 | 16,285 |
Income from discontinued operations | ' | ' | 0 | 2,651 |
Net income | 10,429 | 4,400 | 24,160 | 18,936 |
Other comprehensive income (loss): | ' | ' | ' | ' |
Foreign currency translation gain (loss), net of tax - continuing operations | ' | ' | 5,265 | -1,205 |
Foreign currency translation loss, net of tax - discontinued operations | ' | ' | 0 | -75 |
Foreign currency translation gain (loss), net of tax | 1,218 | -556 | 5,265 | -1,280 |
Comprehensive income - continuing operations | ' | ' | 29,425 | 15,080 |
Comprehensive income - discontinued operations | ' | ' | 0 | 2,576 |
Comprehensive income | 11,647 | 3,844 | 29,425 | 17,656 |
Comprehensive income attributable to non-controlling interests | 2,010 | 904 | 5,507 | 3,023 |
Comprehensive income attributable to parent company | $9,637 | $2,940 | $23,918 | $14,633 |
Net income attributable to parent company’s common shareholders per share | ' | ' | ' | ' |
Income per share from continuing operations attributable to shareholders (in dollars per share) | ' | ' | $0.70 | $0.44 |
Income per share from discontinued operations (in dollars per share) | ' | ' | $0 | $0.08 |
Basic (in dollar per share) | $0.31 | $0.12 | $0.70 | $0.52 |
Diluted- | ' | ' | ' | ' |
Income per share from continuing operations attributable to shareholders (in dollars per share) | ' | ' | $0.70 | $0.44 |
Income per share from discontinued operations (in dollars per share) | ' | ' | $0 | $0.08 |
Diluted (in dollars per share) | $0.31 | $0.12 | $0.70 | $0.52 |
Weighted average number of common shares outstanding | ' | ' | ' | ' |
Basic (in shares) | 28,043,019 | 28,260,302 | 28,043,019 | 28,260,302 |
Diluted (in shares) | 28,062,297 | 28,260,880 | 28,054,008 | 28,261,529 |
Condensed_Unaudited_Consolidat1
Condensed Unaudited Consolidated Balance Sheets (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $54,702 | $87,649 |
Pledged cash deposits | 25,633 | 26,481 |
Short-term investments | 32,274 | 0 |
Accounts and notes receivable, net - unrelated parties | 247,002 | 211,306 |
Accounts and notes receivable, net - related parties | 17,783 | 12,286 |
Advance payments and others - unrelated parties | 2,336 | 3,127 |
Advance payments and others - related parties | 1,204 | 779 |
Inventories | 53,149 | 43,542 |
Assets held for sale | 918 | 0 |
Current deferred tax assets | 4,792 | 4,392 |
Total current assets | 439,793 | 389,562 |
Non-current assets: | ' | ' |
Property, plant and equipment, net | 82,523 | 81,691 |
Intangible assets, net | 671 | 676 |
Other receivables, net - unrelated parties | 764 | 849 |
Other receivables, net - related parties | 67 | 107 |
Advance payment for property, plant and equipment - unrelated parties | 1,949 | 1,001 |
Advance payment for property, plant and equipment - related parties | 829 | 4,162 |
Long-term investments | 3,933 | 3,665 |
Non-current deferred tax assets | 5,549 | 4,112 |
Total assets | 536,078 | 485,825 |
Current liabilities: | ' | ' |
Bank and government loans | 42,199 | 40,284 |
Accounts and notes payable - unrelated parties | 174,875 | 166,380 |
Accounts and notes payable - related parties | 6,258 | 4,521 |
Customer deposits | 1,894 | 870 |
Accrued payroll and related costs | 6,111 | 5,472 |
Accrued expenses and other payables | 27,008 | 23,063 |
Accrued pension costs | 5,002 | 4,255 |
Taxes payable | 8,979 | 5,593 |
Amounts due to shareholders/directors | 303 | 332 |
Deferred tax liabilities | 93 | 46 |
Advances payable | 2,635 | 0 |
Total current liabilities | 275,357 | 250,816 |
Long-term liabilities: | ' | ' |
Advances payable | 0 | 2,609 |
Total liabilities | 275,357 | 253,425 |
Commitments and Contingencies (Note 30) | ' | ' |
Stockholders’ equity: | ' | ' |
Common stock, $0.0001 par value - Authorized - 80,000,000 shares; Issued- 28,260,302 and 28,260,302 shares at September 30, 2013 and December 31, 2012, respectively | 3 | 3 |
Additional paid-in capital | 39,565 | 39,371 |
Retained earnings- | ' | ' |
Appropriated | 10,048 | 9,953 |
Unappropriated | 138,778 | 119,329 |
Accumulated other comprehensive income | 30,272 | 25,898 |
Treasury stock - 217,283 and 217,283 shares at September 30, 2013 and December 31, 2012, respectively | -1,000 | -1,000 |
Total parent company stockholders' equity | 217,666 | 193,554 |
Non-controlling interests | 43,055 | 38,846 |
Total stockholders' equity | 260,721 | 232,400 |
Total liabilities and stockholders' equity | $536,078 | $485,825 |
Condensed_Unaudited_Consolidat2
Condensed Unaudited Consolidated Balance Sheets [Parenthetical] (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 80,000,000 | 80,000,000 |
Common stock, shares issued | 28,260,302 | 28,260,302 |
Treasury stock, shares outstanding | 217,283 | 217,283 |
Condensed_Unaudited_Consolidat3
Condensed Unaudited Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | ||
Cash flows from operating activities: | ' | ' | ||
Net income | $24,160 | $18,936 | ||
Adjustments to reconcile net income from operations to net cash provided by operating activities: | ' | ' | ||
Stock-based compensation | 194 | [1] | 76 | [1] |
Depreciation and amortization | 10,964 | 10,668 | ||
Increase (decrease) in allowance for doubtful accounts | -139 | 16 | ||
Inventory write downs | 480 | 501 | ||
Deferred income taxes | -1,611 | -1,268 | ||
Equity in earnings of affiliated companies | -251 | -139 | ||
Gain on sale of a subsidiary | 0 | -2,848 | ||
Gain on redemption of convertible notes | 0 | -1,421 | ||
Loss on change in fair value of derivative | 0 | 449 | ||
Amortization of debt issue cost | 58 | 135 | ||
Loss (gain) on fixed assets disposals | -4,288 | 44 | ||
(Increase) decrease in: | ' | ' | ||
Pledged deposits | 1,413 | -5,118 | ||
Accounts and notes receivable | -36,803 | -4,741 | ||
Advance payments and others | 465 | 570 | ||
Inventories | -9,076 | -4,306 | ||
Increase (decrease) in: | ' | ' | ||
Accounts and notes payable | 6,199 | -462 | ||
Customer deposits | 1,016 | 337 | ||
Accrued payroll and related costs | 514 | -180 | ||
Accrued expenses and other payables | 3,459 | -6,702 | ||
Accrued pension costs | 653 | 315 | ||
Taxes payable | 3,256 | 4,294 | ||
Advances payable | -32 | 2,210 | ||
Net cash provided by operating activities | 631 | 11,366 | ||
Cash flows from investing activities: | ' | ' | ||
Increase in other receivables | 158 | -1,598 | ||
Cash received from property, plant and equipment sales | 6,282 | 622 | ||
Payments to acquire property, plant and equipment | -9,065 | -16,982 | ||
Payments to acquire intangible assets | -109 | -62 | ||
Purchase of short-term investments | -32,197 | 0 | ||
Dividends from investment under cost method | 66 | 0 | ||
Proceeds from sales of a subsidiary | 0 | 3,561 | ||
Net cash used in investing activities | -34,865 | -14,459 | ||
Cash flows from financing activities: | ' | ' | ||
Proceeds from government and bank loan | 15,588 | 36,402 | ||
Repayments of bank loan | -14,758 | -7,097 | ||
Debt issuance costs paid for bank loan | 0 | -230 | ||
Dividends paid to the non-controlling interests | -1,381 | -2,387 | ||
Redemption of convertible notes | 0 | -23,571 | ||
Decrease in amounts due to shareholders/directors | -40 | -8 | ||
Net cash provided by financing activities | -591 | 3,109 | ||
Effects of exchange rate on cash and cash equivalents | 1,878 | -487 | ||
Net increase (decrease) in cash and cash equivalents | -32,947 | -471 | ||
Cash and cash equivalents at beginning of period | 87,649 | 72,961 | ||
Cash and cash equivalents at end of period | 54,702 | 72,490 | ||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ' | ' | ||
Cash paid for interest | 972 | 10,435 | ||
Cash paid for income taxes | 4,217 | 3,810 | ||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ' | ' | ||
Advance payments for acquiring property, plant and equipment | 2,777 | 5,990 | ||
Accounts receivable from sale of a subsidiary | 0 | 4,361 | ||
Non-controlling interests contribution of capital with property, plant and equipment | 0 | 2,846 | ||
Dividends payable to non-controlling interests | $86 | $707 | ||
[1] | On August 13, 2013 and August 15, 2012, the Company granted 22,500 and 22,500 stock options to the Company’s independent directors, with the exercise price equal to the closing price of the Company’s common stock traded on NASDAQ on the date of grant. The fair value of stock options was determined at the date of grant using the Black-Scholes option pricing model. The Black-Scholes option model requires management to make various estimates and assumptions, including expected term, expected volatility, risk-free rate, and dividend yield. The expected term represents the period of time that stock-based compensation awards granted are expected to be outstanding and is estimated based on considerations including the vesting period, contractual term and anticipated employee exercise patterns. Expected volatility is based on the historical volatility of the Company’s stock. The risk-free rate is based on the U.S. Treasury yield curve in relation to the contractual life of stock-based compensation instruments. The dividend yield assumption is based on historical patterns and future expectations for the Company’s dividends. |
Organization_and_business
Organization and business | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ||||||||
Organization and Business [Text Block] | ' | ||||||||
1 | Organization and business | ||||||||
China Automotive Systems, Inc., “China Automotive,” was incorporated in the State of Delaware on June 29, 1999 under the name Visions-In-Glass, Inc. China Automotive, including, when the context so requires, its subsidiaries and the joint ventures described below, is referred to herein as the “Company.” The Company is primarily engaged in the manufacture and sale of automotive systems and components, as described below. | |||||||||
Great Genesis Holdings Limited, a company incorporated in Hong Kong on January 3, 2003 under the Companies Ordinance in Hong Kong as a limited liability company, “Genesis,” is a wholly-owned subsidiary of the Company. Great Genesis is mainly engaged in the manufacture and sale of automotive systems and components through its controlled subsidiaries and the joint ventures, as described below. | |||||||||
Henglong USA Corporation, “HLUSA,” incorporated on January 8, 2007 in Troy, Michigan, is a wholly-owned subsidiary of the Company, and is mainly engaged in marketing of automotive parts in North America, and provides after-sales service and research and development support accordingly. | |||||||||
The Company owns the following aggregate net interests in the entities established in the People's Republic of China, the “PRC,” and Brazil as of September 30, 2013 and December 31, 2012. | |||||||||
Percentage Interest | |||||||||
Name of Entity | September 30, | December 31, | |||||||
2013 | 2012 | ||||||||
Shashi Jiulong Power Steering Gears Co., Ltd., “Jiulong” 1 | 81 | % | 81 | % | |||||
Jingzhou Henglong Automotive Parts Co., Ltd., “Henglong” 2 | 80 | % | 80 | % | |||||
Shenyang Jinbei Henglong Automotive Steering System Co., Ltd., “Shenyang” 3 | 70 | % | 70 | % | |||||
Universal Sensor Application Inc., “USAI” 4 | 83.34 | % | 83.34 | % | |||||
Wuhan Jielong Electric Power Steering Co., Ltd., “Jielong” 5 | 85 | % | 85 | % | |||||
Wuhu HengLong Automotive Steering System Co., Ltd., “Wuhu” 6 | 77.33 | % | 77.33 | % | |||||
Hubei Henglong Automotive System Group Co., Ltd, “Hubei Henglong” 7 | 100 | % | 100 | % | |||||
Jingzhou Henglong Automotive Technology (Testing) Center, “Testing Center” 8 | 80 | % | 80 | % | |||||
Beijing Henglong Automotive System Co., Ltd., “Beijing Henglong” 9 | 50 | % | 50 | % | |||||
Chongqing Henglong Hongyan Automotive System Co., Ltd, “Chongqing Henglong” 10 | 70 | % | 70 | % | |||||
CAAS Brazil’s Imports And Trade In Automotive Parts Ltd., “Brazil Henglong” 11 | 80 | % | 80 | % | |||||
1 | Jiulong was established in 1993 and mainly engages in the production of integral power steering gear for heavy-duty vehicles. | ||||||||
2 | Henglong was established in 1997 and mainly engages in the production of rack and pinion power steering gears for cars and light-duty vehicles. | ||||||||
3 | Shenyang was established in 2002 and focuses on power steering parts for light duty vehicles. | ||||||||
4 | USAI was established in 2005 and mainly engages in the production and sales of sensor modules. | ||||||||
5 | Jielong was established in 2006 and mainly engages in the production and sales of electric power steering, “EPS.” | ||||||||
6 | Wuhu was established in 2006 and mainly engages in the production and sales of automobile steering systems. | ||||||||
7 | On March 7, 2007, Genesis established Hubei Henglong, formerly known as Jingzhou Hengsheng Automotive System Co., Ltd., its wholly-owned subsidiary, to engage in the production and sales of automotive steering systems. The registered capital of Hubei Henglong at the time of establishment was $10 million. On February 10, 2010, the registered capital of Hubei Henglong was increased to $16 million. On October 12, 2011, the board of directors of the Company approved a reorganization of the Company’s subsidiaries operating in China. As a result of the reorganization, all of Genesis’s equity interests of its subsidiaries operating in China, except for Shenyang, were transferred to Hubei Henglong, the Company’s new China-based holding company. The reorganization was completed on January 19, 2012, subsequent to which the registered capital of Hubei Henglong was increased to $39.0 million. As the reorganized entities were under common control of the Company, the reorganization did not have any impact on the Company’s consolidated financial position or results of operations and should not impact the tax treatment of the Company or its subsidiaries in any material respect. On July 8, 2012, Hubei Henglong changed its name to Hubei Henglong Automotive System Group Co., Ltd. | ||||||||
8 | In December 2009, Henglong, a subsidiary of Genesis, formed the Testing Center, which mainly engages in the research and development of new products. The registered capital of the Testing Center was RMB30.0 million, equivalent to approximately $4.4 million. | ||||||||
9 | On January 24, 2010, Genesis entered into a joint venture contract with Beijing Hainachuan Auto Parts Co., Ltd. to establish Beijing Henglong as a joint venture company to design, develop and manufacture both hydraulic and electric power steering systems and parts. On September 16, 2010, with Beijing Hainachuan’s agreement, Genesis transferred its interest in the joint venture to Hubei Henglong, and left the other terms of the joint venture contract unchanged. According to the joint venture agreement, the Company does not have voting control of Beijing Henglong. Therefore, the Company’s consolidated financial statements do not include Beijing Henglong, and such investment is accounted for through the equity method. | ||||||||
10 | On February 21, 2012, Hubei Henglong and SAIC-IVECO Hongyan Company, “SAIC-IVECO,” established a Sino-foreign joint venture company, Chongqing Henglong, to design, develop and manufacture both hydraulic and electric power steering systems and parts. The joint venture is located in Chongqing City and has a registered capital of RMB60 million, of which RMB42 million, or 70%, is held by Hubei Henglong. The registered capital of Chongqing Henglong was fully contributed by Hubei Henglong in cash of $6.7 million (equivalent to RMB42 million) in January and February 2012 and by SAIC-IVECO in property, plant and equipment with fair value of $2.8 million (equivalent to RMB18 million) in April 2012. | ||||||||
11 | On August 21, 2012, Brazil Henglong was established as a Sino-foreign joint venture company by Hubei Henglong and two Brazilian citizens, Ozias Gaia Da Silva and Ademir Dal’ Evedove. Brazil Henglong engages mainly in the import and sales of automotive parts in Brazil. Such joint venture is located in Brazil and has a registered capital of $1.0 million (equivalent to BRL1.6 million), of which $0.8 million (equivalent to BRL1.3 million), or 80%, is held by Hubei Henglong, and of which $0.2 million (equivalent to BRL0.3 million), or 20%, is held by Mr. Ozias Gaia Da Silva and Mr. Ademir Dal’ Evedove. | ||||||||
Basis_of_presentation_and_sign
Basis of presentation and significant accounting policies | 9 Months Ended | |
Sep. 30, 2013 | ||
Accounting Policies [Abstract] | ' | |
Basis of Presentation and Significant Accounting Policies [Text Block] | ' | |
2 | Basis of presentation and significant accounting policies | |
(a) | Basis of Presentation | |
Basis of Presentation – The accompanying condensed unaudited consolidated financial statements include the accounts of the Company and its subsidiaries. The details of subsidiaries are disclosed in Note 1. Significant inter-company balances and transactions have been eliminated upon consolidation. The condensed unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions in Article 10 of Regulation S-X. Accordingly they do not include all of the information and footnotes required by such accounting principles for complete financial statements. These financial statements should be read in conjunction with the consolidated financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. | ||
The accompanying interim condensed consolidated financial statements are unaudited, but in the opinion of the Company’s management, contain all necessary adjustments, which include normal recurring adjustments, for a fair statement of the results of operations, financial position and cash flows for the interim periods presented. | ||
The condensed consolidated balance sheet as of December 31, 2012 is derived from the Company’s audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. | ||
Certain information and footnote disclosures normally included in financial statements that have been prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, although the Company’s management believes that the disclosures contained in these financial statements are adequate to make the information presented herein not misleading. For further information, please refer to the financial statements and the notes thereto included in the Company’s 2012 Annual Report on Form 10-K, as filed with the Securities and Exchange Commission. | ||
The results of operations for the three months and nine months ended September 30, 2013 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2013. | ||
Estimation - The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. | ||
(b) | Recent Accounting Pronouncements | |
In February 2013, the FASB issued ASU 2013-04, “Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date”. This update provides guidance for the recognition, measurement and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this update is fixed at the reporting date, except for obligations addressed within existing guidance in U.S. GAAP. The guidance requires an entity to measure those obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting entity expects to pay on behalf of its co-obligors. The guidance in this update also requires an entity to disclose the nature and amount of the obligation as well as other information about those obligations. This update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. This update should be applied retrospectively to all prior periods presented for those obligations resulting from joint and several liability arrangements within this update’s scope that exist at the beginning of an entity’s fiscal year of adoption. An entity may elect to use hindsight for the comparative periods (if it changed its accounting as a result of adopting the amendments in this update) and should disclose that fact. Early adoption is permitted. The adoption of this standard is not expected to have any impact on the Company’s financial position. | ||
In March 2013, the FASB issued ASU 2013-05, “Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity”. This update provides that when a reporting entity (parent) ceases to have a controlling financial interest in a subsidiary or group of assets that is a non-profit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) within a foreign entity, the parent is required to apply the guidance in Subtopic 830-30 to release any related cumulative translation adjustment into net income. Accordingly, the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. For an equity method investment that is a foreign entity, a pro rata portion of the cumulative translation adjustment should be released into net income upon a partial sale of such an equity method investment. However, this treatment does not apply to an equity method investment that is not a foreign entity. In those instances, the cumulative translation adjustment is released into net income only if the partial sale represents a complete or substantially complete liquidation of the foreign entity that contains the equity method investment. Additionally, the amendments in this update clarify that the sale of an investment in a foreign entity includes both (1) events that result in the loss of a controlling financial interest in a foreign entity (that is, irrespective of any retained investment) and (2) events that result in an acquirer obtaining control of an acquiree in which it held an equity interest immediately before the acquisition date (sometimes also referred to as a “step acquisition”). Accordingly, the cumulative translation adjustment should be released into net income upon the occurrence of those events. This update is effective prospectively for fiscal years (and interim reporting periods within those years) beginning after December 15, 2013. Early adoption is permitted. The adoption of this standard is not expected to have any impact on the Company’s financial position or operating results. | ||
On July 18, 2013, the FASB issued ASU 2013-11, "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists” (Income Taxes - Topic 740). This update applies to all entities that have unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. An unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, unless otherwise provided in the update. To the extent that a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The assessment of whether a deferred tax asset is available is based on the unrecognized tax benefit and deferred tax asset that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date. For example, an entity should not evaluate whether the deferred tax asset has expired before the statute of limitations on the tax position or whether the deferred tax asset may be used prior to the unrecognized tax benefit being settled. The amendments in this update do not require new recurring disclosures. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. Early adoption is permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. The Company is currently evaluating the impact of adopting this update on its financial statements. | ||
(c) | Significant Accounting Policies | |
Foreign Currencies – China Automotive, the parent company and HLUSA maintain their books and records in United States Dollars, “USD,” their functional currency. The Company’s subsidiaries based in the PRC and Genesis maintain their books and records in Renminbi, their functional currency. The Company’s subsidiary based in Brazil maintains its books and records in Brazilian reais (BRL), its functional currency. In accordance with FASB Accounting Standards Codification (“ASC”) Topic 830, foreign currency transactions denominated in currencies other than the functional currency are remeasured into the functional currency at the rate of exchange prevailing at the balance sheet date for monetary items. Nonmonetary items are remeasured at historical rates. Income and expenses are remeasured at the rate in effect on the transaction dates. Transaction gains and losses, if any, are included in the determination of net income for the period. | ||
In translating the financial statements of the Company’s China subsidiaries and Genesis from their functional currency into the reporting currency in USD, balance sheet accounts are translated using the closing exchange rate in effect at the balance sheet date and income and expense accounts are translated using an average exchange rate prevailing during the reporting period. Adjustments resulting from the translation, if any, are included in accumulated other comprehensive income (loss) in stockholders’ equity. | ||
Stock-Based Compensation – The Company may issue shares of common stock for services rendered or for financing costs. Such shares will be valued based on the market price on the transaction date. The Company may issue stock options to employees in non-capital raising transactions for services. | ||
In July 2004, the Company adopted a stock incentive plan. The maximum number of common shares for issuance under this plan is 2,200,000 with a period of 10 years. The stock incentive plan provides for the issuance, to the Company’s officers, directors, management and employees, of options to purchase shares of the Company’s common stock. Since the adoption of the stock incentive plan, the Company has issued 523,850 stock options, and 1,676,150 stock options remain issuable in the future. As of September 30, 2013, the Company had 105,000 stock options outstanding. | ||
The Company has adopted ASC Topic 718, “Accounting for Stock-Based Compensation,” which establishes a fair value method of accounting for stock based compensation plans. The cost of stock options issued to employees is measured on the grant date based on the fair value. The fair value is determined using the Black-Scholes option pricing model. The resulting amount is charged to expense on the straight-line basis over the period in which the Company expects to receive benefit, which is generally the vesting period. | ||
Comprehensive Income – The Company has adopted ASC Topic 220, “Reporting Comprehensive Income,” which establishes standards for the reporting and display of comprehensive income, its components and accumulated balances in a full set of general purpose financial statements. ASC Topic 220 defines comprehensive income to include all changes in equity except those resulting from investments by owners and distributions to owners, including adjustments to minimum pension liabilities, accumulated foreign currency translation, and unrealized gains or losses on marketable securities. | ||
Financial Instruments – The Company adopted the provisions of ASC Topic 815, “Derivatives and Hedging Activities,” that address the determination of whether an instrument meets the definition of a derivative being indexed to a company’s own stock for purposes of applying the scope exception as provided for in accordance with ASC 815-15. Upon adoption of the standard on the effective date, the Company bifurcated the conversion feature embedded in the convertible notes, classifying it in liabilities and measuring it at fair value at each reporting period, with changes reflected in earnings, until the convertible notes are settled (see Note 24). | ||
Fair Value Measurements – For purposes of fair value measurements, the Company applies the applicable provisions of ASC Topic 820, “Fair Value Measurements”. Accordingly, fair value for the Company’s financial accounting and reporting purposes represents the estimated price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the designated measurement date. With an objective to increase consistency and comparability in fair value measurements and related disclosures, the Financial Accounting Standard Board established the fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. | ||
Cash and cash equivalents, pledged cash deposits, short-term investments, accounts and notes receivable, accounts and notes payable, advance payment or payable, other receivable or payable, accrued expenses and bank and government loans are carried at cost on the consolidated balance sheets, and the carrying amount approximate their fair value because of the short-term nature of these financial instruments. | ||
⋅ | Level 1 Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. A quoted price in an active market provides the most reliable evidence of fair value and shall be used to measure fair value whenever available. | |
⋅ | Level 2 Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially the full term of the asset or liability. As of September 30, 2013 and December 31, 2012, the Company did not have any fair value assets and liabilities classified as Level 2. | |
⋅ | Level 3 Inputs are unobservable inputs for the asset or liability. Unobservable inputs are used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. However, the fair value measurement objective remains the same, that is, an exit price from the perspective of a market participant that holds the asset or owes the liability. Therefore, unobservable inputs shall reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. The compound derivative liabilities are classified as Level 3 as the inputs reflect management’s best estimate of what market participants would use in pricing the liability at the measurement date. As of September 30, 2013 and December 31, 2012, the Company did not have any fair value assets and liabilities classified as Level 3. For a summary of changes in Level 3 derivative liabilities for the three months and nine months ended September 30, 2013 and 2012, please see Note 24. | |
Pledged_cash_deposits
Pledged cash deposits | 9 Months Ended | |
Sep. 30, 2013 | ||
Cash and Cash Equivalents [Abstract] | ' | |
Cash and Cash Equivalents Disclosure [Text Block] | ' | |
3 | Pledged cash deposits | |
Pledged cash deposits act as guarantee for the Company’s notes payable as it regularly pays some of its suppliers by bank notes. The Company has to deposit certain amount, equivalent to 30% - 100% of the face value of the relevant bank note, at a bank in order to obtain the bank note. | ||
Shortterm_investments
Short-term investments | 9 Months Ended | |
Sep. 30, 2013 | ||
Short Term Investments Disclosure [Abstract] | ' | |
Short Term Investments Disclosure [Text Block] | ' | |
4 | Short-term investments | |
Short-term investments comprise time deposits with maturity terms of three months or more but due within one year. The carrying values of time deposits approximate fair value because of their short maturities. The interest earned is recognized in the condensed unaudited statements of operations and comprehensive income over the contractual term of the deposit. | ||
Accounts_and_notes_receivable_
Accounts and notes receivable, net | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Accounts and Notes Receivable Disclosure [Abstract] | ' | |||||||
Accounts and Notes Receivable Disclosure [Text Block] | ' | |||||||
5 | Accounts and notes receivable, net | |||||||
The Company’s accounts and notes receivable as of September 30, 2013 and December 31, 2012 are summarized as follows (figures are in thousands of USD): | ||||||||
September | December 31, 2012 | |||||||
30, 2013 | ||||||||
Accounts receivable - unrelated parties (1) | $ | 130,437 | $ | 117,136 | ||||
Notes receivable - unrelated parties (2) (3) | 117,805 | 95,436 | ||||||
248,242 | 212,572 | |||||||
Less: allowance for doubtful accounts - unrelated parties | -1,240 | -1,266 | ||||||
Accounts and notes receivable- unrelated parties | 247,002 | 211,306 | ||||||
Accounts and notes receivable - related parties | 17,783 | 12,286 | ||||||
$ | 264,785 | $ | 223,592 | |||||
-1 | As of September 30, 2013, the Company has pledged $15.7 million of accounts receivable as security for its comprehensive credit facility with banks in China. | |||||||
-2 | Notes receivable represent accounts receivable in the form of bills of exchange for which acceptances are guaranteed and settlements are handled by banks. | |||||||
-3 | Henglong collateralized its notes receivable in an amount of RMB256.3 million (equivalent to approximately $41.7 million) as security for the credit facility with banks in China and the Chinese government, including RMB216.1 million (equivalent to approximately $35.1 million) in favor of Industrial and Commercial Bank of China, Jingzhou Branch, “ICBC Jingzhou,” for the purpose of obtaining the Henglong Standby Letter of Credit (as defined in Note 13) which is used as security for the non-revolving credit facility in the amount of $30.0 million provided by Industrial and Commercial Bank of China (Macau) Limited, “ICBC Macau,” to the Company in May 2012. The Credit Facility was drawn down on May 22, 2012 and its original maturity date was May 22, 2013. Such maturity date was extended to May 13, 2014 (see Note 13); and RMB40.2 million (equivalent to approximately $6.6 million) in favor of the Chinese government as security for the interest-free government loan (see Note 13). | |||||||
Inventories
Inventories | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Inventory Disclosure [Text Block] | ' | |||||||
6 | Inventories | |||||||
The Company’s inventories as of September 30, 2013 and December 31, 2012 consisted of the following (figures are in thousands of USD): | ||||||||
September | December 31, 2012 | |||||||
30, 2013 | ||||||||
Raw materials | $ | 13,872 | $ | 11,144 | ||||
Work in process | 8,378 | 7,094 | ||||||
Finished goods | 30,899 | 25,304 | ||||||
$ | 53,149 | $ | 43,542 | |||||
Provision for inventories valuation amounted to $0.5 million and $0.5 million for the nine months ended September 30, 2013 and 2012, respectively. | ||||||||
Other_receivables_net
Other receivables, net | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Other Receivables Disclosure [Abstract] | ' | |||||||
Other Receivables Disclosure [Text Block] | ' | |||||||
7 | Other receivables, net | |||||||
The Company’s other receivables as of September 30, 2013 and December 31, 2012 are summarized as follows (figures are in thousands of USD): | ||||||||
September | December 31, 2012 | |||||||
30, 2013 | ||||||||
Other receivables - unrelated parties (1) | $ | 826 | $ | 905 | ||||
Less: allowance for doubtful accounts- unrelated parties | -62 | -56 | ||||||
$ | 764 | $ | 849 | |||||
September | December 31, 2012 | |||||||
30, 2013 | ||||||||
Other receivables - related parties (1) | $ | 674 | $ | 715 | ||||
Less: allowance for doubtful accounts | -607 | -608 | ||||||
$ | 67 | $ | 107 | |||||
-1 | Other receivables consist of amounts advanced to both related and unrelated parties, primarily as unsecured demand loans, with no stated interest rate or due date. These receivables originate as part of the Company's normal operating activities and are periodically settled in cash. | |||||||
Assets_held_for_sale
Assets held for sale | 9 Months Ended | |
Sep. 30, 2013 | ||
Assets Held-for-sale, Current [Abstract] | ' | |
Disclosure of assets held for sale [Text Block] | ' | |
8 | Assets held for sale | |
Assets held for sale represents the remaining land use rights to be sold within the 12 months following September 30, 2013. According to the agreement signed between the Company and Jingzhou Land Reserve Center (“JLRC”), a local PRC government bureau, the Company has agreed to transfer the land use rights over 136,392 square meters of a piece of land in total located at Jingzhou city, Hubei Province, the PRC, to JLRC for total consideration of approximately $13.0 million. The collection of the consideration is subject to JLRC’s completion of its sale of such land use rights to be tendered in the open market. As of September 30, 2013, the Company recognized and received consideration of $4.6 million upon the completion by JLRC of sale of a portion of the land use rights, and a related gain of $4.1 million (before tax) for the sale of partial land use rights was recorded as gain on other sales. The cost of the land use rights over the remaining portion of the land was recorded as assets held for sale. Gain for the sale of the remaining land use rights will be recognized upon the completion by JLRC of its sale of the land use rights and the settlement of the related consideration to the Company. | ||
Long_term_Investments
Long term Investments | 9 Months Ended | |
Sep. 30, 2013 | ||
Long Term Investment [Abstract] | ' | |
Long Term Investments [Text Block] | ' | |
9 | Long term investments | |
As of September 30, 2013 and December 31, 2012, the Company’s balance of long-term investment was $3.9 million and $3.7 million, respectively. For the long-term investments in which the Company has no voting control, such investments were accounted for using the equity method or cost method. | ||
On January 24, 2010, the Company invested $3.1 million to establish a fifty-fifty joint venture company, Beijing Henglong, with an unrelated party. The Company accounts for its operating results with the equity method of accounting. As of September 30, 2013 and 2012, the Company had $3.8 million and $3.5 million of net equity in Beijing Henglong, respectively. | ||
The Company’s share of net assets and net income is reported as “long-term investment” on the condensed unaudited consolidated balance sheets and “equity in earnings of affiliated companies” on the condensed unaudited consolidated statements of operations and comprehensive income. The Company’s condensed unaudited consolidated financial statements reflect the equity earnings of non-consolidated affiliates of $0.1 million and $0.03 million for the three months ended September 30, 2013 and 2012, respectively, and the equity earnings of non-consolidated affiliates of $0.3 million and $0.1 million for the nine months ended September 30, 2013 and 2012, respectively. | ||
Property_plant_and_equipment_n
Property, plant and equipment, net | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||
Property, Plant and Equipment Disclosure [Text Block] | ' | |||||||
10 | Property, plant and equipment, net | |||||||
The Company’s property, plant and equipment as of September 30, 2013 and December 31, 2012 are summarized as follows (figures are in thousands of USD): | ||||||||
September | December 31, 2012 | |||||||
30, 2013 | ||||||||
Land use rights and buildings | $ | 38,159 | $ | 36,881 | ||||
Machinery and equipment | 110,100 | 96,368 | ||||||
Electronic equipment | 6,572 | 6,174 | ||||||
Motor vehicles | 3,109 | 2,942 | ||||||
Construction in progress | 10,220 | 13,280 | ||||||
168,160 | 155,645 | |||||||
Less: Accumulated depreciation | -85,637 | -73,954 | ||||||
$ | 82,523 | $ | 81,691 | |||||
Depreciation charges were $3.7 million and $3.3 million for the three months ended September 30, 2013 and 2012, respectively, and $10.8 million and $10.5 million for the nine months ended September 30, 2013 and 2012, respectively. | ||||||||
As of September 30, 2013, the Company had pledged property, plant and equipment with net book value of $52.7 million for its comprehensive credit facilities with banks in China. | ||||||||
Intangible_assets
Intangible assets | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||
Intangible Assets Disclosure [Text Block] | ' | |||||||
11 | Intangible assets | |||||||
The Company’s intangible assets as of September 30, 2013 and December 31, 2012 are summarized as follows (figures are in thousands of USD): | ||||||||
September | December 31, 2012 | |||||||
30, 2013 | ||||||||
Costs: | ||||||||
Patent technology | $ | 2,050 | $ | 1,901 | ||||
Management software license | 640 | 622 | ||||||
2,690 | 2,523 | |||||||
Less: Amortization | -2,019 | -1,847 | ||||||
$ | 671 | $ | 676 | |||||
Amortization expenses were $0.04 million and $0.06 million for the three months ended September 30, 2013 and 2012, respectively, and $0.1 million and $0.2 million for the nine months ended September 30, 2013 and 2012, respectively. | ||||||||
Deferred_income_tax_assets
Deferred income tax assets | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Income Tax Disclosure [Abstract] | ' | |||||||
Deferred Income Tax Disclosure [Text Block] | ' | |||||||
12 | Deferred income tax assets | |||||||
In accordance with the provisions of ASC Topic 740, “Income Taxes,” the Company assesses, on a quarterly basis, its ability to realize its deferred tax assets. Based on the more likely than not standard in the guidance and the weight of available evidence, the Company believes a valuation allowance against its deferred tax assets is necessary. In determining the need for a valuation allowance, the Company considered the following significant factors: an assessment of recent years’ profitability and losses by tax authorities; the Company’s expectation of profits based on margins and volumes expected to be realized, which are based on current pricing and volume trends; the long period in all significant operating jurisdictions before the expiry of net operating losses, noting further that a portion of the deferred tax asset is composed of deductible temporary differences that are subject to an expiry period until realized under tax law. The Company will continue to evaluate the provision of valuation allowance in future periods. | ||||||||
The components of estimated deferred income tax assets as of September 30, 2013 and December 31, 2012 are as follows (figures are in thousands of USD): | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Losses carry forward (U.S.) (1) | $ | 7,778 | $ | 7,004 | ||||
Losses carry forward (PRC) (1) | 2,054 | 1,887 | ||||||
Product warranties and other reserves | 3,731 | 3,253 | ||||||
Property, plant and equipment | 5,328 | 3,774 | ||||||
Share-based compensation | 296 | 240 | ||||||
Bonus accrual | 304 | 196 | ||||||
Other accruals | 1,112 | 696 | ||||||
Others | 705 | 839 | ||||||
Total deferred tax assets | 21,307 | 17,889 | ||||||
Less: taxable temporary difference related to revenue recognition | -533 | -397 | ||||||
Total deferred tax assets, net | 20,774 | 17,492 | ||||||
Less: Valuation allowance | -10,433 | -8,988 | ||||||
Total deferred tax assets, net of valuation allowance (2) | $ | 10,341 | $ | 8,504 | ||||
-1 | The net operating losses carry forward for the U.S. entity for income tax purposes are available to reduce future years' taxable income. These losses will expire, if not utilized, in 20 years. Net operating losses carry forward for non-U.S. entities can be carried forward for 5 years to offset taxable income. However, as of September 30, 2013, valuation allowance was $10.4 million, including $8.6 million allowance for the Company’s deferred tax assets in the United States and $1.8 million allowance for the Company’s non-U.S. deferred tax assets. Based on the Company’s current operations in the United States, management believes that the deferred tax assets in the United States are not likely to be realized in the future. For the non-U.S. deferred tax assets, pursuant to certain tax laws and regulations in China, the management believes such amount will not be used to offset future taxable income. | |||||||
-2 | Approximately $4.4 million and $4.1 million of deferred income tax asset as of September 30, 2013 and December 31, 2012, respectively, are included in non-current deferred tax assets in the accompanying condensed unaudited consolidated balance sheets. The remaining $4.8 million and $4.4 million of deferred income tax assets as of September 30, 2013 and December 31, 2012, respectively, are included in current deferred tax assets. | |||||||
Bank_and_government_loans_net
Bank and government loans, net | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Short-term Debt [Text Block] | ' | |||||||
13 | Bank and government loans, net | |||||||
Loans consist of the following at September 30, 2013 and December 31, 2012 (figures are in thousands of USD): | ||||||||
September | December 31, 2012 | |||||||
30, 2013 | ||||||||
Short-term bank loan (1) (2) | $ | 5,693 | $ | 10,341 | ||||
Short-term bank loan (3) | 30,000 | 30,000 | ||||||
Short-term government loan (4) | 6,506 | - | ||||||
Subtotal | 42,199 | 40,341 | ||||||
Debt issue cost | -57 | -230 | ||||||
Amortization | 57 | 173 | ||||||
$ | 42,199 | $ | 40,284 | |||||
-1 | These loans are secured by property, plant and equipment of the Company and are repayable within one year. Please see Note 10. At September 30, 2013 and December 31, 2012, the weighted average interest rate was 6.24% and 6.46% per annum, respectively. Interest is paid on the twentieth day of each month and the principal repayment is at maturity. | |||||||
-2 | On September 25, 2012, Jiulong entered into a one-year loan agreement with China Construction Bank Jingzhou branch in the amount of $3.2 million. The agreement contains certain financial and non-financial covenants, including but not limited to restrictions on the utilization of the funds and the maintenance of an asset-liability ratio not exceeding 60%. The Company was in compliance with these covenants as of September 30, 2013. The Company repaid $1.4 milion and $1.8 million in June and July, 2013, respectively. | |||||||
-3 | On May 18, 2012, the Company entered into a credit facility agreement, the “Credit Agreement,” with ICBC Macau to obtain a non-revolving credit facility in the amount of $30.0 million, the “Credit Facility”. The Credit Facility would have expired on November 3, 2012 unless the Company drew down the line of credit in full prior to such expiration date, and the maturity date for the loan drawdown was the earlier of (i) 18 months from the drawdown or (ii) 1 month before the expiry of the standby letter of credit obtained by Henglong from ICBC Jingzhou as security for the Credit Facility, the “Henglong Standby Letter of Credit”. The interest rate of the Credit Facility is calculated based on a three-month LIBOR plus 2.25% per annum, subject to the availability of funds and fluctuation at ICBC Macau’s discretion. The interest is calculated daily based on a 360-day year and it is fixed one day before the first day of each interest period. The interest period is defined as three months from the date of drawdown. As security for the Credit Facility, the Company was required to provide ICBC Macau with the Henglong Standby Letter of Credit for a total amount not less than $31.6 million if the Credit Facility is fully drawn. | |||||||
On May 22, 2012, the Company drew down the full amount of $30.0 million under the Credit Facility and provided the Henglong Standby Letter of Credit for an amount of $31.6 million in favor of ICBC Macau. The Henglong Standby Letter of Credit issued by ICBC Jingzhou is collateralized by Henglong’s notes receivable of RMB216.0 million (equivalent to approximately $35.1 million). The Company also paid an arrangement fee of $0.1 million to ICBC Macau and $0.1 million to ICBC Jingzhou. The original maturity date of the Credit Facility was May 22, 2013. On May 7, 2013, ICBC Macau agreed to extend the maturity date of the Credit Facility to May 13, 2014. The interest rate of the Credit Facility under the extended term is calculated based on the three-month LIBOR plus 2.0% per annum. Except for the above, all other terms and conditions as stipulated in the Credit Agreement remain unchanged. As of September 30, 2013, the interest rate of the Credit Facility was 2.25%. | ||||||||
-4 | On January 31, 2013, the Company received an interest-free Chinese government loan of RMB40.0 million (equivalent to approximately $6.6 million), which will mature on December 31, 2013. Henglong has pledged RMB40.2 million (equivalent to approximately $6.5 million) of notes receivable, which will mature on December 31, 2013, as security for such government loan (see Note 5). | |||||||
Accounts_and_notes_payable
Accounts and notes payable | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Accounts and Notes Payable Disclosure [Abstract] | ' | |||||||
Accounts and Notes Payable Disclosure [Text Block] | ' | |||||||
14. | Accounts and notes payable | |||||||
The Company’s accounts and notes payable as of September 30, 2013 and December 31, 2012 are summarized as follows (figures are in thousands of USD): | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Accounts payable - unrelated parties | $ | 104,392 | $ | 99,100 | ||||
Notes payable - unrelated parties (1) | 70,483 | 67,280 | ||||||
Accounts and notes payable - unrelated parties | 174,875 | 166,380 | ||||||
Accounts payable - related parties | 6,258 | 4,521 | ||||||
$ | 181,133 | $ | 170,901 | |||||
(1) | Notes payable represent accounts payable in the form of bills of exchange whose acceptances are guaranteed and settlements are handled by banks. The Company has pledged cash deposits, notes receivable and certain property, plant and equipment to secure notes payable granted by banks. | |||||||
Accrued_expenses_and_other_pay
Accrued expenses and other payables | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Accrued Expenses and Other Payables Disclosure [Abstract] | ' | ||||||||||
Accrued Expenses and Other Payables Disclosure [Text Block] | ' | ||||||||||
15. | Accrued expenses and other payables | ||||||||||
The Company’s accrued expenses and other payables as of September 30, 2013 and December 31, 2012 are summarized as follows (figures are in thousands of USD): | |||||||||||
September 30, | December 31, 2012 | ||||||||||
2013 | |||||||||||
Accrued expenses | $ | 3,389 | $ | 2,557 | |||||||
Accrued interest | 86 | 87 | |||||||||
Other payables | 2,607 | 2,176 | |||||||||
Warranty reserves (1) | 20,840 | 18,081 | |||||||||
Dividends payable to non-controlling interests | 86 | 162 | |||||||||
$ | 27,008 | $ | 23,063 | ||||||||
-1 | The Company provides for the estimated cost of product warranties when the products are sold. Such estimates of product warranties were based on, among other things, historical experience, product changes, material expenses, services and transportation expenses arising from the manufactured products. Estimates will be adjusted on the basis of actual claims and circumstances. | ||||||||||
For the nine months ended September 30, 2013 and 2012, and for the year ended December 31, 2012, the warranties activities were as follows (figures are in thousands of USD): | |||||||||||
Nine Months Ended September 30, | Year Ended | ||||||||||
December 31, | |||||||||||
2013 | 2012 | 2012 | |||||||||
Balance at beginning of the period | $ | 18,081 | $ | 16,809 | $ | 16,809 | |||||
Additions during the period | 8,554 | 6,865 | 10,931 | ||||||||
Settlement within period, by cash or actual material | -6,199 | -6,661 | -9,264 | ||||||||
Foreign currency translation gain (loss) | 404 | -105 | 41 | ||||||||
Decrease for warranty related to the subsidiary sold | - | -432 | -436 | ||||||||
Balance at end of the period | $ | 20,840 | $ | 16,476 | $ | 18,081 | |||||
Taxes_payable
Taxes payable | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Taxes Payables [Abstract] | ' | |||||||
Taxes Payable [Text Block] | ' | |||||||
16 | Taxes payable | |||||||
The Company’s taxes payable as of September 30, 2013 and December 31, 2012 are summarized as follows (figures are in thousands of USD): | ||||||||
September 30, 2013 | December 31, 2012 | |||||||
Value-added tax payable | $ | 5,049 | $ | 4,347 | ||||
Income tax payable | 3,467 | 878 | ||||||
Other tax payable | 463 | 368 | ||||||
$ | 8,979 | $ | 5,593 | |||||
Advances_payable
Advances payable | 9 Months Ended | |
Sep. 30, 2013 | ||
Payables and Accruals [Abstract] | ' | |
Advances Payable [Text Block] | ' | |
17 | Advances payable | |
As of September 30, 2013 and December 31, 2012, advances payable by the Company were $2.64 million and $2.61 million, respectively. | ||
The amounts are special subsidies made by the Chinese government to the Company to offset the cost and charges related to the improvement of production capacities and improvement of the quality of products. For the government subsidies with no further conditions to be met, the amounts are recorded as other income when received; for the amounts with certain operating conditions, the government subsidies are recorded as advances payable when received and will be recorded as a deduction of related expenses and cost of acquired assets when the conditions are met. | ||
The balances are unsecured, interest-free and will be repayable to the Chinese government if the usage of such advance does not continue to qualify for the subsidy. | ||
Additional_paidin_capital
Additional paid-in capital | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Additional Paid in Capital [Abstract] | ' | ||||||||||||||||
Additional Paid In Capital [Text Block] | ' | ||||||||||||||||
18 | Additional paid-in capital | ||||||||||||||||
The Company’s positions in respect of the amounts of additional paid-in capital for the nine months ended September 30, 2013 and 2012, and the year ended December 31, 2012 are summarized as follows (figures are in thousands of USD): | |||||||||||||||||
Nine Months Ended September 30, | Year Ended | ||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | 2012 | |||||||||||||||
Balance at beginning of the period | $ | 39,371 | $ | 39,296 | $ | 39,296 | |||||||||||
Share-based compensation(1) | 194 | 75 | 75 | ||||||||||||||
Balance at end of the period | $ | 39,565 | $ | 39,371 | $ | 39,371 | |||||||||||
(1) On August 13, 2013 and August 15, 2012, the Company granted 22,500 and 22,500 stock options to the Company’s independent directors, with the exercise price equal to the closing price of the Company’s common stock traded on NASDAQ on the date of grant. The fair value of stock options was determined at the date of grant using the Black-Scholes option pricing model. The Black-Scholes option model requires management to make various estimates and assumptions, including expected term, expected volatility, risk-free rate, and dividend yield. The expected term represents the period of time that stock-based compensation awards granted are expected to be outstanding and is estimated based on considerations including the vesting period, contractual term and anticipated employee exercise patterns. Expected volatility is based on the historical volatility of the Company’s stock. The risk-free rate is based on the U.S. Treasury yield curve in relation to the contractual life of stock-based compensation instruments. The dividend yield assumption is based on historical patterns and future expectations for the Company’s dividends. | |||||||||||||||||
Assumptions used to estimate the fair value of stock options on the grant dates are as follows: | |||||||||||||||||
Issuance Date | Expected volatility | Risk-free rate | Expected term (years) | Dividend yield | |||||||||||||
13-Aug-13 | 131.5 | % | 1.49 | % | 5 | 0 | % | ||||||||||
15-Aug-12 | 149.2 | % | 0.67 | % | 5 | 0 | % | ||||||||||
The above stock options were vested and exercisable immediately. Their fair value on the grant dates of August 13, 2013 and August 15, 2012 using the Black-Scholes option pricing model was $0.2 million and $0.1 million, respectively. During the nine months ended September 30, 2013 and 2012, the Company recognized stock-based compensation expenses of $0.2 million and $0.1 million, respectively. | |||||||||||||||||
Retained_earnings
Retained earnings | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Retained Earnings Disclosure [Abstract] | ' | ||||||||||
Retained Earnings Disclosure [Text Block] | ' | ||||||||||
19 | Retained earnings | ||||||||||
Appropriated | |||||||||||
Pursuant to the relevant PRC laws and regulations, the profits distribution of the Company’s PRC subsidiaries, which are based on their PRC statutory financial statements, rather than the financial statement that was prepared in accordance with U.S. GAAP, are available for distribution in the form of cash dividends after these subsidiaries have paid all relevant PRC tax liabilities, provided for losses in previous years, and made appropriations to statutory surplus at 10%. | |||||||||||
When the statutory surplus reserve reaches 50% of the registered capital of a company, additional reserve is no longer required. However, the reserve cannot be distributed to venture partners. Based on the business licenses of the PRC subsidiaries, the registered capital of Henglong, Jiulong, Shenyang, Jielong, Wuhu, Hubei Henglong and Chongqing are $10.0 million, $4.2 million (equivalent to RMB35.0 million), $8.1 million (equivalent to RMB67.5 million), $6.0 million, $3.8 million (equivalent to RMB30.0 million), $39 million and $9.5 million (equivalent to RMB60.0 million), respectively, and the registered capital of USAI is $2.6 million. | |||||||||||
The Company’s activities in respect of the amounts of the appropriated retained earnings for the nine months ended September 30, 2013 and 2012, and the year ended December 31, 2012 are summarized as follows (figures are in thousands of USD): | |||||||||||
Nine Months Ended September 30, | Year Ended | ||||||||||
December 31, | |||||||||||
2013 | 2012 | 2012 | |||||||||
Balance at beginning of the period | $ | 9,953 | $ | 9,026 | $ | 9,026 | |||||
Appropriation of retained earnings | 95 | 927 | 927 | ||||||||
Balance at end of the period | $ | 10,048 | $ | 9,953 | $ | 9,953 | |||||
Unappropriated | |||||||||||
The Company’s activities in respect of the amounts of the unappropriated retained earnings for the nine months ended September 30, 2013 and 2012, and the year ended December 31, 2012 are summarized as follows (figures are in thousands of USD): | |||||||||||
Nine Months Ended September 30, | Year Ended | ||||||||||
December 31, | |||||||||||
2013 | 2012 | 2012 | |||||||||
Balance at beginning of the period | $ | 119,329 | $ | 99,513 | $ | 99,513 | |||||
Net income attributable to parent company | 19,544 | 15,657 | 20,743 | ||||||||
Appropriation of retained earnings | -95 | -927 | -927 | ||||||||
Balance at end of the period | $ | 138,778 | $ | 114,243 | $ | 119,329 | |||||
Accumulated_other_comprehensiv
Accumulated other comprehensive income | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Equity [Abstract] | ' | ||||||||||
Other Comprehensive Income, Noncontrolling Interest [Text Block] | ' | ||||||||||
20 | Accumulated other comprehensive income | ||||||||||
The Company’s activities in respect of the amounts of the accumulated other comprehensive income for the nine months ended September 30, 2013 and 2012, and the year ended December 31, 2012 are summarized as follows (figures are in thousands of USD): | |||||||||||
Nine Months Ended September 30, | Year Ended | ||||||||||
December 31, | |||||||||||
2013 | 2012 | 2012 | |||||||||
Balance at beginning of the period | $ | 25,898 | $ | 25,291 | $ | 25,291 | |||||
Foreign currency translation adjustment attributable to parent company | 4,374 | -1,024 | 607 | ||||||||
Balance at end of the period | $ | 30,272 | $ | 24,267 | $ | 25,898 | |||||
Noncontrolling_interests
Non-controlling interests | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Noncontrolling Interest [Abstract] | ' | ||||||||||
Noncontrolling Interest Disclosure [Text Block] | ' | ||||||||||
21 | Non-controlling interests | ||||||||||
The Company’s activities in respect of the amounts of the non-controlling interests’ equity for the nine months ended September 30, 2013 and 2012, and the year ended December 31, 2012 are summarized as follows (figures are in thousands of USD): | |||||||||||
Nine Months Ended September 30, | Year Ended | ||||||||||
December 31, | |||||||||||
2013 | 2012 | 2012 | |||||||||
Balance at beginning of the period | $ | 38,846 | $ | 43,028 | $ | 43,028 | |||||
Income attributable to non-controlling interests | 4,616 | 3,279 | 4,744 | ||||||||
Dividends declared to the non-controlling interest holders of joint-venture companies | -1,299 | -6,846 | -6,846 | ||||||||
Discontinued operations – Zhejiang | - | -5,162 | -5,162 | ||||||||
Capital contribution from non-controlling interests | - | 2,846 | 3,012 | ||||||||
Foreign currency translation gain (loss) | 892 | -256 | 70 | ||||||||
Balance at end of the period | $ | 43,055 | $ | 36,889 | $ | 38,846 | |||||
Gain_on_other_sales
Gain on other sales | 9 Months Ended | |
Sep. 30, 2013 | ||
Gain on other sales [Abstract] | ' | |
Gain on other sales [Text Block] | ' | |
22 | Gain on other sales | |
Gain on other sales mainly consisted of net amount retained from sales of materials, property, plant and equipment and scraps. For the three months and nine months ended September 30, 2013, gain on other sales amounted to $5.0 million and $6.8 million, respectively, as compared to $0.7 million and $2.6 million, respectively, for the same periods of 2012. In the third quarter of 2013, the Company sold part of its land use rights and recognized a the gain of $4.1 million, which represented the difference between the selling price of $4.6 million and the net book value of the land use rights of $0.5 million. | ||
Financial_income_expenses_net
Financial (income) expenses, net | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Financial Income Expenses Disclosure [Abstract] | ' | |||||||
Financial Income Expenses Disclosure [Text Block] | ' | |||||||
23 | Financial (income) expenses, net | |||||||
During the three months and nine months ended September 30, 2013 and 2012, the Company recorded financial expenses, net which are summarized as follows (figures are in thousands of USD): | ||||||||
Three Months Ended September 30, | ||||||||
2013 | 2012 | |||||||
Interest expense | $ | 284 | $ | 819 | ||||
Interest income | -1,143 | -409 | ||||||
Foreign exchange gain, net | 24 | 5 | ||||||
Loss of note discount, net | -3 | -7 | ||||||
Bank fees | 149 | 29 | ||||||
Total financial (income) expense, net | $ | -689 | $ | 437 | ||||
Nine Months Ended September 30, | ||||||||
2013 | 2012 | |||||||
Coupon interest and make-whole redemption interest(1) | $ | - | $ | 1,551 | ||||
Interest expense | 1,289 | 1,273 | ||||||
Interest income | -2,298 | -981 | ||||||
Foreign exchange gain, net | 71 | -89 | ||||||
Loss of note discount, net | 9 | -32 | ||||||
Bank fees | 549 | 128 | ||||||
Total financial (income) expense, net | $ | -380 | $ | 1,850 | ||||
-1 | On May 24, 2012, the Company and LBCCA Liquidator reached a settlement agreement. Under the terms of the settlement agreement, the Company redeemed all the remaining convertible notes on May 25, 2012, the redemption date. As a result, there was no coupon interest and make-whole redemption interest related to the convertible notes during the three months ended September 30, 2012 and the nine months ended September 30, 2013 (see Note 24). | |||||||
Gain_and_loss_on_change_in_fai
Gain and loss on change in fair value of derivative | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Gain On Change In Fair Value Of Derivative Disclosure [Abstract] | ' | |||||||||||||
Gain On Change In Fair Value Of Derivative Disclosure [Text Block] | ' | |||||||||||||
24 | Gain and loss on change in fair value of derivative | |||||||||||||
On May 24, 2012, the Company and LBCCA Liquidator reached a settlement agreement. Under the terms of the settlement agreement, the Company redeemed all the remaining convertible notes on May 25, 2012, the redemption date. As a result, there was no gain or loss on change in fair value of derivative during the three months ended September 30, 2012 and the nine months ended September 30, 2013. During the nine months ended September 30, 2012, the Company recorded a loss on change in fair value of derivative of $0.4 million. | ||||||||||||||
In February 2008, the Company issued to two accredited institutional investors, namely Lehman Brothers Commercial Corporation Asia Limited (“Lehman Brothers”) and YA Global Investments L.P (“YA Global”), convertible notes in the principal amount of $35.0 million, with a scheduled maturity date of February 15, 2013 (“convertible notes”). | ||||||||||||||
The Company and YA Global reached a settlement agreement on April 8, 2009. Under the terms of the settlement agreement, the Company paid on April 15, 2009 a redemption amount of $5.0 million to YA Global and YA Global waived its entitlement to the Other Make Whole Amount (as defined in the convertible notes). | ||||||||||||||
On March 1, 2011, the provisional liquidator acting on behalf of Lehman Brothers (“LBCCA Liquidator”) converted $6.4 million principal amount of the convertible notes at a conversion price of $7.0822 per share, and in turn the Company issued 907,708 shares of its common stock to LBCCA Liquidator. | ||||||||||||||
On May 24, 2012, the Company and LBCCA Liquidator reached a settlement agreement. Under the terms of the settlement agreement, the Company redeemed all the remaining convertible notes and paid a redemption amount of $32.4 million to LBCCA Liquidator on May 25, 2012 (“Redemption Date”), including $23.6 million of principal and $8.8 million of interest. On the Redemption Date, the carrying value of the convertible notes was $33.8 million, including $23.6 million of principal, $0.6 million of coupon interest, $8.6 million of make-whole amount payable and $1.0 million of derivative liabilities related to the convertible notes. | ||||||||||||||
The Company’s derivative financial instruments (liabilities) consist of the compound embedded derivative that originated in connection with the above-mentioned convertible note payable and financing arrangement. Derivative liabilities are carried at fair value. | ||||||||||||||
Changes in the fair value of compound derivative liabilities were recorded as a loss on change in fair value of derivative in the condensed unaudited consolidated statement of operations and comprehensive income for the nine months ended September 30, 2012. The following table summarizes the components of loss on change in fair value of derivative arising from fair value adjustments to compound derivative liabilities during the nine months ended September 30, 2012 (figures are in thousands of USD): | ||||||||||||||
Nine Months Ended September 30, 2012 | ||||||||||||||
Balances at January 1 | $ | 559 | ||||||||||||
Decrease due to convertible notes conversion on May 25, 2012 | -1,008 | |||||||||||||
Loss in fair value adjustments | 449 | |||||||||||||
Balances at September 30 | $ | - | ||||||||||||
Estimating fair values of derivative financial instruments requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. In addition, option-based techniques are highly volatile and sensitive to changes in the trading market price of the Company's common stock, which has a high estimated volatility. As of January 1, 2012 and September 30, 2012, the Company calculated the fair value of derivative liabilities to be $0.6 million and $nil, respectively. During the nine months ended September 30, 2012, there was a change in the balance of the fair value of the Company’s derivative liabilities at the beginning and the end of the period, mainly due to changes in the price of the Company’s common stock. During the nine months ended September 30, 2012, the market price of the Company’s common stock rose to $3.82, comparing to $3.30 on January 1, 2012. Since the Company’s derivative liabilities consisted of a conversion option that was embedded in the convertible notes payable, the intrinsic value of the conversion option was sensitive to changes in the trading market price of the Company’s common stock. Since derivative financial instruments are initially and subsequently carried at fair values, the Company’s income or loss reflects the volatility in these estimate and assumption changes. | ||||||||||||||
The Company’s embedded conversion option derivative represents the conversion option, term-extending option, certain redemption and put features in the Company’s convertible notes payable. The features embedded in the convertible notes were combined into one compound embedded derivative that the Company measured at fair value using the Monte Carlo valuation technique. Monte Carlo simulates multiple outcomes over the period to maturity using multiple assumption inputs. The following table sets forth (i) the range of inputs for each significant assumption and (ii) the equivalent, or averages, of each significant assumption as of May 25, 2012, the Redemption Date. | ||||||||||||||
Range | ||||||||||||||
May 25, 2012 Assumptions: | Low | High | Equivalent | |||||||||||
Volatility | 65.33 | % | 102.57 | % | 79.02 | % | ||||||||
Market adjusted interest rates | 5.89 | % | 17.95 | % | 11.97 | % | ||||||||
Credit risk adjusted rates | 16.87 | % | 16.87 | % | 16.87 | % | ||||||||
Implied expected life (years) | - | - | 0.73 | |||||||||||
The Monte Carlo technique requires the use of inputs that range across all levels in the fair value hierarchy. As a result, the technique is a Level 3 valuation technique in its entirety. The calculations of fair value utilized the Company’s trading market values on the calculation dates. The contractual conversion prices were adjusted to give effect to the value associated with the down-round and anti-dilution protection. Expected volatility for each interval in the Monte Carlo process was established based upon the Company’s historical volatility for historical periods consistent with the term of each interval in the calculation. Market adjusted interest rates give effect to expected trends or changes in market interest rates by reference to historical trends in LIBOR. Credit risk adjusted rates, or yields, were developed using bond curves, risk-free rates, market and industry adjustment factors for companies with similar credit standings as the Company’s. | ||||||||||||||
Income_tax_rate
Income tax rate | 9 Months Ended | |
Sep. 30, 2013 | ||
Income Tax Disclosure [Abstract] | ' | |
Income Taxes Excluding Deferred Tax Disclosure [Text Block] | ' | |
25 | Income tax rate | |
The Company’s subsidiaries registered in the PRC are subject to state and local income taxes within the PRC at the applicable tax rate of 25% on the taxable income as reported in their PRC statutory financial statements in accordance with the relevant income tax laws applicable to foreign invested enterprise, unless preferential tax treatment is granted by local tax authorities. If the enterprise meets certain preferential terms according to the China income tax law, such as assessment as a “High & New Technology Enterprise” by the government, then, the enterprise will be subject to enterprise income tax at a rate of 15%. | ||
Pursuant to the New China Income Tax Law and the Implementing Rules (“New CIT”) which became effective as of January 1, 2008, dividends generated after January 1, 2008 and payable by a foreign-invested enterprise to its foreign investors will be subject to a 10% withholding tax if the foreign investors are considered as non-resident enterprises without any establishment or place within China or if the dividends payable have no connection with the establishment or place of the foreign investors within China, unless any such foreign investor’s jurisdiction of incorporation has a tax treaty with China that provides for a different withholding arrangement. | ||
Genesis, the Company’s wholly-owned subsidiary and the direct holder of the equity interests in the Company’s subsidiaries in China, is incorporated in Hong Kong. According to the Mainland China and Hong Kong Taxation Arrangement, dividends paid by a foreign-invested enterprise in China to its direct holding company in Hong Kong will be subject to withholding tax at a rate of no more than 5%, if the foreign investor owns directly at least 25% of the shares of the foreign-invested enterprise. Under the New CIT, if Genesis is regarded as a non-resident enterprise and therefore is required to pay an additional 5% withholding tax for any dividends payable to it from the PRC subsidiaries. | ||
According to PRC tax regulation, the Company should withhold income taxes for the profit distributed from the PRC subsidiaries to Genesis, the subsidiaries’ holding company incorporated in Hong Kong. The Company accounts for the profit that the PRC subsidiaries intended to distribute to Genesis as deferred tax liabilities. During the nine months ended September 30, 2013 and the year ended December 31, 2012, the Company recognized deferred tax liabilities of $0.05 million and $0.04 million for profit to be distributed to Genesis of $0.9 million and $0.8 million, respectively. The Company intended to re-invest the remaining undistributed profits generated from the PRC subsidiaries in those subsidiaries permanently. As of September 30, 2013 and December 31, 2012, the Company still has undistributed earnings of approximately $154.2 million and $124.8 million, respectively, from investment in the PRC subsidiaries that are considered permanently reinvested. Had the undistributed earnings been distributed to Genesis and not permanently reinvested, the tax provision as of September 30, 2013 and December 31, 2012 of approximately $7.7 million and $6.2 million, respectively, would have been recorded. Such undistributed profits will be reinvested in Genesis and not further distributed to the parent company incorporated in the United States going forward. | ||
During 2008, Jiulong was awarded the title of “High & New Technology Enterprise” and, based on the PRC income tax law, it was subject to enterprise income tax at a rate of 15% for 2008, 2009 and 2010. In 2011, the Company passed the re-assessment of the government based on PRC income tax laws. Accordingly, the Company will continue to be taxed at the 15% tax rate in 2011, 2012 and 2013. | ||
During 2008, Henglong was awarded the title of “High & New Technology Enterprise” and, based on the PRC income tax law, it was subject to enterprise income tax at a rate of 15% for 2008, 2009 and 2010. In 2011, the Company passed the re-assessment of the government, based on PRC income tax laws. Accordingly, it will continue to be taxed at the 15% tax rate in 2011, 2012 and 2013. | ||
During 2009, Shenyang was awarded the title of “High & New Technology Enterprise” and, based on the PRC income tax law, it was subject to enterprise income tax at a rate of 15% for 2009, 2010 and 2011. In 2012, the Company passed the re-assessment of the government based on PRC income tax laws. Accordingly, it will continue to be taxed at the 15% tax rate in 2012, 2013 and 2014. | ||
According to the New CIT, Wuhu has been subject to income tax at a rate of 11%, 12% and 12.5%, respectively, for 2010, 2011 and 2012. Wuhu was awarded the title of “High & New Technology Enterprise” and, based on the PRC income tax law, it will be subject to enterprise income tax at a rate of 15% for 2013 and 2014. | ||
According to the New CIT, Jielong has been subject to tax at a rate of 12.5% in 2010 and 2011, and 25% in 2012 and 2013. | ||
According to the New CIT, Hubei Henglong has been subject to tax at a rate of 12.5% from 2010 to 2012. In November 2011, Hubei Henglong was awarded the title of “High & New Technology Enterprise”, based on the PRC income tax law. Accordingly, it will be subject to enterprise income tax at a rate of 15% for 2013 and 2014. | ||
According to the New CIT, USAI and Testing Center were exempted from income tax in 2009, and each has been subject to income tax at a rate of 12.5% in 2010 and 2011, and 25% in 2012 and 2013. | ||
Chongqing Henglong was established in 2012. According to the New CIT, Chongqing Henglong is subject to income tax at a uniform rate of 25%. No provision for Chongqing Henglong is made as it had no assessable income for the three months and nine months ended September 30, 2013 and 2012. | ||
Based on Brazilian income tax laws, Brazil Henglong is subject to income tax at a uniform rate of 15%, and a resident legal person is subject to additional tax at a rate of 10% for the part of taxable income over $0.12 million (equivalent to BRL 0.24 million). The Company had no assessable income in Brazil for the three months and nine months ended September 30, 2013 and 2012. | ||
The profits tax rate of Hong Kong is 16.5%. No provision for Hong Kong tax is made as Genesis is an investment holding company, and had no assessable income in Hong Kong for the three months and nine months ended September 30, 2013 and 2012. | ||
The enterprise income tax rate of the United States is 35%. No provision for U.S. tax is made as the Company had no assessable income in the United States for the three months and nine months ended September 30, 2013 and 2012. | ||
The effective tax rate decreased to 15.3% and 17.8%, respectively, for the three months and nine months ended September 30, 2013 from 16.9% and 18.5%, respectively, for the same periods in 2012, which was primarily due to an increase in the weight of pretax income of lower tax rate subsidiaries, such as Henglong, in the Company’s total pretax income during the three months and nine months ended September 30, 2013. | ||
Discontinued_operations_Zhejia
Discontinued operations - Zhejiang | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Discontinued Operations and Disposal Groups [Abstract] | ' | ||||
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | ' | ||||
26 | Discontinued operations – Zhejiang | ||||
Zhejiang Henglong & Vie Pump-Manu Co., Ltd., “Zhejiang,” in which the Company owned 51% equity interest prior to its disposal in May 2012, was mainly engaged in the production and sales of power steering pumps. Given the power steering pump business has slowly lost its market share in the recent years due to market competition, lower market demand and replacement of hydraulic pressure steering by electric power steering, the Company sold its 51% equity interest in Zhejiang to Vie Group, the non-controlling shareholder of Zhejiang, on May 21, 2012, the “Zhejiang Sale”. Pursuant to ASC Topic 205-20, “Presentation of Financial Statements—Discontinued Operations”, the business of Zhejiang, the “Zhejiang business,” is considered as discontinued operations because: (a) the operations and cash flows of Zhejiang will be eliminated from the Company’s operations as the Company will not continue to purchase power steering pumps from Zhejiang starting from August 2012; and (b) the Company would not have the ability to influence the operation or financial policies of Zhejiang subsequent to the sale. Before the sale, Zhejiang was identified as a product sector for the sales of power steering pumps of the Company, please see Note 28 for the details of segment reporting. For the nine months ended September 30, 2012, the purchases from Zhejiang by the Company amounted to $0.4 million, which were eliminated for the preparation of the consolidated financial statements before the disposition of Zhejiang. There was no purchase from Zhejiang for the three months and nine months ended September 30, 2013. | |||||
The following table summarizes the results of the Zhejiang business included in the condensed unaudited consolidated statements of operations and comprehensive income as discontinued operations (figures are in thousands of USD). | |||||
Nine Months | |||||
Ended September 30, 2012 | |||||
Operational profit from component of discontinued operations, net of tax | $ | 157 | |||
Income from disposing component of discontinued operations, net of tax | 2,494 | ||||
Income from discontinued operations, net of tax | $ | 2,651 | |||
The following table summarizes the revenue and pretax profit of the Zhejiang business reported as discontinued operations (figures are in thousands of USD). | |||||
Nine Months | |||||
Ended September 30, 2012 | |||||
Revenue from component of discontinued operations | $ | 7,423 | |||
Pretax profit from component of discontinued operations | $ | 165 | |||
Summarized assets and liabilities from the discontinued operations as of the disposal date were as follows (figures are in thousands of USD): | |||||
May 21, 2012 | |||||
Assets of discontinued operations | |||||
Current assets | $ | 20,735 | |||
Non-current assets | 6,623 | ||||
Total assets of discontinued operations | $ | 27,358 | |||
Liabilities of discontinued operations | |||||
Current liabilities | 16,823 | ||||
Non-current liabilities | - | ||||
Total liabilities of discontinued operations | $ | 16,823 | |||
The Company did not make separate disclosure of the cash flows of Zhejiang in its condensed consolidated statements of cash flows in this Report, as they are considered to be immaterial in the periods presented. | |||||
Income_per_share
Income per share | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Earnings Per Share [Abstract] | ' | |||||||
Earnings Per Share [Text Block] | ' | |||||||
27 | Income per share | |||||||
In periods when the Company generates income, the Company calculates basic earnings per share (“EPS”) using the two-class method, pursuant to ASC Topic 260, “Earnings Per Share”. The two-class method is required as the Company’s convertible notes qualify as participating securities, having the right to receive dividends should dividends be declared on common stock. Under this method, earnings for the period are allocated on a pro-rata basis to the common stockholders and to the holders of convertible notes based on the weighted average number of common shares outstanding and the number of shares that could be converted. The Company does not use the two-class method in periods when it generates a loss as the holders of the convertible notes do not participate in losses. | ||||||||
For diluted earnings per share, the Company uses the more dilutive of the if-converted method or the two-class method for convertible notes and the treasury stock method for options, assuming the issuance of common shares, if dilutive, resulting from the exercise of options and warrants. | ||||||||
The calculation of diluted income per share attributable to the parent company for the three months ended September 30, 2013 were (figures are in thousands of USD, except share and per share amounts): | ||||||||
Three Months Ended September 30, | ||||||||
2013 | 2012 | |||||||
Numerator: | ||||||||
Net income attributable to the parent company’s common shareholders – Basic and Diluted | $ | 8,624 | $ | 3,404 | ||||
Denominator: | ||||||||
Weighted average shares outstanding | 28,043,019 | 28,260,302 | ||||||
Dilutive effects of stock options | 19,278 | 578 | ||||||
Denominator for dilutive income per share – Diluted | 28,062,297 | 28,260,880 | ||||||
Net income per share attributable to parent company’s common shareholders – Basic | $ | 0.31 | $ | 0.12 | ||||
Net income per share attributable to parent company’s common shareholders – Diluted | $ | 0.31 | $ | 0.12 | ||||
As of September 30, 2013 and 2012, the exercise prices for 60,000 shares and 67,500 shares, respectively, of outstanding stock options were above the weighted average market price of the Company’s common stock during the three months ended September 30, 2013 and 2012, respectively, and these stock options were excluded from the calculation of the diluted income per share for the corresponding periods presented. | ||||||||
The calculations of diluted income per share attributable to the parent company for the nine months ended September 30, 2013 were (figures are in thousands of USD, except share and per share amounts): | ||||||||
Nine Months Ended September 30, | ||||||||
2013 | 2012 | |||||||
Numerator: | ||||||||
Net income attributable to the parent company’s common shareholders | $ | 19,544 | $ | 15,657 | ||||
Allocation to convertible notes holders | - | -925 | ||||||
Net income attributable to the parent company’s common shareholders – Basic and Diluted | 19,544 | 14,732 | ||||||
Denominator: | ||||||||
Weighted average shares outstanding | 28,043,019 | 28,260,302 | ||||||
Dilutive effects of stock options | 10,989 | 1,227 | ||||||
Denominator for dilutive income per share – Diluted | 28,054,008 | 28,261,529 | ||||||
Net income per share attributable to parent company’s common shareholders – Basic | $ | 0.7 | $ | 0.52 | ||||
Net income per share attributable to parent company’s common shareholders –Diluted | 0.7 | 0.52 | ||||||
The calculations of diluted income from continuing operations per share attributable to the parent company for the nine months ended September 30, 2013 were (figures are in thousands of USD, except share and per share amounts): | ||||||||
Nine Months Ended September 30, | ||||||||
2013 | 2012 | |||||||
Numerator: | ||||||||
Net income from continuing operations | $ | 24,160 | $ | 16,285 | ||||
Net income from continuing operations attributable to non-controlling interest | 4,616 | 3,203 | ||||||
Net income from continuing operations attributable to shareholders | 19,544 | 13,082 | ||||||
Allocation to convertible notes holders | - | -773 | ||||||
Net income from continuing operations attributable to the parent company’s common shareholders – Basic and Diluted | 19,544 | 12,309 | ||||||
Denominator: | ||||||||
Weighted average shares outstanding | 28,043,019 | 28,260,302 | ||||||
Dilutive effects of stock options | 10,989 | 1,227 | ||||||
Denominator for dilutive income per share – Diluted | 28,054,008 | 28,261,529 | ||||||
Net income from continuing operations per common share attributable to parent company – Basic | $ | 0.7 | $ | 0.44 | ||||
Net income from continuing operations per common share attributable to parent company –Diluted | 0.7 | 0.44 | ||||||
As of September 30, 2013 and 2012, the exercise prices for 50,000 shares and 60,000 shares, respectively, of outstanding stock options were above the weighted average market price of the Company’s common stock during the nine months ended September 30, 2013 and 2012, respectively, and these stock options were excluded from the calculation of the diluted income per share for the corresponding periods presented. | ||||||||
For the nine months ended September 30, 2012, 1,775,074 shares issuable upon conversion of convertible notes that were then outstanding have not been included in the computation, because such inclusion would have had an anti-dilutive effect. | ||||||||
Significant_concentrations
Significant concentrations | 9 Months Ended | |
Sep. 30, 2013 | ||
Risks and Uncertainties [Abstract] | ' | |
Concentration Risk Disclosure [Text Block] | ' | |
28 | Significant concentrations | |
A significant portion of the Company’s business is conducted in China where the currency is the RMB. Regulations in China permit foreign owned entities to freely convert the RMB into foreign currency for transactions that fall under the "current account," which includes trade related receipts and payments, interest and dividends. Accordingly, the Company’s Chinese subsidiaries may use RMB to purchase foreign exchange for settlement of such "current account" transactions without pre-approval. However, in certain cases, the remittance of currencies out of China, and the PRC subsidiaries may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currencies. If China Automotive is unable to receive dividend payments from its subsidiaries, China Automotive may be unable to effectively finance its operations or pay dividends on its shares. | ||
Transactions other than those that fall under the "current account" and that involve conversion of RMB into foreign currency are classified as "capital account" transactions; examples of "capital account" transactions include repatriations of investment by or loans to foreign owners, or direct equity investments in a foreign entity by a China domiciled entity. "Capital account" transactions require prior approval from China's State Administration of Foreign Exchange, or SAFE, or its provincial branch to convert a remittance into a foreign currency, such as USD, and transmit the foreign currency outside of China. | ||
This system could be changed at any time and any such change may affect the ability of the Company or its subsidiaries in China to repatriate capital or profits, if any, outside China. Furthermore, SAFE has a significant degree of administrative discretion in implementing the laws and has used this discretion to limit convertibility of current account payments out of China. Whether as a result of a deterioration in the Chinese balance of payments, a shift in the Chinese macroeconomic prospects or any number of other reasons, China could impose additional restrictions on capital remittances abroad. As a result of these and other restrictions under the laws and regulations of the PRC, the Company’s PRC subsidiaries are restricted in their ability to transfer a portion of their net assets to the parent. The Company has no assurance that the relevant Chinese governmental authorities in the future will not limit further or eliminate the ability of the Company’s PRC subsidiaries to purchase foreign currencies and transfer such funds to the Company to meet its liquidity or other business needs. Any inability to access funds in China, if and when needed for use by the Company outside of China, could have a material and adverse effect on the Company’s liquidity and its business. | ||
The Company grants credit to its customers including to Xiamen Joylon, Shanghai Fenglong and Jiangling Yude, which are related parties of the Company. The Company’s customers are mostly located in the PRC. | ||
During the nine months ended September 30, 2013, the Company’s ten largest customers accounted for 73.2% of its consolidated net sales, with the largest customer individually accounting for more than 10% of consolidated net sales, i.e., 11.8%. As of September 30, 2013, approximately 3.2% of accounts receivable were from trade transactions with the aforementioned one customer, and there was no individual customer with a receivables balance of more than 10% of total accounts receivable. | ||
During the nine months ended September 30, 2012, the Company’s ten largest customers accounted for 73.4% of its consolidated net sales, with each of two customers individually accounting for more than 10% of consolidated net sales, i.e., 12.2% and 10.5% individually, or an aggregate of 22.7%. As of September 30, 2012, approximately 20.4% of accounts receivable were from trade transactions with the aforementioned two customers, one of them with a receivables balance of more than 10% of total accounts receivable, i.e., 12.0%. | ||
China Automotive, the parent company, may depend on dividend payments by Genesis and HLUSA, which are mainly generated from their subsidiaries in the PRC after they receive payments from the PRC subsidiaries. Under PRC law, the PRC subsidiaries are required to set aside at least 10% of their respective accumulated profits, up to 50% of their paid-in capital, to fund certain mandated reserve funds that are not payable or distributable as cash dividends. Pursuant to applicable regulations, foreign-invested enterprises in China may pay dividends only out of their accumulated profits, if any, determined in accordance with the PRC law. In calculating accumulated profits, foreign investment enterprises in China are required to allocate at least 10% of their annual net income each year, if any, to fund certain reserve funds, including mandated employee benefits funds, unless these reserves have reached 50% of the registered capital of the enterprises (see Note 19). | ||
Related_party_transactions_and
Related party transactions and balances | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Related Party Transactions [Abstract] | ' | |||||||
Related Party Transactions Disclosure [Text Block] | ' | |||||||
29 | Related party transactions and balances | |||||||
Related party transactions are as follows (figures are in thousands of USD): | ||||||||
Related sales | ||||||||
Three Months Ended September 30, | ||||||||
2013 | 2012 | |||||||
Merchandise sold to related parties | $ | 9,166 | $ | 2,939 | ||||
Equipment sold to related parties | - | 82 | ||||||
9,166 | 3,021 | |||||||
Nine Months Ended September 30, | ||||||||
2013 | 2012 | |||||||
Merchandise sold to related parties | $ | 26,344 | $ | 19,325 | ||||
Equipment sold to related parties | - | 82 | ||||||
26,344 | 19,407 | |||||||
Related purchases | ||||||||
Three Months Ended September 30, | ||||||||
2013 | 2012 | |||||||
Materials purchased from related parties | $ | 10,500 | $ | 4,452 | ||||
Technology purchased from related parties | 58 | 433 | ||||||
Equipment purchased from related parties | 777 | 402 | ||||||
Total | $ | 11,335 | $ | 5,287 | ||||
Nine Months Ended September 30, | ||||||||
2013 | 2012 | |||||||
Materials purchased from related parties | $ | 23,171 | $ | 14,137 | ||||
Technology purchased from related parties | 575 | 433 | ||||||
Equipment purchased from related parties | 2,160 | 2,169 | ||||||
Total | $ | 25,906 | $ | 16,739 | ||||
Related receivables | ||||||||
September | December 31, 2012 | |||||||
30, 2013 | ||||||||
Accounts receivable | $ | 17,783 | $ | 12,286 | ||||
Other receivables | 67 | 107 | ||||||
Total | $ | 17,850 | $ | 12,393 | ||||
Related advances | ||||||||
September | December 31, 2012 | |||||||
30, 2013 | ||||||||
Advanced equipment payment to related parties | $ | 829 | $ | 4,162 | ||||
Advanced payments and others to related parties | 1,204 | 779 | ||||||
Total | $ | 2,033 | $ | 4,941 | ||||
Related payables | ||||||||
September | December 31, 2012 | |||||||
30, 2013 | ||||||||
Accounts payable | $ | 6,258 | $ | 4,521 | ||||
These transactions were consummated under similar terms as those with the Company's third party customers and suppliers. | ||||||||
Related parties pledged certain land use rights and buildings as security for the Company’s credit facilities provided by banks. | ||||||||
As of November 13, 2013, Hanlin Chen, the Company’s Chairman, owns 63.65% of the common stock of the Company and has the effective power to control the vote on substantially all significant matters without the approval of other stockholders. | ||||||||
Commitments_and_contingencies
Commitments and contingencies | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||||||||||||||||||
Commitments and Contingencies Disclosure [Text Block] | ' | |||||||||||||||||||
30 | Commitments and contingencies | |||||||||||||||||||
Legal proceedings | ||||||||||||||||||||
Securities Action - Southern District of New York. On October 25, 2011, a purported securities class action (the “Securities Action”) was filed in the United States District Court for the Southern District of New York on behalf of all purchasers of the Company’s securities between March 25, 2010 and March 17, 2011. On February 24, 2012, the plaintiffs filed an amended complaint, changing the purported class period to between May 12, 2009 and March 17, 2011. The amended complaint alleges that the Company, certain of its present officers and directors and the Company’s former independent accounting firm violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and the rules promulgated thereunder, and seeks unspecified damages. The Company filed a motion to dismiss the amended complaint, which was fully briefed on April 18, 2012. On August 8, 2012, the court denied the Company’s motion to dismiss the amended complaint. On September 4, 2012, the Company filed an answer to the amended complaint. On January 15, 2013, plaintiffs filed a motion to certify the purported class, which was fully briefed on April 8, 2013. On May 31, 2013, the court denied plaintiffs’ motion to certify the purported class, and, on July 3, 2013, the court issued its order and opinion. On July 17, 2013, plaintiffs filed a petition for permission to appeal the order denying class certification, and, on August 1, 2013, the Company filed an answer in opposition to the petition. On October 23, 2013, the Court of Appeals for the Second Circuit denied plaintiffs’ petition for permission to appeal. On December 12, 2013, the district court is scheduled to hold a status conference regarding plaintiffs’ remaining individual claims. The Company believes that the allegations in the amended complaint are without merit and intends to defend itself vigorously against the claims. | ||||||||||||||||||||
The above-referenced action does not specify an amount of damages that the plaintiffs seek. Moreover, this matter has not reached the merits of the plaintiffs’ claims. With no merits discovery having been commenced, the Company cannot determine whether an adverse outcome is probable, nor can it provide a reasonable estimate of potential losses related to this matter. Although the Company believes that it has meritorious defenses to this action and intends to defend it vigorously, an adverse outcome in this matter could have a material adverse effect on the Company’s business, financial condition, results of operations or liquidity. | ||||||||||||||||||||
Derivative Action - Delaware Chancery Court. On December 23, 2011, a purported shareholder derivative action was filed in the Court of Chancery of the State of Delaware (the “Court of Chancery”) on behalf of the Company. The complaint alleged that certain of the Company’s current officers and directors breached their fiduciary duties to the Company in relation to the Company’s accounting of convertible notes issued in February 2008. On January 25, 2012, a second purported shareholder derivative action was filed in the Court of Chancery on behalf of the Company. On February 3, 2012, the Court of Chancery consolidated the two cases, which were stayed pending the outcome of the motion to dismiss in the Securities Action. On October 23, 2012, the derivative plaintiffs filed a consolidated amended complaint on behalf of the Company (the “Derivative Action”). The consolidated complaint alleged that certain of the Company’s current officers and directors breached their fiduciary duties to the Company in relation to the Company’s accounting of the convertible notes issued in February 2008. The consolidated complaint set forth three causes of action for breach of fiduciary duties, unjust enrichment and insider trading. On January 7, 2013, the Company filed a motion to dismiss the Derivative Action. That motion was fully briefed on February 28, 2013, and oral argument was held before the Court of Chancery on May 6, 2013. On August 30, 2013, the Court of Chancery dismissed all of the derivative plaintiffs’ claims with prejudice. The time for the derivative plaintiffs to appeal the Court of Chancery’s decision expired on September 30, 2013 and, accordingly, the Derivative Action has terminated. | ||||||||||||||||||||
Other than the above, the Company is not a party to any pending or, to the best of the Company’s knowledge, any threatened legal proceedings. In addition, no director, officer or affiliate of the Company, or owner of record of more than five percent of the securities of the Company, or any associate of any such director, officer or security holder is a party adverse to the Company or has a material interest adverse to the Company in reference to pending litigation. | ||||||||||||||||||||
Other commitments and contingencies | ||||||||||||||||||||
In addition to the bank loans, notes payables and the related interest, the following table summarizes the Company’s major commitments and contingencies as of September 30, 2013 (figures are in thousands of USD): | ||||||||||||||||||||
Payment obligations by period | ||||||||||||||||||||
2013(1) | 2014 | 2015 | 2016 | Thereafter | Total | |||||||||||||||
Interest on short-term bank loan | $ | 294 | $ | 464 | $ | - | $ | - | $ | - | $ | 758 | ||||||||
Obligations for purchasing agreements | 6,883 | 2,302 | 260 | - | - | 9,445 | ||||||||||||||
Total | $ | 7,177 | $ | 2,766 | $ | 260 | $ | - | $ | - | $ | 10,203 | ||||||||
-1 | Remaining 3 months in 2013. | |||||||||||||||||||
Offbalance_sheet_arrangements
Off-balance sheet arrangements | 9 Months Ended | |
Sep. 30, 2013 | ||
Off Balance Sheet Arrangements Disclosure [Abstract] | ' | |
Off Balance Sheet Arrangements Disclosure [Text Block] | ' | |
31 | Off-balance sheet arrangements | |
As of September 30, 2013 and 2012, the Company did not have any significant transactions, obligations or relationships that could be considered off-balance sheet arrangements. | ||
Segment_reporting
Segment reporting | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||
Segment Reporting Disclosure [Text Block] | ' | |||||||||||||||
32 | Segment reporting | |||||||||||||||
The accounting policies of the product sectors are the same as those described in the summary of significant accounting policies except that the disaggregated financial results for the product sectors have been prepared using a management approach, which is consistent with the basis and manner in which management internally disaggregates financial information for the purposes of assisting them in making internal operating decisions. Generally, the Company evaluates performance based on stand-alone product sector operating income and accounts for inter segment sales and transfers as if the sales or transfers were to third parties, at current market prices. | ||||||||||||||||
As of September 30, 2013 and 2012, the Company had eleven product sectors, five of which were principal profit makers and were reported as separate sectors and engaged in the production and sales of power steering (Henglong, Jiulong, Shenyang, Wuhu and Hubei Henglong). The other nine sectors were engaged in the production and sale of sensor modular (USAI), EPS (Jielong), provision of after sales and R&D services (HLUSA), production and sale of power steering (Chongqing Henglong), trade (Brazil Henglong), and the holding company (Genesis). Since the revenues, net income and net assets of these nine sectors are less than 10% of its segment in the condensed unaudited consolidated financial statements, the Company incorporated these nine sectors into “Other Sectors.” | ||||||||||||||||
As discussed in Discontinued Operations - Zhejiang (see Note 26) above, Zhejiang was identified as a product sector for the sales of power steering pumps of the Group prior to disposal on May 21, 2012. After the Company sold its 51% equity interest in Zhejiang on May 21, 2012 and presented it as a discontinued operation, the Company has adjusted the information for Zhejiang’s business in segment reporting for the same period in 2012. | ||||||||||||||||
The Company’s product sector information from continuing operations for the three months ended September 30, 2013 and 2012, is as follows (figures are in thousands of USD): | ||||||||||||||||
Net Sales | Income from Continuing Operations | |||||||||||||||
Three Months Ended September 30, | Three Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Henglong | $ | 55,846 | $ | 39,062 | $ | 8,368 | $ | 4,117 | ||||||||
Jiulong | 16,692 | 15,377 | 279 | 284 | ||||||||||||
Shenyang | 9,095 | 7,314 | 603 | 402 | ||||||||||||
Wuhu | 4,948 | 7,414 | -145 | 729 | ||||||||||||
Hubei Henglong | 11,783 | 9,982 | 6,092 | -1 | 613 | |||||||||||
Other Sectors | 7,558 | 6,635 | 522 | -1,105 | ||||||||||||
Total Segments | 105,922 | 85,784 | 15,719 | 5,040 | ||||||||||||
Corporate | - | - | 309 | -687 | ||||||||||||
Eliminations | -15003 | -12,600 | -5,599 | 47 | ||||||||||||
Total consolidated from continuing operations | $ | 90,919 | $ | 73,184 | $ | 10,429 | $ | 4,400 | ||||||||
-1 | $5.2 million included in the balance was income from investment in Henglong, which has been eliminated at the consolidation level. | |||||||||||||||
The Company’s product sector information from continuing operations for the nine months ended September 30, 2013 and 2012, is as follows (figures are in thousands of USD): | ||||||||||||||||
Net Sales | Income from Continuing Operations | |||||||||||||||
Nine Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Henglong | $ | 177,836 | $ | 123,713 | $ | 19,751 | $ | 14,248 | ||||||||
Jiulong | 56,735 | 54,572 | 1,516 | 1,276 | ||||||||||||
Shenyang | 28,164 | 21,090 | 1,119 | 628 | ||||||||||||
Wuhu | 17,113 | 24,208 | -312 | 581 | ||||||||||||
Hubei Henglong | 34,610 | 29,653 | 7,550 | -1 | 8,946 | -1 | ||||||||||
Other Sectors | 24,866 | 28,160 | 1,416 | 390 | ||||||||||||
Total Segments | 339,324 | 281,396 | 31,040 | 26,069 | ||||||||||||
Corporate | - | - | -2,203 | 3,424 | ||||||||||||
Eliminations | -53,353 | -46,914 | -4,677 | -13,207 | ||||||||||||
Total consolidated from continuing operations | $ | 285,971 | $ | 234,482 | $ | 24,160 | $ | 16,285 | ||||||||
-1 | $5.2 million and $7.0 million included in the respective balances of $7.6 million and $8.9 million was income from investment in Henglong in 2013 and 2012, respectively, which has been eliminated at the consolidation level. | |||||||||||||||
Basis_of_presentation_and_sign1
Basis of presentation and significant accounting policies (Policies) | 9 Months Ended | |
Sep. 30, 2013 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | |
Basis of Accounting, Policy [Policy Text Block] | ' | |
(a) | Basis of Presentation | |
Basis of Presentation – The accompanying condensed unaudited consolidated financial statements include the accounts of the Company and its subsidiaries. The details of subsidiaries are disclosed in Note 1. Significant inter-company balances and transactions have been eliminated upon consolidation. The condensed unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions in Article 10 of Regulation S-X. Accordingly they do not include all of the information and footnotes required by such accounting principles for complete financial statements. These financial statements should be read in conjunction with the consolidated financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. | ||
The accompanying interim condensed consolidated financial statements are unaudited, but in the opinion of the Company’s management, contain all necessary adjustments, which include normal recurring adjustments, for a fair statement of the results of operations, financial position and cash flows for the interim periods presented. | ||
The condensed consolidated balance sheet as of December 31, 2012 is derived from the Company’s audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. | ||
Certain information and footnote disclosures normally included in financial statements that have been prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, although the Company’s management believes that the disclosures contained in these financial statements are adequate to make the information presented herein not misleading. For further information, please refer to the financial statements and the notes thereto included in the Company’s 2012 Annual Report on Form 10-K, as filed with the Securities and Exchange Commission. | ||
The results of operations for the three months and nine months ended September 30, 2013 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2013. | ||
Estimation - The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. | ||
New Accounting Pronouncements, Policy [Policy Text Block] | ' | |
(b) | Recent Accounting Pronouncements | |
In February 2013, the FASB issued ASU 2013-04, “Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date”. This update provides guidance for the recognition, measurement and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this update is fixed at the reporting date, except for obligations addressed within existing guidance in U.S. GAAP. The guidance requires an entity to measure those obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting entity expects to pay on behalf of its co-obligors. The guidance in this update also requires an entity to disclose the nature and amount of the obligation as well as other information about those obligations. This update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. This update should be applied retrospectively to all prior periods presented for those obligations resulting from joint and several liability arrangements within this update’s scope that exist at the beginning of an entity’s fiscal year of adoption. An entity may elect to use hindsight for the comparative periods (if it changed its accounting as a result of adopting the amendments in this update) and should disclose that fact. Early adoption is permitted. The adoption of this standard is not expected to have any impact on the Company’s financial position. | ||
In March 2013, the FASB issued ASU 2013-05, “Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity”. This update provides that when a reporting entity (parent) ceases to have a controlling financial interest in a subsidiary or group of assets that is a non-profit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) within a foreign entity, the parent is required to apply the guidance in Subtopic 830-30 to release any related cumulative translation adjustment into net income. Accordingly, the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. For an equity method investment that is a foreign entity, a pro rata portion of the cumulative translation adjustment should be released into net income upon a partial sale of such an equity method investment. However, this treatment does not apply to an equity method investment that is not a foreign entity. In those instances, the cumulative translation adjustment is released into net income only if the partial sale represents a complete or substantially complete liquidation of the foreign entity that contains the equity method investment. Additionally, the amendments in this update clarify that the sale of an investment in a foreign entity includes both (1) events that result in the loss of a controlling financial interest in a foreign entity (that is, irrespective of any retained investment) and (2) events that result in an acquirer obtaining control of an acquiree in which it held an equity interest immediately before the acquisition date (sometimes also referred to as a “step acquisition”). Accordingly, the cumulative translation adjustment should be released into net income upon the occurrence of those events. This update is effective prospectively for fiscal years (and interim reporting periods within those years) beginning after December 15, 2013. Early adoption is permitted. The adoption of this standard is not expected to have any impact on the Company’s financial position or operating results. | ||
On July 18, 2013, the FASB issued ASU 2013-11, "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists” (Income Taxes - Topic 740). This update applies to all entities that have unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. An unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, unless otherwise provided in the update. To the extent that a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The assessment of whether a deferred tax asset is available is based on the unrecognized tax benefit and deferred tax asset that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date. For example, an entity should not evaluate whether the deferred tax asset has expired before the statute of limitations on the tax position or whether the deferred tax asset may be used prior to the unrecognized tax benefit being settled. The amendments in this update do not require new recurring disclosures. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. Early adoption is permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. The Company is currently evaluating the impact of adopting this update on its financial statements. | ||
Foreign Currency Transactions and Translations Policy [Policy Text Block] | ' | |
(c) | Significant Accounting Policies | |
Foreign Currencies – China Automotive, the parent company and HLUSA maintain their books and records in United States Dollars, “USD,” their functional currency. The Company’s subsidiaries based in the PRC and Genesis maintain their books and records in Renminbi, their functional currency. The Company’s subsidiary based in Brazil maintains its books and records in Brazilian reais (BRL), its functional currency. In accordance with FASB Accounting Standards Codification (“ASC”) Topic 830, foreign currency transactions denominated in currencies other than the functional currency are remeasured into the functional currency at the rate of exchange prevailing at the balance sheet date for monetary items. Nonmonetary items are remeasured at historical rates. Income and expenses are remeasured at the rate in effect on the transaction dates. Transaction gains and losses, if any, are included in the determination of net income for the period. | ||
In translating the financial statements of the Company’s China subsidiaries and Genesis from their functional currency into the reporting currency in USD, balance sheet accounts are translated using the closing exchange rate in effect at the balance sheet date and income and expense accounts are translated using an average exchange rate prevailing during the reporting period. Adjustments resulting from the translation, if any, are included in accumulated other comprehensive income (loss) in stockholders’ equity. | ||
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | ' | |
Stock-Based Compensation – The Company may issue shares of common stock for services rendered or for financing costs. Such shares will be valued based on the market price on the transaction date. The Company may issue stock options to employees in non-capital raising transactions for services. | ||
In July 2004, the Company adopted a stock incentive plan. The maximum number of common shares for issuance under this plan is 2,200,000 with a period of 10 years. The stock incentive plan provides for the issuance, to the Company’s officers, directors, management and employees, of options to purchase shares of the Company’s common stock. Since the adoption of the stock incentive plan, the Company has issued 523,850 stock options, and 1,676,150 stock options remain issuable in the future. As of September 30, 2013, the Company had 105,000 stock options outstanding. | ||
The Company has adopted ASC Topic 718, “Accounting for Stock-Based Compensation,” which establishes a fair value method of accounting for stock based compensation plans. The cost of stock options issued to employees is measured on the grant date based on the fair value. The fair value is determined using the Black-Scholes option pricing model. The resulting amount is charged to expense on the straight-line basis over the period in which the Company expects to receive benefit, which is generally the vesting period. | ||
Comprehensive Income, Policy [Policy Text Block] | ' | |
Comprehensive Income – The Company has adopted ASC Topic 220, “Reporting Comprehensive Income,” which establishes standards for the reporting and display of comprehensive income, its components and accumulated balances in a full set of general purpose financial statements. ASC Topic 220 defines comprehensive income to include all changes in equity except those resulting from investments by owners and distributions to owners, including adjustments to minimum pension liabilities, accumulated foreign currency translation, and unrealized gains or losses on marketable securities. | ||
Financial Instruments Disclosure [Policy Text Block] | ' | |
Financial Instruments – The Company adopted the provisions of ASC Topic 815, “Derivatives and Hedging Activities,” that address the determination of whether an instrument meets the definition of a derivative being indexed to a company’s own stock for purposes of applying the scope exception as provided for in accordance with ASC 815-15. Upon adoption of the standard on the effective date, the Company bifurcated the conversion feature embedded in the convertible notes, classifying it in liabilities and measuring it at fair value at each reporting period, with changes reflected in earnings, until the convertible notes are settled (see Note 24). | ||
Fair Value Measurement, Policy [Policy Text Block] | ' | |
Fair Value Measurements – For purposes of fair value measurements, the Company applies the applicable provisions of ASC Topic 820, “Fair Value Measurements”. Accordingly, fair value for the Company’s financial accounting and reporting purposes represents the estimated price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the designated measurement date. With an objective to increase consistency and comparability in fair value measurements and related disclosures, the Financial Accounting Standard Board established the fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. | ||
Cash and cash equivalents, pledged cash deposits, short-term investments, accounts and notes receivable, accounts and notes payable, advance payment or payable, other receivable or payable, accrued expenses and bank and government loans are carried at cost on the consolidated balance sheets, and the carrying amount approximate their fair value because of the short-term nature of these financial instruments. | ||
⋅ | Level 1 Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. A quoted price in an active market provides the most reliable evidence of fair value and shall be used to measure fair value whenever available. | |
⋅ | Level 2 Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially the full term of the asset or liability. As of September 30, 2013 and December 31, 2012, the Company did not have any fair value assets and liabilities classified as Level 2. | |
⋅ | Level 3 Inputs are unobservable inputs for the asset or liability. Unobservable inputs are used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. However, the fair value measurement objective remains the same, that is, an exit price from the perspective of a market participant that holds the asset or owes the liability. Therefore, unobservable inputs shall reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. The compound derivative liabilities are classified as Level 3 as the inputs reflect management’s best estimate of what market participants would use in pricing the liability at the measurement date. As of September 30, 2013 and December 31, 2012, the Company did not have any fair value assets and liabilities classified as Level 3. For a summary of changes in Level 3 derivative liabilities for the three months and nine months ended September 30, 2013 and 2012, please see Note 24. | |
Organization_and_business_Tabl
Organization and business (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ||||||||
Schedule of Equity Method Investments [Table Text Block] | ' | ||||||||
The Company owns the following aggregate net interests in the entities established in the People's Republic of China, the “PRC,” and Brazil as of September 30, 2013 and December 31, 2012. | |||||||||
Percentage Interest | |||||||||
Name of Entity | September 30, | December 31, | |||||||
2013 | 2012 | ||||||||
Shashi Jiulong Power Steering Gears Co., Ltd., “Jiulong” 1 | 81 | % | 81 | % | |||||
Jingzhou Henglong Automotive Parts Co., Ltd., “Henglong” 2 | 80 | % | 80 | % | |||||
Shenyang Jinbei Henglong Automotive Steering System Co., Ltd., “Shenyang” 3 | 70 | % | 70 | % | |||||
Universal Sensor Application Inc., “USAI” 4 | 83.34 | % | 83.34 | % | |||||
Wuhan Jielong Electric Power Steering Co., Ltd., “Jielong” 5 | 85 | % | 85 | % | |||||
Wuhu HengLong Automotive Steering System Co., Ltd., “Wuhu” 6 | 77.33 | % | 77.33 | % | |||||
Hubei Henglong Automotive System Group Co., Ltd, “Hubei Henglong” 7 | 100 | % | 100 | % | |||||
Jingzhou Henglong Automotive Technology (Testing) Center, “Testing Center” 8 | 80 | % | 80 | % | |||||
Beijing Henglong Automotive System Co., Ltd., “Beijing Henglong” 9 | 50 | % | 50 | % | |||||
Chongqing Henglong Hongyan Automotive System Co., Ltd, “Chongqing Henglong” 10 | 70 | % | 70 | % | |||||
CAAS Brazil’s Imports And Trade In Automotive Parts Ltd., “Brazil Henglong” 11 | 80 | % | 80 | % | |||||
1 | Jiulong was established in 1993 and mainly engages in the production of integral power steering gear for heavy-duty vehicles. | ||||||||
2 | Henglong was established in 1997 and mainly engages in the production of rack and pinion power steering gears for cars and light-duty vehicles. | ||||||||
3 | Shenyang was established in 2002 and focuses on power steering parts for light duty vehicles. | ||||||||
4 | USAI was established in 2005 and mainly engages in the production and sales of sensor modules. | ||||||||
5 | Jielong was established in 2006 and mainly engages in the production and sales of electric power steering, “EPS.” | ||||||||
6 | Wuhu was established in 2006 and mainly engages in the production and sales of automobile steering systems. | ||||||||
7 | On March 7, 2007, Genesis established Hubei Henglong, formerly known as Jingzhou Hengsheng Automotive System Co., Ltd., its wholly-owned subsidiary, to engage in the production and sales of automotive steering systems. The registered capital of Hubei Henglong at the time of establishment was $10 million. On February 10, 2010, the registered capital of Hubei Henglong was increased to $16 million. On October 12, 2011, the board of directors of the Company approved a reorganization of the Company’s subsidiaries operating in China. As a result of the reorganization, all of Genesis’s equity interests of its subsidiaries operating in China, except for Shenyang, were transferred to Hubei Henglong, the Company’s new China-based holding company. The reorganization was completed on January 19, 2012, subsequent to which the registered capital of Hubei Henglong was increased to $39.0 million. As the reorganized entities were under common control of the Company, the reorganization did not have any impact on the Company’s consolidated financial position or results of operations and should not impact the tax treatment of the Company or its subsidiaries in any material respect. On July 8, 2012, Hubei Henglong changed its name to Hubei Henglong Automotive System Group Co., Ltd. | ||||||||
8 | In December 2009, Henglong, a subsidiary of Genesis, formed the Testing Center, which mainly engages in the research and development of new products. The registered capital of the Testing Center was RMB30.0 million, equivalent to approximately $4.4 million. | ||||||||
9 | On January 24, 2010, Genesis entered into a joint venture contract with Beijing Hainachuan Auto Parts Co., Ltd. to establish Beijing Henglong as a joint venture company to design, develop and manufacture both hydraulic and electric power steering systems and parts. On September 16, 2010, with Beijing Hainachuan’s agreement, Genesis transferred its interest in the joint venture to Hubei Henglong, and left the other terms of the joint venture contract unchanged. According to the joint venture agreement, the Company does not have voting control of Beijing Henglong. Therefore, the Company’s consolidated financial statements do not include Beijing Henglong, and such investment is accounted for through the equity method. | ||||||||
10 | On February 21, 2012, Hubei Henglong and SAIC-IVECO Hongyan Company, “SAIC-IVECO,” established a Sino-foreign joint venture company, Chongqing Henglong, to design, develop and manufacture both hydraulic and electric power steering systems and parts. The joint venture is located in Chongqing City and has a registered capital of RMB60 million, of which RMB42 million, or 70%, is held by Hubei Henglong. The registered capital of Chongqing Henglong was fully contributed by Hubei Henglong in cash of $6.7 million (equivalent to RMB42 million) in January and February 2012 and by SAIC-IVECO in property, plant and equipment with fair value of $2.8 million (equivalent to RMB18 million) in April 2012. | ||||||||
11 | On August 21, 2012, Brazil Henglong was established as a Sino-foreign joint venture company by Hubei Henglong and two Brazilian citizens, Ozias Gaia Da Silva and Ademir Dal’ Evedove. Brazil Henglong engages mainly in the import and sales of automotive parts in Brazil. Such joint venture is located in Brazil and has a registered capital of $1.0 million (equivalent to BRL1.6 million), of which $0.8 million (equivalent to BRL1.3 million), or 80%, is held by Hubei Henglong, and of which $0.2 million (equivalent to BRL0.3 million), or 20%, is held by Mr. Ozias Gaia Da Silva and Mr. Ademir Dal’ Evedove. | ||||||||
Accounts_and_notes_receivable_1
Accounts and notes receivable, net (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Accounts and Notes Receivable Disclosure [Abstract] | ' | |||||||
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | ' | |||||||
The Company’s accounts and notes receivable as of September 30, 2013 and December 31, 2012 are summarized as follows (figures are in thousands of USD): | ||||||||
September | December 31, 2012 | |||||||
30, 2013 | ||||||||
Accounts receivable - unrelated parties (1) | $ | 130,437 | $ | 117,136 | ||||
Notes receivable - unrelated parties (2) (3) | 117,805 | 95,436 | ||||||
248,242 | 212,572 | |||||||
Less: allowance for doubtful accounts - unrelated parties | -1,240 | -1,266 | ||||||
Accounts and notes receivable- unrelated parties | 247,002 | 211,306 | ||||||
Accounts and notes receivable - related parties | 17,783 | 12,286 | ||||||
$ | 264,785 | $ | 223,592 | |||||
-1 | As of September 30, 2013, the Company has pledged $15.7 million of accounts receivable as security for its comprehensive credit facility with banks in China. | |||||||
-2 | Notes receivable represent accounts receivable in the form of bills of exchange for which acceptances are guaranteed and settlements are handled by banks. | |||||||
-3 | Henglong collateralized its notes receivable in an amount of RMB256.3 million (equivalent to approximately $41.7 million) as security for the credit facility with banks in China and the Chinese government, including RMB216.1 million (equivalent to approximately $35.1 million) in favor of Industrial and Commercial Bank of China, Jingzhou Branch, “ICBC Jingzhou,” for the purpose of obtaining the Henglong Standby Letter of Credit (as defined in Note 13) which is used as security for the non-revolving credit facility in the amount of $30.0 million provided by Industrial and Commercial Bank of China (Macau) Limited, “ICBC Macau,” to the Company in May 2012. The Credit Facility was drawn down on May 22, 2012 and its original maturity date was May 22, 2013. Such maturity date was extended to May 13, 2014 (see Note 13); and RMB40.2 million (equivalent to approximately $6.6 million) in favor of the Chinese government as security for the interest-free government loan (see Note 13). | |||||||
Inventories_Tables
Inventories (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Schedule of Inventory, Current [Table Text Block] | ' | |||||||
The Company’s inventories as of September 30, 2013 and December 31, 2012 consisted of the following (figures are in thousands of USD): | ||||||||
September | December 31, 2012 | |||||||
30, 2013 | ||||||||
Raw materials | $ | 13,872 | $ | 11,144 | ||||
Work in process | 8,378 | 7,094 | ||||||
Finished goods | 30,899 | 25,304 | ||||||
$ | 53,149 | $ | 43,542 | |||||
Other_receivables_net_Tables
Other receivables, net (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Other Receivables Disclosure [Abstract] | ' | |||||||
Schedule Of Other Receivables [Table Text Block] | ' | |||||||
The Company’s other receivables as of September 30, 2013 and December 31, 2012 are summarized as follows (figures are in thousands of USD): | ||||||||
September | December 31, 2012 | |||||||
30, 2013 | ||||||||
Other receivables - unrelated parties (1) | $ | 826 | $ | 905 | ||||
Less: allowance for doubtful accounts- unrelated parties | -62 | -56 | ||||||
$ | 764 | $ | 849 | |||||
September | December 31, 2012 | |||||||
30, 2013 | ||||||||
Other receivables - related parties (1) | $ | 674 | $ | 715 | ||||
Less: allowance for doubtful accounts | -607 | -608 | ||||||
$ | 67 | $ | 107 | |||||
-1 | Other receivables consist of amounts advanced to both related and unrelated parties, primarily as unsecured demand loans, with no stated interest rate or due date. These receivables originate as part of the Company's normal operating activities and are periodically settled in cash. | |||||||
Property_plant_and_equipment_n1
Property, plant and equipment, net (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||
Property, Plant and Equipment [Table Text Block] | ' | |||||||
The Company’s property, plant and equipment as of September 30, 2013 and December 31, 2012 are summarized as follows (figures are in thousands of USD): | ||||||||
September | December 31, 2012 | |||||||
30, 2013 | ||||||||
Land use rights and buildings | $ | 38,159 | $ | 36,881 | ||||
Machinery and equipment | 110,100 | 96,368 | ||||||
Electronic equipment | 6,572 | 6,174 | ||||||
Motor vehicles | 3,109 | 2,942 | ||||||
Construction in progress | 10,220 | 13,280 | ||||||
168,160 | 155,645 | |||||||
Less: Accumulated depreciation | -85,637 | -73,954 | ||||||
$ | 82,523 | $ | 81,691 | |||||
Intangible_assets_Tables
Intangible assets (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||
Schedule of Impaired Intangible Assets [Table Text Block] | ' | |||||||
The Company’s intangible assets as of September 30, 2013 and December 31, 2012 are summarized as follows (figures are in thousands of USD): | ||||||||
September | December 31, 2012 | |||||||
30, 2013 | ||||||||
Costs: | ||||||||
Patent technology | $ | 2,050 | $ | 1,901 | ||||
Management software license | 640 | 622 | ||||||
2,690 | 2,523 | |||||||
Less: Amortization | -2,019 | -1,847 | ||||||
$ | 671 | $ | 676 | |||||
Deferred_income_tax_assets_Tab
Deferred income tax assets (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Income Tax Disclosure [Abstract] | ' | |||||||
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | ' | |||||||
The components of estimated deferred income tax assets as of September 30, 2013 and December 31, 2012 are as follows (figures are in thousands of USD): | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Losses carry forward (U.S.) (1) | $ | 7,778 | $ | 7,004 | ||||
Losses carry forward (PRC) (1) | 2,054 | 1,887 | ||||||
Product warranties and other reserves | 3,731 | 3,253 | ||||||
Property, plant and equipment | 5,328 | 3,774 | ||||||
Share-based compensation | 296 | 240 | ||||||
Bonus accrual | 304 | 196 | ||||||
Other accruals | 1,112 | 696 | ||||||
Others | 705 | 839 | ||||||
Total deferred tax assets | 21,307 | 17,889 | ||||||
Less: taxable temporary difference related to revenue recognition | -533 | -397 | ||||||
Total deferred tax assets, net | 20,774 | 17,492 | ||||||
Less: Valuation allowance | -10,433 | -8,988 | ||||||
Total deferred tax assets, net of valuation allowance (2) | $ | 10,341 | $ | 8,504 | ||||
-1 | The net operating losses carry forward for the U.S. entity for income tax purposes are available to reduce future years' taxable income. These losses will expire, if not utilized, in 20 years. Net operating losses carry forward for non-U.S. entities can be carried forward for 5 years to offset taxable income. However, as of September 30, 2013, valuation allowance was $10.4 million, including $8.6 million allowance for the Company’s deferred tax assets in the United States and $1.8 million allowance for the Company’s non-U.S. deferred tax assets. Based on the Company’s current operations in the United States, management believes that the deferred tax assets in the United States are not likely to be realized in the future. For the non-U.S. deferred tax assets, pursuant to certain tax laws and regulations in China, the management believes such amount will not be used to offset future taxable income. | |||||||
-2 | Approximately $4.4 million and $4.1 million of deferred income tax asset as of September 30, 2013 and December 31, 2012, respectively, are included in non-current deferred tax assets in the accompanying condensed unaudited consolidated balance sheets. The remaining $4.8 million and $4.4 million of deferred income tax assets as of September 30, 2013 and December 31, 2012, respectively, are included in current deferred tax assets. | |||||||
Bank_and_government_loans_net_
Bank and government loans, net (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Schedule of Debt [Table Text Block] | ' | |||||||
Loans consist of the following at September 30, 2013 and December 31, 2012 (figures are in thousands of USD): | ||||||||
September | December 31, 2012 | |||||||
30, 2013 | ||||||||
Short-term bank loan (1) (2) | $ | 5,693 | $ | 10,341 | ||||
Short-term bank loan (3) | 30,000 | 30,000 | ||||||
Short-term government loan (4) | 6,506 | - | ||||||
Subtotal | 42,199 | 40,341 | ||||||
Debt issue cost | -57 | -230 | ||||||
Amortization | 57 | 173 | ||||||
$ | 42,199 | $ | 40,284 | |||||
-1 | These loans are secured by property, plant and equipment of the Company and are repayable within one year. Please see Note 10. At September 30, 2013 and December 31, 2012, the weighted average interest rate was 6.24% and 6.46% per annum, respectively. Interest is paid on the twentieth day of each month and the principal repayment is at maturity. | |||||||
-2 | On September 25, 2012, Jiulong entered into a one-year loan agreement with China Construction Bank Jingzhou branch in the amount of $3.2 million. The agreement contains certain financial and non-financial covenants, including but not limited to restrictions on the utilization of the funds and the maintenance of an asset-liability ratio not exceeding 60%. The Company was in compliance with these covenants as of September 30, 2013. The Company repaid $1.4 milion and $1.8 million in June and July, 2013, respectively. | |||||||
-3 | On May 18, 2012, the Company entered into a credit facility agreement, the “Credit Agreement,” with ICBC Macau to obtain a non-revolving credit facility in the amount of $30.0 million, the “Credit Facility”. The Credit Facility would have expired on November 3, 2012 unless the Company drew down the line of credit in full prior to such expiration date, and the maturity date for the loan drawdown was the earlier of (i) 18 months from the drawdown or (ii) 1 month before the expiry of the standby letter of credit obtained by Henglong from ICBC Jingzhou as security for the Credit Facility, the “Henglong Standby Letter of Credit”. The interest rate of the Credit Facility is calculated based on a three-month LIBOR plus 2.25% per annum, subject to the availability of funds and fluctuation at ICBC Macau’s discretion. The interest is calculated daily based on a 360-day year and it is fixed one day before the first day of each interest period. The interest period is defined as three months from the date of drawdown. As security for the Credit Facility, the Company was required to provide ICBC Macau with the Henglong Standby Letter of Credit for a total amount not less than $31.6 million if the Credit Facility is fully drawn. | |||||||
On May 22, 2012, the Company drew down the full amount of $30.0 million under the Credit Facility and provided the Henglong Standby Letter of Credit for an amount of $31.6 million in favor of ICBC Macau. The Henglong Standby Letter of Credit issued by ICBC Jingzhou is collateralized by Henglong’s notes receivable of RMB216.0 million (equivalent to approximately $35.1 million). The Company also paid an arrangement fee of $0.1 million to ICBC Macau and $0.1 million to ICBC Jingzhou. The original maturity date of the Credit Facility was May 22, 2013. On May 7, 2013, ICBC Macau agreed to extend the maturity date of the Credit Facility to May 13, 2014. The interest rate of the Credit Facility under the extended term is calculated based on the three-month LIBOR plus 2.0% per annum. Except for the above, all other terms and conditions as stipulated in the Credit Agreement remain unchanged. As of September 30, 2013, the interest rate of the Credit Facility was 2.25%. | ||||||||
-4 | On January 31, 2013, the Company received an interest-free Chinese government loan of RMB40.0 million (equivalent to approximately $6.6 million), which will mature on December 31, 2013. Henglong has pledged RMB40.2 million (equivalent to approximately $6.5 million) of notes receivable, which will mature on December 31, 2013, as security for such government loan (see Note 5). | |||||||
Accounts_and_notes_payable_Tab
Accounts and notes payable (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Accounts and Notes Payable Disclosure [Abstract] | ' | |||||||
Schedule Of Accounts and Notes Payable [Table Text Block] | ' | |||||||
The Company’s accounts and notes payable as of September 30, 2013 and December 31, 2012 are summarized as follows (figures are in thousands of USD): | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Accounts payable - unrelated parties | $ | 104,392 | $ | 99,100 | ||||
Notes payable - unrelated parties (1) | 70,483 | 67,280 | ||||||
Accounts and notes payable - unrelated parties | 174,875 | 166,380 | ||||||
Accounts payable - related parties | 6,258 | 4,521 | ||||||
$ | 181,133 | $ | 170,901 | |||||
(1) | Notes payable represent accounts payable in the form of bills of exchange whose acceptances are guaranteed and settlements are handled by banks. The Company has pledged cash deposits, notes receivable and certain property, plant and equipment to secure notes payable granted by banks. | |||||||
Accrued_expenses_and_other_pay1
Accrued expenses and other payables (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Payables and Accruals [Abstract] | ' | ||||||||||
Schedule of Accounts Payable and Accrued Liabilities [Table Text Block] | ' | ||||||||||
The Company’s accrued expenses and other payables as of September 30, 2013 and December 31, 2012 are summarized as follows (figures are in thousands of USD): | |||||||||||
September 30, | December 31, 2012 | ||||||||||
2013 | |||||||||||
Accrued expenses | $ | 3,389 | $ | 2,557 | |||||||
Accrued interest | 86 | 87 | |||||||||
Other payables | 2,607 | 2,176 | |||||||||
Warranty reserves (1) | 20,840 | 18,081 | |||||||||
Dividends payable to non-controlling interests | 86 | 162 | |||||||||
$ | 27,008 | $ | 23,063 | ||||||||
-1 | The Company provides for the estimated cost of product warranties when the products are sold. Such estimates of product warranties were based on, among other things, historical experience, product changes, material expenses, services and transportation expenses arising from the manufactured products. Estimates will be adjusted on the basis of actual claims and circumstances. | ||||||||||
Schedule of Product Warranty Liability [Table Text Block] | ' | ||||||||||
For the nine months ended September 30, 2013 and 2012, and for the year ended December 31, 2012, the warranties activities were as follows (figures are in thousands of USD): | |||||||||||
Nine Months Ended September 30, | Year Ended | ||||||||||
December 31, | |||||||||||
2013 | 2012 | 2012 | |||||||||
Balance at beginning of the period | $ | 18,081 | $ | 16,809 | $ | 16,809 | |||||
Additions during the period | 8,554 | 6,865 | 10,931 | ||||||||
Settlement within period, by cash or actual material | -6,199 | -6,661 | -9,264 | ||||||||
Foreign currency translation gain (loss) | 404 | -105 | 41 | ||||||||
Decrease for warranty related to the subsidiary sold | - | -432 | -436 | ||||||||
Balance at end of the period | $ | 20,840 | $ | 16,476 | $ | 18,081 | |||||
Taxes_payable_Tables
Taxes payable (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Taxes Payables [Abstract] | ' | |||||||
Schedule Of Income Taxes Payable [Table Text Block] | ' | |||||||
The Company’s taxes payable as of September 30, 2013 and December 31, 2012 are summarized as follows (figures are in thousands of USD): | ||||||||
September 30, 2013 | December 31, 2012 | |||||||
Value-added tax payable | $ | 5,049 | $ | 4,347 | ||||
Income tax payable | 3,467 | 878 | ||||||
Other tax payable | 463 | 368 | ||||||
$ | 8,979 | $ | 5,593 | |||||
Additional_paidin_capital_Tabl
Additional paid-in capital (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Additional Paid in Capital [Abstract] | ' | ||||||||||||||||
Schedule of Additional Paid In Capital [Table Text Block] | ' | ||||||||||||||||
The Company’s positions in respect of the amounts of additional paid-in capital for the nine months ended September 30, 2013 and 2012, and the year ended December 31, 2012 are summarized as follows (figures are in thousands of USD): | |||||||||||||||||
Nine Months Ended September 30, | Year Ended | ||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | 2012 | |||||||||||||||
Balance at beginning of the period | $ | 39,371 | $ | 39,296 | $ | 39,296 | |||||||||||
Share-based compensation(1) | 194 | 75 | 75 | ||||||||||||||
Balance at end of the period | $ | 39,565 | $ | 39,371 | $ | 39,371 | |||||||||||
(1) On August 13, 2013 and August 15, 2012, the Company granted 22,500 and 22,500 stock options to the Company’s independent directors, with the exercise price equal to the closing price of the Company’s common stock traded on NASDAQ on the date of grant. The fair value of stock options was determined at the date of grant using the Black-Scholes option pricing model. The Black-Scholes option model requires management to make various estimates and assumptions, including expected term, expected volatility, risk-free rate, and dividend yield. The expected term represents the period of time that stock-based compensation awards granted are expected to be outstanding and is estimated based on considerations including the vesting period, contractual term and anticipated employee exercise patterns. Expected volatility is based on the historical volatility of the Company’s stock. The risk-free rate is based on the U.S. Treasury yield curve in relation to the contractual life of stock-based compensation instruments. The dividend yield assumption is based on historical patterns and future expectations for the Company’s dividends. | |||||||||||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | ' | ||||||||||||||||
Assumptions used to estimate the fair value of stock options on the grant dates are as follows: | |||||||||||||||||
Issuance Date | Expected volatility | Risk-free rate | Expected term (years) | Dividend yield | |||||||||||||
13-Aug-13 | 131.5 | % | 1.49 | % | 5 | 0 | % | ||||||||||
15-Aug-12 | 149.2 | % | 0.67 | % | 5 | 0 | % | ||||||||||
Retained_earnings_Tables
Retained earnings (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Retained Earnings Disclosure [Abstract] | ' | ||||||||||
Schedule Of Appropriated Retained Earnings [Table Text Block] | ' | ||||||||||
The Company’s activities in respect of the amounts of the appropriated retained earnings for the nine months ended September 30, 2013 and 2012, and the year ended December 31, 2012 are summarized as follows (figures are in thousands of USD): | |||||||||||
Nine Months Ended September 30, | Year Ended | ||||||||||
December 31, | |||||||||||
2013 | 2012 | 2012 | |||||||||
Balance at beginning of the period | $ | 9,953 | $ | 9,026 | $ | 9,026 | |||||
Appropriation of retained earnings | 95 | 927 | 927 | ||||||||
Balance at end of the period | $ | 10,048 | $ | 9,953 | $ | 9,953 | |||||
Schedule Of Unappropriated Retained Earnings [Table Text Block] | ' | ||||||||||
The Company’s activities in respect of the amounts of the unappropriated retained earnings for the nine months ended September 30, 2013 and 2012, and the year ended December 31, 2012 are summarized as follows (figures are in thousands of USD): | |||||||||||
Nine Months Ended September 30, | Year Ended | ||||||||||
December 31, | |||||||||||
2013 | 2012 | 2012 | |||||||||
Balance at beginning of the period | $ | 119,329 | $ | 99,513 | $ | 99,513 | |||||
Net income attributable to parent company | 19,544 | 15,657 | 20,743 | ||||||||
Appropriation of retained earnings | -95 | -927 | -927 | ||||||||
Balance at end of the period | $ | 138,778 | $ | 114,243 | $ | 119,329 | |||||
Accumulated_other_comprehensiv1
Accumulated other comprehensive income (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Equity [Abstract] | ' | ||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | ' | ||||||||||
The Company’s activities in respect of the amounts of the accumulated other comprehensive income for the nine months ended September 30, 2013 and 2012, and the year ended December 31, 2012 are summarized as follows (figures are in thousands of USD): | |||||||||||
Nine Months Ended September 30, | Year Ended | ||||||||||
December 31, | |||||||||||
2013 | 2012 | 2012 | |||||||||
Balance at beginning of the period | $ | 25,898 | $ | 25,291 | $ | 25,291 | |||||
Foreign currency translation adjustment attributable to parent company | 4,374 | -1,024 | 607 | ||||||||
Balance at end of the period | $ | 30,272 | $ | 24,267 | $ | 25,898 | |||||
Noncontrolling_interests_Table
Non-controlling interests (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Noncontrolling Interest [Abstract] | ' | ||||||||||
Schedule Of Noncontrolling Interests Disclosure [Table Text Block] | ' | ||||||||||
The Company’s activities in respect of the amounts of the non-controlling interests’ equity for the nine months ended September 30, 2013 and 2012, and the year ended December 31, 2012 are summarized as follows (figures are in thousands of USD): | |||||||||||
Nine Months Ended September 30, | Year Ended | ||||||||||
December 31, | |||||||||||
2013 | 2012 | 2012 | |||||||||
Balance at beginning of the period | $ | 38,846 | $ | 43,028 | $ | 43,028 | |||||
Income attributable to non-controlling interests | 4,616 | 3,279 | 4,744 | ||||||||
Dividends declared to the non-controlling interest holders of joint-venture companies | -1,299 | -6,846 | -6,846 | ||||||||
Discontinued operations – Zhejiang | - | -5,162 | -5,162 | ||||||||
Capital contribution from non-controlling interests | - | 2,846 | 3,012 | ||||||||
Foreign currency translation gain (loss) | 892 | -256 | 70 | ||||||||
Balance at end of the period | $ | 43,055 | $ | 36,889 | $ | 38,846 | |||||
Financial_income_expenses_net_
Financial (income) expenses, net (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Financial Income Expenses Disclosure [Abstract] | ' | |||||||
Schedule Of Financial Expenses [Table Text Block] | ' | |||||||
During the three months and nine months ended September 30, 2013 and 2012, the Company recorded financial expenses, net which are summarized as follows (figures are in thousands of USD): | ||||||||
Three Months Ended September 30, | ||||||||
2013 | 2012 | |||||||
Interest expense | $ | 284 | $ | 819 | ||||
Interest income | -1,143 | -409 | ||||||
Foreign exchange gain, net | 24 | 5 | ||||||
Loss of note discount, net | -3 | -7 | ||||||
Bank fees | 149 | 29 | ||||||
Total financial (income) expense, net | $ | -689 | $ | 437 | ||||
Nine Months Ended September 30, | ||||||||
2013 | 2012 | |||||||
Coupon interest and make-whole redemption interest(1) | $ | - | $ | 1,551 | ||||
Interest expense | 1,289 | 1,273 | ||||||
Interest income | -2,298 | -981 | ||||||
Foreign exchange gain, net | 71 | -89 | ||||||
Loss of note discount, net | 9 | -32 | ||||||
Bank fees | 549 | 128 | ||||||
Total financial (income) expense, net | $ | -380 | $ | 1,850 | ||||
-1 | On May 24, 2012, the Company and LBCCA Liquidator reached a settlement agreement. Under the terms of the settlement agreement, the Company redeemed all the remaining convertible notes on May 25, 2012, the redemption date. As a result, there was no coupon interest and make-whole redemption interest related to the convertible notes during the three months ended September 30, 2012 and the nine months ended September 30, 2013 (see Note 24). | |||||||
Gain_and_loss_on_change_in_fai1
Gain and loss on change in fair value of derivative (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Gain On Change In Fair Value Of Derivative Disclosure [Abstract] | ' | |||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | ' | |||||||||||||
The following table summarizes the components of loss on change in fair value of derivative arising from fair value adjustments to compound derivative liabilities during the nine months ended September 30, 2012 (figures are in thousands of USD): | ||||||||||||||
Nine Months Ended September 30, 2012 | ||||||||||||||
Balances at January 1 | $ | 559 | ||||||||||||
Decrease due to convertible notes conversion on May 25, 2012 | -1,008 | |||||||||||||
Loss in fair value adjustments | 449 | |||||||||||||
Balances at September 30 | $ | - | ||||||||||||
Schedule of Interest Rate Derivatives [Table Text Block] | ' | |||||||||||||
The following table sets forth (i) the range of inputs for each significant assumption and (ii) the equivalent, or averages, of each significant assumption as of May 25, 2012, the Redemption Date. | ||||||||||||||
Range | ||||||||||||||
May 25, 2012 Assumptions: | Low | High | Equivalent | |||||||||||
Volatility | 65.33 | % | 102.57 | % | 79.02 | % | ||||||||
Market adjusted interest rates | 5.89 | % | 17.95 | % | 11.97 | % | ||||||||
Credit risk adjusted rates | 16.87 | % | 16.87 | % | 16.87 | % | ||||||||
Implied expected life (years) | - | - | 0.73 | |||||||||||
Discontinued_operations_Zhejia1
Discontinued operations - Zhejiang (Tables) | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Discontinued Operations and Disposal Groups [Abstract] | ' | ||||
Schedule Of Disposal Groups Including Discontinued Operations Income Statement and Additional Disclosures One [Table Text Block] | ' | ||||
The following table summarizes the results of the Zhejiang business included in the condensed unaudited consolidated statements of operations and comprehensive income as discontinued operations (figures are in thousands of USD). | |||||
Nine Months | |||||
Ended September 30, 2012 | |||||
Operational profit from component of discontinued operations, net of tax | $ | 157 | |||
Income from disposing component of discontinued operations, net of tax | 2,494 | ||||
Income from discontinued operations, net of tax | $ | 2,651 | |||
Schedule Of Disposal Groups Including Discontinued Operations Income Statement and Additional Disclosures Two [Table Text Block] | ' | ||||
The following table summarizes the revenue and pretax profit of the Zhejiang business reported as discontinued operations (figures are in thousands of USD). | |||||
Nine Months | |||||
Ended September 30, 2012 | |||||
Revenue from component of discontinued operations | $ | 7,423 | |||
Pretax profit from component of discontinued operations | $ | 165 | |||
Schedule Of Disposal Groups Including Discontinued Operations Balance Sheet and Additional Disclosures [Table Text Block] | ' | ||||
Summarized assets and liabilities from the discontinued operations as of the disposal date were as follows (figures are in thousands of USD): | |||||
May 21, 2012 | |||||
Assets of discontinued operations | |||||
Current assets | $ | 20,735 | |||
Non-current assets | 6,623 | ||||
Total assets of discontinued operations | $ | 27,358 | |||
Liabilities of discontinued operations | |||||
Current liabilities | 16,823 | ||||
Non-current liabilities | - | ||||
Total liabilities of discontinued operations | $ | 16,823 | |||
Income_per_share_Tables
Income per share (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Earnings Per Share [Abstract] | ' | |||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | ' | |||||||
The calculation of diluted income per share attributable to the parent company for the three months ended September 30, 2013 were (figures are in thousands of USD, except share and per share amounts): | ||||||||
Three Months Ended September 30, | ||||||||
2013 | 2012 | |||||||
Numerator: | ||||||||
Net income attributable to the parent company’s common shareholders – Basic and Diluted | $ | 8,624 | $ | 3,404 | ||||
Denominator: | ||||||||
Weighted average shares outstanding | 28,043,019 | 28,260,302 | ||||||
Dilutive effects of stock options | 19,278 | 578 | ||||||
Denominator for dilutive income per share – Diluted | 28,062,297 | 28,260,880 | ||||||
Net income per share attributable to parent company’s common shareholders – Basic | $ | 0.31 | $ | 0.12 | ||||
Net income per share attributable to parent company’s common shareholders – Diluted | $ | 0.31 | $ | 0.12 | ||||
The calculations of diluted income per share attributable to the parent company for the nine months ended September 30, 2013 were (figures are in thousands of USD, except share and per share amounts): | ||||||||
Nine Months Ended September 30, | ||||||||
2013 | 2012 | |||||||
Numerator: | ||||||||
Net income attributable to the parent company’s common shareholders | $ | 19,544 | $ | 15,657 | ||||
Allocation to convertible notes holders | - | -925 | ||||||
Net income attributable to the parent company’s common shareholders – Basic and Diluted | 19,544 | 14,732 | ||||||
Denominator: | ||||||||
Weighted average shares outstanding | 28,043,019 | 28,260,302 | ||||||
Dilutive effects of stock options | 10,989 | 1,227 | ||||||
Denominator for dilutive income per share – Diluted | 28,054,008 | 28,261,529 | ||||||
Net income per share attributable to parent company’s common shareholders – Basic | $ | 0.7 | $ | 0.52 | ||||
Net income per share attributable to parent company’s common shareholders –Diluted | 0.7 | 0.52 | ||||||
Schedule Of Continuing Operations Earnings Per Share Basic And Diluted [Table Text Block] | ' | |||||||
The calculations of diluted income from continuing operations per share attributable to the parent company for the nine months ended September 30, 2013 were (figures are in thousands of USD, except share and per share amounts): | ||||||||
Nine Months Ended September 30, | ||||||||
2013 | 2012 | |||||||
Numerator: | ||||||||
Net income from continuing operations | $ | 24,160 | $ | 16,285 | ||||
Net income from continuing operations attributable to non-controlling interest | 4,616 | 3,203 | ||||||
Net income from continuing operations attributable to shareholders | 19,544 | 13,082 | ||||||
Allocation to convertible notes holders | - | -773 | ||||||
Net income from continuing operations attributable to the parent company’s common shareholders – Basic and Diluted | 19,544 | 12,309 | ||||||
Denominator: | ||||||||
Weighted average shares outstanding | 28,043,019 | 28,260,302 | ||||||
Dilutive effects of stock options | 10,989 | 1,227 | ||||||
Denominator for dilutive income per share – Diluted | 28,054,008 | 28,261,529 | ||||||
Net income from continuing operations per common share attributable to parent company – Basic | $ | 0.7 | $ | 0.44 | ||||
Net income from continuing operations per common share attributable to parent company –Diluted | 0.7 | 0.44 | ||||||
Related_party_transactions_and1
Related party transactions and balances (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Related Party Transactions [Abstract] | ' | |||||||
Schedule Of Related Party Transactions [Table Text Block] | ' | |||||||
Related party transactions are as follows (figures are in thousands of USD): | ||||||||
Related sales | ||||||||
Three Months Ended September 30, | ||||||||
2013 | 2012 | |||||||
Merchandise sold to related parties | $ | 9,166 | $ | 2,939 | ||||
Equipment sold to related parties | - | 82 | ||||||
9,166 | 3,021 | |||||||
Nine Months Ended September 30, | ||||||||
2013 | 2012 | |||||||
Merchandise sold to related parties | $ | 26,344 | $ | 19,325 | ||||
Equipment sold to related parties | - | 82 | ||||||
26,344 | 19,407 | |||||||
Related purchases | ||||||||
Three Months Ended September 30, | ||||||||
2013 | 2012 | |||||||
Materials purchased from related parties | $ | 10,500 | $ | 4,452 | ||||
Technology purchased from related parties | 58 | 433 | ||||||
Equipment purchased from related parties | 777 | 402 | ||||||
Total | $ | 11,335 | $ | 5,287 | ||||
Nine Months Ended September 30, | ||||||||
2013 | 2012 | |||||||
Materials purchased from related parties | $ | 23,171 | $ | 14,137 | ||||
Technology purchased from related parties | 575 | 433 | ||||||
Equipment purchased from related parties | 2,160 | 2,169 | ||||||
Total | $ | 25,906 | $ | 16,739 | ||||
Related receivables | ||||||||
September | December 31, 2012 | |||||||
30, 2013 | ||||||||
Accounts receivable | $ | 17,783 | $ | 12,286 | ||||
Other receivables | 67 | 107 | ||||||
Total | $ | 17,850 | $ | 12,393 | ||||
Related advances | ||||||||
September | December 31, 2012 | |||||||
30, 2013 | ||||||||
Advanced equipment payment to related parties | $ | 829 | $ | 4,162 | ||||
Advanced payments and others to related parties | 1,204 | 779 | ||||||
Total | $ | 2,033 | $ | 4,941 | ||||
Related payables | ||||||||
September | December 31, 2012 | |||||||
30, 2013 | ||||||||
Accounts payable | $ | 6,258 | $ | 4,521 | ||||
Commitments_and_contingencies_
Commitments and contingencies (Tables) | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||||||||||||||||||
Contractual Obligation, Fiscal Year Maturity Schedule [Table Text Block] | ' | |||||||||||||||||||
In addition to the bank loans, notes payables and the related interest, the following table summarizes the Company’s major commitments and contingencies as of September 30, 2013 (figures are in thousands of USD): | ||||||||||||||||||||
Payment obligations by period | ||||||||||||||||||||
2013(1) | 2014 | 2015 | 2016 | Thereafter | Total | |||||||||||||||
Interest on short-term bank loan | $ | 294 | $ | 464 | $ | - | $ | - | $ | - | $ | 758 | ||||||||
Obligations for purchasing agreements | 6,883 | 2,302 | 260 | - | - | 9,445 | ||||||||||||||
Total | $ | 7,177 | $ | 2,766 | $ | 260 | $ | - | $ | - | $ | 10,203 | ||||||||
-1 | Remaining 3 months in 2013. | |||||||||||||||||||
Segment_reporting_Tables
Segment reporting (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||
Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block] | ' | |||||||||||||||
The Company’s product sector information from continuing operations for the three months ended September 30, 2013 and 2012, is as follows (figures are in thousands of USD): | ||||||||||||||||
Net Sales | Income from Continuing Operations | |||||||||||||||
Three Months Ended September 30, | Three Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Henglong | $ | 55,846 | $ | 39,062 | $ | 8,368 | $ | 4,117 | ||||||||
Jiulong | 16,692 | 15,377 | 279 | 284 | ||||||||||||
Shenyang | 9,095 | 7,314 | 603 | 402 | ||||||||||||
Wuhu | 4,948 | 7,414 | -145 | 729 | ||||||||||||
Hubei Henglong | 11,783 | 9,982 | 6,092 | -1 | 613 | |||||||||||
Other Sectors | 7,558 | 6,635 | 522 | -1,105 | ||||||||||||
Total Segments | 105,922 | 85,784 | 15,719 | 5,040 | ||||||||||||
Corporate | - | - | 309 | -687 | ||||||||||||
Eliminations | -15003 | -12,600 | -5,599 | 47 | ||||||||||||
Total consolidated from continuing operations | $ | 90,919 | $ | 73,184 | $ | 10,429 | $ | 4,400 | ||||||||
-1 | $5.2 million included in the balance was income from investment in Henglong, which has been eliminated at the consolidation level. | |||||||||||||||
The Company’s product sector information from continuing operations for the nine months ended September 30, 2013 and 2012, is as follows (figures are in thousands of USD): | ||||||||||||||||
Net Sales | Income from Continuing Operations | |||||||||||||||
Nine Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Henglong | $ | 177,836 | $ | 123,713 | $ | 19,751 | $ | 14,248 | ||||||||
Jiulong | 56,735 | 54,572 | 1,516 | 1,276 | ||||||||||||
Shenyang | 28,164 | 21,090 | 1,119 | 628 | ||||||||||||
Wuhu | 17,113 | 24,208 | -312 | 581 | ||||||||||||
Hubei Henglong | 34,610 | 29,653 | 7,550 | -1 | 8,946 | -1 | ||||||||||
Other Sectors | 24,866 | 28,160 | 1,416 | 390 | ||||||||||||
Total Segments | 339,324 | 281,396 | 31,040 | 26,069 | ||||||||||||
Corporate | - | - | -2,203 | 3,424 | ||||||||||||
Eliminations | -53,353 | -46,914 | -4,677 | -13,207 | ||||||||||||
Total consolidated from continuing operations | $ | 285,971 | $ | 234,482 | $ | 24,160 | $ | 16,285 | ||||||||
-1 | $5.2 million and $7.0 million included in the respective balances of $7.6 million and $8.9 million was income from investment in Henglong in 2013 and 2012, respectively, which has been eliminated at the consolidation level. | |||||||||||||||
Organization_and_business_Deta
Organization and business (Details) | Sep. 30, 2013 | Dec. 31, 2012 | ||
Shashi Jiulong Power Steering Gears Co Ltd [Member] | ' | ' | ||
Organization And Principal Activities [Line Items] | ' | ' | ||
Percentage Interest | 81.00% | [1] | 81.00% | [1] |
Jingzhou Henglong Automotive Parts Co Ltd [Member] | ' | ' | ||
Organization And Principal Activities [Line Items] | ' | ' | ||
Percentage Interest | 80.00% | [2] | 80.00% | [2] |
Shenyang Jinbei Henglong Automotive Steering System Co Ltd [Member] | ' | ' | ||
Organization And Principal Activities [Line Items] | ' | ' | ||
Percentage Interest | 70.00% | [3] | 70.00% | [3] |
Universal Sensor Application Inc [Member] | ' | ' | ||
Organization And Principal Activities [Line Items] | ' | ' | ||
Percentage Interest | 83.34% | [4] | 83.34% | [4] |
Wuhan Jielong Electric Power Steering Co Ltd [Member] | ' | ' | ||
Organization And Principal Activities [Line Items] | ' | ' | ||
Percentage Interest | 85.00% | [5] | 85.00% | [5] |
Wuhu Henglong Auto Steering System Co Ltd [Member] | ' | ' | ||
Organization And Principal Activities [Line Items] | ' | ' | ||
Percentage Interest | 77.33% | [6] | 77.33% | [6] |
Hubei Henglong Automotive System Co Ltd [Member] | ' | ' | ||
Organization And Principal Activities [Line Items] | ' | ' | ||
Percentage Interest | 100.00% | [7] | 100.00% | [7] |
Jingzhou Henglong Automotive Technology Testing Center [Member] | ' | ' | ||
Organization And Principal Activities [Line Items] | ' | ' | ||
Percentage Interest | 80.00% | [8] | 80.00% | [8] |
Beijing Henglong Automotive System Co Ltd [Member] | ' | ' | ||
Organization And Principal Activities [Line Items] | ' | ' | ||
Percentage Interest | 50.00% | [9] | 50.00% | [9] |
Chongqing Henglong Hongyan Automotive Systems Co Ltd [Member] | ' | ' | ||
Organization And Principal Activities [Line Items] | ' | ' | ||
Percentage Interest | 70.00% | [10] | 70.00% | [10] |
CAAS Brazils Imports and Trade In Automotive Parts Ltd [Member] | ' | ' | ||
Organization And Principal Activities [Line Items] | ' | ' | ||
Percentage Interest | 80.00% | [11] | 80.00% | [11] |
[1] | Jiulong was established in 1993 and mainly engages in the production of integral power steering gear for heavy-duty vehicles. | |||
[2] | Henglong was established in 1997 and mainly engages in the production of rack and pinion power steering gears for cars and light-duty vehicles. | |||
[3] | Shenyang was established in 2002 and focuses on power steering parts for light duty vehicles. | |||
[4] | USAI was established in 2005 and mainly engages in the production and sales of sensor modules. | |||
[5] | Jielong was established in 2006 and mainly engages in the production and sales of electric power steering, “EPS.†| |||
[6] | Wuhu was established in 2006 and mainly engages in the production and sales of automobile steering systems. | |||
[7] | On March 7, 2007, Genesis established Hubei Henglong, formerly known as Jingzhou Hengsheng Automotive System Co., Ltd., its wholly-owned subsidiary, to engage in the production and sales of automotive steering systems. The registered capital of Hubei Henglong at the time of establishment was $10 million. On February 10, 2010, the registered capital of Hubei Henglong was increased to $16 million. On October 12, 2011, the board of directors of the Company approved a reorganization of the Company’s subsidiaries operating in China. As a result of the reorganization, all of Genesis’s equity interests of its subsidiaries operating in China, except for Shenyang, were transferred to Hubei Henglong, the Company’s new China-based holding company. The reorganization was completed on January 19, 2012, subsequent to which the registered capital of Hubei Henglong was increased to $39.0 million. As the reorganized entities were under common control of the Company, the reorganization did not have any impact on the Company’s consolidated financial position or results of operations and should not impact the tax treatment of the Company or its subsidiaries in any material respect. On July 8, 2012, Hubei Henglong changed its name to Hubei Henglong Automotive System Group Co., Ltd. | |||
[8] | In December 2009, Henglong, a subsidiary of Genesis, formed the Testing Center, which mainly engages in the research and development of new products. The registered capital of the Testing Center was RMB30.0 million, equivalent to approximately $4.4 million. | |||
[9] | On January 24, 2010, Genesis entered into a joint venture contract with Beijing Hainachuan Auto Parts Co., Ltd. to establish Beijing Henglong as a joint venture company to design, develop and manufacture both hydraulic and electric power steering systems and parts. On September 16, 2010, with Beijing Hainachuan’s agreement, Genesis transferred its interest in the joint venture to Hubei Henglong, and left the other terms of the joint venture contract unchanged. According to the joint venture agreement, the Company does not have voting control of Beijing Henglong. Therefore, the Company’s consolidated financial statements do not include Beijing Henglong, and such investment is accounted for through the equity method. | |||
[10] | On February 21, 2012, Hubei Henglong and SAIC-IVECO Hongyan Company, “SAIC-IVECO,†established a Sino-foreign joint venture company, Chongqing Henglong, to design, develop and manufacture both hydraulic and electric power steering systems and parts. The joint venture is located in Chongqing City and has a registered capital of RMB60 million, of which RMB42 million, or 70%, is held by Hubei Henglong. The registered capital of Chongqing Henglong was fully contributed by Hubei Henglong in cash of $6.7 million (equivalent to RMB42 million) in January and February 2012 and by SAIC-IVECO in property, plant and equipment with fair value of $2.8 million (equivalent to RMB18 million) in April 2012. | |||
[11] | On August 21, 2012, Brazil Henglong was established as a Sino-foreign joint venture company by Hubei Henglong and two Brazilian citizens, Ozias Gaia Da Silva and Ademir Dal’ Evedove. Brazil Henglong engages mainly in the import and sales of automotive parts in Brazil. Such joint venture is located in Brazil and has a registered capital of $1.0 million (equivalent to BRL1.6 million), of which $0.8 million (equivalent to BRL1.3 million), or 80%, is held by Hubei Henglong, and of which $0.2 million (equivalent to BRL0.3 million), or 20%, is held by Mr. Ozias Gaia Da Silva and Mr. Ademir Dal’ Evedove. |
Organization_and_business_Deta1
Organization and business (Details Textual) | Aug. 21, 2012 | Aug. 21, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Aug. 21, 2012 | Aug. 21, 2012 | Feb. 21, 2012 | Feb. 21, 2012 | Feb. 10, 2010 | Mar. 07, 2007 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Feb. 21, 2012 | Feb. 21, 2012 | Feb. 21, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2009 | Dec. 31, 2009 | ||||||||||||||||||||
In Millions, unless otherwise specified | Ozias Gaia Da Silva and Ademir Dal Evedove [Member] | Ozias Gaia Da Silva and Ademir Dal Evedove [Member] | China Automotive Systems, Inc., [Member] | Great Genesis Holdings Limited [Member] | Henglong USA Corporation [Member] | Shashi Jiulong Power Steering Gears Co Ltd [Member] | Shashi Jiulong Power Steering Gears Co Ltd [Member] | Jingzhou Henglong Automotive Parts Co Ltd [Member] | Jingzhou Henglong Automotive Parts Co Ltd [Member] | Shenyang Jinbei Henglong Automotive Steering System Co Ltd [Member] | Shenyang Jinbei Henglong Automotive Steering System Co Ltd [Member] | Universal Sensor Application Inc [Member] | Universal Sensor Application Inc [Member] | Wuhan Jielong Electric Power Steering Co Ltd [Member] | Wuhan Jielong Electric Power Steering Co Ltd [Member] | Wuhu Henglong Auto Steering System Co Ltd [Member] | Wuhu Henglong Auto Steering System Co Ltd [Member] | Hubei Henglong Automotive System Group Co Ltd [Member] | Hubei Henglong Automotive System Group Co Ltd [Member] | Hubei Henglong Automotive System Group Co Ltd [Member] | Hubei Henglong Automotive System Group Co Ltd [Member] | Hubei Henglong Automotive System Group Co Ltd [Member] | Hubei Henglong Automotive System Group Co Ltd [Member] | Hubei Henglong Automotive System Group Co Ltd [Member] | Hubei Henglong Automotive System Group Co Ltd [Member] | Hubei Henglong Automotive System Group Co Ltd [Member] | Beijing Henglong Automotive System Co Ltd [Member] | Beijing Henglong Automotive System Co Ltd [Member] | Chongqing Henglong Hongyan Automotive Systems Co Ltd [Member] | Chongqing Henglong Hongyan Automotive Systems Co Ltd [Member] | Chongqing Henglong Hongyan Automotive Systems Co Ltd [Member] | Saic Iveco Hongyan Company [Member] | Saic Iveco Hongyan Company [Member] | CAAS Brazils Imports and Trade In Automotive Parts Ltd [Member] | CAAS Brazils Imports and Trade In Automotive Parts Ltd [Member] | Jingzhou Henglong Automotive Technology Testing Center [Member] | Jingzhou Henglong Automotive Technology Testing Center [Member] | Jingzhou Henglong Automotive Technology Testing Center [Member] | Jingzhou Henglong Automotive Technology Testing Center [Member] | ||||||||||||||||||||
USD ($) | BRL | USD ($) | BRL | USD ($) | USD ($) | BRL | USD ($) | CNY | USD ($) | USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | ||||||||||||||||||||||||||||||||||||||||||||
Organization And Principal Activities [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||||||
Entity Incorporation, Date of Incorporation | ' | ' | 29-Jun-99 | 3-Jan-03 | 8-Jan-07 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7-Mar-07 | 7-Mar-07 | ' | ' | ' | ' | ' | ' | ' | 24-Jan-10 | ' | 21-Feb-12 | ' | ' | ' | ' | 21-Aug-12 | ' | ' | ' | ' | ' | ||||||||||||||||||||
Entity Incorporation Period Of Incorporation | ' | ' | ' | ' | ' | '1993 | ' | '1997 | ' | '2002 | ' | '2005 | ' | '2006 | ' | '2006 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2009 | ' | ' | ' | ||||||||||||||||||||
Capital | $0.20 | 0.3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.80 | 1.3 | ' | $1 | 1.6 | $6.70 | 42 | ' | $10 | ' | ' | ' | ' | 60 | ' | ' | ' | ' | ' | ' | $4.40 | 30 | ||||||||||||||||||||
Additional Paid in Capital | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 39 | ' | ' | ' | ' | 16 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||||||
Property, Plant, and Equipment, Fair Value Disclosure | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2.80 | 18 | ' | ' | ' | ' | ' | ' | ||||||||||||||||||||
Percentage Interest | 20.00% | 20.00% | ' | ' | ' | 81.00% | [1] | 81.00% | [1] | 80.00% | [2] | 80.00% | [2] | 70.00% | [3] | 70.00% | [3] | 83.34% | [4] | 83.34% | [4] | 85.00% | [5] | 85.00% | [5] | 77.33% | [6] | 77.33% | [6] | 80.00% | 80.00% | ' | ' | ' | 70.00% | 70.00% | ' | ' | 50.00% | [7] | 50.00% | [7] | 70.00% | [8] | 70.00% | [8] | ' | ' | ' | 80.00% | [9] | 80.00% | [9] | 80.00% | [10] | 80.00% | [10] | ' | ' |
[1] | Jiulong was established in 1993 and mainly engages in the production of integral power steering gear for heavy-duty vehicles. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[2] | Henglong was established in 1997 and mainly engages in the production of rack and pinion power steering gears for cars and light-duty vehicles. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[3] | Shenyang was established in 2002 and focuses on power steering parts for light duty vehicles. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[4] | USAI was established in 2005 and mainly engages in the production and sales of sensor modules. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[5] | Jielong was established in 2006 and mainly engages in the production and sales of electric power steering, “EPS.†| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[6] | Wuhu was established in 2006 and mainly engages in the production and sales of automobile steering systems. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[7] | On January 24, 2010, Genesis entered into a joint venture contract with Beijing Hainachuan Auto Parts Co., Ltd. to establish Beijing Henglong as a joint venture company to design, develop and manufacture both hydraulic and electric power steering systems and parts. On September 16, 2010, with Beijing Hainachuan’s agreement, Genesis transferred its interest in the joint venture to Hubei Henglong, and left the other terms of the joint venture contract unchanged. According to the joint venture agreement, the Company does not have voting control of Beijing Henglong. Therefore, the Company’s consolidated financial statements do not include Beijing Henglong, and such investment is accounted for through the equity method. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[8] | On February 21, 2012, Hubei Henglong and SAIC-IVECO Hongyan Company, “SAIC-IVECO,†established a Sino-foreign joint venture company, Chongqing Henglong, to design, develop and manufacture both hydraulic and electric power steering systems and parts. The joint venture is located in Chongqing City and has a registered capital of RMB60 million, of which RMB42 million, or 70%, is held by Hubei Henglong. The registered capital of Chongqing Henglong was fully contributed by Hubei Henglong in cash of $6.7 million (equivalent to RMB42 million) in January and February 2012 and by SAIC-IVECO in property, plant and equipment with fair value of $2.8 million (equivalent to RMB18 million) in April 2012. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[9] | On August 21, 2012, Brazil Henglong was established as a Sino-foreign joint venture company by Hubei Henglong and two Brazilian citizens, Ozias Gaia Da Silva and Ademir Dal’ Evedove. Brazil Henglong engages mainly in the import and sales of automotive parts in Brazil. Such joint venture is located in Brazil and has a registered capital of $1.0 million (equivalent to BRL1.6 million), of which $0.8 million (equivalent to BRL1.3 million), or 80%, is held by Hubei Henglong, and of which $0.2 million (equivalent to BRL0.3 million), or 20%, is held by Mr. Ozias Gaia Da Silva and Mr. Ademir Dal’ Evedove. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[10] | In December 2009, Henglong, a subsidiary of Genesis, formed the Testing Center, which mainly engages in the research and development of new products. The registered capital of the Testing Center was RMB30.0 million, equivalent to approximately $4.4 million. |
Basis_of_presentation_and_sign2
Basis of presentation and significant accounting policies (Details Textual) (Stock Incentive Plan 2004[Member]) | 9 Months Ended |
Sep. 30, 2013 | |
Stock Incentive Plan 2004[Member] | ' |
Significant Accounting Policies [Line Items] | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 2,200,000 |
Share-Based Compensation Arrangement By Share-Based Payment Award, Award Vesting Period 1 | '10 years |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 1,676,150 |
Shares, Issued | 523,850 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 105,000 |
Pledged_cash_deposits_Details_
Pledged cash deposits (Details Textual) | 9 Months Ended |
Sep. 30, 2013 | |
Minimum [Member] | ' |
Cash and Cash Equivalents [Line Items] | ' |
Percentage Of Cash and Cash Equivalent Reserve Deposit Required | 30.00% |
Maximum [Member] | ' |
Cash and Cash Equivalents [Line Items] | ' |
Percentage Of Cash and Cash Equivalent Reserve Deposit Required | 100.00% |
Accounts_and_notes_receivable_2
Accounts and notes receivable, net (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Financing Receivables [Line Items] | ' | ' | ||
Accounts receivable - unrelated parties | $130,437 | [1] | $117,136 | [1] |
Notes receivable - unrelated parties | 117,805 | [2],[3] | 95,436 | [2],[3] |
Accounts and Notes Receivable Gross | 248,242 | 212,572 | ||
Less: allowance for doubtful accounts - unrelated parties | -1,240 | -1,266 | ||
Accounts and notes receivable- unrelated parties | 247,002 | 211,306 | ||
Accounts and notes receivable - related parties | 17,783 | 12,286 | ||
Accounts and Notes Receivable, Net | $264,785 | $223,592 | ||
[1] | As of September 30, 2013, the Company has pledged $15.7 million of accounts receivable as security for its comprehensive credit facility with banks in China. | |||
[2] | Notes receivable represent accounts receivable in the form of bills of exchange for which acceptances are guaranteed and settlements are handled by banks. | |||
[3] | Henglong collateralized its notes receivable in an amount of RMB256.3 million (equivalent to approximately $41.7 million) as security for the credit facility with banks in China and the Chinese government, including RMB216.1 million (equivalent to approximately $35.1 million) in favor of Industrial and Commercial Bank of China, Jingzhou Branch, “ICBC Jingzhou,†for the purpose of obtaining the Henglong Standby Letter of Credit (as defined in Note 12) which is used as security for the non-revolving credit facility in the amount of $30.0 million provided by Industrial and Commercial Bank of China (Macau) Limited, “ICBC Macau,†to the Company in May 2012. The Credit Facility was drawn down on May 22, 2012 and its original maturity date was May 22, 2013. Such maturity date was extended to May 13, 2014 (see Note 12); and RMB40.2 million (equivalent to approximately $6.6 million) in favor of the Chinese government as security for the interest-free government loan (see Note 12). |
Accounts_and_notes_receivable_3
Accounts and notes receivable, net (Details Textual) | Sep. 30, 2013 | 21-May-12 | 18-May-12 | 22-May-13 | 22-May-13 | 31-May-12 | 31-May-12 | Jan. 31, 2013 | Jan. 31, 2013 | 31-May-12 | 31-May-12 | 18-May-12 | 31-May-12 | 31-May-12 |
In Millions, unless otherwise specified | USD ($) | USD ($) | USD ($) | Industrial and Commercial Bank Of China Jingzhou Branch [Member] | Industrial and Commercial Bank Of China Jingzhou Branch [Member] | Industrial and Commercial Bank Of China Jingzhou Branch [Member] | Industrial and Commercial Bank Of China Jingzhou Branch [Member] | Industrial and Commercial Bank Of China Macau [Member] | Industrial and Commercial Bank Of China Macau [Member] | Industrial and Commercial Bank Of China Macau [Member] | Industrial and Commercial Bank Of China Macau [Member] | Industrial and Commercial Bank Of China Macau [Member] | Jingzhou Henglong Automotive Parts Co Ltd [Member] | Jingzhou Henglong Automotive Parts Co Ltd [Member] |
USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | USD ($) | USD ($) | CNY | ||||
Financing Receivables [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Financing Receivable, Net | ' | ' | ' | $35.10 | 216 | $35.10 | 216.1 | ' | ' | ' | ' | ' | $41.70 | 256.3 |
Non Revolving Credit Facility | ' | 30 | 30 | ' | ' | ' | ' | 6.5 | 40.2 | 6.6 | 40.2 | 30 | ' | ' |
Accounts Receivable Pledged As Security Value | $15.70 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Inventories_Details
Inventories (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Inventory [Line Items] | ' | ' |
Raw materials | $13,872 | $11,144 |
Work in process | 8,378 | 7,094 |
Finished goods | 30,899 | 25,304 |
Inventory, Net | $53,149 | $43,542 |
Inventories_Details_Textual
Inventories (Details Textual) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Inventory [Line Items] | ' | ' |
Valuation Allowances and Reserves, Adjustments | $0.50 | $0.50 |
Other_receivables_net_Details
Other receivables, net (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Unrelated Parties [Member] | ' | ' | ||
Other Receivables [Line Items] | ' | ' | ||
Other receivables | $826 | [1] | $905 | [1] |
Less: allowance for doubtful accounts | -62 | -56 | ||
Other Receivables Net Noncurrent | 764 | 849 | ||
Related Party [Member] | ' | ' | ||
Other Receivables [Line Items] | ' | ' | ||
Other receivables | 674 | [1] | 715 | [1] |
Less: allowance for doubtful accounts | -607 | -608 | ||
Other Receivables Net Noncurrent | $67 | $107 | ||
[1] | Other receivables consist of amounts advanced to both related and unrelated parties, primarily as unsecured demand loans, with no stated interest rate or due date. These receivables originate as part of the Company's normal operating activities and are periodically settled in cash. |
Assets_held_for_sale_Details_T
Assets held for sale (Details Textual) (USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2013 |
acre | |
Long Lived Assets Held-for-sale [Line Items] | ' |
Area of Land | 136,392 |
Land Available-for-sale | $13 |
Proceeds from Sale of Land Held-for-use | 4.6 |
Gain On Sale Of Land Held For Sale | $4.10 |
Longterm_Investments_Details_T
Long-term Investments (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Jan. 24, 2010 | |
Beijing Henglong Automotive System Co Ltd [Member] | Beijing Henglong Automotive System Co Ltd [Member] | Beijing Henglong Automotive System Co Ltd [Member] | ||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term investments | $3,933,000 | ' | $3,933,000 | ' | $3,665,000 | ' | ' | ' |
Equity Method Investments | ' | ' | ' | ' | ' | 3,800,000 | 3,500,000 | 3,100,000 |
Add: Equity in earnings of affiliated companies | $125,000 | $27,000 | $251,000 | $139,000 | ' | ' | ' | ' |
Property_plant_and_equipment_n2
Property, plant and equipment, net (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Gross | $168,160 | $155,645 |
Less: Accumulated depreciation | -85,637 | -73,954 |
Property, plant and equipment, net | 82,523 | 81,691 |
Land Use Rights and Buildings [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Gross | 38,159 | 36,881 |
Machinery and Equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Gross | 110,100 | 96,368 |
Electronic Equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Gross | 6,572 | 6,174 |
Motor Vechicles [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Gross | 3,109 | 2,942 |
Construction in Progress [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Gross | $10,220 | $13,280 |
Property_plant_and_equipment_n3
Property, plant and equipment, net (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' |
Depreciation | $3.70 | $3.30 | $10.80 | $10.50 |
Pledged Assets Separately Reported, Loans Pledged for Other Debt Obligations, at Fair Value | $52.70 | ' | $52.70 | ' |
Intangible_assets_Details
Intangible assets (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Costs: | ' | ' |
Patent technology | $2,050 | $1,901 |
Management software license | 640 | 622 |
Finite-Lived Intangible Assets, Gross | 2,690 | 2,523 |
Less: Amortization | -2,019 | -1,847 |
Intangible Assets, Net (Excluding Goodwill) | $671 | $676 |
Intangible_assets_Details_Text
Intangible assets (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' |
Finite-Lived Intangible Assets, Amortization Expense | $0.04 | $0.06 | $0.10 | $0.20 |
Deferred_income_tax_assets_Det
Deferred income tax assets (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Deferred Tax Assets [Line Items] | ' | ' | ||
Losses carry forward (U.S.) | $7,778 | [1] | $7,004 | [1] |
Losses carry forward (PRC) | 2,054 | [1] | 1,887 | [1] |
Product warranties and other reserves | 3,731 | 3,253 | ||
Property, plant and equipment | 5,328 | 3,774 | ||
Share-based compensation | 296 | 240 | ||
Bonus accrual | 304 | 196 | ||
Other accruals | 1,112 | 696 | ||
Others | 705 | 839 | ||
Total deferred tax assets | 21,307 | 17,889 | ||
Less: taxable temporary difference related to revenue recognition | -533 | -397 | ||
Total deferred tax assets, net | 20,774 | 17,492 | ||
Less: Valuation allowance | -10,433 | -8,988 | ||
Total deferred tax assets, net of valuation allowance | $10,341 | [2] | $8,504 | [2] |
[1] | The net operating losses carry forward for the U.S. entity for income tax purposes are available to reduce future years' taxable income. These losses will expire, if not utilized, in 20 years. Net operating losses carry forward for non-U.S. entities can be carried forward for 5 years to offset taxable income. However, as of September 30, 2013, valuation allowance was $10.4 million, including $8.6 million allowance for the Company’s deferred tax assets in the United States and $1.8 million allowance for the Company’s non-U.S. deferred tax assets. Based on the Company’s current operations in the United States, management believes that the deferred tax assets in the United States are not likely to be realized in the future. For the non-U.S. deferred tax assets, pursuant to certain tax laws and regulations in China, the management believes such amount will not be used to offset future taxable income. | |||
[2] | Approximately $4.4 million and $4.1 million of deferred income tax asset as of September 30, 2013 and December 31, 2012, respectively, are included in non-current deferred tax assets in the accompanying condensed unaudited consolidated balance sheets. The remaining $4.8 million and $4.4 million of deferred income tax assets as of September 30, 2013 and December 31, 2012, respectively, are included in current deferred tax assets. |
Deferred_income_tax_assets_Det1
Deferred income tax assets (Details Textual) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | U.S [Member] | Non U.S [Member] | ||
Deferred Tax Assets [Line Items] | ' | ' | ' | ' |
Deferred Tax Assets, Valuation Allowance | $10,433 | $8,988 | $8,600 | $1,800 |
Deferred Tax Assets, Net of Valuation Allowance, Noncurrent | 5,549 | 4,112 | ' | ' |
Current deferred tax assets | $4,792 | $4,392 | ' | ' |
Amortizing Period Of Net Operating Loss | ' | ' | '20 years | '5 years |
Bank_and_government_loans_net_1
Bank and government loans, net (Details) (USD $) | 9 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 | ||
Debt Instrument [Line Items] | ' | ' | ||
Short-term government loan | $6,506 | [1] | $0 | [1] |
Subtotal | 42,199 | 40,341 | ||
Debt issue cost | -57 | -230 | ||
Amortization | 57 | 173 | ||
Bank and government loans | 42,199 | 40,284 | ||
China Construction Bank [Member] | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Short-term bank loan | 5,693 | [2],[3] | 10,341 | [2],[3] |
ICBC Macau [Member] | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Short-term bank loan | $30,000 | [4] | $30,000 | [4] |
[1] | On January 31, 2013, the Company received an interest-free Chinese government loan of RMB40.0 million (equivalent to approximately $6.6 million), which will mature on December 31, 2013. Henglong has pledged RMB40.2 million (equivalent to approximately $6.5 million) of notes receivable, which will mature on December 31, 2013, as security for such government loan (see Note 5). | |||
[2] | On September 25, 2012, Jiulong entered into a one-year loan agreement with China Construction Bank Jingzhou branch in the amount of $3.2 million. The agreement contains certain financial and non-financial covenants, including but not limited to restrictions on the utilization of the funds and the maintenance of an asset-liability ratio not exceeding 60%. The Company was in compliance with these covenants as of September 30, 2013. The Company repaid $1.4 milion and $1.8 million in June and July, 2013, respectively. | |||
[3] | These loans are secured by property, plant and equipment of the Company and are repayable within one year. Please see Note 10. At September 30, 2013 and December 31, 2012, the weighted average interest rate was 6.24% and 6.46% per annum, respectively. Interest is paid on the twentieth day of each month and the principal repayment is at maturity. | |||
[4] | On May 18, 2012, the Company entered into a credit facility agreement, the “Credit Agreement,†with ICBC Macau to obtain a non-revolving credit facility in the amount of $30.0 million, the “Credit Facilityâ€. The Credit Facility would have expired on November 3, 2012 unless the Company drew down the line of credit in full prior to such expiration date, and the maturity date for the loan drawdown was the earlier of (i) 18 months from the drawdown or (ii) 1 month before the expiry of the standby letter of credit obtained by Henglong from ICBC Jingzhou as security for the Credit Facility, the “Henglong Standby Letter of Creditâ€. The interest rate of the Credit Facility is calculated based on a three-month LIBOR plus 2.25% per annum, subject to the availability of funds and fluctuation at ICBC Macau’s discretion. The interest is calculated daily based on a 360-day year and it is fixed one day before the first day of each interest period. The interest period is defined as three months from the date of drawdown. As security for the Credit Facility, the Company was required to provide ICBC Macau with the Henglong Standby Letter of Credit for a total amount not less than $31.6 million if the Credit Facility is fully drawn. On May 22, 2012, the Company drew down the full amount of $30.0 million under the Credit Facility and provided the Henglong Standby Letter of Credit for an amount of $31.6 million in favor of ICBC Macau. The Henglong Standby Letter of Credit issued by ICBC Jingzhou is collateralized by Henglong’s notes receivable of RMB216.0 million (equivalent to approximately $35.1 million). The Company also paid an arrangement fee of $0.1 million to ICBC Macau and $0.1 million to ICBC Jingzhou. The original maturity date of the Credit Facility was May 22, 2013. On May 7, 2013, ICBC Macau agreed to extend the maturity date of the Credit Facility to May 13, 2014. The interest rate of the Credit Facility under the extended term is calculated based on the three-month LIBOR plus 2.0% per annum. Except for the above, all other terms and conditions as stipulated in the Credit Agreement remain unchanged. As of September 30, 2013, the interest rate of the Credit Facility was 2.25%. |
Bank_and_government_loans_net_2
Bank and government loans, net (Details Textual) | 1 Months Ended | 1 Months Ended | 1 Months Ended | 1 Months Ended | ||||||||||||||||
In Millions, unless otherwise specified | 22-May-13 | 18-May-12 | Sep. 30, 2013 | Jan. 31, 2013 | Jan. 31, 2013 | Dec. 31, 2012 | 21-May-12 | 22-May-13 | Jan. 31, 2013 | Jan. 31, 2013 | 31-May-12 | 31-May-12 | 18-May-12 | 22-May-13 | 22-May-13 | 31-May-12 | 31-May-12 | Jul. 31, 2013 | Jun. 30, 2013 | Sep. 25, 2012 |
USD ($) | USD ($) | USD ($) | CNY | USD ($) | Industrial and Commercial Bank Of China Macau [Member] | Industrial and Commercial Bank Of China Macau [Member] | Industrial and Commercial Bank Of China Macau [Member] | Industrial and Commercial Bank Of China Macau [Member] | Industrial and Commercial Bank Of China Macau [Member] | Industrial and Commercial Bank Of China Macau [Member] | Industrial and Commercial Bank Of China Jingzhou Branch [Member] | Industrial and Commercial Bank Of China Jingzhou Branch [Member] | Industrial and Commercial Bank Of China Jingzhou Branch [Member] | Industrial and Commercial Bank Of China Jingzhou Branch [Member] | China Construction Bank Jingzhou Branch [Member] | China Construction Bank Jingzhou Branch [Member] | China Construction Bank Jingzhou Branch [Member] | |||
USD ($) | USD ($) | CNY | USD ($) | CNY | USD ($) | USD ($) | CNY | USD ($) | CNY | USD ($) | USD ($) | USD ($) | ||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Short-term Debt, Weighted Average Interest Rate | ' | ' | 6.24% | ' | ' | 6.46% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Short-term Non-bank Loans and Notes Payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $3.20 |
Non Revolving Credit Facility | ' | 30 | ' | ' | ' | ' | 30 | ' | 6.5 | 40.2 | 6.6 | 40.2 | 30 | ' | ' | ' | ' | ' | ' | ' |
Line of Credit Facility, Description | 'LIBOR plus 2.0% | 'LIBOR plus 2.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of Credit Facility, Interest Rate at Period End | ' | ' | 2.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Financing Receivable, Net | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 35.1 | 216 | 35.1 | 216.1 | ' | ' | ' |
Arrangement Fee | ' | ' | ' | ' | ' | ' | ' | 0.1 | ' | ' | ' | ' | ' | 0.1 | ' | ' | ' | ' | ' | ' |
Asset Liability Ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 60.00% |
Interest Free Government Loan | ' | ' | ' | 6.6 | 40 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of Credit, Current | 31.6 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 31.6 | ' | ' | ' | ' | ' | ' | ' |
Repayment Of Debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1.80 | $1.40 | ' |
Accounts_and_notes_payable_Det
Accounts and notes payable (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Accounts And Notes Payable [Line Items] | ' | ' | ||
Accounts payable - unrelated parties | $104,392 | $99,100 | ||
Notes payable - unrelated parties -(1)- | 70,483 | [1] | 67,280 | [1] |
Accounts and notes payable- unrelated parties | 174,875 | 166,380 | ||
Accounts payable- related parties | 6,258 | 4,521 | ||
Accounts and Notes Payable Total | $181,133 | $170,901 | ||
[1] | Notes payable represent accounts payable in the form of bills of exchange whose acceptances are guaranteed and settlements are handled by banks. The Company has pledged cash deposits, notes receivable and certain property, plant and equipment to secure notes payable granted by banks. |
Accrued_expenses_and_other_pay2
Accrued expenses and other payables (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Accrued Expenses [Line Items] | ' | ' | ||
Accrued expenses | $3,389 | $2,557 | ||
Accrued interest | 86 | 87 | ||
Other payables | 2,607 | 2,176 | ||
Warranty reserves | 20,840 | [1] | 18,081 | [1] |
Dividends payable to non-controlling interests | 86 | 162 | ||
Accrued Liabilities, Current | $27,008 | $23,063 | ||
[1] | The Company provides for the estimated cost of product warranties when the products are sold. Such estimates of product warranties were based on, among other things, historical experience, product changes, material expenses, services and transportation expenses arising from the manufactured products. Estimates will be adjusted on the basis of actual claims and circumstances. |
Accrued_expenses_and_other_pay3
Accrued expenses and other payables (Details 1) (USD $) | 9 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Accrued Expenses [Line Items] | ' | ' | ' |
Balance at beginning of the period | $18,081 | $16,809 | $16,809 |
Additions during the period | 8,554 | 6,865 | 10,931 |
Settlement within period, by cash or actual material | -6,199 | -6,661 | -9,264 |
Foreign currency translation gain (loss) | 404 | -105 | 41 |
Decrease for warranty related to the subsidiary sold | 0 | -432 | -436 |
Balance at end of period | $20,840 | $16,476 | $18,081 |
Taxes_payable_Details
Taxes payable (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Taxes Payable [Line Items] | ' | ' |
Value-added tax payable | $5,049 | $4,347 |
Income tax payable | 3,467 | 878 |
Other tax payable | 463 | 368 |
Taxes Payable, Current | $8,979 | $5,593 |
Advances_payable_Details_Textu
Advances payable (Details Textual) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Advance Payable [Line Items] | ' | ' |
Advances payable | $2.64 | $2.61 |
Additional_paidin_capital_Deta
Additional paid-in capital (Details) (USD $) | 9 Months Ended | 12 Months Ended | ||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |||
Additional Paid In Capital [Line Items] | ' | ' | ' | |||
Balance at beginning of the period | $39,371 | $39,296 | $39,296 | |||
Share-based compensation | 194 | [1] | 76 | [1] | 75 | [1] |
Balance at end of the period | $39,565 | $39,371 | $39,371 | |||
[1] | On August 13, 2013 and August 15, 2012, the Company granted 22,500 and 22,500 stock options to the Company’s independent directors, with the exercise price equal to the closing price of the Company’s common stock traded on NASDAQ on the date of grant. The fair value of stock options was determined at the date of grant using the Black-Scholes option pricing model. The Black-Scholes option model requires management to make various estimates and assumptions, including expected term, expected volatility, risk-free rate, and dividend yield. The expected term represents the period of time that stock-based compensation awards granted are expected to be outstanding and is estimated based on considerations including the vesting period, contractual term and anticipated employee exercise patterns. Expected volatility is based on the historical volatility of the Company’s stock. The risk-free rate is based on the U.S. Treasury yield curve in relation to the contractual life of stock-based compensation instruments. The dividend yield assumption is based on historical patterns and future expectations for the Company’s dividends. |
Additional_paidin_capital_Deta1
Additional paid-in capital (Details 1) | 9 Months Ended |
Sep. 30, 2013 | |
Issuance One [Member] | ' |
Additional Paid In Capital [Line Items] | ' |
Issuance Date | 13-Aug-13 |
Expected volatility | 131.50% |
Risk-free rate | 1.49% |
Expected term (years) | '5 years |
Dividend yield | 0.00% |
Issuance Two [Member] | ' |
Additional Paid In Capital [Line Items] | ' |
Issuance Date | 15-Aug-12 |
Expected volatility | 149.20% |
Risk-free rate | 0.67% |
Expected term (years) | '5 years |
Dividend yield | 0.00% |
Additional_paidin_capital_Deta2
Additional paid-in capital (Details Textual) (USD $) | 0 Months Ended | 1 Months Ended | 9 Months Ended | |||
In Millions, except Share data, unless otherwise specified | Aug. 13, 2013 | Aug. 15, 2012 | Aug. 31, 2013 | Aug. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Additional Paid In Capital [Line Items] | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | ' | ' | 22,500 | 22,500 | ' | ' |
Allocated Share-based Compensation Expense | ' | ' | ' | ' | $0.20 | $0.10 |
Share-based Compensation Arrangement by Share-based Payment Award, Options Exercisable, Grant Date Fair Value | $0.20 | $0.10 | ' | ' | ' | ' |
Retained_earnings_Details
Retained earnings (Details) (USD $) | 9 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Retained Earnings Adjustments [Line Items] | ' | ' | ' |
Balance at begining of the period | $9,953 | $9,026 | $9,026 |
Appropriation of retained earnings | 95 | 927 | 927 |
Balance at end of the period | $10,048 | $9,953 | $9,953 |
Retained_earnings_Details_1
Retained earnings (Details 1) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Retained Earnings Adjustments [Line Items] | ' | ' | ' | ' | ' |
Balance at beginning of the period | ' | ' | $119,329 | $99,513 | $99,513 |
Net income attributable to parent company | 8,624 | 3,404 | 19,544 | 15,657 | 20,743 |
Appropriation of retained earnings | ' | ' | -95 | -927 | -927 |
Balance at end of the period | $138,778 | $114,243 | $138,778 | $114,243 | $119,329 |
Retained_earnings_Details_Text
Retained earnings (Details Textual) | 9 Months Ended | ||||||||||||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
Jingzhou Henglong Automotive Parts Co Ltd [Member] | Shashi Jiulong Power Steering Gears Co Ltd [Member] | Shashi Jiulong Power Steering Gears Co Ltd [Member] | Shenyang Jinbei Henglong Automotive Steering System Co Ltd [Member] | Shenyang Jinbei Henglong Automotive Steering System Co Ltd [Member] | Universal Sensor Application Inc [Member] | Wuhan Jielong Electric Power Steering Co Ltd [Member] | Wuhu Henglong Auto Steering System Co Ltd [Member] | Wuhu Henglong Auto Steering System Co Ltd [Member] | Hubei Henglong Automotive System Group Co Ltd [Member] | Chongqing Henglong Hongyan Automotive Systems Co Ltd [Member] | Chongqing Henglong Hongyan Automotive Systems Co Ltd [Member] | ||
USD ($) | USD ($) | CNY | USD ($) | CNY | USD ($) | USD ($) | USD ($) | CNY | USD ($) | USD ($) | CNY | ||
Retained Earnings Adjustments [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Statutory Accounting Practices Statutory Surplus Required Percentage | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Statutory Accounting Practices, Statutory Capital and Surplus Required | ' | $10 | $4.20 | 35 | $8.10 | 67.5 | $2.60 | $6 | $3.80 | 30 | $39 | $9.50 | 60 |
Percentage Of Statutory Surplus Reserve | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accumulated_other_comprehensiv2
Accumulated other comprehensive income (Details) (USD $) | 9 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' |
Balance at beginning of the period | $25,898 | $25,291 | $25,291 |
Foreign currency translation adjustment attributable to parent company | 4,374 | -1,024 | 607 |
Balance at end of the period | $30,272 | $24,267 | $25,898 |
Noncontrolling_interests_Detai
Non-controlling interests (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Noncontrolling Interests Disclosure [Line Items] | ' | ' | ' | ' | ' |
Balance at beginning of the period | ' | ' | $38,846 | $43,028 | $43,028 |
Income attributable to non-controlling interests | 1,805 | 996 | 4,616 | 3,279 | 4,744 |
Dividends declared to the non-controlling interest holders of joint-venture companies | ' | ' | -1,299 | -6,846 | -6,846 |
Income from discontinued operations | ' | ' | 0 | 2,651 | ' |
Capital contribution from non-controlling interests | ' | ' | 0 | 2,846 | 3,012 |
Foreign currency translation gain (loss) | ' | ' | 892 | -256 | 70 |
Balance at end of the period | 43,055 | 36,889 | 43,055 | 36,889 | 38,846 |
Zhejiang Henglong and Vie Pump Manu Co Ltd [Member] | ' | ' | ' | ' | ' |
Noncontrolling Interests Disclosure [Line Items] | ' | ' | ' | ' | ' |
Income from discontinued operations | ' | ' | $0 | ($5,162) | ($5,162) |
Gain_on_other_sales_Details_Te
Gain on other sales (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Gain on other sales disclosure [Line Items] | ' | ' | ' | ' |
Gain (Loss) On Other Sales | $5,030,000 | $704,000 | $6,762,000 | $2,625,000 |
Selling Price Of Land Use Right And Plant | 4,600,000 | ' | ' | ' |
Net Book Value Of Land Use Right And Plant | 500,000 | ' | 500,000 | ' |
Gain On Sale Of Idle Use Right And Plant Before Tax | $4,100,000 | ' | ' | ' |
Financial_income_expenses_net_1
Financial (income) expenses, net (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | ||
Financial Expenses [Line Items] | ' | ' | ' | ' | ||
Coupon interest and make-whole redemption interest | ' | ' | $0 | [1] | $1,551 | [1] |
Interest expense | 284 | 819 | 1,289 | 1,273 | ||
Interest income | -1,143 | -409 | -2,298 | -981 | ||
Foreign exchange gain, net | 24 | 5 | 71 | -89 | ||
Loss of note discount, net | -3 | -7 | 9 | -32 | ||
Bank fees | 149 | 29 | 549 | 128 | ||
Total financial (income) expense, net | ($689) | $437 | ($380) | $1,850 | ||
[1] | On May 24, 2012, the Company and LBCCA Liquidator reached a settlement agreement. Under the terms of the settlement agreement, the Company redeemed all the remaining convertible notes on May 25, 2012, the redemption date. As a result, there was no coupon interest and make-whole redemption interest related to the convertible notes during the three months ended September 2012 and nine months ended September 30, 2013 (see Note 23). |
Gain_and_loss_on_change_in_fai2
Gain and loss on change in fair value of derivative (Details) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2012 |
Derivatives, Fair Value [Line Items] | ' |
Balances at January 1 | $559 |
Decrease due to convertible notes conversion on May 25, 2012 | -1,008 |
Loss in fair value adjustments | 449 |
Balances at September 30 | $0 |
Gain_and_loss_on_change_in_fai3
Gain and loss on change in fair value of derivative (Details 1) | 9 Months Ended |
Sep. 30, 2013 | |
Minimum [Member] | ' |
May 25, 2012 Assumptions: | ' |
Volatility | 65.33% |
Market adjusted interest rates | 5.89% |
Credit risk adjusted rates | 16.87% |
Implied expected life (years) | '0 years |
Maximum [Member] | ' |
May 25, 2012 Assumptions: | ' |
Volatility | 102.57% |
Market adjusted interest rates | 17.95% |
Credit risk adjusted rates | 16.87% |
Implied expected life (years) | '0 years |
Weighted Average [Member] | ' |
May 25, 2012 Assumptions: | ' |
Volatility | 79.02% |
Market adjusted interest rates | 11.97% |
Credit risk adjusted rates | 16.87% |
Implied expected life (years) | '8 months 23 days |
Gain_and_loss_on_change_in_fai4
Gain and loss on change in fair value of derivative (Details Textual) (USD $) | 1 Months Ended | 9 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 0 Months Ended | |||||
Feb. 29, 2008 | Sep. 30, 2012 | 25-May-12 | Dec. 31, 2011 | Sep. 30, 2012 | Sep. 30, 2012 | 25-May-12 | 25-May-12 | 31-May-11 | Mar. 31, 2011 | Apr. 15, 2009 | |
Maximum [Member] | Minimum [Member] | Convertible Debt [Member] | Lbcca Liquidator [Member] | Lbcca Liquidator [Member] | Lbcca Liquidator [Member] | Ya Global [Member] | |||||
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible Debt | $35,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Maturity Date | 15-Feb-13 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Value allocated to debt | ' | ' | ' | ' | ' | ' | 23,600,000 | 23,600,000 | ' | ' | 5,000,000 |
Debt Conversion, Original Debt, Amount | ' | ' | ' | ' | ' | ' | ' | 32,400,000 | 6,400,000 | ' | ' |
Debt Instrument, Convertible, Conversion Price | ' | ' | ' | ' | ' | ' | ' | ' | ' | $7.08 | ' |
Stock Issued During Period, Shares, New Issues | ' | ' | ' | ' | ' | ' | ' | ' | 907,708 | ' | ' |
Interest Expense, Debt, Total | ' | ' | ' | ' | ' | ' | ' | 8,800,000 | ' | ' | ' |
Debt Conversion Converted Instrument Coupon Interest | ' | ' | ' | ' | ' | ' | ' | 600,000 | ' | ' | ' |
Gain Loss On Conversion Of Convertible Debt | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' |
Gain (Loss) in fair value adjustments | ' | 449,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible notes payable | ' | ' | 33,800,000 | ' | ' | ' | 8,600,000 | ' | ' | ' | ' |
Sale Of Market Price Per Share | ' | ' | ' | ' | $3.82 | $3.30 | ' | ' | ' | ' | ' |
Fair value of derivative liabilities | ' | ' | ' | $600,000 | ' | ' | ' | ' | ' | ' | ' |
Income_tax_rate_Details_Textua
Income tax rate (Details Textual) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2008 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2009 | Dec. 31, 2008 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2009 | Dec. 31, 2008 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2009 | Dec. 31, 2008 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 |
USD ($) | BRL | USD ($) | Shashi Jiulong Power Steering Gears Co Ltd [Member] | Shashi Jiulong Power Steering Gears Co Ltd [Member] | Shashi Jiulong Power Steering Gears Co Ltd [Member] | Shashi Jiulong Power Steering Gears Co Ltd [Member] | Shashi Jiulong Power Steering Gears Co Ltd [Member] | Shashi Jiulong Power Steering Gears Co Ltd [Member] | Jingzhou Henglong Automotive Parts Co Ltd [Member] | Jingzhou Henglong Automotive Parts Co Ltd [Member] | Jingzhou Henglong Automotive Parts Co Ltd [Member] | Jingzhou Henglong Automotive Parts Co Ltd [Member] | Jingzhou Henglong Automotive Parts Co Ltd [Member] | Jingzhou Henglong Automotive Parts Co Ltd [Member] | Shenyang Jinbei Henglong Automotive Steering System Co Ltd [Member] | Shenyang Jinbei Henglong Automotive Steering System Co Ltd [Member] | Shenyang Jinbei Henglong Automotive Steering System Co Ltd [Member] | Shenyang Jinbei Henglong Automotive Steering System Co Ltd [Member] | Shenyang Jinbei Henglong Automotive Steering System Co Ltd [Member] | Shenyang Jinbei Henglong Automotive Steering System Co Ltd [Member] | Wuhu Henglong Auto Steering System Co Ltd [Member] | Wuhu Henglong Auto Steering System Co Ltd [Member] | Wuhu Henglong Auto Steering System Co Ltd [Member] | Wuhu Henglong Auto Steering System Co Ltd [Member] | Wuhan Jielong Electric Power Steering Co Ltd [Member] | Wuhan Jielong Electric Power Steering Co Ltd [Member] | Wuhan Jielong Electric Power Steering Co Ltd [Member] | Wuhan Jielong Electric Power Steering Co Ltd [Member] | Hubei Henglong Automotive System Group Co Ltd [Member] | Hubei Henglong Automotive System Group Co Ltd [Member] | Hubei Henglong Automotive System Group Co Ltd [Member] | Hubei Henglong Automotive System Group Co Ltd [Member] | Universal Sensor Application Inc [Member] | Universal Sensor Application Inc [Member] | Universal Sensor Application Inc [Member] | Universal Sensor Application Inc [Member] | Hong Kong Enterprise [Member] | Hong Kong Enterprise [Member] | Chongqing Henglong Hongyan Automotive Systems Co Ltd [Member] | Chongqing Henglong Hongyan Automotive Systems Co Ltd [Member] | United States [Member] | United States [Member] | |||||
USD ($) | USD ($) | ||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Tax rate | 35.00% | ' | ' | ' | 35.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Withholding Tax Percentage Applicable To Foreign Investors As Non Resident Enterprises | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Withholding Tax Percentage Applicable To Foreign Investors To Direct Holding Company | ' | ' | 5.00% | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage Owned In Holding Company To Avail Withholding Tax Of Five Percent | ' | ' | 25.00% | 25.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred Foreign Income Tax Expense (Benefit) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.90 | $0.80 |
Deferred State and Local Income Tax Expense (Benefit) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.05 | 0.04 |
Undistributed Earnings, Basic | ' | ' | 154.2 | ' | ' | 124.8 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Tax Provision On Retained Earning Not Reinvested | ' | ' | 7.7 | ' | ' | 6.2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Effective Income Tax Rate Reconciliation, State and Local Income Taxes | ' | ' | ' | ' | ' | ' | ' | 15.00% | 15.00% | 15.00% | 15.00% | 15.00% | 15.00% | 15.00% | 15.00% | 15.00% | 15.00% | 15.00% | 15.00% | 15.00% | 15.00% | 15.00% | 15.00% | 15.00% | 15.00% | 15.00% | 12.50% | 12.00% | 11.00% | 25.00% | 25.00% | 12.50% | 12.50% | 15.00% | 12.50% | 12.50% | 12.50% | 25.00% | 25.00% | 12.50% | 12.50% | 16.50% | 16.50% | 25.00% | 25.00% | ' | ' |
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential | ' | ' | 15.00% | 15.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional Tax Payable Percentage Subject To Residential Status | ' | ' | 10.00% | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional Tax Payable Subject To Residential Status | ' | ' | $0.12 | 0.24 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Effective Income Tax Rate Reconciliation, Percent, Total | 15.30% | 16.90% | 17.80% | 17.80% | 18.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Discontinued_operations_Zhejia2
Discontinued operations - Zhejiang (Details) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Disposal Groups Including Discontinued Operations Income Statement And Additional Disclosures [Line Items] | ' | ' |
Operational profit from component of discontinued operations, net of tax | ' | $157 |
Income from disposing component of discontinued operations, net of tax | ' | 2,494 |
Income from discontinued operations, net of tax | $0 | $2,651 |
Discontinued_operations_Zhejia3
Discontinued operations - Zhejiang (Details 1) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2012 |
Disposal Groups Including Discontinued Operations Income Statement And Additional Disclosures [Line Items] | ' |
Revenue from component of discontinued operations | $7,423 |
Pretax profit from component of discontinued operations | $165 |
Discontinued_operations_Zhejia4
Discontinued operations - Zhejiang (Details 2) (USD $) | 21-May-12 |
In Thousands, unless otherwise specified | |
Assets of discontinued operations | ' |
Current assets | $20,735 |
Non-current assets | 6,623 |
Total assets of discontinued operations | 27,358 |
Liabilities of discontinued operations | ' |
Current liabilities | 16,823 |
Non-current liabilities | 0 |
Total liabilities of discontinued operations | $16,823 |
Discontinued_operations_Zhejia5
Discontinued operations - Zhejiang (Details Textual) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' |
Ownership Interest Percentage | 51.00% | ' |
Purchases From Zhejiang | ' | $0.40 |
Income_per_share_Details
Income per share (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Numerator: | ' | ' | ' | ' | ' |
Net income attributable to the parent company’s common shareholders | $8,624 | $3,404 | $19,544 | $15,657 | $20,743 |
Allocation to convertible notes holders | ' | ' | 0 | -925 | ' |
Net income attributable to the parent company’s common shareholders - Basic and Diluted | ' | ' | $19,544 | $14,732 | ' |
Denominator: | ' | ' | ' | ' | ' |
Weighted average shares outstanding (in shares) | 28,043,019 | 28,260,302 | 28,043,019 | 28,260,302 | ' |
Dilutive effects of stock options (in shares) | 19,278 | 578 | 10,989 | 1,227 | ' |
Denominator for dilutive income per share - Diluted (in shares) | 28,062,297 | 28,260,880 | 28,054,008 | 28,261,529 | ' |
Net income per share attributable to parent company’s common shareholders - Basic (in dollars per share) | $0.31 | $0.12 | $0.70 | $0.52 | ' |
Net income per share attributable to parent company’s common shareholders - Diluted (in dollars per share) | $0.31 | $0.12 | $0.70 | $0.52 | ' |
Income_per_share_Details_1
Income per share (Details 1) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Numerator: | ' | ' | ' | ' |
Net income from continuing operations | $10,429 | $4,400 | $24,160 | $16,285 |
Net income from continuing operations attributable to non-controlling interest | ' | ' | 4,616 | 3,203 |
Net income from continuing operations attributable to shareholders | ' | ' | 19,544 | 13,082 |
Allocation to convertible notes holders | ' | ' | 0 | -773 |
Net income from continuing operations attributable to the parent company’s common shareholders - Basic and Diluted | $19,544 | $12,309 | $19,544 | $12,309 |
Denominator: | ' | ' | ' | ' |
Weighted average shares outstanding (in shares) | 28,043,019 | 28,260,302 | 28,043,019 | 28,260,302 |
Dilutive effects of stock options (in shares) | 19,278 | 578 | 10,989 | 1,227 |
Denominator for dilutive income per share - Diluted (in shares) | 28,062,297 | 28,260,880 | 28,054,008 | 28,261,529 |
Net income from continuing operations per common share attributable to parent company - Basic (in dollars per share) | ' | ' | $0.70 | $0.44 |
Net income from continuing operations per common share attributable to parent company -Diluted (in dollars per share) | ' | ' | $0.70 | $0.44 |
Income_per_share_Details_Textu
Income per share (Details Textual) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Equity Option [Member] | ' | ' | ' | ' |
Earnings Per Share, Basic and Diluted [Line Items] | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 60,000 | 67,500 | 50,000 | 60,000 |
Convertible Debt [Member] | ' | ' | ' | ' |
Earnings Per Share, Basic and Diluted [Line Items] | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | ' | ' | ' | 1,775,074 |
Significant_concentrations_Det
Significant concentrations (Details Textual) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Unusual Risk or Uncertainty [Line Items] | ' | ' |
Minimum Percentage Of Profit Allocated To Foreign Investment | 10.00% | ' |
Registered Capital Percentage | 50.00% | ' |
Concentration Risk, Percentage | ' | 22.70% |
Ten Largest Customers [Member] | ' | ' |
Unusual Risk or Uncertainty [Line Items] | ' | ' |
Concentration Risk, Percentage | 73.20% | 73.40% |
Customer One [Member] | ' | ' |
Unusual Risk or Uncertainty [Line Items] | ' | ' |
Accounts Receivable Trade Percentage | 3.20% | 12.00% |
Concentration Risk, Percentage | 11.80% | 12.20% |
Customer Two [Member] | ' | ' |
Unusual Risk or Uncertainty [Line Items] | ' | ' |
Accounts Receivable Trade Percentage | ' | 20.40% |
Concentration Risk, Percentage | ' | 10.50% |
Related_party_transactions_and2
Related party transactions and balances (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Related sales | ' | ' | ' | ' | ' |
Merchandise sold to related parties | $9,166 | $3,021 | $26,344 | $19,407 | ' |
Related purchases | ' | ' | ' | ' | ' |
Related parties | 11,335 | 5,287 | 25,906 | 16,739 | ' |
Related receivables | ' | ' | ' | ' | ' |
Accounts receivable | 17,783 | ' | 17,783 | ' | 12,286 |
Other receivables | 67 | ' | 67 | ' | 107 |
Total | 17,850 | ' | 17,850 | ' | 12,393 |
Related advances | ' | ' | ' | ' | ' |
Advanced equipment payment to related parties | 829 | ' | 829 | ' | 4,162 |
Advanced payments and others to related parties | 1,204 | ' | 1,204 | ' | 779 |
Total | 2,033 | ' | 2,033 | ' | 4,941 |
Related payables | ' | ' | ' | ' | ' |
Accounts payable | 6,258 | ' | 6,258 | ' | 4,521 |
Technology Equipment [Member] | ' | ' | ' | ' | ' |
Related purchases | ' | ' | ' | ' | ' |
Related parties | 58 | 433 | 575 | 433 | ' |
Equipment [Member] | ' | ' | ' | ' | ' |
Related sales | ' | ' | ' | ' | ' |
Merchandise sold to related parties | 0 | 82 | 0 | 82 | ' |
Related purchases | ' | ' | ' | ' | ' |
Related parties | 777 | 402 | 2,160 | 2,169 | ' |
Materials [Member] | ' | ' | ' | ' | ' |
Related purchases | ' | ' | ' | ' | ' |
Related parties | 10,500 | 4,452 | 23,171 | 14,137 | ' |
Mechandise [Member] | ' | ' | ' | ' | ' |
Related sales | ' | ' | ' | ' | ' |
Merchandise sold to related parties | $9,166 | $2,939 | $26,344 | $19,325 | ' |
Related_party_transactions_and3
Related party transactions and balances (Details Textual) (Hanlin Chen [Member], Scenario, Forecast [Member]) | Nov. 13, 2013 |
Hanlin Chen [Member] | Scenario, Forecast [Member] | ' |
Related Party Transaction [Line Items] | ' |
Percentage Interest | 63.65% |
Commitments_and_contingencies_1
Commitments and contingencies (Details) (USD $) | Sep. 30, 2013 | |
In Thousands, unless otherwise specified | ||
Commitments and Contingencies Disclosure [Line Items] | ' | |
2013 | $7,177 | [1] |
2014 | 2,766 | |
2015 | 260 | |
2016 | 0 | |
Thereafter | 0 | |
Total | 10,203 | |
Interest and make-whole on convertible notes [Member] | ' | |
Commitments and Contingencies Disclosure [Line Items] | ' | |
2013 | 294 | [1] |
2014 | 464 | |
2015 | 0 | |
2016 | 0 | |
Thereafter | 0 | |
Total | 758 | |
Purchase Commitment [Member] | ' | |
Commitments and Contingencies Disclosure [Line Items] | ' | |
2013 | 6,883 | [1] |
2014 | 2,302 | |
2015 | 260 | |
2016 | 0 | |
Thereafter | 0 | |
Total | $9,445 | |
[1] | Remaining 3 months in 2013. |
Segment_reporting_Details
Segment reporting (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | |||
Net Sales | $90,919 | $73,184 | $285,971 | $234,482 | |||
Income from Continuing Operations | 10,429 | 4,400 | 24,160 | 16,285 | |||
Jingzhou Henglong Automotive Parts Co Ltd [Member] | ' | ' | ' | ' | |||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | |||
Net Sales | 55,846 | 39,062 | 177,836 | 123,713 | |||
Income from Continuing Operations | 8,368 | 4,117 | 19,751 | 14,248 | |||
Shashi Jiulong Power Steering Gears Co Ltd [Member] | ' | ' | ' | ' | |||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | |||
Net Sales | 16,692 | 15,377 | 56,735 | 54,572 | |||
Income from Continuing Operations | 279 | 284 | 1,516 | 1,276 | |||
Shenyang Jinbei Henglong Automotive Steering System Co Ltd [Member] | ' | ' | ' | ' | |||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | |||
Net Sales | 9,095 | 7,314 | 28,164 | 21,090 | |||
Income from Continuing Operations | 603 | 402 | 1,119 | 628 | |||
Wuhu Henglong Auto Steering System Co Ltd [Member] | ' | ' | ' | ' | |||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | |||
Net Sales | 4,948 | 7,414 | 17,113 | 24,208 | |||
Income from Continuing Operations | -145 | 729 | -312 | 581 | |||
Hubei Henglong Automotive System Group Co Ltd [Member] | ' | ' | ' | ' | |||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | |||
Net Sales | 11,783 | 9,982 | 34,610 | 29,653 | |||
Income from Continuing Operations | 6,092 | [1] | 613 | 7,550 | [2] | 8,946 | [2] |
Other Sector [Member] | ' | ' | ' | ' | |||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | |||
Net Sales | 7,558 | 6,635 | 24,866 | 28,160 | |||
Income from Continuing Operations | 522 | -1,105 | 1,416 | 390 | |||
Total Segments [Member] | ' | ' | ' | ' | |||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | |||
Net Sales | 105,922 | 85,784 | 339,324 | 281,396 | |||
Income from Continuing Operations | 15,719 | 5,040 | 31,040 | 26,069 | |||
Corporate Segment [Member] | ' | ' | ' | ' | |||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | |||
Net Sales | 0 | 0 | 0 | 0 | |||
Income from Continuing Operations | 309 | -687 | -2,203 | 3,424 | |||
Consolidation, Eliminations [Member] | ' | ' | ' | ' | |||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | |||
Net Sales | -15,003 | -12,600 | -53,353 | -46,914 | |||
Income from Continuing Operations | ($5,599) | $47 | ($4,677) | ($13,207) | |||
[1] | $5.2 million included in the balance was income from investment in Henglong, which has been eliminated at the consolidation level. | ||||||
[2] | $5.2 million and $7.0 million included in the respective balances of $7.6 million and $8.9 million was income from investment in Henglong in 2013 and 2012, respectively, which has been eliminated at the consolidation level. |
Segment_reporting_Details_Text
Segment reporting (Details Textual) (USD $) | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | 21-May-12 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Zhejiang Henglong and Vie Pump Manu Co Ltd [Member] | Jingzhou Henglong Automotive Parts Co Ltd [Member] | Jingzhou Henglong Automotive Parts Co Ltd [Member] | Jingzhou Henglong Automotive Parts Co Ltd [Member] | Jingzhou Henglong Automotive Parts Co Ltd [Member] | ||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' |
Ownership Interest Percentage | 51.00% | 51.00% | ' | ' | ' | ' |
Investment Income, Net | ' | ' | $5.20 | $7 | $7.60 | $8.90 |