China Yida Announces Second Quarter 2012 Results

13 Aug, 2012, 08:00 ET from China Yida Holding Company

FUZHOU, China, Aug. 13, 2012 /PRNewswire-Asia-FirstCall/ -- China Yida Holding Company (Nasdaq: CNYD) ("China Yida"or the "Company"), a diversified tourism and entertainment enterprise in China, today announced financial results for the second quarter ended June 30, 2012.

Second Quarter 2012 Results

  • Total net revenue was $7.4 million, a decrease of 32.5% compared to $11.0 million in the year-ago period
  • Net revenue from the tourism business was $2.7 million, an increase of 6.1% year over year, with a gross margin of 35.8%
  • Net revenue from the media business was $4.8 million, a decrease of 43.9% year over year, with a gross margin of 64.2%
  • Gross profit was $4.5 million, a decrease of 40.2% compared to $7.5 million in the year-ago period
  • Operating income was $1.8 million, a decline of 64.3% compared to $5.2 million in 2011
  • Net income attributable to China Yida Holding Company was $1.1 million, a decrease of 69.3% compared to $3.5 million in the year-ago period
  • Fully diluted EPS was $0.05 per share compared to $0.18 in the year-ago period

"We are pleased to announce that we achieved a solid increase in tourist traffic to two of our key tourist destinations in the quarter as well as a modest rise in revenue from our tourism segment. We believe that this is a result of the successful execution of a number of initiatives, including our strategy to create scale economies in marketing that extends to all of our properties with the goal to boost tourist traffic to all of our sites," commented Dr. Chen Minhua, Chairman and Chief Executive Officer of China Yida. "We are encouraged to see that visitor traffic to Great Golden Lake has recovered and that visitor traffic to Yunding Park has begun to flourish, although both sites are hampered by ongoing road access issues. Given that the fundamentals in China's dynamic tourism market remain strong, we expect further contribution from our tourism segment growth to the Company's top and bottom line as the summer tourism season draws to a close." 

"We reiterate that our focused growth strategy is the development of unique and attractive tourist destinations to meet the strong fundamentals for tourism in China and we plan upon strategically shifting more fully towards this segment of our business over time," Dr. Chen continued. "The development of three additional properties is on schedule and we expect to commence operation of these new tourist destinations in early 2013."

Second Quarter 2012 Results

Total consolidated net revenue for the Company's two business segments, Tourism and Media, was $7.4 million in the first quarter of 2012, a decrease of 32.5% as compared to $11.0 million in the year-ago quarter. A review of each business segment follows.

Tourism Business

Net revenue from the tourism business was $2.7 million, an increase of 6.1% as compared to $2.5 million in net revenue in the second quarter of 2011. The increase was primarily attributable to an increasing number of tourists visiting both the Great Golden Lake and Yunding Recreational Park tourist destinations, partially offset by the continued downturn at the Hua'An Tulou site. Gross margin from the tourism business was 43.8% for the second quarter of 2012, compared 51.9% in the year-ago quarter, but it improved sequentially from 17.5% in the first quarter of 2012.

The total number of visitors that entered the Great Golden Lake during the second quarter of 2012 was approximated 86,000 as compared to 76,000 in the same period of last year, and up sequentially from 37,000 in the first quarter of 2012. The site generated approximately $1.4 million in revenue in the second quarter, up 7.9% from the comparable year-ago quarter.

Yunding Recreational Park attracted 48,000 visitors in the second quarter of 2012, a solid increase from the 14,000 visitors in the second quarter of 2011 and a marked increase from the 23,000 visitors in the first quarter of 2012.  The site generated approximately $1.0 million in revenue in the second quarter of 2012, more than triple the amount generated in the comparable year-ago quarter, and a strong improvement sequentially from $0.5 million generated in the first quarter of 2012. The increase in visitors and revenue at Yunding for the quarter is primarily attributable to enhanced marketing efforts of the Company's travel agency.

The Hua'An Tulou tourist destination received approximately 20,000 visitors, compared to 59,000 visitors in the comparable year-ago quarter, and 38,000 visitors in the first quarter of 2012. The decrease was mainly due to tough market competition from two nearby Tulou clusters in Fujian Province. Hua'An Tulou generated approximately $0.3 million in revenue in the second quarter of 2012, a decrease of 71.7% from $0.9 million in the comparable year-ago quarter.

Media Business

Net revenue from the media business in the second quarter of 2012 was $4.8 million, a decrease of 43.5% from the $8.5 million posted in the comparable period a year ago. Fujian Education Television Channel ("FETV") experienced a 41.5% fall in revenue in the quarter year over year to an estimated $4.6 million due to actions by domestic media authorities restricting the broadcasting manner and content of TV advertising. Revenue from the Company's train media business was an estimated $0.1 million for the first quarter of 2012 as compared to $0.8 million for the first quarter of 2011, as a majority of advertising clients terminated their purchases due to the absence of an automatic broadcasting and monitoring system.

Gross margin for the media business was 69.9% for the second quarter of 2012, as compared to 73.2% in the comparable year-ago quarter. The decrease in gross margin was primarily attributable to the fall-off in revenue generated from the railway media broadcasts as well as the increase in contracting costs associated with FETV's commercial airtime.

Consolidated Operating Results

Gross profit for China Yida's consolidated operations was $4.5 million in the second quarter of 2012, representing a gross profit margin of 60.6%, compared to gross profit of $7.5 million and a gross margin of 68.4% for the comparable period of 2011.

Total operating expenses increased by 12.8% to $2.6 million in the second quarter of 2012, compared with $2.3 million in the second quarter of 2011. This increase was primarily attributable to a 20.9% jump in selling expenses, which increased from $1.2 million to $1.5 million, due to higher marketing and operating expenses at Yunding Park compared to the same period last year. Operating income decreased by 64.3% to $1.8 million in the second quarter of 2012 compared with $5.2 million in the year ago quarter.

Net income attributable to China Yida Holding Company for the second quarter of 2012 was $1.1 million, or $0.05 per diluted share, as compared with $3.5 million, or $0.18 per diluted share, for the second quarter of 2011.

Six Month Results

Total net revenue decreased by 33.5% to $15.1 million for the six months ended June 30, 2012, compared with $22.8 million for the six months ended June 30, 2011. Net revenue from advertising decreased by 40.3% to $11.0 million, compared with $18.4 million for the six months ended June 30, 2011. Net revenue from the tourism business decreased by 5.1% to $4.2 million, compared with $4.4 million for the six months ended June 30, 2011.

Gross profit for the first six months of 2012 decreased 40.4% year over year to $9.4 million from $15.8 million in the first six months of 2011. The gross margin for the first six months of 2012 was 62.0% as compared to 69.3% in the year-ago period. Operating income decreased by 61.7% to $4.3 million in the first six months of 2012, compared with $11.3 million in the first six months of 2011.

Net income for the six months ended June 30, 2012 was $2.2 million, or $0.11 per fully diluted share, as compared to net income of $7.4 million, or $0.38 per share, for the comparable period of 2011.

Financial Condition

As of June 30, 2012, the Company had $12.1 million in cash and cash equivalents. Working capital was $1.7 million with a current ratio of 1.1. As of June 30, 2012, the Company had total debt of $40.0 million.  Shareholders' equity was $161.3 million at the end of the second quarter of 2012 as compared to $157.9 million at the end of 2011.

China Yida generated $8.2 million in cash flow from operating activities in the second quarter of 2012 and spent $3.2 million on investing activities. The Company received $3.4 million in proceeds from long-term bank loans in the second quarter of 2012 to fund the development of its tourism destinations.

Business Update

The Company experienced reasonably good attendance at its Great Golden Lake and Yunding Recreation Park tourist destinations in the second quarter of 2012 attributable to the onset of the summer tourism season and despite still-difficult road access to both sites. Tourist traffic to the Great Golden Lake increased by approximately 13% from the comparable year-ago quarter although the road to Shangqing River is still under construction and visitors must now use a rougher, more difficult road.  It is anticipated that the road construction by the local government will be completed in early 2013.  The natural view and tourism facilities at the Great Golden Lake destination have now fully recovered from the severe summer floods of 2010.  

Yunding Recreational Park continued to see strong progress as tourist traffic was up in the second quarter of 2012 almost two and a half times the level seen in the comparable year-ago quarter.  However, tourist traffic is still below that of Yunding's designed capacity since the site is also hampered by poor road access.  However, the new expressway connecting Fuzhou to Yongtai Town is being built by the local government and is expected to be completed by early 2013.  In the meantime, Management has been enhancing its marketing efforts as well as developing second-stage entertainment attractions to further enrich tourists' visiting experience. The Company is planning to put its recently constructed guest cottages into operation the third quarter of 2012 which will enable visitors to extend their stay at Yunding. The new restaurants in Gorges are currently in operation and valley rafting facilities began at the site at the end of June.  In addition, the camping center and shopping plaza are both under development.

The increase in tourism segment revenue at both the Great Golden Lake and Yunding Recreational Park was partially offset by the decrease in revenue at the Hua'An Tulou tourism destination, attributable to strong competition among the homogeneous tourism destinations, Nanjing Tulou Cluster and Yongding Tulou Cluster.  The Company plans upon utilizing its travel agency to promote the site as well as offer more promotions in Xiamen City.  China Yida's tourism marketing center designs and executes proactive marketing strategies that include developing creative and constructive relationships with travel agencies and explores new markets for its tourist destinations.

As of June 30, 2012, China Yida has made significant progress in the development of its three new tourism destinations in Anhui and Jiangxi Provinces, the Ming Dynasty Entertainment World in Bengbu City, Anhui province, the China Yang-sheng (Nourishing Life) Paradise in Zhangshu City, Jiangxi province, and the City of Caves in Fenyi City, Jiangxi province.  The development and construction of these new tourist destinations are in line with the Company's schedule. In the second quarter of 2012, the Company invested approximately $0.5 million in the acquisition of land use rights and approximately $2.6 million in the construction of tourism facilities for these new tourist destinations.

Management believes that it can finance all of its ongoing capital expenditures from cash on hand, cash from operations and bank loans secured against its land bank. Entering 2012, new construction and development was adversely affected by more-than-normal rainy days. However, the Company will undertake its best efforts to complete Phase I construction of these new projects and expects to commence operation of the new tourist destinations by the first quarter of 2013.

In terms of its media segment, the Company has previously disclosed that due to strict regulations on certain types of TV advertising, it expects that FETV's advertising revenue may continue to decline further in the quarters ahead.  Beginning on January 1, 2012, the State Administration of Radio Film and Television (SARFT) disallowed any commercial advertisements that are inserted in the midst of certain TV programming with the result that ad time is now minimized and only able to be inserted at a program's end.

The Company's strategic plan is to transition from what is currently a media and tourism company to one that is primarily a tourist company, where revenues derived from its tourism properties account for an ever-increasing percentage of its total revenues.  China Yida foresees diverse revenue streams emanating from its tourist properties which the Company expects will drive a sustainable level of revenue and earnings growth.

Conference Call

China Yida will conduct a conference call at 9:00 a.m. Eastern Time (ET) on Monday, August 13, 2012, to discuss its financial results for the second quarter ended June 30, 2012. To participate in the live conference call, please dial any of the following numbers five to ten minutes prior to the scheduled conference call time.

Toll-Free Dial-In Number:  

US                                     

866-395-5819

China, Domestic                

400-682-8609

Hong Kong                       

800-966-253

Singapore                          

800-101-1512

International callers can also dial +1-706-643-6986.  

The Conference ID for this call is 16778586.  

If you are unable to participate in the call at this time, a replay will be available for two weeks starting on Monday, August 13, 2012 at 12:00 p.m. ET. To access the replay, dial 855-859-2056 or 404-537-3406, international callers dial +1-800-585-8367. The Conference ID is 16778586.

About China Yida

China Yida is a leading tourism and media enterprise focused on China's fast-growing leisure industry and headquartered in Fuzhou City, Fujian province of China.  The Company provides tourism management services and specializes in the development, management and operation of natural, cultural and historic scenic sites. 

China Yida currently operates the Great Golden Lake tourist destination (Global Geopark), Hua'An Tulou tourist destination (World Culture Heritage) and China Yunding Park (National Park).  China Yida is also developing three additional tourism projects, Ming Dynasty Entertainment World, China Yang-sheng (Nourishing Life) Tourism Project and the City of Caves.

The Company's media business provides operations management services including content and advertising management for the Fujian Education Television Station ("FETV"), and "Journey through China on the Train", an advertisement-embedded travel program. 

For further information, please contact the Company directly, or visit its Web site at http://www.yidacn.net.

Forward-Looking Statements

Certain statements in this press release that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by the use of words such as "anticipate," "believe," "expect," "future," "may," "will," "would," "should," "plan," "projected," "intend," and similar expressions. Such forward-looking statements, involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of China Yida Holding Co., Inc. (the "Company") to be materially different from those expressed or implied by such forward-looking statements. The Company's future operating results are dependent upon many factors, including but not limited to: (i) the Company's ability to obtain sufficient capital or a strategic business arrangement; (ii) the Company's ability to build and maintain the management and human resources and infrastructure necessary to support the anticipated growth of its business; (iii) competitive factors and developments beyond the Company's control; and (iv) other risk factors discussed in the Company's periodic filings with the Securities and Exchange Commission, which are available for review at www.sec.gov.

Contact: 

China Yida Holding  

CCG Investor Relations

Jocelyn Chen  

Crocker Coulson, President

Phone: +86 591 28082230  

Phone: + (1) 646-213-1915

Email: ir@yidacn.net  

Email: Crocker.Coulson@ccgir.com

 

FINANCIAL TABLES FOLLOW

 

CHINA YIDA HOLDING CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(UNAUDITED)

Three Months Ended June 30,

 Six Months Ended June 30,

2012

2011

2012

2011

Net revenue

  Advertisement

$

4,762,541

$

8,484,717

$

10,957,060

$

18,353,091

  Tourism

2,652,149

2,498,979

4,188,339

4,414,082

Total net revenue

7,414,690

10,983,696

15,145,399

22,767,173

Cost of revenue

  Advertisement

1,431,408

2,271,732

2,990,408

4,706,554

  Tourism

1,491,741

1,202,363

2,759,334

2,291,764

Total cost of revenue

2,923,149

3,474,095

5,749,742

6,998,318

Gross profit

4,491,541

7,509,601

9,395,657

15,768,855

Operating expenses

  Selling expenses

1,504,155

1,244,427

2,647,120

2,108,318

  General and administrative    expenses

1,144,052

1,102,585

2,423,800

2,369,195

Total operating expenses

2,648,207

2,347,012

5,070,920

4,477,513

Income from operations

1,843,334

5,162,589

4,324,737

11,291,342

Other income (expense)

  Other expense, net

(75,958)

(12,439)

(114,667)

(17,782)

  Interest income

13,859

25,284

20,573

47,416

  Interest expense

(55,231)

(9,358)

(119,491)

(201,758)

Total other expenses

(117,330)

3,487

(213,585)

(172,124)

Income before income tax and non-controlling interest

1,726,004

5,166,076

4,111,152

11,119,218

Less: Provision for income tax

720,133

1,712,056

2,006,321

3,717,746

Net income

1,005,871

3,454,020

2,104,831

7,401,472

Net loss attributed to non-controlling interest

63,911

31,529

131,214

43,163

Net income attributable to China Yida Holding Co.

$

1,069,782

$

3,485,549

$

2,236,045

$

7,444,635

Net income

$

1,005,871

$

3,454,020

$

2,104,831

$

7,401,472

Other comprehensive income

  Foreign currency translation gain

83,727

2,524,447

1,234,044

3,375,966

Comprehensive income

1,089,598

5,978,467

3,338,875

10,777,438

Comprehensive loss attributable to non-controlling interest

60,743

20,044

83,409

68,684

Comprehensive income attributable to China Yida Holding Co.

$

1,150,341

$

5,998,511

$

3,422,284

$

10,846,122

Earnings per share

- Basic

$

0.05

$

0.18

$

0.11

$

0.38

- Diluted

$

0.05

$

0.18

$

0.11

$

0.38

Weighted average shares outstanding

- Basic

19,551,785

19,551,785

19,551,785

19,551,785

- Diluted

19,551,785

19,634,421

19,551,785

19,792,873

 

CHINA YIDA HOLDING CO. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

June 30,

December 31,

2012

2011

(UNAUDITED)

(AUDITED)

ASSETS

Current assets

  Cash and cash equivalents

$

12,137,978

$

5,684,847

  Accounts receivable

210,466

129,849

  Other receivables, net

399,826

4,940,389

  Advances and prepayments

1,609,763

1,881,427

  Prepayment - current portion

366,606

207,117

    Total current assets

14,724,639

12,843,629

  Property and equipment, net

109,620,277

110,593,580

  Construction in progress

31,316,154

25,964,029

  Intangible assets, net

45,574,544

32,355,010

  Long-term prepayments

4,526,790

12,758,763

  Deferred tax assets

-

104,078

    Total assets

$

205,762,404

$

194,619,089

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

  Short-term loans

$

2,536,100

$

943,619

  Long-term debt, current portion

6,169,063

3,761,894

  Accounts payable

57,119

91,385

  Current obligation under airtime rights commitment

2,700,946

2,359,169

  Accrued expenses and other payables

778,223

638,175

  Taxes payable

782,107

1,223,528

  Deferred tax liabilities - current

-

67,644

    Total current liabilities

13,023,558

9,085,414

  Long-term obligation under airtime rights commitment

135,759

1,548,928

  Long-term debt

31,283,697

26,040,732

    Total liabilities

44,443,014

36,675,074

Commitments and contingencies

Equity

Preferred stock ($0.001 par value, 10,000,000 shares authorized, none issued and outstanding)

-

-

Common stock ($0.0001 par value, 100,000,000 shares authorized, 19,551,785 shares issued and outstanding as of June 30, 2012 and December 31, 2011, respectively)

1,955

1,955

Additional paid in capital

49,165,665

49,129,165

Accumulated other comprehensive income

13,670,355

12,484,116

Retained earnings

89,951,227

87,715,182

Statutory reserve

2,549,330

2,549,330

Total China Yida Holding, Co. Stockholders' equity

155,338,532

151,879,748

Non-controlling interest

5,980,858

6,064,267

Total equity

161,319,390

157,944,015

Total liabilities and equity

$

205,762,404

$

194,619,089

 

CHINA YIDA HOLDING CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

For The Six Months Ended June 30,

2012

2011

 CASH FLOWS FROM OPERATING ACTIVITIES

 Net income 

$

2,104,831

$

7,401,472

   Adjustments to reconcile net income to net cash provided by operating activities:

   Depreciation

2,034,363

1,695,433

   Amortization

1,245,421

1,874,315

   Stock based compensation

36,500

501,993

   Deferred tax expense

36,434

43,060

   Amortization of financing costs

115,032

-

 Changes in operating assets and liabilities:

   Accounts receivable

-79,674

-37,502

   Other receivables, net

4,583,908

-262,358

   Advances and prepayments

286,737

-351,761

   Accounts payable

-35,019

-1,098,997

   Accrued expenses and other payables

135,164

107,172

   Taxes payable

-451,484

-480,791

 Net cash provided by operating activities    

10,012,213

9,392,036

 CASH FLOWS FROM INVESTING ACTIVITIES

 Additions to property and equipment

-164,384

-4,092,885

 Additions to construction in progress

-5,178,448

-1,454,280

 Additions to intangible asset 

-4,657,796

-

 Increase in long-term prepayments for acquisition of property, equipment and land use rights

-822,846

-1,169,102

 Net cash used in investing activities   

-10,823,474

-6,716,267

 CASH FLOWS FROM FINANCING ACTIVITIES

 Repayment of loan from non-controlling interest

-

244,618

 Repayment of obligation under airtime rights commitment

-1,103,201

-893,665

 Payment of deferred financing costs

-675,266

-

 Proceeds from short-term loans

1,586,622

-

 Proceeds from long-term loans

9,519,730

10,702,055

 Repayment of long-term loans

-2,096,607

-91,732

 Net cash provided by financing activities      

7,231,277

9,961,276

 EFFECT OF EXCHANGE RATE CHANGES ON CASH 

33,116

287,700

 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

6,453,131

12,924,745

 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

5,684,847

7,146,684

 CASH AND CASH EQUIVALENTS, ENDING OF PERIOD

$

12,137,978

$

20,071,429

 SUPPLEMENTAL DISCLOSURES:

 Non-cash investing activities:

      Transfer from advances and prepayments to intangible assets

$

9,565,542

$

-

 Cash paid during the period for:

      Income tax 

$

2,343,855

$

2,078,619

      Interest 

$

1,479,846

$

437,394

 

The notes in the Company's 2012 10-Q are an integral part of these consolidated financial statements.

 

SOURCE China Yida Holding Company



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