AutoChina International Reports 2012 Third, Fourth Quarter and Year-End Financial Results

AutoChina International Reports 2012 Third, Fourth Quarter and Year-End 
Financial Results 
SHIJIAZHUANG, CHINA -- (Marketwired) -- 04/30/13 --  AutoChina
International Limited ("AutoChina" or the "Company") (OTCBB: AUTCF),
China's largest commercial vehicle sales, servicing, leasing, and
support network, today reported financial results for the third
quarter ended September 30, 2012, and for the fourth quarter and year
ended December 31, 2012. 
Q3 2012 Financial Highlights (comparisons are year over year) 


 
--  Total revenues of $73.3 million, compared to $168.6 million
--  Adjusted Net Income of $4.5 million, compared to $11.9 million
--  Adjusted EBITDA of $11.9 million, compared to $21.8 million

  
Q4 2012 Financial Highlights (comparisons are year over year) 


 
--  Total revenues of $51.9 million, compared to $107.4 million
--  Adjusted Net Income of $2.6 million, compared to $6.9 million
--  Adjusted EBITDA of $6.8 million, compared to $16.2 million

  
Full-year 2012 Financial Highlights (comparisons are year over year) 


 
--  Total revenues of $333.1 million, compared to $598.1 million
--  Gross profit of $88.8 million, compared to $107.5 million
--  Net income of $23.5 million, compared to $25.2 million (which included
    loss on change in fair value of earn-out obligation of $17.3 million)
--  Adjusted Net Income of $23.5 million, compared to $43.5 million
--  Adjusted EBITDA of $50.3 million, compared to $80.0 million

  
Operational Highlights  


 
--  1,154 commercial vehicles leased in the third quarter of 2012, and 816
    in the fourth quarter of 2012
--  5,385 commercial vehicles leased in 2012
--  AutoChina opened nine new commercial vehicle financing and service
    centers in the third quarter of 2012 and 11 new centers in the fourth
    quarter of 2012. As of December 31, 2012, the Company operated 534
    financing and service centers, compared to 506 at December 31, 2011.
--  AutoChina expects continued margin expansion as finance and insurance
    income grows as a percentage of revenue
--  Construction of the Company's new office space in the Kai Yuan Center
    building in Shijiazhuang was completed in April 2013, and AutoChina
    has moved its headquarters into the new space.

  
Operational 
and Market Review 
 Mr. Yong Hui Li, Chairman and CEO of
AutoChina, stated, "During the second half of 2012, we were pleased
to announce the launch of AutoChina's new website, which now serves
as a 24/7-accessible information portal for our customers with new
offerings such as logistics services, consulting on and access to
various types of insurance, and an online used truck marketplace. We
expect the new website to be a key channel by which we expand and
diversify our business via an asset-light model that will complement
our existing heavy truck leasing business and allow AutoChina to
better serve its customers. As China's heavy truck market continues
to be impacted by weakened demand, we have taken the opportunity to
strengthen the Company by building upon our existing heavy-truck
leasing business with these new service offerings, while continuing
to expand our geographic presence through our leasing and finance
center network. We remain optimistic about the long-term prospects of
China's heavy truck industry, which recently welcomed another large
manufacturer in January when Sweden's Volvo announced its heavy-truck
joint venture with Dongfeng Motor Group Co. Given concerns with
pollution and measures to meet more stringent emission standards,
demand for liquefied natural gas-fueled heavy trucks is expected to
increase over the next few years. We will continue to focus on
serving our customers, adapting and growing our business to address
their needs." 
Heavy Truck Sales
 The Company leased 1,154 commercial vehicles in
the third quarter of 2012, compared to 3,126 in the third quarter of
2011, and 816 commercial vehicles in the fourth quarter of 2012,
compared to 1,804 in the fourth quarter of 2011. The decrease in
commercial vehicle sales and servicing and leasing was primarily due
to a general slowdown in the economy that led to unfavorable
investment sentiment for purchasers of commercial vehicles.
Additionally, the Company adopted a stricter leasing policy, which
caused it to repossess more vehicles for late payment and reject a
higher number of new applicants.  
Since launching its commercial vehicle sales and leasing business in
March 2008, the Company has leased over 37,000 trucks, as of December
31, 2012. The Company repossessed 789 vehicles whose lessees had
defaulted on installment payments, sold 611 of these vehicles, and
recorded 18 vehicles as total losses during the year ended December
31, 2012. There were 160 vehicles repossessed, 118 vehicles sold and
15 loss vehicles recorded in the year ended December 31, 2011.
Additionally in 2012, the Company adopted a stricter leasing policy,
which caused it to repossess more vehicles for late payment and
reject a higher number of new applicants. 
Used Vehicle Leasing
 Under the Company's used commercial vehicle
sale-leaseback program, 824 used trucks were leased in the year ended
December 31, 2012.  
Insurance Agency Services
 The Company launched its own insurance
agency business in December 2011 and has signed agreements with four
major insurance companies in China to sell insurance: China United
Property Insurance Company Limited, Sinosafe General Insurance Co.
Ltd. (Hua An Insurance), Ping An Insurance (Group) Company of China,
Ltd., and China Life Property and Casualty Insurance Company Limited.
AutoChina's 534 store locations are each licensed to sell insurance
from these carrier partners, and, as of December 31, 2012, the
Company also operated 23 new insurance agency branch offices in
appropriate markets that are solely dedicated to this service.  
Expansion of Specialty Finance Store Network
 During the 2012 third
quarter, AutoChina opened nine new commercial vehicle financing and
service centers and 11 during the 2012 fourth quarter. As of December
31, 2012, the Company operated 534 financing and service centers,
compared to 506 centers at December 31, 2011. The Company operates
commercial vehicle financing and service centers in the Anhui,
Beijing, Chongqing, Fujian, Gansu, Guangdong, Guangxi, Guizhou,
Hebei, Henan, Hubei, Hunan, Inner Mongolia, Jiangsu, Jiangxi, Jilin,
Liaoning, Ningxia, Shaanxi, Shandong, Shanghai, Shanxi, Sichuan,
Tianjin, Yunnan, and Zhejiang areas of China. 
New Headquarters
 During the second half of 2012, AutoChina closed on
a transaction to purchase 23 floors of newly constructed office space
in the Kai Yuan Center building, which was built by the Company's
Chairman and CEO Mr. Li and is the tallest building in Shijiazhuang
at 245 meters in height. The new office space was purchased for
approximately $56.4 million, and the Company also assumed
approximately $102.9 million in debt as part of the acquisition,
resulting in a total transaction value of approximately $159.3
million.  
Construction of the Kai Yuan Center has been completed, and, in April
2013, AutoChina moved its headquarters into the new building, which
now serves as the control center for each of the Company's 534
commercial vehicle financing and service centers located throughout
China. The Company does not anticipate that it will occupy the entire
office space purchased, and expects to lease out the unoccupied
space, the proceeds from which will be reported as rental income. 
Financial Review 
Note: As part of the 
transaction to purchase the Kai Yuan Center
office space, AutoChina, through its wholly owned subsidiary
AutoChina Group Inc., acquired 100% of the equity of Heat Planet
Holdings Limited ("Heat Planet") and its subsidiaries, which was
controlled by Mr. Li. Heat Planet's primary asset consists of the 23
floors, or over 60,000 square meters, of newly constructed office
space in the Kai Yuan Center building. The acquisition closed on
September 11, 2012. As both AutoChina and the acquired companies were
under the common control of Mr. Li immediately before and after the
merger, the transaction was accounted for as common control merger,
and using merger accounting as if the merger had been consummated at
the beginning of the earliest period presented, and no gain or loss
is recognized. The Company has adjusted its financial statements for
the years ended December 31, 2011, and December 31, 2010, to account
for operating results of Heat Planet and its subsidiaries to reflect
the merger under common control. 
2012 Third Quarter 


 
--  Revenues for the third quarter ended September 30, 2012, were $73.3
    million, compared to $168.6 million in the third quarter of 2011. The
    decrease in revenues primarily resulted from lower demand for heavy
    trucks, which was partially offset by higher finance and insurance
    income during the period. The Company reported $52.5 million in
    commercial vehicle revenues, and $20.8 million, or 28.4% of total
    revenues, in revenues related to finance and insurance.
    
    
--  Cost of sales during the period totaled $51.5 million, with an average
    cost per commercial vehicle of $44,000. Gross margin increased to
    29.7% for the three months ended September 30, 2012, from 17.1% for
    the prior-year period, primarily due to a higher contribution to
    revenues from finance and insurance versus direct sales of commercial
    vehicles.
    
    
--  Net income in the three months ended September 30, 2012, was $4.5
    million, or $0.19 per share based on 23.5 million diluted weighted
    average shares outstanding, compared to $48.6 million, or $2.07 per
    share based on 23.5 million diluted weighted average shares
    outstanding, in the three months ended September 30, 2011. The
    year-over-year decrease primarily resulted from the absence of a gain
    on change ($36.3 million) in fair value of an earn-out obligation,
    which was cancelled.
    
    
--  Adjusted Net Income, which is net income excluding the gain/loss on
    change in fair value of the earn-out obligation and income/loss from
    discontinued operations, was $4.5 million, compared to $11.9 million
    for the third quarter of 2011.
    
    
--  Adjusted EBITDA, which is EBITDA excluding the gain/loss on change in
    fair value of the earn-out obligation, income/loss from discontinued
    operations, stock-based compensation, and accretion of stock
    repurchase obligation, was $11.9 million for the quarter ended
    September 30, 2012, compared to $21.8 million in the prior-year
    quarter.

  
See "Non-GAAP Financial Measures" below for a description of Adjusted
Net Income and Adjusted EBITDA. 
2012 Fourth Quarter 


 
--  Revenues for the fourth quarter ended December 31, 2012, were $51.9
    million, compared to $107.4 million in the fourth quarter of 2011. As
    with the prior quarter, the decrease in revenues primarily resulted
    from lower demand for heavy trucks, which was partially offset by
    higher finance and insurance income during the period. The Company
    reported $34.8 million in commercial vehicle revenues, and $17.1
    million, or 32.9% of total revenues, in revenues related to finance
    and insurance.
    
    
--  Cost of sales during the period totaled $34.7 million, with an average
    cost per commercial vehicle of $45,000. Gross margin increased to
    33.1% for the three months ended December 31, 2012, from 24.7% for the
    prior-year period, primarily due to a higher contribution to revenues
    from finance and insurance versus direct sales of commercial
    vehicles.
    
    
--  Net income in the three months ended December 31, 2012, was $2.6
    million, or $0.19 per share based on 23.5 million diluted weighted
    average shares outstanding, compared to $9.0 million, or $0.39 per
    share based on 23.5 million diluted weighted average shares
    outstanding, in the three months ended December 31, 2011.
    
    
--  Adjusted Net Income was $2.6 million, compared to $6.9 million for the
    fourth quarter of 2011. There was no gain/loss on change in fair value
    of the earn-out obligation for either period; however, there was $2.1
    million in income from discontinued operations for the fourth quarter
    of 2011.
    
    
--  Adjusted EBITDA, which is EBITDA excluding the gain/loss on change in
    fair value of the earn-out obligation, income/loss from discontinued
    operations, stock-based compensation, and accretion of stock
    repurchase obligation, was $6.8 million for the quarter ended December
    31, 2012, compared to $16.2 million in the prior-year quarter.

  
See "Non-GAAP Financial Measures" below for a description of Adjusted
Net Income and Adjusted EBITDA. 
Full-year 2012 


 
--  Revenues for the year ended December 31, 2012, were $333.1 million,
    compared to $598.1 million in the prior-year period. The decrease in
    revenues primarily resulted from a general slowdown in the economy,
    which led to lower demand for heavy trucks. The Company reported
    $249.0 million in commercial vehicle revenues, and $84.1 million, or
    25.2% of total revenues, in revenues related to finance and
    insurance.
    
    
--  Gross profit for 2012 was $88.8 million, compared to $107.5 million in
    the prior-year period. Gross margin increased to 26.7% for the year
    ended December 31, 2012, from 18.0% for the prior-year period,
    primarily due to a higher contribution to revenues from finance and
    insurance versus direct sales of commercial vehicles.
    
    
--  Net income for year ended December 31, 2012, was $23.5 million, or
    $0.99 per share based on 23.8 million diluted weighted average shares
    outstanding, compared to $25.2 million, or $1.07 per share based on
    23.6 million diluted weighted average shares outstanding, in the
    prior-year period, which included a loss on change in fair value of
    the earn-out obligation of $17.3 million.
    
    
--  Adjusted Net Income was $23.5 million, compared to $43.5 million in
    2011.
    
    
--  Adjusted EBITDA for the year ended December 31, 2012, was $50.3
    million, compared to $80.0 million in the prior year.

  
See "Non-GAAP Financial Measures" below for a description of Adjusted
Net Income and Adjusted EBITDA. 
Balance Sheet Highlights 
 At December 31, 2012, AutoChina's cash and
cash equivalents (not including restricted cash) were $75.8 million,
working capital was $105.4 million, total debt was $170.3 million
(including due to affiliates and accounts payable, related parties),
and stockholders' equity was $228.4 million, compared to $43.0
million, $171.6 million, $237.1 million, and $291.2 million,
respectively, at December 31, 2011.  
About AutoChina International Limited
 AutoChina International
Limited is China's largest commercial vehicle sal
es, servicing,
leasing, and support network. AutoChina's operating subsidiary was
founded in 2005 by nationally recognized Chairman and CEO, Yong Hui
Li. As of December 31, 2012, the Company owned and operated 534
commercial vehicle financing centers across China, and primarily
provides sales-type leasing and support services for local customers.
The Company's website is http://www.autochinaintl.com.  
Safe Harbor Statement
 This press release may contain forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995 about the Company. Forward-looking statements are
statements that are not historical facts. Such forward-looking
statements, based upon the current beliefs and expectations of the
Company's management, are subject to risks and uncertainties, which
could cause actual results to differ from the forward-looking
statements. The following factors, among others, could cause actual
results to meaningfully differ from those set forth in the
forward-looking statements: 


 
--  Continued compliance with government regulations;
--  Changing legislation or regulatory environments;
--  Requirements or changes affecting the businesses in which the Company
    is engaged;
--  Industry trends, including factors affecting supply and demand;
--  Labor and personnel relations;
--  Credit risks affecting the Company's revenue and profitability;
--  Changes in the commercial vehicle industry;
--  The Company's ability to effectively manage its growth, including
    implementing effective controls and procedures and attracting and
    retaining key management and personnel;
--  Changing interpretations of generally accepted accounting principles;
--  General economic conditions; and
--  Other relevant risks detailed in the Company's filings with the
    Securities and Exchange Commission.

  
The information set forth herein should be read in light of such risks.
The Company does not assume any obligation to update the information
contained in this press release. 


 
                                                                            
                                                                            
              AUTOCHINA INTERNATIONAL LIMITED AND SUBSIDIARIES              
 CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited) 
               (in thousands except share and per share data)               
                                                                            
                            Three months ended         Nine months ended    
                               September 30,             September 30,      
                         ------------------------  ------------------------ 
                             2012         2011         2012         2011    
                         -----------  -----------  -----------  ----------- 
                                      As Adjusted               As Adjusted 
Revenues                                                                    
  Commercial vehicles    $    52,485  $   143,711  $   214,221  $   422,196 
  Finance                     16,381       22,565       56,659       62,330 
  Insurance                    4,448        2,358       10,323        6,148 
                         -----------  -----------  -----------  ----------- 
    Total revenues            73,314      168,634      281,203      490,674 
                         -----------  -----------  -----------  ----------- 
                                                                            
Cost of sales                                                               
  Commercial vehicles          1,508       24,229        6,082       85,417 
  Commercial vehicles,                                                      
   related parties            49,233      115,630      202,212      324,330 
  Insurance                      794           --        1,265           -- 
                         -----------  -----------  -----------  ----------- 
    Total cost of sales       51,535      139,859      209,559      409,747 
                         -----------  -----------  -----------  ----------- 
                                                                            
Gross profit                  21,779       28,775       71,644       80,927 
                         -----------  -----------  -----------  ----------- 
                                                                            
Operating expenses                                                          
  Selling and marketing        2,660        2,170        7,511        5,702 
  General and                                                               
   administrative             13,689        6,704       30,634       17,153 
  Interest expense             2,011        4,468        8,782       11,763 
  Interest expense,                                                         
   related parties               174          647          685        1,971 
  Other income, net           (4,044)        (755)      (4,934)      (2,819)
                         -----------  -----------  -----------  ----------- 
    Total operating                                                         
     expenses                 14,490       13,234       42,678       33,770 
                         -----------  -----------  -----------  ----------- 
                                                                            
Income from operations         7,289       15,541       28,966       47,157 
                         -----------  -----------  -----------  ----------- 
                                                                            
Other income (expense)                                                      
  Gain (loss) on change                                                     
   in fair value of                                                         
   earn-out obligation            --       36,300           --      (17,300)
  Interest income                 74           38          226           95 
                         -----------  -----------  -----------  ----------- 
    Total other income                                                      
     (expense)                    74       36,338          226      (17,205)
                         -----------  -----------  -----------  ----------- 
                                                                            
Income from continuing                                                      
 operations before                                                          
 income taxes                  7,363       51,879       29,192       29,952 
                                                                            
Income tax provision          (2,837)      (3,663)      (8,240)     (10,693)
                         -----------  -----------  -----------  ----------- 
                                                                            
Income from continuing                                                      
 operations                    4,526       48,216       20,952       19,259 
                                                                            
Income (loss) from                                                          
 discontinued operations          --          477           --       (4,149)
  Income tax benefit                                                        
   (provision)                    --         (120)          --        1,037 
  Net loss attributable                                                     
   to non-controlling                                                       
   interests                      --           --           --           30 
                         -----------  -----------  -----------  ----------- 
Income (loss) from                                                          
 discontinued                                                               
 operations, net of        
                                                 
 taxes                            --          357           --       (3,082)
                         -----------  -----------  -----------  ----------- 
                                                                            
Net income               $     4,526  $    48,573  $    20,952  $    16,177 
                                                                            
Foreign currency                                                            
 translation adjustment       (1,651)       6,913       (2,082)      11,510 
                         -----------  -----------  -----------  ----------- 
                                                                            
Comprehensive income     $     2,875  $    55,486  $    18,870  $    27,687 
                         ===========  ===========  ===========  =========== 
                                                                            
                                                                            
                                                                            
              AUTOCHINA INTERNATIONAL LIMITED AND SUBSIDIARIES              
 CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited) 
                                 - Continued                                
               (in thousands except share and per share data)               
                                                                            
                             Three months ended        Nine months ended    
                               September 30,             September 30,      
                         ------------------------- ------------------------ 
                             2012         2011         2012         2011    
                         ------------ ------------ ------------ ----------- 
                                       As Adjusted              As Adjusted 
Earnings per share                                                          
  Basic                                                                     
    Continuing                                                              
     operations          $       0.19 $       2.05 $       0.89 $      0.82 
    Discontinued                                                            
     operations                    --         0.02           --       (0.13)
                         ------------ ------------ ------------ ----------- 
                         $       0.19 $       2.07 $       0.89 $      0.69 
                         ============ ============ ============ =========== 
  Diluted                                                                   
    Continuing                                                              
     operations          $       0.19 $       2.05 $       0.89 $      0.81 
    Discontinued                                                            
     operations                    --         0.02           --       (0.13)
                         ------------ ------------ ------------ ----------- 
                         $       0.19 $       2.07 $       0.89 $      0.68 
                         ============ ============ ============ =========== 
                                                                            
Dividend declared per                                                       
 share                   $         -- $         -- $       0.25 $        -- 
                         ============ ============ ============ =========== 
Weighted average shares                                                     
 outstanding                                                                
  Basic                    23,538,919   23,538,919   23,538,919  23,538,919 
                         ============ ============ ============ =========== 
  Diluted                  23,538,919   23,538,919   23,658,660  23,640,196 
                         ============ ============ ============ =========== 
                                                                            
                                                                            
                                                                            
              AUTOCHINA INTERNATIONAL LIMITED AND SUBSIDIARIES              
       CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME       
               (in thousands except share and per share data)               
                                                                            
                            Three months ended                              
                               December 31,         Year ended December 31, 
                         ------------------------  ------------------------ 
                             2012         2011         2012         2011    
                         -----------  -----------  -----------  ----------- 
                                      As Adjusted               As Adjusted 
                         (unaudited)  (unaudited)   (audited)    (audited)  
Revenues                                                                    
  Commercial vehicles    $    34,819  $    83,422  $   249,040  $   505,618 
  Finance                     13,145       21,770       69,804       84,100 
  Insurance                    3,945        2,228       14,268        8,376 
                         -----------  -----------  -----------  ----------- 
    Total revenues            51,909      107,420      333,112      598,094 
                         -----------  -----------  -----------  ----------- 
                                                                            
Cost of sales                                                               
  Commercial vehicles          1,268          638        7,350       86,055 
  Commercial vehicles,                                                      
   related parties            32,569       80,242      234,781      404,572 
  Insurance                      894           --        2,159           -- 
                         -----------  -----------  -----------  ----------- 
    Total cost of sales       34,731       80,880      244,290      490,627 
                         -----------  -----------  -----------  ----------- 
                                                                            
Gross profit                  17,178       26,540       88,822      107,467 
                         -----------  -----------  -----------  ----------- 
                                                                            
  Operating expenses                                                        
  Selling and marketing        2,615        2,353       10,126        8,055 
  General and                                                               
   administrative             11,317       10,051       41,951       27,204 
  Interest expense             1,839        4,157       10,621       15,920 
  Interest expense,                                                         
   related parties               184        1,049          869        3,020 
  Other income, net           (2,167)        (596)      (7,101)      (3,415)
                         -----------  -----------  -----------  ----------- 
    Total operating                                                         
     expenses                 13,788       17,014       56,466       50,784 
                         -----------  -----------  -----------  ----------- 
                                                                            
Income from operations         3,390        9,526       32,356       56,683 
                         -----------  -----------  -----------  ----------- 
                                                                            
Other income (expense)                                                      
  Loss on change in fair                                                    
   value of earn-out         
                                               
   obligation                     --           --           --      (17,300)
  Interest income                 82           65          308          160 
                         -----------  -----------  -----------  ----------- 
    Total other income                                                      
     (expense)                    82           65          308      (17,140)
                         -----------  -----------  -----------  ----------- 
                                                                            
Income from continuing                                                      
 operations before                                                          
 income taxes                  3,472        9,591       32,664       39,543 
                                                                            
Income tax provision            (875)      (2,726)      (9,115)     (13,419)
                         -----------  -----------  -----------  ----------- 
                                                                            
Income from continuing                                                      
 operations                    2,597        6,865       23,549       26,124 
                                                                            
Income (loss) from                                                          
 discontinued operations          --        2,819           --       (1,330)
  Income tax benefit                                                        
   (provision)                    --         (704)          --          333 
  Net loss attributable                                                     
   to non-controlling                                                       
   interests                      --           (6)          --           24 
                         -----------  -----------  -----------  ----------- 
Income (loss) from                                                          
 discontinued                                                               
 operations, net of                                                         
 taxes                            --        2,109           --         (973)
                         -----------  -----------  -----------  ----------- 
                                                                            
Net income               $     2,597  $     8,974  $    23,549  $    25,151 
                                                                            
Foreign currency                                                            
 translation adjustment        2,484        3,797          402       15,307 
                         -----------  -----------  -----------  ----------- 
                                                                            
Comprehensive income     $     5,081  $    12,771  $    23,951  $    40,458 
                         ===========  ===========  ===========  =========== 
                                                                            
                                                                            
                                                                            
              AUTOCHINA INTERNATIONAL LIMITED AND SUBSIDIARIES              
 CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - Continued 
               (in thousands except share and per share data)               
                                                                            
                             Three months ended                             
                                December 31,        Year ended December 31, 
                         ------------------------- ------------------------ 
                             2012         2011         2012         2011    
                         ------------ ------------ ------------ ----------- 
                                       As Adjusted              As Adjusted 
                          (unaudited)  (unaudited)   (audited)   (audited)  
Earnings (loss) per                                                         
 share                                                                      
  Basic                                                                     
    Continuing                                                              
     operations          $       0.11 $       0.29 $       1.00 $      1.11 
    Discontinued                                                            
     operations                    --         0.09           --       (0.04)
                         ------------ ------------ ------------ ----------- 
                         $       0.11 $       0.38 $       1.00 $      1.07 
                         ============ ============ ============ =========== 
  Diluted                                                                   
    Continuing                                                              
     operations          $       0.11 $       0.29 $       0.99 $      1.11 
    Discontinued                                                            
     operations                    --         0.09           --       (0.04)
                         ------------ ------------ ------------ ----------- 
                         $       0.11 $       0.38 $       0.99 $      1.07 
                         ============ ============ ============ =========== 
Weighted average shares                                                     
 outstanding                                                                
  Basic                    23,538,919   23,538,919   23,538,919  23,538,919 
                         ============ ============ ============ =========== 
  Diluted                  23,876,548   23,538,919   23,762,378  23,612,398 
                         ============ ============ ============ =========== 
                                                                            
                                                                            
                                                                            
              AUTOCHINA INTERNATIONAL LIMITED AND SUBSIDIARIES              
                         CONSOLIDATED BALANCE SHEETS                        
               (in thousands except share and per share data)               
                                                                            
                                                         December 31,       
                                                 ---------------------------
                                                      2012          2011    
                                                 ------------- -------------
                                                                As Adjusted 
ASSETS                                                                      
Current assets                                                              
Cash and cash equivalents                        $      75,777 $      43,048
Restricted cash                                            160           159
Accounts receivable, net of provision for                                   
 doubtful accounts of $12,041 and $4,830,                                   
 respectively                                           32,956        25,357
Inventories                                              6,728         2,529
Deposits for inventories                                    20           105
Deposits for inventories, related party                     --        14,539
Due from an affiliate                                       --         7,904
Prepaid expenses and other current assets                4,512        12,100
Current maturities of net investment in direct                              
 financing and sales-type leases, net of                                    
 provision for doubtful accounts of $296 and                                
 $714, respectively            
                        196,213       329,111
                                                 ------------- -------------
Total current assets                                   316,366       434,852
                                                                            
Construction-in-progress                                76,669            --
Property, equipment and leasehold improvements,                             
 net                                                     4,985         3,356
Deferred income tax assets                               2,547         1,811
Net investment in direct financing and sales-                               
 type leases, net of current maturities                 38,739       114,447
                                                 ------------- -------------
                                                                            
Total assets                                     $     439,306 $     554,466
                                                 ============= =============
LIABILITIES AND EQUITY                                                      
                                                                            
Current liabilities                                                         
Short-term borrowings (including short-term                                 
 borrowings of the consolidated VIEs without                                
 recourse to AutoChina of $75,412 and $111,095                              
 as of December 31, 2012 and 2011, respectively) $     102,458 $     149,979
Long-term borrowings, current (including long-                              
 term borrowings, current of the consolidated                               
 VIEs without recourse to AutoChina of nil and                              
 $44,438 as of December 31, 2012 and 2011,                                  
 respectively)                                              --        44,438
Accounts payable (including accounts payable of                             
 the consolidated VIEs without recourse to                                  
 AutoChina of $68 and $112 as of December 31,                               
 2012 and 2011, respectively)                           16,392           404
Accounts payable, related parties (including                                
 accounts payable, related parties of the                                   
 consolidated VIEs without recourse to AutoChina                            
 of $706 and nil as of December 31, 2012 and                                
 2011, respectively)                                     2,228            --
Other payables and accrued liabilities                                      
 (including other payables and accrued                                      
 liabilities of the consolidated VIEs without                               
 recourse to AutoChina of $4,857 and $4,415 as                              
 of December 31, 2012 and 2011, respectively)           15,049        13,653
Due to affiliates (including due to affiliates                              
 of the consolidated VIEs without recourse to                               
 AutoChina of $86 and $3,244 as of December 31,                             
 2012 and 2011, respectively)                           65,595        42,696
Customer deposits (including customer deposits                              
 of the consolidated VIEs without recourse to                               
 AutoChina of $161 and $508 as of December 31,                              
 2012 and 2011, respectively)                            1,956         1,152
Income tax payable (including income tax payable                            
 of the consolidated VIEs without recourse to                               
 AutoChina of $1,931 and $1,548 as of December                              
 31, 2012 and 2011, respectively)                        2,551         2,799
Deferred income tax liabilities (including                                  
 deferred income tax liabilities of the                                     
 consolidated VIEs without recourse to AutoChina                            
 of nil and $4,764 as of December 31, 2012 and                              
 2011, respectively)                                     4,717         8,162
                                                 ------------- -------------
Total current liabilities                              210,946       263,283
                                                 ------------- -------------
                                                                            
                                                                            
                                                                            
              AUTOCHINA INTERNATIONAL LIMITED AND SUBSIDIARIES              
                  CONSOLIDATED BALANCE SHEETS - Continued                   
               (in thousands except share and per share data)               
                                                                            
                                                        December 31,        
                                                 -------------------------- 
                                                     2012          2011     
                                                 ------------  ------------ 
                                                                As Adjusted 
Commitment and Contingencies                                                
                                                                            
Equity                                                                      
Preferred shares, $0.001 par value authorized -                             
 1,000,000 shares; issued - none                           --            -- 
Ordinary shares - $0.001 par value authorized -                             
 100,000,000 shares; issued and outstanding -                               
 23,538,919 shares at December 31, 2012,                                    
 respectively; and $0.001 par value authorized -                            
 50,000,000 shares; issued and outstanding -                                
 23,538,919 shares at December 31, 2011,                                    
 respectively                                              24            24 
Additional paid-in capital                            323,856       404,745 
Statutory reserves                                     16,997        13,016 
Accumulated losses                                   (135,487)     (149,170)
Accumulated other comprehensive income                 22,970        22,568 
Total equity                                          228,360       291,183 
                                                 ------------  ------------ 
                                                                            
Total liabilities and equity                     $    439,306  $    554,466 
                                                 ============  ============ 
                                                                            
                                                                            
                                                                            
              AUTOCHINA INTERNATIONAL LIMITED AND SUBSIDIARIES              
                   CONSOLIDATED STATEMENTS OF CASH FLOWS                    
                               (in thousands)                               
                                                                            
                                                    December 31,            
                                         ---------------------------------- 
                                            2012        2011        2010    
                                         ----------  ----------  ---------- 
                                                         As          As     
                                 
                     Adjusted    Adjusted  
Cash flow from continuing operating                                         
 activities:                                                                
                                                                            
Net income (loss)                        $   23,549  $   25,151  $  (62,300)
Adjustments to reconcile net income                                         
 (loss) to net cash provided by (used                                       
 in) operating activities:                                                  
Net loss (income) from discontinued                                         
 operations                                      --         973        (604)
Loss on change in fair value of earn-out                                    
 obligation                                      --      17,300     100,400 
Depreciation and amortization                 1,902       1,420         952 
Provision for bad debts                      14,550       4,271       1,447 
Deferred income taxes                        (4,180)      6,261        (959)
Stock-based compensation expenses             4,553       2,914       3,281 
Changes in operating assets and                                             
 liabilities, net of acquisitions and                                       
 divestitures:                                                              
Accounts receivable                         (22,331)     (5,997)    (20,263)
Notes receivable                                 --          --         222 
Net investment in direct financing and                                      
 sales-type leases                          209,063       2,175    (194,490)
Inventories                                  (4,176)     (1,024)     (1,255)
Deposits for inventories                         85         923      16,567 
Deposits for inventories, related party      14,515     (14,177)         -- 
Prepaid expense and other current assets      7,586      (3,511)     (1,828)
Trade notes payable                              --          --     (12,561)
Accounts payable                             15,922        (536)     (2,756)
Accounts payable, related parties                --          --      16,104 
Other payable and accrued liabilities         1,356       5,729       4,229 
Customers deposits                              798        (100)       (182)
Income tax payable                             (254)     (4,568)      4,912 
                                         ----------  ----------  ---------- 
                                                                            
Net cash provided by (used in)                                              
 continuing operating activities            262,938      37,204    (149,084)
                                         ----------  ----------  ---------- 
                                                                            
Cash flow from continuing investing                                         
 activities:                                                                
                                                                            
Capital expenditure on construction in                                      
 progress                                   (76,353)         --          -- 
Purchase of property, equipment and                                         
 leasehold improvements                      (3,516)     (1,967)     (1,427)
Cash received from sales of subsidiaries         --       7,589          -- 
(Increase) decrease) in restricted cash          --        (155)     12,561 
Decrease (increase) in due from an                                          
 affiliate                                    7,891       9,000      (9,000)
                                         ----------  ----------  ---------- 
                                                                            
Net cash (used in) provided by                                              
 continuing investing activities            (71,978)     14,467       2,134 
                                         ----------  ----------  ---------- 
                                                                            
                                                                            
                                                                            
              AUTOCHINA INTERNATIONAL LIMITED AND SUBSIDIARIES              
              CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued             
                               (in thousands)                               
                                                                            
                                                     December 31,           
                                         -----------------------------------
                                            2012        2011         2010   
                                         ----------  ----------  -----------
                                                         As                 
                                                      Adjusted   As Adjusted
Cash flow from continuing financing                                         
 activities:                                                                
                                                                            
Proceeds from borrowings                    102,036     189,850      220,028
Repayments of borrowings                   (194,093)   (163,567)    (73,269)
Proceeds from affiliates                    137,052     320,641      403,384
Repayment to affiliates                    (170,520)   (372,259)   (366,169)
Increase in accounts payable, related                                       
 parties                                    234,781     404,492      394,578
Repayment to accounts payable, related                                      
 parties                                   (232,562)   (421,036)   (513,690)
Dividend paid                                (5,885)         --           --
Capital distribution                        (29,274)         --           --
Issue of shares on exercise of warrants          --          --       10,296
Issue of shares for cash, net of                                            
 offering costs of $3,758                        --          --       66,242
Shares repurchase                                --          --      (1,630)
                                         ----------  ----------  -----------
                                                                            
Net cash (used in) provided by                                              
 continuing financing activities           (158,465)    (41,879)     139,770
                                         ----------  ----------  -----------
                                                                            
Net cash provided by (used in)                                              
 continuing operating, financing and                                        
 investing activities                        32,495       9,792      (7,180)
                                         ----------  ----------  -----------
                                                                            
Cash flow of discontinued operations:                                       
                                                                            
Cash provided by (used in) provided by                                      
 operating activities                            --      48,537     (84,184)
Cash provided by (used in) investing                                        
 activities                                      --     172,922     (59,454)
Cash (used in) provided by financing                                        
 activities                                      --    (222,289)     144,087
                                         ----------  ----------  -----------
                                   
                                         
Net cash flow (used in) provided by                                         
 discontinued operations                         --        (830)         449
                                         ----------  ----------  -----------
                                                                            
Effect of exchange rate fluctuation on                                      
 cash and cash equivalents                      234       3,138          894
                                         ----------  ----------  -----------
                                                                            
Net increase (decrease) in cash and cash                                    
 equivalents                                 32,729      12,100      (5,837)
                                                                            
Cash and cash equivalents, beginning of                                     
 the year                                    43,048      30,948       36,785
                                         ----------  ----------  -----------
                                                                            
Cash and cash equivalents, end of the                                       
 year                                    $   75,777  $   43,048  $    30,948
                                         ==========  ==========  ===========
                                                                            
                                                                            
Analysis of balances of cash and cash                                       
 equivalents                                                                
Included in cash and cash equivalents                                       
 per consolidated balance sheet              75,777      43,048       30,100
Included in assets of discontinued                                          
 operations                                      --          --          848
                                         ----------  ----------  -----------
                                             75,777      43,048       30,948
                                         ==========  ==========  ===========
                                                                            
                                                                            
                                                                            
              AUTOCHINA INTERNATIONAL LIMITED AND SUBSIDIARIES              
              CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued             
                               (in thousands)                               
                                                                            
                                                     December 31,           
                                         -----------------------------------
                                             2012        2011        2010   
                                         ----------- ----------- -----------
                                                     As Adjusted As Adjusted
Supplemental disclosure of cash flow                                        
 information:                                                               
Continuing Operations                                                       
Interest paid                            $    15,194 $    14,607 $    15,619
                                         =========== =========== ===========
Income taxes paid                        $    13,544 $    11,348 $     6,189
                                         =========== =========== ===========
                                                                            
Discontinued Operations                                                     
Interest paid                            $        -- $     3,943 $       986
                                         =========== =========== ===========
Income taxes paid                        $        -- $         8 $       351
                                         =========== =========== ===========
                                                                            
Supplemental disclosure on non-cash                                         
 continuing financing activities                                            
Reclassification from liability of the                                      
 obligation to issue shares for the                                         
 amendments of earn-out provision to                                        
 equity                                  $        -- $    90,400 $    84,600
                                         =========== =========== ===========
                                                                            
                                                                            
                                                                            
                Non-GAAP Financial Measures ($ in thousands)                
                                                                            
A reconciliation of Adjusted Net Income to net income (loss) is provided    
below:                                                                      
                                                                            
                         Three Months      Three Months                     
                            Ended              Ended           Year Ended   
                        September 30,      December 31,       December 31,  
                        2012     2011      2012     2011     2012     2011  
                      -------- --------  -------- -------  -------- --------
Net income (loss)     $  4,526 $ 48,573  $  2,597 $ 8,974  $ 23,549 $ 25,151
                                                                            
(Income) loss from                                                          
 discontinued                                                               
 operations                 --     (357)       --  (2,109)       --      973
                                                                            
(Gain) loss on change                                                       
 in fair value of                                                           
 earn-out obligation        --  (36,300)       --      --        --   17,300
                      -------- --------  -------- -------  -------- --------
                                                                            
Adjusted Net Income   $  4,526 $ 11,916  $  2,597 $ 6,865  $ 23,549 $ 43,451
                      ======== ========  ======== =======  ======== ========
                                                                            
                                                                            
A reconciliation of Adjusted EBITDA to net income is provided below:        
                                                                            
                         Three Months      Three Months                     
                            Ended              Ended          Year Ended    
                        September 30,      December 31,      December 31,   
                        2012     2011      2012     2011     2012     2011  
                      -------  --------  -------  -------  -------  ------- 
Net income (loss)     $ 4,526  $ 48,573  $ 2,597  $ 8,974  $23,549  $25,151 
                                                                            
(Income) loss from                                                          
 discontinued                                                               
 operations                --      (357)      --   (2,109)      --      973 
                                                                            
Interest expenses       2,185     5,115    2,023    5,206   11,490   18,940 
                                     
                                       
Interest income           (74)      (38)     (82)     (65)    (308)    (160)
                                                                            
Income tax provision    2,837     3,663      875    2,726    9,115   13,419 
                                                                            
(Gain) loss on change                                                       
 in fair value of                                                           
 earn-out obligation       --   (36,300)      --       --       --   17,300 
                                                                            
Stock-based                                                                 
 compensation           1,979       901      926      936    4,553    2,914 
                                                                            
Depreciation &                                                              
 Amortization             492       256      491      539    1,902    1,420 
                      -------  --------  -------  -------  -------  ------- 
                                                                            
Adjusted EBITDA       $11,945  $ 21,813  $ 6,830  $16,207  $50,301  $79,957 
                      =======  ========  =======  =======  =======  ======= 

 
USE OF NON-GAAP MEASURES
 AutoChina defines Adjusted Net Income as net
income (loss) before gain (loss) on change in fair value of earn-out
obligation and before income/loss from discontinued operations, and
Adjusted EBITDA as net income before interest expense (income),
income taxes, depreciation and amortization, as well as the exclusion
of Loss (gain) on change in fair value of earn-out obligation,
(income) loss from discontinued operations, stock-based compensation
and accretion of stock repurchase obligations. Adjusted Net Income
and Adjusted EBITDA exclude certain financial information that would
be included in net income (loss), the most directly comparable GAAP
financial measure. Users of this financial information should
consider the type of material events and transactions that are
excluded from Adjusted Net Income and Adjusted EBITDA, and the
material limitations of therein. For example, Adjusted EBITDA does
not include net interest expense, but because AutoChina has borrowed
money to finance its operations, interest expense is a necessary and
ongoing part of its costs and has assisted AutoChina in generating
revenue; Adjusted EBITDA does not include taxes, although payment of
taxes is a necessary and ongoing part of AutoChina's operations; and
Adjusted EBITDA does not include depreciation and amortization
expense, but because AutoChina uses capital assets to generate
revenue, depreciation and amortization expense is a necessary element
of its cost structure. Therefore, Adjusted Net Income and Adjusted
EBITDA should not be considered an alternative to, or more meaningful
than, net income, as determined in accordance with GAAP, since it
omits the impact of these expenses incurred by AutoChina.  
AutoChina believes that the presentation of these non-GAAP financial
measures is warranted and useful to its shareholders because it
provides an additional analytical tool for understanding the
Company's financial performance by excluding certain items that may
obscure trends in the core operating performance of the Company's
business. Using Adjusted Net Income and Adjusted EBITDA also
facilitates management's internal comparisons to AutoChina's
historical performance and liquidity. AutoChina computes Adjusted Net
Income and Adjusted EBITDA using the same consistent method from
quarter to quarter. The table above has more details on the
reconciliations between GAAP financial measures that are most
directly comparable to Non-GAAP financial measures. 
CONTACT
At the Company
Jason Wang
Chief Financial Officer
(858) 997-0680 
jcwang@kywmall.com  
Investor Relations 
The Equity Group Inc.
Carolyne Yu
Senior Associate
(212) 836-9610 
cyu@equityny.com  
Adam Prior
Senior Vice President
(212) 836-9606 
aprior@equityny.com