SHENZHEN, China, March 5 /PRNewswire-Asia/ --
-- 4Q08 Revenue Increases 70.5% to $143.5 Million
-- 4Q08 Adjusted Net Income Increases 47.1% to $23.7 Million
-- 4Q08 Adjusted EPS Increases 28.9% to $0.49
-- Full Year 2008 Revenue Increases 77.9% to $427.4 Million
-- Full Year Adjusted Net Income Increases 62.1% to $75.6 Million
-- Full Year Adjusted EPS Increases 39.2% to $1.67
China Security & Surveillance Technology, Inc. ("China Security" or "CSST"
or the "Company") (NYSE: CSR) (Nasdaq Dubai: CSR), a leading provider of
digital surveillance technology in the PRC, today reported its financial
results for the fourth quarter and full year ending December 31, 2008 .
Fourth Quarter 2008
Fourth quarter 2008 revenue increased 70.5% to $143.5 million, from $84.2
million in the fourth quarter of 2007, as demand for security solutions
remains strong in both the government and private sectors. Organic revenue
was approximately $124.3 million, or 86.6% of total revenue, while revenue
from acquisitions was approximately $19 million or 13.4% of total revenue. As
a result, organic revenues grew by $55.0 million, or 79.4% from $69.3 million
in the same period of 2007.
In the fourth quarter, gross profits increased $11.0 million, or 44.5%, to
$35.8 million, versus $24.8 million in the prior year's fourth quarter.
However, in this challenging environment, more corporate customers insisted on
price discounts, and therefore, gross margin decreased to 25.0%, from 29.5%
for the same period of 2007. Correspondingly, operating margin decreased to
11.7%, from 16.1% a year ago, while net income decreased to $11.2 million from
$14.8 million in the same quarter last year.
GAAP earnings per diluted share for the fourth quarter of 2008 was $0.23,
as compared to $0.35 for the fourth quarter of 2007. GAAP results include: (1)
approximately $5.6 million, or $0.12 per diluted share, of non-cash expense
related to the redemption accretion on convertible notes; (2) approximately
$2.7 million, or $0.06 per diluted share, of non-cash expense related to
depreciation and amortization of long-lived assets due to our acquisition of
subsidiaries, and (3) approximately $4.2 million, or $0.09 per diluted share,
of non-cash expense related to employee stock compensation recognized pursuant
to SFAS 123 (R).
Excluding these non-cash expenses, adjusted net income grew 47.1% to $23.7
million, versus $16.1 million in the fourth quarter of 2007. Adjusted
earnings per diluted share was $0.49, a 28.9% increase from $0.38 per diluted
share in the fourth quarter of 2007 (see ''About Non-GAAP Financial Measures"
toward the end of this release). Diluted share count increased 14% to $48.2
million from $42.2 million in the fourth quarter of 2007.
The Company's cash position at the end of 2008 was $47.8 million as
compared to $65.9 million at the end of the third quarter. Working capital
increased to $231.0 million, versus $207.1 million at the end of the previous
quarter, and total debt was $163.1 million, up from $157.6 million at the end
of the third quarter of 2008.
Mr. Guo Shen Tu , Chief Executive Officer of China Security, commented,
''In the fourth quarter, we continued to see significant demand from
government Safe-City contracts, and we continue to have excellent success in
winning ever larger contracts, due to our strong brand and comprehensive
product and services offerings. While our pricing and profitability remain
firm in the government sector, we nevertheless experienced price erosions in
our corporate segment, due to higher emphasis on cost controls by many of our
corporate customers. As such, while we continue to project healthy demand and
revenue growth over the next 12 months, we are focused on further integrating
our operations and generating greater synergies across our portfolio of
technologies, products, and subsidiaries. We are also focused on increasing
our manufacturing and administrative efficiencies through targeted cost
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