TAI'AN, China, Dec. 8, 2016 /PRNewswire/ -- China Customer
Relations Centers, Inc. (NASDAQ: CCRC) ("CCRC" or the "Company"), a
leading call center business process outsourcing ("BPO") service
provider in China, today announced
its unaudited financial results for the half-year ended
June 30, 2016.
Six Months Ended June 30, 2016
Financial Highlights (all comparisons to prior year unless
noted)
- Revenues increased by 34.3% to $34.5
million driven by increased sales to existing clients and
sales to new clients.
- Gross margin expanded by 8.1 percentage points to 29.1% while
operating margin increased by 7.5 percentage points to 15.0%, due
to improved operating efficiency and the non-renewal of less
profitable customer contracts.
- Net income increased by 151.6% to $4.6
million. Earnings per share increased by 150.2% to
$0.28.
Mr. Gary Wang, Chairman and Chief
Executive Officer of CCRC, commented, "We couldn't be more pleased
with the first half of the year 2016 results that underscore the
continued and strong demand for our services. Our revenues and net
income increased by 34.3% and 151.6%, respectively, both of which
are the highest levels in company history, and if we continue this
momentum into the second half of the year, we are confident that
2016 could be another banner year for us following a tremendously
gratifying year in 2015. As the highly fragmented Chinese BPO
market continues to expand and evolve, we believe that there is
still plenty of room for us to continue to grow at a rapid rate in
the foreseeable future."
Six Months Ended June 30, 2016
Financial Results
|
|
For the Six Months
Ended June 30,
|
($ millions,
except per share data)
|
|
2016
|
|
2015
|
|
% Change
|
Revenues
|
|
$34.5
|
|
$25.7
|
|
34.3%
|
Gross
profit
|
|
$10.0
|
|
$5.4
|
|
86.1%
|
Gross
margin
|
|
29.1%
|
|
21.0%
|
|
8.1%
|
Operating
income
|
|
$5.2
|
|
$1.9
|
|
167.6%
|
Operating
margin
|
|
15.0%
|
|
7.5%
|
|
7.5%
|
Net income
|
|
$4.6
|
|
$1.8
|
|
151.6%
|
EPS
|
|
$0.28
|
|
$0.11
|
|
150.2%
|
Revenues
For the six months ended June 30,
2016, revenues increased by $8.8
million, or 34.3%, to $34.5
million from $25.7 million for
the same period last year. This increase was mainly driven by the
growth of our BPO business with increased sales to our existing BPO
clients and sales to new BPO clients.
Cost of revenue
Cost of revenues consists primarily of salaries, payroll taxes
and employee benefits costs of our customer service associates and
other operations personnel. Cost of revenues also includes direct
communications costs, rent expense, information technology costs,
and facilities support. Cost of revenues increased by $4.2 million, or 20.5%, to $24.5 million for the six months ended
June 30, 2016 from $20.3 million for the same period last year. As a
percentage of revenues, cost of revenues was 70.9% for the six
months ended June 30, 2016, compared
to 79.0% for the same period last year.
Gross profit and gross margin
Gross profit increased by $4.6
million, or 86.1%, to $10.0
million for the six months ended June
30, 2016 from $5.4 million for
the same period last year. Gross margin increased by 8.1 percentage
points to 29.1% for the six months ended June 30, 2016 from 21.0% for the same period last
year. The increase in gross margin was primarily due to improvement
in overall operating efficiency and the termination of certain less
profitable business.
Selling, general and administrative expense
Selling, general and administrative expenses increased by
$1.4 million, or 40.7%, to
$4.9 million for the six months ended
June 30, 2016 from $3.5 million for the same period last year. We
anticipate that our administrative expenses, particularly those
related to support personnel costs, professional fees, as well as
Sarbanes-Oxley compliance, will continue to increase in 2016 due to
becoming a publically traded company.
Operating income and operating margin
Income from operations increased by $3.2
million, or 167.6%, to $5.2
million for the six months ended June
30, 2016 from $1.9 million for
the same period last year. Operating margin was 15.0% for the six
months ended June 30, 2016, compared
to 7.5% for the same period last year. The increase in operating
income and operating margin was mainly driven by an increase in
revenues as a result of expansion of our BPO business and
improvement in gross margin as a result of improvement in overall
operating efficiency.
Government Grants
We received government grants, which are discretionary and
unpredictable in nature, of $0.4
million for the six months ended June
30, 2016, up slightly from the same period of last year.
Government grants as a percentage of net income were 9.7% for the
six months ended June 30, 2016,
compared to 22.1% for the same period of last year.
Income Taxes
Provision for income taxes was $1.0
million for the six months ended June
30, 2016, an increase of $0.6
million, or 125.8%, from $0.5
million for the same period of last year. We were entitled
to a preferential enterprise income tax ("EIT") rate of 15% in 2015
and 2016. The standard enterprise income tax rate in China is 25%.
Net Income
Net income increased by $2.7
million, or 151.6%, to $4.6
million for the six months ended June
30, 2016 from $1.8 million for
the same period last year. Earnings per basic and diluted share was
$0.28 for the six months ended
June 30, 2016, compared to
$0.11 for the same period of last
year.
Financial Conditions
As of June 30, 2016, the Company
had cash of $11.0 million, compared
to $13.6 million at December 31, 2015. Total working capital was
$19.8 million as of June 30, 2016, compared to $16.1 million at the end of 2015.
Net cash used in operating activities was $0.6 million for the six months ended
June 30, 2016, compared to
$3.4 million for the same period last
year. Net cash used in investing activities was $0.5 million for the six months ended
June 30, 2016, compared to
$0.1 million for the same period last
year. Net cash used in financing activities was $1.3 million for the six months ended
June 30, 2016, compared to
$0.8 million for the same period of
last year.
Notice
Rounding amounts and percentages: Certain amounts and
percentages included in this press release have been rounded for
ease of presentation. Percentage figures included in this press
release have not in all cases been calculated on the basis of such
rounded figures, but on the basis of such amounts prior to
rounding. For this reason, certain percentage amounts in this press
release may vary from those obtained by performing the same
calculations using the figures in the financial statements. In
addition, certain other amounts that appear in this press release
may not sum due to rounding.
About China Customer Relations Centers, Inc.
The Company is a BPO service provider focusing on the complex,
voice-based segment of customer care services, including:
- customer relationship management;
- technical support;
- sales;
- customer retention;
- marketing surveys; and
- research.
The Company's service is currently delivered from 11 call center
locations in Shandong Province,
Jiangsu Province, Hebei Province, Anhui Province, the Xinjiang Uygur Autonomous
Region, the Guangxi Zhuang Autonomous Region, Jiangxi Province and Chongqing City, with a capacity approximately
of 9,984 seats.
Forward-Looking Statement
This press release contains forward-looking statements as
defined by the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include statements concerning plans,
objectives, goals, strategies, future events or performance, and
underlying assumptions and other statements that are other than
statements of historical facts. When the Company uses words such as
"may," "will," "intend," "should," "believe," "expect,"
"anticipate," "project," "estimate" or similar expressions that do
not relate solely to historical matters, it is making
forward-looking statements. Specifically, the Company's
statements regarding its continued growth and business outlook, are
forward-looking statements. Forward-looking statements are
not guarantees of future performance and involve risks and
uncertainties that may cause the actual results to differ
materially from the Company's expectations discussed in the
forward-looking statements. These statements are subject to
uncertainties and risks including, but not limited to, the
following: the Company's goals and strategies; the Company's
future business development; product and service demand and
acceptance; changes in technology; economic conditions; the growth
of the call center business process outsourcing market in
China; reputation and brand; the
impact of competition and pricing; government regulations;
fluctuations in general economic and business conditions in
China and assumptions underlying
or related to any of the foregoing and other risks contained in
reports filed by the Company with the Securities and Exchange
Commission. For these reasons, among others, investors are
cautioned not to place undue reliance upon any forward-looking
statements in this press release. Additional factors are discussed
in the Company's filings with the U.S. Securities and Exchange
Commission, which are available for review at www.sec.gov. The
Company undertakes no obligation to publicly revise these
forward‐looking statements to reflect events or circumstances that
arise after the date hereof.
For more information, please contact:
Tina
Xiao
Weitian Group LLC
Email: ir@ccrc.com
Phone: +1-917-609-0333
CHINA CUSTOMER
RELATIONS CENTERS, INC. AND SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
|
2016
|
|
2015
|
|
|
Unaudited
|
|
|
|
|
|
|
|
ASSETS
|
Cash
|
$
|
|
|
|
|
|
11,033,286
|
$
|
|
|
|
|
|
13,623,849
|
Accounts receivable,
net
|
|
|
|
|
|
|
14,795,351
|
|
|
|
|
|
|
8,852,024
|
Accounts receivable -
related party
|
|
|
|
|
|
|
345,390
|
|
|
|
|
|
|
353,513
|
Notes receivable,
current
|
|
|
|
|
|
|
40,009
|
|
|
|
|
|
|
125,687
|
Prepayments
|
|
|
|
|
|
|
187,334
|
|
|
|
|
|
|
625,876
|
Due from related
parties
|
|
|
|
|
|
|
672,576
|
|
|
|
|
|
|
675,623
|
Deferred tax
assets
|
|
|
|
|
|
|
15,644
|
|
|
|
|
|
|
-
|
Other current
assets
|
|
|
|
|
|
|
1,147,590
|
|
|
|
|
|
|
1,128,262
|
Total current assets
|
|
|
|
|
|
|
28,237,180
|
|
|
|
|
|
|
25,384,834
|
Restricted
cash
|
|
|
|
|
|
|
500,000
|
|
|
|
|
|
|
500,000
|
Notes receivable,
non-current
|
|
|
|
|
|
|
948,317
|
|
|
|
|
|
|
970,620
|
Property and
equipment, net
|
|
|
|
|
|
|
4,589,571
|
|
|
|
|
|
|
4,087,832
|
Other
assets
|
|
|
|
|
|
|
38,643
|
|
|
|
|
|
|
41,729
|
Deferred tax assets,
non-current
|
|
|
|
|
|
|
23,423
|
|
|
|
|
|
|
23,974
|
Total non-current assets
|
|
|
|
|
|
|
6,099,954
|
|
|
|
|
|
|
5,624,155
|
Total
assets
|
$
|
|
|
|
|
|
34,337,134
|
$
|
|
|
|
|
|
31,008,989
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
Accounts
payable
|
$
|
|
|
|
|
|
1,185,862
|
$
|
|
|
|
|
|
896,841
|
Accrued liabilities
and other payables
|
|
|
|
|
|
|
2,892,157
|
|
|
|
|
|
|
2,746,992
|
Wages
payable
|
|
|
|
|
|
|
2,797,033
|
|
|
|
|
|
|
2,803,294
|
Income taxes
payable
|
|
|
|
|
|
|
1,133,288
|
|
|
|
|
|
|
1,014,595
|
Short term
loans
|
|
|
|
|
|
|
464,470
|
|
|
|
|
|
|
1,748,479
|
Deferred tax
liabilities, current
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
35,273
|
Total current liabilities
|
|
|
|
|
|
|
8,472,810
|
|
|
|
|
|
|
9,245,474
|
Deferred tax
liabilities, non-current
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
Total non-current liabilities
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
Total liabilities
|
|
|
|
|
|
|
8,472,810
|
|
|
|
|
|
|
9,245,474
|
Shareholders'
equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares, $0.001
par value, 100,000,000 shares
authorized, 18,329,600 shares issued and outstanding as
of June 30, 2016 and December 31, 2015
|
|
|
|
|
|
|
18,330
|
|
|
|
|
|
|
18,330
|
Additional paid-in
capital
|
|
|
|
|
|
|
11,178,774
|
|
|
|
|
|
|
11,178,774
|
Retained
earnings
|
|
|
|
|
|
|
13,833,881
|
|
|
|
|
|
|
9,728,228
|
Statutory
reserves
|
|
|
|
|
|
|
1,737,106
|
|
|
|
|
|
|
1,288,617
|
Accumulated other
comprehensive income
|
|
|
|
|
|
|
(903,767)
|
|
|
|
|
|
|
(450,434)
|
Total shareholders' equity
|
|
|
|
|
|
|
25,864,324
|
|
|
|
|
|
|
21,763,515
|
Total liabilities and
shareholders' equity
|
$
|
|
|
|
|
|
34,337,134
|
$
|
|
|
|
|
|
31,008,989
|
CHINA CUSTOMER
RELATIONS CENTERS, INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Six Months
Ended June 30,
|
|
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
Revenues,
net
|
|
$
|
34,479,256
|
$
|
25,681,240
|
|
Revenues - related
party
|
|
|
-
|
|
-
|
|
|
Total
revenues
|
|
|
34,479,256
|
|
25,681,240
|
|
Cost of
revenues
|
|
|
24,453,004
|
|
20,293,632
|
|
Gross
profit
|
|
|
10,026,252
|
|
5,387,608
|
|
Operating
expenses:
|
|
|
|
|
|
|
Selling, general
& administrative expenses
|
|
|
4,867,054
|
|
3,459,306
|
|
|
Total operating
expenses
|
|
|
4,867,054
|
|
3,459,306
|
|
Income from
operations
|
|
|
5,159,198
|
|
1,928,302
|
|
Interest
expense
|
|
|
(43,591)
|
|
(200,901)
|
|
Government
grants
|
|
|
442,758
|
|
400,598
|
|
Other
income
|
|
|
162,198
|
|
204,345
|
|
Other
expense
|
|
|
(130,247)
|
|
(63,241)
|
|
|
Total other
income
|
|
|
431,118
|
|
340,801
|
|
Income before
provision for income taxes
|
|
|
5,590,316
|
|
2,269,103
|
|
Income tax
provision
|
|
|
1,036,174
|
|
458,942
|
|
Net
income
|
|
$
|
4,554,142
|
$
|
1,810,161
|
|
Comprehensive
income
|
|
|
|
|
|
|
Net income
|
|
$
|
4,554,142
|
$
|
1,810,161
|
|
Other comprehensive
income (loss)
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
|
(453,333)
|
|
88,602
|
|
Total
comprehensive income
|
|
$
|
4,100,809
|
$
|
1,898,763
|
|
Earnings per
common share
|
|
|
|
|
|
|
Basic
|
|
$
|
0.28
|
$
|
0.11
|
|
Diluted
|
|
$
|
0.28
|
$
|
0.11
|
|
Weighted average
common shares outstanding
|
|
|
|
|
|
|
Basic
|
|
|
16,015,079
|
|
15,929,600
|
|
Diluted
|
|
|
16,015,079
|
|
15,929,600
|
CHINA CUSTOMER
RELATIONS CENTERS, INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Six Months
Ended June 30,
|
|
|
|
|
2016
|
|
|
2015
|
Cash flows from
operating activities
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
|
4,554,142
|
|
$
|
|
1,810,161
|
Adjustments to
reconcile net income to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
|
495,286
|
|
|
|
685,495
|
Deferred income
taxes
|
|
|
|
|
(50,935)
|
|
|
|
(251,853)
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
|
|
(6,248,292)
|
|
|
|
(5,252,332)
|
Due from related
parties
|
|
|
|
|
(12,684)
|
|
|
|
(19,448)
|
Due to related
parties
|
|
|
|
|
-
|
|
|
|
(2,435)
|
Prepayments
|
|
|
|
|
144,551
|
|
|
|
(418,409)
|
Other current
assets
|
|
|
|
|
(28,387)
|
|
|
|
(788,282)
|
Accounts
payable
|
|
|
|
|
22,160
|
|
|
|
75,157
|
Wage
payable
|
|
|
|
|
59,114
|
|
|
|
375,333
|
Income taxes
payable
|
|
|
|
|
144,352
|
|
|
|
213,224
|
Accrued liabilities
and other payables
|
|
|
|
|
276,715
|
|
|
|
161,714
|
Net cash used in
operating activities
|
|
|
|
|
(643,978)
|
|
|
|
(3,411,675)
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
|
|
Purchase of property
and equipment
|
|
|
|
|
(519,431)
|
|
|
|
(304,579)
|
Advance to related
parties
|
|
|
|
|
-
|
|
|
|
(944,593)
|
Repayment from related
parties
|
|
|
|
|
-
|
|
|
|
1,128,322
|
Net cash used in
investing activities
|
|
|
|
|
(519,431)
|
|
|
|
(120,850)
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
|
|
Proceeds from related
parties
|
|
|
|
|
-
|
|
|
|
11,451
|
Repayment to related
parties
|
|
|
|
|
-
|
|
|
|
(11,451)
|
Proceeds from short
term loans
|
|
|
|
|
266,829
|
|
|
|
250,096
|
Repayment of short
term loans
|
|
|
|
|
(1,531,213)
|
|
|
|
(1,046,983)
|
Net cash used in
financing activities
|
|
|
|
|
(1,264,384)
|
|
|
|
(796,887)
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
|
|
|
(162,770)
|
|
|
|
27,299
|
Net change in cash
and cash equivalents
|
|
|
|
|
(2,590,563)
|
|
|
|
(4,302,113)
|
Cash and cash
equivalents, beginning of the year
|
|
|
|
|
13,623,849
|
|
|
|
5,097,010
|
Cash and cash
equivalents, end of the year
|
|
|
$
|
|
11,033,286
|
|
$
|
|
794,897
|
Supplemental cash
flow information
|
|
|
|
|
|
|
|
|
|
Interest
paid
|
|
|
$
|
|
43,591
|
|
$
|
|
200,901
|
Income
taxes paid
|
|
|
$
|
|
739,233
|
|
$
|
|
475,227
|
Non-cash investing
and financing activities
|
|
|
|
|
|
|
|
|
|
Transfer
from prepayments to property and equipment
|
|
|
$
|
|
472,105
|
|
$
|
|
191,928
|
Liabilities assumed in connection with purchase of property and
equipment
|
|
|
$
|
|
292,585
|
|
$
|
|
-
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/china-customer-relations-centers-inc-announces-half-year-2016-unaudited-financial-results-300375485.html
SOURCE China Customer Relations Centers, Inc.