Lentuo International Announces Third Quarter 2013 Financial Results

     Lentuo International Announces Third Quarter 2013 Financial Results

PR Newswire

BEIJING, Dec. 9, 2013

BEIJING, Dec. 9, 2013 /PRNewswire/ -- Lentuo International Inc. (NYSE: LAS)
("Lentuo" or the "Company"), a leading non-state-owned automobile retailer
headquartered in Beijing, today reported its financial results for the third
quarter ended September 30, 2013.

Third Quarter 2013 Financial Highlights

  oRevenues increased 13.6% to RMB953.1million ($155.7 million), from
    RMB838.9 million in the third quarter of 2012.
  oNet income was RMB17.6 million ($2.9 million), compared with a net loss of
    RMB6.4 million in the third quarter of 2012.
  oRevenue from automobile repair and maintenance services as a percentage of
    total revenue increased to 12.3% from 11.4% in the third quarter of 2012.
  oVehicles sold increased 8.6% to 4,842 vehicles, from 4,460 vehicles in the
    third quarter of 2012.

"We continue to see the positive results of our strategy to focus on higher
margin models and expansion of our after sales services. Revenue and gross
margins both increased, particularly in automobile sales, year-over-year, and
revenue from higher margin after-sales services increased as a percentage of
total revenues. These operational and financial developments demonstrate the
strength of the positive long-term fundamentals of China's auto industry and
our ability to capitalize on them," commented Mr. Hetong Guo, Founder and
Chairman of Lentuo International.

"Our FAW-Volkswagen flagship store in Beijing has started to contribute
revenues since its official launch in mid-July 2013 selling 310 vehicles
during the quarter. This store has also further reinforced our 16-year
relationship with FAW-Volkswagen and exemplifies the kind of long-term
relationships we intend to build with all of our partners. As we continue to
optimize our product mix towards higher-margin vehicles and after-sales
services, we look forward to developing equally deep relationships with Itochu
Corporation and First Automobile Finance which have demonstrated their faith
in our strategy with their substantial financial and managerial resources."

Mr. Hetong Guo concluded, "While I am pleased with the progress we have made
so far, I realize we still have a way to go. We will continue to solidify our
position as one of China's premier dealership brands by leveraging the
knowledge and resources we have acquired from our multiple partnerships and
experience. I look forward to the opportunities that will emerge as we seek to
continue to deliver sustainable growth over the long-term."

Third Quarter 2013 Financial Performance

Revenues for the three months ended September 30, 2013 increased by 13.6% to
RMB953.1 million ($155.7 million) from RMB838.9 million in the third quarter
of 2012.

Revenues from automobile sales increased by 11.5% to RMB819.4 million ($133.9
million) during the third quarter of 2013 from RMB735.0 million during the
same period in 2012. The Company sold 4,842 vehicles, an 8.6% increase from
4,460 vehicles in the third quarter of 2012. The increase was primarily due to
the inclusion of the Company's newly opened FAW-Volkswagen flagship store,
which was officially opened in mid-July and contributed to revenue with the
sale of 310 vehicles during the quarter. Sales of Japanese cars showed signs
of improvement after four quarters of contraction.

The average new vehicle unit price for the third quarter of 2013 was
RMB170,591 ($27,874), a 3.3% increase from RMB165,086 in the same period in
2012. The increase was mainly due to the Company's constant optimization of
its product mix as it caters to consumers' increasing demand for popular car
models with higher average selling prices.

Revenues from repair and maintenance services in the third quarter of 2013
increased by 22.1% to RMB117.3 million ($19.2 million) from RMB96.0 million
during the same period in 2012. The Company serviced 49,979 vehicles during
the three months ended September 30, 2013, an 11.6% decrease from the 56,545
vehicles serviced in the third quarter of 2012. The increase in revenues from
repair and maintenance services was primarily due to the optimization of the
Company's service offering mix within repair and maintenance services towards
higher-priced products which tend to contribute more to profits given the
higher average selling prices. The decrease in the number of vehicles serviced
was mainly due to the abnormal effects of a severe rain storm that occurred in
Beijing in July 2012 that caused a temporary spike in the number of vehicles
needing repair during the third quarter of 2012.

                                 Revenues
                                 (in thousands of Renminbi)
                                                             % Increase
                                 3Q 13           3Q 12
                                                             (Decrease)
Sales of automobiles
 Beijing                        709,791         612,044     16.0%
 Outside Beijing                109,653         122,918     (10.8)%
Total                            819,444         734,962     11.5%
Repair and maintenance services
 Beijing                        97,295          79,678      22.1%
 Outside Beijing                19,965          16,356      22.1%
Total                            117,260         96,034      22.1%

                                 Revenues
                                 (in thousands of Renminbi)
                                                             % Increase
                                 3Q 13           3Q 12
                                                             (Decrease)
Sales of automobiles
 German Branded                 578,028         495,090     16.8%
 Japanese Branded               241,416         239,872     0.6%
Total                            819,444         734,962     11.5%
Repair and maintenance services
 German Branded                 80,847          64,261      25.8%
 Japanese Branded               36,413          31,773      14.6%
Total                            117,260         96,034      22.1%

                                   PercentofTotalRevenues
Revenue Category                   3Q 13           3Q 12
Sales of automobiles               86.0%           87.6%
Automobile repair and maintenance
                                   12.3%           11.4%
services
Sales of leased automobiles        0.7%            0.2%
Other services                     1.0%            0.8%
Total                              100%            100%

Cost of goods sold increased by 8.2% to RMB854.0 million ($139.5 million) in
the third quarter of 2013 from RMB789.1 million in the same period of 2012.The
rise was primarily a result of higher revenue.

Gross profit increased by 99.2% to RMB99.1 million ($16.2 million) in the
third quarter of 2013 from RMB49.7 million in the same quarter of 2012. The
increase in gross profit was mainly due to the increase in overall gross
margin.

Overall gross margin for the third quarter of 2013 increased to10.4% from 5.9%
in the third quarter of 2012. Specifically, the gross margin for automobile
sales increased to 4.9% in the third quarter of 2013 from 1.1% in the same
period of 2012, while the gross margin of repair and maintenance services
increased to 41.1%,compared with 40.8% for the same period in 2012. The
increase in gross margin for automobile sales was primarily due to abnormally
low gross margins seen in the second half of 2012 during the strain in
Sino-Japanese relations. This directly affected sales of Japanese-branded
cars, and also caused lower gross margins on non-Japanese branded cars due to
increased market competition. Gross margins on Japanese and non-Japanese
branded cars have since recovered substantially. Overall gross margin
increased mainly due to the significant increase in gross margin for
automobile sales, which contributed most of the Company's revenues.

Selling, marketing and distribution expenses increased by 60.6% to RMB34.6
million ($5.7 million) in the third quarter of 2013 from RMB21.5 million
during the same period of 2012. The increase was primarily due to additional
staff at new dealerships and wage inflation. As a percentage of revenues,
selling, marketing and distribution expenses increased to 3.6% in the third
quarter of 2013 from2.6% in the third quarter of 2012.

General and administrative expenses increased by 39.7% to RMB25.3 million
($4.1million) in the third quarter of 2013 from RMB18.1 million during the
same quarter of 2012. The increase was primarily the result of the addition of
staff for new dealerships and wage inflation. As a percentage of revenues,
general and administrative expenses increased to 2.7% in the third quarter of
2013 from 2.2% in the third quarter of 2012.

Operating income for the third quarter of 2013 was RMB39.2 million ($6.4
million), an increase of 288.3% from RMB10.1 million for the same period in
2012.

Operating margin for the third quarter of 2013 was 4.1%, compared with 1.2%
for the same quarter in 2012. The increase in operating margin was primarily
attributable to the 450 basis point increase in overall gross margin and the
150 basis point increase quarter over quarter in operating expenses as a
percentage of revenue.

Net income attributable to controlling interest was RMB17.6 million ($2.9
million) during the third quarter of 2013, compared with a net loss of RMB6.4
million for the same period in 2012.

Basic and diluted earnings per ordinary share were RMB0.27 ($0.04) for the
third quarter of 2013, compared with basic and diluted loss per ordinary share
of RMB0.11 for the third quarter of 2012. This translates into basic and
diluted earnings per ADS of RMB0.54 ($0.08) in the third quarter of 2013. Each
ADS represents two ordinary shares. Weighted average ordinary shares
outstanding in the third quarter of 2013 increased to 65,137,912 from
58,937,912as of June 30, 2013 due to the 6,200,000 ordinary shares issued
pursuant to the Company's 2010 Share Incentive Plan.

Liquidity and Capital Resources

As of September 30, 2013, the Company had cash and cash equivalents of
RMB130.3 million ($21.3 million), compared with RMB318.9 million as of
December 31, 2012.

Expansion Strategy Update

Lentuo's new FAW-Volkswagen flagship store in Beijing officially opened in
mid-July 2013. The store is now fully operational and contributes
substantially to the Company's revenues.

Lentuo is currently in the planning and preparation stages of jointly
developing the Hailin-Lentuo Auto Mall with the Hailin Economic and
Technological Development Zone in Hailin City, Heilongjiang Province. The Auto
Mall will include numerous full-service 4S^[1] dealerships from some of the
world's leading brands with a large inventory of new and pre-owned cars,
state-of-the-art showrooms, repair and maintenance service centers, vehicle
insurance vendors, leasing services, auto parts, carwash services, etc.

Following receipt of all necessary government approvals, the Company's joint
venture agreement with Itochu, a Fortune Global 500 company, is fully
operational and is currently focused on the new Audi 4S dealership under
construction in Beijing and further expansion of other high-end brand
dealerships across China.

[1]4S refers to authorized dealerships in China that provide Sales, Spare
parts, Service and Survey services.

Conference Call

Lentuo's management will host a conference call to discuss the results at 8:00
a.m. Eastern Standard Time on December 9, 2013 (9:00 p.m. Beijing time on the
same day).

The dial-in details for the live conference call are:

U.S. Toll Free        +1 877-941-1427
International Dial In +1 480-629-9664

A telephone replay of the call will be available after the conclusion of the
conference call at 11:00 a.m. Eastern Standard Time on December 9, 2013
through 11:59 p.m. Eastern Standard Time on December 16, 2013. The dial-in
details for the replay are:

U.S. Toll Free         +1877-870-5176
International Dial In: +1 858-384-5517
Passcode:              4654266

A live webcast of the conference call will be available on the investor
relations section of Lentuo's website at: http://lentuo.investorroom.com/ or
alternately at http://ViaVid.net.

Exchange Rate

This announcement contains translations of certain Renminbi amounts into U.S.
dollars at specified rates solely for the convenience of readers. Unless
otherwise noted, all translations from Renminbi to U.S. dollars were made at
the exchange rate ofRMB 6.1179to US$1.00, as set forth in the H.10
statistical release of the Federal Reserve Board onSeptember 27, 2013.

About Lentuo International Inc.

Lentuo is a leading non-state-owned automobile retailer headquartered in
Beijing. Lentuo operates 12 franchise dealerships, 10 automobile showrooms,
one automobile repair shops and one car leasing company.

Website: http://lentuo.investorroom.com/

Safe Harbor Statement

This press release contains forward-looking statements. These statements
constitute "forward-looking" statements within the meaning of Section 21E of
the Securities Exchange Act of 1934, as amended, and as defined in the U.S.
Private Securities Litigation Reform Act of 1995. These forward-looking
statements can be identified by terminology such as "will," "expects,"
"anticipates," "future," "intends," "plans," "believes," "estimates,"
"target," "going forward," "outlook" and similar statements. Such statements
are based upon management's current expectations and current market and
operating conditions, and relate to events that involve known or unknown
risks, uncertainties and other factors, all of which are difficult to predict
and many of which are beyond the Company's control, which may cause the
Company's actual results, performance or achievements to differ materially
from those in the forward-looking statements. Further information regarding
these and other risks, uncertainties or factors is included in the Company's
filings with the U.S. Securities and Exchange Commission. The Company does not
undertake any obligation to update any forward-looking statement as a result
of new information, future events or otherwise, except as required under
applicable law.

For more information, please contact:

Ms.Jiangyu Luo
Acting CFO
Lentuo International Inc.

Email:luojiangyu@lentuo.net

Christensen
Mr. Christian Arnell
Telephone +86 10 5826 4939 in Beijing
Email: carnell@christensenir.com

Ms. Linda Bergkamp
Phone: +1-480-614-3004 (U.S.A.)
Email: lbergkamp@christensenir.com



Lentuo International Inc.
Consolidated Statements of Income and Comprehensive Income
(Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("US$"), except for
number of shares

and per share data)
                                  For the three months ended
                                  Sep30,2012      Sep30,2013
                                  RMB               RMB            US$
Revenues
 Sales of automobiles            734,962           819,444        133,896
 Automobile repair and           96,034            117,260        19,160
maintenance services
 Sales of leased automobiles     1,323             6,559          1,072
 Other services                  6,554             9,790          1,600
Total revenues                    838,873           953,053        155,728
Cost of goods sold
 Sales of automobiles            (726,875)         (779,217)      (127,323)
 Automobile repair and           (56,857)          (69,059)       (11,284)
maintenance services
 Sales of leased automobiles     (5,045)           (5,347)        (874)
 Other services                  (357)             (368)          (60)
Total cost of goods sold          (789,134)         (853,991)      (139,541)
Gross profit                      49,739            99,062         16,187
Operating expenses
 Selling, marketing and          (21,547)          (34,606)       (5,655)
distribution expenses
 General and administrative      (18,109)          (25,303)       (4,134)
expenses
Total operating expenses          (39,656)          (59,909)       (9,789)
Operating income                  10,083            39,153         6,398
Interest expenses                 (20,009)          (10,219)       (1,670)
Other income, net                 42                819            134
Income before income tax expenses (9,884)           29,753         4,862
Income tax expenses               (255)             (10,220)       (1,670)
Net income and comprehensive      (10,139)          19,533         3,192
income
Net income and comprehensive
income
                                  (3,761)           1,909          312
attributable to non-controlling
interest
Net income and comprehensive
income
                                  (6,378)           17,624         2,880
attributable to controlling
interest
Earnings per ordinary share:
Basic and diluted earnings per    (0.11)            0.27           0.04
ordinary share
Weighted average ordinary shares
outstanding:
Basic and diluted                 58,937,912        65,137,912     65,137,912



Lentuo International Inc.
Consolidated Balance Sheets
(Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("US$"), except for
number of shares and per

share data)
                                   December 31, 2012     Sep 30, 2013
                                   RMB                   RMB          US$
Assets
Current assets
 Cash and cash equivalents        318,909               130,292      21,290
 Restricted cash                  437,875               402,111      65,704
 Accounts receivable (net of
allowance for doubtful
 accounts of nil as of September  41,399                56,654       9,257
30, 2012 and

December 31, 2011)
 Inventories, net                 432,722               508,687      83,119
 Leased automobiles held for      206,604               234,609      38,335
sale, net
 Advances to suppliers            316,067               549,990      89,868
 Prepaid expenses and other       35,148                60,505       9,886
current assets
 Amounts due from related parties 57,830                275,594      45,032
 Deferred tax assets              6,756                 7,957        1,300
Total current assets               1,853,310             2,226,399    363,791
Non-current assets
 Property and equipment, net      560,700               634,482      103,674
 Land use rights, net             18,256                15,216       2,486
 Intangible assets, net           106,058               107,452      17,558
 Goodwill                         73,634                73,634       12,032
 Long-term prepayments            26,500                6,500        1,062
 Long-term investment             11,250                11,250       1,838
 Deferred tax assets              9,624                 8,274        1,352
Total non-current assets           806,022               856,808      140,002
Total assets                       2,659,332             3,083,207    503,793
Liabilities and Stockholders'
Equity
Current liabilities
 Accounts payable                 6,458                 9,398        1,536
 Bills payable                    887,100               737,519      120,510
 Advances from customers          49,974                36,737       6,003
 Accrued expenses and other       444,553               485,079      79,261
current liabilities
 Amounts due to related parties                                      0
 Unrecognized tax benefits        4,963                 4,963        811
 Taxes payable                    54,369                49,051       8,015
 Short-term loans                 365,274               541,817      88,532
Total current liabilities          1,812,691             1,864,564    304,668
Non-current liabilities
 Long-term bank loans             -                     40,000       6,536
 Deferred tax liabilities         31,770                31,200       5,098
Total non-current liabilities     31,770                71,200       11,634
Total liabilities                  1,844,461             1,935,764    316,302
Shareholders' Equity
 Ordinary shares, par value
US$0.00001 per share
Authorized – 500,000,000 shares as
of September

30, 2012 and December 31, 2011
Issued and                         4                     4            1

outstanding – 58,937,912 shares as
of September

30, 2012 and December 31, 2011
 Additional paid-in capital       469,761               641,761      104,863
 Retained earnings                329,147               360,067      58,834
                                                                      -
Total equity for controlling       798,912               1,001,832    163,698
interest
Non-controlling interest          15,959                145,611      23,793
Total shareholder's equity         814,871               1,147,443    187,491
Total liabilities and              2,659,332             3,083,207    503,793
stockholder's equity







SOURCE Lentuo International Inc.

Website: http://lentuo.investorroom.com
Website: http://ViaVid.net