AutoChina International Reports 2013 Third Quarter and Nine Months Financial Results, Commercial Vehicle Revenues Increase of 204%
(firmenpresse) - SHIJIAZHUANG, CHINA -- (Marketwired) -- 12/13/13 -- 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 and nine months ended September 30, 2013.
3,166 commercial vehicles leased in third quarter of 2013, a 174.4% increase from 1,154 in prior-year period
During the 2013 third quarter, the Company established four additional commercial vehicle financing and service centers, and closed one of its centers in Jiangsu province. As of September 30, 2013, AutoChina operated 538 financing and service centers in 26 provinces.
Total revenues of $176.4 million, up 140.6% from $73.3 million, largely due to the increase in new commercial vehicle leases initiated during Q3 2013
Gross profit of $18.6 million, compared to $21.8 million, primarily as a result of the significantly larger number of new trucks purchased for leases initiated during Q3 2013, which have a relatively low margin, while finance income, which is relatively high margin, contributed a greater percentage of revenues in Q3 2012
Net income of $3.3 million, or $0.14 per diluted share, compared to $4.5 million, or $0.19 per diluted share
Adjusted EBITDA of $8.3 million, compared to $11.9 million
Total revenues of $419.8 million, up 49.3% from $281.2 million
Gross profit of $51.0 million, compared to $71.6 million
Net income of $8.0 million, compared to $21.0 million
Adjusted EBITDA of $22.5 million, compared to $43.5 million
Mr. Yong Hui Li, Chairman and CEO of AutoChina, stated, "We continue to see steadily improving conditions in our marketplace. We had our second consecutive quarter of strong lease growth during the 2013 third quarter, and the increased revenues for the period will provide substantial earnings from finance margin over the coming quarters. We continued to keep our default rate stable during the decline in the market cycle and now intend to place our focus on expansion and growth. According to the China Association of Automobile Manufacturers, sales of commercial vehicles in China were up 7.38% to 3.36 million units during the first 10 months of 2013. We continue to operate in the largest global market according to a recent global market report by AlixPartners, as China produced 33% of all commercial trucks built worldwide last year (by comparison North American comprised 18%), and sales of commercial trucks are expected to improve by approximately 7% year-over-year to 995,000 units in 2013. We intend to leverage the infrastructure AutoChina invested in during the recent downward economic cycle in our industry and are optimistic about our prospects in the coming quarters."
The Company announced that it recorded 3,166 new leases of commercial vehicles (primarily Class 8 heavy trucks) as part of the Company's sales-type leasing program in the third quarter of 2013, an increase of 174.4% compared to 1,154 in the third quarter of 2012.
At September 30, 2013, the Company had 13,311 leased vehicles under its sales-type leasing program. AutoChina believes that China's heavy truck industry has begun showing signs of recovery throughout the year, as both output and sales volume have begun to stabilize. Through the first nine months of 2013, the Company recorded 7,612 new leases, a 66.6% increase from 4,569 trucks leased in the prior-year period. An additional 43 trucks were leased under AutoChina's used commercial vehicle sale-leaseback program during the third quarter of 2013, compared to 201 in the prior-year period.
Since launching its commercial vehicle sales and leasing business in March 2008, the Company has leased over 45,000 trucks.
During the 2013 third quarter, the Company established four additional commercial vehicle financing and service centers, one in Sichuan province, two in Yunnan province, and one in Fujian province. The Company also closed one of its centers in Jiangsu province. As of September 30, 2013, AutoChina operated 538 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.
Revenues
Total revenues for the third quarter ended September 30, 2013, were $176.4 million, a 140.6% increase from $73.3 million in the prior-year period.
Commercial vehicle revenues increased 204.0% to $159.5 million from $52.5 million in the prior-year period, primarily as a result of the increase in new leases initiated during the period. The increase in commercial vehicle revenues was also a result of an increase in average price per vehicle, from $45,500 per vehicle in the 2012 third quarter to $50,400 per vehicle in the 2013 third quarter.
The Company reported finance revenue of $10.6 million, or 6.0% of total revenues, during the third quarter of 2013, compared to $16.4 million in the prior-year period, as a result of the decrease in the total outstanding number of commercial vehicle sales, servicing, leasing and support contracts in effect and a decrease in the effective interest rate on leases during the three months ended September 30, 2013, compared to the third quarter of 2012.
Once a lease term ends, a customer can elect to continue to participate in AutoChina's service and support network, and the Company will charge service and support fees on a monthly basis when the services are rendered. As of September 30, 2013, owners of 1,501 vehicles continued to pay for services after the termination of the direct financing and sales-type lease, representing a retention rate of approximately 5.0%.
The Company launched its own insurance agency business in December 2011 and has signed agreements with seven major insurance carriers in China. All of AutoChina's branch locations are each licensed to sell insurance from these carrier partners. The Company's insurance related revenue increased 35.5% to $6.0 million during the period from $4.4 million in the prior-year period.
Rent and property management revenue from the Company's newly commenced office leasing business totaled $242,000. The office leasing business did not exist in the prior-year period.
Gross Profit/Margin
Cost of sales during the period totaled $157.8 million, compared to $51.5 million in the prior-year period, as a result of the increased number of leases initiated.
Gross profit was $18.6 million in the three months ended September 30, 2013, compared to $21.8 million in the prior-year period.
Gross margin decreased to 10.6% for the three months ended September 30, 2013, from 29.7% in the prior-year period, primarily due to the significantly higher number of new leases established during the period, which increased the revenue contributions from the lower-margin initial establishment of new leases relative to the higher-margin monthly amortized finance income.
AutoChina expects margins to improve as these new leases generate finance income over the next two years, increasing the percentage of revenues from finance and insurance income.
Net Income
Net income in the three months ended September 30, 2013, was $3.3 million, or $0.14 per diluted share based on 23.6 million diluted weighted average shares outstanding, compared to $4.5 million, or $0.19 per share based on 23.5 million diluted weighted average shares outstanding, in the three months ended September 30, 2012.
Adjusted EBITDA
Adjusted EBITDA, which is EBITDA excluding stock-based compensation and accretion of stock repurchase obligation, was $8.3 million for the quarter ended September 30, 2013, compared to $11.9 million in the prior-year quarter.
See "Non-GAAP Financial Measures" below for a description of Adjusted EBITDA.
Nine Months 2013
Revenues for the nine months ended September 30, 2013, were $419.8 million, a 49.3% increase from $281.2 million in the prior-year period. The Company reported $373.2 million in commercial vehicle revenues, and $46.6 million in revenues related to finance, insurance, and real estate.
Gross profit for the nine months ended September 30, 2013, was $51.0 million, representing gross margin of 12.1%, a decrease from gross margin of 25.5% for the same period in 2012, which is primarily due to reasons stated in the 2013 third quarter financial review.
Net income for the nine months ended September 30, 2013, was $8.0 million, or $0.34 per share based on 23.7 million diluted weighted average shares outstanding, compared to $21.0 million, or $0.89 per share based on 23.7 million diluted weighted average shares outstanding, in the prior-year period.
Adjusted EBITDA for the nine months ended September 30, 2013, was $22.5 million, compared to $43.5 million in the prior-year period.
At September 30, 2013, AutoChina's cash and cash equivalents (not including restricted cash) were $9.5 million, working capital was $66.9 million, total debt was $155.2 million (including due to affiliates and accounts payable, related parties), and stockholders' equity was $245.4 million, compared to $75.8 million, $105.4 million, $170.3 million, and $228.4 million, respectively, at December 31, 2012.
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 September 30, 2013, the Company owned and operated 538 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 EBITDA as net income before interest expense (income), income taxes, depreciation and amortization, as well as the exclusion of stock-based compensation and accretion of stock repurchase obligations. 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.
CONTACT
At the Company
Jason Wang
Chief Financial Officer
(858) 997-0680
The Equity Group Inc.
Carolyne Yu
Senior Associate
(415) 568-2255
Adam Prior
Senior Vice President
(212) 836-9606
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Datum: 13.12.2013 - 23:15 Uhr
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