If this is shabby earnings, then I want all my companies to have the same...lol
ZHEJIANG PROVINCE, China, Aug. 15 /PRNewswire-FirstCall/ -- China 3C Group (OTC Bulletin Board: CHCG - News), a rapidly growing retailer and distributor of consumer and business products in China, announced today that revenue for the second quarter of 2007 was $64.5 million versus $28.6 million in the comparable quarter last year, an increase of approximately 125%. Net income for the quarter was $5.5 million, or $0.10 per basic and diluted share, up 140% from $2.3 million, or $0.05 per share, for the same quarter last year. As expected, sales in the second quarter of 2007 were less than the first quarter of 2007 due to seasonal effects from the Chinese New Year in the first quarter.
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China 3C Group's Chief Executive Officer, Zhenggang Wang stated, "We are pleased with our year-over-year increase in revenues, which was due to a combination of organic growth of our existing business and the acquisitions of new business operations during the second half of last year. Based on these half year results, we are also reaffirming our full year 2007 earnings guidance of $0.50 to $0.54 per diluted share as we expect the rest of the year to continue to show an increase in growth."
China 3C Group generated $12.9 million in net cash from operating activities during the first six months of 2007 and ended the quarter with $15.2 million in cash. This compares to $1.29 million in net cash generated through operating activities and an ending balance of $3.3 million for the same period last year.
Wang also stated, "Net cash from operating activities increased ten times from where it was in the same period last year, and nearly three-fold to $10.3 million from the $2.6 million reported last quarter.
"The business model we have built of minimal inventory, minimal overhead and maximum turnover serves to maximize our free cash flow and thus directly benefit our financial results and, consequently, our shareholders. In the first quarter of 2007, our cash flow from operations was significantly lower than the second quarter because we were still integrating the operations of our newly acquired subsidiaries with our existing businesses. Management believes that the more stabilized second quarter cash flow numbers indicate that we have successfully integrated operations from the two subsidiaries acquired during the second half of 2006.
"We realized $11.4 million in gross profit for the quarter, up 165% from $4.3 million for the same quarter in fiscal year 2006. Gross profit margin for the quarter was approximately 18%, compared to about 15% for the same period last year. On a sequential basis, gross profit margin increased 1.5% from the 16.5% that we reported for the first quarter this year."
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