China BAK Battery Inc. (CBAK, Financial) filed Quarterly Report for the period ended 2010-06-30.
China Bak Battery Inc. has a market cap of $104.3 million; its shares were traded at around $1.64 with and P/S ratio of 0.5. CBAK is in the portfolios of Louis Moore Bacon of Moore Capital Management, LP.
Gross profit for the third quarter of fiscal year 2010 was negative $1.2 million, down 113% from $9.0 million last quarter and down 123.9% from $5.0 million in the same quarter of last year. During the third quarter of fiscal year 2010, we adopted a temporary competitive pricing strategy for cylindrical battery cells to gain more market share in the OEM market and sales of slow-moving inventory at discount to increase operating cash flow in the third quarter of fiscal year 2010. Furthermore, the Company recorded a provision for obsolete inventory of $5.6 million. As a result, gross margin for the third quarter of fiscal year 2010 was negative 2.1%, compared to 17.9% last quarter and 11.3% in the same quarter of last year. Excluding the impact of our $5.6 million inventory write-down, non-GAAP gross margin for the third quarter of fiscal year 2010 was 2.9%, compared to 12.3% non-GAAP gross margin in the same quarter of fiscal year 2009. Please see the table set forth below which reconciles the non-GAAP financial measures of gross margin and operating loss from operations to their respective most directly comparable GAAP financial measures of gross margin and loss from operations before finance costs, government grant and other income, and income taxes.
Our net loss in the third quarter of fiscal year 2010 was primarily a result of non-cash assets write-downs amounting to $14.5 million of income statement expenses, including the charge of $5.6 million for obsolete inventory noted above. Operating cash flow in the third quarter of fiscal year 2010 was $8.2 million.
We had access to $217.1 million in short-term credit facilities and $56.0 million in long-term credit facilities as of June 30, 2010. As of June 30, 2010, the principal outstanding amounts included short-term bank loans of $138.9 million, long-term bank loans of $11.8 million maturing within one year, and long-term bank loans of $29.5 million maturing in over one year, and bills payable of $36.6 million, leaving $66.2 million of short-term funds available for additional cash needs. In addition, on July 10, 2008, our $60 million shelf registration statement was declared effective by the SEC, pursuant to which we have raised $36.6 million in gross proceeds from sales of common stock and issued common stock warrants exercisable for up to $21.6 million in additional gross proceeds. As $16 million of these warrants were not exercised before their expiration, we may raise up to an additional $17.8 million in gross proceeds from future equity financings under this shelf registration statement.
Shenzhen BAK and BAK Electronics received in aggregate a tax benefit of $9,000 pursuant to their tax holiday and preferential tax rate for the nine months ended June 30, 2010, or $0.0002 per basic share.
Net Revenues. Net revenues increased to $58.6 million for the three months ended June 30, 2010 as compared to $44.7 million for the same period of the prior year, an increase of $13.9 million or 31.0%. The following sets forth the breakdown of our net revenues by battery cell type for the periods indicated.
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China Bak Battery Inc. has a market cap of $104.3 million; its shares were traded at around $1.64 with and P/S ratio of 0.5. CBAK is in the portfolios of Louis Moore Bacon of Moore Capital Management, LP.
Highlight of Business Operations:
Despite continued global economic weakness, we experienced robust revenue growth. During the third quarter of fiscal year 2010, we generated $58.6 million in net revenues, an increase of 16.1% from $50.4 million in the second quarter 2010, and up 31.0% from $44.7 million in the third quarter of 2009.Gross profit for the third quarter of fiscal year 2010 was negative $1.2 million, down 113% from $9.0 million last quarter and down 123.9% from $5.0 million in the same quarter of last year. During the third quarter of fiscal year 2010, we adopted a temporary competitive pricing strategy for cylindrical battery cells to gain more market share in the OEM market and sales of slow-moving inventory at discount to increase operating cash flow in the third quarter of fiscal year 2010. Furthermore, the Company recorded a provision for obsolete inventory of $5.6 million. As a result, gross margin for the third quarter of fiscal year 2010 was negative 2.1%, compared to 17.9% last quarter and 11.3% in the same quarter of last year. Excluding the impact of our $5.6 million inventory write-down, non-GAAP gross margin for the third quarter of fiscal year 2010 was 2.9%, compared to 12.3% non-GAAP gross margin in the same quarter of fiscal year 2009. Please see the table set forth below which reconciles the non-GAAP financial measures of gross margin and operating loss from operations to their respective most directly comparable GAAP financial measures of gross margin and loss from operations before finance costs, government grant and other income, and income taxes.
Our net loss in the third quarter of fiscal year 2010 was primarily a result of non-cash assets write-downs amounting to $14.5 million of income statement expenses, including the charge of $5.6 million for obsolete inventory noted above. Operating cash flow in the third quarter of fiscal year 2010 was $8.2 million.
We had access to $217.1 million in short-term credit facilities and $56.0 million in long-term credit facilities as of June 30, 2010. As of June 30, 2010, the principal outstanding amounts included short-term bank loans of $138.9 million, long-term bank loans of $11.8 million maturing within one year, and long-term bank loans of $29.5 million maturing in over one year, and bills payable of $36.6 million, leaving $66.2 million of short-term funds available for additional cash needs. In addition, on July 10, 2008, our $60 million shelf registration statement was declared effective by the SEC, pursuant to which we have raised $36.6 million in gross proceeds from sales of common stock and issued common stock warrants exercisable for up to $21.6 million in additional gross proceeds. As $16 million of these warrants were not exercised before their expiration, we may raise up to an additional $17.8 million in gross proceeds from future equity financings under this shelf registration statement.
Shenzhen BAK and BAK Electronics received in aggregate a tax benefit of $9,000 pursuant to their tax holiday and preferential tax rate for the nine months ended June 30, 2010, or $0.0002 per basic share.
Net Revenues. Net revenues increased to $58.6 million for the three months ended June 30, 2010 as compared to $44.7 million for the same period of the prior year, an increase of $13.9 million or 31.0%. The following sets forth the breakdown of our net revenues by battery cell type for the periods indicated.
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