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