Welcome!

Microsoft Cloud Authors: Pat Romanski, Liz McMillan, John Basso, Glenn Rossman, Elizabeth White

News Feed Item

China Information Technology, Inc. Announces Third Quarter 2012 Results

SHENZHEN, China, Nov. 7, 2012 /PRNewswire-FirstCall/ -- China Information Technology, Inc. (Nasdaq: CNIT) (the "Company", "our" or "we"), a leading provider of information technologies and display technologies ("DT') based in China, today announced its financial results for the third quarter ended September 30, 2012.

Third Quarter 2012 Financial Highlights

  • Revenues decreased YoY by $1.04 million, or 3.65%, to $27.42 million from $28.46 million a year ago
  • Gross profit decreased YoY by $6.09 million, or 64.25%, to $3.39 million from $9.49 million a year ago
  • Operating loss of $20.04 million vs. operating income of $1.37 million a year ago
  • Net loss of $21.44 million vs. net income of $0.93 million a year ago
  • Fully diluted net loss per share of $0.79 vs. net income per share of $0.03 a year ago

Mr. Jiang Huai Lin, Chairman and Chief Executive Officer of the Company, commented, "Facing macro and fiscal headwinds, the Company experienced a decline in revenues of 3.65% YoY to $27.4 million and a net loss of $21.4 million, including write-downs of certain company assets.  The Company continues to make strides in its business transition.  Our revenues increased 106.5% QoQ from $13.3 million in 2Q 2012 as our new product offerings begin to make significant contributions to our overall revenue mix.  Our third quarter operating cash flow was $4.5 million, reflecting our successful implementation of our strategy of revenue diversification and focus on the quality of earnings."

"Our DT revenues increased 58.5% YoY in the third quarter to $20.1 million from $12.7 million last year.  This is a strong indication that our national marketing campaign is starting to pay off as we expand our DT offerings in different geographical markets.  During the quarter, we completed most of the $10 million project to provide 9,000 units of our IT-Pad to education clients in Anhui Province.  This is an important pilot project for the new-generation interactive teaching tool for China's "Digital Campus" initiative.  The Company was chosen for the project mainly because of its robust integrated proprietary solutions, and this should give us an early-mover advantage in the dynamic China digital education market.  Overall, our DT segment now comprises 73.4% of our total revenues in 3Q 2012, versus 44.6% during the same period last year.  In our IT Segment, despite the significant slowdown in our traditional core area of digital public security, our GIS and DHIS segments, although still at a small base, continued to deliver healthy year-over-year growth."

"Although we expect the rest of the year to remain challenging, we are optimistic about the coming year as we expect the macro sluggish to bottom out and the Company continues to shift to higher value-added products and solutions as we execute our transition strategy.  We will continue to penetrate new DT markets with the introduction of our high-end interactive touch-screen products, including our proprietary IT-Pad, DS-Pad and Tea-Pad series.  We also expect continued growth from our GIS and HIS segments as they gain scale and momentum.  In addition, as the upcoming China 18th National Congress held in November wraps up, we should expect a more concrete plan on the country's economic objectives, including government expenditure, which we hope will add impetus to our overall government-weighted IT segment." 

Third Quarter 2012 Results

The following table sets forth key components of our results of operations for the periods indicated, both in dollars and as a percentage of sales revenue.

 

(All amounts, other than percentages, in U.S. dollars)

 



Three Months Ended September 30, 2012


Three Months Ended September 30, 2011


Period-Over-Period Increase (Decrease)



Amount


% of Revenue


Amount


% of Revenue


Amount


%

Revenue

$

27,424,842


100.00%

$

28,462,571


100.00%

$

(1,037,729)


-3.65%

Costs of revenue


24,033,423


87.63%


18,977,223


66.67%


5,056,200


26.64%

Gross profit


3,391,419


12.37%


9,485,348


33.33%


(6,093,929)


-64.25%

Administrative expenses


(19,596,222)


-71.45%


(5,181,609)


-18.20%


(14,414,613)


278.19%

Research and development expenses


(1,346,871)


-4.91%


(1,106,500)


-3.89%


(240,371)


21.72%

Selling expenses


(2,483,841)


-9.06%


(1,831,845)


-6.44%


(651,996)


35.59%

(Loss)/income from operations


(20,035,515)


-73.06%


1,365,394


4.80%


(21,400,909)


-1567.38%

Subsidy income


365,469


1.33%


475,026


1.67%


(109,557)


-23.06%

Other income, net


(834,169)


-3.04%


(109,459)


-0.38%


(724,710)


662.08%

Interest income


75,231


0.27%


119,861


0.42%


(44,630)


-37.23%

Interest expense


(1,214,388)


-4.43%


(943,947)


-3.32%


(270,441)


28.65%

(Loss)/income before income taxes


(21,643,372)


-78.92%


906,875


3.19%


(22,550,247)


-2486.59%

Income tax benefit (expense)


91,930


0.34%


(11,807)


-0.04%


103,737


-878.61%

Net (loss)/income


(21,551,442)


-78.58%


895,068


3.14%


(22,446,510)


-2507.80%

Less: Net loss attributable to non-controlling interest


108,715


0.40%


32,759


0.12%


75,956


231.86%

Net (loss)/income attributable to CNIT

$

(21,442,727)


-78.19%

$

927,827


3.26%

$

(22,370,554)


-2411.07%

Operating Segments

We report financial and operating information in the following two segments:

  1. IT segment: The IT segment includes revenues from products and services surrounding a variety of our software core competencies, currently primarily in Geographic Information Systems ("GIS"), Digital Public Security Technologies ("DPST") and Digital Hospital Information Systems ("DHIS"). IT segment revenues are generated from the sales of software and system integration services, as well as hardware other than display products.
  2. DT segment: The DT segment includes revenues from products and services surrounding our display technology core competencies, currently primarily in GIS, DPST, education, media, and consumer products. DT segment revenues are generated from sales of hardware and total solutions of hardware integrated with proprietary software and content, as well as services.

Revenue

Our revenue is generated from the sales of our software and hardware products, our fully integrated total solutions, and the related after-sales services. For the three months ended September 30, 2012, our revenue was $27.42 million, compared to $28.46 million for the three months ended September 30, 2011, a decrease of $1.04 million, or 3.65%. The decrease was primarily due to the challenging macro environment and difficult fiscal environment faced by many public sector clients as a result of the Chinese government's implementation of macroeconomic tightening policies, which led to a slowdown in projects for our government customers, which traditionally have been our core customer base; and, secondarily, due to our conscious effort to realign our business operations to create a better revenue mix between IT and DT segments and between government and non-government customers.

Product sales increased by $6.84 million, or 52.46%, to $19.89 million for the three months ended September 30, 2012, as compared to $13.04 million in the same period of 2011. Product sales constituted 72.51% of total revenue during the three-month period ended September 30, 2012, as compared with 45.82% during the same period in 2011. The increase in product sales primarily reflected our successful marketing campaign in promoting our new DT products and our ability to win significant large DT projects in the emerging China digital education market during the third quarter.

Software sales decreased by $2.88 million, or 42.02%, to $3.97 million for the three months ended September 30, 2012, from $6.85 million for the same period in 2011. Software sales constituted 14.49% of our total revenue, which decreased from 24.08% during the same period in the prior year. The decrease was mainly due to the Chinese government's continued austere fiscal policies and the curtailment of the massive government economic stimulus package, which led to a slowdown in software projects for our government customers. In addition, we instituted more stringent customer acceptance policies, which limited new projects to those with more solid credit credentials and long-term business prospects in light of the unfavorable government fiscal environment.

Sales of system integration services decreased by $4.79 million, or 58.90%, to $3.34 million for the three months ended September 30, 2012, from $8.13 million for the same period in 2011. The decrease was mainly the result of the relatively sluggish macro-economic growth in the third quarter of 2012 and a lack of new large system integration solutions engagements in connection with large projects comparable to the Shenzhen Summer Universiade, which was held in August 2011. As a percentage of revenue, system integration sales decreased from 28.58% during the three months ended September 30, 2011 to 12.19% during the three months ended September 30, 2012.

Other revenue decreased by $0.21 million, or 48.4%, from $0.43 million in the three months ended September 30, 2011 to $0.22 million in the same period of 2012. The decrease was mainly due to decrease in maintenance services during the current period.

The following table shows our revenue, percentage of revenue, cost of revenue and gross margin, by category:



Three Months Ended September 30, 2012


Three Months Ended September 30, 2011



Revenue


% of Revenue


Cost of Revenue


Gross Margin


Revenue


% of Revenue


Cost of Revenue


Gross Margin

Products

$

19,885,019


72.51%

$

19,127,070


3.81%

$

13,042,469


45.82%

$

10,315,504


20.91%

Software


3,973,094


14.49%


2,077,985


47.70%


6,852,447


24.08%


2,534,256


63.02%

System integration


3,343,016


12.19%


2,507,384


25.00%


8,134,110


28.58%


5,983,569


26.44%

Others


223,713


0.81%


320,984


-43.48%


433,545


1.52%


143,894


66.81%

Total

$

27,424,842


100.00%

$

24,033,423


12.37%

$

28,462,571


100.00%

$

18,977,223


33.33%

A breakdown of revenue, percentage of revenue, cost of revenue and gross margin by segments is as follows:



Three Months Ended September 30, 2012


Three Months Ended September 30, 2011



Revenue


% of Revenue


Cost of Revenue


Gross Margin


Revenue


% of Revenue


Cost of Revenue


Gross Margin

IT Segment

$

7,301,663


26.62%

$

4,901,368


32.87%

$

15,766,275


55.39%

$

9,214,322


41.56%

DT Segment


20,123,179


73.38%


19,132,055


4.93%


12,696,296


44.61%


9,762,901


23.10%

Total 

$

27,424,842


100.00%

$

24,033,423


12.37%

$

28,462,571


100.00%

$

18,977,223


33.33%

Cost of Revenue and Gross Profit

As indicated in the tables above, our cost of revenues increased by $5.06 million, or 26.64%, to $24.03 million for the three months ended September 30, 2012, as compared with $18.98 million for the three months ended September 30, 2011. As a percentage of revenues, our cost of revenue increased to 87.63% during the three months ended September 30, 2012, from 66.67% in the same period of 2011. As a result, gross margin was 12.37% for the three months ended September 30, 2012, a decrease of 20.96 percentage points from 33.33% in the same period of 2011.

The decrease in gross profit margins, as displayed in the tables above, resulted from several factors. First, in the three months ended September 30, 2012, we continued our efforts to increase our DT solutions as a percentage of total revenue. The percentage of DT revenue increased from 44.61% for the three months ended September 30, 2011 to 73.38% for the same period of 2012. The significant increase in contribution from DT revenue resulted in a decrease in gross profit margin for the three months ended September 30, 2012, as our DT solutions business has lower average gross margins than other segments of our business. Second, due to the Chinese government's implementation of macroeconomic tightening policies, our government customers reduced software project orders. As a result, the percentage of software revenue decreased from 24.08% for the three months ended September 30, 2011 to 14.49% for the same period of 2012. The decrease in contribution from software revenues resulted in a decrease in gross profit margin for the three months ended September 30, 2012 as, on average, software projects have higher average gross margins than other segments of our business. Third, the gross margin of software revenues decreased from the same quarter last year mainly as a result of smaller-scale projects versus last year. Finally, the gross profit margin for our system DT business decreased from 23.10% for the three months ended September 30, 2011 to 4.93% for the same period of 2012, primarily due to our strategy of aggressive market penetration and low introductory prices on large projects in the new interactive DT sectors, including education, where early entrants may have industry standard-setting potential and enjoy leading technology reputation.  All of these factors resulted in a decrease in overall gross profit margin for the three months ended September 30, 2012.

Administrative Expenses

Our administrative expenses consist primarily of compensation and benefits to our general management, finance and administrative staff, professional advisor fees, audit fees and other expenses incurred in connection with general operations. Our administrative expenses increased by $14.41 million, or 278.19%, to $19.6 million for the three months ended September 30, 2012, from $5.18 million for the same period of 2011. Notable changes that resulted in increased administrative expenses included: (1) an increase of $1.92 million in inventory write downs; (2) an increase of $4.01 million in provision of accounts receivables; (3) an increase of $1.54 million in depreciation and amortization expenses; and (4) an increase of $7.7 million in impairment of purchased software. Our DT segment's inventory was written down mainly because its traditional LCD business faced continued declining prices due to global oversupply and lack of LCD demand as it faces significant challenges from 3D-TV and OLED technology.  The impairment of purchased software reflected the declining market value of certain purchased software in light of the protracted challenging environment in the Chinese government software segment

Research and Development Expenses

Our research and development expenses consist primarily of personnel-related expenses, as well as costs associated with new software and hardware development and enhancement. Research and development expenses increased by $0.24 million, or 21.72%, to $1.35 million for the three months ended September 30, 2012, from $1.11 million for the same period of 2011. As a percentage of revenue, research and development expenses accounted for approximately 4.91% of total revenue for the three months ended September 30, 2012, compared with 3.89% for the same period in 2011. Such increase was primarily due to our efforts to develop new products as well as to improve the future profitability of existing products.

Selling Expenses

Our selling expenses consist primarily of compensation and benefits to our sales and marketing staff, sales and after-sales traveling costs, and other sales-related costs. Our selling expenses increased by $0.65 million, or 35.59%, to $2.48 million for the three months ended September 30, 2012, from $1.83 million for the same period of 2011. This increase was due to our increasingly nationwide market expansion, which requires increased travel, promotional, and telecommunication expenses, as well as increased total compensation to sales and marketing staff.

Subsidy Income

For the three months ended September 30, 2012 and 2011, in connection with research and development activities in a designated locale, we received approximately $365,469 and $475,026, respectively, as a subsidy from the local governmental agency in China.

Income Tax Expense

Income tax expense for the three months ended September 30, 2012 decreased by $0.1 million, from $0.01 million for the same period in 2011. The decrease was mainly due to the decrease of income before taxes from PRC subsidiaries in the current period.

Non-controlling Interest

Non-controlling interest of $108,715 for the three months ended September 30, 2012 represents the loss of $297,130 fee retained by our variable interest entity, iASPEC Software Co., Ltd. ("iASPEC"), under our Amended and Restated Management Services Agreement with iASPEC, income of $192,843 from iASPEC's majority-owned subsidiary, Wuda Geoinformatics Co., Ltd., to its 47.46% non-controlling interest, and loss of $4,428 from iASPEC's majority-owned subsidiary, Shenzhen Zhongtian Technology Development Company Ltd., to its 21.79% non-controlling interest.

Net (Loss) Income Attributable to the Company

As a result of the cumulative effect of the foregoing factors, the net loss was $21.44 million during the three months ended September 30, 2012, as compared to a net income $0.93 million for the same period in 2011.

Cash and Cash Equivalents

As of September 30, 2012, the Company had $6.27 million in cash and cash equivalents and $14.33 million in restricted cash. For nine month period ended September 30, 2012, net cash used in operating activities was $10.27 million, as compared to an operating net cash inflow of $7.22 million in the same period last year.

About Non-GAAP Financial Measures

This press release contains non-GAAP financial measures for earnings that exclude non-cash charges. The Company believes that these non-GAAP financial measures are useful to investors because they exclude non-cash charges that management excludes when it internally evaluates the performance of the Company's business and makes operating decisions, including internal budgeting, and performance measurement, as these measures provide a consistent method of comparison to historical periods. Moreover, management believes these non-GAAP measures reflect the essential operating activities of the Company. Accordingly, management excludes the expense arising from certain non-cash charges when making operational decisions. The Company also believes that providing the non-GAAP measures that management uses to its investors is useful to investors for a number of reasons. The non-GAAP measures provide a consistent basis for investors to understand the Company's financial performance in comparison to historical periods. In addition, it allows investors to evaluate the Company's performance using the same methodology and information as that used by the Company's management. Non-GAAP measures are subject to inherent limitations because they do not include all of the expenses included under GAAP and because they involve the exercise of judgment of which charges are excluded from the non-GAAP financial measure. However, the Company's management compensates for these limitations by providing the relevant disclosure of the items excluded.

The following table presents the non-GAAP financial measures contained in this press release and the most directly comparable GAAP measures and provides a reconciliation of the non-GAAP measures to the most directly comparable GAAP measures.

 

Q3 2012 Reconciliation of Net Income and EPS to Exclude Amortization
of Intangible Assets, Goodwill Impairment, Change in Fair Value of Contingent Consideration
and Other Asset Write-downs

 



3 Mos. Ended


3 Mos. Ended


9 Mos. Ended


9 Mos. Ended



30-Sep-12


30-Sep-11


30-Sep-12


30-Sep-11










Net (loss) income Attributable to the Company


(21,442,727)


927,827


(41,153,939)


14,751,847

Amortization of Intangible Assets


326,400


323,083


978,706


950,820

Impairment of goodwill


-


-


7,806,690


-

Change in Contingent consideration


-


(12,311)


-


(1,481,758)

Impairment of property, plant and equipment


7,704,183


-


7,704,183


-

Adjusted (Loss) Net income


(13,412,144)


1,238,599


(24,644,360)


14,220,909










Weighted Average Number of Shares Outstanding









Basic


27,007,608


26,900,921


27,021,196


26,497,164

Diluted


27,007,608


26,900,921


27,021,196


26,497,164










Adjusted Earnings per share









Basic


(0.50)


0.05


(0.91)


0.54

Diluted


(0.50)


0.05


(0.91)


0.54

About China Information Technology, Inc.

China Information Technology, Inc., through its subsidiaries and other consolidated entities, specializes in geographic information systems (GIS), digital public security technology (DPST), and hospital information systems (HIS), as well as high-end digital display products and solutions in China. Headquartered in Shenzhen, China, the Company's integrated solutions include specialized software, hardware, systems integration, and related services to help its customers improve efficiency in information management. To learn more about the Company, please visit its corporate website at http://www.chinacnit.com.

Safe Harbor Statement

This press release may contain certain "forward-looking statements" relating to the business of China Information Technology, Inc., and its subsidiary companies. All statements, other than statements of historical fact included herein, are "forward-looking statements". These forward-looking statements, often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

For further information, please contact:

China Information Technology, Inc.
Iris Yan
Tel: +86 755 8370 4767

Nolan Liu
Tel: +86 755 8831 9888
Email: [email protected] 
http://www.chinacnit.com

 


 

CHINA INFORMATION TECHNOLOGY, INC.

 CONDENSED CONSOLIDATED BALANCE SHEETS

 SEPTEMBER 30, 2012 AND DECEMBER 31, 2011

 Expressed in U.S. dollars (Except for share amounts)

 



September 30,

2012

(Unaudited)


December 31, 2011

 

ASSETS










CURRENT ASSETS





Cash and cash equivalents

$

6,267,404

$

14,019,634

Restricted cash


14,334,550


12,538,049

Accounts receivable:





Billed, net of allowance for doubtful accounts of $16,159,000 and $9,373,000, respectively


24,556,802


31,117,415

Unbilled


76,775,101


72,225,044

Bills receivable


2,823,026


247,338

Advances to suppliers


7,665,203


5,020,747

Amounts due from related parties


744,282


22,823

Inventories, net of provision of $6,391,000 and $5,224,000, respectively


21,116,283


22,317,260

Other receivables and prepaid expenses


9,241,204


9,603,954

Deferred tax assets


3,228,069


2,548,834

TOTAL CURRENT ASSETS


166,751,924


169,661,098






Deposit for purchase of land use rights


27,722,199


27,564,586

Long-term investments


2,415,293


2,401,561

Property, plant and equipment, net


74,498,828


91,161,093

Land use rights, net


4,433,146


1,956,616

Intangible assets, net


14,259,675


14,380,459

Goodwill


46,503,114


53,983,687

Deferred tax assets


610,749


683,042

TOTAL ASSETS

$

337,194,928

$

361,792,142






LIABILITIES AND EQUITY










CURRENT LIABILITIES





Short-term bank loans

$

48,150,243

$

40,983,457

Accounts payable


19,888,280


19,013,509

Bills payable


37,576,088


27,399,393

Advances from customers


5,972,400


6,403,966

Amounts due to related parties


-


593,617

Accrued payroll and benefits


3,214,055


3,060,384

Other payables and accrued expenses


6,114,646


6,784,353

Income tax payable


3,300,333


3,525,949

TOTAL CURRENT LIABILITIES


124,216,045


107,764,628






Long-term bank loans


83,076


109,524

Amounts due to related parties, long-term portion


12,696


12,624

Deferred tax liabilities


1,145,576


1,365,680

TOTAL LIABILITIES

$

125,457,393

$

109,252,456






COMMITMENTS AND CONTINGENCIES





EQUITY





Common stock, par $0.01; authorized capital 100,000,000 shares; shares issued and outstanding 2012: 27,007,608 shares, 2011: 27,230,835 shares

$

286,326

$

286,326

Treasury stock, 2012: 584,231 shares, 2011: 360,627 shares, at cost


(1,011,091)


(695,514)

Additional paid-in capital


101,261,307


101,261,307

Reserve


14,488,533


14,488,533

Retained earnings


54,324,646


95,600,619

Accumulated other comprehensive income


21,130,172


19,925,259

Total equity of the Company


190,479,893


230,866,530

Non-controlling interest


21,257,642


21,673,156

Total equity


211,737,535


252,539,686











TOTAL LIABILITIES AND EQUITY

$

337,194,928

$

361,792,142


 

 

CHINA INFORMATION TECHNOLOGY, INC.

 CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME

 FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011

 Expressed in U.S. dollars (Except for share amounts)

 (Unaudited)

 



Three Months Ended


  Nine Months Ended



September 30,

2012


September 30,

2011


September 30,

2012


September 30,

2011

Revenue - Products

$

19,885,019

$

13,042,469

$

32,373,420

$

32,162,844

Revenue - Software


3,973,094


6,852,447


12,503,081


29,999,605

Revenue - System integration


3,343,016


8,134,110


11,145,722


20,189,827

Revenue – Others


223,713


433,545


966,216


946,822

TOTAL REVENUE


27,424,842


28,462,571


56,988,439


83,299,098










Cost - Products sold


19,127,070


10,315,504


29,453,960


24,910,658

Cost - Software sold


2,077,985


2,534,256


6,446,252


8,921,148

Cost - System integration


2,507,384


5,983,569


8,264,557


14,097,762

Cost - Others


320,984


143,894


775,166


306,786

TOTAL COST


24,033,423


18,977,223


44,939,935


48,236,354










GROSS PROFIT


3,391,419


9,485,348


12,048,504


35,062,744










Administrative expenses


(19,596,222)


(5,181,609)


(34,126,484)


(11,061,388)

Research and development expenses


(1,346,871)


(1,106,500)


(4,063,904)


(2,990,237)

Selling expenses


(2,483,841)


(1,831,845)


(6,358,619)


(5,270,739)

Impairment of goodwill


-


-


(7,806,690)


-

(LOSS) INCOME FROM OPERATIONS


(20,035,515)


1,365,394


(40,307,193)


15,740,380










Subsidy income


365,469


475,026


976,924


592,530

Other income (loss), net


(834,169)


(109,459)


(496,862)


1,481,792

Interest income


75,231


119,861


196,542


254,807

Interest expense


(1,214,388)


(943,947)


(3,216,862)


(2,420,600)

(LOSS) INCOME BEFORE INCOME TAXES


(21,643,372)


906,875


(42,847,451)


15,648,909










Income tax benefit (expense)


91,930


(11,807)


665,603


(1,331,765)

NET (LOSS) INCOME


(21,551,442)


895,068


(42,181,848)


14,317,144










Less: Net loss attributable to the non-controlling interest


108,715


32,759


1,027,909


434,703










NET (LOSS) INCOME ATTRIBUTABLE TO THE COMPANY

$

(21,442,727)

$

927,827

$

(41,153,939)

$

14,751,847










Weighted average number of shares outstanding









Basic


27,007,608


26,900,921


27,021,196


26,497,164

Diluted


27,007,608


26,900,921


27,021,196


26,497,164










(Loss) earnings per share - Basic and Diluted









Basic - Net (loss) income attributable to the Company's common stockholders

$

(0.79)

$

0.03

$

(1.52)

$

0.56

Diluted – Net (loss) income attributable to the Company's common stockholders

$

(0.79)

$

0.03

$

(1.52)

$

0.56

 

 

CHINA INFORMATION TECHNOLOGY, INC.

 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

 FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011

 Expressed in U.S. dollars

 (Except for share amounts)

 (Unaudited)

 



Three Months Ended


Nine Months Ended



September 30, 2012


September 30, 2011


September 30, 2012


September 30, 2011

Net (loss) income

$

(21,551,442)

$

895,068

$

(42,181,848)

$

14,317,144

Other comprehensive (loss) income:









Foreign currency translation (loss) gain


(330,047)


2,590,250


1,411,662


7,472,758

Comprehensive (loss) income


(21,881,489)


3,485,318


(40,770,186)


21,789,902

Comprehensive (loss) income attributable to the non-controlling interest


(16,800)


(57,098)


821,160


196,614

Comprehensive (loss) income attributable to the Company

$

(21,898,289)

$

3,428,220

$

(39,949,026)

$

21,986,516


 

CHINA INFORMATION TECHNOLOGY, INC

 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 NINE MONTHS ENDED SEPTEMBER 30, 2012

 Expressed in U.S. dollars

 (Except for share amounts)

 (Unaudited)

 



Common Stock

Par Value $0.01


Treasury Stock

Par Value $0.01


Additional Paid-in Capital


Reserve


Retained Earnings


Accumulated Other Comprehensive Income


Non Controlling Interest


Total

Shares


Amount

Shares


Amount

BALANCE AT DECEMBER 31, 2011


27,591,462

$

286,326


(360,627)

$

(695,514)

$

101,261,307

$

14,488,533

$

95,600,619

$

19,925,259

$

21,673,156

$

252,539,686

Purchase of treasury stock


-


-


(223,604)


(315,577)


-


-


-


-


-


(315,577)

Rounding impact of Share changes due to one for two reverse stock split of common stock


377


-


-


-


-


-


-


-


-


-

Net loss for the period


-


-


-


-


-


-


(41,153,939)


-


(1,027,909)


(42,181,848)

Capital injection to Zhongtian by minority shareholders


-


-


-


-


-


-


-


-


283,612


283,612

Changes in an Ownership Interest in Zhongtian


-


-


-


-


-


-


(122,034)


-


122,034


-

Foreign currency translation gain


-


-


-


-


-


-


-


1,204,913


206,749


1,411,662

BALANCE AT SEPTEMBER 30, 2012


27,591,839

$

286,326


(584,231)

$

(1,011,091)

$

101,261,307

$

14,488,533

$

54,324,646

$

21,130,172

$

21,257,642

$

211,737,535


 

CHINA INFORMATION TECHNOLOGY, INC.

 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 NINE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011

 Expressed in U.S. dollars

 (Unaudited)

 



Nine Months Ended

September 30, 2012


Nine Months Ended

September 30, 2011

OPERATING ACTIVITIES





Net (loss) income

$

(42,181,848)

$

14,317,144

Adjustments to reconcile net (loss) income to net cash provided by operating activities:





Impairment of goodwill


7,806,690


-

Impairment of property, plant and equipment


7,704,183


-

Provision for losses on accounts receivable and other current assets


7,948,432


323,961

Depreciation


9,324,383


7,966,319

Amortization of intangible assets and land use rights


1,681,342


1,315,848

Loss on disposal of property, plant and equipment, net


1,027,267


195,196

Provision for obsolete inventories


2,737,365


426,295

Change in fair value of contingent consideration


-


(1,481,757)

Change in deferred income tax


(817,406)


(643,327)

Impairment of long-term investments


-


997,449

Imputed interests in relation to shareholder's loan


-


166,667

Changes in operating assets and liabilities, net of effects of business acquisitions





Increase in restricted cash


(2,030,660)


(2,966,985)

Increase in accounts receivable


(6,713,825)


(3,488,629)

Increase in advances to suppliers


(2,907,066)


(194,542)

Increase in other receivables and prepaid expenses


(585,172)


(2,267,718)

Increase in inventories


(1,390,906)


(12,515,398)

Increase in accounts payable and bills payable


10,799,714


6,662,046

Decrease in advances from customers


(468,775)


(2,655,120)

Increase in amounts due to/from related parties


(1,389,334)


(501,058)

(Decrease) increase in accrued expenses and other liabilities


(567,916)


2,231,628

Decrease in income tax payable


(245,755)


(663,790)

Net cash ( used in) provided by operating activities


(10,269,287)


7,224,229






INVESTING ACTIVITIES





Proceeds from sales of property and equipment


18,538


-

Purchases of property, plant and equipment


(876,303)


(7,239,423)

Capitalized and purchased software development costs


(1,434,493)


(1,237,774)

Deposit for software purchase


-


(5,934,390)

Dividends received


79,218


-

Purchase of land-use-rights


(2,512,063)


-

Net cash used in investing activities


(4,725,103)


(14,411,587)






FINANCING ACTIVITIES





Borrowings under short-term loans


78,826,884


68,899,346

Decrease in restricted cash in relation to credit facilities


303,671


773,158

Repayment of short-term loans


(71,874,777)


(73,811,687)

Repayment of long-term loans


(26,682)


(1,751,780)

Purchase of treasury stock


(315,577)


-

Capital injection to Zhongtian by minority shareholders


283,612


-

Net cash used in financing activities


7,197,131


(5,890,963)






Effect of exchange rate changes on cash and cash equivalents


45,029


90,687

NET DECREASE IN CASH AND CASH EQUIVALENTS


(7,752,230)


(12,987,634)

CASH AND CASH EQUIVALENTS, BEGINNING


14,019,634


18,166,857

CASH AND CASH EQUIVALENTS, ENDING

$

6,267,404

$

5,179,223

Supplemental disclosure of cash flow information:





Cash paid during the period





Income taxes

$

477,607

$

2,687,586

Interest paid

$

2,935,919

$

2,006,813

 

SOURCE China Information Technology, Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
"My role is working with customers, helping them go through this digital transformation. I spend a lot of time talking to banks, big industries, manufacturers working through how they are integrating and transforming their IT platforms and moving them forward," explained William Morrish, General Manager Product Sales at Interoute, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
WebRTC is bringing significant change to the communications landscape that will bridge the worlds of web and telephony, making the Internet the new standard for communications. Cloud9 took the road less traveled and used WebRTC to create a downloadable enterprise-grade communications platform that is changing the communication dynamic in the financial sector. In his session at @ThingsExpo, Leo Papadopoulos, CTO of Cloud9, discussed the importance of WebRTC and how it enables companies to focus...
SYS-CON Events announced today that 910Telecom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Housed in the classic Denver Gas & Electric Building, 910 15th St., 910Telecom is a carrier-neutral telecom hotel located in the heart of Denver. Adjacent to CenturyLink, AT&T, and Denver Main, 910Telecom offers connectivity to all major carriers, Internet service providers, Internet backbones and ...
SYS-CON Events announced today that LeaseWeb USA, a cloud Infrastructure-as-a-Service (IaaS) provider, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. LeaseWeb is one of the world's largest hosting brands. The company helps customers define, develop and deploy IT infrastructure tailored to their exact business needs, by combining various kinds cloud solutions.
For basic one-to-one voice or video calling solutions, WebRTC has proven to be a very powerful technology. Although WebRTC’s core functionality is to provide secure, real-time p2p media streaming, leveraging native platform features and server-side components brings up new communication capabilities for web and native mobile applications, allowing for advanced multi-user use cases such as video broadcasting, conferencing, and media recording.
SYS-CON Events announced today that Venafi, the Immune System for the Internet™ and the leading provider of Next Generation Trust Protection, will exhibit at @DevOpsSummit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Venafi is the Immune System for the Internet™ that protects the foundation of all cybersecurity – cryptographic keys and digital certificates – so they can’t be misused by bad guys in attacks...
ReadyTalk has expanded the capabilities of the FoxDen collaboration platform announced late last year to include FoxDen Connect, an in-room video collaboration experience that launches with a single touch. With FoxDen Connect, users can now not only engage in HD video conferencing between iOS and Android mobile devices or Chrome browsers, but also set up in-person meeting rooms for video interactions. A host’s mobile device automatically recognizes the presence of a meeting room via beacon tech...
The cloud market growth today is largely in public clouds. While there is a lot of spend in IT departments in virtualization, these aren’t yet translating into a true “cloud” experience within the enterprise. What is stopping the growth of the “private cloud” market? In his general session at 18th Cloud Expo, Nara Rajagopalan, CEO of Accelerite, explored the challenges in deploying, managing, and getting adoption for a private cloud within an enterprise. What are the key differences between wh...
It’s 2016: buildings are smart, connected and the IoT is fundamentally altering how control and operating systems work and speak to each other. Platforms across the enterprise are networked via inexpensive sensors to collect massive amounts of data for analytics, information management, and insights that can be used to continuously improve operations. In his session at @ThingsExpo, Brian Chemel, Co-Founder and CTO of Digital Lumens, will explore: The benefits sensor-networked systems bring to ...
On Dice.com, the number of job postings asking for skill in Amazon Web Services increased 76 percent between June 2015 and June 2016. Salesforce.com saw its own skill mentions increase 37 percent, while DevOps and Cloud rose 35 percent and 28 percent, respectively. Even as they expand their presence in the cloud, companies are also looking for tech professionals who can manage projects, crunch data, and figure out how to make systems run more autonomously. Mentions of ‘data science’ as a skill ...
Manufacturers are embracing the Industrial Internet the same way consumers are leveraging Fitbits – to improve overall health and wellness. Both can provide consistent measurement, visibility, and suggest performance improvements customized to help reach goals. Fitbit users can view real-time data and make adjustments to increase their activity. In his session at @ThingsExpo, Mark Bernardo Professional Services Leader, Americas, at GE Digital, discussed how leveraging the Industrial Internet a...
Amazon has gradually rolled out parts of its IoT offerings in the last year, but these are just the tip of the iceberg. In addition to optimizing their back-end AWS offerings, Amazon is laying the ground work to be a major force in IoT – especially in the connected home and office. Amazon is extending its reach by building on its dominant Cloud IoT platform, its Dash Button strategy, recently announced Replenishment Services, the Echo/Alexa voice recognition control platform, the 6-7 strategic...
In addition to all the benefits, IoT is also bringing new kind of customer experience challenges - cars that unlock themselves, thermostats turning houses into saunas and baby video monitors broadcasting over the internet. This list can only increase because while IoT services should be intuitive and simple to use, the delivery ecosystem is a myriad of potential problems as IoT explodes complexity. So finding a performance issue is like finding the proverbial needle in the haystack.
There will be new vendors providing applications, middleware, and connected devices to support the thriving IoT ecosystem. This essentially means that electronic device manufacturers will also be in the software business. Many will be new to building embedded software or robust software. This creates an increased importance on software quality, particularly within the Industrial Internet of Things where business-critical applications are becoming dependent on products controlled by software. Qua...
Big Data, cloud, analytics, contextual information, wearable tech, sensors, mobility, and WebRTC: together, these advances have created a perfect storm of technologies that are disrupting and transforming classic communications models and ecosystems. In his session at @ThingsExpo, Erik Perotti, Senior Manager of New Ventures on Plantronics’ Innovation team, provided an overview of this technological shift, including associated business and consumer communications impacts, and opportunities it ...
The 19th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Digital Transformation, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportuni...
IoT is rapidly changing the way enterprises are using data to improve business decision-making. In order to derive business value, organizations must unlock insights from the data gathered and then act on these. In their session at @ThingsExpo, Eric Hoffman, Vice President at EastBanc Technologies, and Peter Shashkin, Head of Development Department at EastBanc Technologies, discussed how one organization leveraged IoT, cloud technology and data analysis to improve customer experiences and effi...
The Internet of Things will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform. In his session at @ThingsExpo, Craig Sproule, CEO of Metavine, demonstrated how to move beyond today's coding paradigm and shared the must-have mindsets for removing complexity from the develo...
SYS-CON Events announced today that MangoApps will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. MangoApps provides modern company intranets and team collaboration software, allowing workers to stay connected and productive from anywhere in the world and from any device.
The IETF draft standard for M2M certificates is a security solution specifically designed for the demanding needs of IoT/M2M applications. In his session at @ThingsExpo, Brian Romansky, VP of Strategic Technology at TrustPoint Innovation, explained how M2M certificates can efficiently enable confidentiality, integrity, and authenticity on highly constrained devices.