FUZHOU, China, November 7, 2011 /PRNewswire-Asia-FirstCall/ -- China Yida Holding Company (Nasdaq: CNYD) ("China Yida" or the "Company"), a leading diversified tourism and entertainment enterprise in China, today announced financial results for the quarter ended September 30, 2011.
Third Quarter 2011 Highlights
"We are pleased to see a significant improvement in tourist traffic to our premier Great Golden Lake destination in the quarter, and remain confident about its continued full recovery. We are also reporting ongoing progress at Yunding Recreational Park, which we believe will develop into a highly popular destination with a wide array of attractions for people of all ages," said Dr. Chen Minhua, Chairman and Chief Executive Officer of China Yida.
"We remain confident about the future of our Company. With the Company operating and developing a strategic mix of properties that yield diversified revenue streams, we anticipate stable and sustainable sources of income. We remain committed to meeting the needs of the dynamic tourism market in China and believe that our unique tourist destinations will generate a high level of tourist satisfaction as well as sound returns on investment," concluded Dr. Chen.
Tourism Business
Net revenue from the tourism business was $2.89 million, an increase of 121.9% from the $1.30 million in the third quarter of 2010. The increase was primarily due to the recovery of tour traffic to the Great Golden Lake relative to the second half of 2010 which was depressed due to severe flooding. Further, top line growth was abetted by sustained visitor traffic to Yunding Recreational Park and revenue from the Hua'An Tulou destination.
Great Golden Lake experienced approximately 110,000 visitors during the third quarter of 2011 and generated revenue of approximately $1.84 million, up 237% from the third quarter of 2010, due to its continuing recovery from the massive flood in southern China last year. It was also up sequentially from the 76,000 visitors and $1.27 million generated from this site during the second quarter of 2010.
The Hua'An Tulou tourist destination received approximately 50,000 visitors during the third quarter of 2011, and generated revenue of approximately $0.67 million, down 15.2% from in the third quarter of 2010. The decrease was mainly due to tough market competition from two other Tulou clusters in Fujian Province.
Yunding Recreational Park attracted 14,000 visitors in the third quarter of 2011, remaining at approximately the same level as in the previous quarter. Revenue from this tourist attraction totaled approximately $0.3 million in the third quarter of 2011.
Gross margin for the tourism business was 51.8% for the third quarter of 2011, as compared to 49.6% a year ago. The slight increase of gross margin was mainly because more tourists came to visit the Great Golden Lake and fixed costs such as depreciation of property and equipment remained at the same level, as compared with the same period of 2010.
Media Business
Net revenue from the media business was $8.3 million, a decrease of 14.4% from the $9.7 million posted in the comparable period a year ago. This decrease was attributable to significantly lower revenue from the Company's train media business due to the current manual broadcasting method of its "Journey through China on the Train" infomercial program and the difficulty associated with monitoring the actual broadcast. Railway media revenue was down 72% for the third quarter of 2011 as compared to the comparable year-ago quarter. Fujian Education Television Channel ("FETV") also experienced a fall in revenue due to actions by domestic media authorities restricting the broadcasting of certain types of TV advertising. FETV revenue was down 8% for the third quarter of 2011 as compared to the comparable year-ago quarter.
Gross margin for the media business was 74.3% for the third quarter of 2011, as compared to 78.2% a year ago. The decrease of gross margin was mainly because the income generated from railway media broadcasts became less predictable due to advertising constraints while fixed costs, such as costs associated with FETV's commercial airtime, remained at the same level as compared with the same period of 2010.
Consolidated Operating Results
Gross profit for China Yida's consolidated operations was $7.7 million in the third quarter of 2011, a decrease of 7.0% from the $8.3 million recorded in the third quarter of 2010. The gross margin was 68.5%, compared to 74.8% for the comparable period of 2010. The decrease in consolidated gross profits is attributable to the decreased revenues and profitability of media business.
Total operating expenses increased by 70.1% to $2.8 million in the third quarter of 2011, compared with $1.6 million in the third quarter of 2010. Selling expenses increased 164.1% year-over-year to $1.6 million mainly due to higher variable expenses associated with the recovery of the Great Golden Lake as well as newly engaged operations at Yunding Park during 2011, which had not been open during the same period in 2010. General and administration expenses increased 14.6% year-over-year to $1.2 million primarily due to the stock based compensation expense related to the issuance of stock options in 2011.
Income from operations decreased to $4.9 million in the third quarter, a decrease of 25.9% compared to $6.6 million in the third quarter of 2010. Operating margin for the third quarter of 2011 was 43.8%, compared to 60.1% for the third quarter of 2010.
Provision for income taxes was $1.7 million in the third quarter, compared to $2.0 million in the comparable year ago quarter.
Net income attributable to China Yida Holding Company for the third quarter of 2011 was $3.2 million, or $0.16 per fully diluted share, as compared to $4.7 million, or $0.23 per fully diluted share, for the third quarter of 2010.
Nine Months Results
Total net revenue decreased by 19.5% to $34.0 million for the nine months ended September 30, 2011, compared with $42.2 million for the nine months ended September 30, 2010. Net revenue from advertising decreased by 4.1% to $26.7 million, compared with $27.8 million for the nine months ended September 30, 2010. Net revenue from the tourism business decreased by 49.3% to $7.3 million, compared with $14.4 million for the nine months ended September 30, 2010.
Gross profit for the first nine months of 2011 decreased 29.8% year over year to $23.4 million with a gross margin of 69.0%. Operating income decreased by 40.5% to $16.2 million in the first nine months of 2011, compared with $27.2 million in the first nine months of 2010.
Net income attributable to China Yida Holding Company for the nine months ended September 30, 2011 was $10.6 million, or $0.54 per fully diluted share, a decrease of 46.9% compared with net income of $19.9 million, or $0.99 per fully diluted share, for the comparable period of 2010.
Financial Condition
As of September 30, 2011, the Company had $14.4 million in cash and cash equivalents on its balance sheet. Working capital was $16.3 million and current ratio was 2.4 times. The Company's total debt is $15.2 million as of September 30, 2011 with $5.4 million bank loans to mature within 12 months. Management plans to replace these short-term bank loans with new bank loans in approximately the same aggregate amounts. The Company also had $152.4 million in shareholders' equity as of September 30, 2011 compared to $133.7 million at the end of 2010.
For the nine months ended September 30, 2011, China Yida generated $4.3 million in cash flow from operating activities. The decrease of $19.1 million from 2010 for this same period was primarily due to a decreased number of tourists visiting the Great Golden Lake Resort during the restoration of the tourist destination and its effect on revenue.
Management believes that the Company can finance all of its ongoing capital expenditures from cash on hand, cash from operations and bank loans secured with its tourism assets will enable it to sustain its operations at the current levels for the next twelve months.
Business Update and Outlook
The Company's overall strategic plan is to evolve from a media and tourism company to one that develops and operates unique and attractive tourist destinations. China Yida foresees diverse sources of income as emanating from its tourist properties so as to generate stable and sustainable revenue growth accompanied by high margins and strong earnings.
Of its existing tourist destinations, the Company is encouraged with the progress made at the Great Golden Lake during the recent quarter. It anticipates that additional time is required for the tourist attraction to return to seasonal levels and that as the road to Shangqing River is repaired, additional progress towards that goal will be made.
At Yunding Recreational Park, the valley rafting facilities has been put into trial operation and two new restaurants have been opened to the public. In addition, the designs for the camping center and shopping plaza have been completed and the process to receive approvals for construction has commenced. Management believes that that increased revenue will depend on when construction of the main road to Yunding Park will be completed by the local government.
Management expects that its Hua'an Tulou site will continue to face difficult competition from two other similar Tulou clusters in Fujian Province. As the development proposal of stream area was not approved by the local administration authority, Management is looking into other ways to enhance Hua'an Tulou's competitiveness.
The Company has been active in developing its three new tourism projects in 2011. They are China Yang-sheng (Nourishing Life) Paradise in Zhangshu City, Jiangxi province, the City of Caves in Fenyi City, Jiangxi province and the Ming Dynasty Entertainment World in Bengbu City, Anhui province. We expect that all three new projects will complete their first phases of construction so as to be open to the public by the end of 2012.
As of September 30, 2011, the total estimated contract costs to complete the China Yang-sheng (Nourishing Life) Paradise are $14.0 million, of which approximately $11.0 million has been paid. As of this same date, the total estimated contract costs to complete the City of Caves are $12.7 million, of which approximately $10.4 million has been paid. Finally, the construction work associated with the Ming Dynasty Entertainment World property is scheduled to commence on November 24, 2011.
"We are buoyed by the positive developments at the Great Golden Lake and Yunding as well as ongoing progress with our new projects," said Dr. Chen Minhua, Chairman and Chief Executive Officer of China Yida. "Our wholly-owned subsidiary, Fujian Yida Travel Service Co., Ltd., will integrate the marketing of all our tourist destinations and they have now opened 16 branches in seven provinces - which we plan to increase to 24 in 2012. Finally, our advertising and broadcast business currently presents certain challenges and we look forward to developing solutions to stabilize this segment," concluded Dr. Chen Minhua, Chairman and Chief Executive Officer of China Yida.
Subsequent Events
George Wung, the Company's Chief Financial Officer, will be leaving the Company effective December 31, 2011, for personal reasons. His resignation is not a result of any disputes or disagreement with the Company on any matter relating to its operations, policies or practices. The Company has initiated a search for a new Chief Financial Officer and will make an announcement as soon as a candidate has been chosen.
"We truly appreciate George's many contributions during his tenure and wish him the best in all of his future endeavors," said Mr. Minhua Chen, China Yida's Chief Executive Officer.
Conference Call
China Yida will hold a conference call at on Monday, November 7, 2011 at 9:00 a.m. Eastern Time to discuss its third quarter 2011 results. To participate in the live conference call, please dial any of the following numbers five to ten minutes prior to the scheduled conference call time.
Toll-Free Dial-In Number: | ||
US | 866-395-5819 | |
China, Domestic | 400-682-8609 | |
Hong Kong | 800-966-253 | |
Singapore | 800-101-1512 | |
International callers can also dial +1-706-643-6986. The Conference ID for this call is 22527451.
If you are unable to participate in the call at this time, a replay will be available for two weeks starting on Monday, November 7, 2011 at 12:00 p.m. Eastern Time. To access the replay, dial 855-859-2056 or 404-537-3406, international callers dial +1-800-585-8367. The Conference ID is 22527451.
About China Yida
China Yida is a leading tourism and media enterprise focused on China's fast-growing leisure industry and headquartered in Fuzhou City, Fujian province of China. The Company provides tourism management services and specializes in the development, management and operation of natural, cultural and historic scenic sites.
China Yida currently operates the Great Golden Lake tourist destination (Global Geopark, including Golden Lake, Shangqing River, Zhuangyuan Rock, Luohan Mountain and Taining Old Town), Hua'An Tulou tourist destination (World Culture Heritage, including Dadi Tulou cluster and the Shangping Tulou cluster) and China Yunding Park (National Park, including Flower Terrace, Heavenly Lake, Colorful Waterfall, Red River Valley and Jade Valley). China Yida is also developing three additional tourism projects, Ming Dynasty Entertainment World, China Yang-sheng (Nourishing Life) Tourism Project and the City of Caves.
The Company's media business provides operations management services including content and advertising management for the Fujian Education Television Station ("FETV"), a top-rated provincial education television channel, and "Journey through China on the Train", an advertisement-embedded travel program, currently the only on-board media program from a third party authorized by China's Ministry of Railways.
For further information, please contact the Company directly, or visit its Web site at http://www.yidacn.net.
Forward-Looking Statements
Certain statements in this press release that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by the use of words such as "anticipate, "believe," "expect," "future," "may," "will," "would," "should," "plan," "projected," "intend," and similar expressions. Such forward-looking statements, involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of China Yida Holding Co., Inc. (the "Company") to be materially different from those expressed or implied by such forward-looking statements. The Company's future operating results are dependent upon many factors, including but not limited to: (i) the Company's ability to obtain sufficient capital or a strategic business arrangement; (ii) the Company's ability to build and maintain the management and human resources and infrastructure necessary to support the anticipated growth of its business; (iii) competitive factors and developments beyond the Company's control; and (iv) other risk factors discussed in the Company's periodic filings with the Securities and Exchange Commission, which are available for review at www.sec.gov.
Contact: | ||
China Yida Holding Company | CCG Investor Relations | |
George Wung CFO | Crocker Coulson, President | |
Phone: + (1) 909-843-6358 | Phone: + (1) 646-213-1915 | |
Email: ir@yidacn.net | Karen Wang, Account Executive | |
Phone: + (86) 21-3133-5076 | ||
Email: karen.wang@ccgir.com | ||
FINANCIAL TABLES FOLLOW
CHINA YIDA HOLDING CO. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | |||||||||
September 30, | December 31, | ||||||||
2011 | 2010 | ||||||||
ASSETS | |||||||||
Current assets | |||||||||
Cash and cash equivalents | $ | 14,358,935 | $ | 7,146,684 | |||||
Accounts receivable | 137,175 | 27,724 | |||||||
Other receivables, net | 5,186,349 | 160,133 | |||||||
Advances and prepayments | 8,249,433 | 1,020,000 | |||||||
Deferred tax assets | 284,420 | 280,266 | |||||||
Total current assets | 28,216,312 | 8,634,807 | |||||||
Property and equipment, net | 111,060,532 | 89,739,372 | |||||||
Construction in progress | 24,272,257 | 35,191,692 | |||||||
Intangible assets, net | 9,658,994 | 14,042,432 | |||||||
Long-term prepayments | 3,021,914 | 193,593 | |||||||
Deferred tax assets | - | 19,913 | |||||||
Total assets | $ | 176,230,009 | $ | 147,821,809 | |||||
LIABILITIES AND EQUITY | |||||||||
Current liabilities | |||||||||
Short-term loans | $ | 1,847,069 | $ | 1,784,687 | |||||
Long-term debt, current portion | 3,584,566 | - | |||||||
Accounts payable | 69,112 | 1,229,237 | |||||||
Current obligation under airtime rights commitment | 2,241,135 | 1,890,657 | |||||||
Accrued expenses and other payables | 2,311,261 | 638,026 | |||||||
Taxes payable | 1,781,281 | 2,255,208 | |||||||
Deferred tax liabilities | 36,155 | - | |||||||
Total current liabilities | 11,870,579 | 7,797,815 | |||||||
Long-term obligation under airtime rights commitment | 2,183,389 | 3,758,376 | |||||||
Long-term debt | 9,783,204 | 2,571,161 | |||||||
Total liabilities | 23,837,172 | 14,127,352 | |||||||
Commitments and contingencies | |||||||||
Stockholders' equity | |||||||||
Preferred stock ($0.001 par value, 10,000,000 shares authorized, none issued and outstanding) | - | - | |||||||
Common stock ($0.0001 par value, 100,000,000 shares authorized, 19,551,785 issued and outstanding as of September 30, 2011 and December 31, 2010 | 1,955 | 1,955 | |||||||
Additional paid in capital | 49,054,622 | 48,478,086 | |||||||
Accumulated other comprehensive income | 12,006,402 | 7,000,839 | |||||||
Retained earnings | 86,222,893 | 75,569,652 | |||||||
Statutory reserve | 2,549,330 | 2,549,330 | |||||||
Total China Yida Holding Co. | 149,835,202 | 133,599,862 | |||||||
Non-controlling interest | 2,557,635 | 94,595 | |||||||
Total equity | 152,392,837 | 133,694,457 | |||||||
Total liabilities and equity | $ | 176,230,009 | $ | 147,821,809 | |||||
CHINA YIDA HOLDING CO. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED) | |||||||||||||||||
Nine Months Ended | Three Months Ended | ||||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||||
Net revenue | |||||||||||||||||
Advertisement | $ | 26,675,530 | $ | 27,820,997 | $ | 8,322,439 | $ | 9,726,192 | |||||||||
Tourism | 7,299,124 | 14,383,404 | 2,885,042 | 1,299,966 | |||||||||||||
33,974,654 | 42,204,401 | 11,207,481 | 11,026,158 | ||||||||||||||
Cost of revenue | |||||||||||||||||
Advertisement | 6,847,683 | 5,855,415 | 2,141,129 | 2,118,790 | |||||||||||||
Tourism | 3,681,633 | 2,958,141 | 1,389,869 | 654,551 | |||||||||||||
10,529,316 | 8,813,556 | 3,530,998 | 2,773,341 | ||||||||||||||
Gross profit | 23,445,338 | 33,390,845 | 7,676,483 | 8,252,817 | |||||||||||||
Operating expenses | |||||||||||||||||
Selling expenses | 3,704,622 | 2,839,638 | 1,596,304 | 604,444 | |||||||||||||
General and administrative expenses | 3,543,764 | 3,320,020 | 1,174,569 | 1,024,657 | |||||||||||||
Total operating expenses | 7,248,386 | 6,159,658 | 2,770,873 | 1,629,101 | |||||||||||||
Income from operations | 16,196,952 | 27,231,187 | 4,905,610 | 6,623,716 | |||||||||||||
Other income (expense) | |||||||||||||||||
Other income (expense), net | (41,430) | 1,650 | (23,648) | (5,593) | |||||||||||||
Interest income | 75,358 | 69,111 | 27,942 | 45,764 | |||||||||||||
Interest expenses | (228,212) | (19,099) | (26,454) | (19,099) | |||||||||||||
(194,284) | 51,662 | (22,160) | 21,072 | ||||||||||||||
Income before income tax and non-controlling interest | 16,002,668 | 27,282,849 | 4,883,450 | 6,644,788 | |||||||||||||
Less: Provision for income tax | 5,433,442 | 7,381,950 | 1,715,696 | 1,989,280 | |||||||||||||
Net income | 10,569,226 | 19,900,899 | 3,167,754 | 4,655,508 | |||||||||||||
Net loss attributable to non-controlling interest | 84,015 | 21,590 | 40,852 | 17,557 | |||||||||||||
Net income attributable to China Yida Holding Co. | $ | 10,653,241 | $ | 19,922,489 | $ | 3,208,606 | $ | 4,673,065 | |||||||||
Net income | $ | 10,569,226 | $ | 19,900,899 | $ | 3,167,754 | $ | 4,655,508 | |||||||||
Other comprehensive income | |||||||||||||||||
Foreign currency translation gain | 5,005,563 | 2,165,824 | 1,741,244 | 1,997,105 | |||||||||||||
Comprehensive income | 15,574,789 | 22,066,723 | 4,908,998 | 6,652,613 | |||||||||||||
Comprehensive loss attributable to non-controlling interest | 84,678 | 21,956 | 41,469 | 17,907 | |||||||||||||
Comprehensive income attributable to China Yida Holding Co. | $ | 15,659,467 | $ | 22,088,679 | $ | 4,950,647 | $ | 6,670,520 | |||||||||
Earnings per share | |||||||||||||||||
- Basic | $ | 0.54 | $ | 1.03 | $ | 0.16 | $ | 0.24 | |||||||||
- Diluted | $ | 0.54 | $ | 0.99 | $ | 0.16 | $ | 0.23 | |||||||||
Weighted average shares outstanding | |||||||||||||||||
- Basic | 19,551,785 | 19,343,858 | 19,551,785 | 19,551,785 | |||||||||||||
- Diluted | 19,561,621 | 20,117,670 | 19,555,436 | 20,325,597 | |||||||||||||
CHINA YIDA HOLDING CO. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | |||||||||
Nine Months Ended | |||||||||
2011 | 2010 | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||
Net income | $ | 10,569,226 | $ | 19,900,899 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||
Depreciation | 2,599,582 | 1,247,957 | |||||||
Amortization | 2,718,586 | 1,463,586 | |||||||
Stock-based compensation | 576,536 | 83,994 | |||||||
Deferred tax | 51,914 | - | |||||||
Changes in operating assets and liabilities: | |||||||||
Accounts receivable | (106,811) | - | |||||||
Other receivables, net | (319,681) | 119,823 | |||||||
Advances and prepayments | 282,239 | (808,288) | |||||||
Accounts payable | (1,098,386) | 1,063,947 | |||||||
Accrued expenses and other payables | 1,539,620 | 861,250 | |||||||
Taxes payable | (544,244) | (575,416) | |||||||
Net cash provided by operating activities | 16,268,581 | 23,357,752 | |||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||
Repayment of loan from (loan to) non-controlling interest | 2,712,533 | (5,750,836) | |||||||
Other receivables - acquisition of land use rights | (4,623,636) | - | |||||||
Advances and prepayments - acquisition of land use rights | (7,365,260) | - | |||||||
Additions to property and equipment | (5,823,616) | (1,819,530) | |||||||
Additions to construction in progress | (2,718,003) | (22,032,201) | |||||||
Proceeds from disposal of intangible assets | 2,080,636 | - | |||||||
Additions to long-term prepayments for acquisition of property and equipment | (2,778,112) | (921,312) | |||||||
Net cash used in investing activities | (18,515,458) | (30,523,879) | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||
Capital contributed by non-controlling interest | - | 5,868,200 | |||||||
Net proceeds from issuance of common stock | - | 26,682,957 | |||||||
Payments of obligation under airtime rights commitment | (1,400,069) | (276,103) | |||||||
Repayment of long-term loans | (246,594) | - | |||||||
Proceeds from long-term loans | 10,788,484 | - | |||||||
Net cash provided by financing activities | 9,141,821 | 32,275,054 | |||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | 317,307 | 512,892 | |||||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 7,212,251 | 25,621,819 | |||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 7,146,684 | 5,776,678 | |||||||
CASH AND CASH EQUIVALENTS, ENDING OF PERIOD | $ | 14,358,935 | $ | 31,398,497 | |||||
SUPPLEMENTAL DISCLOSURES: | |||||||||
Non-cash investing and financing activities: | |||||||||
Transfer from construction in progress to property and equipment | $ | 14,680,446 | $ | 52,991,179 | |||||
Transfer from advances and prepayments to property and equipment | $ | - | $ | 1,173,640 | |||||
Capitalized interest in construction in progress | $ | 511,493 | $ | 214,956 | |||||
Capitalized airtime rights commitment | $ | - | $ | 6,209,282 | |||||
Cash paid during the period for: | |||||||||
Income tax | $ | 5,830,819 | $ | 7,940,410 | |||||
Interest | $ | 691,035 | $ | 234,055 | |||||