BEIJING, Nov. 14, 2013 /PRNewswire-FirstCall/ -- Trunkbow
International Holdings Limited (NASDAQ: TBOW) ("Trunkbow" or the
"Company"), a leading provider of Mobile Payment Solutions ("MPS")
and Mobile Value Added Services ("MVAS") in the PRC, today
announced unaudited financial results for the third quarter ended
September 30, 2013.
Third Quarter 2013Financial
Highlights
- Gross revenues were $6.2 million,
compared with $9.0 million in the
third quarter of 2012.
- MPS gross revenues for the quarter were $0.7 million, compared with $0.6 million in the third quarter of 2012.
- MVAS gross revenues were $5.5
million, compared with $8.5
million a year ago.
- Gross profit was $5.4 million,
compared with $7.0 million in the
third quarter of 2012.
- Gross margin was 88.5%, compared with 78.6% in the third
quarter of 2012.
- Net income was $4.1 million, or
$0.11 per basic and diluted share,
compared with $3.2 million, or
$0.09 per basic and diluted share in
the third quarter of 2012.
Third Quarter 2013 and Recent Business
Highlights
- Trunkbow's total merchant installed base was over 5,400 as of
quarter-end, including approximately 180 merchants who are
implementing Trunkbow's mobile applet solution.
- The Company estimates approximately 20 mobile apps
incorporating this technology are currently available to iOS and
Android smartphone users, with approximately 160 others in
development.
- Entered final stage of construction for cloud data center in
Guangzhou. The Company expects to
launch its e-cloud business through this data center in early
2014.
- Continued the construction of a second cloud data center. The
Shanghai-based center is expected
to be fully operational in 2014.
To date, no decisions have been made with respect to the
Company's response to the going-private proposal previously
announced on November 2, 2012. There
can be no assurance that any definitive offer will be made, that
any agreement will be executed or that this or any other
transaction will be approved or consummated. The Company will
provide relevant updates with respect to the going-private
transaction or any other transaction as appropriate.
Third Quarter 2013 Results
Gross revenue in the third quarter of 2013 was $6.2 million, compared with gross revenue of
$9.0 million in the same period a
year ago. The decline in gross revenue was primarily attributable
to a decrease in systems integration revenue from the Company's
MVAS platforms. Revenue from MVAS declined to $5.5 million, from $8.5
million for the third quarter of 2012, primarily as a result
of the reduction in MVAS software sales related to SMS/phone-call
management and mobile business card offerings. Revenue from the
Company's MPS offerings totaled $0.7
million, compared with $0.6
million in the third quarter of 2012. The increase in MPS
revenue was due to increased MPS software sales.
Cost of revenues in the third quarter of 2013 was $0.7 million, compared with $1.9 million in the same period of 2012. The
decrease in cost of revenues was primarily attributable to a
reduction in sales of MVAS integration and the associated decrease
in equipment costs.
Gross profit in the third quarter of 2013 totaled $5.4 million, compared with $7.0 million in the third quarter of 2012. As a
percentage of net revenue, gross margin was 88.5% in the third
quarter of 2013, compared with 78.6% in the year-ago period. The
increase in gross margin was attributable to the decrease in system
integration revenues, which carry higher hardware costs.
Operating expenses in the third quarter of 2013 were
$0.7 million, compared with
$3.3 million in the third quarter of
2012. The decrease in operating expenses was primarily attributable
to a reversal of $1.0 million in
allowance for doubtful debt and lower advertising and promotion
expenses, as well as continued implementation of well as cost
control measures.
Operating income was $4.7 million
and $3.7 million for the third
quarter of 2013 and 2012, respectively.
Net income attributable to Trunkbow was $4.1 million in the third quarter of 2013,
compared with $3.2 million in the
same period of 2012. Earnings per basic and diluted share was
$0.11 in the third quarter of 2013,
compared with $0.09 in the same
period of 2012, both based on 36.8 million basic and diluted shares
outstanding.
Balance Sheet and Cash Flow
As of September 30, 2013, the
Company had $1.9 million in cash and
cash equivalents, compared with $0.8
million as of December 31,
2012. As of September 30,
2013, the Company had working capital of approximately
$57.2 million and total stockholders'
equity of $99.3 million. Accounts
receivable on September 30, 2013
totaled approximately $50.8 million.
As of November 14, 2013, the Company
had collected approximately $10.3
million of these outstanding receivables.
Nasdaq Notice of Compliance
On June 28, 2013, the Company
received a letter from the Nasdaq Stock Market LLC ("Nasdaq"),
which stated that, based upon the closing bid price for the last 30
consecutive business days, the Company no longer meets the
requirement set forth in Nasdaq Rule 5550(a)(2), which requires
listed securities to maintain a minimum bid price of $1 per share. On October
3, 2013, the Company received a letter from the Nasdaq,
which stated that, for the last 10 consecutive business days, from
September 29, 2013 through
October 2, 2013, the closing bid
price of the Company's common stock has been at $1.00 per share or greater. Accordingly, the
Company regained compliance with Listing Rule 5450(a)(1).
Conference Call
The Company will host a conference call to discuss financial
results for the third quarter ended September 30, 2013 on November 15, 2013 at 8:00
a.m. EST. To participate in the live conference call, please
dial the following number five to ten minutes prior to the
scheduled conference call time: +1 (866) 586-2813. International
callers should dial +61 2 8524 6650. The passcode required is
10585190.
If you are unable to participate in the call at this time, a
replay will be available for 14 days starting on November 15, 2013. To access the replay, please
dial +1 (855) 452-5696, international callers dial +61 2 8199 0299,
and enter the passcode 10585190.
About Trunkbow
Trunkbow International Holdings (NASDAQ: TBOW) is a leading
provider of Mobile Payment Solutions ("MPS") and Mobile Value Added
Solutions ("MVAS") in PRC. Trunkbow's solutions enable the telecom
operators to offer their subscribers access to unique mobile
applications, innovative tools, value-added services that create a
superior mobile experience, and as a result generate higher average
revenue per user and reduce subscriber churn. Since its inception
in 2001, Trunkbow has established a proven track record of
innovation, and has developed a significant market presence in both
the Mobile Value Added and Mobile Payment solutions markets.
Trunkbow supplies its mobile payment solutions to all three Chinese
mobile telecom operators, as well as re-sellers, in several
provinces of China. For more
information, please visit www.trunkbow.com.
Safe Harbor Statement
This press release contains forward-looking statements that
reflect the Company's current expectations and views of future
events that involve known and unknown risks, uncertainties and
other factors that may cause its actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking statements. Such forward looking statements
involve known and unknown risks and uncertainties, including but
not limited to uncertainties relating to the Company's relationship
with China's major telecom
carriers and its resellers, status of its pending "go-private"
transaction, competition from domestic and international companies,
changes in technology, contributions from revenue sharing plans and
general economic conditions. The Company has based these
forward-looking statements largely on its current expectations and
projections about future events and financial trends that it
believes may affect its financial condition, results of operations,
business strategy and financial needs. The results the Company is
providing today are preliminary and unaudited and are subject to
the conclusion of the audit of our financial statements, and could
differ materially from the results disclosed today. Information
regarding these risks, uncertainties and other factors is included
in the Company's annual report on Form 10-K and other filings with
the SEC.
Contact
Information
|
|
In China:
|
In the
U.S.
|
Trunkbow
International Holdings Limited
|
The Piacente
Group
|
Ms. Alice Ye, Chief
Financial Officer
|
Ms. Brandi
Floberg
|
Phone: +86 (10)
8571-2518 (Beijing)
|
Phone: + (1)
212-481-2050 (New York)
|
Email:
ir@trunkbow.com
|
E-mail:
trunkbow@tpg-ir.com
|
|
|
- FINANCIAL TABLES FOLLOW –
TRUNKBOW
INTERNATIONAL HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
|
|
September
30,
|
|
December 31,
|
|
2013
|
|
2012
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
1,926,440
|
|
$
|
783,074
|
Accounts receivable,
net
|
|
50,803,056
|
|
|
46,240,651
|
Advances to
suppliers, net
|
|
9,527,310
|
|
|
12,478,788
|
Prepayments
|
|
401,534
|
|
|
496,372
|
Other current
assets
|
|
1,866,047
|
|
|
9,717,929
|
Loans to third
parties
|
|
9,459,944
|
|
|
4,787,116
|
Due from
directors
|
|
417,132
|
|
|
9,350
|
Inventories
|
|
8,569,191
|
|
|
5,506,740
|
Assets held for
sale
|
|
3,925,051
|
|
|
3,817,913
|
Deferred tax
asset
|
|
1,095,268
|
|
|
942,028
|
Total current
assets
|
|
87,990,973
|
|
|
84,779,961
|
Property and
equipment, net
|
|
36,294,169
|
|
|
30,425,160
|
Land use right,
net
|
|
5,902,259
|
|
|
5,831,641
|
Intangible assets,
net
|
|
1,129,774
|
|
|
271,894
|
Long-term
prepayment
|
|
262,544
|
|
|
368,985
|
TOTAL
ASSETS
|
$
|
131,579,719
|
|
$
|
121,677,641
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts
payable
|
$
|
1,556,525
|
|
$
|
2,655,395
|
Accrued expenses and
other current liabilities
|
|
4,016,408
|
|
|
3,983,227
|
Short-term
loans
|
|
17,855,772
|
|
|
11,175,196
|
Due to
directors
|
|
98,269
|
|
|
106,141
|
Taxes
payable
|
|
7,228,616
|
|
|
6,857,978
|
Total current
liabilities
|
|
30,755,590
|
|
|
24,777,937
|
Deferred
revenue
|
|
1,548,139
|
|
|
1,505,881
|
Total
liabilities
|
|
32,303,729
|
|
|
26,283,818
|
COMMITMENTS AND
CONTINGENCIES
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
Preferred Stock: par
value $0.001, authorized 10,000,000 shares, none issued and
outstanding at September 30, 2013 and December 31, 2012,
respectively
|
|
0
|
|
|
0
|
Common Stock: par
value $0.001, authorized 190,000,000 shares, 36,807,075 shares
issued and outstanding at September 30, 2013 and December 31, 2012,
respectively
|
|
36,807
|
|
|
36,807
|
Additional paid-in
capital
|
|
39,671,966
|
|
|
39,671,966
|
Appropriated retained
earnings
|
|
6,461,938
|
|
|
6,461,938
|
Unappropriated
retained earnings
|
|
46,973,689
|
|
|
45,713,187
|
Accumulated other
comprehensive income
|
|
6,131,590
|
|
|
3,509,925
|
Total
stockholders' equity
|
|
99,275,990
|
|
|
95,393,823
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
$
|
131,579,719
|
|
$
|
121,677,641
|
TRUNKBOW
INTERNATIONAL HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
INCOME
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Revenues
|
$
|
6,242,978
|
|
$
|
9,048,886
|
|
$
|
13,639,958
|
|
$
|
21,817,127
|
Less: Business tax
and surcharges
|
|
105,292
|
|
|
168,007
|
|
|
278,372
|
|
|
406,000
|
Net
revenues
|
|
6,137,686
|
|
|
8,880,879
|
|
|
13,361,586
|
|
|
21,411,127
|
Cost of
revenues
|
|
704,206
|
|
|
1,898,626
|
|
|
4,685,009
|
|
|
3,968,955
|
Gross
profit
|
|
5,433,480
|
|
|
6,982,253
|
|
|
8,676,577
|
|
|
17,442,172
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
Selling and
distribution expenses
|
|
344,884
|
|
|
662,343
|
|
|
1,336,439
|
|
|
2,535,720
|
General and
administrative expenses
|
|
933,426
|
|
|
2,087,644
|
|
|
5,632,776
|
|
|
5,898,692
|
Reversal of allowance
for doubtful debts
|
|
(1,000,000)
|
|
|
0
|
|
|
(1,000,000)
|
|
|
0
|
Research and
development expenses
|
|
439,415
|
|
|
517,891
|
|
|
1,371,204
|
|
|
1,576,808
|
|
|
717,725
|
|
|
3,267,878
|
|
|
7,340,419
|
|
|
10,011,220
|
Income from
operations
|
|
4,715,755
|
|
|
3,714,375
|
|
|
1336,158
|
|
|
7,430,952
|
Other income
(expenses)
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
609
|
|
|
58,734
|
|
|
3,250
|
|
|
174,305
|
Interest
expense
|
|
(301,172)
|
|
|
(297,059)
|
|
|
(917,438)
|
|
|
(733,193)
|
Refund of value-added
tax
|
|
234,195
|
|
|
6,597
|
|
|
1,001,738
|
|
|
1,549,765
|
Government
grants
|
|
35,975
|
|
|
178,478
|
|
|
117,369
|
|
|
300,427
|
Other
income
|
|
5,128
|
|
|
37,160
|
|
|
27,061
|
|
|
92,710
|
Other
expenses
|
|
(4,925)
|
|
|
0
|
|
|
(44,823)
|
|
|
(12,391)
|
|
|
(30,190)
|
|
|
(16,090)
|
|
|
187,157
|
|
|
1,371,623
|
Income before
income tax expense
|
|
4,685,565
|
|
|
3,698,285
|
|
|
1,523,315
|
|
|
8,802,575
|
Income tax
expense
|
|
574,035
|
|
|
516,246
|
|
|
262,813
|
|
|
1,104,951
|
Net
income
|
|
4,111,530
|
|
|
3,182,039
|
|
|
1,260,502
|
|
|
7,697,624
|
Foreign currency
translation fluctuation
|
|
723,427
|
|
|
(163,043)
|
|
|
2,621,665
|
|
|
360,261
|
Comprehensive
income
|
$
|
4,834,957
|
|
$
|
3,018,996
|
|
$
|
3,882,167
|
|
$
|
8,057,885
|
Weighted average
number of common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
36,807,075
|
|
|
36,807,075
|
|
|
36,807,075
|
|
|
36,807,075
|
Diluted
|
|
36,807,075
|
|
|
36,807,075
|
|
|
36,807,075
|
|
|
36,813,912
|
Earnings per
share
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.11
|
|
$
|
0.09
|
|
$
|
0.03
|
|
$
|
0.21
|
Diluted
|
$
|
0.11
|
|
$
|
0.09
|
|
$
|
0.03
|
|
$
|
0.21
|
TRUNKBOW
INTERNATIONAL HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
Nine Months Ended
September 30,
|
|
2013
|
|
2012
|
|
(Unaudited)
|
|
(Unaudited)
|
Cash flows from
operating activities
|
|
|
|
|
|
Net income
|
$
|
1,260,502
|
|
$
|
7,697,624
|
Adjustments to
reconcile net income to net cash used in operating
activities:
|
|
|
|
|
|
Depreciation and
amortization
|
|
809,238
|
|
|
739,581
|
Provision for
doubtful debts
|
|
988,194
|
|
|
1,908,674
|
Impairment of
intangible assets
|
|
252,716
|
|
|
0
|
Deferred
taxes
|
|
(123,524)
|
|
|
(175,335)
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
Accounts
receivable
|
|
(4,223,484)
|
|
|
(5,778,091)
|
Advances to
suppliers
|
|
2,036,269
|
|
|
3,017,886
|
Prepayments
|
|
107,350
|
|
|
(1,311,965)
|
Other current
assets
|
|
7,857,901
|
|
|
(2,920,921)
|
Due from
directors
|
|
(402,211)
|
|
|
713,968
|
Inventories
|
|
(2,870,036)
|
|
|
(728,629)
|
Long-term
prepayment
|
|
115,274
|
|
|
2,225,864
|
Accounts
payable
|
|
(1,158,100)
|
|
|
(17,497)
|
Accrued expenses and
other current liabilities
|
|
592,835
|
|
|
386,447
|
Amounts due to
directors
|
|
(10,709)
|
|
|
(2,251)
|
Taxes
payable
|
|
175,868
|
|
|
(710,814)
|
Deferred
revenue
|
|
0
|
|
|
1,503,640
|
Net cash flows used
in operating activities
|
|
5,408,083
|
|
|
6,548,181
|
Cash flows from
investing activities
|
|
|
|
|
|
Acquisition of
property and equipment and intangible assets
|
|
(5,536,811)
|
|
|
(18,819,394)
|
Collection of loans
to third parties
|
|
1,206,292
|
|
|
(791,390)
|
Payment on loans to
third parties
|
|
(5,524,817)
|
|
|
0
|
Cash advance received
from sale of property
|
|
1,238,460
|
|
|
0
|
Net cash flows used
in investing activities
|
|
(8,616,876)
|
|
|
(19,610,784)
|
Cash flows from
financing activities
|
|
|
|
|
|
Proceeds from bank
loans
|
|
12,778,679
|
|
|
7,267,819
|
Repayment of bank
loan
|
|
(6,494,650)
|
|
|
0
|
Proceeds from loans
from third parties
|
|
193,007
|
|
|
0
|
Repayment of loans
from third parties
|
|
(2,101,875)
|
|
|
0
|
Net cash flows
provided by financing activities
|
|
4,375,161
|
|
|
7,267,819
|
Effect of exchange
rate fluctuation on cash and cash equivalents
|
|
(23,002)
|
|
|
(5,666)
|
Net increase in cash
and cash equivalents
|
|
1,143,366
|
|
|
(5,800,450)
|
Cash and cash
equivalents – beginning of the year
|
|
783,074
|
|
|
6,139,589
|
Cash and cash
equivalents – end of the period
|
$
|
1,926,440
|
|
$
|
339,139
|
Supplemental
disclosure of cash flow information
|
|
|
|
|
|
Cash paid for
interest
|
$
|
1,140,070
|
|
$
|
733,193
|
Cash paid for income
taxes
|
$
|
685,628
|
|
$
|
1,619,878
|
SOURCE Trunkbow International Holdings Limited