China Yida Announces Third Quarter 2012 Results PR Newswire FUZHOU, China, Nov. 13, 2012 FUZHOU, China, Nov. 13, 2012 /PRNewswire/ -- 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 third quarter ended September 30, 2012. Third Quarter 2012 Results oTotal net revenue was $6.3 million, a decrease of 43.6% compared to $11.2 million in theyear-ago period oNet revenue from the tourism business was $3.2 million, an increase of 9.3% year over year, with a gross margin of 48.7% oNet revenue from the media business was $3.2 million, a decrease of 61.9% year over year, with a gross margin of 61.0% oGross profit was $3.5 million, a decrease of 54.8% compared to $7.7 million in the year-ago period oOperating income was $0.3 million compared to $4.9 million in the third quarter of 2011. oNet loss attributable to China Yida Holding Company was $1.0 million, compared to net income attributable to China Yida Holding Company of $3.2 million in the year-ago period oFully diluted loss was $0.05 per share compared to earnings $0.16 per share in the year-ago period "We saw a solid level of tourist traffic to two of our key tourist destinations in the third quarter which drove a modest rise in revenue in our tourism segment. However, the quarter marked the expected contraction of our media business, which experienced the full effects of regulations that seriously hamper the means and mode of advertising. As a result, we reported a loss in the quarter and anticipate an eventual further move away from this business segment. Most important, we are committed to our vision of creating a preëminent tourist company and therefore continue to focus our efforts on developing an array of attractive tourist destinations," commented Dr. Minhua Chen, Chairman and Chief Executive Officer of China Yida. "We are especially pleased to see that visitor traffic to Great Golden Lake has stabilized with the site's full recovery and that visitor traffic to Yunding Park has begun to grow. Further, we believe that both tourist destinations have substantially greater visitor potential once ongoing road access issues are resolved," CEO Chen continued. "The development of our three new properties is largely on schedule and we expect to commence operation of these new tourist destinations during the first half of 2013. Given that the fundamentals in China's tourism market remain strong, we are confident that our tourism segment can achieve continued growth and that our strategy of developing distinctive and varied tourist destinations will succeed in the long run." Third Quarter 2012 Results Total consolidated net revenue for the Company's two business segments, Tourism and Media, was $6.3 million in the third quarter of 2012, a decrease of 43.6% as compared to $11.2 million in the year-ago quarter. A review of each business segment follows. Tourism Business Net revenue from the tourism business was $3.2 million, an increase of 9.3% as compared to $2.9 million in net revenue in the third 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 48.7% in the third quarter, compared to 51.8% in the year-ago quarter, but it improved sequentially from 43.8% in the second quarter of 2012. The total number of visitors that entered the Great Golden Lake during the third quarter of 2012 was approximated 114,000 as compared to 110,000 in the same period of last year, and up sequentially from 86,000 in the second quarter of 2012. The site generated approximately $2.0 million in revenue in the third quarter, up 9.7% from the comparable year-ago quarter. The Company believes that visitor traffic to the Great Golden Lake is gradually improving and expects additional potential for growth once a new road that affords main access to the site is completed. Yunding Recreational Park attracted 34,000 visitors in the third quarter of 2012, a solid increase from the 14,000 visitors in the third quarter of 2011. As compared to the second quarter of 2012, visitor traffic decreased by 14,000 as a result of ongoing road construction and unfavorable weather conditions. The site generated approximately $0.9 million in revenue in the third quarter of 2012, more than double the amount generated in the comparable year-ago quarter. 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 18,000 visitors, compared to 50,000 visitors in the comparable year-ago quarter, and 20,000 visitors in the second 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 third quarter of 2012, a decrease from $0.7 million in the comparable year-ago quarter. Media Business Net revenue from the media business in the third quarter of 2012 was $3.2 million, a decrease of 61.9% from the $8.3 million posted in the comparable period a year ago. Fujian Education Television Channel ("FETV") experienced a 60.3% fall in revenue in the quarter year over year to an estimated $3.1 million due to actions by domestic media authorities restricting the broadcasting manner and content of TV advertising. The restricting content of TV advertising included shopping programs, min ads and certain medical advertisements. Revenue from the Company's train media business was an estimated $0.1 million for the third quarter of 2012 as compared to $0.6 million for the third quarter of 2011, as a majority of advertising clients terminated their purchases due to the absence of an automatic broadcasting and monitoring system. The decrease in revenue is in line with the Company's expectation and further decreases may occur in the next few quarters. Gross margin for the media business was 61.0% for the third quarter of 2012, as compared to 74.3% in the comparable year-ago quarter. The decrease in gross margin was primarily attributable to the substantial fall-off in revenue at FETV. Consolidated Operating Results Gross profit for China Yida's consolidated operations was $3.5 million in the third quarter of 2012, representing a gross profit margin of 54.8%, compared to gross profit of $7.7 million and a gross margin of 68.5% for the comparable period of 2011. Total operating expenses increased by 12.8% to $3.1 million in the third quarter of 2012, compared with $2.8 million in the third quarter of 2011. This increase was primarily attributable to a 31.8% jump in selling expenses, which increased from $1.6 million to $2.1 million, due to higher marketing and operating expenses at Yunding Park compared to the same period last year. Operating income decreased by 93.0% to $0.3 million in the third quarter of 2012 compared with $4.9 million in the year ago quarter. Net loss attributable to China Yida Holding Company for the third quarter of 2012 was $1.0 million, or $0.05 per diluted share, as compared with net income of $3.2 million, or $0.16 per diluted share, for the third quarter of 2011. Nine Month Results Total net revenue decreased by 36.8% to $21.5 million for the nine months ended September 30, 2012, compared with $34.0 million for the nine months ended September 30, 2011. Net revenue from advertising decreased by 47.0% to $14.1 million, compared with $26.7 million for the nine months ended September 30, 2011. Net revenue from the tourism business increased by 0.6% to $7.3 million for the nine months ended September 30, 2012. Gross profit for the first nine months of 2012 decreased 45.1% year over year to $12.9 million from $23.4 million in the first nine months of 2011. The gross margin for the first nine months of 2012 was 59.9% as compared to 69.0% in the year-ago period. Operating income decreased by 71.2% to $4.7 million in the first nine months of 2012, compared with $16.2 million in the first nine months of 2011. Net income attributable China Yida Holding Company for the nine months ended September 30, 2012 was $1.3 million, or $0.06 per fully diluted share, as compared to net income of $10.7 million, or $0.54 per share, for the comparable period of 2011. Financial Condition As of September 30, 2012, the Company had $8.4 million in cash and cash equivalents, up from $5.7 million as of fiscal year end 2011. Working capital was a negative $4.4 million due to an increased level of both short-term loans and the current portion of long-term debt. As of September 30, 2012, the Company had total debt of $40.8 million out of which short term loans comprise $4.1 million and the current portion of its long-term debt is $6.9 million. Shareholders' equity was $159.4 million at the end of the third quarter of 2012 as compared to $157.9 million at the end of 2011. China Yida generated $0.6 million in cash flow from operating activities in the third quarter of 2012 and spent $4.5 million on investing activities. The Company received $1.6 million in proceeds from short-term bank loans in the third 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 third quarter of 2012 attributable to the summer tourism season and despite still-difficult road access to both sites. Tourist traffic to the Great Golden Lake increased by approximately 32.6% from the previous 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 the first half of 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 third 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 the first half of 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 plans to put its recently constructed guest cottages into operation in mid-November of 2012 which will enable visitors to extend their stay at Yunding. The two new restaurants in Gorges are currently in operation and valley rafting facilities began trial operation at the site in conjunction with the season from June to October. In addition, the camping center and shopping plaza are both under development and are expected to roll out in the first half of 2013. 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 September 30, 2012, China Yida has made significant progress in the development of its three new tourism destinations, Ming Dynasty Entertainment World in Bengbu City, Anhui province, 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 first nine months of 2012, the Company invested approximately $4.6 million in the acquisition of land use rights, approximately $9.5 million in the construction of tourism facilities and $1.2 million in the planning and design 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. China Yida carefully reviews its capital expenditures on a regularly basis. Although interest expense were significant in the third quarter, the Company still generated over $10 million in operating cash flow as of September 30, 2012, which it believes is sufficient to meet its repayment obligations. In addition, the Company has ample credit facilities because local banks remain positive as to the Company's future prospects. 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 two new tourist destinations in Jiangxi province by the first half of 2013 and the other one in Anhui province by the second half 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. The Company now expects that it may have to discontinue the FETV business when the contract is due in July 2013. 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. In addition, the Company also expects that in the near future, it is highly likely that it will discontinue its train media business which generates minimal revenue, though such timing has not yet been determined. 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 Tuesday, November 13, 2012, to discuss its financial results for the third quarter ended September 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 Kong800-966-253 Singapore800-101-1512 International callers can also dial +1-706-643-6986. The Conference ID for this call is 64152056. If you are unable to participate in the call at this time, a replay will be available for two weeks starting on Tuesday, November 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 64152056. 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 Phone: + (1) 646-213-1915 28082230 Email: email@example.com Email: Crocker.Coulson@ccgir.com FINANCIAL TABLES FOLLOW CHINA YIDA HOLDING CO. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS September 30, December 31, 2012 2011 (UNAUDITED) (AUDITED) ASSETS Current assets Cash and cash equivalents $ 8,416,253 $ 5,684,847 Accounts receivable 227,674 129,849 Other receivables, net 625,786 4,940,389 Advances and prepayments 1,639,287 1,881,427 Repayment – current portion 363,307 207,117 Total current assets 11,272,307 12,843,629 Property and equipment, net 140,451,891 110,593,580 Construction in progress 3,415,337 25,964,029 Intangible assets, net 44,887,717 32,355,010 Long-term prepayments 4,819,210 12,758,763 Deferred tax assets - 104,078 Total assets $ 204,846,462 $ 194,619,089 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Short-term loans $ 4,114,575 $ 943,619 Long-term debt, current portion 6,871,340 3,761,894 Accounts payable 24,827 91,385 Current obligation under airtime rights 2,206,033 2,359,169 commitment Accrued expenses and other payables 2,080,927 638,175 Taxes payable 391,767 1,223,528 Deferred tax liabilities – current - 67,644 Total current liabilities 15,689,469 9,085,414 Long-term obligation under airtime rights - 1,548,928 commitment Long-term debt 29,769,855 26,040,732 Total liabilities 45,459,324 36,675,074 Commitments and contingencies Stockholders' 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, 19,571,785 and 19,551,785 19,571 19,551 issued and outstanding as of September 30, 2011 and December 31, 2011, respectively) Additional paid in capital 49,148,049 49,111,569 Accumulated other comprehensive income 13,426,488 12,484,116 Retained earnings 88,975,816 87,715,182 Statutory reserve 2,549,330 2,549,330 Total China Yida Holding. Co. Stockholders' 154,119,254 151,879,748 Equity Non-controlling interest 5,267,884 6,064,267 Total stockholders' equity 159,387,138 157,944,015 Total liabilities and stockholders' equity $ 204,846,462 $ 194,619,089 CHINA YIDA HOLDING CO. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME (UNAUDITED) Nine months ended Three months ended September 30, September June 30 2012 2011 2012 2011 Net revenue Advertisement $ 14,126,023 $ 26,675,830 $ 3,168,963 $ 8,322,439 Tourism 7,340,957 7,299,124 3,152,618 2,885,042 Total net revenue 21,466,980 33,974,654 6,321,581 11,207,481 Cost of revenue Advertisement 4,227,122 6,847,683 1,236,714 2,141,129 Tourism 4,377,807 3,681,633 1,618,473 1,389,869 Total cost of revenue 8,604,929 10,529,316 2,855,187 3,530,998 Gross profit 12,862,051 23,445,338 3,466,394 7,676,483 Operating expenses Selling expenses 4,751,736 3,704,622 2,104,616 1,596,304 General and 3,443,661 3,543,764 1,019,861 1,174,569 administrative expenses Total operating expenses 8,195,397 7,248,386 3,124,477 2,770,873 Income from operations 4,666,654 16,196,952 341,917 4,905,610 Other income (expense) Other expense, net (191,870) (41,430) (77,203) (23,648) Interest income 32,218 75,358 11,645 27,942 Interest expenses (990,189) (228,212) (870,698) (26,454) Total other expenses (1,149,841) (194,284) (936,256) (22,160) Income (Loss) before income tax and 3,516,813 16,002,668 (594,339) 4,883,450 non-controlling interest Less: Provision for 2,457,792 5,433,442 451,471 1,715,696 income tax Net income (Loss) 1,059,021 10,569,226 (1,045,810) 3,167,754 Net loss attributed to 201,613 84,015 70,399 40,852 non-controlling interest Net income (loss) attributable to China 1,260,634 10,653,241 (975,411) 3,208,606 Yida Holding Co. Other comprehensive income Foreign currency 980,614 5,005,563 (253,430) 1,741,244 translation gain (loss) Comprehensive income $ 2,039,635 $ 15,574,789 $ (1,299,240) $ 4,908,998 (loss) Compehensive loss attributable to 163,371 84,678 79,962 41,469 non-controlling interest Comprehensive income (loss) attributable to $ 2,023,006 $ 15,659,467 $ (1,219,278) $ 4,950,467 China Yida Holding Co. Earnings per share - Basic $ 0.06 $ 0.54 $ (0.05) $ 0.16 - Diluted $ 0.06 $ 0.54 $ (0.05) $ 0.16 Weighted average shares outstanding - Basic 19,561,240 19,551,785 19,571,785 19,551,785 - Diluted 19,561,240 19,561,621 19,571,785 19,555,436 CHINA YIDA HOLDING CO. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) For the Nine Months Ended September 30, 2012 2011 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 1,059,021 $ 10,569,226 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 3,053,498 2,599,852 Amortization 1,845,015 2,718,586 Stock based compensation 36,500 576,536 Deferred tax 36,434 51,914 Amortization of financing costs Changes in operating assets and liabilities: Accounts receivable (97,174) (106,811) Other receivables, net 3,718,652 (319,681) Advances and prepayments 254,323 282,239 Accounts payable (67,241) (1,098,386) Accrued expenses and other payables 1,441,158 1,539,620 Taxes payable (840,807) (544,244) Net cash provided by operating activities 10,619,976 16,268,581 CASH FLOWS FROM INVESTING ACTIVITIES Additions to property and equipment (9,103,497) (5,823,616) Additions to construction in progress (416,744) (2,718,003) Additions to intangible asset (4,639,247) (11,988,896) Proceeds from disposal of intangible asset 2,080,636 Increase to long-term prepayments for acquisition of Property, equipment and land use rights (1,185,197) (2,778,112) Net cash used in investing activities (15,344,685) (21,227,991) CASH FLOWS FROM FINANCING ACTIVITIES Repayment of loan from non-controlling - 2,712,533 interest Repayment of obligation under airtime rights (1,729,368) (1,400,069) commitment Payment of deferred financing costs (674,645) - Proceeds from short-term loans 3,170,326 Proceeds of long-term loans 9,510,977 10,788,484 Repayment of long-term loans (2,847,632) (246,594) Net cash provided by financing 7,429,658 11,854,354 activities EFFECT OF EXCHANGE RATE CHANGES ON CASH 26,457 317,307 NET INCREASE (DECREASE) IN CASH AND CASH 2,731,406 7,212,251 EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 5,684,847 7,146,684 CASH AND CASH EQUIVALENTS, ENDING OF PERIOD $ 8,416,253 $ 14,358,935 SUPPLEMENTAL DISCLOSURES: Non-cash investing and financing activities: Transfer from construction in progress to property and $ 23,165,538 $ - equipment Transfer from advances and prepayments to intangible $ 9,556,747 $ - assets Cash paid during the period for: Income tax $ 3,199,743 $ 5,830,819 Interest $ 2,303,355 $ 691,035 The notes in the Company's 2012 10-Q are an integral part of these consolidated financial statements. SOURCE China Yida Holding Company Website: http://www.yidacn.net
China Yida Announces Third Quarter 2012 Results
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