SOURCE: Dragon Capital Group Corp.

November 19, 2009 17:26 ET

Dragon Capital Group Corp. Reports Record Financial Results for the First Nine Months of 2009

Revenue Reaches Record $41.1 Million for First Nine Months of 2009, an Increase of 21.87% Compared to $33.7 Million for First Nine Months of 2008; Third Quarter Revenue Reaches $14.2 Million, an Increase of 24.56% Compared to $11.4 Million for Third Quarter Revenue of 2008

SHANGHAI, CHINA--(Marketwire - November 19, 2009) - Dragon Capital Group Corp. (PINKSHEETS: DRGV), a leading holding company of emerging high-tech companies in China, announced today the company's financial results for the third quarter ended September 30, 2009.

Financial Highlights:

Revenue for the third quarter ended September 30, 2009 was $14.2 million, a 24.56% increase over the $11.4 million recorded in the third quarter of 2008. Cost of sales for the third quarter of 2009 were $13.3 million compared to $10.6 million in the third quarter of 2008. Net income from continuing operations for the third quarter of 2009 was $356,187, slight decrease from the $383,126 recorded in the third quarter of 2008. Net income in the third quarter of 2009 was approximately $291,000, slight decrease from approximately $310,000 for the third quarter of 2008. The decrease in net income was largely attributable to the Company's efforts to increase sales and market share through an aggressive pricing strategy in a very difficult market environment.

Nine-Month Financial Results

Revenue for the first nine months of 2009 reached record $41.1 million, a 20% increase from the $33.7 million recorded in the first nine months of 2008. For the first nine months of 2009, net income from continuing operations was $799,553 down from $1.11 million in the first nine months of 2008, mainly a result of reduced margins of its main technological product sales.

Mr. Lawrence Wang, CEO of Dragon Capital Group, stated, "As we are emerging away from a very challenging sales environment, Dragon has made a strong effort to increase sales volume and market share through aggressive pricing. Our dedication to this strategy has enabled Dragon to post record sales while remaining profitable for the quarter and the first nine months of the year. We are confident that these gains in market share will result in a significant expansion in our top and bottom line performance as the economy continues to improve in the coming quarters and margins return to normalized levels. We are confident that China's high-tech industry will provide a significant growth opportunity for Dragon as we continue to seek to grow internally and through opportunistic acquisition of complimentary high tech operations for the benefit of our shareholders."

Consolidated financial Statements
               DRAGON CAPITAL GROUP, CORP. AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEET
                                (Unaudited)

                                  ASSETS

                                                September 30  December 31,
                                                ------------  -------------
                                                    2009          2008
                                                ------------  -------------
CURRENT ASSETS:
  Cash and cash equivalents                     $  1,173,001  $   1,812,809
  Accounts receivable, net of allowance for
   doubtful accounts of $152,903 and $152,533,
   respectively                                    5,042,323      2,921,310
  Other receivables                                  870,868      2,088,449
  Inventories                                      5,909,810      5,829,686
  Loan receivable                                          -        114,000
  Investment in marketable securities                112,000        266,000
  Prepaid expenses and other                         338,562        264,791
  Subsidiaries held for sale                               -      2,273,900
                                                ------------  -------------
    Total Current Assets                          13,446,564     15,570,945

DUE FROM RELATED PARTY                                71,663         71,489
PROPERTY AND EQUIPMENT - Net                         232,503        275,098
                                                ------------  -------------

    Total Assets                                $ 13,750,730  $  15,917,532
                                                ============  =============

                   LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Loans payable                                 $    521,876  $     320,971
  Loans payable-related party                              -         43,769
  Accounts payable and accrued expenses            4,572,367      3,675,375
  Other payable                                      411,138        336,426
  Taxes payable                                     (150,047)        68,235
  Advances from customers                              1,521      1,230,135
  Subsidiaries held for sale                               -            895
                                                ------------  -------------
    Total Current Liabilities                      5,356,855      5,675,806
                                                ------------  -------------

EQUITY:
Dragon Capital Group, Corp.
  Common Stock ($0.001 Par Value; 500,000,000
   Shares Authorized;
   259,644,578 shares issued and outstanding)        259,645        259,645
  Additional paid-in capital                       5,061,071      6,108,800
  Accumulated retained earnings                    2,214,854      2,569,941
  Subscription receivable                             (2,000)             -
  Accumulated comprehensive income                  (248,329)       245,235
                                                ------------  -------------
    Total Dragon Capital Group, Corp.              7,285,241      9,183,621
                                                ------------  -------------
    Noncontrolling interest                        1,108,634      1,058,105
                                                ------------  -------------
      Total Equity                                 8,393,875     10,241,726
                                                ------------  -------------

        Total Liabilities and Equity            $ 13,750,730  $  15,917,532
                                                ============  =============




               DRAGON CAPITAL GROUP, CORP. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENT OF OPERATIONS
                                (Unaudited)

                    For the Three Months Ended  For the Nine Months Ended
                          September 30,               September 30,
                    --------------------------  --------------------------
                        2009          2008          2009          2008
                    ------------  ------------  ------------  ------------
NET REVENUES        $ 14,165,556  $ 11,352,590  $ 41,065,365  $ 33,695,969
COST OF SALES         13,299,065    10,640,081    38,746,832    31,534,898
                    ------------  ------------  ------------  ------------
GROSS PROFIT             866,491       712,509     2,318,533     2,161,071
                    ------------  ------------  ------------  ------------

OPERATING EXPENSES:
  Selling expenses       341,807       150,560       910,513       464,261
  General and
   administrative        168,497       178,823       608,467       586,132
                    ------------  ------------  ------------  ------------
    Total Operating
     Expenses            510,304       329,383     1,518,980     1,050,393
                    ------------  ------------  ------------  ------------
INCOME FROM
 OPERATIONS              356,187       383,126       799,553     1,110,678
                    ------------  ------------  ------------  ------------

OTHER INCOME
  Other income               142           (73)        2,847           (19)
  Interest income
   (expense)             (22,827)       (1,706)      (23,931)       (1,170)
                    ------------  ------------  ------------  ------------
    Total Other
     expense             (22,685)       (1,779)      (21,084)       (1,189)
                    ------------  ------------  ------------  ------------
INCOME BEFORE
 DISCONTINUED
 OPERATIONS,
INCOME TAX AND
 NONCONTROLLING
 INTEREST                333,502       381,347       778,469     1,109,489

DISCOUNTINUED
 OPERATIONS:
  Loss on sale of
   Fomde
   subsidiaries                -             -      (714,983)            -
  Gain from
   discontinued
   operations                  -         3,226         5,603        17,360
                    ------------  ------------  ------------  ------------
    Total (loss)
     gain from
     discontinued
     operations                -         3,226      (709,380)       17,360

INCOME BEFORE
 INCOME TAXES AND
 NONCONTROLLING
 INTEREST                333,502       384,573        69,089     1,126,849
INCOME TAXES             (42,838)      (74,530)     (218,220)     (255,103)
                    ------------  ------------  ------------  ------------

NET (LOSS) INCOME        290,664       310,043      (149,131)      871,746
Less: Net income
 attributable to
 noncontrolling
 interest                (91,762)      (44,780)     (205,956)     (141,532)
                    ------------  ------------  ------------  ------------

NET (LOSS) INCOME
 ATTRIBUTABLE TO
 DRAGON CAPITAL
 GROUP, CORP.            198,902       265,263      (355,087)      730,214
                    ------------  ------------  ------------  ------------

NET INCOME (LOSS)
 PER COMMON SHARE:
  Net (loss) income
   from continuing
   operations       $       0.00  $       0.00  $       0.00  $       0.00
                    ============  ============  ============  ============
  Net (loss) income
   from
   discontinued
   operations       $          -  $       0.00  $      (0.00) $       0.00
                    ============  ============  ============  ============
NET (LOSS) INCOME
 PER COMMON SHARE   $       0.00  $       0.00  $      (0.00) $       0.00
                    ============  ============  ============  ============
WEIGHTED AVERAGE
 COMMON SHARES
 OUTSTANDING:
  Basic and Diluted  259,644,578   240,066,800   259,644,578   236,566,800
                    ============  ============  ============  ============

AMOUNTS
 ATTRIBUTABLE TO
 DRAGON CAPITAL
 GROUP, CORP.
 COMMON
 SHAREHOLDERS:
  Income from
   continuing
   operations, net
   of tax                198,902       262,037       354,293       712,854
  Discontinued
   operations, net
   of tax                      -         3,226      (709,380)       17,360
                    ------------  ------------  ------------  ------------
  Net income             198,902       265,263      (355,087)      730,214
                    ============  ============  ============  ============




               DRAGON CAPITAL GROUP, CORP. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENT OF CASH FLOWS

                                                    For the Nine Months
                                                    Ended Septemeber 30,
                                                      2009         2008
                                                  -----------  -----------
CASH FLOWS FROM OPERATING ACTIVITIES:             (Unaudited)  (Unaudited)
  Income from continuing operations               $   354,293  $   712,854
  Adjustments to reconcile income from operations
   to net cash used in continuing operations:
    Depreciation and amortization                      31,586       41,197
    Allowance for doubtful accounts                         -            -
    Stock based compensation                                -       16,737
    Noncontrolling interest                           205,957      141,532
  Changes in assets and liabilities:
    Accounts receivable                            (2,112,403)    (703,091)
    Other receivable                                1,221,774      (63,363)
    Inventories                                       (65,924)    (537,623)
    Prepaid and other current assets                  (72,004)     (44,052)
    Accounts payable and accrued expenses             888,827     (554,043)
    Other payable                                      73,843       65,153
    Income tax payable                               (218,291)     (17,500)
    Advances from customers                        (1,230,716)     545,566
                                                  -----------  -----------
  Net cash used in continuing operations             (923,058)    (396,633)
                                                  -----------  -----------
  (Loss) income from discontinued operations         (709,380)      17,360
  Adjustments to reconcile (loss) income from
   discontinued operations to net cash used in
   discontinued operations
      Non-cash loss from discontinued operations      714,983            -
      Assets from discontinued operations             (11,112)      (2,362)
      Liabilities from discontinued operations            126      (31,677)
      Minority interest                                 5,383       16,679
                                                  -----------  -----------
  Net cash used in discontinued operations                  -            -
                                                  -----------  -----------
NET CASH USED IN OPERATING ACTIVITIES                (923,058)    (396,633)
                                                  -----------  -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Cash acquired in acquisition                            -      221,684
    Disposition (purchase) of property, plant and
     equipment                                         11,646      (63,596)
                                                  -----------  -----------
NET CASH PROVIDE BY INVESTING ACTIVITIES               11,646      158,088
                                                  -----------  -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Write off the uncollectible loan                  112,926            -
    Proceeds from loans                               292,290
    Payments made - loans                            (102,302)    (116,738)
    Repayments of related party advance               (33,844)     (74,420)
                                                  -----------  -----------
NET CASH PROVIDED BY (USED IN) FINANCING
 ACTIVITIES                                           269,070     (191,158)
                                                  -----------  -----------
EFFECT OF EXCHANGE RATE ON CASH                         2,534      150,106
NET DECREASE IN CASH                                 (639,808)    (279,597)
CASH  - beginning of the year                       1,812,809    1,562,756
                                                  -----------  -----------
CASH - end of period                              $ 1,173,001  $ 1,283,159
                                                  ===========  ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
 INFORMATION:
Cash paid for: Interest                           $     7,397  $     1,416
                                                  ===========  ===========
      Income taxes                                $    55,909  $    34,905
                                                  ===========  ===========
NON-CASH INVESTING ACTIVITIES:
      Subscription receivable for disposal of
       Fomde subsidiary                           $     2,000  $         -
                                                  ===========  ===========


About Dragon Capital Group Corporation

Dragon Capital Group Corporation is a holding company serving as a business incubator for emerging Chinese businesses. Dragon currently controls seven subsidiaries operating in high-tech, IT products and services and management consulting. Three of the subsidiaries are growing strong recurring revenue streams from electronics hardware distribution and network integration. The company's other three subsidiaries, still in the emergent stage, are focused on wireless Internet applications, mobile business solutions, software development, enterprise management, computerized automations systems integration and network integration. For more information, visit, http://www.dragoncapital.us.

Safe Harbor Statement

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning the company's operations, financial performance and, condition. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. The company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, but not limited to, the impact of competitive products, pricing and new technology; changes in consumer preferences and tastes; and effectiveness of marketing; changes in laws and regulations; fluctuations in costs of production, and other factors as those discussed in the company's reports filed with the Securities and Exchange Commission from time to time. In addition, the company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.

Contact Information

  • Contact:
    Investor Relations:
    Gary Liu
    Tel: 954-363-7333 ext. 318