China Auto Logistics 2012 First Quarter Revenues Climbed Past $100 Million on 33% Year Over Year Growth in Luxury Auto Sales
Profits Dampened by Continued Shift in Web-Based Ad Strategy; Near Tripling of Financing Services Led Gains in Other High Margin Services; Investor Conference Call Scheduled for Thursday, May 17th at 8:00am ET
(firmenpresse) - TIANJIN, CHINA -- (Marketwire) -- 05/15/12 -- (the "Company" or "CALI") (NASDAQ: CALI), one of China's leading developers of websites for buyers and sellers of imported and domestic automobiles, a top seller in China of imported luxury cars, and a leading provider of auto-related services, reported today that first quarter revenues in 2012, benefitting from the continuing strong demand in China for luxury vehicles, rose 31.7% to $107.45 million compared with $81.57 million a year earlier. At the same time, the Company continued to shift its focus from web-based advertising sales to further reshaping its online platforms into springboards for increased auto sales and high margin auto related services growth. Consequently, despite continued growth in the Company's other auto-related services businesses, including a 186% increase in finance services revenues, lower results in web-based advertising sales led to an approximately 24% decline in net income to $1,581,477, or $0.07 per share in this year's first quarter, from $2,077,134 or $0.11 per share in the first quarter of 2011.
The per share figures also reflect a year over year increase in diluted weighted average shares outstanding from 19,163,427 shares in last year's first quarter to 22,163,427 shares in 2012.
Mr. Tong Shiping, CEO and Chairman of the Company, stated, "While I would have liked to continue the long string of quarterly profit gains we achieved in recent years, we have paused to regroup at a very high level of achievement with an aim to grow more strongly and steadily in the future, utilizing our web platforms." He added, "Of particular note, our quarterly revenues now exceed the annual revenues we had when we went public in November 2008. We also have dramatically expanded our web presence from a sole focus on auto importers, in a single city, to the full spectrum of China's auto buying public, with a presence in 50 cities across the country. Additionally, we have developed very strong banking relationships that should serve us well in future expansion efforts, while continuing to make strides in developing new high margin on-line services."
Despite a much weaker quarter for auto sales generally in China, luxury auto sales continued to show strength. Capitalizing on its strong web presence and ability to offer dealers a variety of "one-stop" services, including short-term financing, the Company sold 1,129 autos in this year's first quarter, up 44% from 785 vehicles in the first quarter of 2011. Average selling prices per vehicle in the quarter decreased 7.34% to $92,381, reflecting stronger demand for the lower end models of the Company's top selling luxury brands (Toyota, BMW and Mercedes Benz). Together, this resulted in a 33.26% climb in revenues for this segment to $104,297,837. Historically, margins in this business are low, and remained so in the 2012 first quarter, although the Company achieved a slight increase in gross margins to 1.70% from 1.61% a year earlier.
The first quarter of 2012 saw a sharp increase in the Company's short term auto financing services on which it earns a services fee for providing dealers use of its bank facility lines of credit. As of March 31, 2012, the Company had an aggregate line with several of China's leading banks totaling approximately $149 million, from which it had drawn a total of approximately $81 million. Revenues from financing increased 186.32% over the prior year quarter from $698,671 to $2,000,432. Higher interest rates in the period lowered the gross margin on this revenue to approximately 43% from nearly 48% a year earlier, but this nevertheless is a substantially higher margin than on auto sales.
In mid 2011, increasing competition leading to lower advertising pricing led to a re-think of the Company's strategy in this previously fast growing segment, most evident in the decision to write down and discontinue the VIP card business on its Goodcar site. Coverage of the Company's strong line-up of websites was extended to 50 cities in 2012 from 36 in 2011. However, the Company's focus shifted from building web-based advertising sales, to strengthening its online platforms to enhance their ability to draw attention to the Company's auto sales and the auto-related services it offers. The Company saw strong increases in services and auto sales revenues that, in part, related to this. Another short term effect, though, was the 85% reduction in revenues from this previously high margin business to $294,827 in the quarter, which negatively impacted the Company's net income. From a strategic view, however, the Company sees this as a short term sacrifice on the path to increased future growth from new internet-based services which the Company continues to anticipate implementing.
This business saw revenues increase 54% to 615,994.
On March 1, 2011 and again on March 1, 2012, the Company agreed to provide services to manage the largest imported auto mall in Tianjin for an annual fee of $1 million. The contribution to revenues of this high margin business in the first quarter of 2012 was $236,496. Plans to acquire an auto mall were terminated as a mutually satisfactory agreement was not achieved. However, the Company continues to seek another similar acquisition.
"A relaunch of our bottom line growth has taken a bit longer than originally anticipated, but one indication of our continuing potential is that even with the first quarter 85% revenue decline in web-based advertising, revenues in the quarter of $3.1 million for our higher margin web-based advertising, financing services and automobile value added services combined, were only $200,000 lower than the approximately $3.3 million combined figure a year earlier," Mr. Tong noted.
"We also are encouraged by the continuing strong double digit growth outlook for luxury cars in China even in a slowed economy," he continued, "as growth in luxury auto sales provides the underpinning for growth in most of our current services."
"Longer term," Mr. Tong added, "we still see new web-based auto related services for domestic and imported auto drivers and dealers as the key drivers of CALI's bottom line growth and are working hard to bring some of these new services to fruition at the earliest possible time."
The Company will discuss 2012 first quarter results during a live conference call and webcast on .
To participate in the call, interested participants should call 1-888-846-5003 when calling within the United States or 1-480-629-9856 when calling internationally. Please ask for the China Auto Logistics 2012 First Quarter Earnings Conference Call, Conference ID: 4539009. There will be a playback available until 05/24/12. To listen to the playback, please call 1-877-870-5176 when calling within the United States or 1-858-384-5517 when calling internationally. Use the Replay Pin Number: 4539009.
This call is being webcast by ViaVid Broadcasting and can be accessed by clicking on this link or at ViaVid's website at .
China Auto Logistics Inc. operates , one of the leading automobile portals for car dealers and consumers of vehicles and auto-related services in China. Additionally, it is one of China's top sellers of luxury imported cars and a leading developer of websites for buyers and sellers of imported and domestic automobiles. For additional information visit .
Except for historical information contained herein, the statements in this press release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause our actual results in future periods to differ materially from forecasted results. These risks and uncertainties include, among other things, product demand, market competition, and risks inherent in our operations. These and other risks are described in our filings with the U.S. Securities and Exchange Commission.
Richard Sun
Ken Donenfeld
DGI Investor Relations Inc.
Tel: 212-425-5700
Fax: 646-381-9727
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Datum: 15.05.2012 - 14:06 Uhr
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