Science & Technology
Science and Technology
Science and Technology
Fri, November 20, 2009
Thu, November 19, 2009 Dragon Capital Group Corp. Reports Record Financial Results for the First Nine Months of 2009
SHANGHAI, CHINA--(Marketwire - November 19, 2009) - Dragon Capital Group Corp. (
Financial Highlights:
Revenue for the third quarter ended September 30, 2009 was $14.2 million, a 24.56% increase over the $11.4 million recorded in the third quarter of 2008. Cost of sales for the third quarter of 2009 were $13.3 million compared to $10.6 million in the third quarter of 2008. Net income from continuing operations for the third quarter of 2009 was $356,187, slight decrease from the $383,126 recorded in the third quarter of 2008. Net income in the third quarter of 2009 was approximately $291,000, slight decrease from approximately $310,000 for the third quarter of 2008. The decrease in net income was largely attributable to the Company's efforts to increase sales and market share through an aggressive pricing strategy in a very difficult market environment.
Nine-Month Financial Results
Revenue for the first nine months of 2009 reached record $41.1 million, a 20% increase from the $33.7 million recorded in the first nine months of 2008. For the first nine months of 2009, net income from continuing operations was $799,553 down from $1.11 million in the first nine months of 2008, mainly a result of reduced margins of its main technological product sales.
Mr. Lawrence Wang, CEO of Dragon Capital Group, stated, "As we are emerging away from a very challenging sales environment, Dragon has made a strong effort to increase sales volume and market share through aggressive pricing. Our dedication to this strategy has enabled Dragon to post record sales while remaining profitable for the quarter and the first nine months of the year. We are confident that these gains in market share will result in a significant expansion in our top and bottom line performance as the economy continues to improve in the coming quarters and margins return to normalized levels. We are confident that China's high-tech industry will provide a significant growth opportunity for Dragon as we continue to seek to grow internally and through opportunistic acquisition of complimentary high tech operations for the benefit of our shareholders."
Consolidated financial Statements DRAGON CAPITAL GROUP, CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (Unaudited) ASSETS September 30 December 31, ------------ ------------- 2009 2008 ------------ ------------- CURRENT ASSETS: Cash and cash equivalents $ 1,173,001 $ 1,812,809 Accounts receivable, net of allowance for doubtful accounts of $152,903 and $152,533, respectively 5,042,323 2,921,310 Other receivables 870,868 2,088,449 Inventories 5,909,810 5,829,686 Loan receivable - 114,000 Investment in marketable securities 112,000 266,000 Prepaid expenses and other 338,562 264,791 Subsidiaries held for sale - 2,273,900 ------------ ------------- Total Current Assets 13,446,564 15,570,945 DUE FROM RELATED PARTY 71,663 71,489 PROPERTY AND EQUIPMENT - Net 232,503 275,098 ------------ ------------- Total Assets $ 13,750,730 $ 15,917,532 ============ ============= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Loans payable $ 521,876 $ 320,971 Loans payable-related party - 43,769 Accounts payable and accrued expenses 4,572,367 3,675,375 Other payable 411,138 336,426 Taxes payable (150,047) 68,235 Advances from customers 1,521 1,230,135 Subsidiaries held for sale - 895 ------------ ------------- Total Current Liabilities 5,356,855 5,675,806 ------------ ------------- EQUITY: Dragon Capital Group, Corp. Common Stock ($0.001 Par Value; 500,000,000 Shares Authorized; 259,644,578 shares issued and outstanding) 259,645 259,645 Additional paid-in capital 5,061,071 6,108,800 Accumulated retained earnings 2,214,854 2,569,941 Subscription receivable (2,000) - Accumulated comprehensive income (248,329) 245,235 ------------ ------------- Total Dragon Capital Group, Corp. 7,285,241 9,183,621 ------------ ------------- Noncontrolling interest 1,108,634 1,058,105 ------------ ------------- Total Equity 8,393,875 10,241,726 ------------ ------------- Total Liabilities and Equity $ 13,750,730 $ 15,917,532 ============ ============= DRAGON CAPITAL GROUP, CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) For the Three Months Ended For the Nine Months Ended September 30, September 30, -------------------------- -------------------------- 2009 2008 2009 2008 ------------ ------------ ------------ ------------ NET REVENUES $ 14,165,556 $ 11,352,590 $ 41,065,365 $ 33,695,969 COST OF SALES 13,299,065 10,640,081 38,746,832 31,534,898 ------------ ------------ ------------ ------------ GROSS PROFIT 866,491 712,509 2,318,533 2,161,071 ------------ ------------ ------------ ------------ OPERATING EXPENSES: Selling expenses 341,807 150,560 910,513 464,261 General and administrative 168,497 178,823 608,467 586,132 ------------ ------------ ------------ ------------ Total Operating Expenses 510,304 329,383 1,518,980 1,050,393 ------------ ------------ ------------ ------------ INCOME FROM OPERATIONS 356,187 383,126 799,553 1,110,678 ------------ ------------ ------------ ------------ OTHER INCOME Other income 142 (73) 2,847 (19) Interest income (expense) (22,827) (1,706) (23,931) (1,170) ------------ ------------ ------------ ------------ Total Other expense (22,685) (1,779) (21,084) (1,189) ------------ ------------ ------------ ------------ INCOME BEFORE DISCONTINUED OPERATIONS, INCOME TAX AND NONCONTROLLING INTEREST 333,502 381,347 778,469 1,109,489 DISCOUNTINUED OPERATIONS: Loss on sale of Fomde subsidiaries - - (714,983) - Gain from discontinued operations - 3,226 5,603 17,360 ------------ ------------ ------------ ------------ Total (loss) gain from discontinued operations - 3,226 (709,380) 17,360 INCOME BEFORE INCOME TAXES AND NONCONTROLLING INTEREST 333,502 384,573 69,089 1,126,849 INCOME TAXES (42,838) (74,530) (218,220) (255,103) ------------ ------------ ------------ ------------ NET (LOSS) INCOME 290,664 310,043 (149,131) 871,746 Less: Net income attributable to noncontrolling interest (91,762) (44,780) (205,956) (141,532) ------------ ------------ ------------ ------------ NET (LOSS) INCOME ATTRIBUTABLE TO DRAGON CAPITAL GROUP, CORP. 198,902 265,263 (355,087) 730,214 ------------ ------------ ------------ ------------ NET INCOME (LOSS) PER COMMON SHARE: Net (loss) income from continuing operations $ 0.00 $ 0.00 $ 0.00 $ 0.00 ============ ============ ============ ============ Net (loss) income from discontinued operations $ - $ 0.00 $ (0.00) $ 0.00 ============ ============ ============ ============ NET (LOSS) INCOME PER COMMON SHARE $ 0.00 $ 0.00 $ (0.00) $ 0.00 ============ ============ ============ ============ WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: Basic and Diluted 259,644,578 240,066,800 259,644,578 236,566,800 ============ ============ ============ ============ AMOUNTS ATTRIBUTABLE TO DRAGON CAPITAL GROUP, CORP. COMMON SHAREHOLDERS: Income from continuing operations, net of tax 198,902 262,037 354,293 712,854 Discontinued operations, net of tax - 3,226 (709,380) 17,360 ------------ ------------ ------------ ------------ Net income 198,902 265,263 (355,087) 730,214 ============ ============ ============ ============ DRAGON CAPITAL GROUP, CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS For the Nine Months Ended Septemeber 30, 2009 2008 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: (Unaudited) (Unaudited) Income from continuing operations $ 354,293 $ 712,854 Adjustments to reconcile income from operations to net cash used in continuing operations: Depreciation and amortization 31,586 41,197 Allowance for doubtful accounts - - Stock based compensation - 16,737 Noncontrolling interest 205,957 141,532 Changes in assets and liabilities: Accounts receivable (2,112,403) (703,091) Other receivable 1,221,774 (63,363) Inventories (65,924) (537,623) Prepaid and other current assets (72,004) (44,052) Accounts payable and accrued expenses 888,827 (554,043) Other payable 73,843 65,153 Income tax payable (218,291) (17,500) Advances from customers (1,230,716) 545,566 ----------- ----------- Net cash used in continuing operations (923,058) (396,633) ----------- ----------- (Loss) income from discontinued operations (709,380) 17,360 Adjustments to reconcile (loss) income from discontinued operations to net cash used in discontinued operations Non-cash loss from discontinued operations 714,983 - Assets from discontinued operations (11,112) (2,362) Liabilities from discontinued operations 126 (31,677) Minority interest 5,383 16,679 ----------- ----------- Net cash used in discontinued operations - - ----------- ----------- NET CASH USED IN OPERATING ACTIVITIES (923,058) (396,633) ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Cash acquired in acquisition - 221,684 Disposition (purchase) of property, plant and equipment 11,646 (63,596) ----------- ----------- NET CASH PROVIDE BY INVESTING ACTIVITIES 11,646 158,088 ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Write off the uncollectible loan 112,926 - Proceeds from loans 292,290 Payments made - loans (102,302) (116,738) Repayments of related party advance (33,844) (74,420) ----------- ----------- NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 269,070 (191,158) ----------- ----------- EFFECT OF EXCHANGE RATE ON CASH 2,534 150,106 NET DECREASE IN CASH (639,808) (279,597) CASH - beginning of the year 1,812,809 1,562,756 ----------- ----------- CASH - end of period $ 1,173,001 $ 1,283,159 =========== =========== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for: Interest $ 7,397 $ 1,416 =========== =========== Income taxes $ 55,909 $ 34,905 =========== =========== NON-CASH INVESTING ACTIVITIES: Subscription receivable for disposal of Fomde subsidiary $ 2,000 $ - =========== ===========
About Dragon Capital Group Corporation
Dragon Capital Group Corporation is a holding company serving as a business incubator for emerging Chinese businesses. Dragon currently controls seven subsidiaries operating in high-tech, IT products and services and management consulting. Three of the subsidiaries are growing strong recurring revenue streams from electronics hardware distribution and network integration. The company's other three subsidiaries, still in the emergent stage, are focused on wireless Internet applications, mobile business solutions, software development, enterprise management, computerized automations systems integration and network integration. For more information, visit, [ http://www.dragoncapital.us ].
Safe Harbor Statement
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning the company's operations, financial performance and, condition. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. The company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, but not limited to, the impact of competitive products, pricing and new technology; changes in consumer preferences and tastes; and effectiveness of marketing; changes in laws and regulations; fluctuations in costs of production, and other factors as those discussed in the company's reports filed with the Securities and Exchange Commission from time to time. In addition, the company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.
