CNIT Announces 2016 Financial Results

SHENZHEN, CHINA / ACCESSWIRE / April 28, 2017 / China Information Technology, Inc. (CNIT), a provider of cloud-app technologies for Internet-of-Things (IoT) platforms and internet-based ad and information distribution systems in China, today reported that, for the year ended December 31, 2016, the company had revenue of $10,193,590, a 1 percent decrease on revenue of $10,284,868 in 2015. This decrease was mainly due to a year-over-year drop of about $1.5 million in revenue contributed by CNIT’s government-oriented IT systems business – a segment the company continues to de-emphasize – offset in large part by increased revenue of about $1.4 million contributed by CNIT’s privately-focused cloud-based technology solutions segment. As a result, however, of a year-over-year increase in cost of revenue of approximately $1.2 million, gross profit as a percentage of revenue for 2016 fell to 25.4 percent from 38.0 percent in the prior year. Nevertheless, in 2016, CNIT cut its loss from operations to $14,577,928, a 46 percent reduction from its 2015 loss from operations of $26,963,357. This improvement resulted primarily from year-over-year decreases of roughly $2.9 million in administrative expenses, $1.3 million in selling expenses, $0.4 million in R&D expenses, and $4.5 million in impairment of intangible assets and goodwill. Due to assorted non-recurring factors, though, the company had a net loss in 2016 of $18,170,601, or ($.45) per share, compared to a net loss of $7,504,262, or ($.22) per share, in 2015. The most prominent of these factors impacting 2016’s bottom line results was the company’s loss for that year on sale of deposits for land use rights of $2.8 million versus $0 in 2015. The most prominent factors mitigating CNIT’s 2015 net loss was the sale in that year of the company’s factory real estate property, which resulted in a gain on sale of assets of approximately $30.0 million versus $0 in 2016, as well as the company’s 2015 income from discontinued operations of $1.5 million versus $0 in 2016. CNIT reduced its short-term debt to $7.80 million at year-end 2016, from $15.27 million at the end of 2015. The company’s cash on hand at the end of 2016 was $3.75 million compared to $3.79 million a year earlier. Among the company’s most important milestones in 2016, said CNIT, was its commercialization of a cloud-based new media ecosystem comprised of a cloud platform, proprietary intelligent display terminals, and a proprietary USB adaptor that easily transforms any kind of display terminal into a cloud-based IoT terminal and links it to CNIT’s cloud platform. This, in turn, allows this terminal to access the company’s Yunfa Net advertising content delivery system (www.cnitiot.com), which permits a customer to create reduced-cost ads on a PC or mobile app, instantly transmit them to the terminal, and receive feedback from the terminal on which ads it is displaying. These features enable customers to precisely measure the effectiveness of an ad upon a targeted audience. As a result of this offering, said CNIT, both the number of subscribers to Yunfa Net and the digital ad terminals connected to the company’s cloud network in 2016 increased significantly. Regarding 2017, said CEO Mr. Jianghuai Lin, the company’s steady migration to higher-margin cloud-based solution opportunities like Yunfa Net and its recently introduced IoT elevator safety system, Yunti Guard, should allow CNIT to achieve “break-even status or moderate profitability in the second half of the year.” Mr. Lin added that he believes the company’s current cash and cash equivalents, anticipated cash flows from operations in 2017, and additional...