Nickel-metal hydride and lithium ion battery manufacturer Hong Kong Highpower Technology (NASDAQ:HPJ) managed to report improved net income in 2009 despite a 6% decrease in revenues, thanks to much stronger margins.
The New York listed, China based manufacturer of rechargeable batteries for electronic devices generated total revenues of US$70.3 million in the 12 month period ended 31 December 2009 (“FY 2009”), down from $75 million in 2008, which was blamed on lower average selling prices.
However, despite the lower revenues, net income rose 122% to $4.4 million or 33 cents per share (2008: net income $2 million or 15 cents) thanks to improved efficiencies from its manufacturing facilities and higher volumes which helped drive down the average cost per unit.
Gross profit in 2009 increased 18% to $15 million (2008: $12.8 million) as gross margin margins improved by 4% to 21%. Selling and distribution costs remained unchanged at $2.4 million in 2009, while General and administrative (G&A) expenses rose by 1% to 9.1% of net sales.
"We more than doubled our net income in 2009 and significantly increased our gross profit and margins in the face of a still fragile economy. Our focus on cost containment efforts and execution proved invaluable in helping us weather the most severe economic crisis in recent history,” commented George Pan, Chairman and CEO of Hong Kong Highpower Technology.
The NASDAQ listed company ended the year with cash and cash equivalents and restricted cash of $8.4 million and total assets of $51 million. Bank credit facilities totaled $27 million at the end of 2009, with approximately $12million available.
Hong Kong Highpower Technology also reported fourth quarter results today (“Q4”). Net sales for Q4 hit $22.5 million up 27% in Q4 2008, due to an increased demand from customers. Q4 gross profit increased 37% to $4.3 million (Q4 2008: $3.2 million), while gross margins improved by 1% to 19%. Net income in the fourth quarter more than doubled to $0.64 million, or 5 cents per diluted share.
"As we look forward, we believe we are well positioned within our industry to capitalize on growth opportunities with well over 10% share of the global Ni-MH battery market and excellent and stable customer relationships,” Pan added.
Disclosure: no position