- Revenues increase 19 percent to $7.7 million
- Net income amounts to $142,632 despite weak economy
- Balance sheet remains robust with $41.6 million in cash and no debt
VANCOUVER, May 14 /CNW/ - Zongshen PEM Power Systems Inc. ("ZPP" or "the
Company") (TSX:ZPP), today announced its financial results for the three-month
period ended March 31, 2009. All currency amounts referred to in this news
release are in Canadian dollars unless stated otherwise.
For the three-month period ended March 31, 2009 the Company reported
revenues of $7.7 million versus $6.5 million in the corresponding quarter last
year. Volume sales during the first quarter of 2009 totalled 21,120 units,
compared with 23,413 units in the first quarter of 2008. Net income during the
quarter amounted to $142,632 or $0.00 per share, versus a net loss of $124,378
or $(0.00) per share for the first quarter of 2008. Net income during the
three-month period was inclusive of $113,489 costs associated with stock-based
compensation, and $227,497 in interest income generated on the Company's
strong cash balance. The first quarter represents the seasonally weakest
quarter due to the effect of the Chinese New Year and consumer purchasing
At March 31, 2009, the Company was debt free with cash and cash
equivalents amounting to $41.6 million, compared to $33.3 million at December
31, 2008. The Company's strong balance sheet enables ZPP to weather the
current economic downturn while having the ability to explore and complete
select partnerships and acquisitions.
"As anticipated, we continued to see overall weakness, particularly in
export markets, due to the global economic environment during the first
quarter," noted Zongshen Zuo, Chairman and CEO of Zongshen PEM Power Systems
Inc. "We are seeing demand beginning to stabilize and could see a return in
consumer spending habits in the second half of 2009. The management team and
Board of Directors are assessing a number of investment opportunities with a
focus on accretive, complementary business in the two wheel and three wheel
gas and electric vehicle business."
ZPP continues to expect 2009 to be a challenging year for the organic
growth of its e-bike and small gas bike businesses. However, the Company is
well positioned to advance its growth strategy with a solid foundation in
e-bikes and small gas bikes, a strong balance sheet, a large market for its
products and a major shareholder and partner with assets and resources that
can be leveraged to gain competitive advantages. The Company is reviewing
strategic growth opportunities through partnerships and acquisitions, which
would complement its existing business.
The Company will host a conference call on Friday, May 15, 2009 at 11:00
a.m., Eastern Standard Time (EST) to further discuss the first quarter 2009
financial and operational results.
Dial in information is as follows:
Dial in number: 1-888-710-4011 (North America) or 1-913-312-0639
Taped Replay: 1-888-203-1112 (North America) or 1-719-457-0820
Taped Replay Pass Code: 5042919 (Available till May 29, 11:59 p.m.
Live Webcast Link: www.zongshenpem.com
About Zongshen PEM Power Systems Inc.
Zongshen PEM Power Systems Inc. is a public company trading under the
symbol ZPP on the Toronto Stock Exchange. The Company is engaged in the
commercialization of alternative power systems including batteries, fuel cells
and solar power, for a variety of consumer and industrial applications. The
Company manufactures low-cost, high quality, environmentally friendly small
gas motorbikes, electric motorcycles, electric bicycles and other e-vehicles
in China for the Chinese domestic and international markets. Zongshen PEM
Power System's largest shareholder is Zongshen Industrial Group, one of
China's largest manufacturers and distributors of motorcycles, engines, and
Forward Looking Information
This release contains forward-looking statements, which may be identified
by statements containing the words "will", "anticipate", "expect", "intend"
and other similar expressions. These statements are based on certain factors
and assumptions including foreign exchange rates, expected growth and sales,
results of operations, performance, and business prospects and opportunities
and effective income tax rates. While the company considers these factors and
assumptions to be reasonable based on information currently available, they
may prove to be incorrect. Several factors could cause actual results to
differ materially from those in the forward-looking statements, including, but
not limited to: our relationship with Zongshen Industrial Group; fluctuations
in market demand for small gas motorbikes and e-bikes; changes in competitive
pressures, including pricing pressures; timing and amount of capital
expenditures; changes in financial and capital markets and corresponding
effects on the company's investments; changes in currency and exchange rates;
and the effects of government policy and regulations;. Additional risks and
uncertainties can be found in our MD&A for the interim period ended March 31,
2009 and in our other filings with the Canadian securities commissions.
Forward-looking statements are given only as at the date of this release and
the company disclaims any obligation to update or revise the forward-looking
statements, whether as a result of new information, future events or
otherwise, except as required by law.
For further information:
For further information: Ali Mahdavi, Zongshen PEM Power Systems Inc.,
Vice President, Corporate Finance & Investor Relations, (416) 962-3300,