SHIJIAZHUANG, CHINA -- (Marketwired) -- 04/30/15 -- AutoChina International Limited ("AutoChina" or the "Company") (OTCBB: AUTCF), a leading provider of innovative financing solutions for China's transportation industry, today reported financial results for the fourth quarter and year ended December 31, 2014.
Operational Highlights
- 4,787 commercial vehicles leased in fourth quarter of 2014, an 11.6% increase from 4,290 in prior-year period
- 15,615 commercial vehicles leased in 2014, a 31.2% increase from 11,902 in 2013
- Of the 4,787 vehicles leased in the 2014 fourth quarter, 1,086 trucks were leased through AutoChina's store network, and 3,701 trucks were leased through peer stores.
- During the fourth quarter of 2014, the Company established one additional commercial vehicle sales, servicing, leasing and support center. As of December 31, 2014, AutoChina operated 555 financing and service centers in 26 provinces, municipalities, and autonomous regions in China.
- During the fourth quarter of 2014, the Company officially launched its new K-Pay and K-Lend products for the transportation industry throughout China. The electronic payments platform K-Pay is currently generating approximately RMB450 million in transactions per month, and the peer-to-peer lending platform K-Lend has originated over RMB500 million in loans since its launch in November 2014.
Q4 2014 Financial Highlights (comparisons are year over year)
- Total revenues of $222.1 million, compared to $238.3 million, primarily as a result of a lower average price per vehicle due to growing sales through the Company's peer store program
- Gross profit of $21.8 million, or 9.8% of total revenues, compared to $22.5 million, or 9.4% of total revenues
- Net income of $5.4 million, or $0.22 per diluted share, up 42.4% from $3.8 million, or $0.16 per diluted share, primarily as a result of decreased SG&A expenses related to a smaller increase in allowance for credit losses as well as a reduction in staffing
- Adjusted EBITDA of $13.5 million, an increase of 26.9% from $10.6 million
Full-year 2014 Financial Highlights (comparisons are year over year)
- Total revenues of $813.4 million, up 23.6% from $658.1 million, largely due to the increase in new commercial vehicle leases initiated during 2014 and an increase in property lease and management revenue due to a higher occupancy rate
- Gross profit of $87.6 million, or 10.8% of total revenues, up 19.2% from $73.5 million, or 11.2% of total revenues
- Net income of $10.2 million, or $0.43 per diluted share, compared to $11.8 million, or $0.50 per diluted share, primarily as a result of the one-time litigation expenses incurred to settle the SEC lawsuit in the first quarter 2014 and increased interest expenses resulting from increased average interest rates and borrowing balances from banks, lease securitization and affiliates during the year
- Adjusted EBITDA of $47.8 million, an increase of 41.5% from $33.8 million
Management Comments
Mr. Yong Hui Li, Chairman and CEO of AutoChina, stated, "2014 was a year of continued stability in China's heavy truck market, and AutoChina was able to capitalize on these market conditions, leasing a record 15,615 heavy trucks. While I am pleased with this achievement, which could not have been done without the hard work of all our employees, I am extremely proud of the progress of the initiatives we launched in 2014. This includes our new peer stores business, which was a significant contributor to the growth in the total number of new vehicles leased in 2014 since its launch last April. In addition, we developed and launched our K-Pay and K-Lend products to provide innovative Internet-based financial solutions for China's transportation industry. Together, we believe our electronic payment platform and peer-to-peer lending platform can provide a comprehensive one-stop funding and payment solution for small- to medium-sized transportation enterprises. In 2015, as we continue to grow our commercial vehicle sales, servicing and leasing business in China, we will also focus on better serving our customers in the transportation industry by providing them with innovative financing solutions that will help them grow their businesses by increasing productivity and convenience."
Operations - Heavy Truck Sales
The Company leased 4,787 commercial vehicles in the fourth quarter of 2014, compared to 4,290 in the prior-year period. Of the 4,787 vehicles leased during the 2014 fourth quarter, 1,086 trucks were leased through AutoChina's store network, and 3,701 trucks were leased through peer stores.
At December 31, 2014, the Company had 23,819 leased vehicles under its sales-type leasing program. AutoChina recorded 15,615 new leases in 2014, a 31.2% increase from 11,902 trucks leased in 2013. Since launching its commercial vehicle sales and leasing business in March 2008, the Company has leased over 64,000 trucks.
The Company repossessed 468 vehicles whose lessees had defaulted on installment payments, sold 495 repossessed vehicles (repossessed in the quarter or in prior periods), and recognized 25 lost vehicles during the year ended December 31, 2014. In comparison, there were 758 vehicles repossessed, 763 vehicles sold and 30 lost vehicles recorded in the year ended December 31, 2013.
Details of the vehicles leased are as follows:
Number of
Vehicles
Leased
---------
Balance at January 1, 2013 15,078
New leases recorded in the year ended December 31, 2013 11,902
Vehicles repossessed or loss to accident in 2013 (782)
Vehicles transferred to customers at the end of lease term in
2013 (11,203)
---------
Balance at December 31, 2013 14,995
New leases recorded in the year ended December 31, 2014 15,615
Vehicles repossessed or loss due to accident in 2014 (488)
Vehicles transferred to customers at the end of lease term in
2014 (6,303)
---------
Balance at December 31, 2014 23,819
=========
Operations - Expansion of Specialty Finance Store Network
During the fourth quarter of 2014, the Company established one additional commercial vehicle sales, servicing, leasing and support center in Guangdong province. As of December 31, 2014, AutoChina operated 555 financing and service centers in 26 provinces, municipalities, and autonomous regions. The Company operates commercial vehicle financing and service centers in the Anhui, Beijing, Chongqing, Fujian, Gansu, Guangdong, Guangxi, Guizhou, Hebei, Henan, Hubei, Hunan, Inner Mongolia, Jiangsu, Jiangxi, Jilin, Liaoning, Ningxia, Shaanxi, Shandong, Shanghai, Shanxi, Sichuan, Tianjin, Yunnan, and Zhejiang areas of China.
Launch of Peer Stores Business
During the second quarter of 2014, AutoChina began working with third-party commercial vehicle financing stores ("peer stores") to provide financing to their customers. The first two products to be offered are financing for new commercial vehicle purchases and financing for the insurance and taxes related to the purchase of a new commercial vehicle, which were launched in April 2014 and May 2014, respectively. The Company believes that by working with peer stores it can gain a much larger addressable customer base without investment in additional infrastructure. There are currently over 3,100 peer stores participating in the program, which significantly expands AutoChina's reach beyond its own existing store network. Of the 15,615 vehicles leased in 2014, 8,381 trucks were leased through AutoChina's store network, and 7,234 trucks were leased through peer stores.
New Products for the Transportation Industry - Electronic Payment Platform K-Pay and Peer-to-Peer Lending Platform K-Lend
At the end of 2014, AutoChina officially launched its electronic payment platform K-Pay (https://www.dianfubao.com/) throughout China and is currently generating approximately RMB450 million in transactions per month. K-Pay was developed to provide a convenient method for customers to make electronic payments and for the Company to make credit advances to its customers, allowing customers to pay for their everyday truck-operating needs at participating merchants within the K-Pay network. AutoChina earns transaction fees through its K-Pay platform. The Company continues to actively market K-Pay to potential customers and merchants in the transportation industry in an effort to increase the user base.
The Company also launched its peer-to-peer lending platform K-Lend (https://www.qingyidai.com/) nationwide, which has originated over RMB500 million in loans since its initial launch in November 2014. AutoChina created K-Lend to be an online lending marketplace that provides short-term operating capital for small- to medium-sized businesses in the transportation industry. K-Lend is a platform through which AutoChina can originate loans and then sell the loans to the public. Currently, individuals may invest on the K-Lend platform and earn an annual interest rate of 8.5%. AutoChina earns origination fees on K-Lend loans.
Financial Review
2014 Fourth Quarter
Revenues
- Total revenues for the fourth quarter ended December 31, 2014, were $222.1 million, compared to $238.3 million in the prior-year period.
(in thousands) Three months Three months
ended ended
December 31, 2014 December 31, 2013
----------------- -----------------
% of % of YoY %
Amount Revenue Amount Revenue Change
--------- ------- --------- ------- ------
Commercial vehicles $ 202,715 91.2% $ 220,696 92.7% (8.1)%
Finance 13,067 5.9% 12,029 5.0% 8.6%
Insurance and other 4,396 2.0% 5,296 2.2% (17.0)%
Property lease and management 1,960 0.9% 259 0.1% 656.8%
--------- ------- --------- ------- ------
Total revenues $ 222,138 100.0% $ 238,280 100.0% (6.8)%
- Commercial vehicle revenue decreased to $202.7 million, compared to $220.7 million in the prior-year period, primarily as a result of a decrease in average price per vehicle, from $51,400 per vehicle in the 2013 fourth quarter to $42,300 per vehicle in the 2014 fourth quarter. The decrease in average price per vehicle is a result of a higher proportion of leases originated through the Company's new peer stores business, whose trucks typically are leased without a trailer as opposed to trucks leased directly through AutoChina's own store network, which are usually leased with a trailer.
- Finance revenue increased 8.6% to $13.1 million, or 5.9% of total revenues, during the fourth quarter of 2014, from $12.0 million in the prior-year period, as a result of the increase in the total outstanding number of commercial vehicle sales, servicing, leasing and support contracts in effect.
- Insurance and other revenue was $4.4 million, compared to $5.3 million in the prior-year period, primarily as a result of a decrease in the number of trucks leased directly from AutoChina's stores during the period as compared to those leased through peer stores for which it does not sell the truck insurance.
- Property lease and management revenue from the Company's office-leasing business totaled $2.0 million, compared to $259,000 in the prior-year period. This business commenced in April 2013.
Gross Profit/Margin
- Gross profit was $21.8 million in the three months ended December 31, 2014, compared to $22.5 million in the prior-year period.
- Gross margin increased to 9.8% for the three months ended December 31, 2014, from 9.4% in the prior-year period, primarily due to the higher number of leases outstanding during the period, which results in a higher proportion of monthly amortized finance income. Increased property lease and management revenue also contributed to the increase in gross margin.
Net Income
- Net income increased 42.2% to $5.4 million, or $0.22 per diluted share based on 24.0 million diluted weighted average shares outstanding, in the three months ended December 31, 2014, compared to $3.8 million, or $0.16 per share based on 23.7 million diluted weighted average shares outstanding, in the three months ended December 31, 2013.
Adjusted EBITDA
- Adjusted EBITDA, which is EBITDA excluding stock-based compensation and the previously mentioned one-time litigation expense, increased 26.9% to $13.5 million for the quarter ended December 31, 2014, compared to $10.6 million in the prior-year quarter.
Full-year 2014
Revenues
- Total revenues for the year ended December 31, 2014, were $813.4 million, a 23.6% increase from $658.1 million in the prior year.
(in thousands) Year ended Year ended
December 31, 2014 December 31, 2013
----------------- -----------------
% of % of YoY %
Amount Revenue Amount Revenue Change
--------- ------- --------- ------- ------
Commercial vehicles $ 736,145 90.5% $ 593,912 90.2% 23.9%
Finance 54,301 6.7% 43,385 6.6% 25.2%
Insurance and other 18,065 2.2% 20,330 3.1% (11.1)%
Property lease and management 4,937 0.6% 501 0.1% 885.4%
--------- ------- --------- ------- ------
Total revenues $ 813,448 100.0% $ 658,128 100.0% 23.6%
- Commercial vehicle revenues increased 23.9% to $736.1 million from $593.9 million in the prior year, primarily as a result of the increase in new leases initiated in 2014. The increase in commercial vehicles revenue was partially offset by a decrease in average price per vehicle from $49,900 per vehicle in 2013 to $47,100 per vehicle in 2014.
- Finance revenues increased 25.2% to 54.3 million, or 6.7% of total revenues, during the year ended December 31, 2014, compared to $43.4 million in the prior year, as a result of an increase in the total outstanding number of commercial vehicle sales, servicing, leasing and support contracts in effect.
- The Company's insurance-related revenue was $18.1 million, compared to $20.3 million in the prior year, primarily due to reasons stated in the 2014 fourth quarter financial review.
- Property lease and management revenue from the Company's office-leasing business totaled $4.9 million during the period, compared to $501,000 in the prior year. This business commenced in April 2013.
Gross Profit/Margin
- Gross profit for the year ended December 31, 2014, increased 19.2% to $87.6 million, representing gross margin of 10.8%, a decrease from gross margin of 11.2% in 2013, which is primarily due to the significantly higher number of new leases established in 2014, which has a lower margin than the monthly amortized finance income. In addition, the launch of the new peer stores business impacted gross margin as leases initiated through the new peer stores business have a lower gross margin than leases initiated through the Company's own store branch network. Increased property lease and management revenue partially offset the decrease in gross margin.
Net Income
- Net income for the year ended December 31, 2014, was $10.2 million, or $0.43 per share based on 23.8 million diluted weighted average shares outstanding, compared to $11.8 million, or $0.50 per share based on 23.8 million diluted weighted average shares outstanding in the prior year. The decrease in net income was primarily due to a one-time $4.35 million litigation expense incurred to settle an SEC lawsuit in the 2014 first quarter and increased interest expenses resulting from increased average interest rates and borrowing balances from banks, lease securitization and affiliates during the year.
Adjusted EBITDA
- Adjusted EBITDA, which is EBITDA excluding stock-based compensation and the previously mentioned one-time litigation expense, for the year ended December 31, 2014, was $47.8 million, a 41.5% increase from $33.8 million in the prior year.
See "Non-GAAP Financial Measures" below for a description of Adjusted EBITDA.
Balance Sheet Highlights
At December 31, 2014, AutoChina's cash and cash equivalents (not including restricted cash) were $26.0 million, working capital was $141.5 million, total debt was $327.5 million (including due to affiliates and accounts payable, related parties), and stockholders' equity was $263.1 million, compared to $31.4 million, $47.9 million, $295.0 million, and $252.8 million, respectively, at December 31, 2013.
About AutoChina International Limited
AutoChina International Limited focuses on providing innovative financing solutions for China's transportation industry. Founded in 2005, we are China's largest commercial vehicle sales, servicing, leasing, and support network. As of December 31, 2014, the Company owned and operated 555 commercial vehicle financing centers in 26 provinces, municipalities, and autonomous regions across China, and primarily provides sales-type leasing and support services for local customers. The Company's website is http://www.autochinaintl.com.
Safe Harbor Statement
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about the Company. Forward-looking statements are statements that are not historical facts. Such forward-looking statements, based upon the current beliefs and expectations of the Company's management, are subject to risks and uncertainties, which could cause actual results to differ from the forward-looking statements. The following factors, among others, could cause actual results to meaningfully differ from those set forth in the forward-looking statements:
- Continued compliance with government regulations;
- Changing legislation or regulatory environments;
- Requirements or changes affecting the businesses in which the Company is engaged;
- Industry trends, including factors affecting supply and demand;
- Labor and personnel relations;
- Credit risks affecting the Company's revenue and profitability;
- Changes in the commercial vehicle industry;
- The Company's ability to effectively manage its growth, including implementing effective controls and procedures and attracting and retaining key management and personnel;
- Changing interpretations of generally accepted accounting principles;
- General economic conditions; and
- Other relevant risks detailed in the Company's filings with the Securities and Exchange Commission.
The information set forth herein should be read in light of such risks. The Company does not assume any obligation to update the information contained in this press release.
AUTOCHINA INTERNATIONAL LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME
(in thousands except share and per share data)
Three months ended
December 31, Year ended December 31,
------------------------ ------------------------
2014 2013 2014 2013
----------- ----------- ----------- -----------
(unaudited) (unaudited) (audited) (audited)
Revenues
Commercial vehicles $ 202,715 $ 220,696 $ 736,145 $ 593,912
Finance 13,067 12,029 54,301 43,385
Insurance and other 4,396 5,296 18,065 20,330
Property lease and
management 1,960 259 4,937 501
----------- ----------- ----------- -----------
Total revenues 222,138 238,280 813,448 658,128
----------- ----------- ----------- -----------
Cost of sales
Commercial vehicles 2,486 2,727 34,582 9,981
Commercial vehicles,
related parties 197,022 211,661 686,847 569,807
Insurance and other 185 822 1,887 3,485
Property lease and
management 613 554 2,532 1,360
----------- ----------- ----------- -----------
Total cost of
sales 200,306 215,764 725,848 584,633
----------- ----------- ----------- -----------
Gross profit 21,832 22,516 87,600 73,495
----------- ----------- ----------- -----------
Operating (income)
expenses
Selling and
marketing 2,692 2,882 10,718 10,262
General and
administrative 10,765 14,230 46,598 49,927
Litigation expense -- -- 4,350 --
Interest expense 3,236 2,406 12,066 7,626
Interest expense,
related parties 2,535 980 10,689 1,971
Other income, net (3,985) (3,501) (12,361) (13,435)
----------- ----------- ----------- -----------
Total operating
expenses 15,243 16,997 72,060 56,351
----------- ----------- ----------- -----------
Income from operations 6,589 5,519 15,540 17,144
----------- ----------- ----------- -----------
Other income
Interest income 41 31 168 406
----------- ----------- ----------- -----------
Total other income 41 31 168 406
----------- ----------- ----------- -----------
Income before income
taxes 6,630 5,550 15,708 17,550
Income tax provision (1,241) (1,759) (5,542) (5,722)
----------- ----------- ----------- -----------
Net income 5,389 3,791 10,166 11,828
Foreign currency
translation adjustment 1,484 2,432 (1,172) 8,842
----------- ----------- ----------- -----------
Comprehensive income $ 6,873 $ 6,223 $ 8,994 $ 20,670
=========== =========== =========== ===========
Earnings per share
Basic $ 0.23 $ 0.16 $ 0.43 $ 0.50
=========== =========== =========== ===========
Diluted $ 0.22 $ 0.16 $ 0.43 $ 0.50
=========== =========== =========== ===========
Weighted average shares
outstanding
Basic 23,549,644 23,545,939 23,549,112 23,540,761
=========== =========== =========== ===========
Diluted 23,981,192 23,740,298 23,840,644 23,806,194
=========== =========== =========== ===========
AUTOCHINA INTERNATIONAL LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands except share and per share data)
December 31,
---------------------
2014 2013
---------- ----------
ASSETS
Current assets
Cash and cash equivalents $ 26,027 $ 31,370
Restricted cash 988 1,244
Accounts receivable, net of provision for doubtful
accounts of $29,074 and $20,891, respectively 28,915 27,931
Inventories 4,746 5,319
Prepaid expenses, related party 50 --
Prepaid expenses and other current assets 5,520 5,261
Other financing receivables, net 48,506 --
Other financing receivables, net, related party 782 --
Short-term net investment in sales-type leases 56,975 --
Current maturities of long-term net investment in
direct financing and sales-type leases, net of
provision for doubtful accounts of $22 and $389,
respectively 285,983 261,684
Deferred income tax assets 8,751 5,515
---------- ----------
Total current assets 467,243 338,324
Property, equipment and leasehold improvements, net 80,152 82,254
Deferred income tax assets 6,080 4,126
Long-term net investment in direct financing and
sales-type leases, net of current maturities 59,170 128,415
---------- ----------
Total assets $ 612,645 $ 553,119
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Short-term borrowings (including short-term borrowings
of the consolidated VIEs without recourse to
AutoChina of $138,912 and $124,654 as of December 31,
2014 and 2013, respectively) $ 155,342 $ 160,737
Long-term borrowings, current portion (including long-
term borrowings, current portion of the consolidated
VIEs without recourse to AutoChina of nil and nil as
of December 31, 2014 and 2013, respectively) 2,451 --
Long-term payables, current portion (including long-
term payables, current of the consolidated VIEs
without recourse to AutoChina of nil and nil as of
December 31, 2014 and 2013, respectively) 899 1,436
Accounts payable (including accounts payable of the
consolidated VIEs without recourse to AutoChina of
$384 and $93 as of December 31, 2014 and 2013,
respectively) 5,692 10,130
Accounts payable, related parties (including accounts
payable, related parties of the consolidated VIEs
without recourse to AutoChina of $106,525 and $44,044
as of December 31, 2014 and 2013, respectively) 108,211 57,586
Other payables and accrued liabilities (including
other payables and accrued liabilities of the
consolidated VIEs without recourse to AutoChina of
$13,206 and $10,323 as of December 31, 2014 and 2013,
respectively) 20,121 17,146
Due to affiliates (including due to affiliates of the
consolidated VIEs without recourse to AutoChina of
$1,002 and $12,745 as of December 31, 2014 and 2013,
respectively) 25,644 38,143
Customer deposits (including customer deposits of the
consolidated VIEs without recourse to AutoChina of
$460 and $319 as of December 31, 2014 and 2013,
respectively) 4,912 1,680
Income tax payable (including income tax payable of
the consolidated VIEs without recourse to AutoChina
of $1,508 and $2,761 as of December 31, 2014 and
2013, respectively) 2,511 3,599
---------- ----------
Total current liabilities 325,783 290,457
AUTOCHINA INTERNATIONAL LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS - Continued
(in thousands except share and per share data)
December 31,
--------------------
2014 2013
--------- ---------
Noncurrent liabilities
Long-term borrowings (including long-term borrowings
of the consolidated VIEs without recourse to
AutoChina of nil and nil as of December 31, 2014 and
2013, respectively) 14,708 --
Long-term payables (including long-term payables of
the consolidated VIEs without recourse to AutoChina
of $9,102 and $8,955 as of December 31, 2014 and
2013, respectively) 9,102 9,857
--------- ---------
Total liabilities 349,593 300,314
--------- ---------
Commitment and Contingencies
Stockholders' Equity
Preferred shares, $0.001 par value authorized -
1,000,000 shares; issued - none -- --
Ordinary shares - $0.001 par value authorized -
1,000,000,000 shares; issued and outstanding -
23,549,644 shares at December 31, 2014, respectively;
and $0.001 par value authorized - 100,000,000 shares;
issued and outstanding - 23,545,939 shares at
December 31, 2013, respectively 24 24
Additional paid-in capital 328,884 327,631
Statutory reserves 26,222 22,947
Accumulated losses (122,718) (129,609)
Accumulated other comprehensive income 30,640 31,812
--------- ---------
Total stockholders' equity 263,052 252,805
--------- ---------
Total liabilities and stockholders' equity $ 612,645 $ 553,119
========= =========
AUTOCHINA INTERNATIONAL LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
December 31,
-------------------------------
2014 2013 2012
--------- --------- ---------
Cash flow from operating activities:
Net income $ 10,166 $ 11,828 $ 23,549
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
Depreciation and amortization 3,926 3,289 1,902
Provision for bad debts 13,599 18,886 14,550
Deferred income taxes (5,203) (11,681) (4,180)
Stock-based compensation expenses 1,253 3,775 4,553
Changes in operating assets and
liabilities, net of acquisitions and
divestitures:
Restricted cash 251 (1,060) --
Accounts receivable (13,348) (12,832) (22,331)
Other financing receivable (48,679) -- --
Other financing receivable, net, related
parties (779) -- --
Short-term net investment in sales-type
releases (57,329) -- --
Long-term net investment in direct
financing and sales-type leases 42,984 (145,392) 209,063
Inventories 552 1,594 (4,176)
Deposits for inventories, related party -- -- 14,515
Prepaid expense and other current assets (302) (576) 7,671
Accounts payable 902 874 15,922
Other payable and accrued liabilities 3,025 1,596 1,356
Customers deposits 3,372 (332) 798
Income tax payable (1,070) 951 (254)
--------- --------- ---------
Net cash (used in) provided by operating
activities (46,680) (129,080) 262,938
--------- --------- ---------
Cash flow from investing activities:
Capital expenditure on construction in
progress -- -- (76,353)
Purchase of property, equipment and
leasehold improvements (7,389) (8,892) (3,516)
Decrease in due from an affiliate -- -- 7,891
--------- --------- ---------
Net cash (used in) investing activities (7,389) (8,892) (71,978)
--------- --------- ---------
AUTOCHINA INTERNATIONAL LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued
(in thousands)
December 31,
-------------------------------
2014 2013 2012
--------- --------- ---------
Cash flow from financing activities:
Proceeds from borrowings 244,176 201,761 102,036
Repayments of borrowings (233,273) (136,515) (194,093)
Proceeds from affiliates 68,151 22,224 137,052
Repayment to affiliates (80,510) (50,672) (170,520)
Increase in accounts payable, related
parties 693,622 569,807 234,781
Repayment to accounts payable, related
parties (642,998) (515,438) (232,562)
Dividend paid -- -- (5,885)
Capital distribution -- -- (29,274)
--------- --------- ---------
Net cash provided by (used in) financing
activities 49,168 91,167 (158,465)
--------- --------- ---------
Effect of exchange rate fluctuation on cash
and cash equivalents (442) 2,398 234
--------- --------- ---------
Net (decrease) increase in cash and cash
equivalents (5,343) (44,407) 32,729
Cash and cash equivalents, beginning of the
year 31,370 75,777 43,048
--------- --------- ---------
Cash and cash equivalents, end of the year $ 26,027 $ 31,370 $ 75,777
========= ========= =========
Supplemental disclosure of cash flow
information:
Interest paid $ 13,549 $ 8,191 $ 15,194
========= ========= =========
Income taxes paid $ 11,818 $ 16,486 $ 13,544
========= ========= =========
Non-GAAP Financial Measures ($ in thousands)
A reconciliation of Adjusted EBITDA to net income is provided below:
Three Months Ended Year Ended
December 31, December 31,
2014 2013 2014 2013
-------- -------- -------- --------
Net income attributable to
shareholders $ 5,389 $ 3,791 $ 10,166 $ 11,828
Interest expenses 5,771 3,386 22,755 9,597
Interest income (41) (31) (168) (406)
Income tax provision 1,241 1,759 5,542 5,722
Stock-based compensation 106 1,139 1,253 3,775
Depreciation & Amortization 994 562 3,926 3,289
Litigation expense - - 4,350 -
-------- -------- -------- --------
Adjusted EBITDA $ 13,460 $ 10,606 $ 47,824 $ 33,805
======== ======== ======== ========
USE OF NON-GAAP MEASURES
AutoChina defines Adjusted EBITDA as net income before interest expense (income), income taxes, depreciation and amortization, as well as the exclusion of stock-based compensation and one-time litigation expenses. Adjusted EBITDA excludes certain financial information that would be included in net income (loss), the most directly comparable GAAP financial measure. Users of this financial information should consider the type of material events and transactions that are excluded from Adjusted EBITDA, and the material limitations associated therewith. For example, Adjusted EBITDA does not include net interest expense, but because AutoChina has borrowed money to finance its operations, interest expense is a necessary and ongoing part of its costs and has assisted AutoChina in generating revenue; Adjusted EBITDA does not include taxes, although payment of taxes is a necessary and ongoing part of AutoChina's operations; and Adjusted EBITDA does not include depreciation and amortization expense, but because AutoChina uses capital assets to generate revenue, depreciation and amortization expense is a necessary element of its cost structure. Therefore, Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income, as determined in accordance with GAAP.
AutoChina believes that the presentation of these non-GAAP financial measures is warranted and useful to its shareholders because it provides an additional analytical tool for understanding the Company's financial performance by excluding certain items that may obscure trends in the core operating performance of the Company's business. Using Adjusted EBITDA also facilitates management's internal comparisons to AutoChina's historical performance and liquidity. AutoChina computes Adjusted EBITDA using the same consistent method from quarter to quarter. The table above has more details on the reconciliations between GAAP financial measures that are most directly comparable to Non-GAAP financial measures.
CONTACT
At the Company
Jason Wang
Chief Financial Officer
(858) 997-0680
jcwang@che001.com
Investor Relations
The Equity Group Inc.
Carolyne Y. Sohn
Senior Associate
(415) 568-2255
csohn@equityny.com
Adam Prior
Senior Vice President
(212) 836-9606
aprior@equityny.com
