China Digital Communication Group Reports 2006 Financial Results
03 April 2007 - 8:18AM
PR Newswire (US)
LOS ANGELES and SHENZHEN, China, April 2 /PRNewswire-FirstCall/ --
China Digital Communication Group (OTC:CHID) (BULLETIN BOARD: CHID)
, a manufacturer of battery components and distributor of 3G
products in China, announced today that revenue for fiscal year
2006 totaled $12.2 million compared with $12.7 million in 2005. The
company reported a comprehensive net loss of $617,000 or $0.01 per
diluted share in 2006, which included a $3.8 million non-cash
expense in the fourth quarter related to the impairment of goodwill
associated with the acquisition of Galaxy View International. In
the fourth quarter of 2006, the company reported revenues of $2.0
million, compared to $3.1 million in revenue in Q4 '05, and a
comprehensive net loss of $3.1 million, or $0.05 earnings per
diluted share, compared to net income in the year ago period of
$449,000 or $0.01 in earnings per diluted share. Xu Zhongnan, CEO
of China Digital Communication Group, said, "Our operating results
in 2006 were adversely affected by lower demand for our products as
a result of intense competition in the battery shell market. We
also had a one-time, non-cash impairment of goodwill charge of $3.8
million. We had projected higher revenues for Galaxy at the time of
acquisition but adjusted the associated goodwill after a
restructuring in the purchase procedures of Galaxy's main customer.
In addition, our bottom line was affected by an increase in
interest expense from $33,000 in fiscal 2005 to $173,000 in fiscal
2006 due primarily to a loan obtained for the acquisition of
Galaxy." Zhongnan said, "Our company is now actively looking for
merger and acquisition candidates in several attractive industries.
Our current business, though experiencing difficulties in the
battery shell segment, produced about $10 million in revenue from
operations in 2006. We believe this provides us with a stable base
from which to find and acquire other promising companies. There are
numerous opportunities in China today and we intend to capitalize
on them." About China Digital Communication Group China Digital
Communication Group has two wholly owned subsidiaries, Shenzhen
E'Jenie Science and Technology Development Co. Ltd. and Galaxy View
International. E'Jenie manufactures and sells advanced high-quality
lithium-ion battery shell and cap products to all major lithium-ion
battery cell manufacturers in China and has recently begun
manufacturing complete batteries. E'Jenie's products are used to
power mobile phones, MP3 players, laptops, digital cameras, PDAs,
camera recorders and other consumer electronic digital devices.
Galaxy View, through its subsidiary Sono Digital, is a leading
supplier of third-generation (3G) communications technology and
equipment in China. China Digital Communication Group is continuing
its expansion, while seeking distribution partners and acquisitions
in new global markets, including the United States. For more
information, visit http://www.chinadigitalgroup.com/ or contact
Jacky Jiang of China Digital Communication Group at (626) 432-5427,
e-mail: . An investment profile on China Digital Communication
Group may be found at
http://www.hawkassociates.com/chidprofile.aspx. For investor
relations information regarding China Digital Communication Group,
contact Frank Hawkins or Ken AuYeung, Hawk Associates, at (305)
451-1888, e-mail: . An online investor kit including press
releases, current price quotes, stock charts and other valuable
information for investors may be found at
http://www.hawkassociates.com/ and
http://www.americanmicrocaps.com/. To receive free e-mail
notification of future press releases for this company, sign up at
http://www.hawkassociates.com/email.aspx. Forward-looking
statement: Except for the historical information, the matters
discussed in this news release may contain forward-looking
statements, including, but not limited to, factors relating to
future sales. These forward-looking statements may involve a number
of risks and uncertainties. Actual results may differ materially
based on a number of factors, including, but not limited to,
uncertainties in product demand, risks related to doing business in
China, the impact of competitive products and pricing, changing
economic conditions around the world, release and sales of new
products and other risk factors detailed in the company's most
recent annual report and other filings with the Securities and
Exchange Commission. Investor Relations Contact: Hawk Associates,
Inc. Frank Hawkins and Ken AuYeung Phone: (305) 451-1888 E-mail:
http://www.hawkassociates.com/ DATASOURCE: China Digital
Communication Group CONTACT: Investor Relations, Frank Hawkins or
Ken AuYeung, both of Hawk Associates, Inc., +1-305-451-1888, Web
site: http://www.chinadigitalgroup.com/
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