BEIJING, Nov. 20 /PRNewswire-FirstCall/ -- China VoIP & Digital Telecom Inc. (OTC Bulletin Board: CVDT) released its 2008 third quarter financial results yesterday:
-- Revenue was $1.3 million, a decrease of 32% compared with $1.9 million
in 3Q07
-- Operating loss was $1.0 million compared with operating profit of $0.6
million in 3Q07
-- Net income was $1.7 million compared with $0.6 million in the same
quarter of 2007
Mr. Li Kunwu, Chairman of the company expressed disappointment with the results. He stated, "I understand that our investors' will not be satisfied with our third quarter earnings. However, the financial results are driven by some unusual events which I wish to comment on. I continue to believe in the long-term growth prospects of CVDT."
"During the quarter, global economic conditions worsened and our potential clients all delayed purchasing decisions as they weighed the economic impact on their own operations. As a result, we did not get anticipated orders during the quarter and the revenue was significantly lower than our expectations. Also in the quarter, we continued to put large sums of capital into marketing the VoIP services during the Olympics and our new virtualization projects. The large marketing expenses resulted in lower earnings. In addition, we had the research and development costs for our new business communication platform, International Business Communication Center (IBCC) during the quarter. This expense also contributed to the operating loss."
Mr. Li believes the unusual situation in the third quarter should not overshadow the company's growth prospects. He said, "Despite the worldwide economic slowdown, several of CVDT's potential clients have indicated continued interest in purchasing our products and services recently. Our newly developed IBCC platform has attracted many enterprises' and government users since its first debut on the market. The virtualization project led by Beijing Power & Unique Technology, another subsidiary of CVDT, has gained attention from many large enterprises and governmental departments. We have won solid support from the local government on these two projects. The third quarter was a transition period and a difficult quarter, but it is now behind us. The new products and services we offer coupled with government support should fuel our growth in the following months. I am confident that CVDT will deliver better results in the near future."
About China VoIP & Digital Telecom Inc.
China VoIP & Digital Telecom Inc. offers Voice over the Internet Protocol telecommunications services in the People's Republic of China through its wholly owned subsidiary Jinan Yinquan Technology Co., Ltd. Through Jinan Yinquan, China VoIP is well positioned to take full advantage of the tremendous economic growth currently being experienced in China. The Company is currently marketing its NP Soft Switch system in China and is currently in the testing stages of other Information Technology products. More information can be found at http://www.chinavoip-telecom.com .
Safe Harbor Statement
Certain of the statements made in the press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the use of forward-looking terminology such as 'believe,' 'expect,' 'may,' 'will,' 'should,' 'project,' 'plan,' 'seek,' 'intend,' or 'anticipate' or the negative thereof or comparable terminology. Such statements typically involve risks and uncertainties and may include financial projections or information regarding our future plans, objectives or performance. Actual results could differ materially from the expectations reflected in such forward-looking statements as a result of a variety of factors, including the risks associated with the effect of changing economic conditions in The People's Republic of China, variations in cash flow, reliance on collaborative retail partners and on new product development, variations in new product development, risks associated with rapid technological change, and the potential of introduced or undetected flaws and defects in products, and other risk factors detailed in reports filed with the Securities and Exchange Commission from time to time.
For more information, please contact:
Yinquan Investor Contacts:
Michelle Wong
Tel: +86-531-8702-7114
Email: michellewong@yinquan.cn
Great Wall Research LLC
John Armstrong
Tel: +1-203-536-1928
Email: jarmstrong@greatwallresearch.com
