• Net Sales: Increased by 15.4% year over year to $158.6 million in Q2 2024.

• Gross Profit: Grew by 29% year over year to $29.3 million in Q2 2024.

• Gross Margin: Increased to 18.5% in Q2 2024 from 16.5% in Q2 2023.

• Operating Income: Rose by 38.7% year over year to $10.8 million in Q2 2024.

• Net Income: Attributable to parent company's common shareholders was $7.1 million in Q2 2024.

• Diluted Earnings Per Share: $0.24 in Q2 2024 compared to $0.35 in Q2 2023.

• Cash Flow from Operations: $9.1 million for the first six months of 2024.

• EPS Product Sales: Increased by 33.7% year over year to $55.6 million in Q2 2024.

• Special Dividend: $0.80 per common share, totaling approximately $25 million.

• Total Cash and Cash Equivalents: $148.4 million as of June 30, 2024.

• Revenue Guidance for 2024: $605 million.

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Release Date: August 13, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Net sales of steering products increased by 15.4% year over year, indicating strong demand.

• Gross profit grew by 29% year over year, driven by changes in product mix and cost control.

• Sales of electric power steering (EPS) products rose by 33.7% year over year, highlighting growth in advanced product lines.

• Operating income increased by 38.7% year over year, despite higher R&D and SG&A expenses.

• A special dividend of $0.80 per common share was declared, reflecting confidence in sustainable growth and cash generation.

Negative Points

• Sales in the Chinese commercial vehicle market declined by approximately $1 million, indicating challenges in this segment.

• North American sales decreased by $2.1 million year over year, primarily due to reduced demand from Stellantis.

• Net income attributable to shareholders decreased to $7.1 million from $10.5 million in the same quarter last year.

• Diluted earnings per share fell to $0.24 from $0.35 in the second quarter of 2023.

• Foreign exchange volatility led to a net financial expense of $0.7 million, compared to net financial income of $4 million in the previous year.

Q & A Highlights

Q: Gross margin has increased to 18.5% in the second quarter. What is the outlook for the gross margin going forward? A: Jie Li, Chief Financial Officer, explained that the gross margin improved due to increased EPS sales volume and higher value-added products. The company is confident in maintaining at least an 18% gross margin for the rest of the year.