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Chisen Electric Corporation: Chisen Electric Corporation Reports First Quarter Sales Grew 33%; Net Income Up Slightly

^{Published on 2009-08-17 05:29:31, Last Modified on 2009-08-17 05:29:41 - Market Wire}
 

ZHEJIANG, CHINA--(Marketwire - August 17, 2009) - Chisen Electric Corporation (OTCBB: [ CIEC ]) (the "Company"), a leading lead-acid motive battery producer for the electric bicycle market in the People's Republic of China, reported today that revenues in its first quarter grew approximately 33% as it continued to experience strong sales of its battery products.

The Company reported that revenues in its first quarter ended June 30, 2009 increased to $29,475,000 compared with revenues of $22,225,000 in the same period in the prior fiscal year. Net income in the quarter ended June 30, 2009 increased slightly to $2,005,000 from $1,912,000 in the same period last year, while earnings per share in this year's first quarter were $0.04, equal to the $0.04 per share reported in the same period last year.

As the third largest producer of lead-acid motive battery products (LABEBS) in China, with strong relationships with leading electric bicycle-makers there, the Company said it continued to benefit in the first quarter from rapid growth in the PRC electric bicycle market. This helped generate a 76% increase in sales volume in the period.

At the same time the Company said it experienced a 28% decrease in average unit selling prices in response to decreases in major raw material costs, although the decrease was offset by the significant increase in sales volume and overall sales grew 33%.

While the Company reported that cost of sales grew in the quarter, the cost rates (as a percentage of sales) were about even at approximately 81.8% with the year earlier period.

Net income in the 2009 quarter also was affected by a growth related approximately $680,000 increase in sales, marketing and distribution costs as well as increases in G&A expenses mainly related to increased employee compensation and benefits.

Financial Strength

Of significance, in the 2009 quarter the Company arranged a number of bank loans to satisfy growth needs and saw net cash provided by financing activities increase to approximately $11,688,000 from approximately $1,455,000 in the same period last year. The Company's cash position increased as of June 30, 2009 to approximately $9,085,000 compared with $3,182,000 in the prior year quarter. The Company's working capital in the 2009 quarter also increased by close to $2 million to approximately $14,472,000. A decrease in accounts payable of about $20.5 million was offset by an increase to approximately $19.2 million in short-term bank loans, as noted above, as well as by payable and other accrued expenses and liabilities.

Continuing Growth Ahead

Mr. Xu Kecheng, President, CEO and a Director of the Company, commented, "The year is off to a reasonably strong start, with our strengthened financial position, new capital equipment in place to support increased production and a vigorous electric bicycle market. While we anticipate a continuation in fluctuating raw material and sales prices, we will continue to focus on improving our product mix to include higher power products with better selling prices and broadening our customer base." He added, "Our goal continues to be to become the top manufacturer in the industry in China through both internal growth and acquisition. This will permit us to reap the full benefits of the very exciting growth possibilities we see ahead providing a non-polluting, less expensive alternative power source to meet growing transportation needs and consumer preferences for 'green' products."

Description of Chisen Electric Corporation

Chisen Electric Corporation, incorporated in Nevada, USA, and headquartered in Zhejiang Province, the People's Republic of China, is a leading lead-acid motive battery producer for China's personal transportation device market. The Company's battery products are sold under its own brand names and are predominantly used in electric bicycles. Among all types of batteries for electric bicycles, the lead-acid motive battery is the preferred choice for electric bicycle manufacturers in China because of its cost efficiency. In the fiscal year ended March 31, 2009, the Company manufactured more than 7,740,000 batteries and had more than 2,000 employees.

"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995:

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations or beliefs, including, statements concerning the Company's operations, financial performance and condition. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. The Company cautions that these statements by their nature involve risks and uncertainties, and actual results my differ materially depending on a variety important factors, including, but not limited to, the impact of competitive conditions and effectiveness of marketing; changes in laws and regulations; fluctuations in costs of production, financing and other factors as discussed in the Company's reports filed with the Securities and Exchange Commission from time to time, In addition, the Company disclaims any obligation to update any forward-looking statement to reflect events or circumstances after the date hereof. No securities regulatory authority has either approved or disapproved the contents of this new release. This release is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer or selling security holder and that will contain detailed information about the company and management, as well as financial statements. The Company filings with the US Securities and Exchange Commission, including the annual report for the fiscal year ended March 31, 2009 on Form 10-K, can be viewed on EDGAR Online or [ www.sec.gov ].

 Chisen Electric Corporation Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income For the three months ended June 30, 2009 and 2008 Three months ended June 30 ---------------------- 2009 2008 US$’000 US$’000 Operating revenues: Net sales to third parties 29,475 22,225 Cost of sales (24,105) (18,195) ---------- ---------- Gross income 5,370 4,030 Operating expenses: Sales, marketing and distribution (1,787) (1,105) General and administrative (1,056) (612) ---------- ---------- Operating income 2,527 2,313 Other income, net 147 206 Interest income 55 7 Interest expense (369) (286) ---------- ---------- Income before income taxes 2,360 2,240 Income taxes expenses 4 (355) (328) ---------- ---------- Net income 2,005 1,912 Other comprehensive income Foreign currency translation adjustment 1 226 ---------- ---------- Comprehensive income 2,006 2,138 ========== ========== Shares Shares Earnings per share Weight average number of common stock outstanding - basic and diluted 3 50,000,000 50,000,000 ========== ========== US$ US$ Net income per share of common stock outstanding - basic and diluted 0.04 0.04 ========== ==========