China Information Security Technology, Inc. Announces Fourth Quarter and Full Year 2009 Results
- 2009 Revenue Increased 18.4% YoY to $101.0 million
- 2009 Gross Margin Increased 434 basis points YoY to 50.2%
- 2009 Operating Margin Increased 384 basis points YoY to 31.8%
- 2009 Non-GAAP Net Income Increased 20.5% YoY to $32.2 million, or $0.66 per diluted share
- Cash Flow from Operations increased 152.4% YoY to $11.5 million
SHENZHEN, China, March 5 /PRNewswire-Asia-FirstCall/ -- China Information Security Technology, Inc. (Nasdaq: CPBY) ("China Information Security," "CIST" or the "Company"), a leading total solutions provider of digital information security technology (DIST), geographic information systems (GIS) and digital hospital information systems (DHIS) in China, today announced its financial results for the fourth quarter and fiscal year ended December 31, 2009.
Fourth Quarter 2009 Financial Highlights
-- Revenues were $31.5 million, an increase of 14.4% from 4Q08
-- Gross margin was 50.0%, an increase of 1054 basis points from 4Q08
-- Operating margin was 25.8%, an increase of 595 basis points from 4Q08
-- Non-GAAP Net Income increased 51% from 4Q08 to $9.5 million, or $0.19
per diluted share
-- Cash Flow from Operations increased 452.5% from 4Q08 to $3.2 million
Fiscal Year 2009 Financial Highlights
-- Revenues were $101.0 million, an increase 18.4% from fiscal year 2008
-- Gross margin was 50.2%, an increase of 434 basis points from fiscal
year 2008
-- Operating margin was 31.8%, an increase of 384 basis points from fiscal
year 2008
-- Non-GAAP Net Income increased 20.5% from fiscal year 2008 to $32.2
million, or $0.66 per diluted share
-- Cash Flow from Operations increased 152.4% from fiscal year 2008 to
$11.5 million
-- Value of backlog is $41.2 million as of December 31, 2009, a new record
high
"We are pleased to announce strong fourth quarter and full year 2009 results, and we have an optimistic outlook for 2010," commented Mr. Jiang Huai Lin, Chairman and CEO of China Information Security Technology. "We set another record for new contract wins as a result of robust demand for our products and solutions. Our strong customer recognition and branding in the industry have been recognized in each of our core business segments, and we're confident in our ability to achieve our 2010 financial goals."
"Our growth strategy remains focused on deepening our penetration in Guangdong, Fujian, Guangxi, Hainan and Zhejiang province and taking advantage of our success in the region to further expand nationally. We currently have established offices and representatives in Guangzhou, Beijing, Zhejiang, Changsha, Nanning, Nanchang, Wuhan, Xi'an, as well as in Shanghai and Chongqing. We expect to further strengthen our leading position in the industry by leveraging our strong R&D capabilities and standard setting position in the GIS sector, and our outstanding record of execution for mission-critical government IT projects."
"During the quarter, we completed the acquisition of Huipu Electronic (Shenzhen) Co., Ltd., a display technology developer and manufacturer and our long-term partner on various system integration projects. We believe that Huipu's market leading position and distribution network have allowed us to further expand our presence to 32 provinces and regions in China. Moving forward, we plan to strengthen our industry competitiveness and create value added synergies by expanding and integrating Huipu's high-end hardware capabilities, expertise and established brand name with our core software products."
"Our industry is in a growth stage and we believe there are many opportunities to capture. We have built strong barriers to entry around our business and retain a strong and loyal customer base. With our long-term oriented management team and vast market potential, we aim to sustain the growth of our Company while creating value to our shareholders."
Fourth Quarter 2009 Financial Results
Revenues
Total revenues were $31.5 million in 4Q09, an increase of 14.4%, or $4.0 million over 4Q08. The increase was attributable to an increase in the Company's software sales of 70.9% to $18.7 million, and system integration services increased 84.4% to $4.6 million, as compared to the fourth quarter of 2008. Software and system integration sales constituted 59.3% and 39.7% of the Company's total revenue. The increase in system integration revenues were skewed due to the temporary delay of some projects in 4Q08.
Sales of hardware products included $4.68 million contributed by Huipu in November and December of 2009. Despite this, sales of hardware products decreased by 32.3%, for fourth quarter of 2009 from the same period of 2008.
These changes are reflective of the Company's increased focus on high value-added offerings surrounding its core competency, which warrant higher gross margin.
Gross Profit and Gross Margin
Gross profit was $15.8 million in 4Q09, an increase of 44.9%, or $4.89 million, from 4Q08. Gross margin was 50.0% in 4Q09, an improvement of 1054 basis points from 4Q08. The increase in gross margin from the same period one year ago was primarily due to a shift in product mix in favor of software business, which generates higher gross margin than the other two segments.
Administrative Expenses
Administrative expenses were $5.7 million in 4Q09, an increase of 44.2%, or $1.7 million in 4Q08. As a percentage of revenue, administrative expenses went from 14.3% of revenue in the fourth quarter of 2008 to 18.0% in the current period, reflecting our efforts in enhancing managerial capabilities which lead to higher compensation to staff and increased head count. Such investment shall yield managerial efficiency in the long run.
Income from Operations
Income from operations was $8.1 million in 4Q09, an increase of 48.8%, or $2.67 million in 4Q08. The operating margin improved by 595 basis points from 19.8% in the fourth quarter of 2008 to 25.8% in 4Q09. The operating margin increase was primarily due to widened gross margin, partially offset by the increase in administrative expense ratio.
Net Income Attributable to the Company
As a result of the foregoing factors, net income contributable to the Company was $8.8 million in 4Q09, an increase of 72.0%, or $3.7 million in 4Q08.
Fiscal Year 2009 Financial Results
Revenues
Revenue was $101.0 million, compared to $85.30 million for the year ended December 31, 2008, an increase of $15.7 million, or 18.4%. The increase in revenues during 2009 was attributable to an increase in software sales of 82.6% to $63.83 million, as compared to $34.96 million for the year ended December 31, 2008. Software sales constituted 63.2% of the Company's total revenue.
Sales of hardware products included $4.68 million contributed by Huipu in November and December of 2009. Sales of hardware products and system integration services decreased by 37.4% and 1.6%, respectively, for the year ended December 31, 2009, as compared to the year 2008.
These changes are reflective of the Company's increased focus on high value-added offerings surrounding its core competency, which warrant higher gross margin.
For the year ended December 31, 2009, approximately $54.20 million of the Company's revenues were generated by its DIST segment, $36.83 million of revenues were generated by its GIS segment, and $9.97 million was generated by its DHIS segment. This compares with $50.97 million by DIST, $34.28 million by GIS and $50,801 by DHIS for the year ended December 31, 2008. The increase in DIST and GIS segments were 6.3% and 7.4% year-over-year due to growth in the GIS market exceeding that of DIST. The DHIS segment was started in November 2008, so the Company's full-year comparison is skewed by the difference in time periods that contributed to the consolidated results.
Gross Profit and Gross Margin
Gross profit increased by 29.6% from $39.1 in fiscal year 2008 to $50.7 in fiscal year 2009. Gross margin was 50.2% for the year ended December 31, 2009, an increase of 434 basis points, from 45.8% in 2008. The increase in gross margin from the same period one year ago was primarily due to a shift in product mix in favor of software business, which generates higher gross margin than the other two segments.
Income from Operations
Income from operations increased $8.3 million, or 34.6%, to $32.2 million in 2009, from $23.9 million in 2008. The operating margin improved by 384 basis points from 28.0% in 2008 to 31.8% in 2009. The operating margin increase was primarily due to widened gross margin and partially offset by the Company's administrative expense ratio as a result of enhancing managerial capabilities.
Net Income Attributable to the Company
As a result of the foregoing factors, net income contributable to the Company increased $6.3 million, or 26.5%, to $30.1 million in 2009, from $23.8 million in 2008. Fully diluted net income per share was $0.62 in 2009, as compared to $0.51 in 2008.
Cash and Cash Equivalents
As of December 31, 2009, the Company had $19.34 million in cash and cash equivalents, restricted cash and short-term investments, as compared to $15.4 million as of December 31, 2008. During 2009, accounts receivable increased by $28.9 million to $71.8 million. Meanwhile, during 2009, cash provided by operating activities was $11.5 million, an increase of 152% from 2008. Working capital decreased by $8.8 million to $50.4 million, from $59.2 million in 2008.
Recent Developments [Post - Dec. 31, 2009]
-- January 26, 2010 - CIST ranked 13th on the 2010 Forbes China list of
200 small-to-medium sized Chinese corporations with the most potential
-- January 20, 2010 - CIST's proprietary GIS software, GeoGlobe 3.0
selected as a "Recommended Software of 2009" by the China Software
Industry Association
-- January 13, 2010 - CIST completed its previously announced registered
direct offering, raising an aggregate amount of approximately $10.16
million
2010 Outlook
For fiscal year 2010, the Company reaffirms its guidance with projected revenue to be $133-138 million and adjusted net income to be $33.5 - 37.5 million, excluding any non-cash expenses as a result of employee stock awards, amortization of intangible assets associated with acquisitions and changes in fair value of contingent considerations.
About Non-GAAP Financial Measures
This press release contains non-GAAP financial measures for earnings that exclude non-cash charges. China Information Security believes that these non-GAAP financial measures are useful to investors because they exclude non-cash charges that China Information Security's management excludes when it internally evaluates the performance of the Company's business and makes operating decisions, including internal budgeting, and performance measurement, because these measures provide a consistent method of comparison to historical periods. Moreover, management believes these non-GAAP measures reflect the essential operating activities of China Information Security. Accordingly, management excludes the expense arising from certain non-cash charges when making operational decisions. China Information Security believes that providing the non-GAAP measures that management uses to its investors is useful to investors for a number of reasons. The non-GAAP measures provide a consistent basis for investors to understand China Information Security's financial performance in comparison to historical periods. In addition, it allows investors to evaluate China Information Security's performance using the same methodology and information as that used by China Security's management. 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 non- GAAP financial measure. However, China Information Security's management compensates for these limitations by providing the relevant disclosure of the items excluded.
The following table provides the non-GAAP financial measure and the related GAAP measure and provides a reconciliation of the non-GAAP measure to the equivalent GAAP measure.
* Table 1
Q4 2009 and Full Year 2009 Reconciliation of Operating, Net
Income and EPS to Exclude SBC and Amortization of Intangible Assets
3 Mos. 3 Mos. 12 Mos. 12 Mos.
Ended Ended Ended Ended
31-Dec-09 31-Dec-08 31-Dec-09 31-Dec-08
Operating income 8,135,886 3,762,349 32,156,443 23,882,882
Stock based compensation
("SBC") 1,269,510 600,042 1,453,110 1,604,741
Amortization 480,651 543,014 1,786,201 1,354,567
Change in fair value of
contingent consideration* (1,108,759) -- (1,108,759) --
Operating income (without
SBC, amortization and
change in fair value of
contingent
consideration) 8,777,288 4,905,405 34,286,995 26,842,190
Net income Attributable
to the Company 8,813,708 5,123,378 30,094,571 23,786,976
Stock based compensation
("SBC") 1,269,510 600,042 1,453,110 1,604,741
Amortization 480,651 543,014 1,786,201 1,354,567
Change in fair value of
contingent consideration* (1,108,759) 0 (1,108,759) --
Net income (without
SBC, amortization and
change in fair value of
contingent
consideration) 9,455,110 6,266,434 32,225,123 26,746,284
Weighted Average Number of
Shares Outstanding
49,388,270 46,738,491 48,676,391 46,398,600
Basic
49,388,270 47,296,857 48,676,391 46,852,827
Diluted
Earnings Per Share (without
SBC and Amortization)
Basic $0.19 $0.13 $0.66 $0.58
Diluted $0.19 $0.13 $0.66 $0.57
* Represents a gain from the change of fair value of the contingent
consideration for the acquisition of Huipu as at 2009/12/31, according
to FASB ASC 805 - Business Combinations
Conference Call
China Information Security Technology will host a corresponding conference call and live webcast at 8:00 am Eastern Standard Time (9:00 pm, Beijing time) on Friday, March 5, 2010.
The dial-in details for the live conference call are as follows:
- U.S. Toll Free Number: +1-866-519-4004
- International Dial-in Number: +65-6735-7955
- Mainland China Toll Free Number: 10-800-819-0121
10-400-620-8038
- Hong Kong Toll Free Number: 80-093-0346
Conference ID: 60234059
A live and archived webcast of the conference call will be available on the Investor Relations section of China Information Security's website at http://www.chinacpby.com .
A telephone replay of the call will be available from March 5, 2010 through March 12, 2010.
The dial-in details for the replay are as follows:
- U.S. Toll Free Number: +1-866-214-5335
- International Dial-in Number: +61-2-8235-5000
Conference ID: 60234059
About China Information Security Technology, Inc.
China Information Security Technology, Inc., together with its subsidiaries, is a total solution provider of digital security, geographic information, and hospital information systems in the People's Republic of China. Headquartered in Shenzhen, China, the Company's total solutions include specialized software, hardware, systems integration, and related services organized into three business segments - Digital Information Security Technology ("DIST"), Geographic Information Systems ("GIS"), and Digital Hospital Information System ("DHIS"). To learn more about the Company, please visit its corporate website at http://www.chinacpby.com .
Safe Harbor Statement
This press release may contain certain "forward-looking statements" relating to the business of China Information Security Technology, Inc., and its subsidiary companies. All statements, other than statements of historical fact included herein are "forward-looking statements" including statements regarding: the significance of the Company's acquisition of Huipu Electronic (Shenzhen) Co., Ltd.; the ability of the Company to attain a leading position in the industry and create value added synergies by expanding and integrating Huipu's high-end hardware capabilities, expertise and established brand name with the Company's core software products; the general ability of the Company to achieve its commercial objectives, including the Company's plan to sustain the growth while creating shareholder value; the business strategy, plans and objectives of the Company and its subsidiaries; and any other statements of non-historical information. 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. 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 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.
For further information, please contact
China Information Security Technology, Inc.
Iris Yan
Tel: +86-755-8370-4767
Email: [email protected]
Web: http://www.chinacpby.com
Christensen
Kathy Li
Tel: +1-480-614-3036
Email: [email protected]
Roger Hu
Tel: +86-158-1049-5326
Email: [email protected]
CHINA INFORMATION SECURITY TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2009 AND 2008
2009 2,008
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 13,478,633.00 $ 9,565,252.00
Restricted cash 5,859,910.00 --
Short-term investments -- 5,835,838.00
Accounts receivable:
Billed, net of allowance for
doubtful accounts of $1,151,000
and $399,800, respectively 23,907,035.00 17,141,594.00
Unbilled 47,851,638.00 25,715,514.00
Bills receivable -- 4,481,340.00
Advances to suppliers 6,924,036.00 8,469,976.00
Amount due from related parties,
net of allowance for doubtful
accounts of $0 and $73,000,
respectively 129,937.00 131,594.00
Inventories, net of provision of
$184,000 and $49,000,respectively 10,936,004.00 7,107,537.00
Other receivables and prepaid
expenses 15,405,089.00 6,251,484.00
Deferred tax assets 1,719,327.00 --
TOTAL CURRENT ASSETS 126,211,608.00 84,700,129.00
Deposit for software purchase 1,426,452.00 --
Long-term investments 2,862,016.00 3,078,405.00
Property, plant and equipment,
net 53,586,514.00 23,555,603.00
Land use rights, net 1,907,611.00 --
Intangible assets, net 13,556,141.00 13,115,151.00
Goodwill 50,609,866.00 24,018,894.00
Deferred tax assets 668,730.00
TOTAL ASSETS $ 250,828,938.00 $ 148,468,182.00
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term bank loans $ 15,927,780.00 $ 6,327,992.00
Accounts payable 20,159,317.00 7,206,154.00
Bills payable 12,658,029.00 3,501,574.00
Advances from customers 3,950,744.00 2,476,335.00
Amount due to related parties 583,736.00 486,136.00
Accrued payroll and benefits 3,142,240.00 1,319,386.00
Other payables and accrued
expenses 14,252,918.00 2,553,019.00
Contingent consideration, current
portion 1,857,994.00 --
Income tax payable 3,290,245.00 1,592,459.00
TOTAL CURRENT LIABILITIES 75,823,003.00 25,463,055.00
Long-term bank loans 1,907,100.00 --
Contingent consideration, net of
current portion 2,635,397.00 --
Deferred tax liabilities 2,564,604.00 --
TOTAL LIABILITIES 82,930,104.00 25,463,055.00
EQUITY
Common stock, par $0.01;
authorized capital 200,000,000
shares; shares issued and
outstanding 2009: 49,905,141 and
48,797,211 shares, respectively;
2008: 47,462,404 shares 233,548.00 209,121
Treasury stock, 6,000 shares, at
cost (11,468.00) --
Additional paid-in capital 78,495,062.00 64,127,339.00
Reserve 8,345,371.00 4,964,597.00
Retained earnings 60,462,275.00 33,748,480.00
Accumulated other comprehensive
income 5,016,575.00 4,644,693.00
Total equity of the Company 152,541,363.00 107,694,230.00
Non-controlling interest 15,357,471.00 15,310,897.00
Total equity 167,898,834.00 123,005,127.00
TOTAL LIABILITIES AND EQUITY $ 250,828,938.00 $ 148,468,182.00
CHINA INFORMATION SECURITY TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 2009, 2008 AND 2007
2009 2008 2007
Revenue - Products $ 16,784,910 $ 26,822,325 $ 2,007,800
Revenue - Software 63,827,233 34,958,401 13,131,578
Revenue - System integration 19,017,962 19,328,312 15,194,314
Revenue - Others 1,365,989 4,192,146 9,017
TOTAL REVENUE 100,996,094 85,301,184 30,342,709
Cost - Products sold 13,560,279 25,049,072 1,669,410
Cost - Software sold 22,229,542 5,628,436 2,233,493
Cost - System integration 14,251,391 12,196,185 8,470,467
Cost - Others 303,215 3,348,627 --
TOTAL COST 50,344,427 46,222,320 12,373,370
GROSS PROFIT 50,651,667 39,078,864 17,969,339
Administrative expenses 12,653,175 10,158,863 3,288,657
Research and development
expenses 2,705,669 2,596,430 797,580
Management fee -- -- 92,160
Selling expenses 3,136,380 2,440,689 480,465
INCOME FROM OPERATIONS 32,156,443 23,882,882 13,310,477
Subsidy income 833,429 738,482 53,289
Other income, net 1,153,288 200,439 26,146
Interest income 270,666 214,850 138,840
Interest expense (388,686) (179,130) --
INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME 34,025,140 24,857,523 13,528,752
Income tax expense (3,887,495) (1,547,509) (107,300)
INCOME FROM CONTINUING
OPERATIONS 30,137,645 23,310,014 13,421,452
INCOME FROM DISCONTINUED
OPERATIONS NET OF AMOUNT -- 718,159 --
NET INCOME 30,137,645 24,028,173 13,421,452
Less: Net income attributable
to the non-controlling (43,076) (241,197) (90,000)
NET INCOME ATTRIBUTABLE TO
THE COMPANY $ 30,094,569 $ 23,786,976 $ 13,331,452
Basic 48,676,391 46,398,600 39,718,967
Diluted 48,676,391 46,852,827 40,152,855
EARNINGS PER SHARE
Basic - From continuing
operations $ 0.62 $ 0.50 $ 0.34
Basic - From discontinued
operations -- 0.01 --
$ 0.62 $ 0.51 $ 0.34
Diluted - From continuing
operations $ 0.62 $ 0.49 $ 0.33
Diluted - From discontinued
operations -- 0.02 --
$ 0.62 $ 0.51 $ 0.33
CHINA INFORMATION SECURITY TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2009, 2008 AND 2007
2009 2008 2007
OPERATING ACTIVITIES
Net income $ 30,137,645 $ 24,028,173 $ 13,421,452
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Operating cash flows from
discontinued operations -- (718,153) --
Provision for losses on
accounts receivable 2,765,837 472,750 --
Depreciation 4,069,363 2,991,266 1,274,768
Amortization of intangible
assets 1,786,201 1,354,567 168,747
Stock-based compensation 1,453,110 1,604,741 677,891
Loss on disposal of
property and equipment, net 62,803 2,533 --
Provision for obsolete
inventories 183,714 -- --
Change in fair value of
contingent consideration (1,108,759) -- --
Deferred income tax
benefits (1,268,670) -- --
Impairment of long-term
investment 233,211 -- --
Changes in operating assets
and liabilities, net of
effects of business
acquisitions -- -- --
Increase in restricted cash (5,856,949) -- --
Increase in accounts
receivable (24,850,334) (30,169,244) (4,115,867)
Decrease in receivables
from and advances to iASPEC
prior to VIE consolidation -- -- (10,660,988)
Decrease in advances to
suppliers 3,001,469 -- --
Increase (decrease) in
other receivables and
prepaid expenses (13,366,450) (553,400) 592,182
Increase in amount due from
related parties 132,774 372,391 --
Increase in inventories (1,219,083) (472,829) (1,399,838)
Increase in accounts
payable 11,068,019 4,633,198 903,475
Increase (decrease) in
advances from customers 1,416,715 (801,288) 54,830
Increase in other payables
and accrued expenses and
other liabilities 1,149,194 896,447 643,953
Increase in income tax
payable 1,687,973 906,825 46,586
Net cash provided by
operating activities 11,477,783 4,547,977 1,607,191
INVESTING ACTIVITIES
Deposit for business
acquisition of Bocom -- -- (9,000,000)
Cash acquired in VIE
consolidation -- -- 4,731,140
Cash acquired in ISS
acquisition -- -- 326,831
Cash acquired in Bocom
acquisition -- 713,876 --
Cash acquired in Geo
acquisition -- 2,443,677 --
Cash acquired in Zhongtian
acquisition -- 233,243 --
Cash acquired in HPC
acquisition 2,508,394 -- --
Consideration paid for
acquisition of ISS -- -- (7,051,469)
Consideration paid for
acquisition of Geo -- (7,049,073) --
Consideration paid for
acquisition of Zhongtian -- (9,852,455) --
Consideration paid for
acquisition of HPC (8,000,000) -- --
Purchase of Equity Linked
Notes -- -- (22,654,230)
Proceeds from sale of
short-term investments 5,864,400 -- --
Purchase of short-term
investments -- (5,655,605) --
Proceeds from sale of
marketable securities -- 14,966,752 7,687,478
Refund of investment in
former Joint Venture 4,398,300 -- --
Investing cash flows from
discontinued operations -- (8,576,575) --
Proceeds from sales of
property and equipment 78,238 1,146,671 --
Advances to third parties -- -- 332,479
Advances from related
parties -- -- 115,312
Purchases of property and
equipment (16,872,380) (8,928,057) (6,452,450)
Capitalized and purchased
software development costs (1,215,649) (487,541) --
Deposit for software
purchase (1,425,577) -- --
Net cash used in investing
activities (14,664,274) (21,045,087) (31,964,909)
FINANCING ACTIVITIES
Borrowings under short-term
loans 19,952,949 6,314,410 --
Repayment of long-term
loans (351,984) (1,086,312) --
Purchase of treasury stock (11,468) -- --
Repayment of short-term
loans (12,475,839) -- --
Advances repaid to a third
party company -- -- (200,000)
Amount repaid to a
stockholder -- -- (82,304)
Cash received from private
placement of common stock -- -- 49,817,486
Net cash provided by
financing activities 7,113,658 5,228,098 49,535,182
Effect of exchange rate
changes on cash and cash
equivalents (13,786) 1,079,082 405,402
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS 3,913,381 (10,189,930) 19,582,866
CASH AND CASH EQUIVALENTS,
BEGINNING 9,565,252 19,755,182 172,316
CASH AND CASH EQUIVALENTS,
ENDING $ 13,478,633 $ 9,565,252 $ 19,755,182
Supplemental disclosure of
cash flow information:
Cash paid during the period
Income taxes $ 3,464,474 $ 650,648 $ 24,574
Interest $ 379,101 $ 158,650 $ --
Supplemental disclosure of
non-cash investing and
financing activities:
Property and equipment
transfers from inventory $ -- $ 78,784 $ --
Selected information by segment is presented in the following tables for
2009, 2008 and 2007.
Revenues(1) 2009 2008 2007
DIST Segment $ 54,197,481 $ 50,968,985 $ 21,529,388
GIS Segment 36,826,430 34,281,398 8,813,321
DHIS Segment 9,972,183 50,801 --
$ 100,996,094 $ 85,301,184 $ 30,342,709
Percentage to Revenue
DIST Segment 53.6% 59.75% 70.9%
GIS Segment 36.4% 40.18% 29.1%
DHIS Segment 10% 0.07% --
(1) Revenues by operating segments exclude intercompany transactions.
SOURCE China Information Security Technology, Inc.
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