omniture

China TransInfo Announces Third-Quarter 2011 Results

2011-11-14 19:05 3030

BEIJING, November 14, 2011 /PRNewswire-Asia-FirstCall/ -- China TransInfo Technology Corp. (NASDAQ: CTFO) ("China TransInfo" or the "Company"), a leading provider of comprehensive intelligent transportation systems ("ITS") in China through its affiliate, China TransInfo Technology Group Co., Ltd. (the "Group Company"), today reported its financial results for the third quarter ended September 30, 2011.

Third-Quarter 2011 Highlights:

  • Revenue increased 29.7% year over year to $45.5 million
  • Net income was $3.2 million, or $0.13 per diluted share
  • Adjusted net income was $3.5 million, or $0.14 per diluted share(*)
  • Mr. Shudong Xia, the Company's Chairman and Chief Executive Officer, purchased 174,763 shares of the Company's common stock pursuant to a Rule 10b5-1 stock purchase plan
  • The Beijing Municipal Government, through Zhongguancun Development Group, agreed to contribute an aggregate of RMB 50 million (approximately $7.69 million) in cash into the Group Company's subsidiary, Beijing Transwiseway in exchange for a 10% equity interest in Beijing Transwiseway

"We are pleased to report another quarter of solid revenue growth," commented Mr. Shudong Xia, "We have begun seeing our Telematics Service Platform ("TSP") gaining momentum.. Our cooperation with Nissan Motor Co., Ltd. on a new traffic information system, as well as our successive transactions with Dongfeng-Yulon Motors Co. Ltd. and Xiamen King Long Motor Group Co., Ltd. to preinstall real-time traffic data software in their vehicles, made a meaningful revenue contribution in the third quarter. On the highway ITS front, we continue to exhibit strong performance, as demand for IT products and solutions in the transportation industry remains robust."

Third-Quarter 2011 Results

For the quarter ended September 30, 2011, revenue increased 29.7% to $45.5 million from $35.0 million in the year-ago quarter. The increase in revenue was driven primarily by a 40.7% increase in transportation revenue, mainly resulting from strong performance in the highway ITS and TSP businesses. Revenue from products and applications in the transportation business sector was $42.1 million, or 92.7% of total revenue, compared to $29.9 million, or 85.4% of total revenue, in the year-ago quarter. The remainder of revenue derived from Digital City, land and resources, and other business sectors.

Gross profit increased 5.5% to $11.2 million in the third quarter of 2011, as compared to $10.6 million in the year-ago quarter. The gross margin in the third quarter of 2011 decreased to 24.5% from 30.2% in the year-ago quarter, mainly due to lower margins year-over-year in the expanded ITS business.

Selling, general and administrative expenses were $6.6 million, compared to $5.4 million in the third quarter of 2010. The increase was primarily due to higher labor costs and sales promotion expenses associated with higher sales volume. Operating income decreased to $4.6 million from $5.1 million in the third quarter of 2010.

Net income decreased 24.3% to $3.2 million, or $0.13 per diluted share, compared to $4.3 million, or $0.17 per diluted share, in the year-ago quarter. Adjusted net income, which excludes $0.3 million in non-cash stock-based compensation expense and $0.04 million in intangible amortization expense from acquisitions, decreased 25.0% to $3.5 million, or $0.14 per diluted share, compared to $4.7 million, or $0.19 per diluted share, in the comparable period of 2010.(*) Weighted average diluted shares outstanding decreased to 25,272,553 shares from 25,318,470 shares in the year-ago quarter.

Nine-Month 2011 Results

Revenue for the nine months ended September 30, 2011, increased 41.5% to $118.8 million compared to $84.0 million in the same period of 2010. Gross profit increased 12.0% to $32.1 million from $28.7 million a year ago. Operating income declined 11.6% to $11.8 million from $13.4 million in the first nine months of 2010. Net income decreased 6.7% to $9.0 million, or $0.36 per diluted share compared to net income of $9.6 million, or $0.39 per diluted share, in the first nine months of 2010.

Adjusted net income, which excludes non-cash stock based compensation expense of $0.9 million and amortization expense of intangibles from acquisitions of $0.1 million, decreased 9.3% to $10.0 million, or $0.40 per diluted share, compared to $11.0 million, or $0.45 per diluted share, in the first nine months of 2010.(*) Weighted average diluted shares outstanding increased to 25.3 million shares from 24.5 million shares in the first nine months of 2010.

(*) Please refer to the table at the end of this press release for a reconciliation of net income and diluted earnings per share ("EPS") to exclude non-cash stock-based compensation and amortization expense of intangibles from acquisitions.

Financial Condition

As of September 30, 2011, cash and cash equivalents totaled $23.0 million, compared to $43.9 million as of December 31, 2010. The decline in cash and cash equivalents during the first nine months of 2011 was primarily due to a $17.8 million increase in accounts receivable, a $4.5 million decrease in accounts payable, $4.1 million of cost and estimated earnings in excess of billings, and $3.6 million in payments for land-use rights. Working capital increased to $91.2 million compared to $73.8 million as of December 31, 2010. Stockholders' equity was $141.7 million compared to $111.2 million as of December 31, 2010.

Recent Developments

On November 3, 2011, the Company announced that it was included in the 2011 Deloitte Technology Fast 50 China Program, being recognized as one of the top-50 fastest-growing technology companies in China. Notably, China TransInfo was one of the only five companies that have been selected for three consecutive years. In addition, China TransInfo was also included in the 2011 Forbes Asia 200 Best Under A Billion list, being recognized as one of the top-performing companies with revenue under $1 billion in the Asia-Pacific region.

Business Outlook

China TransInfo has successfully developed a first-generation commercial vehicle monitoring and control platform for the Ministry of Transport. To date, the Company has recorded more than one million vehicles registered on the platform and recorded 150,000 active users. The Company expects both the number of registered vehicles and the number of active users to grow substantially going forward.

Mr. Xia continued, "At the end of the third quarter, our sales backlog was approximately $175 million, compared to $189 million at the end of the second quarter of 2011. We signed roughly $40.2 million in contracts during the third quarter. For the full 2011 business year, we expect revenues in the range of $145 million to $148 million and adjusted net income, which excludes non-cash stock based compensation expense and amortization expense of intangibles from acquisitions, within the range of $15 to $16 million. This reduced revenue and adjusted net income guidance is primarily attributable to lower revenue expected from our commercial vehicle location based services ("LBS") business, due to a well-planned shift in our strategy for the rollout in each province, which involves consolidation of many local platform operators. During this period, we are not charging a fee for new registrations to our platform. We are encouraged by recent government initiatives as well as active participation by commercial vehicle manufacturers and local service providers in the commercial LBS market and expect to monetize the business in the future."

Mr. Xia concluded, "We remain optimistic about our business over the long term, although we recently have begun to see higher project execution and staffing costs, which have reduced margins. We plan to actively monitor and control costs, and at the same time, we will maintain our R&D efforts to produce premium, reliable and value-added products and solutions that will strengthen our competitive position in the market."

Conference Call

The Company will host a conference call on Monday, November 14, 2011 at 8:00 a.m. Eastern Standard Time to discuss its financial results for the third quarter ended September 30, 2011.

The earnings release will be available on the Investor Relations page of the Company's website at: http://www.chinatransinfo.com/news.html.

To participate in the live conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: (866) 759-2078. International callers should dial +1 (706) 643-0585. When prompted by the operator, enter conference pass code 23304187.

A replay will be available for 14 days starting on Monday, November 14, 2011 at 10:00 a.m. Eastern Time and can be accessed by dialing (855) 859-2056. International callers should dial +1 (404) 537-3406. When prompted, enter conference pass code 23304187.

An archived webcast of the call will be available on the Company's website at http://www.chinatransinfo.com/WebCast.aspx?sortId=44&sortPId=5. To listen to the live webcast, please go to the Company's website at least fifteen minutes prior to the start of the call to register, download and install any necessary audio software.

Use of Non-GAAP Financial Information

GAAP results for the three and nine months ended September 30, 2011 and 2010 include non-cash share based compensation and amortization of intangible assets from acquisitions. To supplement the Company's condensed consolidated financial statements presented on a GAAP basis, the Company has provided non-GAAP financial information, which are adjusted net income and adjusted earnings per share, excluding the impact of these items in this release. The Company's management believes that these non-GAAP measures provide investors with a better understanding of how the results relate to the Company's historical performance. The additional adjusted information is not meant to be considered in isolation or as a substitute for GAAP financials. The adjusted financial information that the Company provides also may differ from the adjusted information provided by other companies. Management believes that these adjusted financial measures are useful to investors because they exclude non-cash expenses that management excludes when it internally evaluates the performance of the Company's business and makes operating decisions, including internal budgeting, and performance measurement, as these measures provide a consistent method of comparison to historical periods. As a result, the provision of these adjusted measures allows investors to evaluate the Company's performance using the same methodology and information as that used by the Company's management. Moreover, management believes that these adjusted measures reflect the essential operating activities of the Company. Non-GAAP measures are subject to inherent limitations because they do not include all of the expenses included under GAAP and because they involve the exercise of judgment of which charges are excluded from the adjusted financial measure. However, the Company's management compensates for these limitations by providing the relevant disclosure of the items excluded. A reconciliation of adjustments to GAAP results appears in Table 1 in this release.

CHINA TRANSINFO TECHNOLOGY CORP. AND SUBSIDIARIES

Table 1————Reconciliation of Non-GAAP Financial Data



For the three months ended

For the three months ended


September 30, 2011,

September 30, 2010,


Net Income

Diluted EPS

Net Income

Diluted EPS

Amount per consolidated statement of operations

$3,219,736

$0.13

$4,250,564

0.17






Adjustments:





Amortization of intangible assets from acquisitions (1)

37,295

0.00

47,482

0.00

Non-cash share based compensation

277,208

0.01

416,278

0.02






Adjusted Amount

$3,534,239

$0.14

$4,714,324

$0.19






For the nine months ended

For the nine months ended


September 30, 2011,

September 30, 2010,


Net Income

Diluted EPS

Net Income

Diluted EPS

Amount per consolidated statement of operations

$8,976,408

$0.36

$9,619,520

$0.39






Adjustments:





Amortization of intangible assets from acquisitions (1)

135,592

0.01

141,657

0.01

Non-cash share based compensation

871,222

0.03

1,247,043

0.05






Adjusted Amount

$9,983,222

$0.40

$11,008,221

$0.45




(1) Amortization of intangible assets from acquisitions of Beijing TransWiseway in 2008 and UNISITS in 2009.



About China TransInfo

China TransInfo, through its affiliate, the Group Company and the Group Company's PRC operating subsidiaries, is primarily focused on providing urban and highway transportation management solutions and information services. The Company is a leading transportation information products and comprehensive solutions provider, and aims to be the largest real time transportation information service provider and major fleet management service provider in China. As the co-formulator of several transportation technology national standards, the Company owns nine patents and has won a majority of the model cases awarded by the PRC Ministry of Transport. As a result, the Company is playing a key role in setting the standards for transportation information solutions in China. For more information, please visit the Company's website at http://www.chinatransinfo.com.

Safe Harbor Statement

This press release contains certain statements that may include "forward looking statements". All statements other than statements of historical fact included herein are "forward-looking statements". These forward looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

———— FINANCIAL TABLES FOLLOW ————

CHINA TRANSINFO TECHNOLOGY CORP. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets




September 30, 2011

(Unaudited)



December 31, 2010


ASSETS







Cash and cash equivalents


$

22,950,405



$

43,916,597


Restricted cash



2,132,654




3,131,660


Accounts receivable, net of allowance for doubtful accounts of $94,009 and $92,794, respectively



45,764,146




26,881,280


Inventories



3,653,539




1,079,221


Costs and estimated earnings in excess of billings on uncompleted contracts



44,045,758




38,626,089


Prepaid expenses and other current assets



16,581,131




18,551,801


Other receivables



13,729,017




10,632,452


Deferred income tax assets



26,316




25,508


Total current assets



148,882,966




142,844,608


Property and equipment, net



10,914,086




10,878,276


Long-term prepayment for land use right



3,673,368




-


Long-term investments



10,082,199




8,760,692


Intangible assets, net



14,872,523




7,402,829


Goodwill



10,646,300




10,319,768


Other assets



372,592




319,679











Total assets


$

199,444,034



$

180,525,852











LIABILITIES AND STOCKHOLDERS' EQUITY









Accounts payable


$

27,966,527



$

32,296,459


Short-term borrowings from banks



9,390,000




13,728,850


Billings in excess of costs and estimated earnings on uncompleted contracts



13,821,526




14,080,475


Accrued expenses and other current liabilities



6,495,611




8,988,180


Total current liabilities



57,673,664




69,093,964


Other long-term liabilities



109,550




200,699











Total liabilities



57,783,214




69,294,663











Commitments and contingencies



-




-











Stockholders' equity









Preferred stock, $0.001 par value per share, authorized 10,000,000 shares, no shares issued and outstanding at September 30, 2011 and December 31, 2010



-




-


Common stock, $0.001 par value per share, 150,000,000 shares authorized, 25,270,069 shares issued and outstanding



25,270




25,270


Additional paid-in capital



50,292,053




42,887,452


Retained earnings



56,393,889




47,417,481


Non-controlling interests



26,411,900




15,873,242


Accumulated other comprehensive income



8,537,708




5,027,744











Total stockholders' equity



141,660,820




111,231,189











Total liabilities and stockholders' equity


$

199,444,034



$

180,525,852





CHINA TRANSINFO TECHNOLOGY CORP. AND SUBSIDIARIES

Condensed Consolidated Statements Income (unaudited)





Nine Months Ended September, 30

Three Months Ended September, 30




2011

2010

2011

2010

Net sales

$

118,835,691

$

83,972,930

$

45,461,794

$

35,039,549

Cost of sales


86,713,128


55,288,528


34,308,823


24,470,292

Gross profit


32,122,563


28,684,402


11,152,971


10,569,257

Total operating expenses


20,274,176


15,287,215

6,555,553

5,420,039

Income from operations

11,848,387

13,397,187

4,597,418

5,149,218

Non-operating income (expense):










Interest income


181,790


100,907


95,447


23,979


Interest expense


(679,789)


(326,058)


(192,460)


(122,747)


Subsidy income


436,876


1,427,592


175,914


673,568


Other income (expense), net


153,859


(210,462)

39,978

(135,633)



Total non-operating income

92,736

991,979

118,879

439,167

Income before income taxes, noncontrolling interests, and gain on equity









investments in affiliates


11,941,123


14,389,166


4,716,297


5,588,385

Income taxes

1,327,983

1,448,014

465,048

608,191

Net income before non-controlling interests and gain on equity investments










in affiliates net income


10,613,140


12,941,152


4,251,249


4,980,194

Gain (loss) on equity investments in affiliates due to proportional shares of










the affiliates net income

1,774,397

(139,992)

418,412

161,597

Net income before non-controlling interests


12,387,537


12,801,160


4,669,661


5,141,791

Non-controlling interests in net income of subsidiary

3,411,129

3,181,640

1,449,925

891,227

Net income

$

8,976,408

$

9,619,520


3,219,736


4,250,564

Weighted average number of shares of outstanding:










Basic

25,270,069

24,440,253

25,270,069

25,257,569


Diluted

25,273,187

24,504,221

25,272,553

25,318,470

Earnings per share -







Basic

$

0.36

$

0.39

$

0.13

$

0.17


Diluted

$

0.36

$

0.39

$

0.13

$

0.17

Comprehensive income










Net income including noncontrolling interest

$

12,387,537

$

12,801,160

$

4,669,661

$

5,141,791


Translation adjustments


3,509,964


1,662,836


1,392,469


1,321,438

Comprehensive income

$

15,897,501

$

14,463,996

$

6,062,130

$

6,463,229


Comprehensive income attributable to noncontrolling interest

$

3,411,129

$

3,181,640

$

1,449,925

$

891,227


Comprehensive income attributable to CTFO

$

12,486,372

$

11,282,356

$

4,612,205

$

5,572,002




CHINA TRANSINFO TECHNOLOGY CORP. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (unaudited)


Nine Months Ended September 30,


2011

2010

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$

8,976,408

$

9,619,520






Adjustments to reconcile net income to net cash provided by operating activities:





Noncontrolling interests


3,411,129


3,181,640

Depreciation and amortization expense


2,020,329


1,488,333

Stock-based compensation


950,602


1,266,117

Gain on equity investments in affiliates due to proportional shares of the affiliates net income


(1,774,398)


139,992

Gain on disposal of portion equity of subsidiary to noncontroling interest


(40,751)


-

Dividends income


(14,882)


-

Loss on disposal of property and equipment


22,497


(4,587)

Bad debt expense


(1,649)


6,696

(Increase) Decrease in assets:





Restricted cash


1,081,537


(1,627,697)

Accounts receivable


(17,758,732)


(9,229,895)

Inventories


(2,501,865)


(48,844)

Prepaid expenses and other current assets


2,618,533


(13,047,015)

Other receivables


(2,249,306)


(4,040,994)

Cost of estimated earnings in excess of billings on uncompleted contracts


(4,134,188)


(5,862,734)

Other assets


44,701


561,598

(Decrease )Increase in liabilities:





Accounts payable


(4,504,189)


8,276,361

Billings in excess of costs and estimated on uncompleted contracts


(693,851)


(5,215,824)

Accrued expenses and other current liabilities


(2,880,903)


1,638,264

Other long-term liabilities

107,898

-

Net cash used in operating activities

(17,321,080)

(12,899,069)





CASH FLOWS FROM INVESTING ACTIVITIES:





Proceeds from disposal of property and equipment


22,530


58,092

Purchases of property and equipment


(2,301,569)


(532,380)

Payments for acquisition of companies


(203,927)


(259,484)






Purchases of intangible assets


(699,452)


(2,422,365)






Payments for land use right


(3,617,974)


-

Purchase of long-term investment


-


(735,500)

Dividends from equity or cost investees

68,444

110,161

Net cash used in investing activities

(6,731,948)

(3,781,476)





CASH FLOWS FROM FINANCING ACTIVITIES:





Proceeds from short-term borrowings


7,398,970


8,899,550

Payments of short-term borrowings


(12,100,240)


(7,502,100)

Noncontrolling interest shareholders' capital contribution


8,285,025


-

Payment of dividends to noncontrolling interests from subsidiaries


(1,535,651)



Proceeds from issuing common stocks


-


10,000,000

Payments of transaction costs related to stock issuance


-


(610,549)

Net cash provided by financing activities

2,048,104

10,786,901





Effect of foreign currency translation


1,038,732


451,713






Net decrease in cash and cash equivalents


(20,966,192)


(5,441,931)

Cash and cash equivalents - beginning of period

43,916,597

27,400,420

Cash and cash equivalents - end of period

$

22,950,405

$

21,958,489





Supplemental disclosures of cash flow information:





Interest paid

$

682,959

$

326,058

Income taxes paid

$

1,499,014

$

599,848











Supplemental disclosures of cash flow for non-cash transaction:





Dividends receivable from equity or cost investees

$

703,696

$

-

Non-controlling interest shareholders' capital contribution

$

115,605

$

-

Noncontrolling interest shareholders' contributed intangible assets as investment

$

6,878,467

$

-



Company Contact:

Investor Relations Contact:

Ms. Fan Zhou, Investor Relations Director

Mr. John Harmon, CFA, Sr. Account Manager

China TransInfo Technology Corp.

CCG Investor Relations

E-mail: ir@ctfo.com

E-mail: john.harmon@ccgir.com

Tel: + 86 10-5169 1657

Tel: +86 10-6561 6886 ext 807


Website: www.ccgirasia.com



Source: China TransInfo Technology Corp.
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