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Start Time: 10:00
End Time: 10:25
Highpower International, Inc. (HPJ)
Q1 2014 Earnings Conference Call
May 12, 2014, 10:00 AM ET
Henry Sun - CFO
George Pan - CEO
Bryan Bai - VP, Sales
Tricia Ross - IR, Financial Profiles, Inc.
JinMing Liu - Ardour Capital Investments
Previous Statements by HPJ
» Highpower International's CEO Discusses Q4 2013 Results - Earnings Call Transcript
» Highpower Technology's Management Discusses Q3 2013 Results - Earnings Call Transcript
» Highpower Technology's Management Discusses Q2 2013 Results - Earnings Call Transcript
» Highpower International's CEO Discusses Q1 2013 Results - Earnings Call Transcript
I would now like to turn the call over to Tricia Ross of Financial Profiles. Please go ahead.
Thank you and good morning. This is Tricia Ross, Investor Relations for Highpower International. By now, you should have all received a copy of the press release we put out earlier this morning. If you need one, please feel free to contact us at 310-622-8226.
Before we begin, I would like to remind you that comments on today's call contain forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements are identified through the use of words expect, project, target, continue, believe and other words of similar meaning. Such statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of Highpower International to differ materially from the results expressed or implied by such statements.
For a discussion of risks and uncertainties that could cause actual results to differ from those contained in the forward-looking statements, see Risk Factors and Management's Discussion and Analysis of financial conditions and results of operations in the company's annual report on Form 10-K and other reports the company files under the Securities and Exchange Act of 1934.
Although the company believes that the expectations reflected in such forward-looking statements are reasonable, there can be no assurances that such expectations will prove to be correct. The company has no obligation to update the forward-looking information discussed during today's call.
With us today on the call from management is Mr. George Pan, Chairman and Chief Executive Officer; Henry Sun, Chief Financial Officer and Bryan Bai, Vice President of Sales.
With that, I would now like to turn the call over to Henry Sun.
Thank you, Tricia, and thank you all for joining us today. Welcome to Highpower International's first quarter 2014 earnings conference call. I will begin with an overview of our first quarter 2014 progress and the financial results, which we reported in our press release issued this morning. Then, we will turn the call over to Chairman Pan for some very brief remarks and next turn to Bryan for some commentary on our recent sales and marketing initiatives. Finally, I will review our guidance for fiscal year 2014 before opening up the call to your questions.
Overall, the first quarter was an excellent quarter for Highpower which is always seasonally our slowest of the year. We were pleased with the revenue levels we achieved for both of our major business units; lithium and nickel-metal hydride, but more importantly we are excited that the progress we made on positioning our business for future sustained growth.
We have achieved a number of transformative business milestones since the start of 2014 including adding two Fortune 500 customers; SONY and Philips to whom we are now an approved supplier. We received our first ever electrical vehicle order for large format lithium polymer batteries to be used in electric buses. We began shipping products from our new Huizhou facility. We continue to grow into new innovative markets such as wearable products, mobile payment devices and electric lawn mowers.
We initiated the roll-out of our solar compatible energy storage systems line of products and we successfully accessed the capital markets to strengthen our balance sheet by about $5 million. Each of these milestones make Highpower very well positioned to capture significant growth of the rechargeable battery and a clean energy market in the years ahead.
As we have seen for a number of quarters, our lithium battery business continues to deliver strong growth. We continued to secure significant orders from new and existing customers. Our lithium battery net sales were up 44.7% in the first quarter of 2014 over the first quarter of 2013, and our total lithium battery pieces sold increased to 15.2% while we also had 22.5% increase in volume per ampere hour.
Total net sales for the first quarter of 2014 were $29.2 million, a year-over-year increase of 19.5% compared with $24.4 million for the first quarter of 2013. The increase in sales for the first quarter was due to a $4.1 million increase in net sales of our lithium batteries and a $0.4 million increase in net sales of our nickel-metal hydride batteries.
The increase in the number of nickel-metal hydride battery units sold in the first quarter of 2014 was primarily attributable to increased orders from our new customers. The increase in the volume of lithium batteries sold in the first quarter of 2014 was primarily attributable to growth of global demand.
Approximately 69% of our revenue came from China, Hong Kong and the rest of Asia in the first quarter of 2014. Europe contributed approximately 22% in this quarter and the remaining 9% came from North America and rest of the world.