SOURCE: China America Holdings, Inc.

May 24, 2010 09:21 ET

China America Holdings Reports Financial Results for the First Six Months of Fiscal 2010 Ended March 31, 2010

2nd Quarter of Fiscal 2010 Revenue of $8.6 Million, Up 39% From the Three Month Period Ended March 31, 2009; 2nd Quarter of Fiscal 2010 EPS of ($0.00) Versus EPS of ($0.00) for the Three Month Period Ended March 31, 2009; Net Loss for the First Six Months of Fiscal 2010 Narrows to ($6,000) as Compared to a Loss of ($669,000) in the Six Months Ended March 31, 2009

SHANGHAI, CHINA--(Marketwire - May 24, 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 the Company's financial results for the second quarter and first six months of fiscal 2010 ended March 31, 2010.

Financial Highlights

For the second quarter of fiscal 2010 total revenues were $8.7 million, up 39% from the $6.2 million recorded in the six months ended March 31, 2009. For the first six months of fiscal 2010 we recorded revenues of $19.8 million with a net loss that narrowed to ($6,000), up from revenues of $14.1 million and a net loss of ($669,000) in the six months ended March 31, 2009. We recorded a net loss of ($189,000) in the second quarter of fiscal 2010 as compared to ($207,000) in the three months ended March 31, 2009. This resulted in EPS of ($0.00) per diluted and basic share in both periods.

The improvement in net revenue results in the second quarter of fiscal 2010 was largely driven by our aggressive pricing strategy yielding additional orders from new and existing customers. As a result of this pricing strategy gross margins were slightly lower at 6.6% as compared to 7.8% in the three months ended March 31, 2009.

Balance Sheet

At March 31, 2010, working capital was $9.2 million as compared to $8.6 million at September 30, 2009. Total current assets at March 31, 2010 were $16.2 million as compared to $13.9 million at September 30, 2009.

Commenting on the second quarter, Mr. Shaoyin Wang, CEO of China America Holdings, stated, "We continue to gain sales momentum through the first six months of fiscal 2010. Our aggressive pricing strategy continues to yield positive top line results. We gained additional customers at the expense of a small decrease in gross margins. We are confident that our business will continue to grow as the global refrigerant market is becoming increasingly stronger and margins will improve as China begins its mandated transition into more environmentally friendly products. We look forward to a stronger performance in the second half of fiscal 2010 as we work diligently to continue to improve our operating results."

About China America Holdings, Inc.

China America Holdings, Inc. 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.

              CHINA AMERICA HOLDINGS, INC. AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEETS



                                              March 31,     September 30,
                                                 2010            2009
                                           --------------- ---------------
                  ASSETS                      Unaudited
                                           ---------------
CURRENT ASSETS:
Cash and cash equivalents                  $       969,419 $     1,721,231
Accounts receivable, net                         2,673,153       2,782,814
Notes receivable                                   588,007         829,890
Inventory                                        2,455,472       2,165,567
Tax receivable                                     251,446          43,137
Prepaid expense and other current assets         2,326,844         552,460
                                           --------------- ---------------
Total current assets                             9,264,341       8,095,099
                                           --------------- ---------------

LONG-TERM ASSETS:
Restricted cash                                  1,287,284         877,501
Property and equipment, net                      4,760,942       4,049,285
Land use right, net                                820,363         828,654
Other assets                                        29,256          29,250
                                           --------------- ---------------
Total other assets                               6,897,845       5,784,690
                                           --------------- ---------------

Total assets                               $    16,162,186 $    13,879,789
                                           =============== ===============

          LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Notes payable                              $     4,033,133 $     3,036,290
Notes payable-related party                        410,000         400,000
Accounts payable and accrued expenses              753,252         893,391
Advances from customers                            767,204         199,905
Taxes payables                                     492,375         458,570
Due to related parties                             554,619         228,467
                                           --------------- ---------------
Total current liabilities                        7,010,583       5,216,623

EQUITY:
China America Holdings, Inc. shareholders'
 equity
Common stock: $.001 par value, 500,000,000
 shares authorized; 159,810,792 and
 151,810,792 shares issued and outstanding
 at March 31, 2010 and September 30, 2009,
 respectively                                      159,811         151,811
Additional paid-in capital                      20,152,571      20,014,547
Statutory reserves                                 756,166         704,321
Accumulated deficit                            (17,708,473)    (17,650,606)
Accumulated other comprehensive income             430,151         428,109
                                           --------------- ---------------
Total China America Holdings, Inc.
 shareholders' equity                            3,790,226       3,648,182
Noncontrolling interest                          5,361,377       5,014,984
                                           --------------- ---------------
Total equity                                     9,151,603       8,663,166
                                           --------------- ---------------

Total liabilities and equity               $    16,162,186 $    13,879,789
                                           =============== ===============



              CHINA AMERICA HOLDINGS, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF OPERATIONS
                                (UNAUDITED)



                    For the Three Months Ended   For the Six Months Ended
                            March 31,                   March 31,
                    --------------------------- --------------------------
                        2010           2009         2010         2009

Net revenues        $    8,555,365 $  6,229,192 $ 19,813,954 $  14,126,928
Cost of sales            7,989,220    5,742,090   17,653,475    13,414,719
                    -------------- ------------ ------------ -------------
Gross profit               566,145      487,102    2,160,479       712,209

Operating expenses:
Selling expenses           239,529      221,350      909,879       334,867
Consulting and
 investor relations
 expense                   166,636            -      204,136             -
Consulting
 expense-related
 party                      93,000      100,000      239,024       165,812
Compensation and
 related taxes              74,143       53,090      133,478        94,452
General and
 administrative            181,741      122,032      460,559       254,801
                    -------------- ------------ ------------ -------------
Total operating
 expenses                  755,049      496,472    1,947,076       849,932
                    -------------- ------------ ------------ -------------
Total operating
 income (loss)            (188,904)      (9,370)     213,403      (137,723)
                    -------------- ------------ ------------ -------------

Other income
 (expenses):
Interest income              2,810        1,197        4,726         3,729
Interest expense           (17,713)     (22,290)     (32,775)      (58,656)
Interest
 expense-related
 party                      (3,991)           -       (8,024)       (4,032)
Other income                19,888            -       21,148             -
Gain on acquisition              -            -      200,978             -
Loss on disposition
 of property and
 equipment                       -      (61,958)        (236)      (61,958)
Realized loss on
 sale of marketable
 equity securities               -            -            -      (280,975)
Foreign currency
 transaction loss             (364)      (3,480)        (799)       (3,781)
                    -------------- ------------ ------------ -------------
Total other income
 (expenses)                    630      (86,531)     185,018      (405,673)
                    -------------- ------------ ------------ -------------
Net income (loss)
 from continuing
 operations before
 income taxes             (188,274)     (95,901)     398,421      (543,396)
                    -------------- ------------ ------------ -------------

Discontinued
 operations:
Loss from
 discontinued
 operations                      -      (81,250)           -      (174,560)
                    -------------- ------------ ------------ -------------
Total loss from
 discontinued
 operations                      -      (81,250)           -      (174,560)
                    -------------- ------------ ------------ -------------
Income (loss)
 before income
 taxes                    (188,274)    (177,151)     398,421      (717,956)
Income taxes
 (expense) benefit         (33,861)     (26,800)     (58,050)      (12,332)
                    -------------- ------------ ------------ -------------
Net income (loss)         (222,135)    (203,951)     340,371      (730,288)
Net income (loss)
 attributable to
 noncontrolling
 interest                  (34,448)       3,305      346,393       (60,920)
                    -------------- ------------ ------------ -------------
Net (loss) income
 attributable to
 China America
 Holdings, Inc.     $     (187,687)$   (207,256)$     (6,022)$    (669,368)
                    ============== ============ ============ =============

Basic and diluted
 loss per common
 share:
Net (loss) income
 from continuing
 operations         $         0.00 $       0.00 $       0.00 $        0.00
Net (loss) income
 from discontinued
 operations                   0.00         0.00         0.00          0.00
                    -------------- ------------ ------------ -------------
Net loss per common
 share              $         0.00 $       0.00 $       0.00 $        0.00
                    ============== ============ ============ =============

Weighted average
 number of shares
 outstanding:
Basic and diluted      157,855,236  135,810,792  154,799,803   135,810,792
                    ============== ============ ============ =============

Amounts
 attributable to
 China America
 Holdings, Inc.
Income (loss) from
 continuing
 operations, net of
 tax                $     (187,687)$   (126,006)$     (6,022)$    (494,808)
Loss from
 discontinued
 operations, net of
 tax                             -      (81,250)           -      (174,560)
                    -------------- ------------ ------------ -------------
Net (loss) income         (187,687)    (207,256)$     (6,022)$    (669,368)
                    ============== ============ ============ =============

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 sales momentum, pricing strategy, ability to grow, and our expectations regarding our expectations regarding growth of the refrigerant market, revenues, margins, net income and earnings.

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-KT for the transition year ended September 30, 2009.

Contact Information

  • Contact:
    China America Holdings, Inc.
    Lillian Wong
    U.S. Representative
    954-363-7333 ext. 317