-- Q1 Revenue Rises 72% and Net Income Climbs 123% Year-over-Year
-- Exceeds First Quarter 2009 Guidance of $16 to $17 million in revenue and $2.5 to $3 million in net income
SHENZHEN, China, May 7 /PRNewswire-Asia/ -- Universal Travel Group (OTC Bulletin Board: UTVL) ("Universal Travel Group" or the "Company"), a growing travel services provider in the People's Republic of China ("PRC") specializing in online and customer representative services to the travel service industry offering packaged tours, air ticketing, hotel reservation and air cargo agency services, today announced strong financial results for the first quarter ended March 31, 2009.
First Quarter of 2009 Highlights
-- Revenue reached $17.4 million, up 72.4% year-over-year
-- Gross profit totaled $6.3 million, up 123.3% year-over-year
-- Gross margin was 37% for the first quarter of 2009, compared to 28% in
the same period in 2008
-- Income from operations was $4.4 million, up 133% year-over-over
-- Operating margin was 25% in the first quarter of 2009, compared to 19%
in the same period in 2008
-- Net income was $3.3 million or $0.21 per fully diluted share, up 123.3%
year-over-year from $1.5 million, or $0.12 per fully diluted share, in
the same quarter of 2008
-- Signed exclusive, five year co-operation agreement with Byte Power (CQ)
Info Tech Limited to rollout its TRIPEASY Kiosks in strategic locations
in Chongqing
-- Completed a three-for-one reverse split in an effort to prepare the
Company to apply for listing on a senior exchange
-- Strengthened its management team with the appointment of Mr. Jing Xie
as Chief Financial Officer
-- Added increased functionality to it revolutionary TRIPEASY Kiosks
"Although the macroeconomic environment worldwide has continued to be challenging, Universal Travel Group has exhibited strong growth in revenue and net income year-over-year. We attribute this strong performance to the Government's stimulus plan and support of the industry, the successful introduction of our TRIPEASY Kiosks, increased brand awareness and solid execution," said Ms. Jiangping Jiang, Chairwoman and CEO of Universal Travel Group. "We have leveraged our full-service platform to expand our distribution network and have benefitted as our high margin online businesses continue to scale."
First Quarter of 2009 Financial Results
Revenue for the three months ended March 31, 2009 was $17.4 million compared to $10.1 million for the same period in 2008, an increase of approximately 72.4%. The increase in revenue was due to improved weather conditions in the first quarter 2009, compared to the same period last year when severe snowstorms struck most areas in China. The growth in revenue was further supported by the Chinese government's effective economic stimulus plans, creation of a new holiday policy to include a 3-day public holiday in April -- "Tomb sweeping day", the successful rollout of additional TRIPEASY Kiosks, and the Company's increased brand recognition.
Revenue from air-ticketing was $2.8 million for the three months ended March 31, 2009 compared to $1.4 million for the same period last year, an increase of approximately 92.5%. This increase was mainly due to expanded distribution channels, partnership with premium agents and higher commissions obtained from many airlines.
Revenue generated by the cargo agency segment for the three months ended March 31, 2009 was $1.9 million compared to $3.1 million for the same period in 2008, a decrease of approximately 40.5%. This decrease was due to reduced cargo volume as a result of the global economic crisis, with the overall industry falling 16.6%.
Revenue generated by the hotel reservation segment for the three months ended March 31, 2009 was $2.5 million compared to $0.6 million for the same period in 2008, an increase of approximately 310.9%. This increase was due to successful cross marketing and selling strategy within the Company's service chain.
Revenue generated by packaged tours for the three months ended March 31, 2009 was $10.2 million compared to $4.9 million for the same period in 2008, an increase of approximately 108.6%. This increase was primarily due to the tremendous growth of the domestic travel industry; first quarter travelers reached 560 million and tourism income receipts grew by 12.9%.
Gross profit for three months ended March 31, 2009 was $6.3 million compared to $2.8 million for three months ended March 31, 2008, an increase of approximately 123.3%. The increase in gross profit reflects the Company's steady growth and profitability as well as efficient operational control by an experienced management team. Gross profit margin for the first quarter 2009 was 36.6% compared to 28.2% for the same period last year.
Selling, general and administrative expenses for three months ended March 31, 2009 totaled $1.8 million compared to $0.9 million for the same period last year, an increase of approximately 110.4%. The increase in selling, general and administrative expenses reflects the expansion in the Company's business segments.
Interest expense for three months ended March 31, 2009 totaled $0 compared to $0.04 million for three months ended March 31, 2008. The decrease in interest expense was a result of the Company paying off all bank loans in July 2008.
Net income was $3.3 million or 18.8% of revenue for three months ended March 31, 2009, compared to $1.5 million or 14.5% of revenue for three months ended March 31, 2008. The increase in net income reflects the continued growth in the Company's business, and improved weather conditions in first quarter of 2009. The increase in net income as a percentage of revenue is due to the change in revenue mix, where the Company took advantage of the booming domestic tourism industry, created synergies by partnering air ticketing with hotel reservation businesses; and shifted its focus away from the lower margin cargo segment.
Financial Condition
Cash for operations and liquidity needs are funded primarily through cash flows from operations and short-term borrowings. Cash and cash equivalents were $19.2 million as of March 31, 2009. Current assets and current liabilities as of March 31, 2009, were $37.9 million and $5.3 million, yielding working capital of $32.6 million. The Company has no long-term debt. The Company believes that the income from operations is adequate to meet its operating needs in the near future. For the three months ended March 31, 2009, net cash provided by operating activities was approximately $4.2 million, which resulted primarily from efficient operational control and effective management of cash flow.
Recent Developments
-- Appointed U.S. based VP of Finance and Investor Relations, Mr. David
Liu
-- Launched a newly designed corporate website, which integrates the
Company's three previous, separate ones (Classic, TRIPEASY, and
Easytrip versions) into a single more integrated and streamlined
platform
-- Formed a partnership with Fantasia Property Management Co., Ltd., as a
first step to install 50 TRIPEASY Kiosks at 20 different locations of
the partnership's properties in Shenzhen
-- Presented the Best Sales Award by China Southern Airlines
Business Outlook
The Company is optimistic about the economic conditions in the People's Republic of China as well as the continued positive momentum in the travel industry. The abundant liquidity created by government stimulus packages has spurred consumption and demand for travel related services. In addition, a survey published by China Confidential on April 2, 2009 ranked the People's Republic of China to be the most popular holiday destination, taking 63.1% of overall votes, ahead of the U.S. and Europe.
Beginning April 1, 2009, Universal Travel Group expanded the functionality of its TRIPEASY Kiosks to include the ability to deliver cell phone minutes refill services, significantly expanding the Company's potential user base. The Company also formed a partnership to install 50 Kiosks at Fantasia Property Management's properties in Shenzhen to provide a rapid rollout of its TRIPEASY Kiosks to a desired targeted audience. Universal Travel Group should be able to strengthen its existing loyal customer base as well as expand its market share by providing additional value-added services combined with the Kiosks rollout plan.
"We were particularly pleased with our performance this quarter, which demonstrates the strong organic growth in our business, reflecting successful execution of our strategy to cross-sell to our customers via a diversified platform," said Ms. Jiangping Jiang. "We believe we have a wonderful opportunity ahead of us. We believe our online businesses will continue to expand as we capture a greater share of the growing travel services industry in the PRC."
Fiscal Year 2009 Guidance
For the full year 2009, Universal Travel Group expects sales to increase from $76.8 million in 2008 to between $88.0 - $96.0 million, net income to rise from $14.5 million in 2008 to $16.8 - $18.0 million, and earnings per diluted share to grow from $1.11 in 2008 to $1.20 - $1.29 after the recent three-for-one reverse split.
Conference Call Information
The Company will host a conference call at 11:00 a.m. E.D.T. on Thursday, May 7, 2009 to discuss results for the first quarter of 2009. To participate in the live conference call, please dial the following number five minutes prior to the scheduled conference call time: 800-688-0796. International callers should dial +1-617-614-4070. When prompted by the operator, mention conference ID 832 899 57.
If you are unable to participate in the call at this time, a replay will be available for 14 days starting on Thursday, May 7 at 1:00 p.m. E.D.T. To access the replay, please dial 888-286-8010 and enter the conference ID 237 184 38. International callers should dial +1-617-801-6888 and enter the same conference ID 237 184 38.
Company Contact:
Mr. David Liu
VP of Finance and Investor Relations
Universal Travel Group
Address: 1230 Avenue of the Americas, 7th Floor
New York, NY 10020
Phone: +1-646-756-2666
Fax: +1-646-756-2999
Email: liudy@cnutg.com
About Universal Travel Group
Universal Travel Group, a growing travel services provider in the People's Republic of China, is engaged in providing reservation, booking, and domestic and international travel and tourism services throughout the PRC via the internet and through customer representatives. Under the theme "Wings towards a more colorful life" the Company's core services include tour packaging for customers, booking services for air tickets and hotels as well as air cargo transportation. In 2007, Universal Travel Group completed the acquisitions of Speedy Dragon, specializing in air cargo transportation; Xi'an Golden Net, specializing in travel packaged tours; Shanghai LanBao, specializing in hotel reservation and Foshan Overseas International, a PRC-based company that handles domestic and international travel inquiries. Universal Travel's goal is to become the PRC's leading travel services provider in all fields of the tourism industry including the aviation, cargo, hotel booking and tour packaging segments. For more information about the Company, please visit http://us.cnutg.com .
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This press release contains certain statements that may include
"forward-looking statements" within the meaning of federal securities laws. All statements, other than statements of historical facts, included herein are "forward-looking statements". 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. Investors 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 the Company's ability to successfully expand its market presence and those discussed in the Company's periodic reports that are filed with and available from the Securities and Exchange Commission. 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.
UNIVERSAL TRAVEL GROUP
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2009 AND 2008
2009 2008
GROSS REVENUES $17,369,678 $10,076,304
COST OF SERVICES 11,020,899 7,232,758
GROSS PROFIT 6,348,779 2,843,546
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 1,799,879 855,522
STOCK BASED COMPENSATION 165,000 110,012
TOTAL EXPENSES 1,964,879 965,534
INCOME FROM OPERATIONS 4,383,900 1,878,012
OTHER INCOME (EXPENSE)
LOSS ON DISPOSAL OF ASSETS -- (1,104)
OTHER INCOME 3,828 2,874
INTEREST INCOME 25,816 1,415
INTEREST EXPENSE -- (36,707)
TOTAL OTHER INCOME (EXPENSE) 29,644 (33,522)
INCOME BEFORE INCOME TAXES 4,413,544 1,844,490
PROVISION FOR INCOME TAXES (1,145,266) (380,625)
NET INCOME $3,268,278 $1,463,865
NET INCOME PER COMMON SHARE
BASIC $0.24 $0.12
DILUTED $0.21 $0.12
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING
BASIC 13,873,969 12,306,715
DILUTED 15,640,635 12,406,715
UNIVERSAL TRAVEL GROUP
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2009 AND DECEMBER 31, 2008
ASSETS March 31, 2009 December 31, 2008
CURRENT ASSETS
CASH AND CASH EQUIVALENTS $19,171,277 $16,204,531
ACCOUNTS RECEIVABLE, NET 12,913,177 10,715,206
OTHER RECEIVABLES AND DEPOSITS, NET 431,979 141,413
REFUNDABLE ACQUISITION DEPOSIT -- --
DUE FROM SHAREHOLDER -- --
TRADE DEPOSIT 4,567,822 6,737,521
ADVANCES 438,981 438,468
ESCROW DEPOSITS 162,301 762,800
PREPAID EXPENSES 196,154 319,257
TOTAL CURRENT ASSETS 37,881,691 35,319,196
PROPERTY & EQUIPMENT, NET 1,473,656 273,340
INTANGIBLE ASSETS 280,134 307,335
GOODWILL 13,526,809 13,526,809
15,280,599 14,107,484
TOTAL ASSETS $53,162,290 $49,426,680
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
NOTES PAYABLE – BANK $-- $--
NOTE PAYABLE – OTHERS -- --
ACCOUNTS PAYABLE AND ACCRUED EXPENSES 2,912,428 2,219,156
CUSTOMER DEPOSITS 1,405,967 1,047,250
INCOME TAX PAYABLE 975,038 1,759,402
TOTAL CURRENT LIABILITIES 5,293,433 5,025,808
STOCKHOLDERS' EQUITY
COMMON STOCK, $.001 PAR VALUE,
70,000,000 SHARES AUTHORIZED,
13,873,969 AND 13,873,969
ISSUED AND OUTSTANDING 13,873 13,873
ADDITIONAL PAID IN CAPITAL 16,026,116 15,861,116
OTHER COMPREHENSIVE INCOME 1,554,873 1,520,166
STATUTORY RESERVE 372,144 372,144
RETAINED EARNINGS 29,901,851 26,633,573
TOTAL STOCKHOLDERS' EQUITY 47,868,857 44,400,872
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $53,162,290 $49,426,680
UNIVERSAL TRAVEL GROUP
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE THREE MONTHS ENDED MARCH 31, 2009
2009 2008
CASH FLOWS FROM OPERATING ACTIVITIES
NET INCOME $3,268,278 $1,463,865
ADJUSTMENTS TO RECONCILE NET INCOME
TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
DEPRECIATION AND AMORTIZATION 87,283 19,489
PROVISION FOR DOUBTFUL ACCOUNTS 9,205 2,961
STOCK BASED COMPENSATION 165,000 110,102
LOSS ON ASSET DISPOSAL -- 1,105
(INCREASE) / DECREASE IN ASSETS:
ACCOUNTS RECEIVABLE (2,207,176) 455,846
OTHER RECEIVABLE (290,566) 751,167
ADVANCES (513) (24,896)
DUE FROM SHAREHOLDER -- 1,309,981
PREPAID EXPENSES 123,103 (2,492)
TRADE DEPOSITS 2,169,699 (938,405)
CUSTOMER DEPOSITS
ESCROW DEPOSITS 600,499 --
INCREASE / (DECREASE) IN CURRENT
LIABILITIES:
ACCOUNTS PAYABLE AND ACCRUED EXPENSES 693,272 (343,884)
CUSTOMER DEPOSITS 358,717 (120,045)
INCOME TAX PAYABLE (784,364) (311,101)
TOTAL ADJUSTMENTS 924,159 909,828
NET CASH PROVIDED BY(USED IN)
OPERATING ACTIVITIES 4,192,437 2,373,693
CASH FLOWS FROM INVESTING ACTIVITIES
PURCHASE OF PROPERTY & EQUIPMENT (1,260,398) (5,647)
PURCHASE OF INTANGIBLES -- --
PROCEEDS FROM ASSET DISPOSALS -- 663
ACQUISITION DEPOSITS -- 1,453,050
PAID FOR ACQUISITION – NET OF CASH
ACQUIRED -- --
NET CASH USED BY INVESTING ACTIVITIES (1,260,398) 1,448,066
CASH FLOWS FROM FINANCING ACTIVITIES
(REPAYMENTS)PROCEEDS FROM BANK LOAN –
NET -- (78,347)
PROCEEDS OF EQUITY FINANCING -- 599,994
NOTE PAYABLE – OTHERS -- (977,019)
NET CASH PROVIDED BY FINANCING
ACTIVITIES -- (453,372)
EFFECT OF EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS 34,707 351,171
NET CHANGE IN CASH AND CASH
EQUIVALENTS 2,966,746 3,719,558
CASH AND CASH EQUIVALENTS, BEGINNING
BALANCE 16,204,531 2,671,684
CASH AND CASH EQUIVALENTS, ENDING
BALANCE $19,171,277 $6,391,242
SUPPLEMENTAL DISCLOSURES:
CASH PAID DURING THE YEAR FOR:
INTEREST PAYMENTS $-- $36,707
INCOME TAXES $1,929,630 $691,726
OTHER NON-CASH TRANSACTIONS
