NEW YORK, June 1 /PRNewswire-Asia-FirstCall/ -- China Agri-Business, Inc. (OTC Bulletin Board: CHBU - News) a manufacturer of biochemical agricultural application products in China, announced its financial results for the three months ended March 31, 2009.
Sales for the first quarter of 2009 totaled $469,572, an increase of $130,128, or 38.3% as compared to sales of $339,444 for the same quarter ended March 31, 2008. Net income for the quarter ended March 31, 2009 was $106,916, a decrease of 8%, or $9,412, as compared to net income of $116,328 for the quarter ended March 31, 2008. The decrease is largely a result of a non cash interest expense of $56,582, which represents amortization expense related to the convertible notes issued by the Company in September 2008. Without this expense, net income would have been $163,498, an increase of 41%.
Liping Deng, President and CEO of China Agri-Business, commented on the Company's performance: "Our revenues in 2008 were adversely affected by the natural and weather related disasters that occurred in China during 2008. While agricultural production in the affected areas has not yet fully recovered, and we expect that our sales in these areas will continue to be negatively impacted continue through the second quarter of 2009. We are hopeful that farming output will return to earlier levels over the next year."
Mr. Deng went on to say, "As an effort to offset the influence of weather conditions, we are particularly enthusiastic about our Super Chain Sales Partner Program launched in the fourth quarter of 2008. The purpose of this campaign is to establish a closer relationship with farmers through agricultural cooperatives in the rural areas of China. We expect that this effort will result in increasingly larger revenues in the future. As of March 31, 2009, 61 retailers in the Shaanxi province and approximately 39 retailers in the Hunan province have participated in the program. The revenue from those Super Chain Sales Partners was approximately $26,000 during the first quarter 2009."
China Agri-Business, Inc.
Financial Highlights
March 31, December 31,
2009 2008
Current Assets
Cash and cash equivalents $8,570,966 $8,312,636
Accounts receivable, net 37,881 45,165
Inventory 65,217 47,113
Prepaid and other assets 36,761 29,674
Total Current Assets 8,710,825 8,434,588
Property, plant and equipment, net 126,922 231,278
Investment in Tienwe Technology 878,400 879,420
Deferred financing costs, net 151,505 178,879
Intangible assets, net 19,044 59,495
Total Assets $9,886,696 $9,783,660
Current Liabilities
Accounts payable and accrued
liabilities $215,701 $234,007
Long Term Liabilities
Convertible notes, net 352,478 327,020
Stockholders' Equity
Common stock par value $.001 per
share; authorized 100,000,000
shares;
issued and outstanding 12,958,574
and 12,958,574 shares,
respectively 12,959 12,959
Additional paid-in capital 4,369,786 4,369,786
Retained earnings 3,761,128 3,654,212
Accumulated other comprehensive
income 1,174,644 1,185,676
Total stockholders' equity 9,318,517 9,222,633
Total Liabilities and Stockholders'
Equity $9,886,696 $9,783,660
Results of Operations Three Months Ended
March 31,
2009 2008
Sales of products $469,572 $339,444
Cost of goods sold 146,242 103,591
Gross profit 323,330 235,853
Selling, general and administrative
expenses 164,351 124,434
Income from operations 158,979 111,419
Interest (expense) income (52,063) 4,909
Net income $106,916 $116,328
Earnings per common share:
Basic and Diluted $0.01 $0.01
ABOUT CHINA AGRI-BUSINESS, INC.
China Agri-Business, Inc., through its operating company in China, Shaanxi Xin Sheng Centennial Agriculture and Technology Co., Ltd. manufactures and sells non-toxic fertilizer, bactericide and fungicide products used for farming in China. Crops grown with Xinsheng's products are eligible to qualify for the "AA Green Food" rating administered by the China Green Food Development Center, an agency under the jurisdiction of the Ministry of Agriculture of the People's Republic of China (However, our products themselves do not bear the "AA green food" designation). The green food rating system, which consist of an "A" rating and a more stringent "AA" rating. The "AA" rating indicates that the crops contain minimal chemical residue from fertilizers.
The Company's two primary product groups are organic fungicides (Xinsheng Luyuan brand) and bactericides (Xinsheng Lufeng brand). The Company has a total of five brands and produces more than 50 different proprietary applications, including products designed to stimulate plant growth, condition soil, and prevent and cure plant diseases and parasites. The Company has products for a variety of crops, including potatoes, vegetables, cotton and fruit plants, and orchard trees. The products can be used either alone or to supplement other products. The Company Xinsheng's manufacturing facilities are located in Xian, Shaanxi Province, China.
Cautionary Note Regarding Forward-Looking Statements
This document contains forward-looking information about the Company's operating results and business prospects that involve substantial risks and uncertainties. Statements that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. These statements include, but are not limited to, statements about the Company's plans, objectives, expectations, strategies, intentions or other characterizations of future events or circumstances and are generally identified by the words "may," "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "could," "would," and similar expressions. Because these forward-looking statements are subject to a number of risks and uncertainties, the Company's actual results could differ materially from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under the heading "Risk Factors" in the Company's annual report on Form 10-K for the fiscal year ended December 31, 2008, filed with the United States Securities and Exchange Commission and available at http://www.sec.gov . The Company assumes no obligation to update any such forward-looking statements.
