SHIJIAZHUANG, CHINA -- (Marketwired) -- 04/21/14 -- AutoChina International Limited ("AutoChina" or the "Company") (
Operational Highlights
Q4 2013 Financial Highlights (comparisons are year over year)
Full-year 2013 Financial Highlights (comparisons are year over year)
Operational and Market Review
Mr. Yong Hui Li, Chairman and CEO of AutoChina, stated, "As we saw China's heavy truck industry begin to stabilize and recover over the course of 2013, we were able to capitalize on these improving market conditions and are very pleased to have achieved 121.0% year-over-year growth in commercial vehicle leases in 2013. The Company's revenues for the year nearly doubled to $658.1 million in 2013 as a result of the significant growth in new leases, which will continue to provide earnings and have a positive impact on margin as we collect finance income from these leases. According to the China Association of Automobile Manufacturers, sales of commercial vehicles in China saw year-over-year growth of 6.4%, to 4.06 million units in 2013, with heavy truck sales growing 21.7% year over year. 2013 marked the first year of growth in our industry since the declines experienced in 2011-2012. We anticipate growth in the heavy truck industry will remain steady in 2014 as China's economy and infrastructure continues to develop, and AutoChina will continue working to expand its specialty financing business by exploring new opportunities while providing quality service to its customers."
Heavy Truck Sales
The Company recorded 4,290 new leases of commercial vehicles (primarily Class 8 heavy trucks) as part of the Company's sales-type leasing program in the fourth quarter of 2013, an increase of 425.7% compared to 816 in the fourth quarter of 2012.
At December 31, 2013, the Company had 14,995 leased vehicles under its sales-type leasing program. AutoChina recorded 11,902 new leases in 2013, a 121.0% increase from 5,385 trucks leased in 2012. An additional 284 trucks were leased under AutoChina's used commercial vehicle sale-leaseback program during 2013, compared to 824 in the prior year.
Since launching its commercial vehicle sales and leasing business in March 2008, the Company has leased over 49,000 trucks.
Expansion of Specialty Finance Store Network
During the 2013 fourth quarter, the Company established eight additional commercial vehicle financing and service centers, one in Liaoning province, two in Sichuan province, one in Jiangsu province, two in Yunnan province, and two in Zhejiang province. As of December 31, 2013, AutoChina operated 546 financing and service centers in 26 provinces. The Company operates commercial vehicle financing and service centers in the Anhui, Beijing, Chongqing, Fujian, Gansu, Guangdong, Guangxi, Guizhou, Hebei, Henan, Hubei, Hunan, Inner Mongolia, Jiangsu, Jiangxi, Jilin, Liaoning, Ningxia, Shaanxi, Shandong, Shanghai, Shanxi, Sichuan, Tianjin, Yunnan, and Zhejiang areas of China.
Development of New Products -- KyPay and TopAuto Net
The Company announced it is developing two new products that are expected to help the Company expand its business and further assist its customers with their everyday operational needs: 1) KyPay, a new form of electronic payment that offers its members a line of credit and 2) TopAuto Net, a cloud-based e-commerce platform enabling transportation and logistics businesses in China to manage their operations online.
KyPay is a solution whereby the Company will provide credit advances to its customers, allowing them to pay for their everyday truck-operating needs without the need to use cash up front. Based on AutoChina's proprietary methods to determine credit worthiness, KyPay will grant new members a credit line they can use for purchases at merchants that are part of the KyPay network. For example, a vehicle owner will be able to use KyPay to pay for purchases such as gas, parts, and repairs from merchants or other KyPay members. These merchants will then be able to withdraw the funds as cash or use them to pay for goods and services provided by other KyPay members. AutoChina plans to collect merchant fees for KyPay. Fees from customers are anticipated to apply only if customers carry a balance.
TopAuto Net will provide businesses in China's transportation industry with a powerful outsourced solution for managing their operations, as well as an opportunity to build an online presence and audience. TopAuto Net is a cloud-based e-commerce platform that will allow many traditional automotive operating and servicing businesses in China to manage their operations through customizable online information systems (i.e. CRM, ERP) without the need to acquire additional IT resources or hardware/software. AutoChina plans to charge a subscription fee for the use of TopAuto Net.
Financial Review
2013 Fourth Quarter
Revenues
Three months ended Three months ended
(in thousands) December 31, 2013 December 31, 2012
------------------ ------------------
% of % of YoY %
Amount Revenue Amount Revenue Change
--------- -------- --------- -------- --------
Commercial vehicles $ 220,696 92.7% $ 34,819 67.1% 533.8%
--------- -------- --------- -------- --------
Finance 12,029 5.0% 13,145 25.3% (8.5)%
--------- -------- --------- -------- --------
Insurance 5,296 2.2% 3,945 7.6% 34.2%
--------- -------- --------- -------- --------
Rent and property
management 259 0.1% -- 0.0% 100.0%
--------- -------- --------- -------- --------
Total revenues $ 238,280 100.0% $ 51,909 100.0% 359.0%
--------- -------- --------- -------- --------
Gross Profit/Margin
Net Income
Adjusted EBITDA
See "Non-GAAP Financial Measures" below for a description of Adjusted EBITDA.
Full-year 2013
Revenues
Year ended Year ended
(in thousands) December 31, 2013 December 31, 2012
-----------------------------------------
% of % of YoY %
Amount Revenue Amount Revenue Change
--------- -------- --------- -------- --------
Commercial vehicles $ 593,912 90.2% $ 249,090 74.8% 138.4%
--------- -------- --------- -------- --------
Finance 43,385 6.6% 69,804 21.0% (37.8)%
--------- -------- --------- -------- --------
Insurance 20,330 3.1% 14,268 4.3% 42.5%
--------- -------- --------- -------- --------
Rent and property
management 501 0.1% -- 0.0% 100.0%
--------- -------- --------- -------- --------
Total revenues $ 658,128 100.0% $ 333,112 100.0% 97.6%
--------- -------- --------- -------- --------
Gross Profit/Margin
Net Income
Adjusted EBITDA
Balance Sheet Highlights
At December 31, 2013, AutoChina's cash and cash equivalents (not including restricted cash) were $31.4 million, working capital was $47.9 million, total debt was $295.0 million (including due to affiliates and accounts payable, related parties), and stockholders' equity was $252.8 million, compared to $75.8 million, $105.4 million, $201.7 million, and $228.4 million, respectively, at December 31, 2012.
Mr. Li concluded, "As we enter 2014, we are excited to announce the launch of two new offerings for the commercial transportation and logistics industries. We believe KyPay and TopAuto Net will greatly enhance the value AutoChina brings to its customers and the industry at large as KyPay will provide its members with an advanced line of credit that functions as a cashless and secure payment solution while TopAuto Net will enable businesses to expand the scope of their operations through a modern, easy-to-use online platform. Customers will be able to readily communicate and transact with a growing network of merchants, while merchants will be able to market and sell their products and services to a large captive audience, with all transactions funneling through the KyPay payment system. We continue to work toward completing the development of KyPay and TopAuto Net and expect to launch these new products later this year."
About AutoChina International Limited
AutoChina International Limited is China's largest commercial vehicle sales, servicing, leasing, and support network. AutoChina's operating subsidiary was founded in 2005 by nationally recognized Chairman and CEO, Yong Hui Li. As of December 31, 2013, the Company owned and operated 546 commercial vehicle financing centers across China, and primarily provides sales-type leasing and support services for local customers. The Company's website is http://www.autochinaintl.com.
Safe Harbor Statement
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about the Company. Forward-looking statements are statements that are not historical facts. Such forward-looking statements, based upon the current beliefs and expectations of the Company's management, are subject to risks and uncertainties, which could cause actual results to differ from the forward-looking statements. The following factors, among others, could cause actual results to meaningfully differ from those set forth in the forward-looking statements:
The information set forth herein should be read in light of such risks. The Company does not assume any obligation to update the information contained in this press release.
AUTOCHINA INTERNATIONAL LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME
(in thousands except share and per share data)
Three months ended December
31, Year ended December 31,
--------------------------- --------------------------
2013 2012 2013 2012
------------ ------------ ------------ ------------
(unaudited) (unaudited) (audited) (audited)
Revenues
Commercial
vehicles $ 220,696 $ 34,819 $ 593,912 $ 249,090
Finance 12,029 13,145 43,385 69,804
Insurance 5,296 3,945 20,330 14,268
Property lease
and management 259 - 501 -
------------ ------------ ------------ ------------
Total revenues 238,280 51,909 658,128 333,112
------------ ------------ ------------ ------------
Cost of sales
Commercial
vehicles 2,727 1,268 9,981 7,350
Commercial
vehicles,
related parties 211,661 32,569 569,807 234,781
Insurance 822 894 3,485 2,159
Property lease
and management 554 - 1,360 -
------------ ------------ ------------ ------------
Total cost of
sales 215,764 34,731 584,633 244,290
------------ ------------ ------------ ------------
Gross profit 22,516 17,178 73,495 88,822
------------ ------------ ------------ ------------
Operating (income)
expenses
Selling and
marketing 2,882 2,615 10,262 10,126
General and
administrative 14,230 11,317 49,927 41,951
Interest expense 2,406 1,839 7,626 10,621
Interest expense,
related parties 980 184 1,971 869
Other income, net (3,501) (2,167) (13,435) (7,101)
------------ ------------ ------------ ------------
Total operating
expenses 16,997 13,788 56,351 56,466
------------ ------------ ------------ ------------
Income from
operations 5,519 3,390 17,144 32,356
------------ ------------ ------------ ------------
Other income
Interest income 31 82 406 308
------------ ------------ ------------ ------------
Total other
income 31 82 406 308
------------ ------------ ------------ ------------
Income before
income taxes 5,550 3,472 17,550 32,664
Income tax
provision (1,759) (875) (5,722) (9,115)
------------ ------------ ------------ ------------
Net income 3,791 2,597 11,828 23,549
Foreign currency
translation
adjustment 2,432 (2,484) 8,842 402
------------ ------------ ------------ ------------
Comprehensive
income $ 6,223 $ 5,081 $ 20,670 $ 23,951
============ ============ ============ ============
Earnings per share
Basic $ 0.16 $ 0.11 $ 0.50 $ 1.00
============ ============ ============ ============
Diluted $ 0.16 $ 0.11 $ 0.50 $ 0.99
============ ============ ============ ============
Weighted average
shares outstanding
Basic 23,545,939 23,538,919 23,540,761 23,538,919
============ ============ ============ ============
Diluted 23,740,298 23,538,919 23,806,194 23,762,378
============ ============ ============ ============
AUTOCHINA INTERNATIONAL LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands except share and per share data)
December 31,
-----------------
2013 2012
-------- --------
ASSETS
Current assets
Cash and cash equivalents $ 31,370 $ 75,777
Restricted cash 1,244 160
Accounts receivable, net of provision for doubtful
accounts of $20,891 and $12,041, respectively 27,931 32,956
Inventories 5,319 6,728
Prepaid expenses and other current assets 5,261 4,532
Current maturities of net investment in direct financing
and sales-type leases, net of provision for doubtful
accounts of $389 and $296, respectively 261,684 196,213
Deferred income tax assets 5,515 --
-------- --------
Total current assets 338,324 316,366
Construction-in-progress -- 76,669
Property, equipment and leasehold improvements, net 82,254 4,985
Deferred income tax assets 4,126 2,547
Net investment in direct financing and sales-type leases,
net of current maturities 128,415 38,739
-------- --------
Total assets $553,119 $439,306
======== ========
LIABILITIES AND EQUITY
Current liabilities
Short-term borrowings (including short-term borrowings of
the consolidated VIEs without recourse to AutoChina of
$124,654 and $75,412 as of December 31, 2013 and 2012,
respectively) $160,737 $102,458
Long-term payables, current (including long-term payables,
current of the consolidated VIEs without recourse to
AutoChina of nil and nil as of December 31, 2013 and
2012, respectively) 1,436 --
Accounts payable (including accounts payable of the
consolidated VIEs without recourse to AutoChina of $93
and $68 as of December 31, 2013 and 2012, respectively) 10,130 16,392
Accounts payable, related parties (including accounts
payable, related parties of the consolidated VIEs without
recourse to AutoChina of $44,044 and $706 as of December
31, 2013 and 2012, respectively) 57,586 2,228
Other payables and accrued liabilities (including other
payables and accrued liabilities of the consolidated VIEs
without recourse to AutoChina of $10,323 and $4,857 as of
December 31, 2013 and 2012, respectively) 17,146 15,049
Due to affiliates (including due to affiliates of the
consolidated VIEs without recourse to AutoChina of
$12,745 and $86 as of December 31, 2013 and 2012,
respectively) 38,143 65,595
Customer deposits (including customer deposits of the
consolidated VIEs without recourse to AutoChina of $319
and $161 as of December 31, 2013 and 2012, respectively) 1,680 1,956
Income tax payable (including income tax payable of the
consolidated VIEs without recourse to AutoChina of $2,761
and $1,931 as of December 31, 2013 and 2012,
respectively) 3,599 2,551
Deferred income tax liabilities (including deferred income
tax liabilities of the consolidated VIEs without recourse
to AutoChina of nil and nil as of December 31, 2013 and
2012, respectively) -- 4,717
-------- --------
Total current liabilities 290,457 210,946
Noncurrent liabilities
Long-term payables (including long-term payables of the
consolidated VIEs without recourse to AutoChina of $8,955
and nil as of December 31, 2013 and 2012, respectively) 9,857 --
-------- --------
Total liabilities 300,314 210,946
-------- --------
AUTOCHINA INTERNATIONAL LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - Continued
(in thousands except share and per share data)
December 31,
--------------------
2013 2012
--------- ---------
Commitment and Contingencies
Equity
Preferred shares, $0.001 par value authorized -
1,000,000 shares; issued - none -- --
Ordinary shares - $0.001 par value authorized -
100,000,000 shares; issued and outstanding -
23,545,939 shares at December 31, 2013, respectively;
and $0.001 par value authorized - 100,000,000 shares;
issued and outstanding - 23,538,919 shares at
December 31, 2012, respectively 24 24
Additional paid-in capital 327,631 323,856
Statutory reserves 22,947 16,997
Accumulated losses (129,609) (135,487)
Accumulated other comprehensive income 31,812 22,970
--------- ---------
Total equity 252,805 228,360
--------- ---------
Total liabilities and equity $ 553,119 $ 439,306
========= =========
AUTOCHINA INTERNATIONAL LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
December 31,
-------------------------------
2013 2012 2011
--------- --------- ---------
Cash flow from continuing operating
activities:
Net income $ 11,828 $ 23,549 $ 25,151
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
Net loss from discontinued operations -- -- 973
Loss on change in fair value of earn-out
obligation -- -- 17,300
Depreciation and amortization 3,289 1,902 1,420
Provision for bad debts 18,886 14,550 4,271
Deferred income taxes (11,681) (4,180) 6,261
Stock-based compensation expenses 3,775 4,553 2,914
Changes in operating assets and
liabilities, net of acquisitions and
divestitures:
Restricted cash (1,060) -- --
Accounts receivable (12,832) (22,331) (5,997)
Net investment in direct financing and
sales-type leases (145,392) 209,063 2,175
Inventories 1,594 (4,176) (1,024)
Deposits for inventories, related party -- 14,515 (14,177)
Prepaid expense and other current assets (576) 7,671 (2,588)
Accounts payable 874 15,922 (536)
Other payable and accrued liabilities 1,596 1,356 5,729
Customers deposits (332) 798 (100)
Income tax payable 951 (254) (4,568)
--------- --------- ---------
Net cash (used in) provided by continuing
operating activities (129,080) 262,938 37,204
--------- --------- ---------
Cash flow from continuing investing
activities:
Capital expenditure on construction in
progress -- (76,353) --
Purchase of property, equipment and
leasehold improvements (8,892) (3,516) (1,967)
Cash received from sales of subsidiaries -- -- 7,589
Increase in restricted cash -- -- (155)
Decrease in due from an affiliate -- 7,891 9,000
--------- --------- ---------
Net cash (used in) provided by continuing
investing activities (8,892) (71,978) 14,467
--------- --------- ---------
AUTOCHINA INTERNATIONAL LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued
(in thousands)
December 31,
-------------------------------
2013 2012 2011
--------- --------- ---------
Cash flow from continuing financing
activities:
Proceeds from borrowings 201,761 102,036 189,850
Repayments of borrowings (136,515) (194,093) (163,567)
Proceeds from affiliates 22,224 137,052 320,641
Repayment to affiliates (50,672) (170,520) (372,259)
Increase in accounts payable, related
parties 569,807 234,781 404,492
Repayment to accounts payable, related
parties (515,438) (232,562) (421,036)
Dividend paid -- (5,885) --
Capital distribution -- (29,274) --
--------- --------- ---------
Net cash provided by (used in) continuing
financing activities 91,167 (158,465) (41,879)
--------- --------- ---------
Net cash (used in) provided by continuing
operating, financing and investing
activities (46,805) 32,495 9,792
--------- --------- ---------
Cash flow of discontinued operations:
Cash provided by provided by operating
activities -- -- 48,537
Cash provided by investing activities -- -- 172,922
Cash used in financing activities -- -- (222,289)
--------- --------- ---------
Net cash flow used in discontinued
operations -- -- (830)
--------- --------- ---------
Effect of exchange rate fluctuation on cash
and cash equivalents 2,398 234 3,138
--------- --------- ---------
Net (decrease) increase in cash and cash
equivalents (44,407) 32,729 12,100
Cash and cash equivalents, beginning of the
year 75,777 43,048 30,948
--------- --------- ---------
Cash and cash equivalents, end of the year $ 31,370 $ 75,777 $ 43,048
========= ========= =========
Analysis of balances of cash and cash
equivalents
Included in cash and cash equivalents per
consolidated balance sheet 31,370 75,777 43,048
Included in assets of discontinued
operations -- -- --
--------- --------- ---------
31,370 75,777 43,048
========= ========= =========
Supplemental disclosure of cash flow
information:
Continuing Operations
Interest paid $ 8,191 $ 15,194 $ 14,607
========= ========= =========
Income taxes paid $ 16,486 $ 13,544 $ 11,348
========= ========= =========
Discontinued Operations
Interest paid $ -- $ -- $ 3,943
========= ========= =========
Income taxes paid $ -- $ -- $ 8
========= ========= =========
Supplemental disclosure on non-cash
continuing financing activities
Reclassification from liability of the
obligation to issue shares for the
amendments of earn-out provision to equity $ -- $ -- $ 90,400
========= ========= =========
Non-GAAP Financial Measures ($ in thousands)
A reconciliation of Adjusted EBITDA to net income is provided below:
Three Months Ended Year Ended
December 31, December 31,
2013 2012 2013 2012
-------- -------- -------- --------
Net income attributable to
shareholders $ 3,791 $ 2,597 $ 11,828 $ 23,549
Interest expenses 3,386 2,023 9,597 11,490
Interest income (31) (82) (406) (308)
Income tax provision 1,759 875 5,722 9,115
Stock-based compensation 1,834 926 3,775 4,553
Depreciation & Amortization 562 491 3,289 1,902
-------- -------- -------- --------
Adjusted EBITDA $ 11,301 $ 6,830 $ 33,805 $ 50,301
======== ======== ======== ========
USE OF NON-GAAP MEASURES
AutoChina defines Adjusted EBITDA as net income before interest expense (income), income taxes, depreciation and amortization, as well as the exclusion of stock-based compensation. Adjusted EBITDA excludes certain financial information that would be included in net income (loss), the most directly comparable GAAP financial measure. Users of this financial information should consider the type of material events and transactions that are excluded from Adjusted EBITDA, and the material limitations of therein. For example, Adjusted EBITDA does not include net interest expense, but because AutoChina has borrowed money to finance its operations, interest expense is a necessary and ongoing part of its costs and has assisted AutoChina in generating revenue; Adjusted EBITDA does not include taxes, although payment of taxes is a necessary and ongoing part of AutoChina's operations; and Adjusted EBITDA does not include depreciation and amortization expense, but because AutoChina uses capital assets to generate revenue, depreciation and amortization expense is a necessary element of its cost structure. Therefore, Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income, as determined in accordance with GAAP, since it omits the impact of these expenses incurred by AutoChina.
AutoChina believes that the presentation of these non-GAAP financial measures is warranted and useful to its shareholders because it provides an additional analytical tool for understanding the Company's financial performance by excluding certain items that may obscure trends in the core operating performance of the Company's business. Using Adjusted EBITDA also facilitates management's internal comparisons to AutoChina's historical performance and liquidity. AutoChina computes Adjusted EBITDA using the same consistent method from quarter to quarter. The table above has more details on the reconciliations between GAAP financial measures that are most directly comparable to Non-GAAP financial measures.
Add to Digg Bookmark with del.icio.us Add to Newsvine
At the Company
Jason Wang
Chief Financial Officer
(858) 997-0680
jcwang@kywmall.com
Investor Relations
The Equity Group Inc.
Carolyne Y. Sohn
Senior Associate
(415) 568-2255
csohn@equityny.com
Adam Prior
Senior Vice President
(212) 836-9606
aprior@equityny.com