Tongxin International Ltd. (PINKSHEETS: TXIC), a China-based
manufacturer of engineered vehicle body structures ("EVBS") and
stamped parts for the commercial automotive industry, today
provided a preliminary summary of its expected financial results
for the year ended December 31, 2010.
Preliminary Financial Results:
Tongxin International Ltd. (the "Company") expects total
revenues for the year ended December 31, 2010 to be $106.5 million,
a 12.1% decrease from the $121.1 million of total revenues for the
year ended December 31, 2009. Such decrease in total revenues
reflects the reduction of original equipment manufacturer
production of mini and light commercial vehicles and the increase
in production of heavy duty commercial vehicles.
For the year ended December 31, 2010, the Company expects cost
of goods sold to be $99.8 million and selling, general and
administrative expenses to be $14.0 million. As a result, the
Company expects to have an operating loss of $7.3 million for the
year ended December 31, 2010 as compared to operating income of
$5.5 million for the year ended December 31, 2009.
The Company expects total stockholders' equity for the year
ended December 31, 2010 to be approximately $92.1 million compared
to $83.8 million for the year ended December 31, 2009.
Liquidity:
At December 31, 2010, cash, cash equivalents, and restricted
cash (security deposit) totaled approximately $10.8 million. Total
current assets at December 31, 2010 totaled approximately $64.2
million compared to $67.5 million at December 31, 2009. Total
current liabilities totaled approximately $71.4 million at December
31, 2010 compared to $79.7 million at December 31, 2009.
The Company is evaluating its goodwill for impairment in
accordance with the Financial Accounting Standards Board's
Statement of Financial Accounting Standard No. 142, "Goodwill and
Intangible Assets." The determination as to whether a write-down of
goodwill is necessary involves significant judgment based on the
short-term and long-term projections of the future performance of
the reporting unit to which the goodwill is attributed. To the
extent that the Company incurs such an impairment charge, it will
be non-cash in nature. The Company expects to complete the
impairment evaluation of its goodwill and intangible assets by
September 30, 2011.
The Company cautions that all of these financial results are
preliminary and subject to change, possibly materially, following
the completion and analysis of its financial statements for 2010.
Consequently, actual results may differ significantly from the
above estimates. The Company also reiterates that the above
preliminary and unaudited financial information does not represent
all of the information that would normally be included in an Annual
Report on Form 20-F with respect to the Company's financial results
for the year ended December 31, 2010.
Annual Report:
On June 30, 2011, Tongxin International Ltd. filed a Form 12b-25
with the Securities and Exchange Commission indicating that it
would not be able to complete the preparation, review and filing of
its Annual Report on Form 20-F for the fiscal year ended December
31, 2010 by the filing deadline of June 30, 2011. The Company and
its auditor are in the process of completing the audit of the
Company's financial statements for its fiscal year ended December
31, 2009. In addition, and with respect to the audit of Company's
financial statements for its fiscal year ended December 31, 2010,
the Company is in the process of preparing and completing certain
documents and financial and other information necessary to permit
the completion of the required audit of the Company's financial
statements for its fiscal year ended December 31, 2010. The Company
is in the process of gathering such documents and in preparing and
reviewing the financial and other information required to be
included in its Annual Report on Form 20-F for the fiscal year
ended December 31, 2010. The Company expects to file its Annual
Report on Form 20-F for the fiscal year ended December 31, 2010 and
its Annual Report on Form 20-F for its fiscal year ended December
31, 2009 as soon as reasonably possible.
Forward-Looking Statements
This press release contains statements regarding the preparation
and filing of statements or reports, including financial
statements, the Company's expectations concerning its operating
results and financial conditions, as well as other expectations,
plans, goals, objectives, assumptions or information about future
events, any and all of which may constitute forward-looking
statements or information under applicable securities laws. Such
forward-looking statements or information are based on a number of
assumptions which may prove to be incorrect. Although the Company
believes that the expectations reflected in such forward-looking
statements or information are reasonable, undue reliance should not
be placed on forward-looking statements because the Company can
give no assurance that such expectations will prove to be
correct.
All forward-looking statements or information are based on
current expectations, estimates and projections that involve a
number of risks and uncertainties which could cause actual results
to differ materially from those anticipated by the Company and
described in the forward-looking statements or information. These
risks and uncertainties include those described in Tongxin
International Ltd.'s reports to the SEC, and, among others, the
cost and timing of implementing restructuring actions, the
Company's ability to generate cost savings or manufacturing
efficiencies to offset or exceed contractually or competitively
required price reductions or price reductions to obtain new
business, conditions in the automotive industry, certain global and
regional economic conditions, the continuing ability of the Company
to prepare and timely file statements or reports with the SEC, and
the effect of any goodwill impairment analyses that the Company may
perform in the future. If one or more of these risks or
uncertainties materialize (or the consequences of such a
development changes), or should underlying assumptions prove
incorrect, actual outcomes may vary materially from those
forecasted or expected. The forward-looking statements or
information contained in this news release are made as of the date
hereof and the Company undertakes no obligation to update publicly
or revise any forward-looking statements or information, whether as
a result of new information, future events or otherwise, unless so
required by applicable securities laws.
TONGXIN INTERNATIONAL, LTD
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(US$ amounts expressed in thousands, except for share data and earnings per
share)
Successor Company Predecessor Company
---------------------------------- ----------------------
For the For the
Eight-Month Four-Month
Period from Period from
May 1, January 1,
Year Ended Year Ended 2008 to 2008 to Year Ended
December December December 31, April 30, December 31,
31, 2010 31, 2009 2008 2008 2007
---------- ---------- ---------- ---------- ----------
Revenues $ 106,461 $ 121,071 $ 55,770 $ 42,588 $ 89,873
Cost of goods
sold 99,821 105,421 47,207 36,310 69,865
---------- ---------- ---------- ---------- ----------
Gross profit 6,640 15,650 8,563 6,278 20,008
Selling, general
and administrative
expenses 13,974 10,192 5,248 1,793 5,372
---------- ---------- ---------- ---------- ----------
Operating income
(loss) (7,334) 5,458 3,315 4,485 14,636
Other income
(expenses):
Gain on
extinguishment
of liability 4,034
Government
subsidy
income 318 1,173 469 212
(Loss) gain on
warrants 11,522 (20,806) 13,535
Equity
earnings from
equity
investee 19
Other 498 15 (90) 71
Interest
expense (2,230) (1,753) (1,095) (1,607) (1,723)
---------- ---------- ---------- ---------- ----------
Total other
income
(expenses) 10,108 (21,372) 12,819 2,710 (1,704)
---------- ---------- ---------- ---------- ----------
Income (Loss)
before income
taxes 2,774 (15,914) 16,134 7,195 12,932
Income taxes
expense 424 842 627 2,216 3,853
---------- ---------- ---------- ---------- ----------
Net (loss)
income $ 2,350 $ (16,756) $ 15,507 $ 4,979 $ 9,079
Other
comprehensive
income -
foreign
translation
adjustment 4,381 364 426 721 940
---------- ---------- ---------- ---------- ----------
Comprehensive
(loss) income $ 6,731 $ (16,392) $ 15,933 $ 5,700 $ 10,019
---------- ---------- ---------- ---------- ----------
Earnings (loss)
per common
share-basic $ 0.48 $ (1.38) $ 1.37 $ 0.07 $ 0.13
Earnings (loss)
per common
share-diluted $ 0.40 $ (1.03) $ 1.37 $ 0.07 $ 0.13
Weighted average
shares
outstanding -
basic 14,114,297 11,846,273 11,294,633 72,521,705 72,521,705
Weighted average
shares
outstanding -
diluted 16,644,304 15,985,822 11,294,633 72,521,705 72,521,705
TONGXIN INTERNATIONAL, LTD.
CONSOLIDATED BALANCE SHEETS
(US$ amounts expressed in thousands, except for share data and par value)
December 31
2010 2009 2008
--------- --------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 9,935 $ 16,493 $ 11,313
Restricted cash - security deposit 827 4,692 5,836
Notes receivable 6,954 5,769 2,939
Accounts receivable-trade, net of allowance
for doubtful accounts of $2,534 and
$2,957, and $3,856 respectively 13,191 10,204 10,214
Other receivable, net of allowance for
doubtful accounts of $403 and $406, and
$407 respectively 2,625 2,076 1,600
Due (to) from related parties, net of
valuation allowance of $3,391 in 2009 (1,151) (1,346) 17,313
Inventories 27,425 25,070 19,096
Prepaid expenses and other 657 421 1,331
Advance to suppliers 1,518 1,960 3,012
Deferred income tax assets 2,245 2,211 2,067
--------- --------- ---------
Total current assets $ 64,227 $ 67,549 $ 74,721
Investments in non-consolidated
subsidiaries and affiliates 75 209 208
Property, plant and equipment, net of
accumulated depreciation of $7,469 and
$5,709, and $1,927, respectively 49,446 46,894 36,918
Land occupancy rights, net 13,699 3,194 9,633
Goodwill 37,634 36,880 36,696
--------- --------- ---------
Total assets $ 165,081 $ 164,727 $ 158,176
========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 23,874 $ 14,328 $ 15,201
Notes payable 1,654 4,692 5,836
Accrued expenses and other liabilities 3,181 6,867 7,393
Income taxes payable 17,615 17,257 17,418
Short-term loans payable 24,994 24,876 16,669
Short-term loans from shareholders 8,591
Warrant liability 127 11,649 452
--------- --------- ---------
Total current liabilities $ 71,445 $ 79,669 $ 71,560
Long-term liabilities:
Long-term loans payable 163 4,523
Deferred income tax liability 1,311 1,283 2,243
Other 25
--------- --------- ---------
Total liabilities $ 72,919 $ 80,952 $ 78,351
--------- --------- ---------
Commitments and contingencies
Shareholders' equity:
Preferred stock - $0,001 par value,
authorized 1,000,000 shares; none issued
Common stock - $0,001 par value, authorized
39,000,000 shares; 15,827,079 and
15,044,875 and 12,889,758 shares issued,
and 14,237,657 and 13,455,453, and
11,300,336 shares outstanding in 2010 and
2009 and 2008, respectively $ 15 $ 15 $ 13
Additional paid-in-capital 99,093 97,420 77,081
Treasury stock, at cost - 1,589,422 common
shares (7,682) (7,682) (7,682)
Accumulated other comprehensive income 5,172 790 426
Retained earnings (deficit) (4,490) (6,769) 9,987
Minority interests 55
--------- --------- ---------
Total shareholders' equity $ 92,163 $ 83,774 $ 79,825
--------- --------- ---------
Total liabilities and shareholders' equity $ 165,081 $ 164,727 $ 158,176
========= ========= =========
Investor Relations Contact: Stanley Wunderlich Consulting
For Strategic Growth 1, Ltd. Tel: 1-800-625-2236 ext. 7770 Email:
Email Contact Website: www.cfsg1.com Tongxin Corporate
Headquarters 199 Pierce Street, Suite 202 Birmingham, MI 48009
www.txicint.com www.hntx.com
Tongxin (CE) (USOTC:TXIC)
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