CKGT 10K shows negative revenue for Q4 .... evidently they recognized revenues prematurely through 9 months and hence the revisions were cumulatively recognized in Q4.
Through 9 months the 10Q showed revenues of $12.1M, but the 10K shows only $10.4M for the entire year.
EPS, excluding foreign exchange gains, was reported at $0.157 through 9 months but only $0.082 for the year .... effectively a Q4 loss of ($0.075).
Company came out with a PR the morning -
HARBIN, China, April 3 /Xinhua-PRNewswire-FirstCall/ -- China Kangtai Cactus Biotech, Inc. (OTC Bulletin Board: CKGT - News), a vertically integrated grower, developer, manufacturer and marketer of a variety of cactus-based consumer products, today filed 10KSB to the SEC and reported audited results for the year ended December 31, 2006. All results reported are in U.S. dollars.
The Company has achieved an increase in net sales of almost 30%, from $8,002,738 in 2005 to $10,384,655 in 2006. At the same time, costs of sales increased only approximately 15%, from $6,156,184 in 2005 to $7,062,280 in 2006 and selling expenses even decreased approximately 13%, from $242,735 in 2005 to $211,972 in 2006. As a result, net income increased approximately 80%, from $795,491 in 2005 to $1,434,645 in 2006.
Although the audited results reported by the Company reflect a substantial improvement in the Company's operating results on a year over year basis, they are significantly less than the preliminary un-audited results previously reported by the Company. The major difference in revenue recognition is that the Company previously booked revenue when it delivered its products to retail outlets. Under the new revenue recognition standards used in preparation of the audited financial statements the Company recognizes revenue only when the goods are sold by retail outlets to the end customers. A onetime non- recurring charge of almost $1 million in 2006 relating to the issuance of shares of stock as compensation for services also directly reduced net income by the same amount.
Jinjiang Wang, Chief Executive Officer of China Kangtai Cactus Biotech commented, ''The healthy and significant growth in our year 2006 results attributed to a growing demand for our high quality cactus-based consumer products throughout China, as well as our continuing efforts to improve our production and distribution efficiencies.''
Wang concluded, ''Our Company remains focused on creating more product categories and lines for distribution and is adopting a new distribution strategy to quickly and more efficiently penetrate new markets in China. With 17 product patents and 15 pending approval, China Kangtai is the dominant company in the cactus-based consumer product sector."
