TAI'AN, China, Dec. 15,
2017 /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
financial results for the six months ended June 30, 2017.
Mr. Gary Wang, Chairman and Chief
Executive Officer of CCRC, commented, "The momentum of our business
remained strong as we maintained nearly full capacity during the
first half of this year. However, due to capacity limitations, we
were forced to give up on
several low priority clients to make room for new clients that
included China Merchants Bank, ofo, Rong360.com, TianAn Life
Insurance, and J.K. Life Insurance. Due to our business portfolio
restructuring, our revenues were essentially flat year over year
while margins and profitability decreased. The minor decline in
margins and profitability was primarily due to higher operating
expenses incurred during the first half of this year. Looking
ahead, we have been taking steps to add additional capacity, and we
expect growth to return in the second half of the year."
Six Months Ended June 30, 2017
Unaudited Financial Results
|
|
For the Six Months
Ended June 30,
|
($ millions,
except per share data)
|
|
2017
|
|
2016
|
|
%
Change
|
Revenues
|
|
$34.7
|
|
$34.5
|
|
0.7%
|
Gross
profit
|
|
$9.9
|
|
$10.0
|
|
-0.9%
|
Gross
margin
|
|
28.6%
|
|
29.1%
|
|
-0.5 pp*
|
Operating
income
|
|
$3.1
|
|
$5.2
|
|
-40.6%
|
Operating
margin
|
|
8.8%
|
|
15.0%
|
|
-6.1 pp*
|
Net income
attributable to CCRC
|
|
$4.0
|
|
$4.6
|
|
-11.2%
|
EPS - basic and
diluted
|
|
$0.22
|
|
$0.28
|
|
-22.4%
|
|
|
|
|
|
|
|
* PP: percentage
points
|
|
|
|
|
|
|
Revenues
For the six months ended June 30,
2017, revenues increased by $0.3
million, or 0.7%, to $34.7
million from $34.5 million for
the same period last year. We continued to see strong demand for
our business from existing BPO clients as well as new clients with
nearly full seat utilization rate during the six months ended
June 30, 2017. We added several
high-profile clients, including China Merchants Bank, ofo,
Rong360.com, Tianan Life Insurance, and J.K. Life Insurance, and
dropped several lower volume clients due to seat limitations during
the six months ended June 30,
2017.
Cost of revenues
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 $0.3 million, or 1.4%, to $24.8 million for the six months ended
June 30, 2017 from $24.5 million for the same period last year. As a
percentage of revenues, cost of revenues was 71.4% for the six
months ended June 30, 2017, compared
to 70.9% for the same period last year.
Gross profit and gross margin
Gross profit decreased by $0.1
million, or 0.9%, to $9.9
million for the six months ended June
30, 2017 from $10.0 million
for the same period last year. Gross margin decreased by 0.5
percentage points to 28.6% for the six months ended June 30, 2017 from 29.1% for the same period last
year.
Selling, general and administrative expense
Selling, general and administrative expenses increased by
$2.0 million, or 41.2%, to
$6.9 million for the six months ended
June 30, 2017 from $4.9 million for the same period last year. The
increase in selling, general and administrative expenses was a
result of higher payroll and bonus expenses paid to the
administrative personnel and the management team, and increase in
our research and development activities. 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 the second half of 2017
due to the continuing expansion of our business.
Operating income and operating margin
Income from operations decreased by $2.1
million, or 40.6%, to $3.1
million for the six months ended June
30, 2017 from $5.2 million for
the same period last year. The decrease in operating income was
mainly driven by an increase in selling, general and administrative
expenses. Operating margin was 8.8% for the six months ended
June 30, 2017, compared to 15.0% for
the same period last year.
Other income (expenses)
We received government grants, which are discretionary and
unpredictable in nature, of $1.3
million during the six months ended June 30, 2017, compared to $0.4 million during the same period of last year.
Government grants as a percentage of net income were 31.0% for the
six months ended June 30, 2017,
compared to 9.7% for the same period of last year. Total other
income, net of other expenses, increased by $1.0 million, or 230.0%, to $1.4 million for the six months ended
June 30, 2017, compared to
$0.4 million for the same period of
last year.
Income before provision for income taxes
Income before provision for income taxes decreased by
$1.1 million, or 19.7%, to
$4.5 million for the six months ended
June 30, 2017 from $5.6 million for the same period of last year.
The decrease in income before provision for income taxes was mainly
due to the increase in selling, general and administrative expenses
and partially offset by the increase in government grants
received.
Income taxes
Provision for income taxes was $0.3
million for the six months ended June
30, 2017, compared to $1.0
million for the same period of last year.
Net income
Net income decreased by $0.3
million, or 7.2%, to $4.2
million for the six months ended June
30, 2017 from $4.6 million for
the same period last year. After deducting net income attributable
to noncontrolling interest, net income attributable to common
shareholders was $4.0 million, or
$0.22 per basic and diluted share,
for the six months ended June 30,
2017, compared to $4.6
million, or $0.28 per basic
and diluted share, for the same period of last year.
Financial Conditions
As of June 30, 2017, the Company
had cash of $14.9 million, compared
to $15.9 million at December 31, 2016. Total working capital was
$25.8 million as of June 30, 2017, compared to $22.7 million at the end of 2016.
Net cash provided by operating activities was $1.1 million for the first half of 2017, compared
to net cash used in operating activities of $0.6 million for the same period of last year.
Net cash used in investing activities was $2.3 million for the first half of 2017, compared
to $0.5 million for the same period
of last year. Net cash used in financing activities was
$0.1 million for the first half of
2017, compared to $1.3 million for
the same period of last year.
Recent Development
On September 16, 2017, The Company
held its 2017 Annual Meeting of Shareholders at its headquarters in
Taian City, Shandong Province. The Company's shareholders: 1)
ratified the appointment of MaloneBailey, LLC as its independent
registered public accounting firm for the fiscal year of 2017; and
2) reelected Jie Xu and Tianjun Zhang as Class I Directors.
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 call centers
located at over 20 cities across 12 provinces, autonomous regions
and municipalities in China,
including Shandong, Jiangsu, Anhui, Hebei,
Xinjiang, Guangxi, Jiangxi, Chongqing, Beijing, Henan, Shanghai and Sichuan. More information about the Company
can be found at: www.ccrc.com.
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:
Tony Tian,
CFA
Weitian Group LLC
Email: tony.tian@weitian-ir.com
Phone: +1-732-910-9692
CHINA CUSTOMER
RELATIONS CENTERS, INC. AND SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
|
2017
|
|
2016
|
|
|
Unaudited
|
|
|
ASSETS
|
Cash
|
$
|
14,945,618
|
$
|
15,947,268
|
Accounts receivable,
net
|
|
14,494,561
|
|
13,595,396
|
Notes receivable,
current
|
|
560,728
|
|
547,259
|
Prepayments
|
|
1,035,794
|
|
504,780
|
Due from related
parties
|
|
202,930
|
|
248,866
|
Restricted
cash
|
|
500,000
|
|
-
|
Other current
assets
|
|
1,490,701
|
|
1,041,923
|
Total current assets
|
|
33,230,332
|
|
31,885,492
|
Restricted cash,
non-current
|
|
-
|
|
500,000
|
Cost method
investments
|
|
2,065,841
|
|
-
|
Notes receivable -
related party, non-current
|
|
929,629
|
|
907,297
|
Property and
equipment, net
|
|
4,832,675
|
|
4,360,976
|
Deferred tax
assets
|
|
126,753
|
|
69,864
|
Total
assets
|
$
|
41,185,230
|
$
|
37,723,629
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
Accounts
payable
|
$
|
552,836
|
$
|
664,838
|
Accounts payable -
related party
|
|
58,235
|
|
129,489
|
Accrued liabilities
and other payables
|
|
2,504,389
|
|
3,603,471
|
Deferred
revenue
|
|
579,415
|
|
607,160
|
Wage
payable
|
|
3,511,181
|
|
2,885,735
|
Income taxes
payable
|
|
187,975
|
|
883,654
|
Due to related
parties
|
|
-
|
|
446,050
|
Total current liabilities
|
|
7,394,031
|
|
9,220,397
|
Total liabilities
|
|
7,394,031
|
|
9,220,397
|
Equity
|
|
|
|
|
Common shares, $0.001
par value, 100,000,000 shares authorized,
18,329,600 shares issued and outstanding as of June 30, 2017 and
December
31, 2016
|
|
18,330
|
|
18,330
|
Additional paid-in
capital
|
|
10,821,525
|
|
11,178,774
|
Retained
earnings
|
|
21,172,631
|
|
17,226,261
|
Statutory
reserves
|
|
2,165,686
|
|
2,067,835
|
Accumulated other
comprehensive loss
|
|
(1,285,836)
|
|
(1,987,968)
|
Total China Customer Relations Centers, Inc. shareholders'
equity
|
|
32,892,336
|
|
28,503,232
|
Noncontrolling
interest
|
|
898,863
|
|
-
|
Total equity
|
|
33,791,199
|
|
28,503,232
|
Total liabilities and
equity
|
$
|
41,185,230
|
$
|
37,723,629
|
|
|
|
|
|
CHINA CUSTOMER
RELATIONS CENTERS, INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
For The Six Months
Ended June 30,
|
|
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
Revenues,
net
|
$
|
34,737,119
|
$
|
34,479,256
|
|
Cost of
revenues
|
|
24,799,720
|
|
24,453,004
|
|
Gross
profit
|
|
9,937,399
|
|
10,026,252
|
|
Operating
expenses:
|
|
|
|
|
|
Selling, general
& administrative expenses
|
|
6,870,337
|
|
4,867,054
|
|
|
Total operating
expenses
|
|
6,870,337
|
|
4,867,054
|
|
Income from
operations
|
|
3,067,062
|
|
5,159,198
|
|
Other income
(expenses):
|
|
|
|
|
|
Interest
expense
|
|
-
|
|
(43,591)
|
|
Government
grants
|
|
1,309,558
|
|
442,758
|
|
Other
income
|
|
170,032
|
|
162,198
|
|
Other
expense
|
|
(57,080)
|
|
(130,247)
|
|
|
Total other
income
|
|
1,422,510
|
|
431,118
|
|
Income before
provision for income taxes
|
|
4,489,572
|
|
5,590,316
|
|
Income tax
provision
|
|
262,223
|
|
1,036,174
|
|
Net
income
|
|
4,227,349
|
|
4,554,142
|
|
Less: net income
attributable to noncontrolling interest
|
|
183,128
|
|
-
|
|
Net income
attributable to China Customer Relations Centers,
Inc.
|
$
|
4,044,221
|
$
|
4,554,142
|
|
|
|
|
|
|
|
|
Comprehensive
income
|
|
|
|
|
|
Net
income
|
$
|
4,227,349
|
$
|
4,554,142
|
|
Other comprehensive
income (loss)
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
707,037
|
|
(453,333)
|
|
Comprehensive
income
|
|
4,934,386
|
|
4,100,809
|
|
Less: Comprehensive
income attributable to noncontrolling interest
|
|
201,341
|
|
-
|
|
Comprehensive
income attributable to China Customer Relations
Centers, Inc.
|
$
|
4,733,045
|
$
|
4,100,809
|
|
|
|
|
|
|
Earnings per share
attributable to China Customer Relations Centers,
Inc.
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.22
|
$
|
0.28
|
|
Diluted
|
$
|
0.22
|
$
|
0.28
|
|
Weighted average
common shares outstanding
|
|
|
|
|
|
Basic
|
|
18,329,600
|
|
16,015,079
|
|
Diluted
|
|
18,329,600
|
|
16,015,079
|
CHINA CUSTOMER
RELATIONS CENTERS, INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
For The Six Months
Ended June 30,
|
|
|
2017
|
|
|
2016
|
Cash flows from
operating activities
|
|
|
|
|
|
Net
income
|
$
|
4,227,349
|
|
$
|
4,554,142
|
Adjustments to
reconcile net income to net cash provided by (used in)
operating activities:
|
|
|
|
|
|
Loss on
disposal of property and equipment
|
|
2,541
|
|
|
-
|
Depreciation
|
|
808,302
|
|
|
495,286
|
Deferred income
taxes
|
|
(54,388)
|
|
|
(50,935)
|
Changes in assets and
liabilities:
|
|
|
|
|
|
Accounts
receivable
|
|
(556,543)
|
|
|
(6,248,292)
|
Due from
related parties
|
|
-
|
|
|
(12,684)
|
Prepayments
|
|
(1,341,182)
|
|
|
144,551
|
Other current
assets
|
|
(415,423)
|
|
|
(28,387)
|
Accounts
payable
|
|
(171,593)
|
|
|
22,160
|
Accounts
payable - related party
|
|
(73,387)
|
|
|
-
|
Wage
Payable
|
|
546,565
|
|
|
59,114
|
Income taxes
payable
|
|
(707,263)
|
|
|
144,352
|
Deferred
revenue
|
|
(42,085)
|
|
|
-
|
Accrued
liabilities and other payables
|
|
(1,125,830)
|
|
|
276,715
|
Net cash provided
by (used in) operating activities
|
|
1,097,063
|
|
|
(643,978)
|
Cash flows from
investing activities
|
|
|
|
|
|
Purchases of
property and equipment
|
|
(251,460)
|
|
|
(519,431)
|
Proceed from
disposal of property and equipment
|
|
73
|
|
|
-
|
Advance to
related party
|
|
(21,821)
|
|
|
-
|
Payments for
cost method investments
|
|
(2,025,526)
|
|
|
-
|
Net cash used in
investing activities
|
|
(2,298,734)
|
|
|
(519,431)
|
Cash flows from
financing activities
|
|
|
|
|
|
Contribution
from noncontrolling investor in subsidiary
|
|
353,581
|
|
|
-
|
Repayments to
related parties
|
|
(465,828)
|
|
|
-
|
Borrowings from
short term loans
|
|
-
|
|
|
266,829
|
Repayment of
short term loans
|
|
-
|
|
|
(1,531,213)
|
Net cash used in
financing activities
|
|
(112,247)
|
|
|
(1,264,384)
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
312,268
|
|
|
(162,770)
|
Net change in cash
and cash equivalents
|
|
(1,001,650)
|
|
|
(2,590,563)
|
Cash and cash
equivalents, beginning of the period
|
|
15,947,268
|
|
|
13,623,849
|
Cash and cash
equivalents, end of the period
|
$
|
14,945,618
|
|
$
|
11,033,286
|
Supplemental cash
flow information
|
|
|
|
|
|
Interest paid
|
$
|
-
|
|
$
|
43,591
|
Income taxes paid
|
$
|
989,916
|
|
$
|
739,233
|
Non-cash investing
and financing activities
|
|
|
|
|
|
Transfer from
prepayments to property and equipment
|
$
|
829,939
|
|
$
|
472,105
|
Liabilities assumed
in connection with purchase of property and equipment
|
$
|
91,023
|
|
$
|
292,585
|
View original
content:http://www.prnewswire.com/news-releases/china-customer-relations-centers-inc-announces-first-half-of-2017-financial-results-300571879.html
SOURCE China Customer Relations Centers, Inc.