SHENYANG, China, May 16 /Xinhua-PRNewswire-FirstCall/ -- Great China International Holdings, Inc. (OTC Bulletin Board: GCIH) (“Great China International” or “the Company”), a real estate development and property management company in China, today announced financial results for the first quarter of fiscal year 2008 ended on March 31, 2008.
First Quarter 2008 Highlights
-- Total revenues were $2.88 million, up 80.7% year-over-year
-- Gross profit was $1.94 million, up 68.5% year-over-year
-- Net loss was $193,678, or $0.02 per diluted share.
“The collection of rental income for the President Building normally concentrates in the second and third quarters, which is the main reason causing the loss in the net income for the first quarter of 2008,” said Mr. Frank Jiang, Chairman and CEO of Great China International Holdings, Inc. “We are confident that collections will improve in the second quarter and believe that the premier location and Fortune 500 tenants in the President Building provide a great anchor for our business.”
First Quarter of 2008 Results
Great China International’s revenues totaled $2.88 million for the first quarter of fiscal year 2008, up 80.7% from $1.59 million in the same quarter of fiscal year 2007. This change was mainly attributable to the increased sales volume of the remaining residential building units, while rental income remained relatively stable.
Gross profit for the first quarter of fiscal year 2008 totaled $1.94 million, an increase by 68.5% from $1.15 million in the same quarter of 2007. Gross profit margin was 67.3% for the first quarter of fiscal year 2008, a decrease by 6.8% from gross profit margin 72.2% for the same quarter of fiscal year 2007.
Cost of revenues increased to $939,702 by $497,647 or 112.6% for the first quarter of 2008, as compared to $442,055 for the same quarter of 2007. This was primarily attributable to the increase in the number of residential apartment units sold.
Selling expenses increased by $26,397 or 144.7% to $44,639 for the first quarter of 2008, as compared to $18,242 for the same quarter of 2007. The increase was due to business development.
General and administrative expenses increased by $984,350 or 259.9% to $1,363,131 for the first quarter of 2008 compared to $378,781 for the same quarter of 2007.
Other income decreased $1,120,738 or 97% to $34,866 for the first quarter of 2008 from $1,155,604 for the same quarter of 2007 was primarily due to the completion of several non-routine transactions.
Interest and financing costs increased to $788,229 by $194,106 for the first quarter of 2008, as compared to $594,123 for the first quarter of 2007. The increase was primarily due to interest payment on a long-term loan of $5,712,000.
The Company incurred a net loss of $(193,678) for the first quarter of 2008, or $(0.02) per fully diluted share, compared to a net income of $849,405 for the same quarter in 2007, or $0.07 per fully diluted share, representing a decrease of $1,043,083 or 122.80% quarter on quarter.
Financial Condition
As of March 31, 2008, Great China International Holdings had $18.57 million in cash and equivalents and total assets of $78.6 million. The Company had $23.3 million in short-term loans, and $5.7 million in long-term debt, respectively, compared to $25.2 million and $5.5 million, respectively, as of December 31, 2007. Stockholders’ equity on March 31, 2008 was $25.9 million, compared to $25.4 million on December 31, 2007. The Company generated $11.2 million in cash flows from operating activities in the first quarter of 2008, compared to $655,890 in the same quarter of 2007.
Business Outlook
“We plan to continue to sell some of our residential apartments held in inventory, which, together with rental income generated by the President Building, we expect will improve our results of operations in the next quarter. Meanwhile, we are actively seeking profitable development projects, as well as working to secure a large land reserve for property development. We believe the favorable development conditions in the region surrounding Shenyang, our proven track record as a large scale developer, and relations with our strategic partners all position Great China to deliver value for our shareholders,” said Mr. Jiang.
Recent Events
On March 14, 2008, the Company appointed Mr. Raymond Reed Baker as a director to its Board of Directors. Mr. Baker is a Managing Director with The One World Investment Group. He began his career with Pricewaterhouse Coopers LLP, serving in the Transition Services practice and specializing in financial due diligence. Mr. Baker is a Certified Public Accountant in the state of Pennsylvania, has a B.S. in Accounting from The Pennsylvania State University and an MBA from Hong Kong University. Ms. Chen Jin Rong resigned as an independent director on April 2, 2008 due to personal reasons.
About Great China International Holdings, Inc.
Founded in 1989, Great China International Holdings’ wholly owned subsidiary, Shenyang Maryland International Industry Co., Ltd., is the largest non-state-owned real estate developers in Northeast China. The company’s core business is premium residential and commercial development and management. It currently owns and manages the President Building, which was completed in April 2002, with 20 tenants comprised of Fortune 500 companies, including General Electric (China) Co., Ltd., Johnson & Johnson, Kodak and Philip Morris. The company’s prior developments included the Maryland Building, Qiyun New Village, Peacock Garden, University Campus of Shenyang Teacher’s University, and Chenglong Garden, mostly located in Shenyang. For more information, visit http://www.greatchinaholdings.com .
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: This press release contains certain "forward-looking statements," as defined in the United States Private Securities Litigation Reform Act of 1995, that involve a number of risks and uncertainties. There can be no assurance that such statements will prove to be accurate and the actual results and future events could differ materially from management’s current expectations. Such factors include, but are not limited to the Company’s ability to maintain its existing bank loan and to obtain additional bank loans to finance projects, the demand for residential and commercial real estate properties in the Shenyang region, the Company’s relationship with the independent contractors, risk related to property development, potential liability due to the practice of pre-selling projects, competition in the real estate development market, and other risk factors related to doing business in China. The Company undertakes no obligation to publicly update or revise any forward- looking statements, whether as a result of new information, future events or otherwise.
-- Financial Tables Follow --
GREAT CHINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER
COMPREHENSIVE INCOME
FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2008 AND 2007
2008 2007
Revenues
Real estate sales 1,453,855 233,015
Rental and management fee income 1,422,294 1,358,273
Total revenues 2,876,149 1,591,288
Cost of revenues 939,702 442,055
Gross profit 1,936,447 1,149,233
Operation expenses
Selling expenses 44,639 18,242
General and administrative expenses 1,363,131 378,781
Depreciation and amortization 718,918 580,321
Total operation expenses 2,126,688 977,344
Income (loss) from operations (190,241) 171,889
Other income (expense)
Gain on settlement of debt 1,006,222 --
Other income, net (183,127) 1,949,269
Gain on disposal of fixed assets -- --
Impairment loss -- (199,542)
Interest and finance costs (788,229) (594,123)
Total other income (expense) 34,866 1,155,604
Income (loss) before income taxes (155,375) 1,327,493
Provision for income taxes 38,303 478,088
GREAT CHINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2008 AND DECEMBER 31, 2007
March 31, December 31,
2008 2007
ASSETS
Current assets:
Cash and equivalents $18,572,767 $10,044,579
Accounts receivable, net 230,653 325,058
Receivable on disposal of subsidiaries -- 30,701,957
Other receivable, net 56,541 1,070,863
Properties held for resale 7,720,231 7,696,437
Total current assets 26,580,192 49,838,893
Property and equipment, net 52,004,645 50,632,336
Total assets $78,584,837 $100,471,229
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term loans $23,276,400 $25,231,297
Accounts payable and accrued expenses 6,906,105 8,615,415
Other payable 2,239,494 5,723,489
Payable to disposed subsidiaries 871,881 10,494,449
Commission payable 3,161,762 8,898,502
Advances from buyers 1,866,289 2,034,019
Taxes payable 8,638,464 8,552,316
Total current liabilities 46,960,394 69,549,487
Long term debt, net 5,712,000 5,486,968
Total liabilities 52,672,394 75,036,455
Stockholders’ equity:
Common stock, $.001 par value 50,000,000
shares authorized, 11,759,966 issued
and outstanding at March 31, 2008 and
December 31, 2007, respectively 11,760 11,760
Additional paid in capital 4,566,156 4,562,855
Statutory reserve 649,619 638,128
Other comprehensive income 2,136,593 1,468,546
Retained earnings 18,548,316 18,753,485
Total stockholders’ equity 25,912,443 25,434,773
Total liabilities and stockholders’
equity $78,584,837 $100,471,229
GREAT CHINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2008 AND 2007
2008 2007
Cash flows from operating activities:
Net income (loss) ($193,678) $849,405
Adjustments to reconcile net income (loss)
net cash provided by (used in)
operating activities -
Depreciation and amortization 718,918 580,324
Provision for doubtful accounts 190,357 672,678
Allowance for Xita project -- 199,542
Non-cash stock compensation expense 3,301 --
(Increase)/decrease in assets:
Accounts receivable and other receivable 31,651,817 (1,316,154)
Refunds due from contractors -- --
Advances to suppliers -- (111,967)
Prepaid expenses -- 76,579
Properties held for resale 285,659 147,607
Increase/(decrease) in liabilities:
Accounts payable and other payables
and accrued expenses (21,141,255) (520,7040)
Deposits held -- (7,405)
Advances from buyers (245,821) (106,460)
Income and other taxes payable (56,297) 192,445
Net cash provided by (used in)
operating activities 11,213,001 655,890
Cash flows from investing activities:
Construction in progress -- (217,174)
Purchases of property & equipment (29,638) (447,130)
Net cash used in investing activities (29,638) (664,304)
Cash flows from financing activities:
Loan repayments (2,926,247) (995,678)
Advances to directors and affiliated
companies -- (157,285)
Net cash used in financing activities (2,926,247) (1,152,963)
Effect of exchange differences 271,072 33,411
Net increase (decrease) in cash
and cash equivalents 8,528,189 (1,127,966)
Cash and cash equivalents,
beginning of period $10,044,579 1,769,744
Cash and cash equivalents, end of
period $18,572,767 $641,778
Supplemental disclosures of cash
flow information:
Interest paid $556,211 $410,041
Income taxes $39,550 $247,431
For more information, please contact:
Great China International Holdings, Inc.
Mr. Frank Jiang, Chairman & CEO
Tel: +86-1384-059-2520
Email: nancygu@gcih.cn
Web: http://www.greatchinaholdings.com
CCG Elite Investor Relations
Mr. Crocker Coulson, President
Tel: +1-646-213-1915 (New York)
Email: crocker.coulson@ccgir.com
Web: http://www.ccgelite.com
