AutoChina International Reports 2015 First Quarter Financial Results
(firmenpresse) - SHIJIAZHUANG, CHINA -- (Marketwired) -- 06/30/15 -- AutoChina International Limited ("AutoChina" or the "Company") (OTCQB: AUTCF), a leading provider of innovative financing solutions for China's transportation industry, today reported financial results for the first quarter ended March 31, 2015.
1,180 commercial vehicles leased in first quarter of 2015, compared to 2,802 in prior-year period
Of the 1,180 vehicles leased, 397 trucks were leased through AutoChina's store network, and 783 trucks were leased through peer stores.
As of March 31, 2015, the number of AutoChina's commercial vehicle financing and service centers remained unchanged at 555 centers in 26 provinces, municipalities, and autonomous regions in China.
The Company's new electronic payments platform K-Pay is currently generating approximately RMB590 million in third-party transactions per month, and the online marketplace lending platform K-Lend has originated over RMB890 million in loans since its launch in November 2014.
Total revenues of $71.2 million, compared to $158.5 million, as a result of the decrease in commercial vehicle leases initiated during the period, in addition to a growing emphasis on the development of the Company's new Internet-based financing business
Gross profit of $19.3 million, or 27.2% of total revenues, compared to $19.7 million, or 12.5% of total revenues
Net income of $2.7 million, or $0.11 per diluted share, compared to net loss of $2.6 million, or $0.11 per diluted share, which was primarily a result of a one-time $4.35 million litigation expense incurred to settle the SEC lawsuit
Adjusted EBITDA of $9.9 million, an increase of 14.4% from $8.7 million
Mr. Yong Hui Li, Chairman and CEO of AutoChina, stated, "2015 marks an exciting year for our Company as we began a significant transformation of our business. During the 2015 first quarter, we leveraged our network and transportation industry experience to focus on two new Internet-based financial products: K-Pay and K-Lend, which launched at the end of 2014. These products allow us to better meet the various financing needs of our customers throughout China and enable us to serve our customers more efficiently. I am pleased with the initial reception and positive feedback we have received on these new innovative solutions for the transportation industry over the past few months. We expect to continue growing our presence and focus on Internet-based solutions and small business lending, and will also continue to explore ways in which we can better serve our customer base."
Mr. Li continued, "We believe AutoChina has established a firm foundation within the commercial vehicle industry over the course of the past eight years and is well positioned to take advantage of the growing need for innovative financing solutions within the greater transportation industry. Our commercial vehicle financing product continues to contribute the largest portion of our Company's revenue, and it has allowed us to establish a network across China through which we can address the financial needs of our customers through new and growing initiatives. Our goal is to help our customers grow their businesses by increasing productivity and convenience, and we are optimistic about the future as we enter this next phase of the Company's evolution."
The Company leased 1,108 commercial vehicles in the first quarter of 2015, compared to 2,802 in the prior-year period. Of the 1,108 vehicles leased during the 2015 first quarter, 397 trucks were leased through AutoChina's store network, and 783 trucks were leased through peer stores. The year-over-year decrease in commercial vehicle leases initiated was largely due to the Company's focusing its efforts on the newly launched K-Pay and K-Lend products, as well as a slowdown in heavy truck sales throughout China. The China Association of Automobile Manufacturers reported a 33.7% year-over-year reduction in heavy-duty truck sales in the first quarter of 2015. Within this sector that AutoChina serves, market concentration among the largest manufacturers, such as Dongfeng Motor, Sinotruck, and Beiqi Foton, remained high. The sales cycle was largely affected by a slower pace of construction projects and economic development throughout the country.
At March 31, 2015, the Company had 23,069 leased vehicles under its sales-type leasing program. Since launching its commercial vehicle sales and leasing business in March 2008, the Company has leased over 66,000 trucks.
The Company repossessed 100 vehicles whose lessees had defaulted on installment payments, sold 77 repossessed vehicles (repossessed in the quarter or in prior periods), and recognized 20 lost vehicles during the quarter ended March 31, 2015. In comparison, there were 67 vehicles repossessed, 113 vehicles sold and 7 lost vehicles recorded in the quarter ended March 31, 2014.
As of March 31, 2015, the number of AutoChina's commercial vehicle financing and service centers remained unchanged at 555 centers in 26 provinces, municipalities, and autonomous regions in China. 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.
At the end of 2014, AutoChina officially launched its electronic payments platform K-Pay () throughout China and is currently generating approximately RMB590 million in transactions per month. K-Pay was developed to provide a convenient method for customers to make electronic payments and for the Company to make credit advances to its customers, allowing customers to pay for their everyday operating needs at participating merchants within the K-Pay network. AutoChina earns transaction fees through its K-Pay platform. As of March 31, 2015, the K-Pay network had over 30,000 registered users (individuals and merchants), and the Company continues to actively market K-Pay to potential customers and merchants in the transportation industry in an effort to increase the user base.
The Company also launched its online marketplace lending platform K-Lend () nationwide, which has originated over RMB890 million in loans since its initial launch in November 2014. AutoChina created K-Lend to be an online lending marketplace that provides short-term operating capital for small businesses in the transportation industry. K-Lend is also a platform through which AutoChina can originate loans and then sell the loans to the public. Currently, individuals may invest on the K-Lend platform and earn an annual interest rate of 8.5%. AutoChina earns origination fees on K-Lend loans.
Revenues
Total revenues for the first quarter ended March 31, 2015, were $71.2 million, compared to $158.4 million in the prior-year period.
Commercial vehicle revenue decreased to $52.1 million, compared to $141.5 million in the prior-year period, primarily as a result of a decrease in new commercial vehicle leases initiated during the period. The revenue decrease was also impacted by a decrease in average price per vehicle, from $50,500 per vehicle in the 2014 first quarter to $44,200 per vehicle in the 2015 first quarter. The decrease in average price per vehicle is a result of a higher proportion of leases originated through the Company's new peer stores business, whose trucks typically are leased without a trailer as opposed to trucks leased directly through AutoChina's own store network, which are usually leased with a trailer.
Finance revenue increased 22.2% to $14.7 million, or 20.7% of total revenues, during the first quarter of 2015, from $12.1 million in the prior-year period, as a result of the increase in the total outstanding number of commercial vehicle sales, servicing, leasing and support contracts in effect. The peer stores business and K-Lend also contributed to the increase in finance revenue as these businesses did not exist in the prior-year period.
Insurance and other revenue was $2.2 million, compared to $4.4 million in the prior-year period, primarily as a result of a decrease in the number of trucks leased directly from AutoChina's stores during the period as compared to those leased through peer stores for which it does not sell the truck insurance.
Property lease and management revenue from the Company's office-leasing business totaled $2.1 million, compared to $452,000 in the prior-year period. This business commenced in April 2013.
Gross Profit/Margin
Gross profit was $19.3 million in the three months ended March 31, 2015, compared to $19.7 million in the prior-year period.
Gross margin increased to 27.2% for the three months ended March 31, 2015, from 12.5% in the prior-year period, primarily due to the higher number of leases outstanding and lower number of new leases initiated during the period, which resulted in a higher proportion of monthly amortized finance income. Increased property lease and management revenue also contributed to the increase in gross margin.
Net Income
Net income was $2.7 million, or $0.11 per diluted share based on 24.3 million diluted weighted average shares outstanding, in the three months ended March 31, 2015, compared to a net loss of $2.6 million, or $0.11 per share based on 23.5 million diluted weighted average shares outstanding, in the three months ended March 31, 2014. The net loss during the three months ended March 31, 2014, was primarily the result of a one-time $4.35 million litigation expense incurred to settle the SEC lawsuit.
Adjusted EBITDA
Adjusted EBITDA, which is EBITDA excluding stock-based compensation and the previously mentioned one-time litigation expense, increased 14.4% to $9.9 million for the quarter ended March 31, 2015, compared to $8.7 million in the prior-year quarter.
See "Non-GAAP Financial Measures" below for a description of Adjusted EBITDA.
At March 31, 2015, AutoChina's cash and cash equivalents (not including restricted cash) were $30.5 million, working capital was $167.0 million, total debt was $318.7 million (including due to affiliates and accounts payable, related parties), and stockholders' equity was $264.8 million, compared to $26.0 million, $141.5 million, $327.5 million, and $263.1 million, respectively, at December 31, 2014.
AutoChina International Limited focuses on providing innovative financing solutions for China's transportation industry. Founded in 2005, we are China's largest commercial vehicle sales, servicing, leasing, and support network. As of March 31, 2015, the Company owned and operated 555 commercial vehicle financing centers in 26 provinces, municipalities, and autonomous regions across China, and primarily provides sales-type leasing and support services for local customers. The Company also operates an electronic payments platform called K-Pay () and an online marketplace lending platform called K-Lend (). The Company's website is . AutoChina trades on the OTCQB venture stage marketplace for early stage and developing U.S. and international companies. OTCQB companies are current in their reporting and undergo an annual verification and management certification process.
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 one-time litigation expenses. 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 associated therewith. 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.
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.
Jason Wang
Chief Financial Officer
(858) 997-0680
The Equity Group Inc.
Carolyne Y. Sohn
Senior Associate
(415) 568-2255
Adam Prior
Senior Vice President
(212) 836-9606
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Datum: 30.06.2015 - 20:05 Uhr
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