First Quarter Results
Revenues totaled approximately
"We are delighted to see a continuing recovery of demand for our digital
intercom products and solutions amid a broad turnaround in the
Cost of goods sold climbed by 229.2% to
Gross profit for the first quarter of 2010 totaled
Operating expenses totaled approximately
Operating income was
Interest expense decreased to
The Company's net income in the first quarter of 2010 was
Financial Condition
As of
Business Outlook
China Skyrise remains optimistic about
While the Company continues to gain market share with its low-end digital solutions displacing competitors' high-end analog solutions, management believes that China Skyrise also stands to benefit from analog-to-digital upgrades of existing residential neighborhoods, which represents a huge potential market.
"With continuous product innovation and strong brand recognition, we are
optimistic about our financial performance in 2010. The first quarter is
usually the seasonally slowest due to a slowdown in residential construction
around the Chinese Spring Festival. We are confident that our operating
results and operating cash flows will continue to improve throughout the
remainder 2010. Therefore, we reaffirm our previous guidance of revenues of
approximately
About China Skyrise Digital Service Inc.
China Skyrise Digital Service Inc. ("China Skyrise" or the "Company")
develops, sells, installs and maintains digital residential and video-
surveillance products, as well as related software. The Company's customers
are primarily urban and suburban residential communities and real-estate
developers in
Safe Harbor Statements
This press release may contain certain "forward-looking statements" relating to the business of China Skyrise Digital Service Inc., and its subsidiary companies made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact included herein are "forward-looking statements" including statements regarding: the ability of the Company to meet its 2010 financial projections; the general ability of the Company to achieve its commercial objectives, including its ability to continue to successfully grow its business, develop innovative products and strong brand recognition, and further strengthen its competitive position; the business strategy, plans and objectives of the Company and its subsidiaries; and any other statements of non-historical information These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website (http://www.sec.gov ). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.
For further information, please contact: Company Contact: Dustin Han, Vice President, Investor Relations China Skyrise Digital Service Inc. Email: ir@chinaskyrise.com Tel: +1-408-857-8897 Web: http://www.chinaskyrise.com Investor Relations Contact: John Harmon, Senior Account Manager CCG Investor Relations Email: john.harmon@ccgir.com Tel: +1-646-833-3424 Web: http://www.ccgir.com CHINA SKYRISE DIGITAL SERVICE INC. CONSOLIDATED BALANCE SHEETS Expressed in US Dollars March 31, 2010 December 31, 2009 (Unaudited) (Audited) ASSETS Current Assets Cash and cash equivalents $263,944 $409,718 Accounts receivable 3,991,165 3,089,672 Inventory 1,566,613 1,373,733 Deposit and prepaid expense 505,921 558,068 Other receivables 331,299 536,013 Total current assets 6,658,942 6,967,204 Property, plant and equipment, net of accumulated depreciation 324,508 340,616 Other assets Intangible assets, net of accumulated amortization 140,890 120,650 Goodwill 193,754 193,754 Total other assets 334,644 316,404 Total Assets $7,318,094 $6,624,224 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable $1,278,268 $1,005,679 Unearned Revenue 278,951 81,009 Other payables and accrued expenses 542,293 541,767 Short term debt 440,100 440,100 Tax payable 12,144 73,160 Total current liabilities 2,551,756 2,141,715 Commitments and contingencies -- Stockholders' equity Common stock: 0.001 par value Authorized: 75,000,000 common shares Issued and outstanding: 21,110,550(2008: 17,004,800) common shares 21,111 21,111 Additional paid-in capital 2,207,072 2,207,072 Statutory reserves 2,791 2,791 Retained earnings 2,505,332 2,218,197 Accumulated other comprehensive income 30,032 33,338 Total stockholders' equity 4,766,338 4,482,509 Total liabilities and stockholders' equity $7,318,094 $6,624,224 CHINA SKYRISE DIGITAL SERVICE INC. CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME Expressed in US Dollars Three Months Ended Three Months Ended March 31, 2010 March 31, 2009 (Unaudited) (Unaudited) Revenues $1,323,819 $398,843 Cost of goods sold 706,411 214,588 Gross profit 617,408 184,255 Selling and marketing expenses (91,702) (97,233) General and administrative expenses (239,888) (164,894) Net income (loss) from operations 285,818 (77,872) Other Income (Expense) Other income 1,323 424 Government grant -- 73,322 Interest expense (6) (5,364) Total Other Income (Expense) 1,317 68,382 Income(loss) before provision for income taxes 287,135 (9,490) Provision for income taxes -- -- Net income (loss) 287,135 (9,490) Other comprehensive income Foreign currency translation loss (3,306) (33,908) Total comprehensive income $283,829 $(43,398) Earnings Per Share Basic 0.01 (0.01) Diluted 0.01 (0.01) Weighted Average Number of Shares Outstanding Basic 21,110,550 17,004,800 Diluted 21,110,550 17,004,800 CHINA SKYRISE DIGITAL SERVICE INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Expressed in US Dollars Three Months Ended Three Months Ended March 31, 2010 March 31, 2009 (Unaudited) (Unaudited) Cash flows from operating activities: Net income (loss) for the period $287,135 $(9,490) Adjustments to reconcile net income (loss) to net cash from operations: Depreciation 21,030 13,386 Amortization of intangible assets 10,754 6,891 Changes in operating assets and liabilities: (Increase) decrease in inventory (192,880) 50,693 Decrease in deposits and prepaid expenses 52,147 57,033 (Increase) decrease in accounts receivable (901,493) 109,643 Decrease (increase) in other receivable 204,714 (1,139,526) Decrease in tax payable (61,016) -- Decrease in tax recoverable -- 14,772 Increase (decrease) in accounts payable 272,589 (140,724) Increase in unearned revenue 197,942 35,511 Increase in other payable and accrued expenses 526 1,162,468 Net cash (used in) provided by operating activities (108,552) 160,657 Cash flows from investing activities Purchases of property, plant and equipment (4,922) (28,966) Purchases of intangible assets (28,994) (308) Net cash used in investing activities (33,916) (29,274) Cash flows from financing activities Repayment of short term debt -- (109,875) Net cash used in financing activities -- (109,875) Effects of exchange rate changes on cash (3,306) (63,039) Decrease in cash and cash equivalents (145,774) (41,531) Cash and cash equivalents, beginning of period 409,718 508,272 Cash and cash equivalents, end of period $263,944 $466,741 Supplementary disclosures of cash flow information: Cash paid for interest $6 $5,364 Cash paid for taxes $-- $--
SOURCE China Skyrise Digital Service Inc.