Trunkbow Announces Preliminary Fourth Quarter and Full Year 2012 Financial Results

  Trunkbow Announces Preliminary Fourth Quarter and Full Year 2012 Financial
                                   Results

PR Newswire

BEIJING, April 16, 2013

BEIJING, April 16, 2013 /PRNewswire/-- Trunkbow International Holdings
Limited (NASDAQ: TBOW) ("Trunkbow" or the "Company"), a leading provider of
Mobile Payment Solutions ("MPS") and Mobile Value Added Services ("MVAS") in
the PRC, today announced preliminary, unaudited financial results for its
fourth quarter and full year ended December 31, 2012.

Full Year 2012 Financial Highlights

  oGross revenue was $35.5 million, compared with $29.7 million in 2011.

       oMVAS gross revenue increased to $21.6 million, compared with $17.4
         million in 2011.
       oMPS gross revenue in 2012 was $13.9 million, compared with $12.3
         million in 2011.

  oGross profit in 2012 was $29.7 million, compared with $22.9 million in
    2011; gross margin improved to 85.3%, compared with 78.9% in 2011.
  oNet income totaled $12.7 million, or $0.34 per diluted share, compared
    with $16.9 million, or $0.46 per diluted share in 2011.
  oAs of December 31, 2012, cash and cash equivalents totaled $0.8 million.
  oCollected approximately $3.9 million of outstanding accounts receivable as
    of December 31, 2012.

Fourth Quarter 2012 Financial Highlights

  oGross revenue was $13.6 million, compared with $9.7 million in the fourth
    quarter of 2011.

       oMPS gross revenue for the quarter was $7.7 million, compared with
         $8.2 million in the fourth quarter of 2011.
       oMVAS gross revenue increased to $6.0 million, compared with $1.5
         million a year ago.

  oGross profit for the quarter was $12.2 million, compared with $8.3 million
    in the fourth quarter of 2011.
  oGross margin improved to 91.5%, compared with 86.7% in the fourth quarter
    of 2011.

2012 and Recent Business Highlights

  oAnnounced that the Company's board of directors received a preliminary
    non-binding "going-private" transaction proposal letter, dated November 2,
    2012.
  oExtended cooperation with China Unicom through the deployment of a new
    terminal-based MPS platform in Sichuan and Heilongjiang Province.
  oSigned approximately 140 merchants for implementation of Trunkbow-UnionPay
    mobile applet system. Mobile apps containing this payment functionality
    were introduced in the second half of 2012.
  oBegan development of cloud-based MPS services through partnership with
    experienced operators to offer hosted mobile payment services for small-
    and medium-sized businesses.
  oSigned an agreement to develop and implement a new electronic payment
    system for China Minsheng Banking Corp., Ltd. ("CMBC"), China's first
    national joint-stock commercial bank, serving non state-owned enterprises,
    small businesses and high-end consumers. The new system will be designed
    to simplify mobile and Internet payments for 10 million CMBC credit
    cardholders.
  oContinued the construction and began management and operation of the cloud
    data center through partnership with experienced operators to offer
    managed hosting services.

To date, no decisions have been made with respect to the Company's response to
the going-private proposal. There can be no assurance that any definitive
offer will be made, that any agreement will be executed or that this or any
other transaction will be approved or consummated. The Company will provide
relevant updates with respect to the going private transaction or any other
transaction as appropriate.

Fourth Quarter 2012 Results

Gross revenue in the fourth quarter of 2012 was $13.6 million, an increase of
40.2% year-over-year, compared with gross revenue of $9.7 million in the same
period a year ago. The increase in gross revenue was primarily attributable to
the growth of software sales. Revenue from MVAS increased $4.5 million, or
302.1%, to $6.0 million for the fourth quarter of 2012, compared with $1.5
million in the same period of 2011. The increase in MVAS revenue was
primarily driven by the growth on MVAS software sales related to phone call
and SMS management, mobile business card, color numbering and number change
notification. Revenue from the Company's MPS offerings decreased 6.9% to $7.7
million for the fourth quarter of 2012, compared with $8.2 million in the same
period of 2011. The decrease in MPS revenue was attributable to reduction of
the MPS software sales.

Cost of revenue in the fourth quarter of 2012 was $1.1 million, compared with
$1.3 million in the same period of 2011. The decrease in cost of revenue was
primarily attributed to reduction in the system integration, which consumed
significant hardware costs.

Gross profit in the fourth quarter of 2012 totaled $12.2 million, compared
with $8.3 million in the fourth quarter of 2011. As a percentage of net
revenue, gross margin was 91.5% in the fourth quarter of 2012, compared with
86.7% in the year-ago period. The year-over-year improvement in gross margin
was attributable to the increase of software sales and decrease of revenues
from system integration, which involves significantly higher hardware costs.

Operating expenses in the fourth quarter of 2012 were $6.5 million, an
increase of 48.3% year-over-year. The increase in operating expenses was
primarily related to an increase in allowance for doubtful accounts, provided
for customers' receivables and advances to suppliers that are older than one
year. The allowances provided for accounts receivable and advance to suppliers
were $2.1 million and $2.5 million, respectively.

Operating income in the fourth quarter of 2012 was $5.7 million, compared with
$3.9 million reported in the same period last year. The increase in operating
income for the quarter was in line with the increase in revenue.

Net income attributable to Trunkbow was $5.0 million in the fourth quarter of
2012, compared with $4.8 million in the fourth quarter of 2011. Earnings per
basic and diluted share in the fourth quarter of 2012 were $0.14 each, based
on basic and diluted shares outstanding of 36.8 million. This compares with
$0.13 per basic and diluted share based on basic and diluted shares
outstanding of 36.8 million and 37.0 million, respectively, in the year-ago
period.

Balance Sheet and Cash Flow

As of December 31, 2012, the Company had $0.8 million in cash and cash
equivalents, compared with $6.1 million as of December 31, 2011. As of
December 31, 2012, the Company had working capital of $50.5 million and total
shareholders' equity of $95.4 million.Accounts receivable on December 31,
2012 totaled approximately $46.9 million. As December 31, 2012, the Company
had collected approximately $3.9 million of these outstanding receivables.

Conference Call

The Company will host a conference call to discuss financial results for the
fourth quarter and 2012 full year on April 16, 2013 at 8:00 a.m. EDT. To
participate in the live conference call, please dial the following number five
to ten minutes prior to the scheduled conference call time: +1 (718) 354-1231.
International callers should dial +65 6723-9381. The passcode required is
35510300.

If you are unable to participate in the call at this time, a replay will be
available for 14 days starting on April 16, 2013. To access the replay, please
dial +1 (646) 254-3697, international callers dial +61 (2) 8199-0299, and
enter the passcode 35510300.

About Trunkbow

Trunkbow International Holdings (NASDAQ: TBOW) is a leading provider of Mobile
Payment Solutions ("MPS") and Mobile Value Added Solutions ("MVAS") in PRC.
Trunkbow's solutions enable the telecom operators to offer their subscribers
access to unique mobile applications, innovative tools, value-added services
that create a superior mobile experience, and as a result generate higher
average revenue per user and reduce subscriber churn. Since its inception in
2001, Trunkbow has established a proven track record of innovation, and has
developed a significant market presence in both the Mobile Value Added and
Mobile Payment solutions markets. Trunkbow supplies its mobile payment
solutions to all three Chinese mobile telecom operators, as well as
re-sellers, in several provinces of China. For more information, please visit
www.trunkbow.com.

Safe Harbor Statement

This press release contains forward-looking statements that reflect the
Company's current expectations and views of future events that involve known
and unknown risks, uncertainties and other factors that may cause its actual
results, performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by the
forward-looking statements. Such forward looking statements involve known and
unknown risks and uncertainties, including but not limited to uncertainties
relating to the Company's relationship with China's major telecom carriers and
its resellers, competition from domestic and international companies, changes
in technology, contributions from revenue sharing plans and general economic
conditions. The Company has based these forward-looking statements largely on
its current expectations and projections about future events and financial
trends that it believes may affect its financial condition, results of
operations, business strategy and financial needs. The results the Company is
providing today are preliminary and unaudited and are subject to the
conclusion of the audit of our financial statements, and could differ
materially from the results disclosed today. Information regarding these
risks, uncertainties and other factors is included in the Company's annual
report on Form 10-K and other filings with the SEC.

Contact Information
In China:                               In the U.S.
Trunkbow International Holdings Limited The Piacente Group
Ms Alice Ye, Chief Financial Officer    Brandi Floberg/Lee Roth
Phone: +86 (10) 8571-2518 (Beijing)     Phone: + (1) 212-481-2050 (New York)
Email: ir@trunkbow.com                  E-mail:trunkbow@tpg-ir.com



- FINANCIAL TABLES FOLLOW -



TRUNKBOW INTERNATIONAL HOLDINGS LIMITED AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
                                                                                                             December31,    December31,
                                                                                                             2012            2011
ASSETS
Current assets
Cash and cash equivalents                                                                                    $ 783,074       $ 6,139,589
Accounts receivable, net                                                                                       46,896,214      41,147,767
Advances to suppliers, net                                                                                     12,478,788      9,783,454
Prepayment                                                                                                     496,372         316,258
Other current assets                                                                                           7,996,644       4,040,152
Due from directors                                                                                             9,350           758,033
Inventories                                                                                                    5,673,179       4,924,415
Deferred tax asset                                                                                             942,028         117,952
Total current assets                                                                                           75,275,649      67,227,620
Property and equipment, net                                                                                    39,929,472      21,420,803
Land use right, net                                                                                            5,831,641       5,905,583
Intangible assets, net                                                                                         271,894         33,958
Long-term prepayment                                                                                           368,985         2,733,363
TOTAL ASSETS                                                                                                 $ 121,677,641   $ 97,321,327
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable                                                                                             $ 2,655,395     $ 2,238,179
Accrued expenses and other current liabilities*                                                                3,983,227       2,216,128
Short-term loan                                                                                                11,175,196      6,460,945
Due to directors                                                                                               106,141         11,959
Taxes payable                                                                                                  6,857,978       4,209,907
Total current liabilities                                                                                      24,777,937      15,137,118
Deferred revenue                                                                                               1,505,881       0
Total liabilities                                                                                              26,283,818      15,137,118
COMMITMENTS AND CONTINGENCIES
Stockholders' equity
Preferred Stock: par value $0.001, authorized 10,000,000 shares, none issued and outstanding at December       0               0
31, 2012 and December 31, 2011, respectively
Common Stock: par value $0.001, authorized 190,000,000 shares, 36,807,075 shares issued and outstanding at     36,807          36,807
December 31, 2012 and December 31, 2011, respectively
Additional paid-in capital                                                                                     39,671,966      39,671,966
Appropriated retained earnings                                                                                 6,461,938       4,504,667
Unappropriated retained earnings                                                                               45,713,187      34,989,429
Accumulated other comprehensive income                                                                         3,509,925       2,981,340
Total stockholders' equity                                                                                     95,393,823      82,184,209
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                                   $ 121,677,641   $ 97,321,327



TRUNKBOW INTERNATIONAL HOLDINGS LIMITED AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
                                                      Three Months Ended          Years Ended December 31,
                                                      December 31,
                                                      2012          2011          2012          2011
Revenues $ 13,643,170  $ 9,731,237   $ 35,460,297  $ 29,715,407
Less: Business tax and surcharges                       285,297       165,733       691,297       638,377
Net revenues                                            13,357,873    9,565,504     34,769,000    29,077,030
Cost of revenues                                        1,138,681     1,271,549     5,107,636     6,130,071
Gross profit                                            12,219,192    8,293,955     29,661,364    22,946,959
Operating expenses
Selling and distribution expenses                       661,369       676,611       3,197,089     2,344,993
General and administrative expenses                     5,443,467     3,326,555     11,342,159    7,944,055
Research and development expenses                       437,989       407,611       2,014,797     1,434,525
                                                        6,542,825     4,410,777     16,554,045    11,723,573
Income from operations                                  5,676,367     3,883,178     13,107,319    11,223,386
Other income (expenses)
Interest income                                         58,388        5,193         232,693       107,467
Interest expense                                        (223,299)     (35,775)      (956,492)     (87,005)
Refund of value-added tax                               117,841       804,627       1,667,606     2,112,463
Government grants                                       78,732        911,552       379,159       5,651,686
Other income                                            (9,148)       (71,948)      83,562        7,890
Other expenses                                          (332)         13,935        (12,723)      (117,024)
                                                        22,182        1,627,584     1,393,805     7,675,477
Income before income tax expense                        5,698,549     5,510,762     14,501,124    18,898,863
Income tax expense                                      715,144       717,043       1,820,095     1,958,615
Net income                                              4,983,405     4,793,719     12,681,029    16,940,248
Foreign currency translation fluctuation                168,324       620,773       528,585       2,405,664
Comprehensive income                                  $ 5,151,729   $ 5,414,492   $ 13,209,614  $ 19,345,912
Weighted average number of
common shares outstanding
Basic                                                   36,807,075    36,807,075    36,807,075    36,263,911
Diluted                                                 36,807,075    36,974,086    36,812,203    37,163,690
Earnings per share
Basic                                                 $ 0.14        $ 0.13        $ 0.34        $ 0.47
Diluted                                               $ 0.14        $ 0.13        $ 0.34        $ 0.46



TRUNKBOW INTERNATIONAL HOLDINGS LIMITED AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                              Years Ended December 31,
                                              2012             2011
Cashflowsfromoperatingactivities
Net income                                    $ 12,681,029     $ 16,940,248
Adjustments to reconcile net income to net
cash used in operating activities:
Depreciation and amortization                   1,667,726        323,671
Provision for doubtful accounts                 6,582,008        928,218
Share-based compensation expenses               0                350,000
Deferred taxes                                  (822,001)        (116,027)
Changes in operating assets and liabilities:
Accounts receivable                             (9,467,390)      (15,159,545)
Advance to suppliers                            (5,151,720)      (2,585,065)
Prepayment                                      121,529          399,563
Other current assets                            (1,830,839)      (795,636)
Due from directors                              754,321          (664,592)
Inventories                                     (709,476)        (1,078,415)
Long-term prepayment                            354,422          (2,322,161)
Accounts payable                                399,323          1,328,366
Accrued expenses and other current              272,275          1,572,534
liabilities
Other non-current liabilities                   0                (141,940)
Amounts due to directors                        94,043           11,764
Taxes payable                                   2,613,528        337,200
Deferred revenue                                1,505,165        0
Net cash flows used in operating activities     9,063,943        (671,817)
Cash flows from investing activities
Acquisition of property and equipment and       (19,468,008)     (20,823,526)
intangible assets
Acquisition of land use right                   0                (5,877,870)
Collection on loans to third parties            158,438          2,884,763
Payment on loans to third parties               (2,091,387)      (2,784,653)
Acquisition of Delixunda Company (net of        0                (40,223)
cash acquired)
Net cash flows used in investing activities     (21,400,957)     (26,641,509)
Cash flows from financing activities
Proceeds from issuance of common stock (net     0                17,332,251
of finance costs)
Proceeds from bank loan                         18,888,700       6,355,495
Repayment of bank loan                          (14,227,771)     (1,856,436)
Proceeds from loans from third parties          2,401,024        0
Restricted deposit collected from bank          0                371,287
Proceeds from exercise of warrants              0                610,000
Net cash flows provided by financing            7,061,953        22,812,597
activities
Effect of exchange rate fluctuation on cash     (81,454)         380,568
and cash equivalents
Net increase in cash and cash equivalents       (5,356,515)      (4,120,161)
Cash and cash equivalents–beginning of the    6,139,589        10,259,750
year
Cash and cash equivalents–end of the        $ 783,074        $ 6,139,589
period
Supplemental disclosure of cash flow
information
Cash paid for interest                        $ 956,492        $ 74,332
Cash paid for income taxes                    $ 1,649,212      $ 390,586
Supplemental disclosure of noncash financing
activities
Issuance of 30,000 common shares at $5.00     $ 0              $ 150,000
each for the legal fee

SOURCE Trunkbow International Holdings Limited

Website: http://www.trunkbow.com