Revenue Climbs 104.2% year-over-year to $14.3 Million
SHENZHEN, China, Aug. 6 /Xinhua-PRNewswire-FirstCall/ -- Universal Travel
Group (OTC Bulletin Board: UTVG) ("Universal Travel Group" or the "Company"),
a fast growing travel services provider in China specializing in online and
customer representative services to the travel service industry offering
packaged tours, air ticketing, hotel reservation and air cargo agency
services,
today reported financial results for the second quarter ended June 2008.
Second Quarter of 2008 Highlights
-- Revenues more than doubled year-over-year to a record $14.3 million
-- Gross profit increased 58.8% to $4.2 million
-- Net income was $2.1 million, or $0.057 per diluted share
Second Quarter of 2008 Results
Revenue for the second quarter of 2008 increased to a record of $14.3
million, up 104.2% from $7.0 million in the second quarter of 2007. This
increase in revenue was primarily due to the company's strategic expansion
into the hotel reservations and packaged tours businesses through the
acquisitions of Xi'an Golden Net Travel Service Company Limited, Shanghai
Lanbao Travel Service Company Limited and Foshan Overseas International Travel
Service Co., Ltd.
Gross profit for second quarter of 2008 was $4.2 million, up 58.8% from
$2.6 million in the second quarter of 2007. Gross margin for the quarter was
29.0% compared to 37.3% in the same period a year ago. The decline in gross
margin was the result of the acquisitions of businesses with lower gross
margins in 2007.
Net income in the second quarter of 2008 was $2.1 million or $0.057 per
fully diluted share, up 28.0% from $1.7 million, or $0.051 per fully diluted
share in the same period of 2007. Net margin in the second quarter of 2008 was
14.7% compared with 23.5% in the second quarter of 2007.
"We are pleased to announce the record revenues in the second quarter of
2008, which reflects the very strong demand for travel services in China and
our success in introducing differentiated, high value package tours and other
products that are well suited to the tastes of Chinese consumers," said Ms.
Jiangping Jiang, Chairperson and CEO of Universal Travel Group. "The synergies
as the result of integration of the different business segments have weathered
the effects of the earthquakes in May 2008 on our business, and will allow the
Company to provide multiple products to satisfy customers' travel needs and
strengthen our financial performance."
Universal Travel Group's strong revenue growth in the second quarter of
2008 was the result of the Company's acquisitions combined with its steady
organic growth despite seasonality and the occurrence of unexpected events.
Revenues generated from the hotel reservations and packaged tour services
comprised 9.8% and 58.9% of total revenue, respectively. Revenue from
Universal Travel Group's air-ticketing segment increased 5.5% to $1.9 million
for the second quarter of 2008 from $1.8 million for the same period last
year.
This increase was due to seasonality of the travel industry. Revenue generated
by the air cargo agency segment for the second quarter of 2008 was $2.5
million compared to $5.2 million for the same period of 2007. The 51.0%
decline was due to the increase in oil prices, and increased security
inspection on imports and exports due to the 2008 Beijing Olympics.
For the second quarter of 2008, selling, general and administrative
expenses increased 90.2% to $1.3 million, or 8.7% of revenue, from $0.7
million, or 9.4% of revenue in the same period of 2007. The increase in
selling, general and administrative expenses was mainly due to expenses
occurred in operating the Xi'an Golden Net Travel Service Company Limited,
Shanghai Lanbao Travel Service Company Limited and Foshan Overseas
International Travel Service Co., Ltd. The decline in selling, general and
administrative expenses as a percentage of revenue was due to operational
efficiencies.
Stock based compensation was due to options issued to U.S independent
directors.
Operating income in the second quarter of 2008 was $2.9 million, up 46.5%
from $2.0 million in the second quarter of 2007.
Interest expense in the second quarter of 2008 was $28,297 compared to
$20,302 in the comparable period a year ago. The increase in interest expense
was due to short term bank loans to finance the Company's expansion.
Six Month Financial Results
For the first six months of 2008, revenue increased to $24.4 million, up
74.6% from $14.0 million in the first six months of 2007. Gross profit
increased 43.7% in the first six months of 2008 to $7.0 million from $4.9
million in the comparable period a year ago. Gross margin was 28.7% in the
first six months of 2008 compared to 34.9% in the first six months in 2007.
Net income for the first half of 2008 was $3.6 million or $0.096 per fully
diluted share, up 55.2% from $2.3 million, or $0.071 per fully diluted share
in the first half of 2007.
Financial Condition
As of June 30, 2008, Universal Travel Group had $5.5 million in cash and
cash equivalents, including short term borrowings of $1.7 million. As of June
30, 2008, Universal Travel Group had $6.5 million in total liabilities.
Shareholders' equity stood at $25.9 million on June 30, 2008, up from $21.7
million on December 31, 2007. Working capital was $12.2 million. Net cash
from operating activities during the first half of 2008 was $1.4 million.
Business Outlook
China's double digit growth in its GDP and its 10% growth rate in domestic
vacation and commercial travel market are expected to continue their trend
over the next 10 years. This creates a great opportunity for Universal Travel
Group to capture a greater share of this fast-growing travel market. In China,
more than 50% of internet users book hotels through the internet, and this
option has gradually replaced traditional phone call bookings as the primary
method. Furthermore, China is expected to be one of the most attractive
countries for tourism; with developed cities on the east coast and southern
part of China, the western region has its own tourism opportunities due to its
wonderful natural resources and rich cultural landscapes, which have already
attracted many domestic and overseas travelers.
After careful assessment of the devastating earthquake in Sichuan Province
on May 12, 2008 on Universal Travel Group's business, the Company continues to
believe it can achieve its previously stated targets of revenue between $69
million and $73 million and net income between $12 million and $14 million for
the year 2008, not including stock based compensation.
"We initiated our on-line strategy in the second quarter of 2008, and have
been able to capture market share from businesses and consumers in our
packaged tours, hotel reservation and air ticketing segments. The second
quarter of each year is normally the low season. However, due to our online
initiatives, we achieved a 60% revenue increase in hotel bookings quarter-to-
quarter, and a 13% revenue increase in air-ticketing quarter-to-quarter. Our
online strategy has created synergies among the Company's four segments,
providing ample cross-marketing opportunities, while strengthening our pricing
and bargaining power," stated Ms. Jiang.
The Company is optimistic about the remainder of the year. The summer is
usually very strong seasonally and Universal Travel Group should see
additional strength in its business due to the 2008 Beijing Olympics. The
Company made a number of critical, strategic acquisitions in 2007 but its
focus in 2008 is on achieving strong organic growth and creating strong
synergies among acquired companies.
Conference Call Information
Management will conduct a conference call at 9:00 am EST on Thursday,
August 7, 2008 to discuss its second quarter 2008 results. Hosting the call
will be Crocker Coulson, President of CCG, joined by Ms. Jiangping Jiang,
Chairperson and Chief Executive Officer, Mr. Huijie Gao, Vice President of
Corporate Finance and Mr. Jing Xie, Vice President. To participate in the live
conference call, please dial the following number approximately 15 minutes
prior to the scheduled conference call time: 888-482-0024. International
callers should dial 617-801-9702. When prompted by the operator, please
mention Conference Passcode 780 636 61. If you are unable to participate in
the call at this time, a replay will be available for 14 days starting on
Thursday August 7 at 11:00 a.m. Eastern Daylight Time. To access the replay,
please dial 888-286-8010 and enter the passcode 12881388. International
callers should dial 617-801-6888 and enter the same passcode 12881388.
About Universal Travel Group
Universal Travel Group, a fast growing travel services provider in China,
is engaged in providing reservations, bookings, and domestic and international
travel and tourism services throughout China via the internet and through
customer representatives. Under the theme "Wings towards a more colorful life"
the company's core services include tour packaging for customers, booking
services for air tickets and hotels as well as air cargo transportation. In
2007, Universal Travel Group completed the acquisitions of Speedy Dragon,
specializing in air cargo agency; Xi'an Golden Net, specializing in travel
packaged tours; Shanghai LanBao, specializing in hotel reservations and Foshan
Overseas International, a China-based company that handles domestic and
international travel inquiries. Universal Travel Group's goal is to become
China's leading travel services provider in all fields of the tourism industry
including the aviation, cargo, hotel booking and tour packaging segments. For
more information, visit http://us.cnutg.com .
Safe Harbor Statement under the Private Securities Litigation Reform Act
of 1995
This press release contains certain statements that may include 'forward-
looking statements' within the meaning of federal securities laws. All
statements, other than statements of historical facts, included herein are
'forward-looking statements'. 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 the Company's ability to successfully expand its market
presence and those discussed in the Company's periodic reports that are filed
with and available from the Securities and Exchange Commission. 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.
-- Financial tables follow --
UNIVERSAL TRAVEL GROUP
CONSOLIDATED BALANCE SHEETS
(Amounts in U.S. dollars)
JUNE 30, 2008 and DECEMBER 31, 2007
2008 2007
ASSETS
Current Assets
Cash and cash equivalents 5,489,737 2,671,684
Accounts receivable, net 7,112,192 5,403,820
Other receivables and deposits, net 328,457 1,297,426
Refundable acquisition deposit -- 1,453,050
Due from shareholders 267,055 1,444,818
Trade deposit 4,773,333 2,650,744
Advances 655,977 616,861
Prepaid expenses 84,403 713,668
Total Current Assets 18,711,154 16,252,071
Property & equipment, net 120,675 127,393
Intangible assets 1,762 18,626
Goodwill 13,526,809 13,526,809
13,649,246 13,672,828
Total Assets 32,360,400 29,924,899
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes payable - bank 1,107,872 1,288,554
Note payable - others 599,737 1,576,750
Accounts payable and accrued expenses 2,750,295 3,604,666
Customer deposits 1,342,918 1,132,886
Income tax payable 681,211 664,995
Total Current Liabilities 6,482,033 8,267,851
Stockholders' Equity
Common stock, $.001 par value,
70,000,000 shares authorized,
37,031,258 and 36,809,036
issued and outstanding 37,032 36,810
Additional paid in capital 8,673,671 8,601,534
Other comprehensive income 1,116,566 545,164
Statutory reserve 372,144 372,144
Retained earnings 15,678,954 12,101,396
Total Stockholders' Equity 25,878,367 21,657,048
Total Liabilities and Stockholders'
Equity 32,360,400 29,924,899
UNIVERSAL TRAVEL GROUP
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in U.S. Dollars) (Unaudited)
FOR THE SECOND QUARTER OF 2008 ENDED JUNE 30, 2008 and 2007
2008 2007
Gross revenues, $ 14,344,739 $ 7,024,363
Cost of services 10,184,990 4,405,393
Gross Profit 4,159,749 2,618,970
Selling, general and
administrative expenses 1,251,876 658,149
Stock based
compensation 45,790 --
1,297,666 658,149
Income from operations 2,862,083 1,960,821
Other Income (Expense)
Loss on asset disposal -- --
Other income 5,504 --
Interest income 10,525 4,728
Interest expense (28,297) (20,302)
Total Other Income
(Expense) (12,268) (15,574)
Income before income taxes 2,849,815 1,945.247
Provision for income taxes 736,122 293,335
Net income $ 2,113,693 $ 1,651,912
Net income per common share
Basic $ .057 $ .051
Diluted $ .057 $ .051
Weighted average common shares
outstanding
Basic 36,920,147 32,692,142
Diluted 37,086,813 32,692,142
UNIVERSAL TRAVEL GROUP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in U.S. Dollars) (Unaudited)
FOR THE SIX MONTHS ENDED JUNE 30, 2008 and 2007
2008 2007
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 3,577,557 $ 2,305,522
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 38,877 37,715
Loss on asset disposal 1,105
Stock based compensation 155,802 633,360
(Increase) / decrease in assets:
Accounts receivable (1,708,372) (1,489,590)
Other receivable 968,969 (406,551)
Advances (39,116) (2,229,923)
Due from shareholder 1,177,763 49,863
Prepaid expenses (54,172) 10,674
Trade deposits (2,122,588) 192,593
Deposits -- 5,633
Increase / (decrease) in current
liabilities:
Accounts payable and accrued expenses (854,371) 363,495
Customer deposits 210,032 --
Income tax payable 16,216 33,188
Total Adjustments (2,209,855) (2,799,543)
Net cash provided by(used in)
operating activities 1,367,702 (494,021)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property & equipment (17,063) (31,572)
Proceeds from asset disposal 663 --
Acquisition deposits 1,453,050 1,994,254
Paid for acquisition - net of cash
acquired -- (2,982,200)
Net cash used by Investing activities 1,436,650 (1,019,518)
CASH FLOWS FROM FINANCING ACTIVITIES
(Repayments)Proceeds from bank loan
- net (180,682) 1,178,403
Proceeds of equity financing 599,994 --
Note payable - others (977,013) --
Net cash provided by financing activities (557,701) 1,178,403
Effect of exchange rate changes on cash
and cash equivalents 571,402 111,592
Net change in cash and cash equivalents 2,818,053 (223,544)
Cash and cash equivalents, beginning
balance 2,671,684 $ 1,043,555
Cash and cash equivalents, ending
balance $ 5,489,737 $ 820,011
SUPPLEMENTAL DISCLOSURES:
Cash paid during the year for:
Interest payments $ 28,297 $ 20,302
Income Taxes $ 719,906 $ 485,965
Other non-cash transactions
Purchased Goodwill $ (3,621,513)
Fair value of assets purchased less
cash acquired (360,687)
Acquisition financed with stock
issuance 1,000,000
Acquisition paid for with cash - net of
acquired $ (2,982,200)
For more information, please contact:
Universal Travel Group
Mr. Jing Xie, Vice President
Phone: +86-755-83668489
Email: 06@cnutg.cn
Web: http://us.cnutg.com
CCG Investor Relations
Mr. Crocker Coulson, President
Phone: +1-646-213-1915 (New York)
Email: crocker.coulson@ccgir.com
Web: http://www.ccgir.com
SOURCE Universal Travel Group
Mr. Jing Xie, Vice President of Universal Travel Group, +86-755- 83668489, or
06@cnutg.cn, or us.cnutg.com; Mr. Crocker Coulson, President CCG Investor
Relations, +1-646-213-1915 (New York), or crocker.coulson@ccgir.com
