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 May 18, 2009, relating to Tongxin
International Ltd. Filed May 18, 2009 for the first quarter
financial results Ended March 31, 2009.
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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: May 18, 2009
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EXHIBIT
Exhibit Number Description
1. Press release dated May 18, 2009, relating to Tongxin
International Ltd. Filed May 18, 2009 for the first quarter
financial results Ended March 31, 2009.
=========================================================================
Tongxin International, Ltd. Reports First Quarter 2009 Financial Results
NEW YORK and CHANGSHA, China, May 15, 2009 Xinhua- PRNewswire- FirstCall
- - Tongxin International Ltd. ("Tongxin") ("Company") (NASDAQ:TXIC-News)
a manufacturer of engineered commercial vehicle body structures ("EVBS"
or "Cabs"), SUV passenger vehicle bodies and stamped body parts for the
Chinese commercial vehicle market, today announced the Company's first
quarter financial results for the three month period ended March 31,2009.
- - Overall revenues decreased 2.6% to $29.5 million from $30.3 million;
domestic revenues increased 6.3% quarter over quarter
- - Q1 2009 gross margins increased 370 basis-points to 28.6% from 24.9%
in the first quarter 2008
- - Net income increased 6.6 % to $4.1 million in the first quarter from
$3.8 million prior year
- - First quarter EPS increased to $0.36 for the quarter versus $0.34 in
Q1 2008.
First Quarter Financial Results
Net revenues for the first quarter ended March 31, 2009 reached $29.5
million, an approximate $0.8 million, or 2.6% decrease, over the same
period prior year. According the China Association of Automobile
Manufacturers (CAAM), a total of 692,000 trucks were built with more
than half, approximately 343, 800 units, built in March alone. The
three month total in 2009 is 4.4% below 2008 totals for the same
period in 2008. As of April 30 2009, CAAM also reported 339,300
commercial vehicles built in April of 2009, on par with March 2009
build totals.
Tongxin's decrease in revenues is consistent with the market and
representative of the strong first quarter the industry witnessed
in 2008 in an effort to build trucks prior to Euro III emissions
standards enacted on July 1, 2008 and prior to additional factory
restrictions imposed on manufacturers prior to the Beijing Olympics.
Additionally, the Company also reported a drop in exports, from $4.4
million in export sales the first quarter of 2008 to approximately $1.8
million for the first quarter in 2009, due to timing of customer
shipments to Vietnam. Since both the cabs and chassis are shipped to
Vietnam, the drop could be attributable to timing of components
availability and not a loss of customer volume; Tongxin has three export
customers in Vietnam. Excluding exports from Tongxin's revenues, the
Company reported an increase in domestic revenues of 6.3% from its
more than 130-plus customers throughout China.
"We believe that the first quarter of 2009 is a better representation
of our performance for the coming year", stated Vice-Chairman
Duanxiang Zhang of Hunan Tongxin. "Baring the regulation of Euro III
standards that produced a strong first quarter in 2009, we are very
encouraged by the uptick in business and shipments for the last three
months. As domestic demand and the effects of the stimulus package
begin to work their way through the economy plus a noticeable return
of export orders, we, anticipate a succession of strong quarters for
Tongxin and continued demand for our commercial vehicle cabs in 2009."
Zhang concluded.
Cost of goods sold were $21.0 million in the first quarter 2009, a
decrease of $1.7million or 7.3% versus the same period in 2008.
The decrease in costs is directly related to the drop in cold-rolled
steel pricing. Based on a comparison between January 2008 and January
2009, per ton pricing on cold rolled steel has dropped approximately
15.0% from $766.00 per ton to $666.00 per ton (source-Management,
Engineering and Production MEPS, Consultancy UK, ltd.). Corresponding
gross profits for the first quarter were $8.4 million compared to $7.5
million in the first quarter of 2008. As a result, gross margins
increased 370 basis points to 28.6% in 2008 from 24.9% for the prior
quarter ended March 31, 2008.
Total operating expenses for the first quarter of 2009 were $2.7
million versus $1.8 million for the same period in 2008. Included
in the 1st Q operating expenses was approximately $607,000 in
corporate costs reflecting added financial, legal and accounting
expenses, listing costs on NASDAQ, and administrative expenses.
The most significant portion of these costs is approximately $233,000
in SOX compliance costs as the Company works towards SOX compliance
with its partner, Ernst and Young. As a percentage of revenues,
operating expenses were 9.0% compared with 6.0% for the same
period, 2008. Operating income and operating margin for the quarter
were $6.0 million and 20.5%, respectively, versus $5.7 million and
18.9%, respectively for the same period in 2008.
Earnings before interest and taxes were $6.0 million versus $5.75
million the period ended March 31st, 2008. Tongxin pays the standard
Chinese corporate tax rate of 25% however the Company is in the
processes of applying for a reduction in taxes for companies based
in the Henan province and in a related automotive industry. Net
income was $4.1 million, representing an increase of 6.6% from
$3.8 million reported in the same period prior year. Excluding
costs associated with SOX compliance of $233,000, adjusted net
income would be $4.3 million. Net profit margins were 13.9% for
the quarter which represented a 130-basis point increase in net
margins from 12.6% reported the first quarter of 2008. Earnings
per share for the quarter were $0.36 based on 11.3 million shares
outstanding.
Ms. Jackie Chang, Chief Financial and Accounting Officer stated,
"The Company will continue to experience the favorable Impact of
lower steel prices and increasing vehicle production volumes
throughout the year. Steel is approximately 80% of our cost of
goods thus we allocate significant time managing these costs
carefully and our pricing to our customer base."
Balance Sheet and Cash Flow Discussion
As of March 31, 2009, Tongxin International had approximately
$6 million in cash and cash equivalents I $11.3 million on
December 31st, 2008 as reported in the Company's 20-F filing.
The company maintained a current ratio of 1.08 and $25.3 million
in accounts receivable on March 31, 2009. Corresponding days sales
outstanding ("DSO") were 95 days. Stockholders' equity was $84.1
million on March 31, 2009 from $18.7 million for the same period
2008, an increase of $65.4 million which is the purchase price of
the acquisition.Cash flow from operations is a negative $2.4
million due to higher trade receivables as a result of higher
revenue in the first quarter vs. the fourth quarter 2008.
The Company has approximately five million warrants outstanding
with strike price of $5.00 and callable at $10.00. At the Company's
option, and in the event the selling price of the Company's common
shares trades at an average price of $10.00 or more for twenty days
out of a thirty day selling period, it may redeem warrants on
"an all-or-none" basis. If the warrants are redeemed the Company
would recognize gross proceeds of approximately $25 million.
2009 Guidance
For the fiscal year ending December 31, 2009, we anticipate
consolidated earnings per share of $1.10 (based upon shares
outstanding of 11,294,633).
About TXI
Tongxin International Ltd., is the largest independent supplier of
EVBS in China, is capable of providing EVBS for both the commercial
truck and light vehicle market segments, in addition to designing,
fabricating and testing dies used in the manufacturing process. EVBS
consists of exterior body panels including doors, floor pans, hoods,
side panels and fenders.
Forward Looking Statements
Statements contained in this press release, which are not historical
fact, including the anticipated date of listing of the Class A Common
Stock on the NASDAQ Global Market, constitute "Forward-Looking
Statements." Actual results may differ materially due to numerous
important factors that are described in Tongxin International's most
recent report to the SEC on Form 6-K, which may be revised or
supplemented in subsequent reports to the SEC. Such factors include,
among others, the cost and timing of implementing restructuring
actions, the Company's ability to generate cost savings or
manufacturing efficiencies to offset or exceed contractually or
competitively required price reductions or price reductions to
obtain new business, conditions in the automotive industry, and
certain global and regional economic conditions. Tongxin International
does not intend or assume any obligation to update any forward-looking
statement to reflect events or circumstances after the date of this
press release.
For more information, please contact:
Investor Relations Contact:
John Mattio
SVP, HC International, Inc.
Tel: +1-914-669-5340
Email: john.mattio@hcinternational.net
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, In US$, except number of share and per share data)
Three months ended
March 31,
2009 2008
----------------------------
(unaudited) (audited)
Revenues $ 29,499 $ 30,281
Cost of Goods Sold (21,071) (22,734)
Gross Profit 8,428 7,547
Operating expenses:
Selling and General and administrative (2,665) (1,798)
Other income, net 270 -
Profit before income taxes 6,033 5,749
Interest expense (515) (618)
Income before income taxes 5,518 5,131
Income tax expense (1,418) (1,283)
------------- --------------
Net Income 4,100 3,848
Net Income per share-basic 0.363 0.343
Net Income per share-diluted 0.363 0.294
Common Shares used in calculating basic
net income per share ** 11,294,633 11,205,270
Common Shares used in calculating diluted
(Treasury Method)
net income per share 11,294,633 13,101,250
CONSOLIDATED BALANCE SHEETS
(In thousands, In US$, except share data)
March 31,2009 March 31, 2008
---------------- ---------------
(unaudited) (audited)
Assets
Current assets:
Cash and cash equivalents $ 6,003 $ 3,483
Bank Deposit 5,865 -
Accounts and notes receivable, net 25,335 25,388
Other receivable, net 25,083 10,026
Inventories 23,415 15,978
Investment in marketable securities 147 74
Prepaid expenses 3,770 2,959
Deferred tax assets 1,069 1,676
--------------- --------------
Total current assets 90,687 59,584
--------------- --------------
Investments in operating business 472 908
Plant and equipment, net of depreciation 36,282 30,706
Land occupancy rights 9,633 1,865
HNTX internal receivable 8 -
Deferred income tax 878 -
Goodwill 36,696 -
--------------- --------------
Total assets 174,656 93,063
--------------- --------------
Liabilities and shareholders' equity
Current liabilities:
Accounts and notes payable 26,150 15,343
Accrued expenses and other liabilities 14,974 10,671
Income taxes payable 19,749 9,246
Short-term loans 22,386 24,492
Short-term loans from shareholders - -
Derivative liability 452 -
--------------- --------------
Totoal current liabilities 83,711 59,752
Long-term loans 4,545 14,597
Deferred tax liability 2,256 22
Other 26 -
--------------- --------------
Total liabilities 90,538 74,371
Shareholders' equity:
Common stock (authorized, 39,000,000
common shares US$0.001 par value, issued 98 8,762*
and outstanding 11,300,336 shares)
Treasury stock (7,682)
Capital surplus 78,882 -
Reserve funds 11 2,998
Deficit accumulated at develop (5,519) -
Retained earnings 18,328 6,932
--------------- --------------
Total shareholders' equity 84,118 18,692
--------------- --------------
Total liabilities and shareholders' equity 174,656 93,063
--------------- --------------
* Paid-in Capital
Consolidated Statements of Cash Flows
For Year Ended March 31, 2008
(US$ amounts in thousands)
March 31, 2009 March 31, 2008
------------------ -------------------
(unaudited) (unaudited)
Cash flows from operating activities:
Net income(loss) $ 4,100 $ 3,847
Adjustments to reconcile net income
(loss)to net
cash provided by(used in)operating
activities:
Allowance for doubtful accounts - (136)
Depreciation expense 659 520
Amortization expense 64 15
Changes in
Decrease in tax payable 2,331 -
Increase of inventories (4,319) (3,449)
Increase of accounts and notes receivable (18,353) (950)
Decrease (increase)of prepaid expenses 427 (37)
Increase of accounts payable and notes
payable 5,126 6,349
Increase(decrease)of accrued expenses
and other liabilities 7,581 750
-------- --------
Net cash provided by(used in )operating
activities (2,384) 6,909
-------- --------
Cash flows from investing activities:
Purchase of property,plant and equipment (239) (6,205)
Net cash used in investing activities (239) (6,205)
-------- --------
Cash folws from financing activities:
Proceeds from capital contributions - -
Proceeds from loans (2,852) 4,325
Dividends paid (263)
Cash repayments of amounts borrowed (3,275)
-------- --------
Net cash provided by financing activities (2,852) 787
-------- --------
Effect of foreign exchange rate changes 165 330
Net increase(decrease)in cash and cash
equivalents (5,310) 1,821
Cash and cash equivalents at beginning of
year 11,313 1,662
Cash and cash equivalents at end of year 6,003 3,483
Income taxes paid 1,418 1,283
Interest paid 515 618