Revenues and EPS Increased by 33.4% and 106.4%, Respectively,
for the First Half of 2020
TAI'AN, China, Dec. 18, 2020 /PRNewswire/ -- China Customer
Relations Centers, Inc. (NASDAQ: CCRC) ("CCRC" or the "Company"), a
leading business process outsourcing ("BPO") service provider
serving internet, e-commerce, banking, and telecommunications
clients in China, today announced
its unaudited financial results for the six months ended
June 30, 2020.
First Half of 2020 Highlights (all comparisons to prior year
unless noted)
- Revenues increased by 33.4% to $97.72
million, driven by strong demand for our business from
existing BPO clients and the contribution from new clients
including Huaxia Bank, Ping'An Bank,
Suning Insurance, and Vipshop,
among others.
- Gross profit increased by 38.9% to $25.91 million. Gross margin was 26.5%, compared
to 25.5% for the same period of the prior year.
- Operating income increased by 89.1% to $10.06 million. Operating margin increased by 3.0
percentage point to 10.3%.
- Net income attributable to common shareholders increased by
106.4% to $10.30 million.
- Earnings per share was $0.56,
compared to $0.27 for the same period
of the prior
year.
First Half of 2020 Financial Results (Unaudited)
|
|
For the Six Months
Ended June 30,
|
($ millions,
except per share data)
|
2020
|
|
2019
|
|
%
Change
|
Revenues
|
|
$97.72
|
|
$73.27
|
|
33.4%
|
Gross
profit
|
|
$25.91
|
|
$18.65
|
|
38.9%
|
Gross
margin
|
|
26.5%
|
|
25.5%
|
|
1.0 pp*
|
Operating
income
|
|
$10.06
|
|
$5.32
|
|
89.1%
|
Operating
margin
|
|
10.3%
|
|
7.3%
|
|
3.0 pp*
|
Net income
attributable to CCRC
|
$10.30
|
|
$4.99
|
|
106.4%
|
EPS - basic and
diluted
|
|
$0.56
|
|
$0.27
|
|
107.4%
|
*pp: percent
points
|
|
|
|
|
|
|
Revenues
For the six months ended June 30,
2020, revenues increased by $24.45
million, or 33.4%, to $97.72
million from $73.27 million
for the same period of the prior year. We continued to see strong
demand for our business from existing BPO clients while adding new
clients with notable additions including Huaxia Bank, Ping'An Bank, Suning Insurance,
and Vipshop, among others, during
the six months ended June 30,
2020.
We continued to increase our service capacity, which increased
by 2,969 seats, or 13.3%, to 25,329 seats as of June 30, 2020 from 22,360 seats at the end of
2019.
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, IT costs, and facilities
support expenses. Cost of revenues increased by $17.19 million, or 31.5%, to $71.81 million for the six months ended
June 30, 2020 from $54.62 million for the same period of the prior
year. The increase in cost of revenues was in line with the
increase in revenues. As a percentage of revenues, cost of revenues
was 73.5% for the six months ended June 30,
2020, compared to 74.5% for the same period of the prior
year.
Gross profit and gross margin
Gross profit increased by $7.26
million, or 38.9%, to $25.91
million for the six months ended June
30, 2020 from $18.65 million
for the same period of the prior year. The
increase in gross profit was primarily driven by increased revenues
as well as COVID-19 related social security and rent relief
benefits received during the pandemic. Gross margin
increased by 1.0 percentage point to 26.5% for the six months ended
June 30, 2020 from 25.5% for the same
period of the prior year.
Selling, general and administrative expense
Selling, general and administrative ("SG&A") expenses
consist primarily of sales and administrative employee-related
expenses, professional fees, travel costs, research and development
costs, and other corporate expenses. SG&A expenses increased by
$2.52 million, or 18.9%, to
$15.85 million for the six months
ended June 30, 2020 from $13.33 million for the same period of the prior
year. As a percentage of revenues, SG&A expenses decreased from
18.2% for the six months ended June 30,
2019 to 16.2% for the six months ended June 30, 2020.
Operating income and operating margin
Income from operations increased by $4.74
million, or 89.1%, to $10.06
million for the six months ended June
30, 2020 from $5.32 million
for the same period of the prior year. The increase in operating
income was related to increased gross profit which was partially
offset by increased SG&A expenses. Operating margin was 10.3%
for the six months ended June 30,
2020, compared to 7.3% for the same period of the prior
year.
Other income
We recognized government grants, which are discretionary and
unpredictable in nature, of $1.38
million during the six months ended June 30, 2020, compared to $0.56 million recognized during the same period
of the prior year. Total other income, net of other expenses,
increased by $1.30 million, or
184.7%, to $2.01 million for the six
months ended June 30, 2020 from
$0.71 million for the same period of
the prior year.
Income before provision for income taxes
Income before provision for income taxes increased by
$6.05 million, or 100.3%, to
$12.07 million for the six months
ended June 30, 2020 from $6.03 million for the same period of the prior
year. The increase in income before provision for income taxes was
due to increased operating income as well as government grants and
other income.
Income taxes
Provision for income taxes was $1.73
million for the six months ended June
30, 2020, compared to $0.96
million for the same period of the prior year.
Net income and earnings per share
Net income increased by $5.27
million, or 104.1%, to $10.34
million for the six months ended June
30, 2020 from $5.07 million
for the same period of the prior year. After deducting net income
attributable to noncontrolling interest, net income attributable to
common shareholders was $10.30
million, or $0.56 per basic
and diluted share, for the six months ended June 30, 2020, compared to $4.99 million, or $0.27 per basic and diluted share, for the same
period of the prior year.
Financial Conditions
As of June 30, 2020, the Company
had cash of $28.67 million, compared
to $25.33 million at December 31, 2019. Total working capital was
$58.59 million as of June 30, 2020, compared to $47.50 million at the end of 2019.
Net cash provided by operating activities was $7.87 million for the six months ended
June 30, 2020, compared to net cash
used in operating activities of $1.34
million for the same period of the prior year. Net cash used
in investing activities was $1.81
million for the six months ended June
30, 2020, compared to $1.30
million for the same period of the prior year. Net cash used
in financing activities was $2.17
million for the six months ended June
30, 2020, compared to net cash provided by financing
activities of $0.03 million for the
same period of the prior 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 leading BPO service provider in China focusing on the complex, voice-based and
online-based segments of customer care services, including:
- customer relationship management;
- technical support;
- sales;
- customer retention;
- marketing surveys; and
- research.
The Company currently has a service capacity of approximately
25,329 seats for its call centers. 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) the impact of COVID-19; and 2)
continued growth, shareholder returns 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:
Sherry Zheng
Weitian Group LLC
Email: shunyu.zheng@weitian-ir.com
Phone: +1-718-213-7386
CHINA
CUSTOMER RELATIONS CENTERS, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
|
|
June
30,
|
|
December
31,
|
|
|
2020
|
|
2019
|
|
|
(Unaudited)
|
|
|
ASSETS
|
Cash and cash
equivalents
|
$
|
28,673,083
|
$
|
25,328,486
|
Accounts
receivable, net
|
|
47,438,549
|
|
42,606,485
|
Prepayments
|
|
2,912,547
|
|
2,396,646
|
Prepayment,
related party
|
|
78,109
|
|
90,429
|
Due from
related party, current
|
|
212,218
|
|
-
|
Income taxes
recoverable
|
|
201,283
|
|
712,459
|
Other current
assets
|
|
3,911,556
|
|
3,408,704
|
Total current
assets
|
|
83,427,345
|
|
74,543,209
|
Equity
investments
|
|
3,396,904
|
|
3,446,346
|
Property and
equipment, net
|
|
9,788,227
|
|
10,115,782
|
Deferred tax
assets
|
|
239,379
|
|
242,863
|
Due from
related party, non-current
|
|
-
|
|
215,307
|
Operating lease
right-of-use assets
|
|
9,882,185
|
|
9,827,114
|
Operating lease
right-of-use assets - related party
|
|
92,732
|
|
172,121
|
Total non-current
assets
|
|
23,399,427
|
|
24,019,533
|
Total
assets
|
$
|
106,826,772
|
$
|
98,562,742
|
|
|
|
|
|
LIABILITIES
AND EQUITY
|
|
|
Accounts
payable
|
$
|
2,836,918
|
$
|
2,602,972
|
Accounts
payable - related parties
|
|
49,945
|
|
149,658
|
Accrued
liabilities and other payables
|
|
4,677,490
|
|
4,641,892
|
Deferred
revenue
|
|
235,293
|
|
456,331
|
Wages
payable
|
|
10,261,274
|
|
10,472,596
|
Income taxes
payable
|
|
1,247,114
|
|
452,961
|
Operating lease
liabilities, current
|
|
3,369,036
|
|
3,797,069
|
Operating lease
liabilities - related party, current
|
|
40,670
|
|
163,995
|
Short term
loans
|
|
2,122,181
|
|
4,306,138
|
Total current
liabilities
|
|
24,839,921
|
|
27,043,612
|
Operating lease
liabilities, non-current
|
|
7,164,013
|
|
6,068,702
|
Total non-current
liabilities
|
|
7,164,013
|
|
6,068,702
|
Total liabilities
|
|
32,003,934
|
|
33,112,314
|
Equity
|
|
|
|
|
Common shares,
$0.001 par value, 100,000,000 shares authorized, 18,329,600 shares
issued and outstanding as of June 30, 2020 and December 31,
2019
|
|
18,330
|
|
18,330
|
Additional
paid-in capital
|
|
18,485,598
|
|
15,074,267
|
Retained
earnings
|
|
52,891,042
|
|
47,347,781
|
Statutory
reserves
|
|
7,161,554
|
|
5,818,330
|
Accumulated
other comprehensive loss
|
|
(4,352,452)
|
|
(3,411,744)
|
Total China Customer
Relations Centers,
Inc. shareholders'
equity
|
|
74,204,072
|
|
64,846,964
|
Noncontrolling
interest
|
|
618,766
|
|
603,464
|
Total
equity
|
|
74,822,838
|
|
65,450,428
|
Total
liabilities and equity
|
$
|
106,826,772
|
$
|
98,562,742
|
CHINA
CUSTOMER RELATIONS CENTERS, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME
(Unaudited)
|
|
|
For The Six Months
Ended June 30,
|
|
|
|
2020
|
|
2019
|
|
|
|
|
|
|
Revenues,
net
|
$
|
97,720,912
|
$
|
73,274,748
|
Cost of
revenues
|
|
71,809,229
|
|
54,623,472
|
Gross
profit
|
|
25,911,683
|
|
18,651,276
|
Operating
expenses:
|
|
|
|
|
Selling, general
& administrative expenses
|
15,848,053
|
|
13,329,194
|
|
Total operating
expenses
|
|
15,848,053
|
|
13,329,194
|
Income from
operations
|
|
10,063,630
|
|
5,322,082
|
Interest
expense
|
|
(109,430)
|
|
(30,475)
|
Government
grants
|
|
1,384,198
|
|
555,229
|
Other
income
|
|
758,268
|
|
201,945
|
Other
expense
|
|
(23,242)
|
|
(20,722)
|
|
Total other
income
|
|
2,009,794
|
|
705,977
|
Income before
provision for income taxes
|
12,073,424
|
|
6,028,059
|
Income tax
provision
|
|
1,733,355
|
|
961,021
|
Net
income
|
|
10,340,069
|
|
5,067,038
|
Less: net income
attributable to noncontrolling interest
|
42,253
|
|
77,947
|
Net income
attributable to China Customer Relations Centers,
Inc.
|
$
|
10,297,816
|
$
|
4,989,091
|
|
|
|
|
|
|
Comprehensive
income
|
|
|
|
|
Net income
|
$
|
10,340,069
|
$
|
5,067,038
|
Other comprehensive
income (loss)
|
|
|
|
Foreign currency
translation adjustment
|
(967,659)
|
|
(6,737)
|
Total
Comprehensive income
|
9,372,410
|
|
5,060,301
|
Less: Comprehensive
income attributable to noncontrolling interest
|
15,302
|
|
140,467
|
Comprehensive
income attributable to China Customer Relations Centers,
Inc.
|
$
|
9,357,108
|
$
|
4,919,834
|
|
|
|
|
|
|
Earnings per share
attributable to China Customer Relations Centers,
Inc.
|
Basic
|
$
|
0.56
|
$
|
0.27
|
Diluted
|
$
|
0.56
|
$
|
0.27
|
CHINA
CUSTOMER RELATIONS CENTERS, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(Unaudited)
|
|
|
For The Six Months
Ended June 30,
|
|
|
|
2020
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities
|
|
|
|
|
|
|
|
Net income
|
|
$
|
10,340,069
|
|
$
|
5,067,038
|
|
Adjustments to
reconcile net income to net cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
|
Depreciation
|
|
|
2,445,941
|
|
|
2,845,134
|
|
Loss on disposal of
property and equipment
|
|
|
226,974
|
|
|
68,475
|
|
Non-cash lease
expense
|
|
|
436,327
|
|
|
-
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(5,471,004)
|
|
|
(5,493,897)
|
|
Prepayments
|
|
|
(1,010,254)
|
|
|
(917,156)
|
|
Prepayment, related
party
|
|
|
11,079
|
|
|
(1,783)
|
|
Other current
assets
|
|
|
(554,215)
|
|
|
(97,228)
|
|
Operating lease
liabilities
|
|
|
135,277
|
|
|
(843,053)
|
|
Accounts
payable
|
|
|
272,668
|
|
|
(130,978)
|
|
Accounts payable -
related parties
|
|
|
(98,062)
|
|
|
(55,237)
|
|
Wages
payable
|
|
|
(62,836)
|
|
|
412,029
|
|
Income taxes
recoverable
|
|
|
503,504
|
|
|
207,879
|
|
Income taxes
payable
|
|
|
804,727
|
|
|
(56,564)
|
|
Deferred
revenue
|
|
|
(215,584)
|
|
|
(114,931)
|
|
Accrued liabilities
and other payables
|
|
|
101,960
|
|
|
(2,226,854)
|
|
Net cash provided
by (used in) operating activities
|
|
|
7,866,571
|
|
|
(1,337,126)
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
Purchase of property
and equipment
|
|
|
(1,808,750)
|
|
|
(1,371,577)
|
|
Proceeds from sale of
property and equipment
|
|
|
988
|
|
|
28,210
|
|
Repayment from
related parties
|
|
|
-
|
|
|
44,222
|
|
Net cash used in
investing activities
|
|
|
(1,807,762)
|
|
|
(1,299,145)
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
Borrowings from
short-term loans
|
|
|
4,231,293
|
|
|
3,725,560
|
|
Repayment of
short-term loans
|
|
|
(6,398,592)
|
|
|
(3,694,345)
|
|
Net cash provided
by (used in) financing activities
|
|
|
(2,167,299)
|
|
|
31,215
|
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
|
(546,913)
|
|
|
(62,102)
|
|
Net change in cash
and cash equivalents
|
|
|
3,344,597
|
|
|
(2,667,158)
|
|
Cash and cash
equivalents, beginning of the period
|
|
|
25,328,486
|
|
|
24,419,912
|
|
Cash and cash
equivalents, end of the period
|
|
$
|
28,673,083
|
|
$
|
21,752,754
|
|
Supplemental cash
flow information
|
|
|
|
|
|
|
|
Interest
paid
|
|
$
|
109,433
|
|
$
|
82,531
|
|
Income
taxes paid
|
|
$
|
905,535
|
|
$
|
1,139,416
|
|
Non-cash investing
and financing activities
|
|
|
|
|
|
|
|
Transfer from
prepayments to property and equipment
|
|
$
|
457,666
|
|
$
|
-
|
|
Liabilities assumed
in connection with purchase of property and equipment
|
|
$
|
-
|
|
$
|
17,792
|
|
View original
content:http://www.prnewswire.com/news-releases/china-customer-relations-centers-inc-announces-financial-results-for-the-first-half-of-2020-301196061.html
SOURCE China Customer Relations Centers, Inc.