AutoChina International Reports 2012 Third, Fourth Quarter and Year-End Financial Results
(firmenpresse) - SHIJIAZHUANG, CHINA -- (Marketwired) -- 04/30/13 -- AutoChina International Limited ("AutoChina" or the "Company") (OTCBB: AUTCF), China's largest commercial vehicle sales, servicing, leasing, and support network, today reported financial results for the third quarter ended September 30, 2012, and for the fourth quarter and year ended December 31, 2012.
Total revenues of $73.3 million, compared to $168.6 million
Adjusted Net Income of $4.5 million, compared to $11.9 million
Adjusted EBITDA of $11.9 million, compared to $21.8 million
Total revenues of $51.9 million, compared to $107.4 million
Adjusted Net Income of $2.6 million, compared to $6.9 million
Adjusted EBITDA of $6.8 million, compared to $16.2 million
Total revenues of $333.1 million, compared to $598.1 million
Gross profit of $88.8 million, compared to $107.5 million
Net income of $23.5 million, compared to $25.2 million (which included loss on change in fair value of earn-out obligation of $17.3 million)
Adjusted Net Income of $23.5 million, compared to $43.5 million
Adjusted EBITDA of $50.3 million, compared to $80.0 million
1,154 commercial vehicles leased in the third quarter of 2012, and 816 in the fourth quarter of 2012
5,385 commercial vehicles leased in 2012
AutoChina opened nine new commercial vehicle financing and service centers in the third quarter of 2012 and 11 new centers in the fourth quarter of 2012. As of December 31, 2012, the Company operated 534 financing and service centers, compared to 506 at December 31, 2011.
AutoChina expects continued margin expansion as finance and insurance income grows as a percentage of revenue
Construction of the Company's new office space in the Kai Yuan Center building in Shijiazhuang was completed in April 2013, and AutoChina has moved its headquarters into the new space.
Mr. Yong Hui Li, Chairman and CEO of AutoChina, stated, "During the second half of 2012, we were pleased to announce the launch of AutoChina's new website, which now serves as a 24/7-accessible information portal for our customers with new offerings such as logistics services, consulting on and access to various types of insurance, and an online used truck marketplace. We expect the new website to be a key channel by which we expand and diversify our business via an asset-light model that will complement our existing heavy truck leasing business and allow AutoChina to better serve its customers. As China's heavy truck market continues to be impacted by weakened demand, we have taken the opportunity to strengthen the Company by building upon our existing heavy-truck leasing business with these new service offerings, while continuing to expand our geographic presence through our leasing and finance center network. We remain optimistic about the long-term prospects of China's heavy truck industry, which recently welcomed another large manufacturer in January when Sweden's Volvo announced its heavy-truck joint venture with Dongfeng Motor Group Co. Given concerns with pollution and measures to meet more stringent emission standards, demand for liquefied natural gas-fueled heavy trucks is expected to increase over the next few years. We will continue to focus on serving our customers, adapting and growing our business to address their needs."
Heavy Truck Sales
The Company leased 1,154 commercial vehicles in the third quarter of 2012, compared to 3,126 in the third quarter of 2011, and 816 commercial vehicles in the fourth quarter of 2012, compared to 1,804 in the fourth quarter of 2011. The decrease in commercial vehicle sales and servicing and leasing was primarily due to a general slowdown in the economy that led to unfavorable investment sentiment for purchasers of commercial vehicles. Additionally, the Company adopted a stricter leasing policy, which caused it to repossess more vehicles for late payment and reject a higher number of new applicants.
Since launching its commercial vehicle sales and leasing business in March 2008, the Company has leased over 37,000 trucks, as of December 31, 2012. The Company repossessed 789 vehicles whose lessees had defaulted on installment payments, sold 611 of these vehicles, and recorded 18 vehicles as total losses during the year ended December 31, 2012. There were 160 vehicles repossessed, 118 vehicles sold and 15 loss vehicles recorded in the year ended December 31, 2011. Additionally in 2012, the Company adopted a stricter leasing policy, which caused it to repossess more vehicles for late payment and reject a higher number of new applicants.
Used Vehicle Leasing
Under the Company's used commercial vehicle sale-leaseback program, 824 used trucks were leased in the year ended December 31, 2012.
Insurance Agency Services
The Company launched its own insurance agency business in December 2011 and has signed agreements with four major insurance companies in China to sell insurance: China United Property Insurance Company Limited, Sinosafe General Insurance Co. Ltd. (Hua An Insurance), Ping An Insurance (Group) Company of China, Ltd., and China Life Property and Casualty Insurance Company Limited. AutoChina's 534 store locations are each licensed to sell insurance from these carrier partners, and, as of December 31, 2012, the Company also operated 23 new insurance agency branch offices in appropriate markets that are solely dedicated to this service.
Expansion of Specialty Finance Store Network
During the 2012 third quarter, AutoChina opened nine new commercial vehicle financing and service centers and 11 during the 2012 fourth quarter. As of December 31, 2012, the Company operated 534 financing and service centers, compared to 506 centers at December 31, 2011. 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.
New Headquarters
During the second half of 2012, AutoChina closed on a transaction to purchase 23 floors of newly constructed office space in the Kai Yuan Center building, which was built by the Company's Chairman and CEO Mr. Li and is the tallest building in Shijiazhuang at 245 meters in height. The new office space was purchased for approximately $56.4 million, and the Company also assumed approximately $102.9 million in debt as part of the acquisition, resulting in a total transaction value of approximately $159.3 million.
Construction of the Kai Yuan Center has been completed, and, in April 2013, AutoChina moved its headquarters into the new building, which now serves as the control center for each of the Company's 534 commercial vehicle financing and service centers located throughout China. The Company does not anticipate that it will occupy the entire office space purchased, and expects to lease out the unoccupied space, the proceeds from which will be reported as rental income.
As part of the transaction to purchase the Kai Yuan Center office space, AutoChina, through its wholly owned subsidiary AutoChina Group Inc., acquired 100% of the equity of Heat Planet Holdings Limited ("Heat Planet") and its subsidiaries, which was controlled by Mr. Li. Heat Planet's primary asset consists of the 23 floors, or over 60,000 square meters, of newly constructed office space in the Kai Yuan Center building. The acquisition closed on September 11, 2012. As both AutoChina and the acquired companies were under the common control of Mr. Li immediately before and after the merger, the transaction was accounted for as common control merger, and using merger accounting as if the merger had been consummated at the beginning of the earliest period presented, and no gain or loss is recognized. The Company has adjusted its financial statements for the years ended December 31, 2011, and December 31, 2010, to account for operating results of Heat Planet and its subsidiaries to reflect the merger under common control.
2012 Third Quarter
Revenues for the third quarter ended September 30, 2012, were $73.3 million, compared to $168.6 million in the third quarter of 2011. The decrease in revenues primarily resulted from lower demand for heavy trucks, which was partially offset by higher finance and insurance income during the period. The Company reported $52.5 million in commercial vehicle revenues, and $20.8 million, or 28.4% of total revenues, in revenues related to finance and insurance.
Cost of sales during the period totaled $51.5 million, with an average cost per commercial vehicle of $44,000. Gross margin increased to 29.7% for the three months ended September 30, 2012, from 17.1% for the prior-year period, primarily due to a higher contribution to revenues from finance and insurance versus direct sales of commercial vehicles.
Net income in the three months ended September 30, 2012, was $4.5 million, or $0.19 per share based on 23.5 million diluted weighted average shares outstanding, compared to $48.6 million, or $2.07 per share based on 23.5 million diluted weighted average shares outstanding, in the three months ended September 30, 2011. The year-over-year decrease primarily resulted from the absence of a gain on change ($36.3 million) in fair value of an earn-out obligation, which was cancelled.
Adjusted Net Income, which is net income excluding the gain/loss on change in fair value of the earn-out obligation and income/loss from discontinued operations, was $4.5 million, compared to $11.9 million for the third quarter of 2011.
Adjusted EBITDA, which is EBITDA excluding the gain/loss on change in fair value of the earn-out obligation, income/loss from discontinued operations, stock-based compensation, and accretion of stock repurchase obligation, was $11.9 million for the quarter ended September 30, 2012, compared to $21.8 million in the prior-year quarter.
See "Non-GAAP Financial Measures" below for a description of Adjusted Net Income and Adjusted EBITDA.
2012 Fourth Quarter
Revenues for the fourth quarter ended December 31, 2012, were $51.9 million, compared to $107.4 million in the fourth quarter of 2011. As with the prior quarter, the decrease in revenues primarily resulted from lower demand for heavy trucks, which was partially offset by higher finance and insurance income during the period. The Company reported $34.8 million in commercial vehicle revenues, and $17.1 million, or 32.9% of total revenues, in revenues related to finance and insurance.
Cost of sales during the period totaled $34.7 million, with an average cost per commercial vehicle of $45,000. Gross margin increased to 33.1% for the three months ended December 31, 2012, from 24.7% for the prior-year period, primarily due to a higher contribution to revenues from finance and insurance versus direct sales of commercial vehicles.
Net income in the three months ended December 31, 2012, was $2.6 million, or $0.19 per share based on 23.5 million diluted weighted average shares outstanding, compared to $9.0 million, or $0.39 per share based on 23.5 million diluted weighted average shares outstanding, in the three months ended December 31, 2011.
Adjusted Net Income was $2.6 million, compared to $6.9 million for the fourth quarter of 2011. There was no gain/loss on change in fair value of the earn-out obligation for either period; however, there was $2.1 million in income from discontinued operations for the fourth quarter of 2011.
Adjusted EBITDA, which is EBITDA excluding the gain/loss on change in fair value of the earn-out obligation, income/loss from discontinued operations, stock-based compensation, and accretion of stock repurchase obligation, was $6.8 million for the quarter ended December 31, 2012, compared to $16.2 million in the prior-year quarter.
See "Non-GAAP Financial Measures" below for a description of Adjusted Net Income and Adjusted EBITDA.
Full-year 2012
Revenues for the year ended December 31, 2012, were $333.1 million, compared to $598.1 million in the prior-year period. The decrease in revenues primarily resulted from a general slowdown in the economy, which led to lower demand for heavy trucks. The Company reported $249.0 million in commercial vehicle revenues, and $84.1 million, or 25.2% of total revenues, in revenues related to finance and insurance.
Gross profit for 2012 was $88.8 million, compared to $107.5 million in the prior-year period. Gross margin increased to 26.7% for the year ended December 31, 2012, from 18.0% for the prior-year period, primarily due to a higher contribution to revenues from finance and insurance versus direct sales of commercial vehicles.
Net income for year ended December 31, 2012, was $23.5 million, or $0.99 per share based on 23.8 million diluted weighted average shares outstanding, compared to $25.2 million, or $1.07 per share based on 23.6 million diluted weighted average shares outstanding, in the prior-year period, which included a loss on change in fair value of the earn-out obligation of $17.3 million.
Adjusted Net Income was $23.5 million, compared to $43.5 million in 2011.
Adjusted EBITDA for the year ended December 31, 2012, was $50.3 million, compared to $80.0 million in the prior year.
See "Non-GAAP Financial Measures" below for a description of Adjusted Net Income and Adjusted EBITDA.
At December 31, 2012, AutoChina's cash and cash equivalents (not including restricted cash) were $75.8 million, working capital was $105.4 million, total debt was $170.3 million (including due to affiliates and accounts payable, related parties), and stockholders' equity was $228.4 million, compared to $43.0 million, $171.6 million, $237.1 million, and $291.2 million, respectively, at December 31, 2011.
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, 2012, the Company owned and operated 534 commercial vehicle financing centers across China, and primarily provides sales-type leasing and support services for local customers. The Company's website is .
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:
Continued compliance with government regulations;
Changing legislation or regulatory environments;
Requirements or changes affecting the businesses in which the Company is engaged;
Industry trends, including factors affecting supply and demand;
Labor and personnel relations;
Credit risks affecting the Company's revenue and profitability;
Changes in the commercial vehicle industry;
The Company's ability to effectively manage its growth, including implementing effective controls and procedures and attracting and retaining key management and personnel;
Changing interpretations of generally accepted accounting principles;
General economic conditions; and
Other relevant risks detailed in the Company's filings with the Securities and Exchange Commission.
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 defines Adjusted Net Income as net income (loss) before gain (loss) on change in fair value of earn-out obligation and before income/loss from discontinued operations, and Adjusted EBITDA as net income before interest expense (income), income taxes, depreciation and amortization, as well as the exclusion of Loss (gain) on change in fair value of earn-out obligation, (income) loss from discontinued operations, stock-based compensation and accretion of stock repurchase obligations. Adjusted Net Income and Adjusted EBITDA exclude 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 Net Income and 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 Net Income and 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 Net Income and Adjusted EBITDA also facilitates management's internal comparisons to AutoChina's historical performance and liquidity. AutoChina computes Adjusted Net Income and 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.
CONTACT
At the Company
Jason Wang
Chief Financial Officer
(858) 997-0680
The Equity Group Inc.
Carolyne Yu
Senior Associate
(212) 836-9610
Adam Prior
Senior Vice President
(212) 836-9606
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Datum: 30.04.2013 - 20:05 Uhr
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