ZHEJIANG, China–SORL Auto Parts, Inc., a leading manufacturer and distributor of automotive brake systems as well as other key safety-related auto parts in China, announced today its financial results for the first quarter ended March 31, 2019.
Net sales for the 2019 first quarter were $136.2 million, up 26.5% from $107.7 million in the first quarter of 2018. Revenues from the domestic OEM segment grew 44.6% year-over-year to $74.9 million;
Revenues from international markets increased to $18.0 million. Gross margin was 26.8% compared with 28.0% in the first quarter of 2018.
Net income attributable increased to $9.0 million, or $0.46 per basic and diluted share, compared with $8.3 million, or $0.43 per basic and diluted share in the first quarter of 2018.
Mr. Xiaoping Zhang, SORL’s Chief Executive Officer and Chairman, stated, “We are taking a ‘winner-takes-all’ mentality to expand our market shares in a business environment filled with uncertainties and anxieties. On the OEM side, we continue to strengthen our relationships with the main truck and bus producers in China through our new products and service. For the aftermarket, we differentiate ourselves with better pricing and top quality to gain market share. In the international market, we continue to focus on key markets and key customers to bolster our foothold.”
Ms. Jinrui Yu, SORL’s Chief Operating Officer, added, “Our growing product portfolio of advanced products continues to generate substantial sales growth even in the current challenging economic environment in China. We continue to add resources to our research and development program while we also maintain one of the highest gross margins in the industry.”
Research and development (“R&D”) expenses were $5.0 million compared with $3.6 million in the first quarter of 2018. As a percentage of revenue, R&D expenses were 3.6% in the first quarter of 2019 compared with 3.3% of revenue in the first quarter of 2018.
SORL recently received a proposal from its CEO to take the company private.
Mr. Xiaoping Zhang, its Chairman and Chief Executive Officer, Ms. Shuping Chi and Mr. Xiaofeng Zhang, directors of the Company, and Ruili Group Co., Ltd. have proposed to acquire all of the outstanding shares of common stock of the company not already owned by the consortium for US$4.26 per share of common stock in cash. Ms. Chi is the wife of Chairman Zhang and Mr. Xiaofeng Zhang is the brother of Chairman Zhang.
The $4.26 per share price of the proposal represents a 13.9% premium over the Company’s last closing price on April 24, 2019, a premium of approximately 35.64% to its average closing price during the last 30 trading days, and a premium of approximately 36.93% to its average closing price during the last 60 trading days.