UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 or 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 333-147086-01
TONGXIN INTERNATIONAL LTD.
_____________________________________________________________________
(Translation of Registrant's Name into English)
199 Pierce Street,Suite 202
Birmingham, Michigan 48009
_____________________________________________________________________
(Address of Principal Executive Office)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form 20-F [X] Form 40-F [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T
Rule 101(b)(1): ____
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper
of a Form 6-K if submitted solely to provide an attached annual report to
security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T
Rule 101(b)(7): ____
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper
of a Form 6-K if submitted to furnish a report or other document that the
registrant foreign private issuer must furnish and make public under the
laws of the jurisdiction in which the registrant is incorporated, domiciled
or legally organized (the registrant's "home country"), or under the rules
of the home country exchange on which the registrant's securities are
traded, as long as the report or other document is not a press release, is
not required to be and has not been distributed to the registrant's
security holders, and, if discussing a material event, has already been the
subject of a Form 6-K submission or other Commission filing on EDGAR.
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes [ ] No [X]
If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b):
This form 6-K consists of the following exhibits attached hereto:
1. Press release dated November 10, 2008, relating to Tongxin
International Ltd. Filed November 10, 2008 for the third quarter
financial results Ended September 30, 2008.
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
TONGXIN INTERNATIONAL LTD.
----------------------------------
(Registrant)
By: /s/ Rudy Wilson
-----------------------------
Name: Rudy Wilson
Title: Chairman of the Board
and Chief Executive Officer
/s/ Jackie Chang
-----------------------------
Name: Jackie Chang
Title: Chief Financial and
Accounting Officer
Date: November 10, 2008
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EXHIBIT
Exhibit Number Description
1. Press release dated November 10, 2008, relating to Tongxin
International Ltd. Filed November 10, 2008 for the third quarter
financial results Ended September 30, 2008.
=========================================================================
Tongxin International, Ltd. Reports Third Quarter 2008
Financial Results
NEW YORK and CHANGSHA, China, November 10th, 2008 Xinhua-
PRNewswire- FirstCall - Tongxin International Ltd. ("Tongxin")
("Company") (NASDAQ:TXIC-News) a manufacturer of engineered
commercial vehicle body structures ("EVBS"), SUV passenger
vehicle bodies and stamped body parts for the Chinese
commercial vehicle market, today announced the Company's third
quarter financial results ended September 30th, 2008.
- - Third quarter revenues increased 4.7 % to $22.8 million
vs. Q3 2007
- - Third quarter net income decreased 16.2 % to $2.1
million vs. Q3 2007
- - Nine-month revenues increased 21.3 % to $76.3 million
vs. the same period in 2007
- - Nine-month net income increased 8.0 % to $8.1 million
vs. the same period in 2007
2008 Third Quarter Financial Results
Net revenues for the third quarter ended September 30, 2008
reached $22.8 million, an approximate $1.1 million or 4.7%
increase over the same period of the prior year. As reported
earlier this year, the third quarter for Tongxin International
and other companies in the automotive and steel sectors were
hampered by factory reductions in preparation for, and during,
the Beijing Olympics this summer. Government restrictions on
power and emissions were placed on many automotive
manufacturers and supply from steel mills producing cold-
rolled steel for the months of July, August and half of
September were also reduced. The effects of these measures
anticipated a slow quarter for the entire sector. As reported
by the UK Telegraph on September 21st, manufacturers including
both sectors of automotive, passenger and commercial, resumed
full production in mid September. Further adding to the
challenges for the third quarter were slowdowns in production
as the industry prepared for Euro III emission regulations in
China.
Cost of goods sold were $18.5 million in the third quarter
2008, an increase of 13 % versus the same period, 2007. Gross
profits for the third quarter were $4.4 million compared to
$5.5 million in the third quarter of 2007. Gross margin
percentages decreased to 19.2% in 2008 from 25.1% for the
three months ended September 30, 2007. The decrease was
directly attributed to higher costs in raw materials,
specifically the 29% price increase in cold-rolled steel since
January 1, 2008. Pricing increases are yet being passed on
to customers, particularly Tongxin's largest customers in the
Company's network of 130 commercial vehicle manufacturers
throughout China. The Company anticipates a return to its
standard gross margins of approximately 25% as steel pricing
levels and material increases in contracts are recorded from
recent invoices.
Total operating expenses for the third quarter of 2008 were
$1.5 million versus $1.4 million for the same period in 2007.
Operating expenses as a percentage of revenues were 6.5%
compared with 6.2% for the same period, 2007. Operating income
and operating margin for the quarter were $2.9 million and
12.6%, versus $4.1 million and 18.9% in 2007.
Net income was $2.1 million, representing a decrease of 16.2%
from $2.5 million reported in the same period prior year. The
net income reflects the $175,000 one-time transaction costs
recorded by Tongxin International, Ltd (previously Automotive
Acquisition Corporation) for the Company's business
combination with Hunan Tongxin. The Company incurred $521,000
in taxes for the quarter and pays an effective tax rate of
23.5% for the year. Corresponding net profit margins were
9.1% for the quarter which represented a 230-basis point
decrease versus the same quarter, 2007. This decrease was
related to increases in raw material costs. Earnings per
share for the quarter was $0.19 based on 11.2 million shares.
"We believe our management team properly estimated the effects
of the factory restrictions and associated demands of the Euro
III emission standards on our sales and shipments in the third
quarter," opened Rudy Wilson, CEO of Tongxin International.
"Despite our predictions, we were encouraged to see a slight
increase in revenues quarter over quarter especially since the
same set of circumstances were not present for our 2007 third
quarter. Considering the highly-restrictive environment in
which we were operating around the dates of the Olympics, an
increase in revenues during third quarter demonstrates the
resilience of the commercial market and our position as the
leading EVBS supplier." Wilson concluded.
2008 Nine-Month Financial Results
Revenue increased approximately 21.3% to $76.3 million for the
nine months ended September 30, 2008 as compared to $62.9
million for the same period last year. Operating expenses for
the nine months ended September 30, 2008 were $4.7 million
compared to $3.9 million for the same period in 2007.
Operating expenses as a percentage of revenues remained steady
at 6.2% for the nine months ended September 30, 2008 compared to
the same period in 2007. Operating income for the nine months
ended September 30, 2008 was $11.9 million, a decrease of 5.3%
compared to $12.6 million for the nine months ended September
30, 2007. Net income was $8.1 million for the nine months
ended September 30, 2008, an increase of 8.0% compared to same
period last year. Net income for the nine months ended
September 30th, 2008 reflected an one-time transaction cost of
$320,000 associated with the Company's business combination on
April 17th, 2008. Earnings per diluted share were $0.73 based
on 11.2 million shares.
"We are very confident about our business operation and that
our team will reach our guidance of the year. After polling
our top customers and scheduling our builds and deliveries of
the fourth quarter, the market has responded with added demand
pent up from manufacturers and their customers in October. A
combination of lowered steel prices, strong order bookings
from our customers and the relaxing of the Euro III compliance
time table should result in a return to our standard margins
and pace of business we experienced during the first quarter
of this year." Wilson added.
Balance Sheet and Cash Flow Discussion
As of September 30, 2008, Tongxin International had
approximately $19.0 million in cash and cash equivalents.
The company maintained a current ratio of 1.1 to 1 and $12.0
million in accounts receivable on September 30, 2008.
Corresponding days sales outstanding (DSO) were 47 days.
Stockholders' equity was $34.2 million on September 30, 2008,
representing an increase of 52.8% versus same period 2007.
The Company has approximately five million warrants with
strike price of $5.00 and callable at $10.00. If exercised,
warrants would yield $25.2 million in proceeds to the company.
Business Outlook
Based on its order bookings and accrued demand for the same
time period, the Company anticipates a strong fourth quarter
as its customer base completely resumes production and the
extension of timetables to meet Euro III regulations.
Additionally, the Company is completing USGAAP audit of Meihua
Bus for which a framework agreement was signed on July 28th,
2008. Preliminary results for Meihua Bus indicate higher than
expected revenues and net income for the 2008 year. Tongxin
anticipates closing the Meihua acquisition before year end.
Company News and Events
- - Tongxin International announced the appointment of Ms.
Jackie Chang as CFO and CAO of Tongxin International. Ms.
Chang's appointment was effective November 1, 2008.
- - Tongxin is participating at the Rodman and Renshaw
Growth Conference during November 10-12th and conducting a
non-deal road show to meet with prospective and current
investors in the New York area the week of the 10th of
November
- - Tongxin will also participate in the Roth China
Conference held in Las Vegas the 19-21st of November.
Conference Call
The Company will host a conference call on November 10th,
2008, at 5:00 p.m. EDT. To attend the call, please use the
dial information below. When prompted, ask for the "Tongxin
International" and or be prepared to provide the conference
ID.
Date: November, 10th 2008
Time: 5:00 pm ET
Conference Line Dial-In (U.S.): 1-800-762-8932
International Dial-In: +1-480-629-9031
Conference ID: 3941507
Webcast link:
http://viavid.net/dce.aspx?sid=0000594C
Please dial in at least 10-minutes before the call to ensure
timely participation. A playback will be available through
November 17th, 2008. To listen, please call 800-406-7325
within the United States or +1 303-590-3030 when calling
internationally. Utilize the pass code 3941507 for the replay.
About TXI
Tongxin International Ltd., is the largest independent
supplier of EVBS in China, is capable of providing EVBS for
both the commercial truck and light vehicle market segments,
in addition to designing, fabricating and testing dies used in
the manufacturing process. EVBS consists of exterior body
panels including doors, floor pans, hoods, side panels and
fenders.
Forward Looking Statements
Statements contained in this press release, which are not
historical fact, including the anticipated date of listing of
the Class A Common Stock on the NASDAQ Global Market,
constitute "Forward-Looking Statements." Actual results may
differ materially due to numerous important factors that are
described in Tongxin International's most recent report to the
SEC on Form 6-K, which may be revised or supplemented in
subsequent reports to the SEC. Such actors include, among
others, the cost and timing of implementing restructuring
actions, the Company's ability to generate cost savings or
manufacturing efficiencies to offset or exceed contractually
or competitively required price reductions or price reductions
to obtain new business, conditions in the automotive industry,
and certain global and regional economic conditions. Tongxin
International does not intend or assume any obligation to
update any forward-looking statement to reflect events or
circumstances after the date of this press
release.
For more information, please contact:
Investor Relations Contact:
John Mattio
SVP, HC International, Inc.
Tel: +1-914-669-5340
Email: john.mattio@hcinternational.net
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, In US$, except number of share and per share data)
Three months ended Nine months ended
September 30, September 30,
2008 2007 2008 2007
---------------------------- --------------------------
(unaudited) (unaudited) (unaudited) (unaudited)
Revenues $ 22,849 $ 21,822 $ 76,328 $ 62,922
Cost of Goods Sold 18,468 16,347 59,713 46,481
Gross Profit 4,381 5,475 16,615 16,441
16,441
Operating expenses:
Selling and 1,493 1,360 4,698 3,855
General and administrative
Other income, net 151 65 373 80
Profit before income taxes 3,039 4,180 12,290 12,666
Interest expense 437 518 1,667 1,520
Income before income taxes 2,602 3,662 10,623 11,146
Income tax expense 521 1,179 2,498 3,625
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Net Income 2,081 2,483 8,125 7,521
Net Income per share-basic 0.186 0.222 0.725 0.671
Net Income per share-diluted 0.186 0.222 0.725 0.671
Common Shares used in calculating basic
net income per share ** 11,205,270 11,205,270 11,205,270 11,205,270
Common Shares used in calculating diluted
(Treasury Method)
net income per share 11,205,270 11,205,270 11,205,270 11,205,270
* The net income is inclusive of one-time transaction costs of
approximately $320,000 and $175,000 in the nine and three
month periods ended September 30, 2008, respectively. These
one-time costs are associated with the transaction dated
April 17, 2008 between Asia Automotive Acquisition Corporation
and Hunan Tongxin Enterprise Co. Ltd. The adjusted net income
and earnings per share giving effect to these onetime costs
are as follows:
- - Nine Months ended September 30, 2008: Adjusted Net Income
$8.45 Million; EPS $0.75/share
- - Three months ended September 30, 2008: Adjusted Net Income
$2.30 Million; EPS $0.20/share
** Includes 7,649,000 restricted common shares and 3,556,270
free float common shares
CONSOLIDATED BALANCE SHEETS (HIGHLIGHT ITEM)
(In thousands, In US$, except share data)
September30,2008 September30,2007
---------------- ----------------
Assets
Current assets:
Cash and cash equivalents $ 19,013 $ 7,646
Accounts receivable, net 12,018 11,382
Other receivable, net 7,641 4,309
Related party 6,951 10,056
Notes receivable 4,322 5,520
Inventories 17,446 15,403
Investment in marketable securities 73 -
Prepaid expenses 8,518 3,395
Deferred tax assets 1,689 1,710
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Total current assets 77,671 59,421
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Investments in non-consolidated
subsidiaries and affiliates 912 820
Plant and equipment, net of depreciation
of $9,748 and $13,394, respectively 36,108 28,407
Land occupancy rights 2,019 1,876
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Total assets 116,710 90,524
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Liabilities and shareholders' equity
Current liabilities:
Accounts payable 17,917 16,215
Notes payable 2,933 -
Accrued expenses and other liabilities 10,229 7,707
Income taxes payable 18,578 11,068
- current 2,321 -
- prior period/year 16,257 11,068
Dividend payable - 5,279
Short-term loans 20,533 17,933
Short-term loans from shareholders 3,152 4,912
Deferred tax liability 4 -
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Totoal current liabilities 73,346 63,114
Long-term loans - 4,394
Long-term loans from shareholders 8,634 -
Other 522 630
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Total liabilities 82,502 68,138
Shareholders' equity:
Common stock (authorized, 39,000,000
common shares US$0.001 par value, issued
and outstanding 11,205270 shares) 8,762 8,762
Reserve funds 13,070 1,994
Accumulated other comprehensive income 2,474 2,421
Retained earnings 9,902 9,209
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Total shareholders' equity 34,208 22,386
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Total liabilities and shareholders' equity 116,710 90,524
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