omniture

China TransInfo Technology Corp. Announces Record Second Quarter Results

2008-08-14 18:29 1493


BEIJING, Aug. 15 /Xinhua-PRNewswire-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 (the “PRC”), today announced its financial results for the second quarter ended June 30, 2008.

Second Quarter 2008 Highlights

-- Revenue increased 218.1% year-over-year to a record $5.1 million

-- Gross profit increased 209.5% year-over-year to $3.1 million, or 60.7%

of revenue

-- Operating income grew 169.9% year-over-year to $2.3 million

-- Net income increased 152.5% year-over-year to $2.2 million, or $0.11

per basic and fully diluted share

-- Acquired majority ownership of China TranWiseway Information Technology

Co., Ltd (“China TranWiseway”)

-- Won a bid to construct the Olympic Games Traffic GIS Application System

for the Beijing Traffic Management Bureau

-- Appointed three independent directors to the Company’s board,

completing the formation of its audit, compensation and governance and

nominating committees and establishing a majority independent board

“Based on our position at the forefront of the transportation information solutions industry, China TransInfo has recorded outstanding results and achieved many significant business developments during the second quarter of 2008,” stated Mr. Shudong Xia, CEO of China TransInfo. “During the three months ended June 30, 2008, we successfully won project bids to build GIS transportation applications for the Beijing Olympic Games as well as for the city of Chengdu. Meanwhile, we also acquired 70% of China TranWiseway in May, which we believe was a significant milestone in achieving our long term goal of building a nationwide transportation information platform.”

Second Quarter 2008 Results

For the three months ended June 30, 2008, total revenue was $5.1 million, a 218.1% increase from $1.6 million posted during the same period in 2007. The rapid growth of the Company’s revenue mainly resulted from increased sales in the transportation, digital city and land & resource segments, which accounted for 48.9%, 33.1%, and 17.9% of the total revenue during the second quarter of 2008, respectively. The new contract bid-win success rate remained at approximately 90% during the quarter, similar to the same period in 2007. During the three months ended June 30, 2008, 56.9% of total sales came from software products, while 43.1% resulted from the sales of hardware products.

Gross profit increased 209.5% to $3.1 million in the second quarter of 2008, compared to $1.0 million in the prior year period. Gross margin was 60.7% as compared to 62.4% during the same period in 2007. The decrease in gross margin was primarily due to increased sales of slightly lower margin software components as a percentage of total sales during the three months ended June 30, 2008.

Selling, general and administrative expenses in the second quarter of 2008 were $0.8 million, an increase of 418.9% from $0.2 million in the second quarter of 2007. The large increase in general and administrative expenses was mainly due to growing staff scale as well as higher administrative expenses associated with being a public company. The rapid increase of selling expenses was mainly attributable to the expanded business operations and the increase in sales volume.

Operating income increased 169.9% to $2.3 million, or 44.5% of revenue, from $0.8 million, or 52.5% of revenue, in the second quarter of 2007.

Net income increased to $2.2 million in the second quarter of 2008, or $0.11 per basic and fully diluted share, as compared to net income of $0.9 million, or $0.06 per basic and fully diluted share, during the same period in 2007.

Six Months 2008 Results

Net revenue was $9.8 million in the six months ended June 30, 2008, up 130.6% from $4.2 million in the six months ended June 30, 2007. Gross profit was $5.5 million with a gross margin of 56.2%, up 193.9% from $1.9 million and a gross margin of 44.1% in the six months ended June 30, 2007. Operating income was $4.0 million with an operating margin of 41.1%, up 180.5% from $1.4 million and an operating margin of 33.8% in the six months ended June 30, 2007. Net income was $3.9 million, or $0.20 per basic and fully diluted share, up 151.6% from $1.5 million, or $0.13 per basic and fully diluted share, in the six months ended June 30, 2007.

Financial Condition

On June 30, 2008, cash totaled $7.8 million, up 14.3% from $6.8 million on December 31, 2007. The increase of cash was mainly due to an increase in sales and net profit as well as an increase in accounts payable for the six months ended June 30, 2008 compared to the same period of 2007. As of June 30, 2008, the Company had working capital of $16.9 million and total current liabilities of $7.8 million. Stockholders’ equity totaled $25.0 million as of June 30, 2008, compared to $19.7 million at the end of 2007.

Net cash provided by operations was $2.0 million for the six months ended June 30, 2008, compared with net cash used in operations of ($0.4) million for the same period in 2007.

Recent Events

-- July 2008, China TransInfo successfully closed a private placement

transaction with SAIF Partners III L.P. (“SAIF”), pursuant to which

the Company issued and sold to SAIF about 2.59 million shares of the

Company’s common stock at a purchase price of $5.80 per share,

generating gross proceeds of $15 million

-- July 2008, China TransInfo signed an agreement for taxi advertisements

with China Unicom Limited (NYSE: CHU) valued at RMB 5 million

(approximately $0.73 million) in the city of Urumqi

-- July 2008, China TransInfo’s common stock began trading on the Nasdaq

Capital Market under the trading symbol “CTFO”

-- August 2008, China TransInfo entered into a taxi advertisement

placement agreement with Xinjiang Malan Advertisement Limited for a

period of five years in the city of Urumqi

Business Outlook

For 2008, the Company expects to achieve revenues of approximately $30.0 million and net income of approximately $11.0 million.

“As China continues to invest heavily in its infrastructure development on a nationwide basis, we believe the demand for advanced GIS technology and software applications will remain strong in the near future. Our recent financing from SAIF, worth $15 million, will allow China TransInfo the financial flexibility to fully take advantage of all potential opportunities in this area,” stated Mr. Shudong Xia, the Company’s CEO. “We are particularly excited about the continued growth of our taxi media platform, which has already been successfully debuted in Urumqi as we move into new markets in the second half of 2008. Also, having completed an upgrade to the NASDAQ Capital Market, we look forward to increased liquidity and a higher profile in the investment community.”

Conference Call

The Company will host a conference call at 08:00 a.m. Eastern time on Friday, August 15, 2008 to discuss its second quarter 2008 results. Hosting the call will be Mr. Crocker Coulson, president of CCG Investor Relations, joined by Mr. Shudong Xia, chief executive officer, Mr. Troy Mao, chief financial officer and Ms. Cathy Zhuang, investor relations supervisor.

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 797 979 41.

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 79797941.

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 ITS SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE INCOME

Three Months Ended June 30, Six Months Ended June 30,

2008 2007 2008 2007

Revenues $5,131,050 $1,613,020 $9,772,299 $4,237,566

Cost of revenues 2,016,663 606,773 4,279,088 2,368,208

Gross profit 3,114,387 1,006,247 5,493,211 1,869,358

Expenses:

Selling,

general, and

administrative

expenses 829,880 159,939 1,478,280 437,934

Income from

operations 2,284,507 846,308 4,014,931 1,431,424

Other income

(expense):

Interest income 11,956 20,055 27,184 21,062

Interest expense (9,917) (4,243) (9,917) (12,229)

Minority

interest (120,829) (211,380) (214,791) (233,967)

Decrease in fair

value of

warrant

liability -- 187,499 -- 187,499

Other

income(expense)

- net (4,239) 100,817 (4,239) 179,152

Total other

income

(expense) (123,029) 92,748 (201,763) 141,517

Net income before

income taxes 2,161,478 939,056 3,813,168 1,572,941

Provision for

income taxes 5,714 85,212 (59,893) 33,767

Net income $2,155,764 $853,844 $3,873,061 $1,539,174

Weighted average

shares of

outstanding -

basic 19,601,107 14,160,514 19,601,107 11,440,216

Weighted average

shares of

outstanding-

diluted 19,814,371 14,299,403 19,844,610 11,509,660

Income (Loss)

per share -

basic $0.11 $0.06 $0.20 $0.13

diluted $0.11 $0.06 $0.20 $0.13

Comprehensive

income

Net income $2,155,764 $853,844 $3,873,061 $1,539,174

Translation

adjustments 492,392 227,607 1,328,404 291,510

Comprehensive

income $2,648,156 $1,081,451 $5,201,465 $1,830,684

CHINA TRANSINFO TECHNOLOGY CORP. AND ITS SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

June 30, 2008 December 31,

(Unaudited) 2007

ASSETS

Current Assets:

Cash and cash equivalents $7,822,743 $6,842,238

Restricted cash -- 243,852

Accounts receivable 5,024,844 4,246,805

Cost and estimated earnings in

excess of billings on

uncompleted contracts 5,909,183 2,659,969

Inventory 711,136 --

Prepayments 3,354,858 2,328,289

Other receivable 1,240,427 812,268

Deferred tax assets 328,365 250,668

Other current assets 286,234 226,061

Total current assets 24,677,790 17,610,150

Prepayment on investment 277,210 260,490

Property and equipment, net 7,484,600 3,574,722

Intangible assets 525,600 --

Goodwill 671,593 --

Total assets $33,636,793 $21,445,362

June 30, 2008 December 31,

(Unaudited) 2007

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current Liabilities:

Accounts payable $3,203,813 $446,143

Notes payable 3,063,900 --

Billings in excess of costs and

estimated earnings on

uncompleted contracts 529,604 258,265

Accrued expenses 974,527 389,432

Total current liabilities 7,771,844 1,093,840

Minority Interest 870,667 655,876

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 11,002,285 10,905,114

Retained earnings 11,756,808 7,883,747

Accumulated other comprehensive

gain - translation adjustments 2,215,588 887,184

Total stockholders’ equity 24,994,282 19,695,646

Total liabilities and stockholders’

equity $33,636,793 $21,445,362

CHINA TRANSINFO TECHNOLOGY CORP. AND ITS SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

2008 2007

Cash flows from operating

activities:

Net income $3,873,061 $1,539,174

Adjustments to reconcile net income

(loss) to net cash provided by (used

in) operating activities:

Depreciation and amortization

expenses 56,643 17,144

Minority interest 214,791 233,967

Stock-based compensation 97,171

Changes in operating assets:

Increase in restricted cash 252,282 --

Deferred income tax expense

(benefit) (59,893) 33,767

Revaluation of warrant

liability -- (187,499)

(Increase) Decrease in

accounts receivable 31,495 (843,326)

(Increase) Decrease in

prepayment (767,926) (385,595)

(Increase) Decrease in other

receivable (286,710) (232,469)

(Increase) Decrease in cost

and estimated earnings

in excess of billings on

uncompleted contracts (2,185,721) (270,296)

(Increase) Decrease in

inventory (508,398) --

(Increase) Decrease in other

current assets (47,141) (97,817)

Increase (Decrease) in

accounts payable 2,185,056 (36,340)

Increase (Decrease) in

billings in excess of costs

and estimated earnings on

uncompleted contracts (907,649) 266,402

Increase (Decrease) in accrued

expenses 80,148 (458,119)

Net cash provided by (used in)

operating activities 2,027,209 (421,007)

Cash flows from investing activities

Cash flows from investing

activities:

Cash acquired from reverse

acquisition 9,199,660

(Increase) in loan to others -- (149,812)

Payment of cash to the

shareholders of the accounting

acquirer -- (2,000,000)

Decrease in other assets - deposits -- 6,066

Purchases of property and

equipment (3,588,438) (766,656)

Purchases of intangible assets and

goodwill (1,175,740) --

Cash acquired from subsidiary

of CTW 264,415 --

Net cash used in investing

activities (4,499,763) 6,289,258

Cash flows from financing

activities:

Proceeds from (payments of) short-

term borrowings 2,836,800 (259,420)

Merger costs charged directly to

equity -- (1,447,361)

Proceeds from issuing shares -- 3,200,000

Net change in CTW minority

interest (100,266) --

Payable for acquiring CTW 392,897 --

Net cash provided by financing

activities 3,129,431 1,493,219

Effect of foreign currency exchange

translation 323,628 35,932

Net increase (decrease) in cash 980,505 7,397,402

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

Cash - ending $7,822,743 $8,718,566

Supplemental disclosures:

Interest paid $2,825 $12,040

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 Investor Relations Inc.

Mr. Crocker Coulson, President

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

Email: crocker.coulson@ccgir.com

Web: http://www.ccgir.com

Source: China TransInfo Technology Corp.
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