China Yida Announces Fourth Quarter and Fiscal Year 2011 Results

FUZHOU, China, March 29, 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 fourth quarter and fiscal year ended December 31, 2011.

Full Year 2011 Results and Recent Developments

• Total net revenue decreased 22.6% to $42.2 million, compared to $54.5 million in 2010
• Net revenue from the tourism business decreased 44.4% year over year to $9.2 million, with a gross margin of 45.3%
• Net revenue from the media business decreased 13.0% year over year to $33.0 million, with a gross margin of 74.3%
• Gross profit decreased 32.0% to $28.7 million, compared to $42.2 million in 2010
• Operating income was $19.0 million, compared to $34.2 million in 2010
• Net income attributable to China Yida Holding Company decreased 51.9% to $12.1 million, compared to $25.3 million in 2010
• Fully diluted EPS was $0.62 per share, compared to $1.27 in 2010
• Mr. Yongxi Lin was named the Company's Interim Chief Financial Officer
• Dr. Minhua Chen, the Company's Chairman and CEO, purchased approximately 84,000 shares of the Company's common stock in open market transactions

"Although we were still profitable in a difficult year, our fiscal year 2011 results fell below our expectations reflecting certain challenges associated with our business segments that we are working hard to address. The recovery of tourist traffic to our Great Golden Lake destination has been slower than expected as has traffic to Yunding Recreational Park, as access to both sites is currently limited while modern roads are being built by the local governments. Also, while results from our media segment also fell somewhat due to restrictions imposed by domestic media authorities, our focus, first and foremost, is our tourism business which we are working very hard to grow and develop," Dr. Chen Minhua, Chairman and Chief Executive Officer of China Yida stated.

"We are currently taking steps to maximize the dollars earned from tourists who are visiting our existing destinations.  We are building a new resort at Yunding Park that we hope will contribute to revenue by year-end 2012 and set the stage for a recovery in 2013.  We anticipate that our operating cash flow and our reserve of land provides sufficient liquidity to maintain our development goals in the years ahead.  With the Company operating a strategic mix of properties that yield a diversified revenue stream, and with three exciting projects currently in development, we anticipate a rising and sustainable level of revenue flow in the long run," Dr. Chen added.

Fourth Quarter 2011 results

Total consolidated net revenue for the Company's two business segments, Tourism and Media, decreased 33.2% to $8.2 million in the fourth quarter of 2011 as compared to $12.3 million in the fourth quarter of 2010. A review of each business segment follows.

Tourism Business

Net revenue from the tourism business decreased 13.4% to approximate $1.9 million, compared with approximated $2.2 million in the fourth quarter of 2010. The decrease was primarily due to a decrease in the number of tourists visiting Hua'An Tulou and Yunding Recreational Park. Gross margin from the tourism business was 29.5% for the fourth quarter of 2011, compared to 44.3% a year ago. The year-over-year decrease was due to higher depreciation expenses with the addition of property and equipment (Phase II projects at Yunding Park) to the balance sheet.

The total number of visitors that entered the Great Golden Lake during the fourth quarter of 2011 was approximated 73,000, a modest recovery from 60,000 in the same period of last year. The site generated approximately $1.1 million in revenue in the fourth quarter, up 20.9% from the comparable year-ago quarter. Yunding Recreational Park attracted 14,000 visitors in the fourth quarter of 2011, remaining at approximately the same level as in the previous quarter.  However, the site's attendance decreased from the 25,000 visitors in the fourth quarter of 2010 and therefore, its $0.3 million in revenue generated in the fourth quarter of 2011 represents a decrease of 46.5% from the comparable year-ago quarter. The Hua'An Tulou tourist destination received approximately 39,000 visitors during the fourth quarter of 2011, as compared to 45,000 a year ago. The decrease was mainly due to tough market competition from two other Tulou clusters in Fujian Province. Hua'An Tulou generated approximately $0.5 million in revenue in the fourth quarter, a decrease of 40.4% from the comparable year-ago quarter.

Media Business

Net revenue from the media business in the fourth quarter of 2011 was $6.3 million, a decrease of 37.6% from the $10.1 million posted in the comparable period a year ago. Fujian Education Television Channel ("FETV") experienced a 23.4% fall in revenue in the quarter year over year to an estimated $6.2 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 $145,000 for the fourth quarter of 2011, as compared to $2.5 million for the fourth quarter of 2010, 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 74.3% for the fourth quarter of 2011, as compared to 77.8% 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 $5.3 million in the fourth quarter of 2011, representing a gross margin of 63.8%, compared to $8.8 million and 71.7% for the comparable period of 2010.

Total operating expense increased by 31.8% to $2.5 million in the fourth quarter of 2011, compared with $1.9 million in the fourth quarter of 2010, as a result of marketing expansion, increased stock based compensation expense, and increased management fees for new tourism projects. Operating income decreased by 60.0% to $2.8 million, compared with $7.0 million a year ago.

Net income attributable to China Yida Holding Company for the fourth quarter of 2011 was $1.5 million, or $0.08 per diluted share, as compared with $5.3 million, or $0.26 per diluted share, for the fourth quarter of 2010.

Full Year 2011 Results

Total net revenue was $42.2 million for the full year 2011, a decrease of 22.6% as compared to total net revenue of $54.5 million for the full year 2010. Net revenue from tourism for the full year 2011 was $9.2 million, a decrease of 44.4% as compared to $16.6 million for the full year 2010. The decrease was primarily attributable to the 33.6% decrease in the number of tourists visiting the Great Golden Lake during the year. Net revenue from the media business for the full year 2011 was $33.0 million, a decrease of 13.0% as compared to $37.9 million for the full year 2010, primarily due to actions by domestic media authorities restricting FETV's broadcasting of certain types of TV advertising as well as the instability of railway media broadcast revenue.

Gross profit for 2011 decreased 32.0% year over year to $28.7 million, with a gross margin of 68.0%, as compared to 77.4% in 2010. Operating income for 2011 decreased 44.5% year over year to $19.0 million and EBITDA decreased 33.5% to $25.7 million year over year.  Net income attributable to China Yida Holding Company was $12.1 million or $0.62 per fully diluted share, as compared with a net income of $25.3 million or $1.27 per fully diluted share for 2010.

Financial Condition

As of December 31, 2011, the Company had $5.7 million in cash and cash equivalents. Working capital was $3.8 million with a current ratio of 1.4. As of its fiscal year end 2011, the Company had total debt of $30.7 million.  The Company also had total debt of $30.7 million and $157.9 million in shareholders' equity to close the year 2011 as compared to $133.7 million in shareholders' equity at the end of 2010.

China Yida generated $17.4 million in cash flow from operating activities in 2011 and spent $48.0 million on capital expenditures, in which $22.9 million constituted additions to intangible assets including land use rights. The Company gained $29.7 million in proceeds from long term bank loans in 2011 to fund the development of the tourism destinations. There are $4.71 million in bank loans that will mature in the coming twelve months which the Company plans to replace with new bank loans.

Business Update and 2012 Outlook

In conjunction with strict regulations on certain types of TV advertising, Management expects that FETV's advertising revenue may decline further in 2012.  Beginning in 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.  In addition, it has become challenging to find buyers for advertising on the Company's "Journey through China on the Train" railway program due to the absence of an automatic broadcasting and monitoring system.

The natural view and tourism facilities at the Great Golden Lake destination have almost recovered, though tourist traffic has not yet returned to normal levels. As the local government is currently rebuilding the road to Shangqing River, tourists who seek to visit Great Golden Lake must now travel on a rougher, more demanding road. Therefore, the tourist traffic to Shangqing River is likely to be constrained until at least the beginning of 2013 when it is anticipated that the road will be rebuilt.

Since its grand opening on September 28, 2010, Yunding Recreational Park had admitted approximately 79,000 visitors as of year-end 2011. However, tourist traffic has been much lower than indicated by its designed capacity due to the poor condition of roads that connect to the site. The delayed schedule via the coordinating local governments indicates that the new expressway connecting Fuzhou to Yongtai Town is expected to be completed by the end of 2012. However, the main road connecting the town to Yunding is expected to be completed by June 2012. As tourist traffic will likely remain lower than planned, Management will continue to work on the development of second-stage tourism projects focusing upon entertainment attractions that directly engage tourists. The Company will also seek to open the resort hotel on the property before the completion of the roads.

The Hua'An Tulou destination has experienced an 11.6% decrease in visitor traffic in 2011 relative to 2010. The Company believes that the site will continue to face difficult competition from two similar Tulou clusters in Fujian Province.

As of December 31, 2011, China Yida has made significant progress in the development of its new tourism destinations in Anhui and Jiangxi Provinces, with over 200 million RMB invested in acquisition of land use rights and over 60 million RMB in construction of tourism facilities. Management reaffirms its belief that despite recent setbacks, the Company 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, Management will undertake its best efforts to generate revenues from the new properties by the end of 2012.

China Yida's wholly-owned subsidiary, Fujian Yida Travel Service Co., Ltd., with 18 branches strategically located throughout China, has started to integrate the marketing of the Company's three operating tourist destinations. The Company's current plan is to increase the number of these travel and marketing branches to 24 in 2012.

Conference Call

China Yida will hold a conference call at 9:00 a.m. Eastern Time on Thursday, March 29, 2012 to discuss its fourth quarter and fiscal year 2011 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 +1-706-643-6986. The conference ID for this call is 63839739. If you are unable to participate in the call at this time, a replay will be available for two weeks starting on Thursday, March 29, 2012 at 12:00 p.m. ET. To access the replay, dial 855-859-2056 or 404-537-3406, international callers may dial +1-800-585-8367. The Conference Replay pass-code is 63839739.

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.

FINANCIAL TABLES FOLLOW

The notes in the Company's 2011 10-K are an integral part of these consolidated financial statements.

SOURCE China Yida Holding Company