China TransInfo Technology Corp. (CTFO, Financial) filed Quarterly Report for the period ended 2010-03-31.
China Transinfo Technology Corp. has a market cap of $165.13 million; its shares were traded at around $6.86 with a P/E ratio of 11.63 and P/S ratio of 2.59.
On March 22, 2010, we and our VIEs, China TransInfo Technology Group Co., Ltd., or the Group Company, entered into certain equity transfer agreements, or the Equity Transfer Agreements, with several individual shareholders, or the Transferors, of Beijing UNISITS Technology Co. Ltd., or UNISITS, pursuant to which the Group Company acquired 30.85% equity interest in UNISITS from the Transferors. Pursuant to the Equity Transfer Agreements, the Group Company purchased approximately 16.23 million shares of UNISITS from the Transferors in exchange for RMB 4.41 million (approximately US$0.65 million) in cash (the Cash Consideration), 40% of which is payable within seven days after the effective date of the Equity Transfer Agreements, and approximately 1.16 million shares of our common stock, which are issuable within 30 days of the effective date of the Equity Transfer Agreements. The Equity Transfer Agreements contain make good provisions, under which the Transferors agree to deposit a total of 697,162 shares of our common stock with an escrow agent designated by us that they will receive as partial consideration for the acquisition. Specifically, if UNISITSs 2010 after-tax net income under Chinese GAAP is less than RMB 37.50 million (approximately US$5.50 million) or its 2011 after-tax net income under Chinese GAAP is less than RMB 46.88 million (approximately US$6.86 million), then 50% of the shares of our common stock deposited by the Transferors in escrow will be returned to us for cancellation for each applicable year. In addition, for each applicable year as described above, we will not be required to pay the remainder of the Cash Consideration, which represents RMB 1.323 million (approximately US$0.19 million), or 30% of the total Cash Consideration, per year if UNISITS fails to meet the respective performance targets. For additional information regarding this transaction, please refer to our current report on Form 8-K filed on September 14, 2009 and the exhibits attached thereto.
Net Sales Net sales increased by $18.38 million, or 282.10%, to $24.89 million for the three months ended March 31, 2010, from $6.51 million during the same period of 2009. Approximately 107.41% of this increase is attributable to increase in transportation revenue mainly resulted from expanded business and acquisition of UNISITS. UNISTS contributed approximately $16.05 million sales during the three months ended March 31, 2010. Our digital city business decreased by $1.58 million, or 91.07%, to $0.15 million for the three months ended March 31, 2010, from $1.73 million during the same period of 2009. The decrease was mainly due to the fact that we no longer focus in this area of business.
Our selling expenses including sales representative commissions, promotion fees and marketing expenses, increased approximately $0.40 million, or 110.47%, to $0.76 million for the three months ended March 31, 2010, from $0.36 million during the same period of 2009. As a percentage of revenues, selling expenses decreased to 3.05% for the three months ended March 31, 2010, from 5.54% during the same period of 2009. The increase of selling expenses was mainly attributable to our expanded operations and sales volume as well as the enhanced marketing activities for the three months ended March 31, 2010. Our general and administrative expenses were approximately $4.11 million (16.51% of total sales) and approximately $1.51 million (23.11% of total sales) for the three months ended March 31, 2010 and 2009, respectively. The increase of administrative expenses was mainly attributable to the increase of staffing, enhanced research and development efforts as well as more professional expenses associated with being a public company. - 19 -
Investing Activities Our primary uses of cash for investing activities are payments for the acquisition of property, plant and equipment, as well as intangible assets. Net cash used in investing activities for the three-month period ended March 31, 2010 was approximately $0.68 million, which is a decrease of approximately $0.71 million from net cash used in investing activities of approximately $1.39 million for the same period of 2009. The decrease of the cash used in investing activities was mainly due to the fact that we acquired less equipment and intangible assets during the first quarter of 2010 as compared to the same period of 2009.
Financing Activities Net cash provided by financing activities for the three-month period ended March 31, 2010 was approximately $9.32 million, while for the same period of 2009 we had approximately $0.13 million net cash used in financing activities. Such change was mainly attributable to the private placement transaction with SAIF during the first quarter of 2010, in which we raised $10 million in gross proceeds.
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China Transinfo Technology Corp. has a market cap of $165.13 million; its shares were traded at around $6.86 with a P/E ratio of 11.63 and P/S ratio of 2.59.
Highlight of Business Operations:
Net sales Our net sales were approximately $24.89 million for the first quarter of 2010, an increase of 282.10% from the same quarter of prior year. Gross Margin Gross margin was 34.29% for the first quarter of 2010, as compared to 51.01% for the same period in 2009. Operating Profit Operating profit was approximately $3.67 million for the first quarter of 2010, an increase of 151.63% from $1.46 million of the same quarter of prior year. Net Income Net income was approximately $1.76 million for the first quarter of 2010, an increase of 21.42% from the same quarter of prior year. On February 21, 2010, we entered into a securities purchase agreement with our 10% shareholder, SAIF Partners III L.P., or SAIF, pursuant to which we sold a total of 1,564,945 shares of common stock, par value $0.001 per share to SAIF, for an aggregate purchase price of $10,000,000. The shares were priced at $6.39 per share. The shares were sold pursuant to a shelf registration statement declared effective by the SEC on November 16, 2009. The offering and sale of the shares closed on February 24, 2010.On March 22, 2010, we and our VIEs, China TransInfo Technology Group Co., Ltd., or the Group Company, entered into certain equity transfer agreements, or the Equity Transfer Agreements, with several individual shareholders, or the Transferors, of Beijing UNISITS Technology Co. Ltd., or UNISITS, pursuant to which the Group Company acquired 30.85% equity interest in UNISITS from the Transferors. Pursuant to the Equity Transfer Agreements, the Group Company purchased approximately 16.23 million shares of UNISITS from the Transferors in exchange for RMB 4.41 million (approximately US$0.65 million) in cash (the Cash Consideration), 40% of which is payable within seven days after the effective date of the Equity Transfer Agreements, and approximately 1.16 million shares of our common stock, which are issuable within 30 days of the effective date of the Equity Transfer Agreements. The Equity Transfer Agreements contain make good provisions, under which the Transferors agree to deposit a total of 697,162 shares of our common stock with an escrow agent designated by us that they will receive as partial consideration for the acquisition. Specifically, if UNISITSs 2010 after-tax net income under Chinese GAAP is less than RMB 37.50 million (approximately US$5.50 million) or its 2011 after-tax net income under Chinese GAAP is less than RMB 46.88 million (approximately US$6.86 million), then 50% of the shares of our common stock deposited by the Transferors in escrow will be returned to us for cancellation for each applicable year. In addition, for each applicable year as described above, we will not be required to pay the remainder of the Cash Consideration, which represents RMB 1.323 million (approximately US$0.19 million), or 30% of the total Cash Consideration, per year if UNISITS fails to meet the respective performance targets. For additional information regarding this transaction, please refer to our current report on Form 8-K filed on September 14, 2009 and the exhibits attached thereto.
Net Sales Net sales increased by $18.38 million, or 282.10%, to $24.89 million for the three months ended March 31, 2010, from $6.51 million during the same period of 2009. Approximately 107.41% of this increase is attributable to increase in transportation revenue mainly resulted from expanded business and acquisition of UNISITS. UNISTS contributed approximately $16.05 million sales during the three months ended March 31, 2010. Our digital city business decreased by $1.58 million, or 91.07%, to $0.15 million for the three months ended March 31, 2010, from $1.73 million during the same period of 2009. The decrease was mainly due to the fact that we no longer focus in this area of business.
Our selling expenses including sales representative commissions, promotion fees and marketing expenses, increased approximately $0.40 million, or 110.47%, to $0.76 million for the three months ended March 31, 2010, from $0.36 million during the same period of 2009. As a percentage of revenues, selling expenses decreased to 3.05% for the three months ended March 31, 2010, from 5.54% during the same period of 2009. The increase of selling expenses was mainly attributable to our expanded operations and sales volume as well as the enhanced marketing activities for the three months ended March 31, 2010. Our general and administrative expenses were approximately $4.11 million (16.51% of total sales) and approximately $1.51 million (23.11% of total sales) for the three months ended March 31, 2010 and 2009, respectively. The increase of administrative expenses was mainly attributable to the increase of staffing, enhanced research and development efforts as well as more professional expenses associated with being a public company. - 19 -
Investing Activities Our primary uses of cash for investing activities are payments for the acquisition of property, plant and equipment, as well as intangible assets. Net cash used in investing activities for the three-month period ended March 31, 2010 was approximately $0.68 million, which is a decrease of approximately $0.71 million from net cash used in investing activities of approximately $1.39 million for the same period of 2009. The decrease of the cash used in investing activities was mainly due to the fact that we acquired less equipment and intangible assets during the first quarter of 2010 as compared to the same period of 2009.
Financing Activities Net cash provided by financing activities for the three-month period ended March 31, 2010 was approximately $9.32 million, while for the same period of 2009 we had approximately $0.13 million net cash used in financing activities. Such change was mainly attributable to the private placement transaction with SAIF during the first quarter of 2010, in which we raised $10 million in gross proceeds.
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