omniture

China TransInfo Announces Record Third Quarter Results

2009-11-12 18:14 1510

BEIJING, China, Nov. 12 /PRNewswire-Asia-FirstCall/ -- China TransInfo Technology Corp., (Nasdaq: CTFO), ("China TransInfo" or "the Company"), a leading provider of public transportation information systems technology and comprehensive solutions in the People's Republic of China ("PRC"), today announced its financial results for the third quarter ended September 30, 2009.

Third Quarter 2009 Highlights

-- Revenues increased 115.0% to $19.2 million, from $8.9 million in the

comparable period of 2008.

-- Gross profit increased 49.1% to $7.4 million, as compared to $4.9

million for the same period of last year.

-- Operating income grew 28.0% to $4.3 million, from $3.3 million for

the same period of last year.

-- Net income attributable to China TransInfo increased 28.3% to $4.0

million, or $0.18 per fully diluted share, as compared to $3.1

million, or $0.14 per fully diluted share, in the comparable period

of 2008.

-- Expanded further into the transportation systems market in China by

acquiring a 35.17% of the equity interest in Beijing UNISITS

Technology Co. Ltd. ("UNISITS").

-- Launched TransPLE Passenger Flow Statistic, Detecting and Analysis

System ("TransPLE") and China's first multi-city real-time traffic

website (http://www.palmcity.cn ) and mobile phone software with

initial coverage in Chinese cities, including Beijing, Shanghai,

Chongqing, Chengdu, and Wuhan.

-- Awarded a RMB 31.8 million (approximately $4.7 million) contract by

the Wuhan Municipal Transportation Management Bureau to construct a

transportation management system (the "Wuhan Project").

-- Established a subsidiary in Chongqing and opened a branch in

Hangzhou.

-- Transferred the listing of its common stock to the Nasdaq Global

Market from the Nasdaq Capital Market.

"During the third quarter of 2009, we achieved strong progress in many of our key business segments," said Mr. Shudong Xia, Chief Executive Officer of China TransInfo. "Our newly launched TransPLE and multi-city real-time traffic website and mobile phone software are backed by our proprietary advanced technologies. Both applications feature strong market potential in their respective niches. In addition to our geographic expansion in Hangzhou and Chongqing, we have continued to improve our business presence in our existing markets, including the recently announced RMB 31.8 million (approximately $4.7 million) contract with the Wuhan government to construct a transportation management system. Through our controlling interest in UNISITS, we expect to further increase our market penetration and tap the potentially lucrative domestic expressway information service market."

Third Quarter 2009 Results

During the three months ended September 30, 2009, revenues increased 115.0% to $19.2 million, from $8.9 million during the same quarter of 2008, primarily due to increased business and brand recognition in the transportation information sector. Revenues from our transportation, digital city, and land & resource segments accounted for 90.7%, 4.1%, and 5.1% of total revenues, respectively.

Gross profit increased 49.1% to $7.4 million, as compared to $4.9 million in the same period of 2008. Gross margin decreased to 38.4% from 55.4% in the comparable period of 2008, mainly due to the inclusion of UNISITS' financials in the Company's consolidated financial statements since UNISITS concentrates on lower margin traffic engineering E&M systems for expressways in China. Our legacy business continues to remain strong with gross margins above 50% in the three months ended September 30, 2009.

Selling, general and administrative expenses were $3.1 million, as compared to $1.6 million in the third quarter of 2008, including a $0.5 million increase in selling expenses to $0.6 million. Beginning in 2009, the Company strategically increased its marketing budget to grow its brand awareness in the transportation information sector. For example, the Company has attended more industry trade shows and conferences in 2009 than in previous years. General and administrative expenses were approximately $2.5 million, as compared to $1.5 million in the same period of 2008. The significant increase in general and administrative expenses was mainly due to increased staffing levels, additional research and development initiatives, and higher professional fees associated with being a public company.

Operating income increased 28.0% to $4.3 million, or 22.2% of revenue, from $3.3 million, or 37.3% of revenue, in the third quarter of 2008.

Net income attributable to the Company increased 28.3% to $4.0 million, or $0.18 per fully diluted share, compared to net income of $3.1 million, or $0.14 per fully diluted share, during the same quarter of 2008. Adjusted net income attributable to the Company excluding non-cash expenses was $4.0 million, or $0.18 per fully diluted share, compared to $3.2 million, or $0.15 per fully diluted share, in the same period last year.

The diluted weighted average number of shares outstanding increased from 21.5 million in the third quarter of 2008 to 22.6 million in the quarter ended September 30, 2009 mainly due to the issuance of additional shares from the private placement in July 2008.

Nine Months 2009 Results

In the nine months ended September 30, 2009, revenues increased 88.7% to $35.3 million, as compared to $18.7 million in the same period of 2008. Gross profit increased 47.3% to $15.4 million, from $10.4 million in the comparable period of 2008. Gross margin was 43.6%, as compared to 55.8% in the year ago period. Operating income rose 16.6% to $8.6 million, as compared to $7.3 million in the same period last year. Net income attributable to China TransInfo increased 18.0% to $8.2 million, or $0.37 per fully diluted share, from $7.0 million, or $0.34 per fully diluted share, in the comparable period last year. Adjusted net income attributable to China TransInfo excluding

non-cash expenses was $8.4 million, or $0.38 per share on a fully diluted basis, compared to $7.1 million, or $0.35 per share on a fully diluted basis, in the same period of 2008.

Financial Condition

As of September 30, 2009, cash and cash equivalents excluding restricted cash totaled $21.1 million as compared to $16.1 million on December 31, 2008. In addition, the Company reported working capital of $39.1 million and total current liabilities of $47.4 million. Stockholders' equity totaled $69.6 million, up from $47.6 million at the end of 2008.

Net cash used in operations was $2.4 million for the nine months ended September 30, 2009, compared with net cash provided by operations of $1.3 million for the same period in 2008.

Business Outlook

"In addition to launching our TransPLE and real-time traffic website, we recently added our mobile phone application, Palmcity Live-Traffic, to China Telecom's Surfing Space AppMarket. As a result, we are well-positioned to benefit from China's rapidly developing transportation infrastructure and growth in private vehicle ownership. As of September 30, 2009 our contract backlog was approximately $60 million, which we believe will enable us to meet our financial goals for 2009. In addition, we are very pleased with our controlling position in UNISITS, which is expected to further expand our footprint in the transportation systems market in China," commented Mr. Xia.

As a result of the strong top line growth in the first nine months of 2009 as well as our consolidation of UNISITS' financials, China TransInfo has increased its fiscal year 2009 revenue guidance under US GAAP from previously announced $45.0 million to approximately $55.0 million and now expects net income, excluding amortizations of intangible assets from acquisitions as well as non-cash share-based compensation, to be between $13.3 and $13.5 million for fiscal year 2009.

Conference Call

China TransInfo will host a conference call at 8:00 a.m. Eastern time on Thursday, November 12, 2009 to discuss its third quarter 2009 results. To participate in the live conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: 1-888-339-2688. International callers should dial +1-617-847-3007. When prompted by the operator, mention conference pass code 809 092 57.

If you are unable to participate in the call at this time, a replay will be available for seven days after the call is held. To access the replay, please dial 1-888-286-8010 or +1-617-801-6888 from outside the US and enter pass code 226 532 06.

In addition, the call will be broadcast live over the internet via the following link:

http://www.chinatransinfo.com/WebCast.aspx?sortId=44&sortPId=5

Use of Non-GAAP Financial Information

GAAP results for the three month and nine month periods ended September 30, 2009 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 is 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. Management believes that these non-GAAP 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, because these measures provide a consistent method of comparison to historical periods. Moreover, management believes that these non-GAAP measures reflect the essential operating activities of the Company. In addition, the provision of these non-GAAP measures allows investors to evaluate the Company's performance using the same methodology and information as that used by the Company's management. 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 non-GAAP 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 below. This additional non-GAAP information is not meant to be considered in isolation or as a substitute for GAAP financials. The

non-GAAP financial information that the Company provides also may differ from the non-GAAP information provided by other companies.

About China TransInfo

China TransInfo, through its affiliate, China TransInfo Technology Group Co., Ltd., (the "Group Company") and the Group Company's PRC operating subsidiaries, is primarily focused on providing transportation information services and comprehensive solutions based on GIS technologies. The Company aims to become the largest transportation information products and comprehensive solutions provider, as well as the largest real time transportation information platform operator and provider in China. In addition, the Company is developing its transportation system to include Electronic Toll Collection (ETC) technology. As the co-formulator of several transportation technology national standards, the Company owns software copyrights for 88 software products and has won 5 of the 10 model cases sponsored by the PRC Ministry of Communications. The Company's affiliation with Peking University provides the Company access to the University's GeoGIS Research Laboratory, including over 30 Ph.D. researchers. As a result, the Company is playing a key role in setting the standards for electronic transportation information solutions. 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.

For more information, please contact:

China TransInfo Technology Corp.

Ms. Fan Zhou, IR Director

Tel: +86-10-8267-1299 x8033

Email: ir@ctfo.com

CCG Investor Relations Inc.

Mr. Crocker Coulson, President

Tel: +1-646-213-1915 (New York)

Email: crocker.coulson@ccgir.com

Web: http://www.ccgirasia.com

--FINANCIAL TABLES FOLLOW--

CHINA TRANSINFO TECHNOLOGY CORP. AND ITS SUBSIDIARIES UNAUDITED

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

Three Months Ended Nine Months Ended

September 30, September 30,

2009 2008 2009 2008

Revenues $19,165,553 8,913,514 $35,256,869 $18,685,813

Cost of revenues 11,809,948 3,979,049 19,896,690 8,258,137

Gross profit 7,355,605 4,934,465 15,360,179 10,427,676

Operating Expenses 3,097,483 1,607,712 6,797,818 3,085,992

Income from operations 4,258,122 3,326,753 8,562,361 7,341,684

Other income

(expense):

Interest income 18,909 23,575 51,392 50,759

Interest expense -42,038 -66,066 -132,027 -75,983

Subsidy income 188,829 305,804 308,113 305,804

Other incomes - net 52,433 4,239 59,301 --

Total other income

(expense) 218,133 267,552 286,779 280,580

Net income before

income taxes 4,476,255 3,594,305 8,849,140 7,622,264

Income tax expenses:

Current 94,980 -- 109,946 --

Deferred -9,116 109,864 -- 49,971

Total income tax

expense (benefit) 85,864 109,864 109,946 49,971

Net income including

noncontrolling

interest 4,390,391 3,484,441 8,739,194 7,572,293

Less: Net income

attributable to

noncontrolling

interests 415,114 386,900 515,588 601,691

Net income

attributable to CTFO $3,975,277 $3,097,541 $8,223,606 $6,970,602

Weighted average

CTFO shares of

outstanding -

Basic 22,333,000 21,325,245 22,245,288 20,175,820

Diluted 22,579,496 21,522,431 22,485,924 20,393,171

Earnings per share

attributable to CTFO

common shareholders -

Basic $0.18 $0.15 $0.37 $0.35

Diluted $0.18 $0.14 $0.37 $0.34

Comprehensive income

Net income including

noncontrolling

interest $4,390,391 3,484,441 $8,739,194 $7,572,293

Translation

adjustments -283,124 47,347 -388,589 1,375,751

Comprehensive income $4,107,267 $3,531,788 $8,350,605 $8,948,044

Comprehensive income

attributable to

noncontrolling

interest $415,114 $386,900 $515,588 $601,691

Comprehensive income

attributable to

CTFO $3,692,153 $3,144,888 $7,835,017 $8,346,353

CHINA TRANSINFO TECHNOLOGY CORP. AND ITS SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

30-Sep-09 31-Dec-08

(Unaudited)

ASSETS

Current Assets:

Cash and cash equivalents $21,125,873 $16,122,464

Restricted cash 2,261,141 1,209,542

Accounts receivable, net 15,313,210 7,735,742

Inventory 301,140 23,775

Cost and estimated earnings in

excess of billings on uncompleted

contracts 28,066,671 11,912,285

Prepayments 9,709,570 3,647,731

Other receivable 8,575,034 2,940,404

Deferred tax assets 218,417 211,708

Other current assets 903,644 --

Total current assets 86,474,700 43,803,651

Long-term investments 6,990,560 278,730

Property and equipment, net 9,786,144 9,874,005

Intangible assets, net 4,097,928 1,490,807

Goodwill 9,834,668 3,095,017

Other non-current assets 439,449 147,607

Total assets $117,623,449 $58,689,817

30-Sep-09 31-Dec-08

(Unaudited)

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:

Accounts payable $20,959,687 $5,518,402

Notes payable 7,481,700 2,934,000

Due to related parties 73,946 528,485

Billings in excess of costs and

estimated earnings on uncompleted

contracts 12,066,028 846,971

Deferred revenue 129,220 214,256

Other payable 4,653,184 149,282

Accrued liabilities 1,993,930 881,484

Total current

liabilities 47,357,695 11,072,880

Long-term liability 668,219 --

Total Liabilities 48,025,914 11,072,880

Commitments and contingencies -- --

Stockholders' equity:

China TransInfo Technology Corp.

Preferred stock, par

value $0.001 per share,

10,000,000 shares authorized

and 0 shares issued and

outstanding -- --

Common stock, par value $0.001

per share, 150,000,000 shares

authorized, 22,402,989 and

22,187,314 issued and

outstanding, respectively 22,403 22,187

Additional paid-in capital 24,930,192 24,654,890

Retained earnings 27,197,830 18,974,224

Accumulated other comprehensive

gain - translation adjustments 2,111,304 2,499,893

Total China TransInfo

Technology Corp.

shareholders' equity 54,261,729 46,151,194

Noncontrolling interest 15,335,806 1,465,743

Total stockholders' equity 69,597,535 47,616,937

Total liabilities and stockholders'

equity $117,623,449 $58,689,817

CHINA TRANSINFO TECHNOLOGY CORP. AND SUBSIDIARIES RECONCILIATION

OF NON-GAAP FINANCIAL DATA

For the three months ended For the nine months ended

30-Sep-09 30-Sep-08 30-Sep-09 30-Sep-08

Net Diluted Net Diluted Net Diluted Net Diluted

Income EPS Income EPS Income EPS Income EPS

Adjusted

Amount 4,049,363 0.18 3,161,487 0.15 8,432,861 0.38 7,133,174 0.35

Adjustments

Amortization

of intangible

assets from

acquisitions

(1) 18,594 0.00 4,348 0.00 27,315 0.00 5,803 0.00

Non-cash

share based

compen-

sation 55,542 0.00 59,598 0.00 181,940 0.01 156,769 0.01

Amount per

consoli-

dated

statement

of oper-

ations 3,975,227 0.18 3,097,541 0.14 8,223,606 0.37 6,970,602 0.34

1) Amortizations of intangible assets from acquisitions includes

amortizations of intangible assets from acquisitions of China

TranWiseway in 2008 and UNISITS in 2009

Source: China TransInfo Technology Corp.
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