Universal Travel Group Announces Strong Third Quarter 2008 Results
-- Revenue Rises 79% and Net Income Climbs 51% Year-over-Year -- Raises full year guidance to revenue of $72-$74 million and net income of $13.5 to $14.5 million, or 32 to 35 cents per share
SHENZHEN, China, Nov. 5 /Xinhua-PRNewswire-FirstCall/ -- Universal Travel Group Inc. (OTC Bulletin Board: UTVG) ("Universal Travel Group" or the "Company"), a growing travel services provider in the People's Republic of China ("PRC") specializing in online and customer representative services to the travel service industry offering packaged tours, air ticketing, hotel reservation and air cargo agency services, today announced its strong financial results for the third quarter ended September 30, 2008.
Third Quarter of 2008 Highlights
-- Revenue reached a record $22.9 million, up 78.7% year-over-year -- Gross profit totaled $7.9 million, up 74.4% year-over-year -- Net income was $4.6 million or $0.22 per fully diluted share, up 50.9% year-over-year from $3.1 million, or $0.16 per fully diluted share, in the same quarter of 2007 -- Successfully closed a PIPE financing of $7.1 million with a group of seasoned investors -- Launched new online booking website, http://www.cnutg.com.cn, with travel information and 360¡ã view photos of sight-seeing destinations and hotel rooms -- Started beta testing of TRIPEASY Kiosks aimed at business travelers and those who have no access to the internet
"We are extremely pleased with the significant increase in all segments of our travel businesses during the third quarter, the result of the high travel season and positive effects from the Beijing Olympics Games," said Ms. Jiangping Jiang, Chairwoman and CEO of Universal Travel Group. "We plan to carefully monitor the testing and rollout of our TRIPEASY Kiosks. We expect to start generating revenue from this innovative product beginning in 2009, which will contribute to our future growth and expand our brand recognition as a leader in the travel industry in the PRC."
Third Quarter of 2008 Results
Revenue for the three months ended September 30, 2008 was $22.9 million compared to $12.8 million for the same period of 2007, an increase of approximately 78.7%. This increase is due to the company's strategic expansion into the hotel reservation and packaged tours business via the acquisitions of Xi'an Golden Net Travel Service Company Limited, Shanghai Lanbao Travel Service Company Limited and Foshan Overseas International Travel Service Co., Ltd.
Gross profit for three months ended September 30, 2008 was $7.9 million compared to $4.5 million for three months ended September 30, 2007, an increase of approximately 74.4%. The increase in gross profit reflects the company's strategic expansion into the profitable hotel reservation and packaged tours business via the acquisitions. The increase also reflects the results of efficient management and control of operations by an experienced management team.
Selling, general and administrative expenses for three months ended September 30, 2008 totaled $1.9 million compared to $812,464 for three months ended September 30, 2007, an increase of approximately 136.0%. Selling, general and administrative expenses were approximately 8.4% of revenue for three months ended September 30, 2008 as compared to 6.3% for three months ended September 30, 2007. The increase in selling, general and administrative expenses reflects the increase in the Company's expenses as a result of the acquisitions of Xi'an Golden Net Travel Service Company Limited, Shanghai Lanbao Travel Service Company Limited and Foshan Overseas International Travel Service Co., Ltd.
Net income was $4.6 million, or 20.2% of revenue, for three months ended September 30, 2008, compared to $3.1 million, or 23.9% of revenue, for three months ended September 30, 2007. The increase in net income reflects the continued growth in the Company's business and the income derived from the acquisitions of Xi'an Golden Net Travel Service Company Limited, Shanghai Lanbao Travel Service Company Limited and Foshan Overseas International Travel Service Co., Ltd. The decrease in net income as a percentage of revenue is the result of the acquisitions of lower net income margin businesses. By integrating the different business segments and leveraging off the synergies between such segments, the Company expects that net income margin could be improved over time.
Nine Month Results
Revenue for the nine months ended September 30, 2008 was $47.3 million compared to $26.8 million for nine months ended September 30, 2007, an increase of approximately 76.6%. Gross profit for the nine months ended September 30, 2008 was $14.9 million, compared to $9.4 million for nine months ended September 30, 2007, an increase of approximately 58.4%. Gross profit margin for nine months ended September 30, 2008 was 31.4%, compared to 35.0% for nine months ended September 30, 2007. Selling, general and administrative expenses for nine months ended September 30, 2008 totaled $4 million, compared to $2.2 million for nine months ended September 30, 2007. Interest expense for nine months ended September 30, 2008 totaled $78,525 compared to $42,724 for nine months ended September 30, 2007, an increase of approximately 83.8%. Net income was $8.2 million or 17.3% of revenue for the nine months ended September 30, 2008, compared to $5.4 million or 20.0% of revenue for the nine months ended September 30, 2007.
Financial Condition
As of September 30, 2008, Universal Travel Group had $12.6 million in cash and cash equivalents, $24.1 million in working capital and a current ratio of 6.6:1. The Company has no long-term debt.
The Company generated $2.9 million in cash from operating activities for the nine months ended September 30, 2008, which resulted primarily from the company's increase of business activities and trade deposits, and seasonal decrease of accounts payable, compared to cash provided by operating activities of $5.3 million in the same period last year. The Company received proceeds of $7.1 million from an equity financing in the third quarter from a group of seasoned investors to support corporate development initiatives.
Business Outlook
Despite the recent economic slowdown worldwide, the Company continues to experience strong demand for its products and services. Universal Travel Group has built resilience with integrated and diversified services, aiming to capture a greater share of the travel market in the long run. In the PRC, an increasing number of Internet users book hotels through the Internet, and this option has gradually replaced traditional phone call bookings as the primary method. Furthermore, the PRC is expected to be one of the most attractive countries for tourism with developed cities on the east coast and southern part of the PRC and wonderful natural resources and rich cultural landscapes in the west.
Universal Travel Group believes the outlook for its all travel segments remains attractive. The Company anticipates demand for its travel products and services to continue due to the PRC's rising middle class, world class conventions scheduled to be held in the PRC and appreciation of the Chinese Yuan. In addition, the Company is methodically executing its Kiosks' business plan with proceeds from its recent financing to provide unique services, and increase its profitability.
"In the midst of the current economic slowdown, the PRC's consumption continues to rise. We believe the travel sector will continue to push ahead into the future. This provides significant opportunities for us," said Jiangping Jiang. "We believe Universal Travel Group's strategy to provide integrated travel products and services should enable further opportunities to enhance shareholder value."
Based on greater-than-expected third quarter results, the Company is increasing its forecast for full-year 2008 revenue to a range of $72 million to $74 million from revenue of $69 million to $73 million; net income to a range of between $13.5 million and $14.5 million from net income of $12 million to $14 million, not including stock based compensation; earnings per share to a range of between $0.32 to $0.35 from earnings per share of between $$0.29 to $0.33.
Conference Call Information
The Company will host a conference call at 9:00 a.m. E.S.T. on Thursday, November 6, 2008 to discuss results for the third quarter of 2008. To participate in the live conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: 888-339-2688. International callers should dial 617-847-3007. When prompted by the operator, mention Conference passcode 870 055 11. If you are unable to participate in the call at this time, a replay will be available for 14 days starting on Thursday, November 6 at 11:00 a.m. E.S.T. To access the replay, please dial 888-286-8010 and enter the passcode 91725351. International callers should dial 617-801-6888 and enter the same passcode 91725351.
About Universal Travel Group Inc.
Universal Travel Group, a fast growing travel services provider in China, is engaged in providing reservation, booking, and domestic and international travel and tourism services throughout China via the internet and through customer representatives. Under the theme "Wings towards a more colorful life" the company's core services include tour packaging for customers, booking services for air tickets and hotels as well as air cargo transportation. In 2007, Universal Travel Group completed the acquisitions of Speedy Dragon, specializing in air cargo transportation; Xi'an Golden Net, specializing in travel packaged tours; Shanghai LanBao, specializing in hotel reservation and Foshan Overseas International, a China-based company that handles domestic and international travel inquiries. Universal Travel's goal is to become China's leading travel services provider in all fields of the tourism industry including the aviation, cargo, hotel booking and tour packaging segments. For more information, visit http://us.cnutg.com.
For more information, please contact:
Company Contact: Mr. Jing Xie Secretary of Board & Vice President Universal Travel Group Inc. Tel: +86-755-8366-8489 Email: 06@cnutg.cn Web: us.cnutg.com
Investor Relations Contact: Mr. Crocker Coulson President CCG Investor Relations Tel: +1-646-213-1915 (NY office) Email: crocker.coulson@ccgir.com Web: http://www.ccgirasia.com
-- Financial tables follow --
UNIVERSAL TRAVEL GROUP CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED SEPTEMBER 30,
Selling, general and administrative expenses 1,917,323 812,464 Income from operations 5,938,388 3,693,115
Other Income (Expense)
Other income (1,485) -- Interest income (9,941) (2,955) Interest expense 13,521 21,442 Total Other Income (Expense) 2,095 18,487 Income before income taxes 5,926,293 3,674,628
Provision for income taxes 1,307,966 608,153
Net income $4,628,327 $3,066,475
Net income per common share Basic $ .12 $ .09 Diluted $ .12 $ .09
Weighted average common shares outstanding Basic 38,695,295 35,314,298 Diluted 39,693,980 35,464,848
UNIVERSAL TRAVEL GROUP CONSOLIDATED STATEMENTS OF INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30,
Selling, general and administrative expenses 4,024,721 2,222,407 Stock based compensation 155,802 633,360
4,180,523 2,855,767
Income from operations 10,678,483 6,524,243
Other Income (Expense) Loss on asset disposal 1,105 -- Other income (9,863) -- Interest income (21,881) (17,783) Interest expense 78,525 42,724 Total Other Income (Expense) 47,886 24,941 Income before income taxes 10,630,597 6,499,302
Provision for income taxes 2,424,713 1,127,306 Net income $8,205,884 $ 5,371,996
Net income per common share Basic $ .22 $ .16 Diluted $ .22 $ .16
Weighted average common shares outstanding Basic 37,546,605 34,304,914 Diluted 38,050,305 34,421,337
UNIVERSAL TRAVEL GROUP CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 2008 and DECEMBER 31, 2007
ASSETS 2008 2007 Current Assets Cash and cash equivalents $12,564,894 $2,671,684 Accounts receivable, net 9,218,433 5,403,820 Other receivables and deposits, net 295,896 1,297,426 Refundable acquisition deposit -- 1,453,050 Due from shareholder 137,885 1,444,818 Trade deposit 4,614,844 2,650,744 Advances 437,509 616,861 Escrow deposits 762,800 -- Prepaid expenses 437,761 713,668 Total Current Assets 28,470,022 16,252,071
Current Liabilities Notes payable - bank $-- $1,288,554 Note payable - others -- 1,576,750 Accounts payable and accrued expenses 1,941,231 3,604,666 Customer deposits 1,197,362 1,132,886 Income tax payable 1,203,889 664,995 Total Current Liabilities 4,342,482 8,267,851
Stockholders' Equity
Common stock, $.001 par value, 70,000,000 shares authorized, 41,619,966 and 36,809,036 issued and outstanding 41,621 36,810 Additional paid in capital 15,781,582 8,601,534 Other comprehensive income 1,273,865 545,164 Statutory reserve 372,144 372,144 Retained earnings 20,307,280 12,101,396 Total Stockholders' Equity 37,776,492 21,657,048 Total Liabilities and Stockholders' Equity $42,118,974 $29,924,899
UNIVERSAL TRAVEL GROUP CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30,
2008 2007 CASH FLOWS FROM OPERATING ACTIVITIES
Net Income 8,205,884 5,371,996 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 49,850 60,269 Provision for doubtful accounts 7,185 -- Stock based compensation 155,802 633,360 Loss on asset disposal 1,105 (Increase) / decrease in assets: Accounts receivable (3,821,798) (1,982,708) Other receivable 1,001,530 19,760 Advances 179,352 (414,885) Due from shareholder 1,306,933 729,173 Prepaid expenses (407,530) 18,752 Trade deposits (1,964,100) 53,652 Customer deposits 64,476 (514) Escrow deposits (726,800) -- Increase / (decrease) in current liabilities: Accounts payable and accrued expenses (1,663,435) 613,482 Income tax payable 538,894 209,551 Total Adjustments (5,314,368) (60,108)
Net cash provided by(used in) operating activities 2,891,348 5,311,888
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property & equipment (27,742) (50,024) Proceeds from asset disposals 663 Acquisition deposits 1,453,050 2,288,481 Paid for acquisition - net of cash acquired -- (7,278,434) Net cash used by Investing activities 1,425,971 (5,039,977)
CASH FLOWS FROM FINANCING ACTIVITIES
(Repayments)Proceeds from bank loan - net (1,288,554) 1,289,873 Proceeds of equity financing 7,712,494 -- Note payable - others (1,576,750) -- Net cash provided by financing activities 4,847,190 1,289,873 Effect of exchange rate changes on cash and cash equivalents 728,701 123,521
Net change in cash and cash equivalents 9,893,210 1,685,305 Cash and cash equivalents, beginning balance 2,671,684 1,043,555
Cash and cash equivalents, ending balance 12,564,894 2,728,860
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