Trunkbow International Holdings Ltd : Trunkbow Announces First Quarter 2013 Financial Results

Conference Call Scheduled for May 16, 2013 at 8:00 a.m. EDT

BEIJING, May 15, 2013-- Trunkbow International Holdings Limited (NASDAQ: TBOW) ("Trunkbow" or the "Company"), a leading provider of Mobile Payment Solutions ("MPS") and Mobile Value Added Services ("MVAS") in the PRC, today announced financial results for the first quarter ended March 31, 2013.

FirstQuarter2013 Financial Highlights

*  Gross revenueswere $1.1million, compared with $6.8million in the first quarter of 2012.

•       -  MPS gross revenues for the quarter were $0.9million, compared with $4.4million in the first quarter of 2012.
• -  MVAS gross revenuesdeclinedto $0.2million, compared with $2.4million a year ago.

*  Gross profit for the quarter was $0.2million, compared with $5.3million in the first quarter of 2012.

*  First quarter 2013 gross margin was22.6%.

First Quarter 2013 and Recent Business Highlights

• * Signed approximately ten new merchants for implementation of the Trunkbow-UnionPay mobile applet system in the first quarter, increasing the total merchant base to 150.
• * The Company estimates nearly 20 mobile apps incorporating the technology are currently available to iOS and Android smartphone users.
• * Began marketing of cloud-based MPS services to small- and medium-sized businesses.
• * Continued the construction and began management and operation a cloud data center in Guangzhou. The Company expects to begin offering hosted services through this data center in the second quarter of 2013.
• * Continued the construction of a cloud data center in Shanghai. The Company expects to begin offering hosted services through this data center in late 2013.

To date, no decisions have been made with respect to the Company's response to the going-private proposal previously announced on November 2, 2012. There can be no assurance that any definitive offer will be made,that any agreement will be executed or that this or any other transaction will be approved or consummated.The Company will provide relevant updates with respect to thegoing private transaction or any other transaction as appropriate.

FirstQuarter 2013 Results

Gross revenue in the first quarter of 2013 was $1.1million, compared with gross revenue of $6.8million in the same period a year ago. The decline ingross revenue was primarily attributable toreduced demand for the Company's platform solutions in the first quarter of 2013.Revenue from MVAS declined to $0.2 million,from $2.4 million for the first quarter of 2012, primarily as a result of a reduction in sales of the Company's mobile newspaper, business operator and SMS/phone-call management offerings. Revenue from the Company's MPS offerings totaled $0.9 million, compared with $4.4 million for the first quarter of 2012. The decline in MPS revenue was attributable toreduction of the MPS software sales.

Cost of revenue in the fourth quarter of 2012 was $0.8million, compared with $1.3million in the same period of 2012. The decreasein cost of revenue wasprimarily attributed to thedecline in revenue compared to the first quarter of 2012.

Gross profit in the first quarter of 2013totaled $0.2million, compared with $5.3million in the first quarter of 2012. As a percentage of net revenue, gross margin was 22.6% in the firstquarter of 2013, compared with 80.0% in the year-ago period. The year-over-year decline in gross margin was attributable toa significant increase in the proportion of revenue from system integration, which involves significantly higher hardware costs.

Operating expenses in the first quarter of 2013 were $2.4million, compared with $2.7 million in the first quarter of 2012. The decrease in operating expenses was primarily attributable to a reduction in selling and distribution expenses related to lower marketing and advertising activity.

Operating loss in the first quarter of 2013 was $(2.2)million, compared withoperating income of $2.6million reported in the same period last year.

Net loss attributable to Trunkbow was $(1.5)million in the first quarter of 2013, compared with net income of $2.2million in the first quarter of 2012. Earnings(loss)per basic and diluted share in the first quarter of 2013 were $(0.04)each, based on basic and diluted shares outstanding of 36.8million. This compares with $0.06per basic and diluted share,based on basic and diluted shares outstanding of 36.8million in the year-ago period.

Balance Sheet and Cash Flow

As of March 31, 2013, the Company had $0.3million in cash and cash equivalents, compared with $0.8 million as of December 31, 2012. As of March 31, 2013, the Company had working capital of $49.1million and total shareholders' equity of $94.4million. Accounts receivable on March 31, 2013 totaled approximately $43.1million.As of May 14, 2013, the Company had collected approximately $0.6 million of these outstanding receivables.

Conference Call

The Company will host a conference call to discuss financial results for the firstquarter ended March 31, 2013 on May 16, 2013at 8:00 a.m. EDT. To participate in the live conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: [phone]. International callers should dial [phone]. The passcode required is 72743753.

If you are unable to participate in the call at this time, a replay will be available for 14 days starting onMay 16, 2013. To access the replay, please dial [phone], international callers dial [phone], and enter the passcode 72743753.

About Trunkbow

Trunkbow International Holdings (NASDAQ: TBOW) is a leading provider of Mobile Payment Solutions ("MPS") and Mobile Value Added Solutions ("MVAS") in PRC. Trunkbow's solutions enable the telecom operators to offer their subscribers access to unique mobile applications, innovative tools, value-added services that create a superior mobile experience, and as a result generate higher average revenue per user and reduce subscriber churn. Since its inception in 2001, Trunkbow has established a proven track record of innovation, and has developed a significant market presence in both the Mobile Value Added and Mobile Payment solutions markets. Trunkbow supplies its mobile payment solutions to all three Chinese mobile telecom operators, as well as re-sellers, in several provinces of China. For more information, please visit www.trunkbow.com.

Safe Harbor Statement

This press release contains forward-looking statements that reflect the Company's current expectations and views of future events that involve known and unknown risks, uncertainties and other factors that may cause its actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.  Such forward looking statements involve known and unknown risks and uncertainties, including but not limited to uncertainties relating to the Company's relationship with China's major telecom carriers and its resellers, status of its pending "go-private" transaction, competition from domestic and international companies, changes in technology, contributions from revenue sharing plans and general economic conditions. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. The results the Company is providing today are preliminary and unaudited and are subject to the conclusion of the audit of our financial statements, and could differ materially from the results disclosedtoday. Information regarding these risks, uncertainties and other factors is included in the Company's annual report on Form 10-K and other filings with the SEC.

Contact Information
In China:	In the U.S.
Trunkbow International Holdings Limited	The Piacente Group
Ms Alice Ye, Chief Financial Officer	Brandi Floberg/Lee Roth
Phone: [phone] (Beijing)	Phone: + (1) 212-481-2050 (New York)
Email: [e-mail]	E-mail:[e-mail]

- FINANCIAL TABLES FOLLOW -

TRUNKBOW INTERNATIONAL HOLDINGS LIMITED AND SUBSIDIARIES
UNAUDITEDCONSOLIDATED BALANCE SHEETS

		March 31,				December 31,
		2013				2012
		(Unaudited)
ASSETS
Current assets
Cash and cash equivalents*		$	331,337			$	783,074
Accounts receivable, net*			43,109,334				46,896,214
Advances to suppliers, net			16,615,308				12,478,788
Prepayments			448,246				496,372
Other current assets*			9,249,560				7,996,644
Due from directors*			34,513				9,350
Inventories*			6,067,664				5,673,179
Deferred tax asset			1,116,320				942,028
Total current assets			76,972,282				75,275,649
Property and equipment, net*			40,388,353				39,929,472
Land use right, net			5,833,378				5,831,641
Intangible assets, net			268,848				271,894
Long-term prepayment*			332,936				368,985
TOTAL ASSETS		$	123,795,797			$	121,677,641
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable*		$	2,707,052			$	2,655,395
Accrued expenses and other current liabilities*			3,886,217				3,983,227
Short-term loan			15,938,541				11,175,196
Due to directors*			6,409				106,141
Taxes payable*			5,318,102				6,857,978
Total current liabilities			27,856,321				24,777,937
Deferred revenue			1,514,161				1,505,881
Total liabilities			29,370,482				26,283,818
COMMITMENTS AND CONTINGENCIES
Stockholders' equity
Preferred Stock: par value $0.001, authorized 10,000,000 shares, none issued and outstanding at March 31, 2013 and December 31, 2012, respectively			0				0
Common Stock: par value $0.001, authorized 190,000,000 shares, 36,807,075 shares issued and outstanding at March 31, 2013 and December 31, 2012, respectively			36,807				36,807
Additional paid-in capital			39,671,966				39,671,966
Appropriated retained earnings			6,461,938				6,461,938
Unappropriated retained earnings			44,260,746				45,713,187
Accumulated other comprehensive income			3,993,858				3,509,925
Total stockholders' equity			94,425,315				95,393,823
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	123,795,797			$	121,677,641

TRUNKBOW INTERNATIONAL HOLDINGS LIMITED AND SUBSIDIARIES
UNAUDITEDCONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

		Three Months Ended March 31,
		2013				2012
		(Unaudited)				(Unaudited)
Revenues		$	1,083,000			$	6,798,213
Less: Business tax and surcharges			39,850				116,551
Net revenues			1,043,150				6,681,662
Cost of revenues			807,297				1,339,336
Gross profit			235,853				5,342,326
Operating expenses
Selling and distribution expenses			656,060				1,025,022
General and administrative expenses			1,328,315				1,160,671
Research and development expenses			408,255				550,862
			2,392,630				2,736,555
(Loss) income from operations			(2,156,777	)			2,605,771
Other income (expenses)
Interest income			1,701				55,632
Interest expense			(223,681	)			(179,009	)
Refund of value-added tax			717,217				0
Government grants			79,632				39,627
Other income			0				15,851
Other expenses			(39,449	)			(10,811	)
			535,420				(78,710	)
(Loss) income before income tax			(1,621,357	)			2,527,061
Income tax (benefit) expense			(168,916	)			320,572
Net (loss) income			(1,452,441	)			2,206,489
Foreign currency translation fluctuation			483,933				459,452
Comprehensive (loss) income		$	(968,508	)		$	2,665,941
Weighted average number of common shares outstanding
Basic			36,807,075				36,807,075
Diluted			36,807,075				36,827,585
Net (loss) income per share
Basic		$	(0.04	)		$	0.06
Diluted		$	(0.04	)		$	0.06

TRUNKBOW INTERNATIONAL HOLDINGS LIMITED AND SUBSIDIARIES
UNAUDITEDCONSOLIDATED STATEMENTS OF CASH FLOWS

		Three Months Ended March 31,
		2013				2012
		(Unaudited)				(Unaudited)
Cash flows from operating activities
Net (loss) income		$	(1,452,441	)		$	2,206,489
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization			225,500				112,853
Changes in operating assets and liabilities:
Accounts receivable			4,040,052				(855,358	)
Advances to suppliers			(4,063,174	)			1,429,898
Prepayments			50,796			(1,832,754	)
Other current assets			18,304				(1,774,648	)
Due from directors			(25,083	)			185,315
Inventories			(362,867	)			(925,047	)
Long-term prepayment			38,033				1,960,778
Deferred tax assets			(168,916)				0
Accounts payable			37,012				(1,059,130	)
Accrued expenses and other current liabilities			380,643				68,388
Amounts due to directors			(100,199	)			(12,054	)
Taxes payable			(1,575,752	)			(998,076	)
Net cash flows used in operating activities			(2,958,092	)			(1,493,346	)
Cash flows from investing activities
Acquisition of property and equipment and intangible assets			(431,384	)			(1,048,584	)
Collection on loans to third parties			557,201				0
Payment on loans to third parties			(1,783,042	)			(1,109,561	)
Net cash flows used in investing activities			(1,657,225	)			(2,158,145	)
Cash flows from financing activities
Proceeds from bank loans			8,190,875				3,601,015
Repayment of bank loans			(3,494,444	)			0
Repayment of loans from third parties			(499,419	)			0
Net cash flows provided by financing activities			4,197,012				3,601,015
Effect of exchange rate fluctuation on cash and cash equivalents			(33,432	)			(17,742	)
Net decrease in cash and cash equivalents			(451,737	)			(68,218	)
Cash and cash equivalents - beginning of the year			783,074				6,139,589
Cash and cash equivalents - end of the period		$	331,337			$	6,071,371
Supplemental disclosure of cash flow information
Cash paid for interest		$	99,374			$	179,009
Cash paid for income taxes		$	138,923			$	320,572