Exhibit 99.1
CHINA BAK BATTERY, INC.
Company Contact: Investor Relations Contact:
Jim Groh Matt Hayden/Brett Maas
(843) 342-7809 (843) 272-4653
jim@bakbattery.com matt@haydenir.com
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China BAK Battery Reports 60% Increase in Revenue
and 83% Increase in Net Income for Fiscal 2005
Fourth-Quarter Revenue Increases 59%;
Net Income Increases 189%.
SHENZHEN, China & DALLAS - December 30, 2005 - China BAK Battery, Inc. (OTC BB:
CBBT), one of the largest manufacturers of Lithium Ion (Li-ion) batteries, today
announced financial results for the fourth quarter and fiscal year ended
September 30, 2005.
Financial Results
For the fourth quarter of its fiscal year ended September 30, 2005, the Company
reported revenue of $26.8 million, an increase of 59.2 percent compared to the
$16.8 million reported for the fourth quarter of the 2004 fiscal year. Gross
profits for the fourth quarter of the 2005 fiscal year were $8.8 million, or
32.8 percent of sales, compared to gross profit of $3.6 million, or 21.6 percent
of sales for the fourth quarter of the 2004 fiscal year. Total operating
expenses for the fourth quarter of the 2005 fiscal year were $3.2 million, or
11.9 percent of sales, compared to $1.4 million, or 8.2 percent of sales for the
fourth quarter of the 2004 fiscal year. Net income for the fourth quarter of
fiscal 2005 increased 188.8 percent to $4.6 million, or $0.11 per basic and
diluted share, compared to net income of $1.6 million, or $0.05 per basic and
diluted share, for the fourth quarter of fiscal 2004. The Company used 42.2
million diluted shares in the calculation for the fourth quarter of fiscal 2005
compared to 31.2 million diluted shares in the fourth quarter of fiscal 2004.
For the full fiscal year ended September 30, 2005, the Company reported revenue
of $101.9 million, an increase of 59.9 percent compared to the $63.7 million
reported for the 2004 fiscal year. Gross profits were $25.7 million, or 25.2
percent of sales, for the fiscal year ended September 30, 2005 compared to $13.8
million, or 21.7 percent of sales, for fiscal 2004. Total operating expenses for
the 2005 fiscal year were $10.4 million, or 10.2 percent of sales, compared to
$5.7 million, or 8.9 percent of sales for the 2004 fiscal year. Net income for
the 2005 fiscal year was $12.4 million, or $0.32 per basic and fully diluted
share, an increase of 83.4 percent compared to net income of $6.7 million, or
$0.22 per share reported in the 2004 fiscal year.
Xiangqian Li, the Company's Chief Executive Officer, commented, "This was an
outstanding year for China BAK Battery, as we exceeded $100 million in annual
revenues for the first time with each quarter's revenues surpassing the prior
quarter. We expanded our market opportunity by beginning lithium polymer battery
manufacturing and grew our manufacturing capacity to meet growing demand for our
products. The result of our growth initiatives in terms of products, market
share growth and channel expansion combined with continued growth in our
existing markets contributed to our increase in revenues, gross profit margin
and the over 80 percent increase in net income for the 2005 fiscal year versus
the 2004 fiscal year."
Management intends to conduct a conference call within the next month to update
investors on the Company's progress and near-term strategy.
The Company's cash balances increased during fiscal 2005, with cash and
restricted cash totaling $52.4 million as of September 30, 2005 compared to
$10.3 million as of September 30, 2004. The Company completed the 2005 fiscal
year with a current ratio of 1.2 to 1 and $20 million in working capital. As a
result of sales of common stock in private placements and the Company's
retention of earnings, stockholder's equity increased 357 percent to $88.0
million at the end of fiscal 2005 compared to $19.2 million at the end of fiscal
2004.
About BAK China Battery
China BAK Battery, Inc. is a commercial manufacturer of standard and customized
Lithium Ion (Li-ion) rechargeable batteries 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 one of the largest Li-ion replacement battery
manufacturers in the world. BAK operates a 62-acre, 1.9 million square foot
manufacturing operation in Shenzen, PRC.
Forward-Looking Statements
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 fact included herein are
"forward-looking statements" including statements regarding China BAK Battery,
Inc. and its subsidiary companies business strategy, plans and objective and
statements of non-historical information. These forward looking statements are
often identified by the use of forward-looking terminology such as "believes,"
"expects" or similar expressions, involve known and unknown risks and
uncertainties. Although China BAK Battery, Inc. believes that the expectations
reflected in these forward-looking statements are reasonable, they do involve
assumptions, risks and uncertainties, and these expectations may prove to be
incorrect. 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.
Consolidated Balance Sheets
As of September 30, 2005 and 2004
(Amounts expressed in US Dollars, except number of shares)
September 30, September 30,
2005 2004
$ $
Assets
Current Assets
Cash 33,055,784 3,212,176
Cash - Restricted 19,392,280 7,120,069
Accounts Receivable, Net 43,379,754 20,999,561
Inventories 21,696,226 29,535,985
Prepaid Expenses 1,448,119 1,330,645
Notes Receivable 484,028 18,122
Accounts Receivable - Related Party 271,873 911,093
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Total Current Assets 119,728,064 63,127,651
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Long-Term Assets
Property, Plant and Equipment 52,160,610 19,875,583
Construction in Progress 17,804,181 23,656,190
Land Use Rights 3,246,791 4,029,038
Less Accumulated Depreciation (5,873,954) (2,370,774)
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Long-Term Assets, Net 67,337,628 45,190,037
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Other Assets
Other Assets 566,703 225,972
Intangible Assets, Net 53,379 58,362
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Total Other Assets 620,082 284,334
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Total Assets 187,685,774 108,602,022
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Liabilities and Stockholders' Equity
Current Liabilities
Accounts Payable 17,836,561 23,570,087
Bank Loans, Short Term 39,545,230 27,304,162
Short-Term Loans -- 1,812,316
Notes Payable 29,577,308 20,772,559
Land Use Rights Payable 2,962,560 3,750,756
Construction Costs Payable 5,241,883 6,347,846
Customer Deposits 655,065 369,390
Accrued Expenses 3,196,594 5,247,656
Other Liabilities 712,506 181,223
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Total Current Liabilities 99,727,707 89,355,995
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CONTINGENCIES AND COMMITMENTS (NOTE 13)
Stockholders' Equity
Common Stock - $.001 Par Value; 100,000,000 Shares Authorized;
48,878,396 and 31,225,642 shares issued and outstanding at
September 30, 2005 and 2004, respectively 48,878 31,226
Additional Paid In Capital 68,012,808 12,052,845
Accumulated Comprehensive Income (Loss) 362,728 (144)
Reserves 3,688,989 1,724,246
Retained Earnings 15,844,664 5,437,854
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Total Stockholders' Equity 87,958,067 19,246,027
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Total Liabilities and Stockholders' Equity 187,685,774 108,602,022
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CHINA BAK BATTERY, INC.
Consolidated Statements of Operations
For the Years Ended September 30, 2005 and 2004
(Amounts expressed in US Dollars, except number of shares)
2005 2004
$ $
Revenues, Net of Returns 101,921,583 63,746,202
Cost of Goods Sold 76,234,834 49,921,818
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Gross Profit 25,686,749 13,824,384
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Expenses:
Selling 4,023,582 1,877,878
General and Administrative 5,027,154 3,141,125
Research and Development 541,735 328,779
Bad Debts Expense 769,807 326,990
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Total Expenses 10,362,278 5,674,772
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Operating Income 15,324,471 8,149,612
Other Expenses
Finance Costs 2,395,137 1,006,056
Other Expenses 28,117 2,916
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Net Income Before Provision for
Income Tax 12,901,217 7,140,640
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Provision for Income Tax 526,840 394,333
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Net Income 12,374,377 6,746,307
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Net Income Per Common and Common
Equivalent Share:
Basic 0.32 0.22
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Diluted 0.32 0.22
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Weighted Average Shares Outstanding:
Basic 38,288,874 31,225,642
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Diluted 38,405,401 31,225,642
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CHINA BAK BATTERY, INC.
Consolidated Statements of Operations
For the Three Months Ended September 30, 2005 and 2004
(Amounts expressed in US Dollars, except number of shares)
2005 2004
$ $
----------- -----------
Revenues, Net of Returns 26,762,368 16,811,746
Cost of Goods Sold 17,993,367 13,178,237
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Gross Profit 8,769,001 3,633,509
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Expenses (Reversals):
Selling 1,097,080 560,667
General and Administrative 2,042,418 278,953
Research and Development 227,109 (16,692)
Bad Debts Expense (Reversal) (174,288) 554,141
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Total Expenses 3,192,319 1,377,069
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Operating Income 5,576,682 2,256,440
Other Expenses (Income):
Finance Costs 1,062,019 483,427
Other Income (5,507) (2,323)
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Net Income Before Provision for
Income Tax 4,520,170 1,775,336
Provision for (Reversal of) Income Tax (123,674) 167,490
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Net Income 4,643,844 1,607,846
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Net Income Per Common and Common
Equivalent Share:
Basic 0.11 0.05
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Diluted 0.11 0.05
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Weighted Average Shares Outstanding:
Basic 42,116,280 31,225,642
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Diluted 42,247,042 31,225,642
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