Q2 revenues rise 56% year-over-year to $18.4 million
Q2 GAAP net income from continuing operations was $3.2 million, or $0.23 per diluted share vs. $0.17 in Q208
Q2 Non-GAAP net income from continuing operations was $4.3 million, or $0.30 per diluted share vs. $0.17 in Q208
SHENZHEN, China, Aug. 13 /PRNewswire-Asia/ -- Universal Travel Group (Amex: UTA) ("Universal Travel Group" or the "Company"), a growing travel services provider in the People's Republic of China ("PRC") specializing in online and customer representative services to the travel service industry offering packaged tours, air ticketing and hotel reservation services, today announced strong financial results for the second quarter ended June 30, 2009.
Second Quarter of 2009 Highlights
-- Revenues were $18.4 million, up 55.9% year-over-year
-- Gross profit totaled $6.9 million, up 76.2%
-- Gross margin was 37.4%, compared to 33.1% in the same period of 2008
-- GAAP income from operations was $4.2 million, up approximately 52.1%
year-over-year
-- Non-GAAP income from operations was $5.3 million, up approximately
88.2% year-over-year(*)
-- GAAP net income from continuing operations was $3.2 million or $0.23
per diluted share compared to $2.1 million or $0.17 per diluted share
in the same period of 2008
-- Non-GAAP net income from continuing operations was $4.3 million or
$0.30 per diluted share compared to $2.1 million or $0.17 per diluted
share in the same period of 2008(*)
-- Established its second home base in Chongqing and held its grand
opening on June 16, 2009
-- Sold its Air Cargo Agency business to focus on high-growth travel
business
-- Added to Russell 3000, Russell Global and Russell Microcap Indexes
-- Successfully upgraded to NYSE AMEX market and hosted Bell Ringing
Ceremony
"Our major business segments experienced significant growth in the second quarter of 2009, which we attribute to the growth in China's economy with the strong government stimulus plan and demand in the travel industry, combined with our growing brand recognition," said Ms. Jiangping Jiang, Chairwoman and CEO of Universal Travel Group. "We expanded our operations with a new home base in Chongqing and continued our rapid rollout of our revolutionary TRIPEASY Kiosks. We expect our strong financial performance will continue through 2009, enabling us to achieve our previously stated financial goals."
Second Quarter of 2009 Financial Results
Revenue for the three months ended June 30, 2009 was $18.4 million compared to $11.8 million for the same period in 2008, an increase of approximately 55.9%. The increase in revenue was due to the continued strong domestic travel demand, especially during one of the major holidays, Labor Day, and innovative marketing channels to cross sell the services on the Company's travel platform. The increased number of fully functional TRIPEASY kiosks also helped to raise brand awareness.
Revenue from air-ticketing was $3.2 million for the three months ended June 30, 2009 compared to $1.9 million for the same period last year, an increase of approximately 70.1%. This increase was mainly due to the increased domestic demand as well. In addition, the Company witnessed stronger demand from individual travelers due to China's travel incentive policies.
Revenue generated by the hotel reservation segment for the three months ended June 30, 2009 was $2.7 million compared to $1.4 million for the same period in 2008, an increase of approximately 92.2%. This increase was due to the sustained growth in the travel industry and successful integration of the various business segments of the Company.
Revenue generated by packaged tours for the three months ended June 30, 2009 was $12.4 million compared to $8.5 million for the same period in 2008, an increase of approximately 46.6%. This increase was primarily due to the increased in tourism demand and successful marketing initiatives.
Gross profit for three months ended June 30, 2009 was $6.9 million compared to $3.9 million for three months ended June 30, 2008, an increase of approximately 76.2%. The increase in gross profit was largely due to the contributing factors to revenue as well as strong growth in domestic air-ticking and hotel reservation growth as a result of the synergies from combining both with the packaged tours segment.
Gross profit margin for the second quarter of 2009 was 37.4% compared to 33.1% for the same period last year. The increase in gross profit margin was mostly due to the sale of the air cargo agency business, strong focus on direct and online sales and the roll-out of TRIPEASY kiosks.
Selling, general and administrative expenses for three months ended June 30, 2009 totaled $1.6 million compared to $1.1 million for the same period last year, an increase of approximately 48.1%. However, the selling, general and administrative expenses were 8.6% of revenue for the three months ended June 30, 2009, compared to 9.1% for the same period last year, as a result of efficient cost management.
GAAP income from operations was $4.2 million for three months ended June 30, 2009, compared to $2.8 million for three months ended June 30, 2008. The company incurred Stock Based Compensation ("SBC") expenses in the second quarter of $1.1 million compared to $0.05 million in the year earlier period. Excluding this non-cash expense, the Company's non-GAAP income from operations was $5.3 million for the three months ended June 30, 2009, compared to $2.8 million for the three months ended June 30, 2008. Non-GAAP operating margin was 28.8%.(*)
Interest expense for three months ended June 30, 2009 totaled $0 compared to $0.03 million for three months ended June 30, 2008. The decrease in interest expense was a result of the company paying off all bank loans in July 2008.
GAAP net income from continuing operations was $3.2 million for three months ended June 30, 2009, compared to $2.1 million for three months ended June 30, 2008. The company incurred Stock Based Compensation ("SBC") expenses in the second quarter of $1.1 million compared to $0.05 million in the year earlier period. Excluding this non-cash expense, the Company's non-GAAP net income from continuing operations was $4.3 million for the three months ended June 30, 2009, compared to $2.1 million for the three months ended June 30, 2008.(*)
(*) See Table 1 for a reconciliation of operating income, net income and
EPS to exclude non-cash Stock Based Compensation ("SBC") expense.
Six Months Results
Revenue for the six months ended June 30, 2009 was $33.9 million compared to $18.8 million for the same period in 2008, an increase of approximately 80.8%. The increase in revenue was due to strong domestic travel demand and increased market presence. In the past two quarters, consumers were very receptive to the TRIPEASY kiosks and the usage rate per machine has been growing steadily.
Revenue from air-ticketing was $6.0 million for the six months ended June 30, 2009 compared to $3.4 million for the same period last year, an increase of approximately 79.6%. This increase was mainly due to organic growth of YZL and the increase in air passengers.
Revenue generated by the hotel reservation segment for the six months ended June 30, 2009 was $5.2 million compared to $2.0 million for the same period in 2008, an increase of approximately 158.4%. This increase was driven by the integration and consolidation of marketing channels among the subsidiaries in major domestic cities.
Revenue generated by packaged tours for the six months ended June 30, 2009 was $22.6 million compared to $13.4 million for the same period in 2008, an increase of approximately 69.4%. This increase was primarily due to the synergies created by having a diversified platform.
Gross profit for six months ended June 30, 2009 was $13.0 million compared to $6.2 million for six months ended June 30, 2008, an increase of approximately 108.2%. The increase in gross profit was largely due to integration of different business lines and increased profit from packaged tours.
Selling, general and administrative expenses for six months ended June 30, 2009 totaled $3.3 million compared to $1.8 million for the same period last year, an increase of approximately 85.5%. However, the selling, general and administrative expenses were 9.7% of revenue for the six months ended June 30, 2009, compared to 9.4% for the same period last year, as a result of effective and stable cost management.
GAAP income from operations was $8.5 million for six months ended June 30, 2009, compared to $4.3 million for six months ended June 30, 2008. The company incurred Stock Based Compensation ("SBC") expenses in the six months of $1.2 million compared to $0.16 million in the year earlier period. Excluding this non-cash expense, the Company's non-GAAP income from operations was $9.7 million for the six months ended June 30, 2009, compared to $4.5 million for the six months ended June 30, 2008. Non-GAAP operating margin was 28.6%.(*)
GAAP net income from continuing operations was $6.4 million for six months ended June 30, 2009, compared to $3.3 million for three months ended June 30, 2008. The company incurred Stock Based Compensation ("SBC") expenses in the six month period of $1.2 million compared to $0.16 million in the year earlier period. Excluding this non-cash expense, the Company's non-GAAP net income from continuing operations was $7.6 million for the six months ended June 30, 2009, compared to $3.4 million for the three months ended June 30, 2008.
(*) See Table 1 for a reconciliation of operating income, net income and
EPS to exclude non-cash Stock Based Compensation ("SBC") expense.
Financial Condition
Cash for operations and liquidity needs are funded primarily through cash flows from operations and short-term borrowings. Cash and cash equivalents were $18.4 million as of June 30, 2009. Current assets and current liabilities as of June 30, 2009, were $37.2 million and $5.1 million, yielding working capital of $32.2 million. The Company has no long-term debt. The Company believes that the income from operations is adequate to meet its operating needs in the near future. For the six months ended June 30, 2009, net cash provided by operating activities was approximately $11.7 million, which resulted primarily from the Company's organic growth in operations and effective management of cash flow.
Recent Developments
Increased the number of TRIPEASY Kiosks to over 200 and significantly expanded its coverage in Guangdong province through strategic partnerships with multiple property management companies.
Business Outlook
The Company remains optimistic due to the increased activities in the travel and leisure industry in the PRC, as well as it growing online service platform and comprehensive marketing strategies.
The Company jump-started its retail initiative with the TRIPEASY Kiosks this year. Although the Kiosks are generating modest revenue in comparison to overall revenue from operations, it has benefited the Company by generating business flow to its call centers and website as well as increasing the Company's visual presence throughout Shenzhen and other major cities. Leveraging its experience with the Kiosks rolled out thus far, the Company plans to rapidly distribute its TRIPEASY Kiosks in Xi'an, Chongqing and Hong Kong for the rest of 2009.
The Company opened a new second home base in Chongqing in June 2009. After establishing a solid home base in the Pearl River Delta region, which covers cities around the Guangdong province, the Company is now seeking to penetrate the Chongqing Delta region, which covers Chongqing, Xi'an and Chengdu. Chongqing is the largest and most populated municipality of the People's Republic of China's four provincial-level municipalities with a population of approximately 32 million. Chongqing's nominal GDP in 2008 reached RMB509.7 billion (US$73.4 billion) with an annual growth rate of 14.3%. In addition, there is a significant amount of government support aimed at transforming Chongqing into Southwestern China's economic, trade, and financial center and serve as a platform to open up the country's western interior to economic development.
"This quarter, we continued to experience strong organic growth in each of our businesses, and our sales and profit growth demonstrate the scalability of our diversified platform," said Ms. Jiangping Jiang. "We look forward to a strong second half as we gain momentum and brand awareness with our Kiosks strategy and further establish our presence in western China with our new second home base in Chongqing."
Fiscal Year 2009 Guidance
For the full year 2009, Universal Travel Group expects sales to increase from $76.8 million in 2008 to between $88.0 - $96.0 million, net income to rise from $14.5 million in 2008 to $16.8 - $18.0 million, and earnings per diluted share to range from $1.07 - $1.15 in 2009. Net income and EPS estimates exclude the non-cash stock based compensation expense, and reflect the recent three-for-one reverse split.
Non-GAAP reconciliation table
*TABLE 1
Universal Travel Group
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2009 AND 2008
Three Months Ended Three Months Ended
June 30, 2009 June 30, 2008
Operating Operating
Income Income
GAAP income from ops. $4,239,851 $2,787,801
Stock Based Compensation 1,055,648 45,790
Non-GAAP operating income $5,295,499 $2,833,591
Net Diluted Net Diluted
Income EPS Income EPS
GAAP net income cont. ops. $3,233,845 0.23 $2,073,941 0.17
Stock Based Compensation 1,055,648 0.08 45,790 0.00
Non-GAAP net income cont. ops. $4,289,493 0.30 $2,119,731 0.17
Six Months Ended Six Months Ended
June 30, 2009 June 30, 2008
Operating Operating
Income Income
GAAP income from ops. $8,478,864 $4,311,490
Stock Based Compensation 1,220,648 155,802
Non-GAAP operating income $9,699,512 $4,467,292
Net Diluted Net Diluted
Income EPS Income EPS
GAAP net income cont. ops. $6,370,428 0.45 $3,258,236 0.26
Stock Based Compensation 1,220,648 0.09 155,802 0.01
Non-GAAP net income cont. ops. $7,591,076 0.54 $3,414,038 0.28
Use of Non-GAAP Financial Measures
GAAP results for the three months ended June 30, 2009 include non-cash stock based compensation charges. To supplement the Company's condensed consolidated financial statements presented on a GAAP basis, the Company has provided non-GAAP financial information excluding the impact of these items in this release. The Company's management believes that this non-GAAP measure provides investors with a better understanding of how the results relate to the Company's historical performance. A reconciliation of the adjustments to GAAP results appears in the table accompanying this press release. This additional non-GAAP information is not meant to be considered in isolation or as a substitute for GAAP financials. The non-GAAP financial information that the Company provides also may differ from the non-GAAP information provided by other companies.
Conference Call Information
The Company will host a conference call at 11:00 a.m. E.D.T. on Thursday, August 13, 2009 to discuss results for the second quarter of 2009. To participate in the live conference call, please dial the following number five minutes prior to the scheduled conference call time: 888-419-5570. International callers should dial 617-896-9871. When prompted by the operator, mention conference ID 634 363 73.
If you are unable to participate in the call at this time, a replay will be available for 14 days starting on Thursday, August 13 at 1:00 p.m. E.D.T. To access the replay, please dial 888-286-8010 and enter the conference ID number 766 926 50. International callers should dial 617-801-6888 and enter the same conference ID number. The replay would also be available on the Company's website: http://us.cnutg.com .
About Universal Travel Group
Universal Travel Group, a growing travel services provider in the PRC, is engaged in providing reservation, booking, and domestic and international travel and tourism services throughout the PRC via the internet and through customer representatives. Under the theme "Wings towards a more colorful life" the Company's core services include tour packaging for customers and booking services for air tickets and hotels. In 2007, Universal Travel Group completed the acquisitions of Shenzhen Speedy Dragon, specializing in air cargo transportation; Xi'an Golden Net, specializing in travel packaged tours; Shanghai LanBao, specializing in hotel reservation and Foshan Overseas International, a PRC-based company that handles domestic and international travel inquiries. In 2009, Universal Travel Group sold Shenzhen Speedy Dragon to focus on more profitable travel related businesses and its cost effective TRIPEASY Kiosks expansion. Universal Travel Group's goal is to become the PRC's leading travel services provider in all fields of the tourism industry including the aviation, hotel booking and tour packaging segments. For more information about the Company, please visit http://us.cnutg.com .
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This press release contains certain statements that may include "forward-looking statements" within the meaning of federal securities laws. All statements, other than statements of historical facts, included herein are "forward-looking statements." 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. Investors 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 the Company's ability to successfully expand its market presence and those discussed in the Company's periodic reports that are filed with and available from the Securities and Exchange Commission. 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.
UNIVERSAL TRAVEL GROUP
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED JUNE 30,
(UNAUDITED)
2009 2008
Gross revenues, $18,405,473 $11,802,974
Cost of services 11,521,673 7,897,036
Gross Profit 6,883,800 3,905,938
Selling, general and administrative
expenses 1,588,301 1,072,347
Stock based compensation 1,055,648 45,790
Total expenses 2,643,949 1,118,137
Income from operations 4,239,851 2,787,801
Other Income (Expense)
Other income 2,591 5,504
Interest income 12,358 10,307
Interest expense -- (28,297)
Total Other Income (Expense) 14,949 (12,486)
Income before income taxes
-continuing operations 4,254,800 2,775,315
Provision for income taxes 1,020,955 701,374
Net income - continuing operations $3,233,845 $2,073,941
Income from discontinued operations 62,652 74,500
Tax on income from discontinued
operations (16,370) (34,748)
Dividend from discontinued operations 2,260,981 --
Loss on disposition of discontinued
operations (3,031,576) --
Net loss from discontinued operation (724,313) 39,752
Net Income 2,509,532 2,113,693
Comprehensive Income
Net Income 2,509,532 2,113,693
Foreign currency translation gains 13,880 220,231
Total Comprehensive income 2,523,412 2,333,924
Net income per common share -
continuing operations
Basic $0.24 $0.17
Diluted $0.23 $0.17
Net income per common share -
discontinued operations
Basic $(0.05) $--
Diluted $(0.05) $--
Weighted average common shares
outstanding
Basic 13,676,994 12,306,715
Diluted 14,122,917 12,362,271
UNIVERSAL TRAVEL GROUP
CONSOLIDATED STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30,
(UNAUDITED)
2009 2008
Gross revenues, $33,916,152 $18,755,352
Cost of services 20,938,269 12,521,173
Gross Profit 12,977,883 6,234,179
Selling, general and administrative
expenses 3,278,371 1,766,887
Stock based compensation 1,220,648 155,802
Total expenses 4,499,019 1,922,689
Income from operations 8,478,864 4,311,490
Other Income (Expense)
Loss on disposal of assets -- (1,104)
Other income 6,419 8,378
Interest income 23,296 11,722
Interest expense -- (65,004)
Total Other Income (Expense) 29,715 (46,008)
Income before income taxes
-continuing operations 8,508,579 4,265,482
Provision for income taxes 2,138,151 1,007,246
Net income - continuing operations $6,370,428 $3,258,236
Income from discontinued operations 222,416 428,822
Tax on income from discontinued
operations (44,441) (109,501)
Dividend from discontinued operations 2,260,981 --
Loss on disposition of discontinued
operations (3,031,576) --
Net loss from discontinued operation (592,620) 319,321
Net Income 5,777,808 3,577,557
Comprehensive Income
Net Income 5,777,808 3,577,557
Foreign currency translation gains 48,587 571,402
Total Comprehensive income 5,826,395 4,148,959
Net income per common share -
continuing operations
Basic $.47 $.27
Diluted $.45 $.26
Net income per common share -
discontinued operations
Basic $(0.04) $0.03
Diluted $(0.04) $0.03
Weighted average common shares
outstanding
Basic 13,676,994 12,306,715
Diluted 14,122,917 12,362,271
UNIVERSAL TRAVEL GROUP
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2009 AND DECEMBER 31, 2008
06/30/2009 12/31/2008
ASSETS (Unaudited) (Audited)
Current Assets
Cash and cash equivalents $18,388,175 $16,204,531
Accounts receivable, net 11,708,758 10,715,206
Other deposits, net 67,272 141,413
Trade deposit 3,402,948 6,737,521
Advances 439,226 438,468
Escrow deposits 162,301 762,800
Prepaid expenses 279,618 319,257
Note receivable 512,430 --
Dividend receivable 2,260,981 --
Total Current Assets 37,221,709 35,319,196
Property & equipment, net 6,183,786 273,340
Intangible assets 420,718 307,335
Goodwill 9,896,270 13,526,809
16,500,774 14,107,484
Total Assets $53,722,483 $49,426,680
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current Liabilities
Accounts payable and accrued expenses $3,293,448 $2,219,156
Customer deposits 879,515 1,047,250
Income tax payable 882,555 1,759,402
Total Current Liabilities 5,055,518 5,025,808
Total liabilities 5,055,518 5,025,808
Stockholders' Equity
Common stock, $.001 par value,
70,000,000 shares authorized,
13,915,089 and 13,873,969 issued and
outstanding, includes 238,095 and 0
in treasury stock 13,914 13,873
Additional paid in capital 17,081,723 15,861,116
Treasury Stock (2,780,950) --
Other comprehensive income 1,568,753 1,520,166
Statutory reserve 372,144 372,144
Retained earnings 32,411,381 26,633,573
Total Stockholders' Equity 48,666,965 44,400,872
Total Liabilities and Stockholders'
Equity $53,722,483 $49,426,680
UNIVERSAL TRAVEL GROUP
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30,
(UNAUDITED)
2009 2008
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $5,777,808 $3,577,557
Adjustments to reconcile net income
to net cash
provided by operating activities:
Depreciation and amortization 195,997 38,877
Provision for doubtful accounts 11,005 --
Stock based compensation 1,220,647 155,802
Loss on disposition of discontinued
operation 3,031,576 --
Loss on asset disposal -- 1,105
(Increase) / decrease in assets:
Accounts receivable (2,767,660) (1,708,372)
Other receivable (66,628) 968,969
Advances (758) (39,116)
Due from shareholder -- 1,177,763
Prepaid expenses 32,779 (54,172)
Trade deposits 3,282,462 (2,122,588)
Escrow deposits 600,499 --
Increase / (decrease) in current
liabilities:
Accounts payable and accrued expenses 1,386,871 (854,371)
Customer deposits (167,735) 210,032
Income tax payable (860,497) 16,216
Total Adjustments 5,898,558 (2,209,855)
Net cash provided by(used in)
operating activities 11,676,366 1,367,702
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property & equipment (6,076,248) (17,063)
Purchase of intangibles (168,955) --
Proceeds from asset disposals -- 663
Proceeds of disposition of subsidiary
- net of cash sold (1,035,125) --
Dividend receivable (2,260,981)
Acquisition deposits -- 1,453,050
Net cash used by Investing activities (9,541,309) 1,436,650
CASH FLOWS FROM FINANCING ACTIVITIES
(Repayments)Proceeds from bank loan -
net -- (180,682)
Proceeds of equity financing -- 599,994
Note payable - others -- (977,013)
Net cash provided by financing
activities -- (557,701)
Effect of exchange rate changes on
cash and cash equivalents 48,587 571,402
Net change in cash and cash
equivalents 2,183,644 2,818,053
Cash and cash equivalents, beginning
balance 16,204,531 2,671,684
Cash and cash equivalents, ending
balance $18,388,175 $5,489,737
For further information, please contact:
Company Contact:
Universal Travel Group
Mr. Jing Xie
Chief Financial Officer
Phone: +86-755-8366-8489
Email: 06@cnutg.cn
Web: http://us.cnutg.com
Investor Relations Contact:
CCG Investor Relations
Mr. Crocker Coulson, President
Phone: +1-646-213-1915 (NY office)
Email: crocker.coulson@ccgir.com
Mr. Gary Chin
Phone: +1-646-213-1909
Web: http://www.ccgirasia.com
