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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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#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 Wishmaster 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 Wishmaster 06/18/18 12:40:08 PM
#1108   Smart money definitely adding today LowFloatLopes 06/18/18 12:37:03 PM
#1107   That’s why i bought lol LowFloatLopes 06/18/18 12:36:34 PM
#1106   Could be very big here, looks like they Wishmaster 06/18/18 12:35:03 PM
#1105   I’m in LowFloatLopes 06/18/18 12:09:00 PM
#1104   would love to see current financials; wondering if db7 06/18/18 12:08:59 PM
#1103   Could be an interesting play. As ihubbers always adijas 06/18/18 11:05:07 AM
#1102   I'm learning towards something interesting coming with the db7 06/18/18 10:57:13 AM
#1101   8k excerpt regarding the sec from years back, db7 06/18/18 10:56:32 AM
#1100   assuming David is the brother of the director db7 06/18/18 10:56:17 AM
#1099   'if' I recall correctly, I believe the sec db7 06/18/18 10:53:39 AM
#1098   This was a Nasdaq-listed SPAC; there were (still db7 06/18/18 10:50:05 AM
#1097   You might be right. adijas 06/18/18 10:29:01 AM
#1096   I always thought TXIC will make a cash Dina 06/18/18 10:26:18 AM
#1095   Thanks, I was just looking into the old adijas 06/18/18 10:23:19 AM
#1094   There is a problem with filing financials unfortunately. Dina 06/18/18 10:02:29 AM
#1093   You are right. Missed that. But the fact adijas 06/18/18 09:51:33 AM
#1092   Feb 10, 2014 Dina 06/18/18 09:47:40 AM
#1091   form 13G out. David E. Huff bought 1,049,687.50 adijas 06/18/18 09:37:19 AM
#1090   I believe this is the holding company where db7 06/06/18 11:00:39 AM
#1089   8k, here is the exhibit pr; not sure db7 05/24/18 04:17:17 PM
#1088   hi Ed! back in this.. blast from db7 08/07/15 03:37:32 PM
#1087   A solid company, formerly $10 NASDAQ stock with Dina 01/25/15 11:52:34 AM
#1086   Filings 2015, 2016 or never? What is the Dina 01/25/15 12:11:45 AM
#1085   Did you see this? Is this good? http://www.otcmarkets.com/news/otc-market-headli BingBing90 08/20/14 03:14:35 AM
#1084   $TXIC - on watch as company returns from tbirdman 04/13/12 09:11:33 PM
#1083   http://finance.yahoo.com/news/Tongxin-International-Ltd-iw-3251792247.html?x=0&. suntzutrade 06/30/11 10:56:51 PM
#1082   Atter all the financial restatement, they plan to suntzutrade 06/30/11 10:53:55 PM
#1081   CEO says 10k audit should be out sometime August. suntzutrade 06/30/11 10:53:32 PM
#1080   the company has a new website. check it out. suntzutrade 06/30/11 10:53:11 PM
#1079   warrants extended a year.. tried to get some db7 03/09/11 09:44:39 AM
#1078   Press Release Source: Law Office of Charles L. tsunamikimo 02/25/11 09:20:05 PM
#1077   http://www.marketwire.com/mw/search.do tsunamikimo 01/25/11 12:09:19 PM
#1076   Mod Rec.. tsunamikimo 01/25/11 12:08:42 PM
#1075   Company News tsunamikimo 01/25/11 12:08:25 PM
#1074   Sec Details tsunamikimo 01/25/11 12:07:24 PM
#1073   AH yesterday - atco1982 01/06/11 08:47:33 AM
#1072   how are you seeing the future? KBcompany 11/30/10 01:39:09 PM
#1071   see new article TXIC white_tiger 11/18/10 06:48:01 PM
#1070   +12% and reversal. Looking for GAP close at 3.5 rastaone 10/15/10 04:06:45 PM
#1069   Looks good today... rastaone 10/15/10 01:50:27 PM
#1068   TXIC I lost $1000 on it. I momentum74 10/12/10 02:24:06 PM
#1067   37% of shares held by institutions...many will be sahd3g 10/12/10 08:45:45 AM
#1066   TXIC going to the pink sheets. I've never sahd3g 10/12/10 08:39:22 AM