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Intra-Asia Entertainment Corporation Announces Record Second Quarter 2007 Results



BEIJING, Aug. 16 /Xinhua-PRNewswire-FirstCall/ -- Intra-Asia Entertainment Corporation, (OTC Bulletin Board: IRAE) ("Intra-Asia" or "the Company"), a leading Geographic Information System technology provider for the People's Republic of China ("PRC") government's Transportation, Land & Resource and Digital City segments, today announced record financial results for the second quarter ended June 30, 2007.

Second Quarter 2007 Highlights

-- Total revenues increased 16.8% year-over-year to $1.6 million

-- Gross profit increased 80.5% year-over-year to $1.0 million, or 62.4%

of revenues

-- Operating income rose 136.3% to $846,308, or 52.5% of revenues

-- Net income grew 72.1% to $666,345 or $0.05 per fully diluted share

-- Won Transportation project from the Beijing Transportation Committee

and a pilot project from Chengdu city with an aggregate value of $0.4

million

-- Won GPS Orientation Base Station project from Sunking Corporation

valued at $0.9 million

-- Won Hangzhou city 3-D Geology Management project from the Land &

Resource Ministry valued at $0.1 million

Second Quarter 2007 Results

"The second quarter clearly demonstrates the ongoing success of our business strategy. We continue to win important contracts in our target market segments, including Transportation, Land & Resources and Digital City, as we further expand our offerings and GIS solutions," said Mr. Shudong Xia, CEO of Intra-Asia. "We continue to expand our presence throughout China due to our excellent reputation, successful track record and advanced technology."

For the three months ended June 30, 2007, total revenues grew 16.8% to $1.6 million, compared to $1.4 million in the second quarter of 2006. The increase in revenue was mainly due to the increased sales to the Digital City and Land & Resources sectors, which increased 30.3% and 38.2%, respectively in the second quarter of 2007. Sales to the Transportation, Digital City, Land & Resources and other sectors accounted for 30.1%, 48.2%, 15.9% and 5.8% of revenues, respectively, in the second quarter of 2007. Revenues from software and hardware products accounted for 42.7% and 57.3% of total sales, respectively, during the second quarter of 2007.

Gross profit grew 80.5% to $1.0 million, or 62.4% of revenues, compared to $557,401, or 40.3% of revenues, in the second quarter of 2006. The increase in gross margin was mainly due to the increased contribution of software solutions projects during the quarter following a number of software projects awarded in the second quarter of 2007.

Operating expenses decreased 19.8% to $159,939, primarily due to lower administrative expenses following the implementation of internal cost control measures. Selling expenses increased as a result of expanded operations and higher sales volume. As a percentage of revenues, operating expenses were 9.9% of revenues in the second quarter of 2007, compared to 14.4% of revenues in the same quarter of the prior year.

Income from operations was $846,308 in the second quarter of 2007, up 136.3% from $358,094 in the same quarter last year. Operating margin was 52.5% compared to 25.9% in the same period of 2006.

Net income was $666,345 in the second quarter of 2007, or $0.05 per diluted share, up 72.1% from $387,094, or $0.05 per share, in the second quarter of 2006. Diluted earnings per share in the second quarter of 2007 reflects a year over year increase of 5,736,743 in diluted weighted average shares due to a private placement financing in May 2007.

Six-Month Results

Revenues for the first half of 2007 were $4.2 million, up 58.1% from $2.7 million during the first half of 2006. Gross profit was $1.9 million, or 44.1% of revenues, up 51.9% from $1.2 million, or 45.9% of revenues, in the first half of 2006. Operating income was $1.4 million, or 33.8% of revenues, up 62.1% from $883,087, or 33.0% of sales, in the first half of 2006. Net income for the first half of 2007 was $1.4 million, or $0.12 per diluted share, compared to net income of $941,960, or $0.11 per diluted share, in the same period a year ago. Diluted earnings per share in the first half of 2007 reflects an increase of 2,944,904 in diluted weighted average shares due to a private placement financing in May 2007.

Financial Condition

As of June 30, 2007, the Company had cash and cash equivalents (including restricted cash) of $8.7 million, working capital of $14.8 million and $394,500 outstanding on its bank loan. Shareholder's equity stood at to $15.8 million, up from $6.09 million on December 31, 2006.

On May 14, 2007, the Company completed a private placement financing with certain accredited investors of 13,333,334 shares of its common stock and warrants to purchase 2,083,333 shares of its common stock. As a result of this private placement, the Company raised $3.2 million in gross proceeds, resulting in $2.1 million in net proceeds after the deduction of offering expenses.

Recent Events

In July 2007, the Company won the Phase II contracts for the Chengdu Intelligent Parking System projects valued at $0.87 million. Phase III Intelligent Parking System project in Chengdu is planned for implementation in 2008. This quarter the company also won Transportation project from the Beijing Transportation Committee and a pilot project from Chengdu city with an aggregate value of $0.4 million. Furthermore the company won Hangzhou city 3-D Geology Management project from the Land & Resource Ministry valued at $0.1 million.

On July 30, 2007, the Company filed an information statement with the Securities and Exchange Commission announcing its intent to change the company's name to China TransInfo Technology Corp., and to effect a 1-for-7.5 reverse stock split. The company believes that the new name better reflects its business focus and that the reverse split will position the company to have an appropriate capital structure to list its shares on a major stock market in the future. The Company has obtained written consent from the majority of its stockholders and expects the reverse stock split and name change to be completed around August 20, 2007.

Outlook for 2007 and Beyond

"The market for integrated transportation solutions and GIS technology remains strong, with increasing demand for IT applications solutions in China's Transportation, Land & Resource and Digital City sectors," said Mr. Xia. "Of particular note is the Transportation Information System, a major national initiative in which the government will roll out GIS technology to 600 municipalities throughout China. Intra-Asia is well positioned to capture many of these opportunities, as we won the majority of ‘beta' contracts issued in the first round of bids."

For 2007, the Company estimates revenues of approximately $12.0 million and net income of $4.3 million. For 2008, the Company expects revenues of about $27.0 million and net income of approximately $8.0 million.

About Intra-Asia Entertainment Corporation

Intra-Asia Entertainment Corporation, through its subsidiary Beijing PKU Chinafront High Technology Co., Ltd., offers a full range of GIS application solutions that cover GIS system planning, deployment, system construction, data testing, system audit & optimization, user's manuals and customer training through self-developed GIS platform software products for 2D and 3D GIS system models. The Company has 13 copyright registered certificates granted from the China Software Testing Center and the National Copyright Administration of the PRC. Intra-Asia serves the government sectors of the GIS market in China with an emphasis on the following three major Chinese central government initiatives: (i) Transportation; (ii) Digital City; and (iii) Land & Resources. Intra-Asia also has a first mover advantage in the 3D GIS segment having developed the first and only three dimensional GIS platform software in China. Furthermore, the Company's affiliation with Peking University, which currently owns 15% of the company, provides access to the university's GeoGIS Research Laboratory, including 30 PhD researchers. Intra-Asia has been thoroughly involved in the beta stages of the GIS information systems in China, especially in the transportation segment. In 2005 and 2006, Intra-Asia was awarded three of four Ministry of Transportation case models designed to test GIS application solutions. Now, the Company is playing a key role in setting the standards for GIS solutions.

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 -

INTRA-ASIA ENTERTAINMENT CORPORATION AND ITS SUBSIDIARY

CONSENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)

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

2007 2006 2007 2006

Revenues $1,613,020 $1,381,648 $4,237,566 $2,680,222

Cost of

revenues 606,773 824,248 2,368,208 1,449,721

Gross profit 1,006,247 557,401 1,869,358 1,230,501

Expenses:

Selling,

general, and

administrative

expenses 159,939 199,307 437,930 347,414

Income from

operations 846,308 358,094 1,431,428 883,087

Other income

(expense):

Interest

income 20,055 261 21,062 512

Interest

expense (4,243) (9,521) (12,229) (13,751)

Minority

interest (211,380) (5,099) (233,967) (5,099)

Other

income(expense)

- net 100,817 4,241 179,152 39,926

Total other

income

(expense) (94,751) (10,118) (45,982) 21,588

Net income

before income

taxes 751,557 347,976 1,385,446 904,675

Provision for

income taxes 85,212 (39,118) 33,767 (37,285)

Net income $666,345 $387,094 $1,351,679 $941,960

Weighted

average

shares of

outstanding -

basic 14,160,514 8,562,660 11,440,216 8,564,756

Weighted

average

shares of

outstanding -

diluted 14,299,403 8,562,660 11,509,660 8,564,756

Income (Loss)

per share -

basic $0.05 $0.05 $0.12 $0.11

diluted $0.05 $0.05 $0.12 $0.11

Comprehensive

income (loss)

Net income

(loss) $666,345 $387,094 $1,351,679 $941,960

Translation

adjustments 178,745 10,574 242,648 32,879

Comprehensive

income (loss) $845,090 $397,668 $1,594,327 $974,839

INTRA-ASIA ENTERTAINMENT CORPORATION AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, 2007 December 31, 2006

(Unaudited)

ASSETS

Current Assets:

Cash and cash equivalents $8,718,566 $1,321,164

Restricted cash 131,500 128,200

Accounts receivable 3,682,462 2,756,541

Cost and estimated earnings in

excess of billings on

uncompleted contracts 914,692 624,589

Prepayments 1,536,237 1,116,580

Other receivable 440,280 125,556

Deferred tax assets 473,873 461,982

Other current assets 186,375 85,019

Total current assets 16,083,985 6,619,631

Prepayment on investment 249,850 243,580

Property and equipment, net 1,004,541 238,545

Deferred tax assets 182,347 211,145

Deposits 5,853 11,701

Loans to others 428,818 269,989

Total assets $17,955,394 $7,594,591

June 30, 2007 December 31, 2007

(Unaudited)

LIABILITIES AND SHAREHOLDERS’

EQUITY

Current Liabilities:

Accounts payable $129,844 $162,503

Notes payable 394,500 641,000

Billings in excess of costs and

estimated earnings on

uncompleted contracts 613,995 335,286

Accrued expenses 165,062 357,598

Total current liabilities 1,303,401 1,496,387

Minority Interest 820,650 4,768

Stockholders’ equity (deficit):

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 , 19,601,111 shares

issued and outstanding 19,601

Additional paid-in capital 10,537,885 2,416,000

Accumulated deficit 4,814,341 3,462,666

Accumulated other comprehensive

loss - translation adjustments 459,516 214,770

Total stockholders’ equity

(deficit) 15,831,343 6,093,436

Total liabilities and stockholders’

equity (deficit) $17,955,394 $7,594,591

INTRA-ASIA ENTERTAINMENT CORPORATION AND ITS SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

2007 2006

Cash flows from operating

activities:

Net income (loss) $1,351,679 $941,960

Adjustments to reconcile net income

(loss) to net cash provided by (used in)

operating activities:

Depreciation and amortization expenses 17,144 10,974

Merger costs to be charged

directly to equity (1,447,361)

Changes in operating assets:

Increase in restricted cash

Deferred income tax expense (benefit) 33,767 (37,285)

Minority interest 233,967 5,099

Increase in accounts receivable (843,326) (247,793)

Increase in prepayment (385,595) (419,662)

Increase in other receivable (232,469) (95,755)

Increase in cost and estimated

earnings in excess of billings on

uncompleted contracts (270,296) (55,599)

Increase in other current

assets (97,817) (114,526)

Decrease in accounts payable (36,340) (62,217)

Increase in billings in excess

of costs and estimated earnings

on uncompleted contracts 266,402 129,343

Increase (Decrease) in accrued expenses (730,437) 28,252

Net cash provided by (used in)

operating activities (2,140,682) 82,791

Cash flows from investing activities

Cash flows from investing activities:

Cash acquired from reverse merger of PKU 1,321,164 --

(Increase) in loan to others (149,812) (9,544)

Payment of cash to the shareholders

of the accounting acquirer (2,000,000) --

Decrease in other assets - deposits 6,066 3,374

Payment of cash to JingBo Co. for

investment (786,680)

Purchases of property and equipment (766,656) (68,104)

Net cash used in investing activities (2,375,918) (74,274)

Cash flows from financing activities:

Proceeds from (payments of) short-

term borrowings (259,420) 124,620

Proceeds from issuing shares 3,200,000 --

Net cash provided by financing activities 2,940,580 124,620

Effect of foreign currency exchange

translation 35,932 2,072

Net increase (decrease) in cash (1,540,088) 135,209

Cash - beginning 10,258,654 149,691

Cash - ending $8,718,566 $284,900

Supplemental disclosures:

Interest paid $12,040 $13,112

Income taxes paid $-- $--

For more information, please contact:

Mr. Shudong Xia

Chief Executive Officer

Intra-Asia Entertainment Corporation

Email: xsd@techfront.com.cn

Investor Relations Contact:

Mr. Crocker Coulson

President

CCG Elite

Tel: +1-646-213-1915 (NY office)

Email: crocker.coulson@ccgir.com

Source: Intra-Asia Entertainment Corporation
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