Super Chain Store Program Achieved Preliminary Success in Hunan Province
NEW YORK, Aug. 18 /PRNewswire-Asia-FirstCall/ -- China Agri-Business, Inc. (OTC Bulletin Board: CHBU) a manufacturer and distributor of organic agricultural application products in China, has released its financial results for the three and six months ended June 30, 2009.
Revenue for the quarter ended June 30, 2009 totaled $703,875, a decrease of 40% as compared to revenue of $1,182,746 for the quarter ended June 30, 2008. Revenue for the six months ended June 30, 2009 totaled $1,173,447, a decrease of 23% as compared to revenue of $1,522,190 during the comparable period in 2008.
Net income for the six months ended June 30, 2009 was $353,817, a decrease of 55%, or $439,394, as compared to $793,211 for the six months ended June 30, 2008. The decrease in net income was primarily due to the decrease in sales, an increase in selling and marketing expenditures and an increase in non cash interest expense.
The year over year decrease in sales is attributable to the continued negative impact of severe weather conditions in China during 2008 as well as the continued global financial crisis. It was estimated that farmer investment in agriculture production decreased by 40% during the period from October 2008 to March 2009, compared to the same period one year ago. These two events contributed to lower farming revenues in 2008. The farmers in the disaster affected areas, in return, are reluctant to buy more expensive organic fertilizer.
Liping Deng, President and Chief Executive Officer of China Agri-Business, commented on the Company's performance stating, 'As an effort to offset the influence of weather conditions, we launched a Super Chain Sales Partner Program 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 in addition to the traditional sales network.'
To date, Chian Agri has established 42 Super Chain Stores in Hunan province and 61 in Shaanxi province. Total sales attributable to these 103 Super Chain Stores were approximately $154,400 during the six months ended June 30, 2009. Sales to Super Chain Stores helped the Company to indemnify the sluggish sale to some extent. Super Chain Store Program achieved preliminary success in Hunan province. During Six months ended June 30, 2009, the sales to Hunan province counted for 13.6% of our total sales. Among those sales, 17.4% was contributed by those 42 Super Chain Stores.
Mr. Deng went on to say, 'We will continue to focus on sales. Next, we will help farmers to sell their organic agricultural products. We have a plan to establish an organic agricultural products market place in Xian city for the farmers who used our products. We expect our revenue growth to return to earlier levels by the end of 2009.'
China Agri-Business, Inc.
Financial Highlights
June 30, December 31,
2009 2008
Current Assets
Cash and cash equivalents $8,887,933 $8,312,636
Accounts receivable, net 37,249 45,165
Inventory 79,067 47,113
Prepaid and other assets 27,720 29,674
Total Current Assets 9,031,969 8,434,588
Property, plant and equipment, net 116,491 231,278
Investment in Tienwe Technology 878,400 879,420
Deferred financing costs, net 124,685 178,879
Intangible assets, net 15,995 59,495
Total Assets $10,167,540 $9,783,660
Current Liabilities
Accounts payable and accrued
liabilities $224,374 $234,007
Long Term Liabilities
Convertible notes, net 377,715 327,020
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 4,008,029 3,654,212
Accumulated other comprehensive
income 1,174,677 1,185,676
Total stockholders' equity 9,565,451 9,222,633
Total Liabilities and Stockholders'
Equity $10,167,540 $9,783,660
Results of Operations
Six Months Ended
June 30,
2009 2008
Sales of products $1,173,447 $1,522,190
Cost of goods sold 334,894 458,577
Gross profit 838,553 1,063,613
Gross profit rate 71.46% 69.87%
Selling, general and administrative
expenses 383,145 281,919
Income from operations 455,408 781,694
Interest (expense) income (101,591) 11,517
Net income $353,817 $793,211
Earnings per common share:
Basic and Diluted $0.03 $0.06
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.
Safe Harbor and Cautionary Statement
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.
SOURCE China Agri-Business, Inc.
Source: PR Newswire (August 18, 2009 - 8:20 AM EDT)
