SOURCE: China Auto Logistics Inc.

China Auto Logistics Inc.

May 16, 2011 16:15 ET

China Auto Logistics Reports 2011 First Quarter Net Income Grew 36% Year-Over-Year on 50% Increase in Revenues

Investor Conference Call to Be Held Wednesday, May 18, at 8:00am ET

TIANJIN, CHINA--(Marketwire - May 16, 2011) - China Auto Logistics Inc. (the "Company" or "CALI") (NASDAQ: CALI), one of China's leading developer of automobile-related websites, a top seller in China of imported luxury vehicles and a leading provider in China of automobile-related services, today announced that growth in all business segments generated record overall sales and profits in its 2011 first quarter.

For its first quarter ended March 31, 2011, the Company reported:

  • Net revenue grew 50% to $81.2 million compared with $54.1 million in the same period last year;

  • Net income attributable to shareholders increased 36% to $2.1 million, or $0.11 per share, on 19.2 million weighted average shares outstanding, compared with $1.5 million, or $0.08 per share on 18.1 million weighted average shares outstanding a year earlier;

  • Revenues from the Company's auto mall management and web-based advertising services were the leading percentage gainers in the quarter with gains of 183% and 83% respectively, while sales of automobiles grew 49% year over year and contributed $78.3 million to total revenues;

  • In line with the Company's growth strategy, services businesses were the largest contributors to operating income growth in the period led, by web-based advertising services which contributed 51% of total operating income in the quarter, with operating income of $1.5 million, up 56% from $964,773 in the first quarter last year.

"I am very pleased with the continuing outstanding results thus far in 2011 on the heels of our record setting results last year," stated Mr. Tong Shiping, CEO and Chairman of the Company. He continued, "A key focus in the period was the successful integration of our recently acquired www.goodcar.cn site into our www.cali.com.cn portal. During the quarter revenues generated by services offered on this highly popular consumer site were a significant contributor to the revenue growth and profits of our web-based advertising business, and expansion of the site will remain a continuing management focus."

"During the quarter," Mr. Shiping added, "we also continued the shift in our imported car sales to higher end models and saw the average price per vehicle sold in the quarter grow to $99,703 from $83,681 in the first quarter last year. The strong growth in this segment -- with vehicles sold in the quarter increasing to 785 from 626 in last year's first quarter -- had a dampening effect on margins. However, we continue to believe over the longer term we have a better opportunity to increase margins with sales of higher end cars coupled with the rapid expansion of our high margin on-line services."

"Another highlight in the quarter was the renewal of our agreement to manage the Tianjin auto mall which was a solid contributor to our highly profitable services revenue," Mr. Shiping noted. "Reflecting very well on the Company's financial strength and our relationship with leading banks in China, during the quarter we also were able to achieve an $85 million increase in our facility lines of credit, from $51 million at year end 2010 to $136 million as of March 31st. Our ability to provide auto dealers with short term inventory loans utilizing these credit lines has been a key factor in building our overall relationship with them and opens the door to providing additional services."

Going Forward: Another Year of Strong Growth

Mr. Shiping concluded, "Despite the elimination of certain incentives to auto purchasers and the introduction of some new restrictions on drivers, China should continue to be the world's leading automotive market and remain a very fertile environment for the continuing strong growth of our Company. As such, our highly attractive and informative websites currently covering 35 cities will continue to expand their geographical coverage with our target of 60 cities reaching 70% of China's auto buying public by 2012 still in place. Further, we see significant progress ahead toward our goal of achieving 50% of revenues from new on-line services we expect to offer. At the moment, we are particularly excited about the prospects we see for introducing on-line domestic auto sales in the second half this year, as well as other auto-related services."

Conference Call Invitation

The Company will discuss first quarter results during a live conference call and webcast on Wednesday, May 18, 2011, at 8:00am ET.

To participate in the call, interested participants should call 1-877-941-2069 when calling within the United States or 1-480-629-9713 when calling internationally. Please ask for the China Auto Logistics 2011 First Quarter Conference Call, Conference ID: 4440246. There will be a playback available until 05/25/11. To listen to the playback, please call 1-877-870-5176 when calling within the United States or 1-858-384-5517 when calling internationally. Use the Replay Pin Number: 4440246.

This call is being webcast by ViaVid Broadcasting and can be accessed by clicking on this link http://viavid.net/dce.aspx?sid=00008639 or at ViaVid's website at www.viavid.net.

(SEE ATTACHED TABLE)

About China Auto Logistics Inc. (CALI)

China Auto Logistics Inc. operates www.cali.com.cn, which rapidly has become one of the leading automobile portals for car dealers and consumers of vehicles and auto-related services throughout China. The Company also is one of China's top sellers of luxury imported cars as well as one of the country's leading developers of websites for buyers and sellers of imported and domestic automobiles. Recently initiating auto-related services for dealers and purchasers of domestic autos, it is China's leading "one stop" provider of logistical services and financing to imported car dealers nationwide and manager of the large imported auto mall in Tianjin. Its subscription and advertising based www.at188.com is the number one site for imported car dealers and consumers. Its www.at160.com site, focused on the domestic auto market, has climbed rapidly to become one of the top domestic auto websites and ranks among the top 125 most visited sites in China. In 2010, the Company completed the acquisition of www.goodcar.cn, a highly popular internet destination for auto drivers attracted by the discount cards offered on the site for a variety of automotive products and services including 5% discounts on gas purchases. The Company believes the integration of these wide ranging sites and services in a single portal serving a broad spectrum of China's "auto living" public, as well as the addition of new web-based auto-related services for businesses and consumers, will drive future growth. For additional information visit www.chinaautologisticsinc.com.

Information Regarding Forward-Looking Statements

Except for historical information contained herein, the statements in this press release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause our actual results in future periods to differ materially from forecasted results. These risks and uncertainties include, among other things, product demand, market competition, and risks inherent in our operations. These and other risks are described in our filings with the U.S. Securities and Exchange Commission.

CHINA AUTO LOGISTICS INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended March 31,
20112010
Net revenue$81,210,800$54,149,272
Cost of revenue77,236,57651,413,280
Gross profit3,974,2242,735,992
Operating expenses:
Selling and marketing374,147198,400
General and administrative682,816392,310
Total operating expenses1,056,963590,710
Income from operations2,917,2612,145,282
Other income (expenses):
Interest income12,51832,585
Interest expenses-(39,551)
Miscellaneous(9,087)-
Total other income (expenses)3,431(6,966)
Income before income taxes2,920,6922,138,316
Income taxes816,188584,516
Net income2,104,5041,553,800
Less: Net income attributable to noncontrolling interests27,37025,354
Net income attributable to shareholders of China Auto Logistics Inc.$2,077,134$1,528,446
Earnings per share attributable to shareholders of China Auto Logistics Inc. - basic and diluted$0.11$0.08
Weighted average number of common share outstanding - basic and diluted19,163,42718,100,000

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