Exhibit 991
Company Contact: Investor Relations Contact:
Jim Groh Matt Hayden/Brett Maas
(843) 342-7809 (843) 272-4653
jim@bakbattery.com matt@haydenir.com
China BAK Battery's Third Quarter Revenues Increase
59.1% and Net Income Increases 112%
Revenues of $24.2 million vs. $15.2 million
Net Income of $3.4 million vs. $1.6 million
SHENZHEN, China & DALLAS - August 16, 2005 - China BAK Battery, Inc. (OTC BB:
CBBT), the largest provider of replacement Lithium Ion (Li-ion) batteries in
China and the seventh largest manufacturer of Li-ion batteries in the world,
today announced financial results for the third quarter and nine-month period
ended June 30, 2005.
Financial Results
For the third quarter, the Company reported revenue of $24.2 million, an
increase of 59.1 percent compared to the $15.2 million reported for the third
quarter last year. Gross profits were $7.6 million, or 31.5 percent of sales,
compared to gross profit of $3.7 million, or 24.6 percent of sales for the third
quarter last year. Total operating expenses were $3.6 million, or 14.8 percent
of sales, compared to $1.7 million, or 10.9 percent of sales for the third
quarter last year. Net income for the quarter increased 112 percent to $3.4
million, or $0.08 per basic and diluted share, compared to net income of $1.6
million, or $0.05 per diluted share for the third quarter last year. The Company
utilized 41.2 million diluted shares in the calculation this year compared to
32.4 million diluted shares in the third quarter of last year.
For the nine months ended June 30, the Company reported revenue of $75.2
million, an increase of 60.1 percent compared to the $46.9 million reported for
the year ago period. Gross profits were $18.9 million, or 25.1 percent of sales,
for the nine-month period, compared to $11.2 million, or 23.9 percent of sales,
for the same period in fiscal 2004. Total operating expenses were $9.1 million,
or 12.1 percent of sales, compared to $5.3 million, or 11.4 percent of sales for
the nine-month period last year. Net income for the nine-month period this year
was $7.7 million, or $0.21 per basic and diluted share, an increase of 50
percent compared to net income of $5.1 million, or $0.16 per share reported in
the same year ago period.
Xiangqian Li, the Company's Chief Executive Officer, commented, "As we indicated
with our preliminary projections last week, we reported a significant increase
in revenues and net income for both the quarter and year-to-date periods,
stemming from our recent facility expansion and further sequential quarterly
improvements in our gross profit margins. This improvement in gross margin was
primarily due to a combination of improved yields and lower material costs. We
initiated a modest investment in our sales infrastructure, and continued our
investment in research and development, as we remain focused on improving our
portfolio of products while expanding our customer base both domestically and
internationally. We are well-positioned to continue our revenue growth through a
product mix which includes new technologies and batteries for new applications
to both new and existing customers. These factors, plus our confidence in the
Lithium Ion technology initiative and our initial success in penetrating the OEM
marketplace, gives us confidence to reaffirm our earnings guidance of
approximately $12 million in net income for fiscal 2005, which ends September
30."
About China BAK Battery
China BAK Battery, Inc. is a commercial manufacturer of standard and customized
Lithium Ion (Li-ion) rechargeable batteries for use in various portable
electronic applications, including cellular phones, MP3 players, laptop
computers, electric bicycles, digital cameras, video camcorders, and general
industrial applications. BAK is the largest Li-ion replacement battery
manufacturer in China and the seventh largest manufacturer of Li-ion batteries
in the world. BAK operates a 90-acre, 1.9 million square foot manufacturing
operation in Shenzen, PRC.
Forward-Looking Statements
This press release contains certain statements that may include "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All
statements, other than statements of historical facts, included herein are
"forward-looking statements." Included among "forward-looking statements" are,
among other things statements regarding China BAK Battery's business strategy,
plans and objectives and statements about non-historical information. These
forward-looking statements are often identified by the use of terms and phrases
such as "expect," "estimate," "project," "plan," "believe," "achievable,"
"anticipate" and similar terms and phrases. Although China BAK Battery, Inc.
believes that the expectations reflected in these forward-looking statements are
reasonable, they do involve assumptions, risks and uncertainties, and these
expectations may prove to be incorrect. The Company's actual net income for the
2005 fiscal year may not be the same as its income guidance and the Company's
new technologies and batteries for new applications may not achieve the expected
result. You should not place undue reliance on these forward-looking statements,
which speak only as of the date of this press release.
China BAK Battery, Inc.'s actual results could differ materially from those
anticipated in these forward-looking statements as a result of a variety of
factors, including those discussed in China BAK Battery, Inc.'s periodic reports
that are filed with and available from the Securities and Exchange Commission.
All forward-looking statements attributable to China BAK Battery, Inc. or
persons acting on its behalf are expressly qualified in their entirety by these
factors. Other than as required under the securities laws, China BAK Battery,
Inc. does not assume a duty to update these forward-looking statements.
Tables To Follow
CHINA BAK BATTERY, INC.
(Formerly known as Medina Coffee, Inc.) and Subsidiary
Consolidated Balance Sheets
As of June 30, 2005 and September 30, 2004
(Amounts Expressed in US Dollars)
(Unauidted)
Assets
June 30, September 30,
2005 2004
$ $
(Audited)
Current Assets
Cash 1,647,781 3,212,176
Cash -Restricted 22,073,231 7,120,069
Accounts Receivable, Net 37,056,547 20,999,561
Inventories 13,093,761 29,535,985
Prepaid Expenses 1,527,601 1,330,645
Notes Receivable 289,978 18,122
Accounts Receivable - Related Party 295,477 911,093
------------ ------------
Total Current 75,984,376 63,127,651
------------ ------------
Long-Term Assets
Property, Plant, & Equipment 36,266,563 19,875,583
Construction in Progress 24,727,567 23,656,190
Land Use Rights 4,029,038 4,029,038
Less Accumulated Depreciation (4,673,566) (2,370,774)
------------ ------------
Long-term Assets, Net 60,349,602 45,190,037
------------ ------------
Other Assets
Other Receivables 94,293 225,972
Intangible Assets, Net 49,596 58,362
------------ ------------
Total other 143,889 284,334
------------ ------------
Total Assets 136,477,867 108,602,022
============ ============
Liabilities and Stockholders' Equity
Current Liabilities
Accounts Payable 20,479,444 23,570,087
Bank Loans, Short Term 37,515,858 27,304,162
Short Term Loans -- 1,812,316
Notes Payable, Other 23,888,792 20,772,559
Land Use Rights Payable 3,751,028 3,750,756
Construction Costs Payable 4,062,261 6,347,846
Customer Deposits -- 369,390
Accrued Expenses 3,871,277 5,247,656
Other Liabilities 407,215 181,223
------------ ------------
Total Current 93,975,875 89,355,995
------------ ------------
Stockholders' Equity
Capital Stock-$.001 Par Value; 100,000,000 Shares
Authorized; 40,978,533 and 32,378,100 Shares
Issued and Outstanding at June 30, 2005 and
September 30, 2004, respectively 40,978 32,378
Additional Paid In Capital 27,571,722 12,051,693
Accumulated Comprehensive Income (Loss) (1,669) (144)
Reserves 2,854,017 1,724,246
Retained Earnings 12,036,944 5,437,854
------------ ------------
42,501,992 19,246,027
------------ ------------
Total Liabilities and Stockholders' Equity 136,477,867 108,602,022
============ ============
CHINA BAK BATTERY, INC.
(Formerly known as Medina Coffee, Inc.) and Subsidiary
Consolidated Statements of Operations
For The Three Months Ended June 30, 2005 and 2004
(Amounts Expressed in US Dollars)
(Unaudited)
2005 2004
$ $
----------- -----------
Revenues, Net of Returns 24,154,543 15,183,988
Cost of Goods Sold 16,547,598 11,442,431
----------- -----------
Gross Profit 7,606,945 3,741,557
----------- -----------
Expenses:
Selling Expense 975,859 474,640
General and Administrative Expenses 1,068,895 927,296
Research and Development 128,835 139,166
Bad Debts Expense (Recovery) 598,608 (334,746)
Depreciation and Amortization 805,753 452,805
----------- -----------
Total Expenses 3,577,950 1,659,161
----------- -----------
Operating Income 4,028,995 2,082,396
Other Expense
Finance Costs 371,404 364,649
Other Expense 8,745 (9,319)
----------- -----------
Net Income Before Provision for Income Taxes 3,648,846 1,727,066
Provision for Income Taxes 286,672 129,449
----------- -----------
Net Income 3,362,174 1,597,617
=========== ===========
Net Income Per Common and Common Equivalent Share:
Basic 0.08 0.05
=========== ===========
Diluted 0.08 0.05
=========== ===========
Weighted Average Number of Common and
Common Equivalent Shares Outstanding:
Basic 40,978,533 32,378,100
=========== ===========
Diluted 41,192,819 32,378,100
=========== ===========
CHINA BAK BATTERY, INC.
(Formerly Known as Medina Coffee, Inc.) and Subsidiary
Consolidated Statements of Operations
For The Nine Months Ended June 30, 2005 and 2004
(Amounts Expressed in US Dollars)
(Unaudited)
2005 2004
$ $
Revenues, Net of Returns 75,159,215 46,934,456
Cost of Goods Sold 56,286,898 35,713,698
----------- -----------
Gross Profit 18,872,317 11,220,758
----------- -----------
Expenses:
Selling Expense 2,678,830 1,310,829
General and Administrative Expenses 2,877,091 2,851,748
Research and Development 314,626 345,471
Bad Debts Expense 944,095 (227,151)
Depreciation and Amortization 2,311,558 1,046,689
----------- -----------
Total Expenses 9,126,200 5,327,586
----------- -----------
Operating Income 9,746,117 5,893,172
Other Expense
Finance Costs 1,333,118 522,629
Other Expense 33,624 5,239
----------- -----------
Net Income Before Provision for Income Taxes 8,379,375 5,365,304
Provision for Income Taxes 650,514 226,843
----------- -----------
Net Income 7,728,861 5,138,461
=========== ===========
Net Income Per Common and Common Equivalent Share:
Basic 0.21 0.16
=========== ===========
Diluted 0.21 0.16
=========== ===========
Weighted Average Number of Common and
Common Equivalent Shares Outstanding:
Basic 37,481,654 32,378,100
=========== ===========
Diluted 37,593,436 32,378,100
=========== ===========
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