China TransInfo Announces Record Unaudited Fourth Quarter and Full Year 2009 Results; Anticipates Robust Growth for 2010
BEIJING, March 22 /PRNewswire-Asia-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 ("PRC"), today reported its unaudited financial results for the fourth quarter and year ended December 31, 2009.
Fourth Quarter 2009 Highlights
-- Revenue increased 166.1% year-over-year to $28.4 million
-- Gross profit expanded 64.9% year-over-year to $10.0 million
-- Operating income grew 26.1% year-over-year to $5.1 million
-- Adjusted net income increased 22.3% year-over-year to $5.1 million, or
$0.23 per fully diluted share
-- Appointed BDO Guangdong Dahua Delu as New Independent Auditor
-- Launched three new real-time traffic mobile phone applications and
expanded real-time traffic application coverage to Shenzhen, Tianjin
and Changzhou
-- Awarded a provincial highway toll settlement and billing system
contract in Shanxi Province valued at approximately RMB 26 million, or
approximately USD $3.8 million
-- Awarded an intelligent transportation system contract in Hubei Province
valued at approximately RMB 114 million, or approximately USD $16.7
million
Fiscal 2009 Highlights
-- Revenue increased 116.8% year-over-year to a record $63.7 million
-- Gross profit expanded 53.8% year-over-year to $25.4 million
-- Operating income grew 20.0% year-over-year to $13.7 million
-- Adjusted net income increased 19.7% to $13.6 million, or $0.60 per
fully diluted share
-- As of December 31, 2009, cash and cash equivalents totaled $27.4
million
"During 2009, we generated record revenue and earnings results, solidified our industry leading market position with numerous successful new product launches, and completed a highly accretive acquisition," commented Mr. Shudong Xia, Chief Executive Officer of China TransInfo. "Our acquisition of UNISITS, a leader in China's intelligent transportation systems industry, marked a major milestone for us in 2009, as we now leverage UNISITS' technology, market share and customer relationships to further drive new market opportunities."
Unaudited Fourth Quarter 2009 Results
For the quarter ended December 31, 2009, revenue increased 166.1% to $28.4 million, as compared to $10.7 million in the comparable period of 2008. Products and applications in the transportation business sector accounted for 91.7% of total revenue in the quarter with the remainder derived from the digital city, land & resources, and other sectors.
The Company's gross profit increased 64.9% to $10.0 million in the fourth quarter of 2009, compared to $6.1 million in the same period of 2008. Gross margin was 35.2%, compared to 56.9% during the same period of 2008. The decrease in gross margin resulted from the consolidation of UNISITS' financials into those of China TransInfo, since UNISITS' business involves more hardware components, which have much lower margin than does the Company's legacy transportation business.
Selling, general and administrative expenses were $4.9 million, as compared to $2.0 million in the fourth quarter of 2008. The increase was primarily due to the Company's expansion initiatives, including higher marketing, staffing, and professional fees.
Operating income increased 26.1% to $5.1 million, as compared to $4.1 million in the fourth quarter of 2008.
Other income was $1.4 million, as compared to $0.2 million in the fourth quarter of 2008. The significant increase is mostly attributable to a $1.4 million increase in governmental subsidy income.
Net income attributable to the Company increased 15.3% to $4.8 million, or $0.21 per fully diluted share, as compared to net income of $4.2 million, or $0.20 per fully diluted share, in the same period in 2008. Adjusted net income attributable to the Company excluding non-cash stock based compensation expense and amortization expense of intangibles from acquisitions increased 22.3% to $5.1 million, or $0.23 per fully diluted share, as compared to $4.2 million, or $0.20 per fully diluted share, in the comparable period of 2008. Weighted average fully diluted shares outstanding increased to 22.5 million shares in the fourth quarter of 2009 from 20.9 million shares in the fourth quarter of 2008.
Unaudited Full Year 2009 Results
Revenue for 2009 increased 116.8% to $63.7 million, as compared to $29.4 million in 2008. Gross profit expanded 53.8% to $25.4 million from $16.5 million in 2008. Operating income grew 20.0% to $13.7 million from $11.4 million in 2008. Net income attributable to the Company increased 17.0% to $13.0 million, or $0.58 per fully diluted share, as compared to net income of $11.1 million, or $0.53 per fully diluted share, in 2008. Adjusted net income attributable to the Company excluding non-cash expenses increased 19.7% to $13.6 million, or $0.60 per fully diluted share, as compared to $11.3 million, or $0.54 per fully diluted share, in 2008. Weighted average fully diluted shares outstanding increased to 22.5 million shares in 2009 from 20.9 million shares in 2008.
Financial Condition
As of December 31, 2009, cash and cash equivalents totaled $27.4 million, up from $16.1 million at December 31, 2008. Working capital increased to $44.4 million, as compared to $32.7 million at the end of 2008. Stockholders' equity was $77.8 million, as compared to $47.6 million at the end of 2008. Cash flow from operating activities increased 251.7% to $8.8 million from $2.5 million in 2008, primarily as a result of the increase in sales and net profit for 2009 as well as the Company receiving customer payments on some contracts ahead of schedule.
Recent Events
On March 22, 2010, the Company and the Company's variable interest entity, China TransInfo Technology Group Co., Ltd. (the "Group Company") entered into equity transfer agreements (the "Equity Transfer Agreements") with several individual shareholders (the "Transferors") of Beijing UNISITS Technology Co. Ltd. ("UNISITS"), pursuant to which the Group Company acquired 30.85% equity interest in UNISITS from the Transferors. Pursuant to the Equity Transfer Agreements, the Group Company purchased approximately 16.23 million shares of UNISITS from the Transferors in exchange for RMB 4.41 million (approximately USD $0.65 million) in cash (the "Cash Consideration"), 40% of which is payable within seven days after the effective date of the Equity Transfer Agreements, and approximately 1.16 million shares of the Company's common stock, which are issuable within 30 days of the effective date of the Equity Transfer Agreements. The Equity Transfer Agreements contain "make good" provisions, under which the Transferors agree to deposit a total of 697,162 shares of the Company's common stock with an escrow agent designated by the Company that they will receive as partial consideration for the acquisition. Specifically, if UNISITS' 2010 after-tax net income under Chinese GAAP is less than RMB 37.50 million (approximately USD $5.50 million) or its 2011 after-tax net income under Chinese GAAP is less than RMB 46.88 million (approximately USD $6.86 million), then 50% of the shares of the Company's common stock deposited by the Transferors in escrow will be returned to the Company for cancellation for each applicable year. In addition, for each applicable year as described above, the Company will not be required to pay the remainder of the Cash Consideration, which represents RMB 1.323 million (approximately USD $0.19 million), or 30% of the total Cash Consideration, per year if UNISITS fails to meet the respective performance targets.
On February 24, 2010, the Company issued and sold 1,564,945 shares of its common stock at a price of $6.39 per share to SAIF Partners III L.P. for an aggregate purchase price of $10 million. The Company intends to use the net proceeds from the offering for general corporate purposes, expansion of current business development and potential acquisitions.
On January 25, 2010, China TransInfo announced that the Company was awarded an intelligent transportation system contract in Zhejiang Province valued at approximately RMB 156 million, or approximately USD $22.9 million, through its VIE subsidiary Beijing UNISITS Technology Co., Ltd. ("UNISITS").
On January 21, 2010, the Company announced that it was ranked 11th on the 2010 Forbes China list of small-to-medium sized Chinese companies with the most potential. China TransInfo was the only transportation information technology company selected.
Business Outlook
"We remain very confident that intelligent transportation systems, our core business, will provide us with strong prospects in 2010, given China's extensive expressway construction plans, rapidly expanding automobile market, and growing traffic density," commented Mr. Xia. "As a result, we believe that the Company will continue to generate organic growth from winning follow-on contracts from existing clients, while bringing in new revenue sources from strategic acquisition opportunities. In addition, by leveraging UNISITS' large presence in China's expressway market with our leadership in the urban transportation market, we expect to further penetrate China's inter-city information services segment, which offers a significantly larger market for our products and services."
For 2010, the Company expects revenues to increase to approximately $120 million and adjusted net income attributable to the Company excluding non-cash expenses to be approximately $18 million. GAAP net income attributable to the Company is projected to be approximately $16 million.
Conference Call
China TransInfo will host a conference call at 8:00 a.m. Eastern Time on Monday, March 22, 2010 at 8:00 a.m. Eastern Time to discuss its unaudited financial results for the fourth quarter and full year of 2009. To participate in the live conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: (877) 406-6165. International callers should dial (706) 902-4263. When prompted by the operator, enter conference pass code 625 186 46.
If you are unable to participate in the call at this time, a replay will be available for 14 days starting on Monday, March 22, 2010 at 10:00 a.m. Eastern Time and can be accessed by dialing (800) 642-1687. International callers should dial (706) 645-9291. When prompted, enter conference pass code 625 186 46.
Use of Non-GAAP Financial Information
GAAP results for the three month and the year ended December 31, 2009 include non-cash share based compensation and amortization of intangible assets from acquisitions. To supplement the Company's condensed consolidated financial statements presented on a GAAP basis, the Company has provided non-GAAP financial information, which is adjusted net income and adjusted earnings per share, excluding the impact of these items in this release. The Company's management believes that these non-GAAP measures provide investors with a better understanding of how the results relate to the Company's historical performance. The additional adjusted information is not meant to be considered in isolation or as a substitute for GAAP financials. The adjusted financial information that the Company provides also may differ from the adjusted information provided by other companies. Management believes that these adjusted financial measures are useful to investors because they exclude non-cash expenses that management excludes when it internally evaluates the performance of the Company's business and makes operating decisions, including internal budgeting, and performance measurement, as these measures provide a consistent method of comparison to historical periods. As a result, the provision of these adjusted measures allows investors to evaluate the Company's performance using the same methodology and information as that used by the Company's management. Moreover, management believes that these adjusted measures reflect the essential operating activities of the Company. Non-GAAP measures are subject to inherent limitations because they do not include all of the expenses included under GAAP and because they involve the exercise of judgment of which charges are excluded from the adjusted financial measure. However, the Company's management compensates for these limitations by providing the relevant disclosure of the items excluded. A reconciliation of adjustments to GAAP results appears below.
CHINA TRANSINFO TECHNOLOGY CORP. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL DATA
For the three months ended
31-Dec-09 31-Dec-08
Net Income Diluted EPS Net Income Diluted EPS
Adjusted Amount 5,117,597 0.23 4,185,241 0.20
Adjustments
Amortization of
intangible assets
from acquisitions(1) 47,111 0.00 4,379 0.00
Non-cash share
based compensation 319,993 0.01 60,987 0.00
Amount per unaudited
consolidated
statement of
operations 4,750,493 0.21 4,119,875 0.20
For the twelve months ended
31-Dec-09 31-Dec-08
Net Income Diluted EPS Net Income Diluted EPS
Adjusted
Amount 13,550,458 0.60 11,318,415 0.54
Adjustments
Amortization of
intangible assets
from acquisitions (1) 74,426 0.00 10,182 0.00
Non-cash share
based compensation 501,933 0.02 217,756 0.01
Amount per unaudited
consolidated
statement of
operations 12,974,099 0.58 11,090,477 0.53
About China TransInfo
China TransInfo, through its affiliate, China TransInfo Technology Group Co., Ltd., (the "Group Company") and the Group Company's PRC operating subsidiaries, is primarily focused on providing transportation information services and comprehensive solutions based on GIS technologies. The Company aims to become the largest transportation information products and comprehensive solutions provider, as well as the largest real time transportation information platform operator and provider in China. In addition, the Company is developing its transportation system to include Electronic Toll Collection (ETC) technology. As the co-formulator of several transportation technology national standards, the Company owns software copyrights for 89 software products and has won 5 of the 10 model cases sponsored by the PRC Ministry of Communications. The Company's affiliation with Peking University provides the Company access to the University's GeoGIS Research Laboratory, including over 30 Ph.D. researchers. As a result, the Company is playing a key role in setting the standards for electronic transportation information solutions. For more information, please visit the Company's 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
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
For three months ended For twelve months ended
December 31, December 31,
2009 2008 2009 2008
unaudited unaudited
Revenues 28,429,252 10,684,650 63,686,121 29,370,463
Cost of revenues 18,413,493 4,609,121 38,310,183 12,867,258
Gross profit 10,015,759 6,075,529 25,375,938 16,503,205
Selling, general
and admini-
strative expenses 4,870,077 1,995,510 11,667,895 5,081,502
Income from
operations 5,145,682 4,080,019 13,708,043 11,421,703
Other income
(expense):
Interest income 58,352 18,023 109,744 68,782
Interest expense (112,547) (59,137) (244,574) (135,120)
Subsidy income 1,422,178 224,296 1,730,291 530,100
Other income - net 32,138 32,168 91,439 32,168
Total other
income 1,400,121 215,350 1,686,900 495,930
Income before
income taxes,
noncontrolling
interest, and
equity investments 6,545,803 4,295,369 15,394,943 11,917,633
Income tax expense 567,409 12,984 677,355 62,955
Net income before
noncontrolling
interest and gain
on equity invest-
ments in affiliates 5,978,394 4,282,385 14,717,588 11,854,678
Gain on equity
investments in
affiliates due to
proportional shares
of the affiliates'
net income 1,793,387 -- 1,793,387 --
Net income before
noncontrolling
interest 7,771,781 4,282,385 16,510,975 11,854,678
Noncontrolling
interests in
net income of
subsidiary 3,021,288 162,510 3,536,876 764,201
Net income 4,750,493 4,119,875 12,974,099 11,090,477
Weighted average
number of common
shares of
outstanding -
Basic 22,333,765 20,678,693 22,333,765 20,678,693
Diluted 22,505,641 20,883,951 22,505,641 20,883,951
Earnings per share -
Basic 0.21 0.20 0.58 0.54
Diluted 0.21 0.20 0.58 0.53
CHINA TRANSINFO TECHNOLOGY CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31,
2009 2008
ASSETS unaudited
Current Assets:
Cash and cash equivalents $27,400,420 $16,122,464
Restricted cash 1,591,076 1,209,542
Accounts receivable, net of
allowance for doubtful accounts
of $38,209 and $32,439,
respectively 14,968,778 7,735,742
Inventory 482,286 23,775
Cost and estimated earnings in
excess of billings on
incomplete contracts 33,853,708 11,912,285
Prepayments 5,871,997 3,647,731
Other receivables 8,416,096 2,940,404
Deferred tax assets 28,715 211,708
Total current assets 92,613,076 43,803,651
Long-term investments 8,027,122 --
Property and equipment, net 10,541,486 9,874,005
Intangible assets, net 4,494,781 1,490,807
Goodwill 9,979,631 3,095,017
Other assets 826,671 426,337
Total assets $126,482,767 $58,689,817
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $20,728,539 $5,518,402
Short term borrowings from banks 7,481,700 2,934,000
Loans payable to related parties -- 528,485
Billings in excess of costs and
estimated earnings on
incomplete contracts 17,021,936 846,971
Accrued liabilities 3,022,140 1,608,560
Total current liabilities 48,254,315 11,072,880
Other long-term liability 389,489 --
Total liabilities 48,643,804 11,072,880
Commitments and contingencies
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 , 22,452,745 and
22,187,314 issued and
outstanding, respectively 22,453 22,187
Additional paid-in capital 25,253,666 24,654,890
Retained earnings 31,948,323 18,974,224
Noncontrolling interests 18,499,475 1,465,743
Accumulated other comprehensive
income 2,115,046 2,499,893
Total stockholders' equity 77,838,963 47,616,937
Total liabilities and stockholders'
equity $126,482,767 $58,689,817
CHINA TRANSINFO TECHNOLOGY CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
2009 2008
unaudited
Cash flows from operating activities:
Net income, including noncontrolling
interest $12,974,099 $11,090,477
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Noncontrolling interests 3,536,876 764,201
Depreciation and amortization
expenses 1,320,031 200,746
Stock-based compensation 505,464 217,756
Gain on equity investments in
affiliates due to proportional
shares of the affiliates' net
income (1,793,387) --
Loss on disposal of property and
equipment 9,164 11,747
Allowance for doubtful accounts 5,767 31,571
Deferred income tax 189,586 55,531
(Increase) Decrease in assets:
Restricted cash 634,402 (932,126)
Accounts receivable (1,793,525) (2,634,838)
Prepayments 3,944,172 (1,035,964)
Other receivables (1,194,154) (1,852,411)
Cost and estimated earnings
in excess of billings on
uncompleted contracts (16,350,203) (8,088,233)
Inventory (414,369) 185,993
Other current assets 24,403 234,892
Other non-current assets (678,646) (147,489)
Decrease (Increase) in
liabilities:
Accounts payable 3,687,044 4,471,898
Billings in excess of costs
and estimated earnings on
uncompleted contracts 3,974,128 (613,988)
Deferred revenue 138,228 66,382
Other payable (435,267) (55,029)
Accrued liabilities 730,625 393,312
Customer deposits (190,593) 144,150
Net cash provided by (used in)
operating activities 8,823,845 2,508,578
Cash flows from investing activities:
Cash from acquisitions $12,210,500 $294,872
Proceeds from disposal of property
and equipment 5,412 26,072
Refund from prepayment of building 1,217,457 --
Purchases of property and equipment (2,669,035) (6,547,901)
Payments for acquisition of
companies (6,545,403) (2,702,813)
Purchases of intangible assets (2,543,933) (1,324,577)
Net cash provided by (used in)
investing activities 1,674,998 (10,254,347)
Cash flows from financing activities:
Proceeds from short-term borrowings 4,398,300 2,883,000
Payable for acquiring subsidiary -- 86,490
Minority shareholders' capital
contribution 87,960 300,775
Payment of dividends from
subsidiaries' and variable
interest entity (2,791,434) --
Proceeds from issuing shares -- 15,000,000
Paid transaction cost debit to APIC (32,500) (1,794,660)
Proceeds from (payments to) related
parties (528,161) 250,859
Net cash provided by financing
activities 1,134,165 16,726,464
Effect of foreign currency exchange
translation (355,052) 299,531
Net increase in cash 11,277,956 9,280,226
Cash and cash equivalents - beginning 16,122,464 6,842,238
Cash and cash equivalents - ending $27,400,420 $16,122,464
Supplemental disclosures:
Interest paid $228,899 $135,120
Income taxes paid $21,819 $847
For more information, please contact:
Company Contact:
Ms. Fan Zhou, Investor Relations Director
China TransInfo Technology Corp.
Phone: +86-10-5169-1657
Email: [email protected]
Investor Relations Contact:
CCG Investor Relations
Web: http://www.ccgirasia.com
Mr. Shaun Smolarz, Financial Writer
Phone: +1-646-701-7444
Email: [email protected]
Mr. Crocker Coulson, President
Phone: +1-646-213-1915
Email: [email protected]
SOURCE China TransInfo Technology Corp.
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