China TransInfo Technology Corp. Announces Record Fourth Quarter and 2008 Year End Results

- Revenue and net income up 147.5 and 150.9%, respectively - Fully diluted EPS reaches $0.53

BEIJING, March 25 /PRNewswire-Asia-FirstCall/ -- China TransInfo Technology Corp., (NASDAQ: CTFO) ("China TransInfo" or "the Company"), a leading provider of public transportation information systems technology and comprehensive solutions in the People's Republic of China ("PRC"), today reported its financial results for the fourth quarter and year ended December 31, 2008.

    Fourth Quarter 2008 Highlights
    -- Revenue increased 176.1% year-over-year to a record $10.7 million
    -- Gross profit increased 160.2% year-over-year to $6.1 million
    -- Income from operations increased 135.9% year-over-year to $4.1 million
    -- Net income increased 404.4% year-over-year to $4.1 million, or $0.19
       per fully diluted share
    -- Entered into a cooperative agreement with China Mobile Ltd. Dalian
       Branch to jointly invest in the installation of in-taxi LED GPS
       security surveillance devices on 6,000 taxis in Dalian.
    -- Attended Roth Capital "China Comes to Vegas" conference in Las Vegas,

    Full Year 2008 Highlights
    -- Revenue increased 147.5% year-over-year to a record $29.4 million.
    -- Gross profit increased 164.0% year-over-year to $16.5 million, or 56.2%
       of revenues
    -- Operating income grew 135.4% year-over-year to $11.4 million
    -- Net income increased 150.9% to $11.1 million, or $0.53 per fully
       diluted share

"China TransInfo achieved several historical milestones in 2008 in terms of both our business operations and corporate development," stated Mr. Shudong Xia, chief executive officer of China TransInfo. "We have made remarkable progress in several core areas of our business operations, including being awarded the Olympic Games Traffic GIS Application System project and the expansion of our taxi media business in several domestic large cities, allowing us to achieve record financial results with solid top and bottom line growth. In addition to strong organic growth, China TransInfo acquired majority ownership of China TranWiseway and Dajian Zhitong, and full ownership of Shanghai Yootu. This has allowed us to strengthen our foundation for further expansion in the areas of transportation information services, taxi media, and real time traffic data technology and services."

"With respect to our corporate development, we successfully raised $15 million from a private placement and upgraded to Nasdaq Capital Market in the summer of 2008. Furthermore, with the addition of experienced independent directors and a new chief financial officer, we have raised the level of oversight and improved our corporate governance."

Fourth Quarter 2008 Results

For the quarter ended December 31, 2008, revenues were $10.7 million, a 176.1% increase from $3.9 million posted during the same quarter in 2007. This was primarily due to an increase in sales of the Company's products and applications in the transportation business segment, which accounted for 59.1% of the total revenues in the quarter. The remaining revenue came from the Digital City sector, Land & Resources sector, and other business segments.

The Company's gross profit increased 160.2% to $6.1 million in the fourth quarter of 2008, compared to $2.3 million a year ago. Gross margin was 56.9% in the fourth quarter of 2008, compared to 60.3% during the same period in 2007. The decrease in gross margin was mainly due to the execution of lower-margin contracts from business segments outside of the transportation sector in the fourth quarter of 2008.

Selling, general and administrative expenses in the fourth quarter of 2008 were $2.0 million, up from $0.6 million in the fourth quarter of 2007. Selling expenses were $0.7 million, compared with $0.2 million in the same period of 2007. The significant increase in selling expenses was primarily due to expansion of our business during the fourth quarter of 2008. Administrative expenses were $1.3 million in the three months ended December 31 2008, up from $0.4 million in the same period of 2007. The increase of administrative expenses was mainly attributable to increased staffing and expenses associated with being a public company.

Operating income increased 135.9% to $4.1 million, or 38.2% of revenues, compared to $1.7 million, or 44.7% of revenues, in the fourth quarter of 2007.

Other income was $0.2 million in the fourth quarter of 2008, compared with other expense of $0.5 million in the fourth quarter of 2007. Other expense in the year ago period, was mainly attributed to non-cash expenses from the decrease in fair value of the Company's warrant liability.

Net income increased to $4.1 million in the fourth quarter of 2008, or $0.19 per fully diluted share, as compared to net income of $0.8 million, or $0.04 per fully diluted share, during the same period in 2007. Weighted average fully diluted shares outstanding increased to 22.3 million shares in the fourth quarter of 2008 from 19.9 million shares in the fourth quarter of 2007 as a result of the acquisition and issuance of additional shares from a private placement in July 2008.

Full Year 2008 Results

Revenues for 2008 were $29.4 million, up 147.5% from $11.9 million in 2007. Gross profit was $16.5 million or 56.2% of revenues, up 164.0% from $6.3 million, or 52.7% of revenues in 2007. Operating income was $11.4 million, or 38.9% of revenues, up 135.4% from $4.9 million, or 40.9% of revenues, in 2007. Net income was $11.1 million, or $0.53 per fully diluted share, as compared to net income of $4.4 million, or $0.28 per fully diluted share, in 2007. Weighted average fully diluted shares outstanding increased to 20.9 million shares in 2008 from 15.7 million shares in 2007 due to a private placement financing completed in July 2008.

Financial Condition

As of December 31, 2008 cash totaled $16.1 million and working capital was $32.7 million, up from $16.5 million at December 31, 2007. The Company did not have any long-term debt at the end of 2008. Stockholders' equity stood at $46.2 million at the end of 2008, as compared to $19.7 million at the end of 2007. Cash flow from operating activities increased from $0.09 million in 2007 to $2.5 million in 2008.

    Recent Events
    -- January 2009 - Through its majority owned subsidiary Dalian Dajian
       Zhitong Information Service Co., Ltd. (Dajian Zhitong), China TransInfo
       has entered into a five-year taxi. advertisement placement agreement
       with Dalian Liyang Media Limited ("Dalian Liyang").
    -- February 2009 - China TransInfo completed its corporate restructuring
       using a VIE arrangement designed to allow it to engage in certain
       restricted businesses in China.
    -- March 2009 - The Company signed a contract with Mapbar, a leading
       mapping software provider in China, to provide real-time traffic data
       mapping software add-ons to Motorola China mobile phones.
    -- March 2009 - China TransInfo attended the International Exhibition on
       Infrastructure, Traffic Management, Safety and Parking in Shanghai.

Business Outlook

"As we step into 2009, the domestic and international business environment has seen dramatic changes compared to last year. However, we believe that the market for our products and services offers tremendous growth potential going forward. The aggressive $586 billion (RMB 4 trillion) economic stimulus plan initiated by the Chinese central government will likely act as a catalyst toward the development of the transportation information industry in China," said Mr. Xia. "As a result, we are confident that 2009 will bring another year of continued growth. We plan to increase emphasis on technology research and development in 2009 to maintain our leadership position in the market over the long term. In addition, we intend to build on the series of acquisitions we made in 2008, further expand our business and improve our brand recognition on a nationwide basis."

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