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China Customer Relations Centers, Inc. Announces Half Year 2016 Unaudited Financial ResultsTAI'AN, China, Dec. 8, 2016 /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 unaudited financial results for the half-year ended June 30, 2016. Six Months Ended June 30, 2016 Financial Highlights (all comparisons to prior year unless noted)
Mr. Gary Wang, Chairman and Chief Executive Officer of CCRC, commented, "We couldn't be more pleased with the first half of the year 2016 results that underscore the continued and strong demand for our services. Our revenues and net income increased by 34.3% and 151.6%, respectively, both of which are the highest levels in company history, and if we continue this momentum into the second half of the year, we are confident that 2016 could be another banner year for us following a tremendously gratifying year in 2015. As the highly fragmented Chinese BPO market continues to expand and evolve, we believe that there is still plenty of room for us to continue to grow at a rapid rate in the foreseeable future." Six Months Ended June 30, 2016 Financial Results
Revenues For the six months ended June 30, 2016, revenues increased by $8.8 million, or 34.3%, to $34.5 million from $25.7 million for the same period last year. This increase was mainly driven by the growth of our BPO business with increased sales to our existing BPO clients and sales to new BPO clients. Cost of revenue 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 $4.2 million, or 20.5%, to $24.5 million for the six months ended June 30, 2016 from $20.3 million for the same period last year. As a percentage of revenues, cost of revenues was 70.9% for the six months ended June 30, 2016, compared to 79.0% for the same period last year. Gross profit and gross margin Gross profit increased by $4.6 million, or 86.1%, to $10.0 million for the six months ended June 30, 2016 from $5.4 million for the same period last year. Gross margin increased by 8.1 percentage points to 29.1% for the six months ended June 30, 2016 from 21.0% for the same period last year. The increase in gross margin was primarily due to improvement in overall operating efficiency and the termination of certain less profitable business. Selling, general and administrative expense Selling, general and administrative expenses increased by $1.4 million, or 40.7%, to $4.9 million for the six months ended June 30, 2016 from $3.5 million for the same period last year. 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 2016 due to becoming a publically traded company. Operating income and operating margin Income from operations increased by $3.2 million, or 167.6%, to $5.2 million for the six months ended June 30, 2016 from $1.9 million for the same period last year. Operating margin was 15.0% for the six months ended June 30, 2016, compared to 7.5% for the same period last year. The increase in operating income and operating margin was mainly driven by an increase in revenues as a result of expansion of our BPO business and improvement in gross margin as a result of improvement in overall operating efficiency. Government Grants We received government grants, which are discretionary and unpredictable in nature, of $0.4 million for the six months ended June 30, 2016, up slightly from the same period of last year. Government grants as a percentage of net income were 9.7% for the six months ended June 30, 2016, compared to 22.1% for the same period of last year. Income Taxes Provision for income taxes was $1.0 million for the six months ended June 30, 2016, an increase of $0.6 million, or 125.8%, from $0.5 million for the same period of last year. We were entitled to a preferential enterprise income tax ("EIT") rate of 15% in 2015 and 2016. The standard enterprise income tax rate in China is 25%. Net Income Net income increased by $2.7 million, or 151.6%, to $4.6 million for the six months ended June 30, 2016 from $1.8 million for the same period last year. Earnings per basic and diluted share was $0.28 for the six months ended June 30, 2016, compared to $0.11 for the same period of last year. Financial Conditions As of June 30, 2016, the Company had cash of $11.0 million, compared to $13.6 million at December 31, 2015. Total working capital was $19.8 million as of June 30, 2016, compared to $16.1 million at the end of 2015. Net cash used in operating activities was $0.6 million for the six months ended June 30, 2016, compared to $3.4 million for the same period last year. Net cash used in investing activities was $0.5 million for the six months ended June 30, 2016, compared to $0.1 million for the same period last year. Net cash used in financing activities was $1.3 million for the six months ended June 30, 2016, compared to $0.8 million for the same period of last 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 BPO service provider focusing on the complex, voice-based segment of customer care services, including:
The Company's service is currently delivered from 11 call center locations in Shandong Province, Jiangsu Province, Hebei Province, Anhui Province, the Xinjiang Uygur Autonomous Region, the Guangxi Zhuang Autonomous Region, Jiangxi Province and Chongqing City, with a capacity approximately of 9,984 seats. 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: Tina Xiao
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