Both Revenues and Net Profit Hit Company Record Highs,
Following Growth of 90% and 172%, Respectively
TAI'AN, China, Oct. 12, 2018 /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, 2018.
First Half of 2018 Highlights (all comparisons to prior year
unless noted)
- Revenues increased by 90.1% to a Company record of $66.0 million driven by continued expansion of
its business.
- Gross profit increased by 103.6% to $20.2 million. Gross margin increased by 2% to
30.6%.
- Operating income increased by 305.8% to $12.4 million. Operating margin increased by 10%
to 18.8%.
- Net income attributable to common shareholders increased by
172.2% to $11.0 million.
- EPS attributable to common shareholders was $0.60, versus $0.22
for the same period of last year.
- As of June 30, 2018, the Company
had service capacity of 15,709 seats, compared to 13,992 seats at
the end of 2017.
Mr. Gary Wang, Chairman and Chief
Executive Officer of CCRC, commented, "We continue to see strong
momentum in our business with both revenues and net profit reaching
Company record highs following growth of 90.1% and 172.2%,
respectively, in the first half of 2018. Gross and operating
margins also increased by 2% and 10% percent, respectively, as we
also managed our costs and expenses carefully while pursuing
growth. As we continue to gain growth from BPO clients, new clients
also contributed significantly to the growth in the first half of
2018. These new clients included some high-profile companies such
as, Bank of China (Hefei City
Branch), China Unicom (Chongqing Provincial Branch), China Post (Chongqing Provincial Branch), China
Mobile (Yunnan Provincial Branch), and BAIC BJEV."
Six Months Ended June 30, 2018
Financial Results (Unaudited)
|
|
For the Six Months
Ended June 30,
|
($ millions,
except per share data)
|
|
2018
|
|
2017
|
|
%
Change
|
Revenues
|
|
$66.0
|
|
$34.7
|
|
90.1%
|
Gross
profit
|
|
$20.2
|
|
$9.9
|
|
103.6%
|
Gross
margin
|
|
30.6%
|
|
28.6%
|
|
2.0 pp
|
Operating
income
|
|
$12.4
|
|
$3.1
|
|
305.8%
|
Operating
margin
|
|
18.8%
|
|
8.8%
|
|
10.0 pp
|
Net income
attributable to CCRC
|
|
$11.0
|
|
$4.0
|
|
172.2%
|
EPS attributable to
CCRC - basic and
diluted
|
|
$0.60
|
|
$0.22
|
|
172.2%
|
|
|
|
|
|
|
|
Revenues
For the six months ended June 30,
2018, revenues increased by $31.3
million, or 90.1%, to a company record high of $66.0 million from $34.7
million for the same period of last year. We continued to
see strong demand for our business from existing BPO clients as
well as new clients during the six months ended June 30, 2018. As of June
30, 2018, The Company had call centers located at 24 cities
across 14 provinces, autonomous regions and municipalities in
China, including Shandong, Jiangsu, Anhui, Hebei,
Xinjiang, Guangxi, Jiangxi, Chongqing, Beijing, Henan, Shanghai, Sichuan, Yunnan and Guangdong with a capacity approximately of
15,709 seats.
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 $21.0 million, or 84.7%, to $45.8 million for the six months ended
June 30, 2018 from $24.8 million for the same period of last year.
As a percentage of revenues, cost of revenues was 69.4% for the six
months ended June 30, 2018, compared
to 71.4% for the same period of last year.
Gross profit and gross margin
Gross profit increased by $10.3
million, or 103.6%, to $20.2
million for the six months ended June
30, 2018 from $9.9 million for
the same period of last year. Gross margin increased by 2% to
30.6%, the highest level since 2013, for the six months ended
June 30, 2018 from 28.6% for the same
period of last year.
Selling, general and administrative expense
Selling, general and administrative expenses increased by
$0.9 million, or 13.3%, to
$7.8 million for the six months ended
June 30, 2018 from $6.9 million for the same period of last year.
The increase in selling, general and administrative expenses was a
result of higher payroll and bonus expenses paid to the
administrative and research personnel and the management team. As a
percentage of revenues, SG&A decreased from 19.8% for the six
months ended June 30, 2017 to 11.8%
for the six months ended June 30,
2018. We are able to maintain our current cost level for
administration departments despite the increase in our business for
the first half of 2018 due to increased efficiency in our
management team. 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 2018 due to the continuing expansion of our
business.
Operating income and operating margin
Income from operations increased by $9.4
million, or 305.8%, to $12.4
million for the six months ended June
30, 2018 from $3.1 million for
the same period of last year. The increase in operating income was
mainly driven by an increase in revenues and improvement in gross
margin and partially offset by increases in selling, general and
administrative expenses. Operating margin was 18.8% for the six
months ended June 30, 2018, compared
to 8.8% for the same period of last year.
Other income
We received government grants, which are discretionary and
unpredictable in nature, of $0.6
million during the six months ended June 30, 2018, compared to $1.3 million during the same period of last year.
Government grants as a percentage of net income were 5.2% for the
six months ended June 30, 2018,
compared to 31.0% for the same period of last year. Total other
income, net of other expenses, decreased by $0.9 million, or 63.2%, to $0.5 million for the six months ended
June 30, 2018 from $1.4 million for the same period of last
year.
Income before provision for income taxes
Income before provision for income taxes increased by
$8.5 million, or 188.9%, to
$13.0 million for the six months
ended June 30, 2018 from $4.5 million for the same period of last year.
The increase in income before provision for income taxes was mainly
due to the increase in income from operations and partially offset
by decrease in other income.
Income taxes
Provision for income taxes was $1.9
million for the six months ended June
30, 2018, compared to $0.3
million for the same period of last year.
Net income and earnings per share
Net income increased by $6.9
million, or 162.7%, to $11.1
million for the six months ended June
30, 2018 from $4.2 million for
the same period of last year. After deducting net income
attributable to noncontrolling interest, net income attributable to
common shareholders was $11.0
million, or $0.60 per basic
and diluted share, for the six months ended June 30, 2018, compared to $4.0 million, or $0.22 per basic and diluted share, for the same
period of last year.
Financial Conditions
As of June 30, 2018, the Company
had cash of $20.5 million, compared
to $18.6 million at December 31, 2017. Total working capital was
$39.4 million as of June 30, 2018, compared to $30.0 million at the end of 2017.
Net cash used in operating activities was $0.1 million for the six months ended
June 30, 2018, compared to net cash
provided by operating activities of $1.1
million for the same period of last year. Net cash used in
investing activities was $1.6 million
for the six months ended June 30,
2018, compared to $2.3 million
for the same period of last year. Net cash provided by financing
activities was $3.9 million for the
six months ended June 30, 2018,
compared to net cash used in financing activities of $0.1 million for the same period of last
year.
Recent Development
On August 11, 2018, The Company
held its 2018 Annual Meeting of Stockholders at its headquarters in
Tai'An City, Shandong Province. The Company's shareholders:
1) reelected Weixin Wang and Owens
Meng as Class II Directors; 2) ratified the appointment of
MaloneBailey, LLP as its independent registered public accounting
firm for the fiscal year of 2018; and 3) approved the 2018 Share
Incentive Plan.
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 leading BPO service provider in China 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 24 cities across 14 provinces, autonomous regions
and municipalities in China,
including Shandong, Jiangsu, Anhui, Hebei,
Xinjiang, Guangxi, Jiangxi, Chongqing, Beijing, Henan, Shanghai, Sichuan, Yunnan and Guangdong with a capacity of approximately
15,709 seats. 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: 1) anticipated increase in administrative
costs; and 2) continued growth and business outlook, are
forward-looking statements. Forward-looking statements are not
guarantee 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: ttian@weitianco.com
Phone: +1-732-910-9692
CHINA CUSTOMER
RELATIONS CENTERS, INC. AND SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
|
|
2018
|
|
2017
|
|
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
20,451,269
|
$
|
18,628,365
|
Accounts
receivable, net
|
|
|
32,819,649
|
|
23,689,583
|
Notes
receivable - related party
|
|
|
951,791
|
|
968,277
|
Prepayments
|
|
|
2,221,324
|
|
1,277,149
|
Due from
related parties, net
|
|
|
193,170
|
|
219,051
|
Other current
assets
|
|
|
1,429,910
|
|
1,084,929
|
Total current
assets
|
|
|
58,067,113
|
|
45,867,354
|
Equity
investments
|
|
|
3,625,871
|
|
3,688,676
|
Property and
equipment, net
|
|
|
6,655,375
|
|
6,067,338
|
Deferred tax
assets
|
|
|
431,388
|
|
313,463
|
Total non-current
assets
|
|
|
10,712,634
|
|
10,069,477
|
Total
assets
|
|
$
|
68,779,747
|
$
|
55,936,831
|
|
|
|
|
|
|
LIABILITIES
AND EQUITY
|
|
|
|
|
|
Accounts
payable
|
|
$
|
1,124,730
|
$
|
495,177
|
Accounts
payable - related parties
|
|
|
39,698
|
|
46,661
|
Accrued
liabilities and other payables
|
|
|
2,826,636
|
|
4,724,823
|
Deferred
revenue
|
|
|
417,941
|
|
607,660
|
Wages
payable
|
|
|
5,853,536
|
|
5,565,078
|
Income taxes
payable
|
|
|
842,443
|
|
541,321
|
Short term
loan
|
|
|
7,553,897
|
|
3,842,371
|
Total current
liabilities
|
|
|
18,658,881
|
|
15,823,091
|
Total
liabilities
|
|
|
18,658,881
|
|
15,823,091
|
Equity
|
|
|
|
|
|
Common shares,
$0.001 par value, 100,000,000 shares
authorized, 18,329,600 shares issued and outstanding as
of June 30, 2018 and December 31, 2017
|
|
|
18,330
|
|
18,330
|
Additional
paid-in capital
|
|
|
11,202,396
|
|
11,202,396
|
Retained
earnings
|
|
|
35,478,905
|
|
25,292,402
|
Statutory
reserves
|
|
|
3,418,376
|
|
2,597,031
|
Accumulated
other comprehensive income (loss)
|
|
|
(994,341)
|
|
80,868
|
Total China Customer
Relations Centers, Inc.
shareholders' equity
|
|
|
49,123,666
|
|
39,191,027
|
Noncontrolling
interest
|
|
|
997,200
|
|
922,713
|
Total
equity
|
|
|
50,120,866
|
|
40,113,740
|
Total
liabilities and equity
|
|
$
|
68,779,747
|
$
|
55,936,831
|
CHINA CUSTOMER
RELATIONS CENTERS, INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
For The Six Months
Ended June 30,
|
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
Revenues,
net
|
|
$
|
66,036,657
|
$
|
34,737,119
|
Cost of
revenues
|
|
|
45,803,839
|
|
24,799,720
|
Gross
profit
|
|
|
20,232,818
|
|
9,937,399
|
Operating
expenses:
|
|
|
|
|
|
Selling, general
& administrative expenses
|
|
7,787,102
|
|
6,870,337
|
Total operating
expenses
|
|
|
7,787,102
|
|
6,870,337
|
Income from
operations
|
|
|
12,445,716
|
|
3,067,062
|
Interest
expense
|
|
|
(120,659)
|
|
-
|
Government
grants
|
|
|
572,245
|
|
1,309,558
|
Other
income
|
|
|
80,470
|
|
170,032
|
Other
expense
|
|
|
(9,270)
|
|
(57,080)
|
Total other
income
|
|
|
522,786
|
|
1,422,510
|
Income before
provision for income taxes
|
|
12,968,502
|
|
4,489,572
|
Income tax
provision
|
|
|
1,863,761
|
|
262,223
|
Net
income
|
|
|
11,104,741
|
|
4,227,349
|
Less: net income
attributable to noncontrolling interest
|
96,893
|
|
183,128
|
Net income
attributable to China Customer Relations
Centers, Inc.
|
$
|
11,007,848
|
$
|
4,044,221
|
|
|
|
|
|
|
Comprehensive
income
|
|
|
|
|
|
Net
income
|
|
$
|
11,104,741
|
$
|
4,227,349
|
Other comprehensive
income (loss)
|
|
|
|
|
Foreign currency
translation adjustment
|
|
(1,097,615)
|
|
707,037
|
Total
Comprehensive income
|
|
10,007,126
|
|
4,934,386
|
Less: Comprehensive
income attributable to noncontrolling
interest
|
74,487
|
|
201,341
|
Comprehensive
income attributable to China Customer
Relations Centers, Inc.
|
$
|
9,932,639
|
$
|
4,733,045
|
|
|
|
|
|
|
Earnings per share
attributable to China Customer
Relations Centers, Inc.
|
Basic
|
|
$
|
0.60
|
$
|
0.22
|
Diluted
|
|
$
|
0.60
|
$
|
0.22
|
Weighted average
common shares outstanding
|
|
|
|
Basic
|
|
|
18,329,600
|
|
18,329,600
|
Diluted
|
|
|
18,329,600
|
|
18,329,600
|
CHINA CUSTOMER
RELATIONS CENTERS, INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
For The Six Months
Ended June 30,
|
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
Cash flows from
operating activities
|
|
|
|
|
|
Net
income
|
|
$
|
11,104,741
|
$
|
4,227,349
|
Adjustments to
reconcile net income to net cash
provided by (used in) operating activities:
|
|
|
|
|
|
Depreciation
|
|
|
1,219,183
|
|
808,302
|
Loss on disposal of
property and equipment
|
|
|
3,366
|
|
2,541
|
Deferred income
taxes
|
|
|
(128,150)
|
|
(54,388)
|
Changes in assets and
liabilities:
|
|
|
|
|
|
Accounts
receivable
|
|
|
(9,911,512)
|
|
(556,543)
|
Due from related
parties, net
|
|
|
(94,772)
|
|
-
|
Prepayments
|
|
|
(1,178,806)
|
|
(1,341,182)
|
Other current
assets
|
|
|
(377,832)
|
|
(415,423)
|
Accounts
payable
|
|
|
624,601
|
|
(171,593)
|
Accounts payable -
related parties
|
|
|
(6,414)
|
|
(73,387)
|
Wages
payable
|
|
|
398,411
|
|
546,565
|
Income taxes
payable
|
|
|
322,647
|
|
(707,263)
|
Deferred
revenue
|
|
|
(186,486)
|
|
(42,085)
|
Accrued liabilities
and other payables
|
|
|
(1,896,512)
|
|
(1,125,830)
|
Net cash provided
by (used in) operating
activities
|
|
|
(107,535)
|
|
1,097,063
|
Cash flows from
investing activities
|
|
|
|
|
|
Purchase of property
and equipment
|
|
|
(1,720,478)
|
|
(251,460)
|
Proceeds from sale of
property and equipment
|
|
|
71
|
|
73
|
Payments for equity
investments
|
|
|
-
|
|
(2,025,526)
|
Advances to related
parties
|
|
|
-
|
|
(21,821)
|
Repayments from
related parties
|
|
|
117,802
|
|
-
|
Net cash used in
investing activities
|
|
|
(1,602,605)
|
|
(2,298,734)
|
Cash flows from
financing activities
|
|
|
|
|
|
Contribution from
noncontrolling investor in
subsidiary
|
|
|
-
|
|
353,581
|
Repayments to related
parties
|
|
|
-
|
|
(465,828)
|
Borrowings from short
term loan
|
|
|
3,891,596
|
|
-
|
Net cash provided
by (used in) financing
activities
|
|
|
3,891,596
|
|
(112,247)
|
Effect of exchange
rate changes on cash and
cash equivalents
|
|
|
(358,552)
|
|
312,268
|
Net change in cash
and cash equivalents
|
|
|
1,822,904
|
|
(1,001,650)
|
Cash and cash
equivalents, beginning of the
period
|
|
$
|
18,628,365
|
$
|
15,947,268
|
Cash and cash
equivalents, end of the period
|
|
$
|
20,451,269
|
$
|
14,945,618
|
Supplemental cash
flow information
|
|
|
|
|
|
Interest
paid
|
|
$
|
120,659
|
$
|
43,591
|
Income
taxes paid
|
|
$
|
1,647,613
|
$
|
739,233
|
Non-cash investing
and financing activities
|
|
|
|
|
|
Transfer from
prepayments to property and
equipment
|
|
$
|
176,730
|
$
|
472,105
|
Liabilities assumed
in connection with purchase of
property and equipment
|
|
$
|
49,318
|
$
|
292,585
|
View original
content:http://www.prnewswire.com/news-releases/china-customer-relations-centers-inc-announces-company-record-financial-results-for-the-first-half-of-2018-300730100.html
SOURCE China Customer Relations Centers, Inc.