HONG KONG, Oct. 6 /Xinhua-PRNewswire-FirstCall/ -- China Technology
Development Group Corporation (NASDAQ:CTDC) (collectively, the
"Company", "We", "us", or "our") announced today its unaudited
consolidated financial results for the six month period ended June
30, 2006. Our revenues increased by US$165,000, or 39.66%, from
US$416,000 in the six months ended June 30, 2005 (the "2005
Period") to US$581,000 in the the six months ended June 30, 2006
(the "2006 Period"). The nutraceutical business acquired in 2005
contributed a total revenue of US$203,000 in the 2006 Period.
Excluding this, the revenues of our IT operations slightly
decreased by US$38,000, or 9.13% from US$416,000 in the 2005 Period
to US$378,000 in the 2006 Period. Our total cost of sales increased
by US$96,000, or 45.5%, from US$211,000 in the 2005 Period to
US$307,000 in the 2006 Period. The cost of sales of our
nutraceutical business in the 2006 Period was US$150,000. Excluding
this, the cost of sales of our IT operations in the 2006 Period
amounted to US$157,000, which represented a decrease of US$54,000,
or 25.59%, from US$211,000 in the 2005 Period. The decrease was due
primarily to an increase in the proportion of sales of our
self-developed products, the costs of which are lower than the cost
of products purchased from other suppliers due to the increased
control we have with respect to the cost of the materials utilized
to produce such products. As a result, our gross profit in the 2006
Period amounted to US$274,000, which increased by US$69,000, or
33.66%, from US$205,000 in the 2005 Period. The gross profit of our
nutraceutical business in the 2006 Period amounted to US$53,000.
Excluding this, the gross profit of our IT operations in the 2006
Period amounted to US$221,000, which represented an increase of
US$16,000, or 7.8% from US$205,000 in the 2005 Period. As a
percentage of sales, the gross profit margin of our IT operations
increased by 9.19%, from 49.28% in the 2005 Period to 58.47% in the
2006 Period. Selling, general and administrative expenses
("SG&A expenses") increased by US$627,000, or 125.9%, from
US$498,000 in the 2005 Period to US$1,125,000 in the 2006 Period.
SG&A of our nutraceutical operations in the 2006 Period
amounted to US$308,000 which mainly included amortization and
depreciation charges of approximately US$158,300 for the 2006
Period. Excluding this, the SG&A expenses of our IT operations
and corporate office increased by US$319,000, or 64.06%, from
US$498,000 of the 2005 Period to US$817,000 of the 2006 Period. The
significant increase in the SG&A expense was due to the
following factors: (1) SG&A expenses of our IT operations
increased by US$56,000 or 15.56%, from US$360,000 in the 2005
Period to US$416,000 in the 2006 Period, due primarily to
additional technicians that were recruited by us to develop new
products; (2) SG&A expenses of our corporate office increased
by US$263,000, or 190.58%, from US$138,000 in the 2005 Period to
US$401,000 in the 2006 Period. The significant increase was due
primarily to an increase in staff costs and rental expenses as a
result of the expansion of our corporate office beginning in May
2005. As of June 30, 2006, we had a cash balance of US$878,000. The
Company also maintained a deposit of US$783,000 with China Biotech
Holdings Limited, a related company, for the purpose of financing
potential investments in nutraceutical entities in China. We also
had available cash equivalents of $273,000 in the form of accounts
receivables due from Beijing Holdings Limited, our principal
stockholder, which amounts represented the proceeds receivable from
Beijing Holdings Limited in respect of the sale of available-
for-sales securities owned by us to Beijing Holdings Limited. CHINA
TECHNOLOGY DEVELOPMENT GROUP CORPORATION AND SUBSIDIARIES UNAUDITED
CONSOLIATED STATEMENTS OF OPERATIONS (Amounts in thousands, except
per share data) For the periods ended June 30, 2005 and 2006 June,
30 June 30, 2005 2006 US$(Note (1)) US$(Note (1)) Continuing
operations: Revenues 416 581 Cost of sales (211) (307) Gross Profit
205 274 Selling, general and administrative expenses (498) (1,125)
Operating loss (293) (851) Interest income -- 5 Non-operating
income 39 76 Non-operating expenses -- (35) Loss before income tax
provision (254) (805) Income taxes provision -- (1) Loss from
continuing operations before minority interests (254) (806)
Minority interest-continuing operations -- 70 Loss from continuing
operations (254) (736) Discontinued operations: Loss from
discontinued operations including loss on disposal of US$63 on
March 31, 2005 (36) -- Net loss for the period (290) (736) Loss per
share -Basic and dilutive (0.04) (0.07) Loss per share from
continuing operations -Basic and dilutive (0.03) (0.07)
Income/(loss) per share from discontinued operations -Basic and
dilutive (0.01) -- Weighted average ordinary shares -Basic and
dilutive 6,894 11,275 CHINA TECHNOLOGY DEVELOPMENT GROUP
CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands) at December 31, 2005 and June 30,2006
December 31, June 30, 2005 2006 US$(Note (1)) US$(Note (1)) ASSETS
CURRENT ASSETS Cash and cash equivalents 2,292 878 Short-term
investments-security trust account 14 1 Available-for-sale
securities 46 55 Trade accounts receivable, net 99 92 Inventories
323 380 Value added tax and business tax recoverable -- 13 Due from
related parties 1,057 1,106 Prepayment for investment in subsidiary
-- 75 Other assets 183 148 TOTAL CURRENT ASSETS 4,014 2,748
Long-term prepayment for rental of land 66 65 Property, plant and
equipment, net 1,147 1,058 Intangible asset 818 737 Goodwill 8,697
8,697 TOTAL ASSETS 14,742 13,305 LIABILITIES AND SHAREHOLDERS'
EQUITY CURRENT LIABILITIES Trade accounts payable 72 72 Accrued
professional fees 484 313 Income tax payable 31 30 Value added tax
and business tax payable 5 -- Deferred government grants 29 12 Due
to a related party 446 62 Short term borrowings 111 71 Deferred tax
liabilities 62 62 Other liabilities and accrued expenses 465 460
TOTAL CURRENT LIABILITIES 1,705 1,082 Minority interests 690 619
SHAREHOLDERS' EQUITY Common stock, US$0.01 par value; 2,500,000,000
shares authorised; shares issued and outstanding 11,274,497 in 2005
and 2006) 114 114 Additional paid-in capital 33,765 33,765
Accumulated deficit (21,412) (22,148) Accumulated other
comprehensive losses (120) (127) TOTAL SHAREHOLDERS' EQUITY 12,347
11,604 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 14,742 13,305
CHINA TECHNOLOGY DEVELOPMENT GROUP CORPORATION UNAUDITED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Amount in thousands) For the
periods ended June 30, 2005 and 2006 2005 2006 US$(Note (1))
US$(Note (1)) Cash flows from operating activities Net loss (331)
(736) Adjustments to reconcile net loss to net cash used in
operating activities Minority interests in loss of consolidated
subsidiaries -- (71) Amortization of intangible asset, goodwill and
software development costs -- 81 Amortization of long-term
prepayment for rental of land -- 1 Depreciation 6 95 Dividend
income -- (1) Unrealised loss on trading securities 41 -- Gain on
disposal of available-for-sale securities (2) -- Loss on disposal
of discontinued operations 63 -- Changes in assets and liabilities:
Decrease in trade accounts receivable 69 7 Increase in inventories
(8) (57) (Increase)/decrease in due from related parties and other
assets 8 (14) Decrease in trade accounts payable, amount due to a
related party and other current liabilities (156) (577) Decrease in
income tax payable (2) (19) Net cash used in operating activities
(312) (1,291) Cash flows from investing activities Security trust
account 1,929 13 Dividend income -- 1 Decrease in funds held by
related parties for security investment purposes 1,034 -- Net cash
and cash equivalents disposal of upon disposal of discontinued
operations (44) -- Proceeds from disposal of available-for-sale
securities 222 -- Prepayment for investment in subsidiary -- (75)
Purchase of property, plant and equipment -- (6) Proceed on
disposal of fixed assets (6) -- Net cash provided by investing
activities 3,135 (67) Cash flows from financing activities
Repayment of short term borrowings -- (40) Net cash used in
financing activities -- (40) Effect of exchange rate changes on
cash and cash equivalents 1 (16) Net increase/ (decrease) in cash
and cash equivalents 2,824 (1,414) Cash and cash equivalents at
beginning of period 657 2,292 Cash and cash equivalents at end of
period 3,481 878 CHINA TECHNOLOGY DEVELOPMENT GROUP CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS'
EQUITY (Amounts in thousands) at June 30, 2005, December 31, 2005
and June 30, 2006 Stock No. of Options shares Equity Granted
US$(Note (1)) US$(Note (1)) Balance at June 30, 2005 6,894,497
23,483 -- Issue of shares 4,380,000 9,998 -- Stock options granted
-- 398 Net loss -- -- Net unrealized gain on available-for-sale
securities -- -- Less: Reclassification adjustment for loss
realized on sale -- -- Translation adjustment -- -- Total
comprehensive loss for the year Balance at December 31, 2005
11,274,497 33,481 398 Net loss -- -- Net unrealized gain on
available-for-sale securities -- -- Translation adjustment -- --
Total comprehensive loss for the year Balance at June 30, 2006
11,274,497 33,481 398 Accumulated other Total Accumulated
comprehensive shareholders' losses losses equity US$(Note (1))
US$(Note (1)) US$(Note (1)) Balance at June 30, 2005 (19,259) (444)
3,780 Issue of shares -- -- 9,998 Stock options granted -- -- 398
Net loss (2,153) - (2,153) Net unrealized gain on
available-for-sale securities -- 23 23 Less: Reclassification
adjustment for loss realized on sale -- 362 362 Translation
adjustment -- (61) (61) Total comprehensive loss for the year 324
Balance at December 31, 2005 (21,412) (120) 12,347 Net loss (736)
(736) -- Net unrealized gain on available-for-sale securities -- 9
9 Translation adjustment -- (16) (16) Total comprehensive loss for
the year (7) Balance at June 30, 2006 (22,148) (127) 11,604 Note
(1): The functional currency of the Company is Renminbi ("Rmb"),
the lawful currency of the People's Republic of China. For the
convenience of the reader, translation of amounts from Renminbi
into United States Dollars ("US$") has been made at the noon buying
rate in New York City for cable transfer in foreign currencies as
certified for customs purposes by the Federal Reserve Bank of New
York City on June 30, 2006 of Rmb 7.9943 = US$1.00 for the
operating results of periods ended June 30, 2005 and 2006 and for
the financial position as of December 31, 2005 and June 30, 2006.
No representation is made that the Renminbi amounts could have
been, or could be, converted into United States Dollars at that
rate or at any other certain rate. Note (2): Our results for the
2006 Period included the results of our IT operations and
nutraceutical operations (acquired in 2005), as compared to solely
the IT operations was included in the 2005 Period. About CTDC CTDC
is engaged in providing information network security solutions and
developing health food products utilizing bio-active components of
bamboo in People's Republic of China. For more information, please
visit our website at http://www.chinactdc.com/ . This Report of
Foreign Private Issuer on Form 6-K contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, and Section 21E of the Securities Exchange Act of 1934.
These statements relate to future events or the Company's future
financial performance. The Company has attempted to identify
forward-looking statements by terminology including "anticipates",
"believes", "expects", "can", "continue", "could", "estimates",
"expects", "intends", "may", "plans", "potential", "predict",
"should" or "will" or the negative of these terms or other
comparable terminology. These statements are only predictions,
uncertainties and other factors may cause the Company's actual
results, levels of activity, performance or achievements to be
materially different from any future results, levels or activity,
performance or achievements expressed or implied by these
forward-looking statements. The information in this Report on Form
6-K is not intended to project future performance of the Company.
Although the Company believes that the expectations reflected in
the forward-looking statements are reasonable, the Company does not
guarantee future results, levels of activity, performance or
achievements. The Company expectations are as of the date this Form
6-K is filed, and the Company does not intend to update any of the
forward-looking statements after the date this Report on Form 6-K
is filed to confirm these statements to actual results, unless
required by law. For Further information: Michael Siu Executive
Director, Chief Financial Officer and Secretary Tel: +852-3112-8461
Fax: +852-3112-8410 Email: DATASOURCE: China Technology Development
Group Corporation CONTACT: Michael Siu of China Technology
Development Group Corporation, +852-3112-8461, or fax,
+852-3112-8410, or Web site: http://www.chinactdc.com/
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