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China Customer Relations Centers, Inc. Announces Financial Results for the Full Year 2020 as Compared to Full Year 2019


TAI’AN, China, May 17, 2021 /PRNewswire/ — China Customer Relations Centers, Inc. (NASDAQ: CCRC) (“CCRC” or the “Company”), a leading e-commerce and financial services business process outsourcing (“BPO”) service provider in China, today announced its financial results for the year ended December 31, 2020.

Full Year of 2020 Financial Results

Revenues

For the year ended December 31, 2020, revenues increased by $66.91 million, or 38.6%, to $240.32 million from $173.41 million for the same period of the prior year. Our revenue growth in the year of 2020 resulted primarily from acquiring new customers and increased sales volumes to our existing clients.

We continued to increase our service capacity, which increased by 6,889 seats, or 30.8%, to 29,249 seats as of December 31, 2020 from 22,360 seats at the end of 2019. 

Cost of revenues

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, IT costs, and facilities support expenses. Cost of revenues increased by $54.22 million, or 40.3%, to $188.73 million for the year ended December 31, 2020 from $134.50 million for the same period of the prior year. The increase in cost of revenues was in line with the increase in revenues. As a percentage of revenues, cost of revenues was 78.5% for the year ended December 31, 2020, compared to 77.6% for the same period of the prior year.

Gross profit and gross margin

Gross profit increased by $12.69 million, or 32.6%, to $51.59 million for the year ended December 31, 2020 from $38.90 million for the same period of the prior year. Gross margin decreased by 1.0 percentage point to 21.5% for the year ended December 31, 2020 from 22.4% for the same period of the prior year.

Selling, general and administrative expense

Selling, general and administrative (“SG&A”) expenses consists primarily of sales and administrative employee-related expenses, professional fees, travel costs, research and development costs, and other corporate expenses. SG&A expenses increased by $1.45 million, or 5.5%, to $27.78 million for the year ended December 31, 2020 from $26.32 million for the same period of the prior year. As a percentage of revenues, SG&A expenses decreased from 15.2% for the year ended December 31, 2019 to 11.6% for the year ended December 31, 2020.

Operating income and operating margin

Income from operations increased by $11.23 million, or 89.2%, to $23.82 million for the year ended December 31, 2020 from $12.59 million for the same period of the prior year. The increase in operating income was related to increased gross profit which was partially offset by increased SG&A expenses. Operating margin was 9.9% for the year ended December 31, 2020, compared to 7.3% for the same period of the prior year.

Other income

We recognized government grants, which are discretionary and unpredictable in nature, of $2.99 million during the year ended December 31, 2020, compared to $1.83 million recognized during the same period of the prior year. Total other income, net of other expenses, increased by $1.20 million, or 40.4%, to $4.18 million for the year ended December 31, 2020 from $2.98 million for the same period of the prior year.

Income before provision for income taxes

Income before provision for income taxes increased by $12.44 million, or 79.9%, to $28.00 million for the year ended December 31, 2020 from $15.57 million for the same period of the prior year. The increase in income before provision for income taxes was due to increased operating income as well as government grants and other income.

Income taxes

Provision for income taxes was $3.07 million for the year ended December 31, 2020, compared to $2.39 million for the same period of the prior year.

Net income and earnings per share

Net income increased by $11.76 million, or 89.2%, to $24.93 million for the year ended December 31, 2020 from $13.17 million for the same period of the prior year. After deducting net income attributable to noncontrolling interest, net income attributable to common shareholders was $24.86 million, or $1.36 per basic and diluted share, for the year ended December 31, 2020, compared to $13.06 million, or $0.71 per basic and diluted share, for the same period of the prior year.

Financial Conditions

As of December 31, 2020, the Company had cash of $43.67 million, compared to $25.33 million at December 31, 2019. Total working capital was $74.06 million as of December 31, 2020, compared to $47.50 million at the end of 2019.

Net cash provided by operating activities was $24.05 million for the year ended December 31, 2020, compared to $5.21 million for the same period of the prior year. Net cash used in investing activities was $5.54 million for the year ended December 31, 2020, compared to $4.46 million for the same period of the prior year. Net cash used in financing activities was $2.66 million for the year ended December 31, 2020, compared to net cash provided by financing activities of $0.54 million for the same period of the prior 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 leading BPO service provider in China focusing on the complex, voice-based and online-based segments of customer care services, including:

  •  customer relationship management;
  •  technical support;
  •  sales;
  •  customer retention;
  •  marketing surveys; and
  •  research.

The Company’s service is currently delivered in Provinces of Shandong, Jiangsu, Liaoning, Guangdong, Yunnan, Hubei, Sichuan, Hebei, Anhui, Xinjiang, Guangxi, Jiangxi, Heilongjiang, and Chongqing. More information about the Company can be found at: www.ccrc.com.

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 growth, shareholder returns and business outlook, are forward-looking statements. Forward-looking statements are not guarantee 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:

Sherry Zheng 
Weitian Group LLC
Email: [email protected]
Phone: +1-718-213-7386

CHINA CUSTOMER RELATIONS CENTERS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS




December 31,



December 31,




2020



2019









ASSETS














Cash and cash equivalents


$

43,669,538



$

25,328,486


Accounts receivable



63,493,891




42,606,485


Prepayments



2,352,988




2,396,646


Prepayment, related parties



359,142




90,429


Due from related parties, current



470,076





Income taxes recoverable



104,721




712,459


Other current assets



4,420,220




3,408,704


Total current assets



114,870,576




74,543,209


Equity investments



3,678,171




3,446,346


Property and equipment, net



12,543,156




10,115,782


Deferred tax assets



259,200




242,863


Due from related party, non-current






215,307


Operating lease right-of-use assets



12,265,679




9,827,114


Operating lease right-of-use assets – related party



341,078




172,121


Total non-current assets



29,087,284




24,019,533


Total assets


$

143,957,860



$

98,562,742











LIABILITIES AND EQUITY









Accounts payable


$

4,315,457



$

2,602,972


Accounts payable – related parties



260,790




149,658


Accrued liabilities and other payables



11,018,516




4,641,892


Deferred revenue



1,196,659




456,331


Wages payable



15,663,312




10,472,596


Income taxes payable



974,510




452,961


Operating lease liabilities, current



5,678,812




3,797,069


Operating lease liabilities – related party, current



165,734




163,995


Short-term loans



1,531,933




4,306,138


Total current liabilities



40,805,723




27,043,612


Operating lease liabilities, non-current



7,461,337




6,068,702


Operating lease liabilities – related party, non-current



175,002





Total non-current liabilities



7,636,339




6,068,702


Total liabilities



48,442,062




33,112,314


Equity









Common shares, $0.001 par value, 100,000,000 shares authorized, 18,329,600 
    shares issued and outstanding as of December 31, 2020 and December 31,
    2019



18,330




18,330


Additional paid-in capital



18,424,483




15,074,267


Retained earnings



66,854,353




47,347,781


Statutory reserves



7,761,226




5,818,330


Accumulated other comprehensive income (loss)



2,457,406




(3,411,744)


Total China Customer Relations Centers, Inc. shareholders’ equity



95,515,798




64,846,964


Noncontrolling interest






603,464


Total equity



95,515,798




65,450,428


Total liabilities and equity


$

143,957,860



$

98,562,742


CHINA CUSTOMER RELATIONS CENTERS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME




For The Years Ended December 31,




2020



2019



2018












Revenues, net


$

240,316,024



$

173,409,113



$

141,433,641


Cost of revenues



188,725,246




134,504,540




102,567,896


Gross profit



51,590,778




38,904,573




38,865,745


Operating expenses:













Selling, general & administrative expenses



27,772,891




26,318,771




21,329,908


Total operating expenses



27,772,891




26,318,771




21,329,908


Income from operations



23,817,887




12,585,802




17,535,837


Interest expense



(176,422)




(190,808)




(404,958)


Government grants



2,989,897




1,825,402




1,709,297


Other income



1,803,014




1,547,788




552,205


Other expense



(434,048)




(202,688)




(124,370)


Total other income



4,182,441




2,979,694




1,732,174


Income before provision for income taxes



28,000,328




15,565,496




19,268,011


Income tax provision



3,069,477




2,391,371




2,966,880


Net income



24,930,851




13,174,125




16,301,131


Less: net income attributable to noncontrolling interest



70,052




118,114




208,593


Net income attributable to China Customer Relations Centers,
    Inc.


$

24,860,799




13,056,011




16,092,538















Comprehensive income













Net income


$

24,930,851



$

13,174,125



$

16,301,131


Other comprehensive income (loss)













Foreign currency translation adjustment



5,855,857




(828,331)




(2,741,283)


Total Comprehensive income



30,786,708




12,345,794




13,559,848


Less: Comprehensive income attributable to noncontrolling
    interest



56,759




109,238




140,467


Comprehensive income attributable to China Customer
    Relations Centers, Inc.


$

30,729,949



$

12,236,556



$

13,419,381















Earnings per share attributable to China Customer Relations
    Centers, Inc.













Basic


$

1.36



$

0.71



$

0.88


Diluted


$

1.36



$

0.71



$

0.88


Weighted average common shares outstanding













Basic



18,329,600




18,329,600




18,329,600


Diluted



18,329,600




18,329,600




18,329,600


CHINA CUSTOMER RELATIONS CENTERS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS




For The Years Ended December 31,




2020



2019



2018












Cash flows from operating activities










Net income


$

24,930,851



$

13,174,125



$

16,301,131


Adjustments to reconcile net income to net cash provided by
    operating activities:













Depreciation



4,070,582




3,404,912




2,635,242


Allowance for credit losses









952,439


Loss on disposal of property and equipment



59,366




19,091




34,166


Deferred income taxes






238,883




(196,909)


Non-cash lease expense



4,319,670




3,501,753





Changes in operating lease right-of-use assets and operating
    lease liabilities upon lease modification



634,328








Changes in assets and liabilities:













Accounts receivable



(17,048,770)




(13,057,615)




(7,937,804)


Due from related parties



(9,929)








Prepayments



(298,525)




(2,097,963)




(887,778)


Prepayments, related parties



(248,456)







(95,244)


Other current assets



(740,237)




(1,510,847)




(970,199)


Operating lease liabilities



(3,955,614)




(3,037,030)





Accounts payable



1,454,416




2,017,431




147,818


Accounts payable – related parties



95,611




(10,440)




122,630


Wages payable



4,245,097




3,511,093




1,884,440


Income taxes recoverable



620,277




(192,965)




(548,893)


Income taxes payable



464,576




94,336




(153,896)


Deferred revenue



671,332




100,245




(221,771)


Accrued liabilities and other payables



4,934,855




(941,772)




1,077,098


Net cash provided by operating activities



24,049,979




5,213,237




12,142,470


Cash flows from investing activities













Purchase of property and equipment



(5,334,709)




(4,481,450)




(4,768,139)


Proceeds from sale of property and equipment



7,179




36,693




9,197


Advance to equity investee



(435,445)







(1,461)


Collection from equity investee



429,068








Advance to related parties



(381,309)




(214,111)




(105,827)


Repayment from related parties



171,179




198,017




117,802


Net cash used in investing activities



(5,544,037)




(4,460,851)




(4,748,428)


Cash flows from financing activities













Contribution from noncontrolling investor in subsidiary



108,970








Dividend distributed to noncontrolling investor in subsidiary






(213,722)




(355,232)


Borrowings from short-term loans



4,351,712




4,452,368




3,891,596


Repayment of short-term loans



(7,124,316)




(3,694,345)




(3,625,448)


Net cash provided by (used in) financing activities



(2,663,634)




544,301




(89,084)


Effect of exchange rate changes on cash and cash
    equivalents



2,498,744




(388,113)




(1,513,411)


Net change in cash and cash equivalents



18,341,052




908,574




5,791,547


Cash and cash equivalents, beginning of the year



25,328,486




24,419,912




18,628,365


Cash and cash equivalents, end of the year


$

43,669,538



$

25,328,486



$

24,419,912


Supplemental cash flow information













Interest paid


$

175,811



$

190,808



$

404,958


Income taxes paid


$

2,924,643



$

2,993,733



$

3,929,237


Non-cash investing and financing activities













Transfer from prepayments to property and equipment


$

705,933



$

904,309



$

392,637


Liabilities assumed in connection with purchase of property
    and equipment


$

7,200



$

24,512



$

88,112


Liability assumed in connection with acquisition of
    noncontrolling interest


$

830,308



$



$


Operating lease right-of-use assets obtained in exchange for
    operating lease liability


$

7,069,165



$

5,496,939



$


SOURCE China Customer Relations Centers, Inc.



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