SOURCE: Tongxin International Ltd.

Tongxin International Ltd.

November 22, 2011 14:25 ET

Tongxin International Announces Unaudited Financial Results for the Nine-Month Period Ended September 30, 2011

Gross Profit More Than Doubles in 2011 Nine Month Period

CHANGSHA, CHINA--(Marketwire - Nov 22, 2011) - Tongxin International Ltd. (PINKSHEETS: TXIC), a China-based manufacturer of engineered vehicle body structures ("EVBS") and stamped parts for the commercial automotive industry, today announced its unaudited financial results for the nine-month period ended September 30, 2011.

For the nine-months ended September 30, 2011, the Company reported net revenue of $73.35 million, compared to net revenue of $72.33 million in the 2010 nine-month period. Gross profit for the 2011 nine-month period was $6.83 million, representing a 109.5% increase from $3.26 million in the prior year period. This increase is attributable to steel price reductions and increased medium-duty cab sales. The increase in these sales led to improved unit sales prices and, accordingly, reduced the variable cost enabling the Company to achieve lower production unit costs.

The Company reported a net-loss of $(6.2) million, or $(0.33) per diluted share, for the nine-months ended September 30, 2011, compared to a net loss of $(0.67) million and income of $1.37 per share, for the nine months ended September 30, 2010. The diluted share calculation is based on a comprehensive net income (loss) which includes foreign translation adjustments.

Duanxiang Zhang, the Company's Chairman, said, "As we work towards resolving all legal issues that originated with the Company's previous management team, we continue to experience higher than normal expenses driving a loss to the bottom-line. While we expect these issues to be resolved within the next year and are confident that our Directors and Officers (D&O) Liability insurance will help reimburse these expenses, our key focus remains on our operational growth and meeting the needs of a broadening market."

Zhang continued, "We continue to strengthen our position as the largest independent supplier of Engineered Vehicle Body Structures (EVBS) in China with increased sales of our medium duty cab's built for the fast-growing commercial truck segment. As our sales continue to reflect our leadership position, we are confident that revenues will continue to climb as demand grows within China, as well as North America and Europe where we are rapidly building our customer base. With regard to the bottom-line, we expect consistent, strong improvements moving forward as we rectify our legal issues and take additional steps to reduce our operational costs."

About Tongxin International Ltd.

Tongxin International Ltd., the largest independent supplier of EVBS in China, is capable of providing EVBS for both the commercial truck and light vehicle market segments. The Company also designs, fabricates and tests dies used in the vehicle body structure manufacturing process. EVBS consists of exterior body panels including doors, floor pans, hoods, side panels and fenders. Tongxin International Ltd. maintains a network of over 130 customers throughout 21 provinces in China. Headquartered in Changsha, the Company also maintains regional manufacturing in Dali, Ziyang and Zhucheng. For more information, please visit or

Forward-Looking Statements

This press release contains statements regarding the preparation and filing of statements or reports, including financial statements, the Company's expectations concerning its operating results and financial conditions, as well as other expectations, plans, goals, objectives, assumptions or information about future events, any and all of which may constitute forward-looking statements or information under applicable securities laws. Such forward-looking statements or information are based on a number of assumptions which may prove to be incorrect. Although the Company believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because the Company can give no assurance that such expectations will prove to be correct.

All forward-looking statements or information are based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by the Company and described in the forward-looking statements or information. These risks and uncertainties include those described in Tongxin International Ltd.'s reports to the SEC, and, among others, the cost and timing of implementing restructuring actions, the Company's ability to generate cost savings or manufacturing efficiencies to offset or exceed contractually or competitively required price reductions or price reductions to obtain new business, conditions in the automotive industry, certain global and regional economic conditions, the continuing ability of the Company to prepare and timely file statements or reports with the SEC, and the effect of any goodwill impairment analyses that the Company may perform in the future. If one or more of these risks or uncertainties materialize (or the consequences of such a development changes), or should underlying assumptions prove incorrect, actual outcomes may vary materially from those forecasted or expected.

The forward-looking statements or information contained in this news release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Table to Follow

(US$ amounts expressed in thousands, except for share data and earnings per share)
Nine Months Ended September 30, 2011 Nine Months Ended September 30, 2010
Revenues $ 73,348 $ 72,326
Cost of goods sold 66,516 69,066
Gross profit 6,832 3,260
Selling, general and administrative expenses 10,760 10,528
Income (loss) from operations (3,928 ) (7,268 )
Other income (expenses):
Government subsidy income 156 300
(Loss) gain on warrants (25 ) 8,378
Other 423 316
Interest expense (2,541 ) (2,014 )
Total other income (expenses) (1,988 ) 6,980
Income (loss) before income taxes (5,916 ) (288 )
Income taxes expense 259 377
Net (loss) income (6,176 ) (665 )
Other comprehensive income - foreign translation adjustment $ 603 $ 4,044
Comprehensive (loss) income (5,572 ) 3,379
Earnings (loss) per common share-basic (0.39 ) $ 1.37
Earnings (loss) per common share-diluted (0.33 ) $ 1.37
Weighted average shares outstanding - basic 14,162,388 14,083,283
Weighted average shares outstanding - diluted 16,658,233 16,621,898

Contact Information

  • Contact:
    In the U.S.:
    Stanley Wunderlich
    Consulting For Strategic Growth 1
    Tel: 1-800-625-2236 ext. 7770