China Yida Announces Fourth Quarter and Fiscal Year 2012 Results

FUZHOU, China, March 25, 2013 /PRNewswire/ -- China Yida Holding Company (Nasdaq: CNYD) ("China Yida" or the "Company"), a diversified tourism and entertainment enterprise in China, today announced its preliminary unaudited financial results for the fourth quarter and fiscal year ended December 31, 2012.

Fiscal Year 2012 Results

• Net revenue from the tourism business was $10.6 million for fiscal 2012, an increase of 14.8% from fiscal 2011, with a gross margin of 42.8%
• Net revenue from the media business was $17.0 million for fiscal 2012, a decrease of 48.5% as compared to fiscal 2011, with a gross margin of 68.5%
• Total net revenue was $27.6 million for fiscal 2012, a decrease of 34.6% compared to $42.2 million for fiscal year 2011
• Gross profit was $16.2 million for fiscal 2012, a decrease of 43.6% compared to $28.7 million for fiscal 2011
• Operating income was $4.4 million for fiscal 2012 compared to $19.0 million for fiscal 2011
• Net loss attributable to China Yida Holding Company was $0.3 million for fiscal 2012, compared to net income attributable to China Yida Holding Company of $12.1 million for fiscal 2011
• Fully diluted loss was $0.07 per share for fiscal 2012 compared to fully diluted earnings per share of $3.10 for fiscal 2011

"As previously stated, China Yida's mission is to be a preeminent tourist company with all of its operations to consist of existing and new tourist destinations, and so I am pleased to report that the Company's tourist segment showed a solid revenue gain of 14.8% in fiscal 2012 compared to fiscal 2011," stated Dr. Minhua Chen, Chairman and Chief Executive Officer of China Yida. "We are also pleased to report a robust 68.5% rise in tourism revenue for the fourth quarter of 2012 versus the year-ago quarter driven by increased visitor traffic to our two prime tourist destinations. However, we expect continued pressure from the high levels of debt that we have had to assume to fulfill our commitment to local governments to develop our new tourist projects outside Fujian Province.  Therefore, we expect further losses in the quarters ahead and a loss for the full year 2013."

"We are especially pleased to see that visitor traffic to the Great Golden Lake has normalized this year and that a record number of tourists visited Yunding Recreational Park in the fourth quarter.  We believe that both of these tourist destinations will generate even greater tourist traffic once ongoing road access issues are resolved," CEO Minhua Chen continued. "Given that the fundamentals in China's tourism market remains strong, we continue to be committed to our participation in this market and we will work hard to prevail despite our current funding challenges."

Fourth Quarter 2012 Results

Total consolidated net revenue for the Company's two business segments, Tourism and Media, was $6.1 million in the fourth quarter of 2012, a decrease of 25.5% as compared to $8.2 million in the year-ago quarter. A review of each business segment follows.

Tourism Business

Net revenue from the tourism segment was $3.3 million in the fourth quarter of 2012, an increase of 68.5% as compared to $1.9 million in the year-ago quarter. The increase was primarily attributable to a substantial increase in the number of tourists visiting both the Great Golden Lake and Yunding Recreational Park tourist destinations partially offset by the continued downturn at the Hua' An Tulou site. Gross margin from the tourism segment was 48.3% in the fourth quarter, as compared to 29.5% in the year-ago quarter.

The total number of visitors that entered the Great Golden Lake during the fourth quarter of 2012 was approximated 102,000, an increase of 39.7% as compared to 73,000 in the same period of 2011, though down sequentially from 114,000 in the third quarter of 2012 due to seasonality factors. The site generated approximately $1.6 million in revenue in the fourth quarter, up 40.9% from the comparable year-ago quarter. The Company believes that visitor traffic to the Great Golden Lake is gradually improving and expects additional potential for growth once a new road that affords better access to the site is completed.

Yunding Recreational Park attracted 60,000 visitors in the fourth quarter of 2012, a substantial increase from the 14,000 visitors in the fourth quarter of 2011, and also up sequentially from the 34,000 visitors in the third quarter of 2012. The site generated approximately $1.5 million in revenue in the fourth quarter of 2012 which represents a five-fold increase in the revenue generated in the comparable year-ago quarter. The increase is attributable to the site's added attractions such as its new trial cottage accommodations which are encouraging additional site visitors. Further, a sustained marketing effort by the Company's travel agency over the last year is having a positive effect on attendance.

The Hua' An Tulou tourist destination received approximately 18,000 visitors in the fourth quarter of 2012 compared to 39,000 visitors in the comparable year-ago quarter, and was flat sequentially from the 18,000 visitors in the third quarter of 2012. Hua' An Tulou generated approximately $0.2 million in revenue in the fourth quarter of 2012, a decrease from $0.5 million in the comparable year-ago quarter.  The year-to-year decrease was mainly due to tough market competition from two nearby Tulou clusters in Fujian Province.

Media Business

Net revenue from the media business in the fourth quarter of 2012 was $2.9 million, a decrease of 54.4% from the $6.3 million posted in the comparable period a year ago. Fujian Education Television Channel ("FETV") experienced a 56.0% fall in revenue in the fourth quarter as compared to the year-ago quarter to an estimated $2.8 million due to actions by domestic media authorities restricting the broadcasting manner and content of TV advertising. The restriction on content of TV advertising included shopping programs, mini ads and certain medical advertisements.

Revenue from the Company's train media business was an estimated $0.10 million for the fourth quarter of 2012 as compared to $0.15 million for the fourth quarter of 2011, as a majority of advertising clients have terminated their purchases due to the absence of an automatic broadcasting and monitoring system.  The continued decrease in revenue is in line with the Company's expectations and further decreases may occur in the next few quarters.

Gross margin for the media business was 60.5% for the fourth quarter of 2012, as compared to 74.3% in the comparable year-ago quarter. The decrease in gross margin continues to be attributable to the substantial fall-off in revenue at FETV.

Fourth Quarter 2012 Consolidated Operating Results

Gross profit for China Yida's consolidated operations was $3.3 million in the fourth quarter of 2012, representing a gross profit margin of 54.0%, compared to gross profit of $5.3 million and a gross margin of 63.8% for the comparable period of 2011.

Total operating expenses increased by 47.3% to $3.6 million in the fourth quarter of 2012, compared with $2.5 million in the year-ago quarter. This increase was primarily attributable to a 60.0% jump in selling expenses, which increased to $1.9 million from $1.2 million in the comparable year-ago period due to higher marketing and operating expenses at Yunding Park including expenses related to the Company's new subsidiary that will operate performance and show events at the Yunding site. The Company experienced an operating loss of $0.3 million in the fourth quarter of 2012 as compared to income from operations of $2.8 million in the year ago quarter.

The net loss attributable to China Yida Holding Company for the fourth quarter of 2012 was $1.5 million, or $0.39 per diluted share, as compared to net income attributable to China Yida Holding Company of $1.5 million, or $0.38 per diluted share, for the fourth quarter of 2011.

Fiscal Year 2012 Results

Total net revenue decreased by 34.6% to $27.6 million for the fiscal year ended December 31, 2012, compared with $42.2 million for the fiscal year ended December 31, 2011.  Net revenue from the tourism business increased by 14.8% to $10.6 million for the fiscal year ended December 31, 2012. However, net revenue from advertising decreased by 48.5% to $17.0 million, compared to $33.0 million for the twelve months ended December 31, 2011.

Gross profit for the fiscal year ended 2012 decreased 43.6% year over year to $16.2 million from $28.7 million for fiscal 2011. The gross margin for the fiscal year ended 2012 was 58.6% as compared to 68.0% for the fiscal year ended 2011. Operating income was $4.4 million for fiscal 2012, a 77.1% decrease from $19.0 million for fiscal year 2011.

China Yida Holding Company experienced a net loss of $0.3 million for fiscal year, or a net loss of $0.07 per fully diluted share, as compared to net income of $12.1 million, or $3.10 per share, for fiscal year 2011.

Financial Condition

As of December 31, 2012, the Company had $6.6 million in cash and cash equivalents, up from $5.7 million as of fiscal year end 2011. The Company's working capital deficit was $2.3 million due to an increased level of both short-term loans and the current portion of long-term debt. As of December 31, 2012, the Company had total debt of $57.0 million out of which short-term loans comprised $1.6 million and the current portion of its long-term debt was $6.8 million.  Shareholders' equity was $158.7 million as of fiscal year end 2012 as compared to $157.9 million as of fiscal year end 2011.

China Yida generated $11.2 million in cash flow from operating activities for fiscal year 2012, compared to approximately $17.4 million for fiscal 2011, with the decrease of approximately $6.2 million primarily due to the decrease in net income during fiscal 2012.  The net cash used in investing activities for fiscal 2012 was approximately $33.3 million as compared to $48.0 million for fiscal 2011, with the decrease of approximately $14.6 million primarily due to the decrease expended in fiscal 2012 for obtaining land use rights for its tourist destinations. The Company's net cash provided by financing activities was $23.0 million for fiscal year 2012 as compared to $28.9 million for fiscal year 2011 attributable to a higher level of long-term loan repayments during fiscal 2012 as compared to fiscal 2011.

Business Update and 2013 Outlook

The Company experienced vastly improved attendance at its Great Golden Lake and Yunding Recreation Park tourist destinations in the fourth quarter of 2012 attributable to the promotion efforts of the Company's tourist agency as well as enhanced tourist attractions at the Yunding site.  For the year, tourist traffic increased 9.4% at the Great Golden Lake to 339,000 visitors and tourist traffic increased 38.7% to 165,000 visitors at Yunding Recreational Park.  The Company believes that there is room for improved tourist traffic to both tourist destinations when road construction that will enable easier travel to both sites is completed.

As the natural view and tourism facilities at the Great Golden Lake has now recovered from the flash floods of the summer of 2010, with tourist traffic having normalized, revenue for fiscal 2012 increased 15.4% to approximately $5.5 million from fiscal 2011.  However, the road to Shangqing River is still under construction and visitors must now use a rougher, more difficult road.  It is anticipated that the road construction by the local government will be completed in 2013. 

Yunding Recreational Park continues to see strong progress as tourist traffic set a record in the fourth quarter of 2012 and revenues attributable to the site rose 102.1% to approximately $3.9 million for fiscal 2012 as compared to fiscal 2011.  The site's guest cottages were in trial operation in the fourth quarter of 2012 and the Company should realize revenue in these overnight accommodations beginning in the first quarter of 2013.  However, the revenue generated from the site's valley rafting activity, which has been in operation since the beginning of the third quarter, will likely see a slowdown in the winter months.  The Company believes that tourist traffic is still below that of Yunding's designed capacity since the site is hampered by poor road access.  However, the new expressway connecting Fuzhou to Yongtai Town is being built by the local government and is expected to be completed in 2013. 

The increase in tourism revenue at both the Great Golden Lake and Yunding Recreational Park was partially offset by a decrease in revenue at the Hua' An Tulou tourism destination.  The Hua' An Tulou destination generated approximately $1.3 million in fiscal 2012, a 55.4% decrease from fiscal 2011. This decrease is attributable to strong competition from nearby homogeneous tourist sites, Nanjing Tulou Cluster and Yongding Tulou Cluster.  The Company plans upon further engaging in promotions that might enhance traffic to our Hua' An Tulou site.

As of fiscal year end, 2012, China Yida has made significant progress in the development of its three new tourism destinations, Ming Dynasty Entertainment World in Bengbu City, Anhui Province, China Yang-sheng (Nourishing Life) Paradise in Zhangshu City, Jiangxi Province, and the City of Caves in Fenyi City, Jiangxi Province.   These three new tourism projects are outside of Fujian Province and further expands the Company's geographic footprint to capitalize upon the rapidly growing tourism and leisure market opportunity in China.  Operating components of all three sites are expected to open in 2013 as the development and construction of these new tourist destinations are in line with the Company's schedule.

Ming Dynasty Entertainment World in Bengbu City, Anhui Province, is a tourist site emblematic of cultural tourism that will reproduce the royal life of the Ming Dynasty and offer recreational activities of the era.  As of December 31, 2012, the first phase of the site construction has commenced and the Company a total of $10.3 million of capital has been invested towards the development of this site.

China Yang-sheng (Nourishing Life) Paradise in Zhangshu City, Jiangxi Province, is a leisure and health tourist destination which is planned to include a spa and resort hotel, will reflect the region's reputation as a traditional medicine and herb center.  The site contains the only natural salt water hot spring destination in southern China.  The capital expenditures planned for the first development phase of this tourist site is estimated at approximately $36.6 million. Management expects that the Salt Water Hot Spring Spa & Health Center and the Yang-sheng resort hotel will be open to the public by the third quarter of 2013.

The City of Caves in Fenyi City, Jiangxi Province, has one of the largest and most characteristic karst land underground caverns in China. Its three hour driving circle covers a population of approximately 80 million people and is expected to draw tourists who are also visiting nearby world-class tourist destinations.  In addition, the site is approximately a one-hour drive from China Yida's Yang-sheng Paradise, which means that the Company can launch an integrated marketing campaign for these two tourist sites.  The first phase of development for the City of Caves, composed of the Altair and Vega caves, is scheduled to start trial operation by the third quarter of 2013.  The investment budget for each phase is $14.7 million with a total budget for the site's three phases of $44.1 million.

Management carefully reviews its capital expenditures on a regularly basis and has recently come to believe that our ability to finance our new projects in development has become somewhat challenged.  The Company has had to extensively rely upon bank financing given that other means of financing, such as the equity capital markets, have not been accessible to it.  Therefore, the Company will pursue reducing expenses wherever possible since it places the highest priority on meeting its financial obligations associated with its bank financing.  The Company believes that this would ensure continued capital flow and enable the development of its high quality tourist destinations currently in development.

In terms of its media segment, the Company has previously disclosed that due to strict regulations on certain types of TV advertising, it expects that FETV's advertising revenue may continue to decline further in the quarters ahead. The Company now expects that it may have to discontinue the FETV business when the contract is due in July 2013. Beginning on January 1, 2012, the State Administration of Radio Film and Television (SARFT) disallowed any commercial advertisements that are inserted in the midst of certain TV programming with the result that ad time is now minimized and only able to be inserted at a program's end. In addition, the Company also expects that in the near future, it is highly likely that it will discontinue its train media business which generates minimal revenue, though such timing has not yet been determined.

The Company's is executing upon its strategic plan to transition from what is currently a media and tourism company to one that is a tourist company in its entirety, where revenues derived from its tourism properties ultimately account for all of its revenue generation.  China Yida foresees a diverse revenue stream emanating from its tourist properties which the Company expects will drive a sustainable level of revenue and earnings growth.

"Tourism continues to be a dynamic growth sector for China as domestic tourism has surged due to the country's unprecedented economic growth and higher disposable incomes.  China's inbound tourism has also risen due to the country's wide spectrum of rich tourist sites.  China is now poised to become the world's second largest tourism economy after the U.S. by 2015.  With six tourist sites expected to be in operation this year, China Yida expects to be a major participant in this exciting, high growth sector," CEO Minhua Chen concluded.

Recent Development

Effective November 19, 2012, the Company conducted a 1-for-5 reverse stock split of all issued and outstanding shares of its common stock. Upon the effect of the reverse stock split, the Company's issued and outstanding shares reduced from 19,551,785 to 3,914,580. Except as otherwise specified, all information in the financial statements and all share and per share information has been retroactively adjusted for all periods presented to reflect the reverse stock split, as if the reverse stock split had occurred at the beginning of the earliest period presented.

Conference Call

China Yida will conduct a conference call at 9:00 a.m. Eastern Time (ET) on Monday, March 25, 2013, to discuss its financial results for the fourth quarter and fiscal year ended December 31, 2012. To participate in the live conference call, please dial any of the following numbers five to ten minutes prior to the scheduled conference call time.

International callers can also dial +1-706-643-6986.

The Conference ID for this call is 21802690.

If you are unable to participate in the call at this time, a replay will be available for two weeks starting on Monday, March 25, 2012 at 12:00 p.m. ET. To access the replay, dial 855-859-2056 or 404-537-3406, international callers dial +1-800-585-8367. The Conference ID is 21802690.

About China Yida

China Yida is a leading tourism and media enterprise focused on China's fast-growing leisure industry and headquartered in Fuzhou City, Fujian province of China.  The Company provides tourism management services and specializes in the development, management and operation of natural, cultural and historic scenic sites. 

China Yida currently operates the Great Golden Lake tourist destination (Global Geopark), Hua' An Tulou tourist destination (World Culture Heritage) and China Yunding Park (National Park).  China Yida is also developing three additional tourism projects, Ming Dynasty Entertainment World, China Yang-sheng (Nourishing Life) Tourism Project and the City of Caves.

The Company's media business provides operations management services including content and advertising management for the Fujian Education Television Station ("FETV"), and "Journey through China on the Train", an advertisement-embedded travel program. 

For further information, please contact the Company directly, or visit its Web site at http://www.yidacn.net.

Forward-Looking Statements

Certain statements in this press release that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by the use of words such as "anticipate," "believe," "expect," "future," "may," "will," "would," "should," "plan," "projected," "intend," and similar expressions. Such forward-looking statements, involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of China Yida Holding Co., Inc. (the "Company") to be materially different from those expressed or implied by such forward-looking statements. The Company's future operating results are dependent upon many factors, including but not limited to: (i) the Company's ability to obtain sufficient capital or a strategic business arrangement; (ii) the Company's ability to build and maintain the management and human resources and infrastructure necessary to support the anticipated growth of its business; (iii) competitive factors and developments beyond the Company's control; and (iv) other risk factors discussed in the Company's periodic filings with the Securities and Exchange Commission, which are available for review at www.sec.gov.

FINANCIAL TABLES FOLLOW

SOURCE China Yida Holding Company

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

440k+
Newsrooms &
Influencers

9k+
Digital Media
Outlets

270k+
Journalists
Opted In

GET STARTED