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China TransInfo Technology Corp. Announces Record First Quarter Results

2008-05-14 00:33

BEIJING, May 14 /Xinhua-PRNewswire-FirstCall/ -- China TransInfo Technology Corp., (OTC Bulletin Board: 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 (the “PRC”), today announced its financial results for the first quarter ended March 31, 2008.

First Quarter 2008 Highlights

-- Sales increased 76.8% year-over-year to a record $4.6 million

-- Gross profit increased 175.6% year-over-year to $2.4 million, or 51.3%

of sales

-- Operating income grew 195.7% year-over-year to $1.7 million

-- Net income increased 150.6% year-over-year to $1.7 million, or $0.09

per basic and fully diluted share

-- Appointed Mr. Troy Mao as chief financial officer

-- Won key contracts in Huhhot and Urumqi

-- Opened a new regional branch office in Taiyuan, Shanxi Province

-- Received a technology award from Beijing Municipal Government and

Beijing Information Office

“China TransInfo is emerging as a leader in the rapidly developing market for traffic information systems and real-time traffic data services in China. In our most recent quarter alone, we won a technology award from the Beijing Municipal Government and Beijing Information Office and opened a new branch in Shanxi Province to establish a regional headquarters to serve the central China market. Furthermore, we continued to expand our taxi media platforms with new contracts in Huhhot, Inner Mongolia and Urumqi, Xinjiang Uighur Autonomous Region. Finally, the addition of Mr. Troy Mao as our chief financial officer has significantly improved our financial oversight and strengthened our corporate governance.”

First Quarter 2008 Results

For the quarter ended March 31, 2008, total revenue was $4.6 million, a 76.8% increase from $2.6 million posted during the same quarter in 2007. This was primarily due to a significant increase in sales in both the transportation and digital city segments, which accounted for 46.6% and 41.3% of the total revenue in the quarter, respectively. The remaining amount was attributable to the land & resource sector and other businesses. During the three months ended March 31, 2008, 55.1% of total sales came from software products, while 44.9% resulted from the sales of hardware products.

Gross profit increased 175.6% to $2.4 million in the first quarter of 2008, compared to $0.9 million in the prior year period. Gross margin was 51.3% as compared to 32.9% during the same period in 2007. The increase in gross margin was due to the sales mix between software and hardware products, as software products accounted for a higher proportion of sales in the quarter and have a higher gross margin.

Selling, general and administrative expenses in the first quarter of 2008 were $648,400, an increase of 133.2% from $277,995 in the first quarter of 2007. The large increase in selling, general and administrative expenses was mainly due to staff growth, increased selling expenses due to a general expansion in business, and noncash charge of share-based compensation expense as a result of options granted to an executive officer as well as higher administrative expenses associated with being a public company.

Operating income increased 195.7% to $1.7 million, or 37.3% of revenue, from $0.6 million, or 22.3% of revenue, in the first quarter of 2007.

Net income increased to $1.7 million in the first quarter of 2008, or $0.09 per basic and fully diluted share, as compared to net income of $0.7 million, or $0.04 per basic and fully diluted share, during the same period in 2007. Fully diluted shares outstanding increased from 17.8 million shares in the first quarter of 2007 to 19.9 million shares in the first quarter of 2008 as a result of the acquisition and issuance of additional shares from a share exchange transaction and private placement in May 2007.

Financial Condition

On March 31, 2008, cash totaled $5.4 million, down from $6.8 million on December 31, 2007. The decrease of cash was mainly due to capital expenditures on equipment for the taxi media business. As of March 31, 2008, the Company had working capital of $16.5 million and total current liabilities of $1.1 million. The Company did not have any short term bank loans or credit instruments as of March 31, 2008. Stockholders’ equity totaled $22.3 million as of March 31, 2008, compared to $19.7 million at the end of 2007.

Net cash provided by operations was $0.9 million for the three months ended March 31, 2008, compared with net cash used in operations of ($0.7) million for the same period in 2007.

Recent Events

-- April 2008, China TransInfo won a bid of model case commissioned by

China Ministry of Communication to construct a comprehensive geographic

information system (“GIS”) for the city of Chengdu.

-- May 2008, China TransInfo appointed three independent directors to its

board, completing the formation of its audit, compensation and

governance and nominating committees and establishing a majority

independent board

Business Outlook

For 2008, the Company is forecasting revenues of approximately $33.0 million and net income of roughly $11.0 million.

“Along with the rapid development of digitalization in China, we expect to continue to see strong demand from government and commercial organizations for advanced GIS software applications. In addition, income from our transportation products and services will continue to constitute an increasingly large portion of our revenue, as the sector just surpassed digital city as our largest source of revenue for the first time in the most recent quarter,” stated Mr. Shudong Xia, China TransInfo’s CEO.

Conference Call

The Company will host a conference call at 10:00 a.m. Eastern time on May 14, 2008 to discuss its first quarter 2008 results. Joining Mr. Shudong Xia, Chief Executive Officer, will be Mr. Troy Mao, Chief Financial Officer, and Ms. Cathy Zhuang, IR Supervisor of China TransInfo.

To participate in the live conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: (866) 800-8648. International callers should dial +1-617-614-2702. When prompted by the operator, mention conference pass code 228 973 07.

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, dial (888) 286-8010. International callers should dial +1-617-801-6888. The conference pass code is 228 973 07.

About China TransInfo

China TransInfo, through its subsidiary Beijing PKU ChinaFront High Technology Co., Ltd. (“PKU”), is primarily focused on providing transportation information services. The Company aims to become the largest transportation information product and comprehensive solutions provider, as well as the largest integrated transportation information platform and commuter traffic media platform builder and operator in China. China TransInfo is involved in developing multiple applications in transportation, digital city, land and resource filling system based on GIS technologies which is used to service the public sector. In addition, the Company is also developing its transportation system to include Electronic Toll Collection technology. The Company is the co-formulator to several transportation technology national standards and has software copyrights to 23 software products. China TransInfo has won 3 of 4 model cases sponsored by the PRC Ministry of Communications. The Company’s affiliation with Peking University, which currently owns 5% of PKU, provides access to the University’s GeoGIS Research Laboratory, including over 30 Ph.D. researchers. As a result, the Company is currently playing a key role in setting the standards for electrified transportation information solutions. For more information please visit the company 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

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Three Months Ended March 31,

2008 2007

Revenues $ 4,641,249 $ 2,624,546

Cost of revenues 2,262,425 1,761,435

Gross profit 2,378,824 863,111

Expenses:

Selling, general, and

administrative expenses 648,400 277,995

(share-based compensation of

$42,736 and $0, respectively)

Income from operations 1,730,424 585,116

Other income (expense):

Interest income 15,228 1,007

Interest expense -- (7,986)

Minority interest (93,962) (22,587)

Other income(expense) - net -- 78,335

Total other income (expense) (78,734) 48,769

Net income before income taxes 1,651,690 633,885

Provision for income taxes (65,607) (51,445)

Net income $ 1,717,297 $ 685,330

Weighted average shares

of outstanding - basic 19,601,017 17,809,440

Weighted average shares

of outstanding - diluted 19,853,523 17,809,440

Income (Loss) per share -

basic $ 0.09 $ 0.04

diluted $ 0.09 $ 0.04

Comprehensive income (loss)

Net income (loss) $ 1,717,297 $ 685,330

Translation adjustments 836,012 63,903

Comprehensive income (loss) $ 2,553,309 $ 749,233

CHINA TRANSINFO TECHNOLOGY CORP. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED BALANCE SHEETS

March 31, 2008 December 31,2007

(Unaudited)

ASSETS

Cash and cash equivalents $ 5,442,822 $ 6,842,238

Restricted cash 35,700 243,852

Accounts receivable 4,567,662 4,246,805

Cost and estimated earnings

in excess of billings on

uncompleted contracts 3,101,847 2,659,969

Prepayments 2,653,664 2,328,289

Other receivable 1,472,181 812,268

Deferred tax assets 328,119 250,668

Other current assets 2,768 226,061

Total current assets 17,604,763 17,610,150

Prepayment on investment 271,320 260,490

Property and equipment, net 6,273,718 3,574,722

$ 24,149,801 $ 21,445,362

LIABILITIES AND SHAREHOLDERS’

EQUITY

Current Liabilities:

Accounts payable $ 578,562 $ 446,143

Billings in excess of costs

and estimated earnings on

uncompleted contracts 115,214 258,265

Accrued expenses 414,496 389,432

Total current liabilities 1,108,272 1,093,840

Minority Interest 749,838 655,876

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, 19,601,107 shares

issued and outstanding 19,601 19,601

Additional paid-in capital 10,947,850 10,905,114

Retained earnings 9,601,044 7,883,747

Accumulated other comprehensive

gain - translation adjustments 1,723,196 887,184

Total stockholders’ equity 22,291,691 19,695,646

Total liabilities and

stockholders’ equity $ 24,149,801 $ 21,445,362

CHINA TRANSINFO TECHNOLOGY CORP. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

2008 2007

Cash flows from operating activities:

Net income $1,717,297 $685,330

Adjustments to reconcile net income

(loss) to net cash provided by (used

in) operating activities:

Depreciation and amortization

expenses 21,368 14,183

Minority interest 93,962 (222)

Stock-based compensation 42,736

Changes in operating assets:

Increase in restricted cash 213,658 --

Deferred income tax expense

(benefit) (65,607) (51,445)

(Increase) Decrease in accounts

receivable (141,233) (330,863)

(Increase) Decrease in

prepayment (223,726) (458,544)

(Increase) Decrease in other

receivable (616,240) (54,975)

(Increase) Decrease in cost and

estimated earnings

in excess of billings on

uncompleted contracts (324,259) (201,073)

(Increase) Decrease in other

current assets 227,755 (19,715)

Increase (Decrease) in accounts

payable 111,455 (2,602)

Increase (Decrease) in billings

in excess of costs and estimated

earnings on uncompleted contracts (150,526) (283,631)

Increase (Decrease) in accrued

expenses 11,199 23,067

Net cash provided by (used in)

operating activities 917,839 (680,490)

Cash flows from investing activities

Cash flows from investing activities:

(Increase) in loan to others -- (54,700)

Decrease in other assets - deposits -- (1,071)

Purchases of property and equipment (2,517,627) (227)

Net cash used in investing activities (2,517,627) (55,998)

Cash flows from financing activities:

Proceeds from (payments of) short-

term borrowings -- (258,020)

Net cash provided by financing

activities -- (258,020)

Effect of foreign currency exchange

translation 200,372 9,620

Net increase (decrease) in cash (1,399,416) (984,888)

Cash - beginning 6,842,238 1,321,164

Cash - ending $5,442,822 $336,276

Supplemental disclosures:

Interest paid $- $7,986

Income taxes paid $- $-

For more information, please contact:

China TransInfo Technology Corp.

Ms. Cathy Zhuang, IR Supervisor

Tel: +86-10-8267-1299 x8032 (Beijing)

Email: cathyzhuang@ctfo.com

CCG Elite Investor Relations Inc.

Mr. Crocker Coulson, President

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

Email: crocker.coulson@ccgir.com

Web: http://www.ccgelite.com

Source: China TransInfo Technology Corp.

Related stocks: NASDAQ:CTFO

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