China America Holdings (CAAH) Announces 39% Jump in Q2 Revenues
China America Holdings, Inc. (CAAH), a holding company which owns a 56% stake in Shanghai Aohong Chemical Co., Ltd. based in Shanghai, China. Shanghai Aohong Chemical Co., Ltd., specializes in the distribution of an assortment of liquid chemicals, similar to companies like Eastman Chemical Company (EMN) and The Dow Chemical Company (DOW). Second fiscal quarter financial highlights of 2010, reveal CAAH business performance to be increasingly positive. Implementing aggressive price strategy provides CAAH with a confident future in global market structure.
China America Holdings, Inc. (CAAH), a holding company operating in China that owns 56% of China based subsidiary Shanghai Aohong Chemical Co., Ltd, announced today the Company’s financial results for the second quarter and first six months of fiscal 2010 ended March 31, 2010.
Financial Highlights
For the second quarter of fiscal 2010 total revenues were $8.7 million, up 39% from the $6.2 million recorded in the six months ended March 31, 2009. For the first six months of fiscal 2010 we recorded revenues of $19.8 million with a net loss that narrowed to ($6,000), up from revenues of $14.1 million and a net loss of ($669,000) in the six months ended March 31, 2009. We recorded a net loss of ($189,000) in the second quarter of fiscal 2010 as compared to ($207,000) in the three months ended March 31, 2009. This resulted in EPS of ($0.00) per diluted and basic share in both periods.
The improvement in net revenue results in the second quarter of fiscal 2010 was largely driven by our aggressive pricing strategy yielding additional orders from new and existing customers. As a result of this pricing strategy gross margins were slightly lower at 6.6% as compared to 7.8% in the three months ended March 31, 2009.
Balance Sheet
At March 31, 2010, working capital was $9.2 million as compared to $8.6 million at September 30, 2009. Total current assets at March 31, 2010 were $16.2 million as compared to $13.9 million at September 30, 2009.
Commenting on the second quarter, Mr. Shaoyin Wang, CEO of China America Holdings, stated, “We continue to gain sales momentum through the first six months of fiscal 2010. Our aggressive pricing strategy continues to yield positive top line results. We gained additional customers at the expense of a small decrease in gross margins. We are confident that our business will continue to grow as the global refrigerant market is becoming increasingly stronger and margins will improve as China begins its mandated transition into more environmentally friendly products. We look forward to a stronger performance in the second half of fiscal 2010 as we work diligently to continue to improve our operating results.”
About China America Holdings, Inc.
China America Holdings, Inc. is a holding company which owns a 56% stake in Shanghai Aohong Chemical Co., Ltd. based in Shanghai, China. Shanghai Aohong Chemical Co., Ltd. is a distributor of assorted liquid coolants which are utilized in a variety of applications, primarily as refrigerants in air conditioning systems for automobiles, residential and commercial air conditioning systems, and a manufacturer of steel non-refillable cylinders. For more information, please visit http://www.caah.us.
CHINA AMERICA HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, September 30,
2010 2009
————— —————
ASSETS Unaudited
—————
CURRENT ASSETS:
Cash and cash equivalents $ 969,419 $ 1,721,231
Accounts receivable, net 2,673,153 2,782,814
Notes receivable 588,007 829,890
Inventory 2,455,472 2,165,567
Tax receivable 251,446 43,137
Prepaid expense and other current assets 2,326,844 552,460
————— —————
Total current assets 9,264,341 8,095,099
————— —————
LONG-TERM ASSETS:
Restricted cash 1,287,284 877,501
Property and equipment, net 4,760,942 4,049,285
Land use right, net 820,363 828,654
Other assets 29,256 29,250
————— —————
Total other assets 6,897,845 5,784,690
————— —————
Total assets $ 16,162,186 $ 13,879,789
=============== ===============
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Notes payable $ 4,033,133 $ 3,036,290
Notes payable-related party 410,000 400,000
Accounts payable and accrued expenses 753,252 893,391
Advances from customers 767,204 199,905
Taxes payables 492,375 458,570
Due to related parties 554,619 228,467
————— —————
Total current liabilities 7,010,583 5,216,623
EQUITY:
China America Holdings, Inc. shareholders’
equity
Common stock: $.001 par value, 500,000,000
shares authorized; 159,810,792 and
151,810,792 shares issued and outstanding
at March 31, 2010 and September 30, 2009,
respectively 159,811 151,811
Additional paid-in capital 20,152,571 20,014,547
Statutory reserves 756,166 704,321
Accumulated deficit (17,708,473) (17,650,606)
Accumulated other comprehensive income 430,151 428,109
————— —————
Total China America Holdings, Inc.
shareholders’ equity 3,790,226 3,648,182
Noncontrolling interest 5,361,377 5,014,984
————— —————
Total equity 9,151,603 8,663,166
————— —————
Total liabilities and equity $ 16,162,186 $ 13,879,789
=============== ===============
CHINA AMERICA HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
For the Three Months Ended For the Six Months Ended
March 31, March 31,
————————— ————————–
2010 2009 2010 2009
Net revenues $ 8,555,365 $ 6,229,192 $ 19,813,954 $ 14,126,928
Cost of sales 7,989,220 5,742,090 17,653,475 13,414,719
————– ———— ———— ————-
Gross profit 566,145 487,102 2,160,479 712,209
Operating expenses:
Selling expenses 239,529 221,350 909,879 334,867
Consulting and
investor relations
expense 166,636 – 204,136 -
Consulting
expense-related
party 93,000 100,000 239,024 165,812
Compensation and
related taxes 74,143 53,090 133,478 94,452
General and
administrative 181,741 122,032 460,559 254,801
————– ———— ———— ————-
Total operating
expenses 755,049 496,472 1,947,076 849,932
————– ———— ———— ————-
Total operating
income (loss) (188,904) (9,370) 213,403 (137,723)
————– ———— ———— ————-
Other income
(expenses):
Interest income 2,810 1,197 4,726 3,729
Interest expense (17,713) (22,290) (32,775) (58,656)
Interest
expense-related
party (3,991) – (8,024) (4,032)
Other income 19,888 – 21,148 -
Gain on acquisition – – 200,978 -
Loss on disposition
of property and
equipment – (61,958) (236) (61,958)
Realized loss on
sale of marketable
equity securities – – – (280,975)
Foreign currency
transaction loss (364) (3,480) (799) (3,781)
————– ———— ———— ————-
Total other income
(expenses) 630 (86,531) 185,018 (405,673)
————– ———— ———— ————-
Net income (loss)
from continuing
operations before
income taxes (188,274) (95,901) 398,421 (543,396)
————– ———— ———— ————-
Discontinued
operations:
Loss from
discontinued
operations – (81,250) – (174,560)
————– ———— ———— ————-
Total loss from
discontinued
operations – (81,250) – (174,560)
————– ———— ———— ————-
Income (loss)
before income
taxes (188,274) (177,151) 398,421 (717,956)
Income taxes
(expense) benefit (33,861) (26,800) (58,050) (12,332)
————– ———— ———— ————-
Net income (loss) (222,135) (203,951) 340,371 (730,288)
Net income (loss)
attributable to
noncontrolling
interest (34,448) 3,305 346,393 (60,920)
————– ———— ———— ————-
Net (loss) income
attributable to
China America
Holdings, Inc. $ (187,687)$ (207,256)$ (6,022)$ (669,368)
============== ============ ============ =============
Basic and diluted
loss per common
share:
Net (loss) income
from continuing
operations $ 0.00 $ 0.00 $ 0.00 $ 0.00
Net (loss) income
from discontinued
operations 0.00 0.00 0.00 0.00
————– ———— ———— ————-
Net loss per common
share $ 0.00 $ 0.00 $ 0.00 $ 0.00
============== ============ ============ =============
Weighted average
number of shares
outstanding:
Basic and diluted 157,855,236 135,810,792 154,799,803 135,810,792
============== ============ ============ =============
Amounts
attributable to
China America
Holdings, Inc.
Income (loss) from
continuing
operations, net of
tax $ (187,687)$ (126,006)$ (6,022)$ (494,808)
Loss from
discontinued
operations, net of
tax – (81,250) – (174,560)
————– ———— ———— ————-
Net (loss) income (187,687) (207,256)$ (6,022)$ (669,368)
============== ============ ============ =============
Safe Harbor Statement
China America Holdings, Inc. is hereby providing cautionary statements identifying important factors that could cause our actual results to differ materially from those projected in forward-looking statements (as defined in such act). Any statements that are not historical facts and that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, indicated through the use of words or phrases such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “intends,” “plans,” “believes” and “projects”) may be forward-looking and may involve estimates and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. These statements include, but are not limited to, our belief about our sales momentum, pricing strategy, ability to grow, and our expectations regarding our expectations regarding growth of the refrigerant market, revenues, margins, net income and earnings.
We caution that the factors described herein could cause actual results to differ materially from those expressed in any forward-looking statements we make and that investors should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time, and it is not possible for us to predict all of such factors. Further, we cannot assess the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. This press release is qualified in its entirety by the cautionary statements and risk factor disclosure contained in our Securities and Exchange Commission filings, including our Annual Report on Form 10-KT for the transition year ended September 30, 2009.
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