Tongxin International Ltd. Updates Shareholders on 2009 Audit
- Company will not meet 20-F Filing Deadline
- Company expects to report 2009 revenues of $121.6 Million
CHANGSHA, China, July 15 /PRNewswire-Asia-FirstCall/ -- Tongxin International Ltd. (Nasdaq: TXIC), a China-based manufacturer of engineered vehicle body structures ("EVBS" or "truck cabs") regrets to inform its shareholders that it is unable to publish its Audited Consolidated Financial Statements for the year ended December 31, 2009 within the extended timeframe of July 15, 2010. The Company is in the process of obtaining adequate documentation to support and determine the appropriate accounting treatment of certain related-party transactions of approximately US $7.7 million with a related party, Meihua Bus ("MB"). TXI will file audited financial statements as soon as they become available.
TXI's wholly-owned operating subsidiary is Hunan Tongxin Enterprise Co., Ltd. ("HT") in the People's Republic of China ("PRC"). TXI acquired HT in 2008. When HT sought approval from the PRC to be acquired by TXI, there were concerns that government approval would not be forthcoming unless HT spun off its bus manufacturing business. Therefore, HT spun off its bus manufacturing business which resulted in the creation of MB as a separate company in July 2007.
As a result of the foregoing, the Company's completion of its annual consolidated financial statements and required disclosures are being delayed pending the Company's review of these related-party matters. The Company's Audit Committee has obtained a third-party to assist in obtaining adequate documentation of this review. The Company's Audit Committee and Management have discussed the facts and circumstances of these related-party matters with the Company's independent auditors.
The following unaudited financial information for the year ended December 31, 2009 is included for informational purposes. The Company cautions that the financial information being presented is both unaudited and subject to further review and possible change. Additionally, these results do not provide complete financial information and are subject to audit by the Company's independent auditors. However, subject to the foregoing caveats, the Company believes that the information below represents the best information currently available to the Company's management.
(US$ amounts expressed in thousands, except for share data)
Un-Audited Audited Audited
Ended and as Period May to Period January to
of December December 2008 and April 2008 and
31, 2009 as of December as of April 30,
31, 2008 2008
Sales 121,629 55,770 42,588
Cash 16,493 11,313 5,429
Restricted Cash 4,692 5,836 --
Cash Receipts from
Warrant Exercise 10,732 -- --
Net Loan repayment (4,907) (6,398) 72
Warrant Outstanding 2,876,274 5,022,742 5,031,250
Basic Share 11,846,273 11,294,633 72,521,705
Audited Audited Audited
December 31, December 31, December 31,
2008 2007 2006
Sales 98,358 89,873 66,605
Cash 11,313 1,662 3,582
Restricted Cash 5,836 -- --
Cash Receipts from
Warrant Exercise -- -- --
Net Loan repayment (6,326) (3,960) 2,354
Warrant Outstanding N/A N/A N/A
Basic Share 11,294,633 72,521,705 72,521,705
REVENUES
The Company had total revenues of $121.6 million in 2009 compared to $98.4 million in 2008, representing an increase of $23.3 million or 23.7%. Increased market share was the principal driver of this growth and was evidenced by increased unit shipments of finished cabs and components to new customers as well as an increase in shipments to Vietnam of 4,810 EVBS (including 5 different EVBS models). The Vietnamese automotive market trended towards 15% annual growth in 2009 versus 2008, and the Company expects that this emerging market will continue to grow in 2010. The Company does not anticipate any material changes in prices to customers in this market. The Company's sales were not impacted by the cost reduction of the steel material in 2009.
WARRANTS
The Company had 2,876,274 outstanding warrants that were in-the-money as of December 31, 2009. The Company has 5,022,742 outstanding warrants that were out-of-the-money as of December 31, 2008.
About Tongxin International Ltd.
Tongxin International Ltd., the largest independent supplier of EVBS in China, is capable of providing EVBS for both the commercial truck and light vehicle market segments. The Company also designs, fabricates and tests dies used in the vehicle body structure manufacturing process. EVBS consists of exterior body panels including doors, floor pans, hoods, side panels and fenders. Tongxin maintains a network of 130 customers throughout 20 provinces in China. Headquartered in Changsha, Tongxin also maintains regional manufacturing in Dali, Ziyang and Zhucheng.
FORWARD LOOKING STATEMENTS
Statements contained in this press release, which are not historical fact, constitute "Forward-Looking Statements." Actual results may differ materially due to numerous important factors that are described in Tongxin International's most recent report to the SEC on Form 6-K, which may be revised or supplemented in subsequent reports to the SEC. Such factors include, among others, the cost and timing of implementing restructuring actions, the Company's ability to generate cost savings or manufacturing efficiencies to offset or exceed contractually or competitively required price reductions or price reductions to obtain new business, conditions in the automotive industry, and certain global and regional economic conditions. Tongxin International does not intend or assume any obligation to update any forward-looking statement to reflect events or circumstances after the date of this press release.
For more information, please contact:
COMPANY:
Mr. Rudy Wilson, CEO
Tel: +1-248-593-8330
Email: [email protected]
Ms. Jackie Chang, CFO
Tel: +1-626-660-7117
China: +86-13467553808
Email: [email protected]
Web: http://www.txicint.com
SOURCE Tongxin International Ltd.
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