omniture

China TransInfo Announces Record Unaudited Fourth Quarter and Full Year 2009 Results; Anticipates Robust Growth for 2010

2010-03-22 18:25 1359

BEIJING, March 22 /PRNewswire-Asia/ -- 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 reported its unaudited financial results for the fourth quarter and year ended December 31, 2009.

Fourth Quarter 2009 Highlights

-- Revenue increased 166.1% year-over-year to $28.4 million

-- Gross profit expanded 64.9% year-over-year to $10.0 million

-- Operating income grew 26.1% year-over-year to $5.1 million

-- Adjusted net income increased 22.3% year-over-year to $5.1 million, or

$0.23 per fully diluted share

-- Appointed BDO Guangdong Dahua Delu as New Independent Auditor

-- Launched three new real-time traffic mobile phone applications and

expanded real-time traffic application coverage to Shenzhen, Tianjin

and Changzhou

-- Awarded a provincial highway toll settlement and billing system

contract in Shanxi Province valued at approximately RMB 26 million, or

approximately USD $3.8 million

-- Awarded an intelligent transportation system contract in Hubei Province

valued at approximately RMB 114 million, or approximately USD $16.7

million

Fiscal 2009 Highlights

-- Revenue increased 116.8% year-over-year to a record $63.7 million

-- Gross profit expanded 53.8% year-over-year to $25.4 million

-- Operating income grew 20.0% year-over-year to $13.7 million

-- Adjusted net income increased 19.7% to $13.6 million, or $0.60 per

fully diluted share

-- As of December 31, 2009, cash and cash equivalents totaled $27.4

million

"During 2009, we generated record revenue and earnings results, solidified our industry leading market position with numerous successful new product launches, and completed a highly accretive acquisition," commented Mr. Shudong Xia, Chief Executive Officer of China TransInfo. "Our acquisition of UNISITS, a leader in China's intelligent transportation systems industry, marked a major milestone for us in 2009, as we now leverage UNISITS' technology, market share and customer relationships to further drive new market opportunities."

Unaudited Fourth Quarter 2009 Results

For the quarter ended December 31, 2009, revenue increased 166.1% to $28.4 million, as compared to $10.7 million in the comparable period of 2008. Products and applications in the transportation business sector accounted for 91.7% of total revenue in the quarter with the remainder derived from the digital city, land & resources, and other sectors.

The Company's gross profit increased 64.9% to $10.0 million in the fourth quarter of 2009, compared to $6.1 million in the same period of 2008. Gross margin was 35.2%, compared to 56.9% during the same period of 2008. The decrease in gross margin resulted from the consolidation of UNISITS' financials into those of China TransInfo, since UNISITS' business involves more hardware components, which have much lower margin than does the Company's legacy transportation business.

Selling, general and administrative expenses were $4.9 million, as compared to $2.0 million in the fourth quarter of 2008. The increase was primarily due to the Company's expansion initiatives, including higher marketing, staffing, and professional fees.

Operating income increased 26.1% to $5.1 million, as compared to $4.1 million in the fourth quarter of 2008.

Other income was $1.4 million, as compared to $0.2 million in the fourth quarter of 2008. The significant increase is mostly attributable to a $1.4 million increase in governmental subsidy income.

Net income attributable to the Company increased 15.3% to $4.8 million, or $0.21 per fully diluted share, as compared to net income of $4.2 million, or $0.20 per fully diluted share, in the same period in 2008. Adjusted net income attributable to the Company excluding non-cash stock based compensation expense and amortization expense of intangibles from acquisitions increased 22.3% to $5.1 million, or $0.23 per fully diluted share, as compared to $4.2 million, or $0.20 per fully diluted share, in the comparable period of 2008. Weighted average fully diluted shares outstanding increased to 22.5 million shares in the fourth quarter of 2009 from 20.9 million shares in the fourth quarter of 2008.

Unaudited Full Year 2009 Results

Revenue for 2009 increased 116.8% to $63.7 million, as compared to $29.4 million in 2008. Gross profit expanded 53.8% to $25.4 million from $16.5 million in 2008. Operating income grew 20.0% to $13.7 million from $11.4 million in 2008. Net income attributable to the Company increased 17.0% to $13.0 million, or $0.58 per fully diluted share, as compared to net income of $11.1 million, or $0.53 per fully diluted share, in 2008. Adjusted net income attributable to the Company excluding non-cash expenses increased 19.7% to $13.6 million, or $0.60 per fully diluted share, as compared to $11.3 million, or $0.54 per fully diluted share, in 2008. Weighted average fully diluted shares outstanding increased to 22.5 million shares in 2009 from 20.9 million shares in 2008.

Financial Condition

As of December 31, 2009, cash and cash equivalents totaled $27.4 million, up from $16.1 million at December 31, 2008. Working capital increased to $44.4 million, as compared to $32.7 million at the end of 2008. Stockholders' equity was $77.8 million, as compared to $47.6 million at the end of 2008. Cash flow from operating activities increased 251.7% to $8.8 million from $2.5 million in 2008, primarily as a result of the increase in sales and net profit for 2009 as well as the Company receiving customer payments on some contracts ahead of schedule.

Recent Events

On March 22, 2010, the Company and the Company's variable interest entity, China TransInfo Technology Group Co., Ltd. (the "Group Company") entered into equity transfer agreements (the "Equity Transfer Agreements") with several individual shareholders (the "Transferors") of Beijing UNISITS Technology Co. Ltd. ("UNISITS"), pursuant to which the Group Company acquired 30.85% equity interest in UNISITS from the Transferors. Pursuant to the Equity Transfer Agreements, the Group Company purchased approximately 16.23 million shares of UNISITS from the Transferors in exchange for RMB 4.41 million (approximately USD $0.65 million) in cash (the "Cash Consideration"), 40% of which is payable within seven days after the effective date of the Equity Transfer Agreements, and approximately 1.16 million shares of the Company's common stock, which are issuable within 30 days of the effective date of the Equity Transfer Agreements. The Equity Transfer Agreements contain "make good" provisions, under which the Transferors agree to deposit a total of 697,162 shares of the Company's common stock with an escrow agent designated by the Company that they will receive as partial consideration for the acquisition. Specifically, if UNISITS' 2010 after-tax net income under Chinese GAAP is less than RMB 37.50 million (approximately USD $5.50 million) or its 2011 after-tax net income under Chinese GAAP is less than RMB 46.88 million (approximately USD $6.86 million), then 50% of the shares of the Company's common stock deposited by the Transferors in escrow will be returned to the Company for cancellation for each applicable year. In addition, for each applicable year as described above, the Company will not be required to pay the remainder of the Cash Consideration, which represents RMB 1.323 million (approximately USD $0.19 million), or 30% of the total Cash Consideration, per year if UNISITS fails to meet the respective performance targets.

On February 24, 2010, the Company issued and sold 1,564,945 shares of its common stock at a price of $6.39 per share to SAIF Partners III L.P. for an aggregate purchase price of $10 million. The Company intends to use the net proceeds from the offering for general corporate purposes, expansion of current business development and potential acquisitions.

On January 25, 2010, China TransInfo announced that the Company was awarded an intelligent transportation system contract in Zhejiang Province valued at approximately RMB 156 million, or approximately USD $22.9 million, through its VIE subsidiary Beijing UNISITS Technology Co., Ltd. ("UNISITS").

On January 21, 2010, the Company announced that it was ranked 11th on the 2010 Forbes China list of small-to-medium sized Chinese companies with the most potential. China TransInfo was the only transportation information technology company selected.

Business Outlook

"We remain very confident that intelligent transportation systems, our core business, will provide us with strong prospects in 2010, given China's extensive expressway construction plans, rapidly expanding automobile market, and growing traffic density," commented Mr. Xia. "As a result, we believe that the Company will continue to generate organic growth from winning follow-on contracts from existing clients, while bringing in new revenue sources from strategic acquisition opportunities. In addition, by leveraging UNISITS' large presence in China's expressway market with our leadership in the urban transportation market, we expect to further penetrate China's inter-city information services segment, which offers a significantly larger market for our products and services."

For 2010, the Company expects revenues to increase to approximately $120 million and adjusted net income attributable to the Company excluding non-cash expenses to be approximately $18 million. GAAP net income attributable to the Company is projected to be approximately $16 million.

Conference Call

China TransInfo will host a conference call at 8:00 a.m. Eastern Time on Monday, March 22, 2010 at 8:00 a.m. Eastern Time to discuss its unaudited financial results for the fourth quarter and full year of 2009. To participate in the live conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: (877) 406-6165. International callers should dial (706) 902-4263. When prompted by the operator, enter conference pass code 625 186 46.

If you are unable to participate in the call at this time, a replay will be available for 14 days starting on Monday, March 22, 2010 at 10:00 a.m. Eastern Time and can be accessed by dialing (800) 642-1687. International callers should dial (706) 645-9291. When prompted, enter conference pass code 625 186 46.

Use of Non-GAAP Financial Information

GAAP results for the three month and the year ended December 31, 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. 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 below.

CHINA TRANSINFO TECHNOLOGY CORP. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL DATA

For the three months ended

31-Dec-09 31-Dec-08

Net Income Diluted EPS Net Income Diluted EPS

Adjusted Amount 5,117,597 0.23 4,185,241 0.20

Adjustments

Amortization of

intangible assets

from acquisitions(1) 47,111 0.00 4,379 0.00

Non-cash share

based compensation 319,993 0.01 60,987 0.00

Amount per unaudited

consolidated

statement of

operations 4,750,493 0.21 4,119,875 0.20

For the twelve months ended

31-Dec-09 31-Dec-08

Net Income Diluted EPS Net Income Diluted EPS

Adjusted

Amount 13,550,458 0.60 11,318,415 0.54

Adjustments

Amortization of

intangible assets

from acquisitions (1) 74,426 0.00 10,182 0.00

Non-cash share

based compensation 501,933 0.02 217,756 0.01

Amount per unaudited

consolidated

statement of

operations 12,974,099 0.58 11,090,477 0.53

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 89 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.

-FINANCIAL TABLES FOLLOW-

CHINA TRANSINFO TECHNOLOGY CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

For three months ended For twelve months ended

December 31, December 31,

2009 2008 2009 2008

unaudited unaudited

Revenues 28,429,252 10,684,650 63,686,121 29,370,463

Cost of revenues 18,413,493 4,609,121 38,310,183 12,867,258

Gross profit 10,015,759 6,075,529 25,375,938 16,503,205

Selling, general

and admini-

strative expenses 4,870,077 1,995,510 11,667,895 5,081,502

Income from

operations 5,145,682 4,080,019 13,708,043 11,421,703

Other income

(expense):

Interest income 58,352 18,023 109,744 68,782

Interest expense (112,547) (59,137) (244,574) (135,120)

Subsidy income 1,422,178 224,296 1,730,291 530,100

Other income - net 32,138 32,168 91,439 32,168

Total other

income 1,400,121 215,350 1,686,900 495,930

Income before

income taxes,

noncontrolling

interest, and

equity investments 6,545,803 4,295,369 15,394,943 11,917,633

Income tax expense 567,409 12,984 677,355 62,955

Net income before

noncontrolling

interest and gain

on equity invest-

ments in affiliates 5,978,394 4,282,385 14,717,588 11,854,678

Gain on equity

investments in

affiliates due to

proportional shares

of the affiliates'

net income 1,793,387 -- 1,793,387 --

Net income before

noncontrolling

interest 7,771,781 4,282,385 16,510,975 11,854,678

Noncontrolling

interests in

net income of

subsidiary 3,021,288 162,510 3,536,876 764,201

Net income 4,750,493 4,119,875 12,974,099 11,090,477

Weighted average

number of common

shares of

outstanding -

Basic 22,333,765 20,678,693 22,333,765 20,678,693

Diluted 22,505,641 20,883,951 22,505,641 20,883,951

Earnings per share -

Basic 0.21 0.20 0.58 0.54

Diluted 0.21 0.20 0.58 0.53

CHINA TRANSINFO TECHNOLOGY CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

December 31,

2009 2008

ASSETS unaudited

Current Assets:

Cash and cash equivalents $27,400,420 $16,122,464

Restricted cash 1,591,076 1,209,542

Accounts receivable, net of

allowance for doubtful accounts

of $38,209 and $32,439,

respectively 14,968,778 7,735,742

Inventory 482,286 23,775

Cost and estimated earnings in

excess of billings on

incomplete contracts 33,853,708 11,912,285

Prepayments 5,871,997 3,647,731

Other receivables 8,416,096 2,940,404

Deferred tax assets 28,715 211,708

Total current assets 92,613,076 43,803,651

Long-term investments 8,027,122 --

Property and equipment, net 10,541,486 9,874,005

Intangible assets, net 4,494,781 1,490,807

Goodwill 9,979,631 3,095,017

Other assets 826,671 426,337

Total assets $126,482,767 $58,689,817

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:

Accounts payable $20,728,539 $5,518,402

Short term borrowings from banks 7,481,700 2,934,000

Loans payable to related parties -- 528,485

Billings in excess of costs and

estimated earnings on

incomplete contracts 17,021,936 846,971

Accrued liabilities 3,022,140 1,608,560

Total current liabilities 48,254,315 11,072,880

Other long-term liability 389,489 --

Total liabilities 48,643,804 11,072,880

Commitments and contingencies

Stockholders' equity:

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 , 22,452,745 and

22,187,314 issued and

outstanding, respectively 22,453 22,187

Additional paid-in capital 25,253,666 24,654,890

Retained earnings 31,948,323 18,974,224

Noncontrolling interests 18,499,475 1,465,743

Accumulated other comprehensive

income 2,115,046 2,499,893

Total stockholders' equity 77,838,963 47,616,937

Total liabilities and stockholders'

equity $126,482,767 $58,689,817

CHINA TRANSINFO TECHNOLOGY CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

2009 2008

unaudited

Cash flows from operating activities:

Net income, including noncontrolling

interest $12,974,099 $11,090,477

Adjustments to reconcile net income

to net cash provided by (used in)

operating activities:

Noncontrolling interests 3,536,876 764,201

Depreciation and amortization

expenses 1,320,031 200,746

Stock-based compensation 505,464 217,756

Gain on equity investments in

affiliates due to proportional

shares of the affiliates' net

income (1,793,387) --

Loss on disposal of property and

equipment 9,164 11,747

Allowance for doubtful accounts 5,767 31,571

Deferred income tax 189,586 55,531

(Increase) Decrease in assets:

Restricted cash 634,402 (932,126)

Accounts receivable (1,793,525) (2,634,838)

Prepayments 3,944,172 (1,035,964)

Other receivables (1,194,154) (1,852,411)

Cost and estimated earnings

in excess of billings on

uncompleted contracts (16,350,203) (8,088,233)

Inventory (414,369) 185,993

Other current assets 24,403 234,892

Other non-current assets (678,646) (147,489)

Decrease (Increase) in

liabilities:

Accounts payable 3,687,044 4,471,898

Billings in excess of costs

and estimated earnings on

uncompleted contracts 3,974,128 (613,988)

Deferred revenue 138,228 66,382

Other payable (435,267) (55,029)

Accrued liabilities 730,625 393,312

Customer deposits (190,593) 144,150

Net cash provided by (used in)

operating activities 8,823,845 2,508,578

Cash flows from investing activities:

Cash from acquisitions $12,210,500 $294,872

Proceeds from disposal of property

and equipment 5,412 26,072

Refund from prepayment of building 1,217,457 --

Purchases of property and equipment (2,669,035) (6,547,901)

Payments for acquisition of

companies (6,545,403) (2,702,813)

Purchases of intangible assets (2,543,933) (1,324,577)

Net cash provided by (used in)

investing activities 1,674,998 (10,254,347)

Cash flows from financing activities:

Proceeds from short-term borrowings 4,398,300 2,883,000

Payable for acquiring subsidiary -- 86,490

Minority shareholders' capital

contribution 87,960 300,775

Payment of dividends from

subsidiaries' and variable

interest entity (2,791,434) --

Proceeds from issuing shares -- 15,000,000

Paid transaction cost debit to APIC (32,500) (1,794,660)

Proceeds from (payments to) related

parties (528,161) 250,859

Net cash provided by financing

activities 1,134,165 16,726,464

Effect of foreign currency exchange

translation (355,052) 299,531

Net increase in cash 11,277,956 9,280,226

Cash and cash equivalents - beginning 16,122,464 6,842,238

Cash and cash equivalents - ending $27,400,420 $16,122,464

Supplemental disclosures:

Interest paid $228,899 $135,120

Income taxes paid $21,819 $847

For more information, please contact:

Company Contact:

Ms. Fan Zhou, Investor Relations Director

China TransInfo Technology Corp.

Phone: +86-10-5169-1657

Email: ir@ctfo.com

Investor Relations Contact:

CCG Investor Relations

Web: http://www.ccgirasia.com

Mr. Shaun Smolarz, Financial Writer

Phone: +1-646-701-7444

Email: shaun.smolarz@ccgir.com

Mr. Crocker Coulson, President

Phone: +1-646-213-1915

Email: crocker.coulson@ccgir.com

Source: China TransInfo Technology Corp.
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