omniture

China TransInfo Announces First Quarter 2011 Results

2011-05-12 18:41 2721

BEIJING, May 12, 2011 /PRNewswire-Asia/ -- China TransInfo Technology Corp. (NASDAQ: CTFO) ("China TransInfo" or the "Company"), a leading provider of comprehensive intelligent transportation solutions ("ITS") in China through its affiliate, China TransInfo Technology Group Co., Ltd. (the "Group Company"), today reported its financial results for the three months ended March 31, 2011.


First Quarter 2011 Highlights

  • Revenue increased 46.7% year-over-year to $36.5 million
  • Gross profit increased 21.8% year-over-year to $10.4 million
  • Operating income increased 11.1% year-over-year to $4.1 million
  • Net income increased 68.7% year-over-year to $3.0 million
  • Earnings per share increased 54.2% to $0.12
  • Adjusted net income, which excludes non-cash stock based compensation expense of $0.3 million and amortization expense of intangibles from acquisitions of $0.05 million, increased 49.5% year-over-year to $3.3 million, or $0.13 per diluted share*

"We are pleased with our first quarter results as we achieved strong increases in revenue, net income and earnings per share," commented by Mr. Shudong Xia, Chairman and Chief Executive Officer. "We continue to see very positive market trends in our industry as the government sector in China moves forward with its plans to build more roads and increase intelligent transportation system spending to improve transportation efficiency.  At this stage of the market's development, we believe it is strategically important for us to focus on maximizing market share and consolidating our leadership position in the industry.  As a result, and as is reflected in our first quarter financial results, in many cases we have pursued new contracts aggressively even if it meant a lower margin contribution.  As the ITS industry evolves and matures, we believe that there will be substantial new businesses opportunities addressing users of the ITS infrastructure. The commercial vehicle LBS business is a good example: an increasing portion of the new businesses will be represented by the companies with dominant positions in industry. "  

First Quarter 2011 Results

For the quarter ended March 31, 2011, revenue increased 46.7% to $36.5 million from $24.9 million in the comparable period of 2010. Approximately 91.9% of this increase is attributable to the increase in transportation revenue mainly resulting from the Company's organic growth in the transportation business.  Revenue from products and applications in the transportation business sector was $35.1 million, or 96.3% of total revenue, compared to $24.5 million, or 98.3% of total revenue, in the same period last year.  The remainder of revenue was derived from the digital city, land and resources, and other business sectors.  

The Company's gross profit increased 21.8% to $10.4 million in the first quarter of 2011 compared to $8.5 million in the same period of 2010. Gross margin in the first quarter of 2011 decreased to 28.5% from 34.3% in the same period of 2010, mainly due to the fact that the Company had expanded operations in ITS businesses and substantially increased sales but on average resulted in a relatively lower gross margin profile in the first quarter of 2011 compared to the same period of 2010.

Selling, general and administrative expenses were $6.3 million compared to $4.9 million in the first quarter of 2010. The increase was primarily due to the Company's expanded operations and sales volume as well as enhanced marketing activities. Operating income increased 11.1% to $4.1 million from $3.7 million in the first quarter of 2010.

Net income increased 68.7% to $3.0 million, or $0.12 per diluted share, compared to $1.8 million, or $0.08 per diluted share, in the same period of 2010. Adjusted net income, which excludes non-cash stock based compensation expense of $0.3 million and amortization expense of intangibles from acquisitions of $0.05 million, increased 49.5% to $3.3 million, or $0.13 per diluted share, compared to $2.2 million, or $0.10 per diluted share, in the comparable period of 2010.*  Weighted average diluted shares outstanding increased to 25.3 million shares from 23.1 million shares in the same period of 2010.

(*) See the table following this press release for a reconciliation of net income and diluted EPS to exclude non-cash stock based compensation expense and amortization expense of intangibles from acquisitions.  

Financial Condition

As of March 31, 2011, cash and cash equivalents totaled $25.0 million compared to $43.9 million as of December 31, 2010. Working capital increased to $84.4 million compared to $73.8 million as of December 31, 2010.  Stockholders' equity was $129.2 million compared to $111.2 million as of December 31, 2010.  

Recent Events

  • On April 28, 2011, CCTV (China Central Television) featured China TransInfo on CCTV-1's prime-time news program.
  • On April 16, 2011, Mr. Liu Qi, Secretary of the CPC Beijing Municipal Committee and Mr. Guo Jinlong, Mayor of Beijing Municipal Government, together with other top Beijing municipal government leaders, visited China TransInfo's Beijing headquarters, where the Company presented its ITS business development and proposed a plan aimed at mitigating traffic jams in the city of Beijing.
  • In April 2011, the Company announced it will serve as the Director-General of the Zhongguancun Intelligent Transportation Industry Association, which the Company played a key role in helping establish.
  • On April 4, 2011, the Company announced that the Group Company's subsidiary, Beijing Zhangcheng Science and Technology Co., Ltd., recently signed a development agreement with Nissan Motor Co., Ltd. to work on a New Energy and Industrial Technology Development Organization project, which is the first national cooperation between China and Japan aimed at improving the use of energy efficiency and protecting the environment in China through the application of a New Traffic Information System. The two-year agreement is valued at JPY340.9 million, or approximately $4.1 million.
  • On March 28, 2011, Beijing Zhangcheng Science and Technology Co., Ltd. (Palmcity) signed a two-year contract with Dongfeng-Yulon Motors Co. Ltd. to preinstall the Company's real time traffic data software in Dongfeng-Yulon's vehicles on a license basis for RMB128 Yuan per vehicle for a two-year term. Dongfeng-Yulon is an automobile manufacturing joint venture between China's Dongfeng Motor and Taiwan's Yulon Motor, targeting middle class consumers in China.  

Business Outlook

Following the issuance of the relevant technology standards by the PRC Ministry of Transport ("MOT") in April 2011, the Company has begun the installation of its commercial vehicle monitoring and controlling terminals in Heibei province.  In the first phase of its plan to be executed in 2011, MOT selected eight pilot provinces to carry out the commercial vehicle monitoring and controlling services.  As of this date, the Company has established local branches and offices in six of the eight provinces.  As the rollout progresses, the Company expects its recurring-revenue commercial vehicle LBS business to drive a long-run increase in the Company's gross margin performance.  

Mr. Xia commented, "At the end of the first quarter, our sales backlog was $183 million compared to $212 million at the year end of 2010. The first quarter is normally our slowest season as the Chinese New Year and other government conferences delay new bidding processes for ITS projects.   It is also typically a negative cash flow quarter, since we increase spending on project bids, fees and other related expenses, whereas receivables collection is normally more active in the latter part of the year.  Following the seasonal pattern of our business, as the year progresses we expect our cash flow to turn positive and our contract awards to pick up.  For fiscal 2011, we continue to expect revenue of between $151 million and $159 million and adjusted net income of between $20 million and $24 million.  Adjusted net income excludes non-cash stock based compensation expense and amortization expense of intangibles from acquisitions."  

Mr. Xia concluded, "We are very excited about our business for the balance of 2011 and beyond.  We see large and growing market opportunities in the ITS market in China, as the Chinese Government has been making great effort to promote transportation safety and improve transportation efficiency.  With our first mover advantage and market leadership position, we believe we have strong prospects for continued success."

Conference Call

The Company will host a conference call on Thursday, May 12, 2011, at 8:00 a.m. Eastern Time to discuss its financial results for the three months ended March 31, 2011.  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 65224341.  A replay will be available for 14 days starting on Thursday, May 12, 2011 at 10:00 a.m. Eastern Time and can be accessed by dialing (800) 642-1687. International callers should dial +1 (706) 645-9291. When prompted, enter conference pass code 65224341.

Use of Non-GAAP Financial Information

GAAP results for the three months ended March 31, 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

RECONCILIATION OF NON-GAAP FINANCIAL DATA


 

 

 

For the three months ended

 

 

 

31-March-11

 

31-March-10

 

 

 

Net
Income

 

Diluted
EPS

 

Net
Income

 

Diluted
EPS

 

 

Adjusted Amount

 

$3,319,063

 

$0.13

 

$2,220,600

 

$0.10

 

 

 

 

 

 

 

 

Adjustments

 

 

 

 

 

 

Amortization of intangible assets 
from acquisitions (1)  

 

$48,850

 

$0.00

 

$47,075

 

$0.00

 

 

Non-cash share based compensation

 

$302,937

 

$0.01

 

$414,486

 

$0.02

 

 

Amount per unaudited consolidated 
statement of operations

 

$2,967,276

 

$0.12

 

$1,759,039

 

$0.08

 

 

(1) Amortizations of intangible assets from acquisitions of China TranWiseway 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-formula1tor 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 Transportation. 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.

Company Contact:

 

Investor Relations Contact:              

 

 

Ms. Fan Zhou, Investor Relations Director                      

 

Mr. Athan Dounis

 

 

China TransInfo Technology Corp.

 

Email: athan.dounis@ccgir.com

 

 

Email: ir@ctfo.com

 

Tel: +1-646-213-1916

 

 

Tel+ 86 10 –5169 1657

 

Website: www.ccgirasia.com

 

 

 

 


–FINANCIAL TABLES FOLLOW—

CHINA TRANSINFO TECHNOLOGY CORP. AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(Unaudited)


 

 

 

 

Three Months Ended March 31,

 

 

 

 

 

2011

 

 

 

2010

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

$

 

36,499,159

 

 

 

$

 

24,887,475

 

 

 

Cost of sales

 

 

 

26,106,038

 

 

 

 

16,354,299

 

 

 

Gross profit

 

 

 

10,393,121

 

 

 

 

8,533,176

 

 

 

Total operating expenses

 

 

 

6,321,059

 

 

 

 

4,867,457

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

 

4,072,062

 

 

 

 

3,665,719

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-operating income (expenses):

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

 

39,726

 

 

 

 

30,486

 

 

 

Interest expense

 

 

 

(250,573)

 

 

 

 

(97,854)

 

 

 

Subsidy income

 

 

 

195,626

 

 

 

 

26,443

 

 

 

Other expense, net

 

 

 

75,476

 

 

 

 

(56,911)

 

 

 

Total non-operating income (expenses)

 

 

 

60,255

 

 

 

 

(97,836)

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes, non-controlling interests, and gain on equity investments in affiliates

 

 

 

4,132,317

 

 

 

 

3,567,883

 

 

 

Income taxes

 

 

 

501,125

 

 

 

 

375,796

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

3,631,192

 

 

 

 

3,192,087

 

 

 

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

 

 

 

332,636

 

 

 

 

(358,795)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income before non-controlling interests

 

 

 

3,963,828

 

 

 

 

2,833,292

 

 

 

Non-controlling interests in net income of subsidiary

 

 

 

996,552

 

 

 

 

1,074,253

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

$

 

2,967,276

 

 

 

$

 

1,759,039

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding:

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

25,270,069

 

 

 

 

23,011,775

 

 

 

Diluted

 

 

 

25,273,542

 

 

 

 

23,100,630

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

Basic

 

 

$

 

0.12

 

 

 

$

 

0.08

 

 

 

Diluted

 

 

$

 

0.12

 

 

 

$

 

0.08

 

 

 

 

 

 

 

 

 

 

 

 

 

 



CHINA TRANSINFO TECHNOLOGY CORP. AND SUBSIDIARIES

 

 

Condensed Consolidated Balance Sheets

 

 

 

 

 

March 31, 2011

 

December 31, 2010

 

 

ASSETS

 

 

 

 

Cash and cash equivalents

 

$

 

25,049,729

 

$

 

43,916,597

 

 

Restricted cash

 

 

10,395,546

 

 

3,131,660

 

 

Accounts receivable, net of allowance for doubtful accounts of $93,360 and $92,794, respectively

 

 

31,860,586

 

 

26,881,280

 

 

Inventories

 

 

1,349,437

 

 

1,079,221

 

 

Costs and estimated earnings in excess of billings on uncompleted contracts

 

 

42,172,458

 

 

38,626,089

 

 

Prepaid expenses and other current assets

 

 

17,201,361

 

 

18,551,801

 

 

Other receivables

 

 

12,387,934

 

 

10,632,452

 

 

Deferred tax assets

 

 

25,677

 

 

25,508

 

 

Total current assets

 

 

140,442,728

 

 

142,844,608

 

 

Property and equipment, net

 

 

10,641,682

 

 

10,878,276

 

 

Long-term investments

 

 

9,152,214

 

 

8,760,692

 

 

Intangible assets, net

 

 

14,331,676

 

 

7,402,829

 

 

Goodwill

 

 

10,387,796

 

 

10,319,768

 

 

Other assets

 

 

322,015

 

 

319,679

 

 

 

 

 

 

 

 

Total assets

 

$

 

185,278,111

 

$

 

180,525,852

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Accounts payable

 

$

 

26,040,542

 

$

 

32,296,459

 

 

Short-term borrowings from banks

 

 

12,216,000

 

 

13,728,850

 

 

Billings in excess of costs and estimated earnings on uncompleted contracts

 

 

11,877,469

 

 

14,080,475

 

 

Accrued expenses and other current liabilities

 

 

5,952,356

 

 

8,988,180

 

 

Total current liabilities

 

 

56,086,367

 

 

69,093,964

 

 

Other long-term liabilities

 

 

-

 

 

200,699

 

 

Total liabilities

 

 

56,086,367

 

 

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 March 31, 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

 

 

48,914,249

 

 

42,887,452

 

 

    Retained earnings

 

 

50,384,757

 

 

47,417,481

 

 

    Non-controlling interests

 

 

24,205,537

 

 

15,873,242

 

 

    Accumulated other comprehensive income

 

 

5,661,931

 

 

5,027,744

 

 

 

 

 

 

 

 

Total stockholders' equity

 

 

129,191,744

 

 

111,231,189

 

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

 

185,278,111

 

$

 

180,525,852

 

 

 

 

 

 

 



CHINA TRANSINFO TECHNOLOGY CORP. AND SUBSIDIARIES

 

 

Condensed Consolidated Statements of Cash Flows (unaudited)

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

 

2011

 

2010

 

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

    Net income

 

$

 

2,967,276

 

$

 

1,759,039

 

 

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

 

 

 

 

 

 

     Non-controlling interests

 

 

996,552

 

 

1,074,253

 

 

     Depreciation and amortization expense

 

 

652,129

 

 

394,025

 

 

     Stock-based compensation

 

 

310,538

 

 

420,845

 

 

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

 

 

(332,636)

 

 

358,795

 

 

       affiliates net income

 

 

 

 

 

 

     Dividends income

 

 

(14,693)

 

 

 

 

     Loss on disposal of property and equipment

 

 

6,655

 

 

 

 

     Bad debt expense

 

 

-

 

 

40,670

 

 

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

 

 

 

 

 

 

        Restricted cash

 

 

(1,192,248)

 

 

(824,320)

 

 

        Accounts receivable

 

 

(4,785,754)

 

 

(3,825,934)

 

 

        Inventories

 

 

(262,205)

 

 

204,326

 

 

        Prepaid expenses and other current assets

 

 

1,467,418

 

 

(2,687,271)

 

 

        Other receivables

 

 

(1,749,678)

 

 

(3,071,267)

 

 

        Costs of estimated earnings in excess of billings on uncompleted contracts

 

 

(3,280,538)

 

 

2,509,661

 

 

        Other assets

 

 

(228)

 

 

 

 

        Accounts payable

 

 

(5,689,594)

 

 

(2,063,780)

 

 

        Billings in excess of costs and estimated on uncompleted contracts

 

 

(2,288,006)

 

 

(4,416,053)

 

 

        Accrued expenses and other current liabilities

 

 

(3,115,251)

 

 

(89,361)

 

 

Net cash used in operating activities

 

 

(16,310,263)

 

 

(10,216,372)

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

    Proceeds from disposal of property and equipment

 

 

13,500

 

 

-

 

 

    Purchases of property and equipment

 

 

(984,331)

 

 

(297,871)

 

 

    Payments for acquisition of companies

 

 

(201,334)

 

 

-

 

 

    Purchases of intangible assets

 

 

(211,214)

 

 

(384,661)

 

 

    Dividends from equity or cost investees

 

 

14,693

 

 

 

 

Net cash used in investing activities

 

 

(1,368,686)

 

 

(682,532)

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

    Proceeds from short-term borrowings

 

 

3,043,600

 

 

73,325

 

 

    Payments of short-term borrowings

 

 

(4,641,490)

 

 

(146,650)

 

 

    Non-controlling interest shareholders' capital contribution

 

 

190,225

 

 

 

 

    Proceeds from issuing common stocks

 

 

-

 

 

10,000,000

 

 

    Payments of transaction costs related to stock issuance

 

 

-

 

 

(610,428)

 

 

Net cash (used in) provided by financing activities

 

 

(1,407,665)

 

 

9,316,247

 

 

 

 

 

 

 

 

Effect of foreign currency translation

 

 

219,746

 

 

(3,861)

 

 

 

 

 

 

 

 

Net decrease in cash and cash equivalents

 

 

(18,866,868)

 

 

(1,586,518)

 

 

Cash and cash equivalents – beginning of period

 

 

43,916,597

 

 

27,400,420

 

 

Cash and cash equivalents – end of period

 

$

 

25,049,729

 

$

 

25,813,902

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

    Interest paid

 

$

 

251,866

 

$

 

90,778

 

 

    Income taxes paid

 

$

 

444,346

 

$

 

231,841

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow for non-cash transaction:

 

 

 

 

 

 

 

 

 

 

 

 

    Restricted cash

 

$

 

6,030,000

 

$

 

-

 

 

    Non-controlling interest shareholders' capital contribution

 

$

 

6,030,000

 

$

 

-

 

 

 

 

 

 

 




Source: China TransInfo Technology Corp.
Related Stocks:
NASDAQ:CTFO
Keywords: Transportation
collection