New York, NY (PRWEB) April 05, 2013
Consumer Capital Group, Inc. (OTCBB: CCGN - News) ("CCG" or the "The Company"), primarily engaged in the development and operation of its retailing website "Chinese Consumer Market Network" which allows third-party merchants to sell their general merchandise products directly to consumers in the PRC and the U.S., as well as debit card business and meat distribution business, today announced that it released its financial results for the year ended December 31, 2012.
Jack Gao, President and Chief Executive Officer of CCG, commented, “Even though our e-commerce business decreased compared to 2011, we made some progress in our debit cards business. We are collaborating with Union Pay and Fuxin Bank in China to issue cobranded debit cards. The cards have all the financial functions of traditional bank cards and provide discounts and refunds to the holders from their consumptions with participating dealers. We made progress in constructing and testing the system for the debit cards in 2012.”
Selected Fiscal Year 2012 Financial Results
We derive our revenues from our e-commerce business and meat distribution business. We have realized zero revenue from our debit card business. Our net revenues for the year ended December 31, 2012 decreased to $6,823,880 from $7,783,719 for the year ended December 31, 2011, a decrease of $959,839 or 12.3%.
Our net revenues from e-commerce business for the year ended December 31, 2012 decreased to $1,153,389 from $2,155,027 for the year ended December 31, 2011, a decrease of $1,001,638 or 46.5%. The decrease was primarily due to a significant decrease in sales resulting from the restructuring of our sales team and less successful marketing activities.
Meat Distribution Business
Our net revenues from meat distribution business for the year ended December 31, 2012 increased to $5,670,491 in the year ended December 31, 2012 from $5,628,692 for the year ended December 31, 2011, an increase of $41,799 or 0.7%.
Cost of Sales
Cost of sales includes costs of our products, shipping charges from the suppliers and to our customers, and costs of packaging material associated with our meat distribution business. Cost and expenses associated with our e-commerce business, such as processing costs and transaction costs, are recognized as our selling expenses in our consolidated statements of comprehensive loss. Our cost of sales for the year ended December 31, 2012 increased to $5,595,790 from $5,564,088 for the year ended December 31, 2011, an increase of $31,702 or 0.6%. The increase was in line with the increase in revenues from the meat distribution business.
Our gross profit for the year ended December 31, 2012 decreased to $1,228,090 from $2,219,631 for the year ended December 31, 2011, a decrease of $991,541 or 44.7%. The decrease was primarily due to a decrease in sales from e-commerce business. Our gross profit margin for the year ended December 31, 2012 decreased to 18.0% from 28.5% for the year ended December 31, 2011. The decrease of our gross profit margin was primarily due to revenues from the meat distribution business accounting for a much higher percentage of our revenues, which has a lower profit margin than the e-commerce business.
Our operating expenses consist of selling expenses, and general and administrative expenses. Our total operating expenses for the year ended December 31, 2012 decreased to $2,561,388 from $4,433,532 for the year ended December 31, 20111, a decrease of $1,872,144 or 42.2%.
Selling expenses for the year ended December 31, 2012 decreased to $985,515 from $1,894,933 for the year ended December 31, 2011, a decrease of $909,418 or 48.0%. Selling expenses for the e-commerce business for the year ended December 31, 2012 decreased to $937,080 from $1,845,979 for the year ended December 31, 2011, a decrease of $908,899, or 49.2%. The decrease was in line with the decrease in sales in our e-commerce business. Selling expenses for the meat distribution business for the years ended December 31, 2012 and 2011 were $48,435 and $48,954, respectively.
General and administrative expenses for the year ended December 31, 2012 decreased to $1,575,873 from $2,538,599 for the year ended December 31, 2011, a decrease of $962,726, or 37.9%. The decrease was primarily due to a decreases in our professional expenses, management fee, share based compensation and welfare expenses.
The net cash used in operating activities was $1,783,227 for the year ended December 31, 2012, which was primarily due to a net loss of $1,285,670, an increases in other payables of $36,254, an increase in advance to suppliers of $440,242, an increase in accounts payable of $622,731, an increase of accounts receivable of $569,398 and an increase in deferred revenue of $112,386, partially offset by decreases in inventories of $493,572 and expenses from the issuance of common stocks to service providers of $486,533.
The net cash used in operating activities was $1,921,043 for the year ended December 31, 2011, which was primarily due to a net loss of $2,106,457, increases in inventories of $793,966, accrued liabilities of $784,435 and taxes payable of $465,460, partially offset by decreases in accounts payable of $770,344 and other payable of $980,251.
The net cash generated from or used in investing activities was nil for the year ended December 31, 2012.
The net cash used in investing activities was $107,843 for the year ended December 31, 2011, which was due to the purchase of property and equipment for the office renovation.
The net cash generated from financing activities was $1,342,942 for the year ended December 31, 2012, which was due to proceeds from related parties of $3,294,993, offset by payments to related parties of $1,952,051.
The net cash generated from financing activities was $483,064 for the year ended December 31, 2011, which was due to proceeds from related parties of $3,521,856, offset by payments to related parties of $3,177,920.
“We will continue to develop our debit card business and hope that it will become one of our major revenue resources. In 2012, we have built a team of experienced professionals for our E-commerce business.” said Mr. Gao. “At the same time, we are doing research of Chinese e-commerce industry and plan to make adjustments as necessary for our e-commerce business in 2013 to increase revenue.”
About Consumer Capital
We are primarily engaged in three different businesses: e-commerce services, meat distribution, and debit card business. We operate an online retail platform at http://www.ccmus.com for customers in China and another online platform at http://www.ccgusa.com for customers in the United State. Our online retail platforms allow third-party merchants to sell their general merchandise products directly to consumers in the PRC and the U.S. We differentiate ourselves from other e-commerce service providers by providing a variety of incentives to our existing customers in the PRC. Our member customers obtain bonus points for each purchase, which can be used to redeem cash value in their next purchase. When our customers’ accumulated purchases exceed pre-set thresholds, they will be upgraded to a higher membership level and will be entitled to additional incentives such as special discounts and higher bonus points on subsequent purchases. Our member customers may also receive awards from our daily sweepstakes program. We employ a system that escrows payments to third-party merchants for the goods until the consumer indicates that the order was satisfactorily fulfilled.
Safe Harbor Statements
This press release contains forward-looking statements made within the meaning and under the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward looking statements are based upon the current plans, estimates and projections of Consumer Capital's management and are subject to risks and uncertainties, which could cause actual results to differ from the forward looking statements. Such statements include, among others, those concerning market and industry segment growth and demand and acceptance of new and existing products; any projections of sales, earnings, revenue, margins or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements regarding future economic conditions or performance; uncertainties related to conducting business in China, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. Therefore, you should not place undue reliance on these forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: business conditions in China, general economic conditions; geopolitical events and regulatory changes, availability of capital, changes in the agricultural industry, the Company's ability to maintain its competitive position. Additional Information regarding risks can be found in the Company's Annual Report on Form 10-K the Company's recently filed Prospectus filed pursuant to Rule 424(b)(3) on the website of the U.S. Securities and Exchange Commission.
Mr. Jack Gao, President
Consumer Capital Group