SOURCE: China America Holdings, Inc.

January 14, 2010 08:00 ET

China America Holdings Reports Financial Results for the Nine Months Transition Period Ended September 30, 2009

Fiscal Year 2009 Revenue of $22.9 Million; Fiscal Year 2009 GAAP Net Loss of ($362,000); Fiscal Year 2009 EBITDA Net Income of $46,000

SHANGHAI, CHINA--(Marketwire - January 14, 2010) - China America Holdings, Inc. (OTCBB: CAAH), a holding company operating in China that owns 56% of China based subsidiary Shanghai Aohong Chemical Co., Ltd., announced today its financial results for the nine month transition period ended September 30, 2009.

Financial Highlights:

For the nine month transition period from January 1, 2009 to September 30, 2009 (the "2009 transition period"), revenue was $22.9 million. Revenue from continuing operations improved slightly to $8.5 million in the three month period ended September 30, 2009, up 3.5% sequentially from the $8.2 million recorded from continuing operations in the three month period ended June 30, 2009.

Revenue and gross profit margin decreased during the 2009 transition period as compared to the first nine months of fiscal 2008. The decrease in gross profit margin was attributable to the company's aggressive pricing strategy in an intensely competitive domestic market. Additionally, the global economic downturn resulted in a profound decrease in the export market for coolants, causing additional margin pressure as many traditional exporters added additional supply onto the domestic market.

In the second half of calendar 2009 these pressures began to abate as oversupply was worked through the system and a number of competitors were forced to shut down operations or elected to exit the business. As a result, prices for our products have firmed and management sees a return to more normalized margins continuing into fiscal 2010.

Balance Sheet

At September 30, 2009, total assets were $13.9 million and shareholder equity was $8.7 million. At December 31, 2008, total assets were $9.3 million and shareholder equity of $8.6 million. At September 30, 2009 cash and cash equivalents were $1.7 million and working capital was $2.9 million. At December 31, 2008 cash and cash equivalents were $2.2 million and working capital was $4.2 million.

Mr. Shaoyin Wang, CEO of China America Holdings, stated, "The 2009 transition period was a very challenging time for our business as we experienced increased competitive pressures due to the global downturn. Management responded by taking immediate decisive actions through reduced pricing in an effort to maintain our existing clients and attract additional customers to accelerate our business as conditions in China and the world continue to improve. With a number of competitors having exited the business and our company remaining in a relatively strong financial condition, we believe that we have successfully navigated through this difficult period in China and the worst of the global recession. We are confident that we now emerge from this period as one of the leaders in our industry, poised for a strong reacceleration of growth with improved market conditions. We look forward to realizing rewards for the difficult measures taken in this past year which we believe will help to create significant positive momentum in fiscal 2010 and beyond."

About China America Holdings, Inc.

China America Holdings, Inc. (OTCBB: CAAH) is a holding company which owns a 56% stake in Shanghai Aohong Chemical Co., Ltd. based in Shanghai, China. Shanghai Aohong Chemical Co., Ltd. is a distributor of assorted liquid coolants which are utilized in a variety of applications, primarily as refrigerants in air conditioning systems for automobiles, residential and commercial air conditioning systems, and a manufacturer of steel non-refillable cylinders. For more information, please visit http://www.caah.us.

Safe Harbor Statement

China America Holdings, Inc. is hereby providing cautionary statements identifying important factors that could cause our actual results to differ materially from those projected in forward-looking statements (as defined in such act). Any statements that are not historical facts and that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, indicated through the use of words or phrases such as "will likely result," "are expected to," "will continue," "is anticipated," "estimated," "intends," "plans," "believes" and "projects") may be forward-looking and may involve estimates and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. These statements include, but are not limited to, our belief about our growth strategy and its impact on our results of operations, our efforts to locate opportunistic acquisition targets, our expectations regarding improvement and growth in our operations in China and our commitment to our growth strategy in China.

We caution that the factors described herein could cause actual results to differ materially from those expressed in any forward-looking statements we make and that investors should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time, and it is not possible for us to predict all of such factors. Further, we cannot assess the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. This press release is qualified in its entirety by the cautionary statements and risk factor disclosure contained in our Securities and Exchange Commission filings, including our Annual Report on Form 10-K for the year ended December 31, 2008.

Contact Information

  • Contact:
    China America Holdings, Inc.
    Gary Liu
    U.S. Representative
    954-363-7333 ext. 318