China Yida Announces Fourth Quarter and Fiscal Year 2010 Results

FUZHOU, China, March 17, 2011 /PRNewswire-Asia-FirstCall/ -- China Yida Holding Company (Nasdaq: CNYD) ("China Yida" or the "Company"), a leading diversified tourism and entertainment enterprise in China, today announced financial results for the fourth quarter and fiscal year ended December 31, 2010.

Full Year 2010 Highlights

• Total net revenue increased 6.4% to $54.5 million, compared to $51.2 million in 2009
• Net revenue from the tourism business decreased 15.7% year over year to $16.6 million, with a gross margin of 74.7%
• Net revenue from the media business increased 20.3% year over year to $37.9 million, with a gross margin of 78.6%
• Gross profit grew 3.9% to $42.2 million, compared to $40.6 million in 2009
• Operating income decreased 0.6% to $34.2 million, compared to $34.4 million in 2009
• Net income attributable to China Yida Holding Company decreased 0.9% to $25.25 million, compared to $25.49 million in 2009
• Fully diluted EPS was $1.27 per share, compared to $1.47 in 2009
• Yunding Park was opened to the public on September 28, 2010
• The Company renewed the contract to operate the Fujian Education TV Channel (FETV) for an additional five years until July 31, 2015
• The Company signed agreements to develop three new tourism projects including the Ming Dynasty Entertainment World in Anhui Province, China Yang-sheng (Nourishing Life) Paradise and the City of Caves in Jiangxi Province
• Closed a registered direct offering of 2,489,721 common shares at a purchase price of $11.50 per share for net proceeds of approximately $28.6 million

Fourth Quarter 2010 Highlights

• Total net revenue decreased 15.1% to $12.3 million, compared to $14.5 million in the fourth quarter of 2009
• Net revenue from the tourism business dropped 62.5% year over year to $2.2 million, with a gross margin of 44.3%
• Net revenue from the media business increased 17.9% year over year to $10.1 million, with a gross margin of 77.8%
• Gross profit decreased 22.4% to $8.8 million, compared to $11.4 million in the same period last year
• Net income attributable to China Yida Holding Company decreased 10% to $5.3 million, compared to $5.9 million in the same period last year
• Fully diluted EPS was $0.26 per share, compared to $0.34 in the fourth quarter of 2009

"Our 2010 results were adversely affected by a significant decline in tourist traffic at our Great Golden Lake destination during the back half of the year, as a result of the summer flash floods. I believe we have a two-phase process to recover from the unexpected damages caused by the floods.  We successfully completed the first phase in early December of last year, that is, we recovered from the physical damages to facilities in the destination and re-opened it to the public.  Now, we are in the second phase which requires us to strengthen the marketing effort to re-build Great Golden Lake's image in order to attract tourist traffic back to previous levels," Dr. Chen Minhua, Chairman and Chief Executive Officer of China Yida stated.

"Despite this setback, I believe we still have a clear growth plan and long-term visibility into the profitability of our business model. In 2010, we renewed our contract to operate FETV for an additional 5 years, we opened Yunding Park, and signed three new tourism projects outside Fujian Province. We also strengthened our management team to support the development of our new tourism destinations. With our business model combining high quality tourism and media assets and a strong pipeline of new tourism destinations under development, we believe that we remain well positioned to deliver positive results for our shareholders in the years ahead," Dr. Chen added.

Fourth Quarter 2010 results

Total net revenue decreased by 15.1% to $12.3 million, compared with $14.5 million in the fourth quarter of 2009.

Tourism Business

Net revenue from the tourism business dropped 62.5% to approximate $2.2 million, compared with approximated $6.0 million in the fourth quarter of 2009. The decrease was primarily attributable to the temporary closure of the Great Golden Lake tourism destination due to the southern China flood. The Company reopened the Golden Lake on July 19 2010 and Shangqing River on December 1, 2010. Gross margin from the tourism business was 44.3% for the fourth quarter of 2010, compared to 60.2% a year ago. The year-over-year decrease was due to the flooding on Great Golden Lake and higher depreciation expenses along with the addition of property and equipment to the balance sheet.

The total number of visitors that entered the Great Golden Lake during the fourth quarter of 2010 was approximated 60,000, compared with approximately 163,000 in the same period of last year. Revenue from the Great Golden Lake totaled approximated $0.817 million for the fourth quarter of 2010.

During the fourth quarter of 2010, Hua'An Tulou accepted approximated 45,000 visitors, and contributed approximated $0.85 million in revenue to the Company, and Yunding Park attracted 25,000 visitors with average spend of RMB142.

Media Business

Net revenue from the media business grew 17.9% to $10.1 million, compared with $8.5 million in the same period of last year. This increase was due to the organic growth of FETV's revenue and the revenue growth generated from the "Journey through China on the Train" program

Gross margin for the media business was 77.8% for the fourth quarter of 2010. The decrease was mainly due to higher production cost for the railway media broadcasting as well as higher cost of acquiring the rights to redistribute FETV's commercial airtime.

Gross profit for China Yida's consolidated operations was $8.8 million in the fourth quarter of 2010, representing a gross margin of 71.7, compared to $11.4 million and 78.4 % for the comparable period of 2009.

Total operating expense increased by 5.5% to $1.9 million in the fourth quarter of 2010, compared with $1.77 million in the fourth quarter of 2009. The Company wrote off $0.4 million on construction in progress due to the flooding.

Operating income decreased by 27.5% to $6.97 million, compared with $9.6 million a year ago. Operating margin for the fourth quarter of 2010 was 56.5%, compared with 66.2% for the fourth quarter of 2009.

Net income attributable to China Yida Holding Company for the fourth quarter of 2010 was $5.35 million, or $0.26 per diluted share, as compared with $5.9 million, or $0.34 per diluted share, for the fourth quarter of 2009.

Full Year 2010 Results

Total net revenue increased by 6.4% to $54.5 million, compared with $51.2 million in 2009.

Net revenue from tourism declined 15.7% to $16.6 million, compared to $19.7 million in 2009. The decrease was primarily attributable to the temporary closure of the Great Golden Lake tourism destination in the back half of the year due to the southern China flood.

Net revenue from the media business increased by 20.2% to $37.9 million, driven by organic growth of FETV's revenue as well as contribution of "Journey through China on the Train", which started generating revenue from the third quarter of 2009.

Gross profit for 2010 increased 3.9% year over year to $42.2 million, with gross margin of 77.4%, as compared to 79.3% in 2009. Operating income for 2010 decreased 0.6% year over year to $34.2 million and EBITDA increased 3.5% to $38.7 million.

Net income attributable to China Yida Holding Company was $25.3 million, or $1.27 per fully diluted share, a decrease of approximated 10% compared with a net income of $25.5 million, or $1.47 per share for 2009.

Financial Condition

As of December 31, 2010, the Company reported $7.1 million in cash and cash equivalents. Working capital was $0.857 million with a current ratio of 1.1. As of December 31, 2010, the Company had $133.7 million in shareholders' equity compared to $77.7 million at the end of 2009.

On January 28, 2010, the Company closed a registered direct offering of 2,489,721common shares at a purchase price of $11.50 per share for aggregate proceeds of approximately $28.6 million and net proceeds of approximately $26.68 million. After giving effect to the registered direct offering, the Company now has 19,551,785 shares of common stock outstanding.

China Yida generated $30.2 million in cash flow from operating activities in 2010 and spent $55 million on capital expenditures, including $51.1 million that was primarily used for the construction of the tourism projects.

2010 Outlook and Guidance

Since the grand opening on September 28, 2010, Yunding Park had admitted approximated 25,000 visitors as of December 31, 2011. The tourist traffic was lower than management's previous expectation because the construction of the expressway connecting Fuzhou and Yunding Park. According to the local government, this expressway is expected to be completed in the first half of 2012. The average expenditure from each tourist to Yunding Park was approximately RMB142 in the fourth quarter of 2010. Yunding Park's peak season is expected to start in late April.

The Company commenced the second phase construction for Yunding Park and expects to open a new restaurant in Gorges by the end of March 2011. It will also introduce Valley Rafting in May, Camping Center in August and a shopping plaza in late 2011. Going forward, in addition to the sale of entry tickets, China Yida expects to generate revenue from catering, entertainment, transportation, shopping, tourism properties and hotel, thus participating in every aspect of the tourism value chain.

The expressway connecting the Great Golden Lake with the Wuyi Mountain has been completed and will shorten the driving time between these destinations to 1.5 hours and hopefully attract part of visitors to the popular Wuyi Mountain. The annual average tourist traffic to the Wuyi Mountain is around 2 million people.

The management expects approximated 5% organic growth for FETV's advertising revenue in 2011. Because the automatic broadcasting and monitoring system is still unavailable on the train,  lower customer satisfaction has affected the growth of advertising sales from "Journey through China on the Train".

Pertaining to the agreements China Yida signed with local governments, the Company was allowed to acquire the land use rights for a total area of approximately 5000 Mu (approximately 824 acres as 1 acre = 6.07 Mu) in Anhui and Jiangxi provinces. The management's goal is to acquire 3000 Mu in 2011 and another 2000 Mu in 2012.

The Company also made progress in the development of its new tourism destinations. Planning and design for The Ming Dynasty Entertainment World in Bengbu City, Anhui has been completed, and at China Yang-sheng (Nourishing Life) Paradise project, in Zhangshu City, Jiangxi Province the Company started road construction to its scenic site. Finally, for "The City of Caves" featuring the largest and most characteristic karst land underground caverns in Xinyu City, Jiangxi Province the Company started road construction as well as first phase construction.

Management reaffirms its belief that, despite the recent setbacks, China Yida can finance all of its on-going capital expenditures from cash on hand, cash from operations and bank loans secured against its land bank.

Conference Call

China Yida will hold a conference call at 09:00 a.m. Eastern Time on Thursday, March 17, 2011 to discuss its fourth quarter and fiscal year 2010 results. To participate in the live conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: 866-395-5819. International callers may dial +1-706-643-8814. The conference ID for this call is 51908856. If you are unable to participate in the call at this time, a replay will be available for two weeks starting on Thursday, March 17, 2010 at 10:00 a.m. ET. To access the replay, dial 800-642-1687, international callers may dial +1-706-645-9291. The Conference Replay pass-code is 51908856.

About China Yida

We, together with our subsidiaries, operate as a diversified entertainment company in the People's Republic of China, headquartered in Fuzhou, Fujian, China. Our business consists of two segments, advertisement and tourism.  Our advertisement segment includes the operation and management of a domestic television channel and outdoor on-train programming. This segment manages the content and re-sells airtime to advertisers and agencies for the television channel, and produces the content for outdoor on-train programming. Our tourism segment develops, operates, manages and markets domestic tourist destinations, including natural, cultural, and historical tourist destinations and theme parks. This segment also creates / designs and constructs new tourist concepts, attractions and properties for our tourist destinations.

Our advertisement segment currently operates and manages the Fujian Education Television Channel ("FETV"), a province wide television channel in Fujian, and the "Journey through China on the Train" programming (or the "Railway Media") on China's high-speed railway networks.

Our tourism segment currently has three destinations that are open to the public. They are (i) the Great Golden Lake tourist destination (the "Great Golden Lake", titled with Global Geopark and the part of China Danxia – a World Natural Heritage Site granted by the United Nations Educational, Scientific and Cultural Organization ("UNESCO") in Taining County, Fujian, (ii) Yunding Recreational Park (a large-scale recreational park, or the "Yunding Park") in Yongtai County, Fujian, and (iii) Hua'An Tulou cluster (or the "Earth Buildings" or the "Tulou", part of Fujian Tulou – a World Cultural Heritage Site granted by UNESCO) in Hua'An County, Fujian.

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.

FINANCIAL TABLES FOLLOW

SOURCE China Yida Holding Company