Tongxin Intl (PINK:TXIC)

Six Month Results For Period Ended June 30, 2011

• Net revenue for the six months ended June 30, 2011 was $55.3 million, a 3% increase from net revenue of $53.7 million reported for the prior six-month period ended June 30, 2010.
• The Company reported a net loss of $(2.63) million for the six months ended June 30, 2011, compared to net income of $1.7 million for the prior year period.

Duanxiang Zhang, Chairman of Tongxin International, stated, "Tongxin continues to demonstrate its leadership position within the commercial vehicle market with the introduction of new EVBS models for all types of trucks. We are pleased with the initial demand for our latest model in the medium duty truck sector and believe we will see continued demand throughout the year as growth in the sector remains strong and our cabs have proven to be of the highest level of quality while remaining most cost efficient. We look forward to providing a further update on our progress as we introduce new products to a widened customer base and further build upon our already strong market position."

CHANGSHA, CHINA--(Marketwire - 07/25/11) - Tongxin International Ltd. (Pinksheets:TXIC - News), a China-based manufacturer of engineered vehicle body structures ("EVBS") and stamped parts for the commercial automotive industry, today provided a preliminary summary of its expected financial results for the year ended December 31, 2010.

Preliminary Financial Results:

Tongxin International Ltd. (the "Company") expects total revenues for the year ended December 31, 2010 to be $106.5 million, a 12.1% decrease from the $121.1 million of total revenues for the year ended December 31, 2009. Such decrease in total revenues reflects the reduction of original equipment manufacturer production of mini and light commercial vehicles and the increase in production of heavy duty commercial vehicles.

For the year ended December 31, 2010, the Company expects cost of goods sold to be $99.8 million and selling, general and administrative expenses to be $14.0 million. As a result, the Company expects to have an operating loss of $7.3 million for the year ended December 31, 2010 as compared to operating income of $5.5 million for the year ended December 31, 2009.

The Company expects total stockholders' equity for the year ended December 31, 2010 to be approximately $92.1 million compared to $83.8 million for the year ended December 31, 2009.

Liquidity:

At December 31, 2010, cash, cash equivalents, and restricted cash (security deposit) totaled approximately $10.8 million. Total current assets at December 31, 2010 totaled approximately $64.2 million compared to $67.5 million at December 31, 2009. Total current liabilities totaled approximately $71.4 million at December 31, 2010 compared to $79.7 million at December 31, 2009.

The Company is evaluating its goodwill for impairment in accordance with the Financial Accounting Standards Board's Statement of Financial Accounting Standard No. 142, "Goodwill and Intangible Assets." The determination as to whether a write-down of goodwill is necessary involves significant judgment based on the short-term and long-term projections of the future performance of the reporting unit to which the goodwill is attributed. To the extent that the Company incurs such an impairment charge, it will be non-cash in nature. The Company expects to complete the impairment evaluation of its goodwill and intangible assets by September 30, 2011.

The Company cautions that all of these financial results are preliminary and subject to change, possibly materially, following the completion and analysis of its financial statements for 2010. Consequently, actual results may differ significantly from the above estimates. The Company also reiterates that the above preliminary and unaudited financial information does not represent all of the information that would normally be included in an Annual Report on Form 20-F with respect to the Company's financial results for the year ended December 31, 2010.

For the fiscal year ended December 31, 2009, the Company reported revenue of $121 million, representing a 24% increase from $98.4 million in the comparable period of 2008.

The Company also reported, however, a net loss of $(16.8 million) for the year ended December 31, 2009, compared to net income of $20.5 million for the consolidated results of the prior year period ended December 31, 2008.

Fully Diluted EPS loss of $(1.38)

William E. Zielke, Chief Executive Officer and Chief Administrative Officer of the Company, commented, "While we have made considerable efforts in the past year to strengthen our internal operations, we have also maintained our market position as the largest independent Chinese supplier of commercial EVBS. The Hunan Tongxin brand is well established and recognized for its high quality and reliable products, and we enjoy both brand name and trademark protection in the PRC."

Mr. Zielke continued, "Our new management team intends to vigorously maintain our market leadership, even as we anticipate lower revenues for 2010. In 2009, we increased the number of our product programs and we intend to expand further the diversity of our products, while curbing our costs and expenses. Going forward, we are targeting the North American and European collision-parts after-markets, leveraging the cost advantages of our high quality components versus those of other international OEM suppliers."

Tongxin International Ltd. announced the following:

1. Lowered revenue guidance of $100 million - $110 millionfor the fiscal year ended December 31, 2010.  The previous revenue guidance was $150 million -$160 millionprovided on February 23, 2010. The lowered revenue guidance is based on a decrease in market share due to:

• in-house production of cabs, and anticipated drop in orders from international customers in Vietnam.
• The impact of the cessation of certain government sponsored stimulus programs throughout 2010.
• The slower than anticipated startup of the new medium duty model ("model 1120 Tianrui") with substantially higher content than conventional cabs.
• A drop in sales especially in the mini and light commercial truck segments contributed to the revised revenue guidance.

The Company also anticipates a later than anticipated start-up on its new medium-heavy duty model ("model 1260 Tianjiao").

Tongxin previously announced on September 17, 2010 unaudited revenues of $121.6 million for the fiscal year ended December 31, 2009.

2. Rudy Wilson was removed as Chief Executive Officer (although he remains as a director) of the Company, and Jackie Chang was removed as Chief Financial Officer and Chief Accounting Officer of the Company.

3. William E. Zielke has been appointed Chief Executive Officer and Chief Administrative Officer of Tongxin International Ltd.  In connection with Mr. Zielke's appointment, Mr. Zhang Duanxiang was appointed Chairman of the Company.

4. There was no truth to the rumors that the Board of Directors was currently considering a "going private" transaction.