NEW YORK and HARBIN, China, March 1, 2010 (GLOBE NEWSWIRE) -- China Digital Animation Development, Inc. (OTCBB:CHDA) today provided a business update and announced financial results for its fiscal second quarter ended December 31, 2009.
Mr. Fu Qiang, Chairman and Chief Executive Officer, commented, "We are pleased to report the planned acquisition of Chongqing Dinv Ares Filming Production Co., Ltd., an award-winning film production company based in Chongqing, China, is on track and progressing smoothly. This transaction will be highly accretive and launches our company into 2-D animation, movie production, and development of our own original content."
By developing its own original content, China Digital plans to leverage its current production capabilities and believes there is significant market potential as well as the opportunity to expand margins. China Digital expects this acquisition to close within the next few months.
Revenue in the digital animation business was relatively flat with the same period last year, as China Digital focused its efforts on the acquisition of Dinv Ares and on developing original content. Results were also tempered by the fact that China Digital is shifting resources away from the Trans World Financial website to focus on its core business of digital animation and movie production.
"With the acquisition of Dinv Ares nearly complete, we resumed growth heading into the third quarter and our pipeline is solid, providing us good visibility into future quarters. Given our strong balance sheet and clean capital structure, we are well positioned for the future," concluded Mr. Fu.
Revenue for the second quarter of fiscal 2010 totaled $1.2 million versus $1.4 million in the second quarter of fiscal 2009. Revenue from animation design and development was $877,820, compared to $945,000 for the same period last year. Overall gross profit in the second quarter was $537,000 versus $1.2 million in the same period last year, reflecting several lower margin projects and reduced revenue from the Trans World Financial website. Net income was approximately $251,000, or $0.01 per share versus $736,000, or $0.04 per share in the second quarter of last year.
As of December 31, 2009, the company had cash and cash equivalents of $1.1 million, working capital of $3.4 million, no long-term debt, and shareholders' equity of $13.1 million.
About China Digital Animation Development, Inc.
China Digital Animation Development, Inc. is a premier China-based digital animation development company, operating in Harbin (one of the largest animation development centers in China) as well as Beijing in The People's Republic of China. The Company also has an administrative office in New York City. The Company is engaged in animation post-stage processing, animation outsourcing, and information transmission services. The Company also operates an animation development skills training center located in Harbin, China, which provides its students with different types of animation skill training programs such as motion graphics, product modeling, character animation, and more. The Company's technical team has extensive experience in animation production and outsourcing.
Safe Harbor Statement
In addition to historical information, this press release contains forward-looking statements, which are generally identifiable by use of the words "believes," "expects," "intends," "anticipates," "plans to," "estimates," "projects," or similar expressions. These forward-looking statements represent Management's belief as to the future of China Digital Animation Development, Inc. Whether those beliefs become reality will depend on many factors that are not under Management's control. Many risks and uncertainties exist that could cause actual results to differ materially from those reflected in these forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in Section 1A: "Risk Factors" In the Company's Annual Report on Form 10-K for the year ended June 30, 2009. Readers are cautioned not to place undue reliance on these forward-looking statements. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements.
| CHINA ANIMATION DEVELOPMENT, INC. AND SUBSIDIARIES | |||||
| CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME | |||||
| (Unaudited) | |||||
| Three Months Ended | Six Months Ended | ||||
| December 31, | December 31, | ||||
| 2009 | 2008 | 2009 | 2008 | ||
| Revenues | $ 1,234,375 | $ 1,371,034 | $ 2,378,290 | $ 2,504,968 | |
| Cost of Goods Sold | 697,413 | 139,670 | 918,764 | 313,135 | |
| Gross Profit | 536,962 | 1,231,364 | 1,459,526 | 2,191,833 | |
| Operating Expenses: | |||||
| Sales Expenses | 69,742 | 100,503 | 134,373 | 154,713 | |
| General and Administrative Expenses | 196,367 | 187,729 | 365,979 | 285,657 | |
| Total Operating Expenses | 266,109 | 288,232 | 500,352 | 440,370 | |
| Income from Operations before other Income and (expenses) | 270,853 | 943,132 | 959,174 | 1,751,463 | |
| Other Income and (Expense): | |||||
| Interest income | 83,952 | 5,960 | 168,548 | 13,045 | |
| Gains from Disposal of Fixed Assets | -- | -- | (26) | ||
| Gain from Investment | -- | -- | |||
| Other expense | -- | (50) | (50) | ||
| Total Other Income and (Expense) | 83,952 | 5,910 | 168,522 | 12,995 | |
| Income Before Income Taxes | 354,805 | 949,042 | 1,127,696 | 1,764,458 | |
| Provision for Income Taxes | 103,653 | 242,728 | 299,532 | 457,905 | |
| Income After Provision for Income Taxes | 251,152 | 706,314 | 828,164 | 1,306,553 | |
| Gain from Operations of Discontinued Component (Net of Taxes) | 33,477 | 32,816 | |||
| Net Income before Minority Interest | 251,152 | 739,791 | 828,164 | 1,339,369 | |
| Minority Interest | -- | 3,482 | -- | 17,268 | |
| Net Income | $ 251,152 | $ 736,309 | $ 828,164 | $ 1,322,101 | |
| Basic and diluted income per share | 0.01 | 0.04 | 0.04 | 0.07 | |
| Weighted average common shares outstanding | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | |
| CHINA ANIMATION DEVELOPMENT, INC. AND SUBSIDIARIES | ||||
| CONSOLIDATED BALANCE SHEETS | ||||
| 2009 | ||||
| DECEMBER 31 | JUNE 30 | |||
| (Unaudited) | (Audited) | |||
| ASSETS | ||||
| Current Assets: | ||||
| Cash and Cash Equivalents | $ 1,069,023 | $ 2,282,786 | ||
| Accounts Receivable, net | 1,113,182 | 1,388,599 | ||
| Employee Advances | 4,287 | 2,234 | ||
| Advanced to Suppliers | -- | 1,443,440 | ||
| Interest Receivable | 55,013 | 54,786 | ||
| Prepaid Expenses | 1,426,838 | 84,202 | ||
| Total Current Assets | 3,668,343 | 5,256,047 | ||
| Non-current Assets | ||||
| Property, Plant & Equipment, net | 4,566,790 | 3,929,257 | ||
| Land Use Right and Other Intangible Assets, net | 2,960,290 | 1,106,870 | ||
| Long Term Investment | 2,200,500 | 2,191,457 | ||
| Total Non-current Assets | 9,727,580 | 7,227,584 | ||
| Total Assets | $ 13,395,923 | $ 12,483,631 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
| Current Liabilities: | ||||
| Accounts Payable | $ 71,255 | $ 29,219 | ||
| Advance from Customers | -- | -- | ||
| Payroll Payable | 1,817 | -- | ||
| Tax Payable | 138,737 | 214,471 | ||
| Accrued Expenses and Other Payable | 67,509 | 64,964 | ||
| Total Current Liabilities | 279,318 | 308,654 | ||
| Long-Term Liabilities: | ||||
| Loan Payable | 66,000 | 5,000 | ||
| Total Long-Term Liabilities | 66,000 | 5,000 | ||
| Total Liabilities | 345,318 | 313,654 | ||
| Stockholders' Equity: | ||||
| Common Stock, par value $0.001, 500,000,000 authorized 20,000,000 shares issued and outstanding | 20,000 | 20,000 | ||
| Additional Paid in Capital | 6,223,717 | 6,223,717 | ||
| Accumulated Other Comprehensive Income | 1,814,442 | 1,761,978 | ||
| Reserved Fund | 705,738 | 341,524 | ||
| Retained Earnings | 4,286,708 | 3,822,758 | ||
| Total Stockholders' Equity | 13,050,605 | 12,169,977 | ||
| Total Liabilities and Stockholders' Equity | $ 13,395,923 | $ 12,483,631 | ||