CNIT ANNOUNCES 2016 FINANCIAL RESULTS

SHENZHEN, China, April 28, 2017 -- China Information Technology, Inc. (Nasdaq: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&#39s 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&#39s current cash and cash equivalents, anticipated cash flows from operations in 2017, and additional availability under its borrowing facilities will be sufficient to meet CNIT&#39s operating and financial obligations for the remainder of the calendar year.

“We are confident that 2017 will be the year in which CNIT turns the corner and begins to bloom as one of China’s better known providers of important cloud-based technologies for elevator safety and advertising communications.”

For additional information on CNIT’s 2016 performance, please see the company’s 20-F filing at http://www.chinacnit.com/Relation/SecFill.

About China Information Technology, Inc.
China Information Technology, Inc. (CNIT) is a leading Internet service company that provides integrated cloud-based solutions enabling innovation and smart living in the fields of new media, elevator safety management, education, etc. Through continuous innovation, CNIT is aiming to leverage its proprietary Cloud-Application-Terminal technology to level the competitive landscape in the new media industry and deliver value for its shareholders, employees, customers, and the community. To learn more, please visit http://www.chinacnit.com.

Safe Harbor Statement
This press release may contain certain "forward-looking statements" relating to the business of China Information Technology, Inc., and its subsidiaries and other consolidated entities. All statements, other than statements of historical fact included herein, are "forward-looking statements" in nature within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, often identified by the use of forward-looking terminologies such as "believes", "expects" or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company&#39s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company&#39s periodic reports that are filed with the Securities and Exchange Commission and available on its website (http://www.sec.gov). All forward-looking statements attributable to the Company and its subsidiaries and other consolidated entities or persons acting on their behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

For further information, please contact:
China Information Technology, Inc.
Iris Yan
Tel: +86-755-8370-4767
Email: IR@chinacnit.com
http://www.chinacnit.com
or
Asia IR-PR
Jimmy Caplan
Tel: +512-329-9505
Email: jimmy@asia-irpr.com
or
Media Relations: Asia IR-PR
Rick Eisenberg
Tel: +212-496-6828
Email: rick@asia-irpr.com

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