Fatt, Greater China Corporation, GCHC, results for 1998...
NEW YORK, April 26 /PRNewswire/ -- Greater China Corporation (OTC Bulletin Board: GCHC - news) announced today that it is unaware of the cause behind the recent rise in the Company's common stock price and the increased volume in share trading activity. The Company has made no statements or issued any press releases in recent weeks and has not passed on any information that would influence such activity.
Greater China Corporation is currently restructuring its operations to focus on manufacturing and distribution in China. This process is well advanced, which has allowed the Company to begin exporting products from its China operations into telecommunications markets worldwide. The restructuring will also result in lower costs, reduced currency risk and more efficient use of resources and assets. The Company intends to establish an internet service in China targeted at linking western and Chinese industries using its already extensive network of customers in China.
The Company also wishes to address the current outstanding SEC filings which are overdue. The Company is currently auditing the prior two fiscal years (years ended March 31, 1997 and March 31, 1998) for The International Technology Group Limited (ITG) and subsidiaries which were acquired by Greater China Corporation effective April 1, 1998. Due to anomalies between ITG's accounting records and non GAAP accounting records, the process of re-auditing the company's accounts in GAAP format is taking more time than anticipated. The reconciliation between Chinese accounting practice and GAAP has also resulted in delays. However, this process is anticipated to be completed in the near future, at which time the consolidated audit for Greater China Corporation's new fiscal year ended December 31, 1998, can be completed and released. The Company did not anticipate the difficulty in reconciling these two systems, but is now working to GAAP standards for current and future accounting and is working closely with its auditors and legal counsel to resolve these issues as quickly as possible.
The Company announced today certain unaudited results of operations for the quarter and nine (9) month period ended December 31, 1998, which are subject to final adjustment upon completion of audits for the related periods.
The unaudited consolidated operating results for the three months ended December 31, 1998 were net revenues of $4,983,000 and a gross profit of $1,024,O00. After deduction of expenses for selling, general and administration, depreciation, finance charges and one-time expenses related to fund raising, the net profit for the period was $202,000. After an allowance for the minority interest in the Chinese manufacturing subsidiary, the net corporate profit for the period was $35,000.
The unaudited consolidated operating results for the nine month period ended December 31, 1998 were net revenues of $l5,234,000 and a gross profit of $3,149,000. After deducting expenses for selling, general and administration, depreciation, finance charges and fund raising expenses, the net profit for the period was a profit of $435,000. After allowance for minority interests, the net profit was $49,000.
These results compare favorably with results for the previous full fiscal year of ITG operations (prior to the acquisition of ITG by the Company), which ended March 31, 1998. During that year, unaudited revenues were $7.3 million with a net loss of $907,000.
Mr. Gary Robinson, President and Chief Executive Officer of Greater China Corporation, attributed the improvement in operations to a number of factors, including: results from the Company's new manufacturing facility in China, which have exceeded forecasts; a strong increase in demand for the Company's fiber optic telecommunications products, which it sells to more than 2,000 users in China through its proprietary catalogue and through the internet; the addition of $1.5 million working capital, through a bridge loan.
In addition, Mr. Robinson noted that, in contrast to neighboring countries in Asia, the Chinese economy has continued to expand rapidly, particularly in the telecommunications sector, which the Chinese government has designated for rapid development.
Greater China Corporation and its subsidiary, The International Technology Group, are in the business of manufacturing and distributing products and equipment related to the production, installation and maintenance of fiber optic cables. A significant portion of the Company's sales are into the People's Republic of China and other Asian markets.
Forward-looking statements in this document are necessarily subject to risks and uncertainties which may affect the accuracy of such statements, including risks relating to doing business in the People's Republic of China and future economic conditions in Asia. The Company undertakes no obligation to update such factors or to publicly announce the results of any revisions to the forward-looking statements contained herein.
SOURCE: Greater China Corporation
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