China 3C Group, a retailer and wholesale distributor of consumer and business products in China, reported its financial results for the fourth quarter and full year of 2008. Net sales for the fourth quarter of 2008 totaled $84.9 million, a 22.9% increase compared to $69.1 million for the same period of the prior year. The company’s retail business accounted for approximately 68% of sales while the wholesale business generated approximately 32% of sales.
Net sales for last year increased 13% to $310.6 million, versus $276.0 million for 2007. General and administrative expenses for the year totaled $14.1 million, or approximately 4.5% of sales, compared to $13.6 million, or 4.9% of sales, in 2007. Income from operations for 2008 was $34.5 million, a slight decrease from the prior year. Net income was $26.8 million (or $0.51 diluted earnings per share) for 2008, compared to $22.9 million (or $0.44 diluted earnings per share) in 2007.
Mr. Zhenggang Wang, Chairman and Chief Executive Officer, commented, “We are very pleased to report solid full year and fourth quarter 2008 financial results, particularly as our fourth quarter results exceeded our preliminary revenue, net income and diluted EPS results announced in mid-January 2009. We believe that China 3C Group continues to benefit uniquely from its size and scale, strong customer and supplier relationships, its product breadth and selection and its pricing, all of which, in our view, have allowed us to expand our market position even during these challenging economic times.”
”We continue to see steady improvement to our balance sheet. We finished the year with over $32 million in cash. This was an increase from both the prior year and prior quarter and also takes into account a partial cash payment of approximately $7.3 million for the acquisition of Jinhua Boafa announced in late December 2008. We are pleased with the efficiencies of our operations, which are best demonstrated by our inventory turns, which turned 24 times in 2008. In addition, we have no debt, were cash flow positive from operations and ended 2008 with a book value per share of $1.66,” he added.
In conclusion, Wang commented, ”We believe that 2009 will be another solid year for China 3C Group. Consumer demand for our products remains steady and we continue to focus on expanding profits and minimizing operating expenses within our store-in-store locations. We also expect to see growth coming from our direct and franchise stores we expect to open this year. With the establishment of our franchise business, we believe that we have a great opportunity to increase our sales and profitability, create additional operating leverage and improve our brand visibility. We look forward to further establishing China 3C Group as a leading retailer and distributor of consumer electronic products in the eastern China region.”