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Q1 2009:

Tongxin International, Ltd. Reports First Quarter 2009 Financial Results

  • On Monday May 18, 2009, 7:19 am EDT

NEW YORK and CHANGSHA, China, May 18 /PRNewswire-Asia-FirstCall/ -- Tongxin International Ltd. ("Tongxin") ("Company") (Nasdaq: TXIC - News) a manufacturer of engineered commercial vehicle body structures ("EVBS" or "Cabs"), SUV passenger vehicle bodies and stamped body parts for the Chinese commercial vehicle market, today announced the Company's first quarter financial results for the three month period ended March 31, 2009.

    -- Overall revenues decreased 2.6% to $29.5 million from $30.3 million
       while domestic revenues increased 6.3% quarter over quarter
    -- Q1 2009 gross margins increased 370 basis-points to 28.6% from 24.9% in
       the first quarter 2008
    -- Net income increased 6.6 % to $4.1 million in the first quarter from
       $3.8 million prior year
    -- First quarter EPS increased to $0.36 for versus $0.34 in Q1 2008.


First Quarter Financial Results

Net revenues for the first quarter ended March 31, 2009 reached $29.5 million, an approximate $0.8 million, or 2.6% decrease, over the same period prior year. According the China Association of Automobile Manufacturers (CAAM), a total of 692,000 trucks were built in the first three months of 2009 with more than half, approximately 343, 800 units, built in March alone. The three month total is 4.4% below 2008 totals for the same period in 2008. As of April 30, 2009, CAAM also reported 339,300 commercial vehicles built in April, on par with March 2009 build totals.

Tongxin's decrease in revenues is consistent with the market and representative of the strong first quarter the industry witnessed in 2008 in an effort to build trucks prior to Euro III emissions standards enacted on July 1, 2008 and prior to factory restrictions imposed on manufacturers prior to the Beijing Olympics. Additionally, the Company also reported a drop in exports, from $4.4 million in export sales the first quarter of 2008 to approximately $1.8 million for the first quarter in 2009, due to timing of customer shipments to Vietnam. Since both the cabs and chassis are shipped to Vietnam, the drop could be attributable to timing of components availability and not a loss of customer volume; Tongxin has three export customers in Vietnam. Excluding exports from Tongxin's revenues, the Company reported an increase in domestic revenues of 6.3% from its more than 130-plus customers throughout China.

"We believe that the first quarter of 2009 is a better representation of our performance for the coming year", stated Vice-Chairman Duanxiang Zhang of Hunan Tongxin. "Baring the regulation of Euro III standards that produced a strong first quarter in 2009, we are very encouraged by the uptick in business and shipments for the last three months. As domestic demand and the effects of the stimulus package begin to work their way through the economy plus a noticeable return of export orders, we, anticipate a succession of strong quarters for Tongxin and continued demand for our commercial vehicle cabs in 2009," Zhang concluded.

Cost of goods sold were $21.0 million in the first quarter 2009, a decrease of $1.7million or 7.3% versus the same period in 2008. The decrease in costs is directly related to the drop in cold-rolled steel pricing. Based on a comparison between January 2008 and January 2009, per ton pricing on cold rolled steel has fallen approximately 15.0% from $766.00 per ton to $666.00 per ton (source - Management, Engineering and Production MEPS, Consultancy UK, ltd.). Corresponding gross profits for the first quarter were $8.4 million compared to $7.5 million in the first quarter of 2008. As a result, gross margins increased 370 basis points to 28.6% in 2008 from 24.9% for the prior quarter ended March 31, 2008.

Total operating expenses for the first quarter of 2009 were $2.7 million versus $1.8 million for the same period in 2008. Included in the first quarter operating expenses was approximately $607,000 in corporate costs reflecting added financial, legal and accounting expenses, listing costs on NASDAQ, and administrative expenses. The most significant portion of these costs is approximately $233,000 in SOX compliance costs as the Company works towards SOX compliance with its partner, Ernst and Young. As a percentage of revenues, operating expenses were 8.2% compared with 6.0% for the same period, 2008. Operating income and operating margin for the quarter were $6.0 million and 20.5%, respectively, versus $5.7million and 18.9%, respectively for the same period in 2008.

Earnings before interest and taxes were $6.0 million versus $5.75 million the period ended March 31st, 2008. Tongxin pays the standard Chinese corporate tax rate of 25% however the Company is in the processes of applying for a reduction in taxes for companies based in the Henan province and in a related automotive industry. Net income was $4.1 million, representing an increase of 6.6% from $3.8 million reported in the same period prior year. Excluding costs associated with SOX compliance of $233,000, adjusted net income would be $4.3 million. Net profit margins were 13.9% for the quarter which represented a 130-basis point increase in net margins from 12.6% reported the first quarter of 2008. Earnings per share for the quarter were $0.36 based on 11.3 million shares outstanding.

Ms. Jackie Chang, Chief Financial and Accounting Officer stated, "The Company will continue to experience the favorable Impact of lower steel prices and increasing vehicle production volumes throughout the year. Steel is approximately 80% of our cost of goods thus we allocate significant time managing these costs carefully and our pricing to our customer base."

Balance Sheet and Cash Flow Discussion

As of March 31, 2009, Tongxin International had approximately $6 million in cash and cash equivalents versus $11.3 million on December 31, 2008. The company maintained a current ratio of 1.08 and $25.3 million in accounts receivable on March 31, 2009. Corresponding days sales outstanding were 95 days. Stockholders' equity was $84.1 million on March 31, 2009 from $18.7 million for the same period 2008, an increase of $65.4 million which is the purchase price of the acquisition. Cash flow from operations is a negative $2.4 million due to higher trade receivables as a result of higher revenue in the first quarter.

The Company has approximately five million warrants outstanding with strike price of $5.00 and callable at $10.00. At the Company's option, and in the event the selling price of the Company's common shares trades at an average price of $10.00 or more for twenty days out of a thirty day selling period, it may redeem warrants on "an all-or-none" basis. If the warrants are redeemed the Company would recognize gross proceeds of approximately $25 million.

2009 Guidance

For the fiscal year ending December 31, 2009, we anticipate consolidated earnings per share of $1.10 (based upon shares outstanding of 11,294,633).

About TXI

Tongxin International Ltd., is the largest independent supplier of EVBS in China, is capable of providing EVBS for both the commercial truck and light vehicle market segments, in addition to designing, fabricating and testing dies used in the manufacturing process. EVBS consists of exterior body panels including doors, floor pans, hoods, side panels and fenders.

Forward Looking Statements

Statements contained in this press release, which are not historical fact, including the anticipated date of listing of the Class A Common Stock on the NASDAQ Global Market, constitute "Forward-Looking Statements." Actual results may differ materially due to numerous important factors that are described in Tongxin International's most recent report to the SEC on Form 6-K, which may be revised or supplemented in subsequent reports to the SEC. Such factors include, among others, the cost and timing of implementing restructuring actions, the Company's ability to generate cost savings or manufacturing efficiencies to offset or exceed contractually or competitively required price reductions or price reductions to obtain new business, conditions in the automotive industry, and certain global and regional economic conditions. Tongxin International does not intend or assume any obligation to update any forward-looking statement to reflect events or circumstances after the date of this press release.


         For more information, please contact:       John Mattio      SVP, HC International, Inc.      Tel:   +1-914-669-5340      Email: john.mattio@hcinternational.net       





earnings table***->

2009 Q1:  Revenue: $29,500,000   Net Income: $4,100,000   EPS: $.36   Gross Margin: 28.6%

2008 Q4:  Revenue: $22,100,000   Net Income: $  900,000   EPS: $.08   Gross Margin:  ?
2008 Q3:  Revenue: $22,800,000   Net Income: $2,100,000   EPS: $.19   Gross Margin: 19.2%
2008 Q2:  Revenue: $23,200,000   Net Income: $2,452,000   EPS: $.19   Gross Margin: 19.6%
2008 Q1:  Revenue: $30,300,000   Net Income: $3,847,000   EPS: $.34   Gross Margin: 24.9%

2007 Q4:  Revenue: $20,288,000   Net Income: $2,318,000   EPS: $ ?    Gross Margin:  ?
2007 Q3:  Revenue: $??,???,???   Net Income: $2,500,000   EPS: $ ?    Gross Margin:  ?
2007 Q2:  Revenue: $18,719,000   Net Income: $2,263,000   EPS: $ ?    Gross Margin: 26.0%
2007 Q1:  Revenue: $23,906,000   Net Income: $2,779,000   EPS: $ ?    Gross Margin: 24.4%

***Please let me know if you have data where one of my questions marks are OR if you notice something incorrect as i just threw this together in a hurry








Conference Call which i highly recommend listening to:





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#1158   Watching for filings like a hawk; we’ve waited db7 12/08/20 06:09:28 AM
#1157   Hi db, i hope all is well with bobkubecka 12/07/20 11:26:16 PM
#1156   Hi Bob, after seeing a little action today db7 12/07/20 04:29:35 PM
#1155   TXIC Tongxin (PK) 0.05 278.8% 95,643 barnyarddog 05/13/20 01:20:10 PM
#1154   https://www.facebook.com/pg/CSMunya/posts/ scroll down to June 29th: db7 07/17/19 02:41:54 PM
#1153   waiting as well on this one and a db7 07/17/19 11:03:48 AM
#1152   All good db7, just patiently waiting on this bobkubecka 07/17/19 11:02:17 AM
#1151   welcome! hope you're doing well Bob :) db7 07/17/19 10:42:00 AM
#1150   Thanks for posting that, nice find as always :) bobkubecka 07/17/19 10:33:53 AM
#1149   agreed; I always said I'd prefer a filing db7 07/17/19 10:28:54 AM
#1148   Looks that way. This had the potential to adijas 07/17/19 10:26:51 AM
#1147   agreed; I keep getting excited when they start db7 07/17/19 10:23:17 AM
#1146   Nice find! Now we need some filings! adijas 07/17/19 10:16:31 AM
#1145   interesting! found this page: db7 07/17/19 10:08:23 AM
#1144   http://hntxmj.com/article/show_article.php?id=193 (translated via google ch db7 07/17/19 10:00:29 AM
#1143   re: opelroc-> db7 05/08/19 11:28:20 AM
#1142   Agreed. adijas 05/03/19 10:02:09 AM
#1141   combined with why did Liu file all of db7 05/03/19 09:48:30 AM
#1140   Could be, it's also vehicle parts. And why adijas 05/03/19 09:06:37 AM
#1139   googling a little: -> new subsidiary? http://www.opelroctool.com/en/about/ db7 05/02/19 04:30:36 PM
#1138   Huff at it again :) ---> https://ih.advfn.com/stock-market/USOTC/tongxin-intern db7 05/02/19 04:12:26 PM
#1137   There it goes adijas 05/01/19 12:13:20 PM
#1136   It touched .15 a year ago, and last adijas 05/01/19 12:01:47 PM
#1135   Thinking/hoping this starts to gap to the upside db7 05/01/19 11:52:58 AM
#1134   .145 gone now adijas 05/01/19 11:49:16 AM
#1133   hoping this .145 ask is the last one db7 05/01/19 11:47:16 AM
#1132   True adijas 05/01/19 09:13:33 AM
#1131   They both must imo db7 05/01/19 09:12:22 AM
#1130   He must know something we don't adijas 05/01/19 09:04:33 AM
#1129   SC 13G/A out, insider David Huff was the db7 04/30/19 04:26:41 PM
#1128   probably only you and I watching it lol db7 04/29/19 03:00:54 PM
#1127   You just beat me, lol adijas 04/29/19 02:54:57 PM
#1126   Interesting buying today adijas 04/29/19 02:54:37 PM
#1125   a little volume and watching the level II db7 04/29/19 02:54:17 PM
#1124   It's very intruiging. He took a 10% stake adijas 04/25/19 07:49:41 AM
#1123   13G out this morning. Something is up db7 04/25/19 07:26:34 AM
#1122   Form 13 out adijas 04/25/19 07:25:38 AM
#1121   I also noticed recently that one of their db7 04/24/19 09:15:49 PM
#1120   Liu Zhenyu is also listed as contact person adijas 04/24/19 07:33:01 PM
#1119   Form 3 out adijas 04/24/19 06:00:38 PM
#1118   Was hoping we would have had follow-up from db7 02/07/19 02:23:19 PM
#1117   Was just noticing that. Interesting. adijas 02/07/19 02:10:45 PM
#1116   SC-13G/A, looks like David Huff bought the 20k db7 02/07/19 02:08:02 PM
#1115   Another 8k out adijas 08/25/18 06:44:37 AM
#1114   SS updated the other day ...OS is 15M LowFloatLopes 06/18/18 04:42:29 PM
#1113   Tomorrow .30+ imo LowFloatLopes 06/18/18 03:28:49 PM
#1112   Ghost money coming in I love it Kicko 06/18/18 02:45:05 PM
#1111   .11 x .13 adijas 06/18/18 02:43:32 PM
#1110   Wouldn’t wait too long on this one ;) LowFloatLopes 06/18/18 12:42:37 PM
#1109   I will wait, I love this setup Kicko 06/18/18 12:40:08 PM
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