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Tianli Agritech Reports First Quarter 2012 Results

-Revenue increased 32% to $7.8 million

-Retail operations generated $1.1 million in revenues

-Generated $2.4 million in cash from operations

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WUHAN, China, May 14, 2012 /PRNewswire-Asia/ -- Tianli Agritech, Inc. (NASDAQ: OINK), a leading producer of breeder and market hogs, and retailer of pork products, headquartered in Wuhan City, China, today announced its financial results for the first quarter of 2012.  

First quarter 2012

Summarized First Quarter 2012 Results
(Dollar Figures Rounded – Percentages based on Actual Results)


Q1 2012

Q1 2011

+/-

Sales

$7.8 million

$5.9 million

+32%

Gross Profit

$1.7 million

$2.5 million

-29%

Selling, General and Administrative Expenses

$1.1 million

$0.8 million

+33%

Net Income

$0.7 million

$1.8 million

-62%

EPS*

$0.07

$0.18

-61%

*EPS calculations are based on 10,135,000 shares and 10,125,000 shares, the weighted average number of shares outstanding during Q1 2012 and Q1 2011, respectively.

Sales for the first quarter of 2012 increased 32%, with breeder hog sales declining 17% and market hog sales increasing by 34%. The Company sold 27,095 hogs in total compared to 23,020 hogs in the comparable period in 2011.   Market pricing for both retail and breeder hogs year over year was relatively flat. In addition to the increase in our sales as a result of the overall growth in hog sales, our sales also increased as a result of the inclusion of our retail sales which began in the third quarter of 2011 and constituted 14% of our revenue in the first quarter of 2012.

Sales by Products

 (Dollar Figures Rounded – Percentages based on Actual Results)




















                    Q1 2012


Q1 2011

Products


No. of Hogs
Sold




Sales
Revenues


No. of Hogs
Sold




Sales
Revenues

Breeder Hogs


6,766





$

$2.0 million


7,884






$2.4 million

Market Hogs


20,329





$

$4.7 million


15,136






$3.5 million

Retail








$1.1million








-

Total


27,095





$

$7.8 million


23,020






$5.9 million





















Breeder hog revenues in the three months ended March 31, 2012 fell 17% over the comparable 2011 period and comprised 26% of our revenues for the quarter.  The decline in breeder hog sales is attributed to higher feed costs which caused farmers to forego purchases of breeders.  The Company sold 6,766 breeder hogs in the first quarter of 2012, down 14% from the same period last year.   Conversely, sales of market hogs were up approximately 34% over the prior year due to higher volume and increased demand for retail pork products.  Tianli also recorded $1.1 million of revenues from its retail business which began in the third quarter of 2011. The cooperative arrangement with An Puluo  is currently distributing pork products under the Tianli-An Puluo brand in over 50 major retail outlets in Great Wuhan, including Wal-mart, Zon 100and RT Mart.

Gross profit was $1.7 million in the first quarter of 2012, a 29% decrease from the same period last year. Gross margin was 22.3% in the first quarter of 2012 compared to 41.7% in the first quarter of 2011 as a result of significantly higher feed costs and lower pork prices.  The decrease in the gross margin of our hog segment was partially offset by the margins obtained by our retail business, which was approximately 40% in the first quarter of 2012.

Selling, general and administrative (SG&A) expenses were $1.1 million in the first quarter of 2012, an increase of approximately $0.3 million from $0.8 million in the first quarter of 2011. The biggest contributor to the year-over-year increase in SG&A expenses was our retail business. Operating margins were 8.5% and 28.0% in the first quarter of 2012 and 2011, respectively.

Net income for the three months ended March 31, 2012 was approximately $0.7 million, down 62% from the same period last year. Earnings per fully diluted share were $0.07 compared to $0.18 last year.

Tianli's Chairwoman and CEO, Ms. Hanying Li, stated, "We continue to see strong demand across each of our businesses.  In the first quarter of 2012 we sold 34% more market hogs while our breeder hog sales were negatively impacted by a weak market and the contamination that occurred in December 2011, which resulted in a loss of approximately 500 breeder hogs. I am extremely pleased with the progress of our black hog program, which will become a big contributor to our sales later this year. We anticipate further growth by expanding the number of farms that participate in our program with local cooperatives to raise Enshi black hogs." 

Financial Position

As of March 31, 2012, the Company had $6.8 million in cash, compared to $6.5 million as of December 31, 2011. Working capital was $11.6 million, down from $11.9 million as of December 31, 2011.  Because the Company conducts its hog sales on cash on delivery basis, it has low levels of accounts receivable outstanding, which totaled $0.6 million at March 31, 2012. Inventories were $10 million compared to $9.9 million at the end of 2011. 

Tianli generated approximately $2.4 million in cash from operating activities and spent $1.7 million on capital expenditures and breeding stock during the first three months of 2012, primarily to support its black hog program expansion. 


Earnings Conference Call

Ms. Hanying Li, Chairwoman and CEO, Mr. Guofu Zhang, CFO and Mr. Simon Guo, Tianli's VP and US Representative, will host the conference call. To attend the call, please use the information below for either dial-in access or webcast access. When prompted on dial-in, ask for the "Tianli Agritech, Inc. call" and/or be prepared to provide the conference ID.

To attend the call, please use the information below for either dial-in access or webcast access. When prompted on dial-in, ask for "Tianli Agritech First Quarter 2012 Conference Call".

Conference Call


Date:

Tuesday, May 15, 2012

Time:

9:00 am Eastern Time, US

Conference Line Dial-In (U.S.):

+1-877-317-6776

International Dial-In:

+1-412-317-6776

Conference ID:

Tianli Agritech First Quarter 2012 Conference Call

Webcast link:

http://webcast.mzvaluemonitor.com/Home/Login/ad110092-10c8-484b-9e20-dc65b82819ba

Please dial in at least 10 minutes before the call to ensure timely participation. A playback will be available through May 23, 2012. To listen, please call +1-877-344-7529 within the United States or +1-412-317-0088 if calling internationally.

This call is being webcast by MZ Technologies and can be accessed by clicking on the following link: http://webcast.mzvaluemonitor.com/Home/Login/ad110092-10c8-484b-9e20-dc65b82819ba


About Tianli Agritech, Inc.

Tianli Agritech, Inc. is in the business of breeding, raising and selling hogs in the People's Republic of China and is developing a retail channel for pork products including high-value, black hog meat. The company is focused on growing high quality hogs for sale for breeding and meat purposes. The company conducts genetic, breeding and nutrition research to steadily improve its production capabilities.

Forward-Looking Statements

This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulation, and other risks contained in reports filed by the company with the Securities and Exchange Commission. All such forward-looking statements, whether written or oral, and whether made by or on behalf of the company, are expressly qualified by the cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.

For more information, please contact:


Company – US
Tianli Agritech, Inc.
Mr. Simon Guo
Vice President and US Representative
Phone:+1-347-343-0580
Email: simon@tianli-china.com
Web: http://www.tianli-china.com


Company – CHINA
Tianli Agritech, Inc.
Ms. Joyce Shen
Administrative Secretary
Phone: 86-27-82740726  x 895
Email: ir@tianli-china.com
Web
: http://www.tianli-china.com

Investor Relations
Mr. John Mattio
MZ Group, SVP
Phone: (212) 730-7130
Email: john.mattio@mzgroup.com
Web: http://www.mz-ir.com

TIANLI AGRITECH, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(AMOUNTS EXPRESSED IN US DOLLARS)



March 31, 2012


December 31, 2011



(Unaudited)



ASSETS





Current Assets:





Cash and cash equivalents

$

6,788,660

$

6,518,533

Accounts receivable


550,546


994,329

Inventories


10,048,721


9,924,594

Advances to suppliers


149,687


7,868

Prepaid expenses


99,952


174,893

Loan to An Puluo


1,108,964


1,101,582

Other receivables


186,413


172,668

Total Current Assets


18,932,943


18,894,467

Plant and equipment, net


20,134,492


17,677,831

Construction in progress


1,972,024


3,202,483

Biological assets, net


3,952,296


3,886,580

Long-term prepaid expenses


1,821,535


1,883,445

Land use rights, net


1,520,475


1,522,709

Total Assets

$

48,333,765

$

47,067,515






LIABILITIES AND STOCKHOLDERS' EQUITY





Current Liabilities:





Short-term loans

$

4,752,701

$

4,721,064

Accounts payable and accrued liabilities


166,643


316,473

Due to An Puluo


697,283


1,090,563

Other payables


1,598,317


781,037

Due to related party


120,923


120,326

Total Liabilities


7,335,867


7,029,463






Stockholders' Equity:





Common stock ($0.001 par value, 50,000,000 shares





authorized, 10,135,000 shares issued and outstanding on March 31, 2012 and December 31, 2011)


10,135


10,135

Additional paid in capital


13,525,619


13,520,276

Statutory surplus reserves


2,416,647


2,416,647

Retained earnings


22,501,770


21,795,072

Accumulated other comprehensive income


2,543,727


2,295,922

Total Stockholders' Equity


40,997,898


40,038,052

 Total Liabilities and Stockholders' Equity

$

48,333,765

$

47,067,515

 

TIANLI AGRITECH, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(AMOUNTS EXPRESSED IN US DOLLARS)

(UNAUDITED)

 



For the Three Months Ended March 31,



2012


2011

Revenue

$

7,806,189

$

5,906,966

Cost of goods sold


6,067,706


3,443,820

    Gross profit


1,738,483


2,463,146






General and administrative expenses


745,745


769,974

Selling expenses


329,356


37,182

Income from operations


1,075,101


807,156






Other income (expense):





Interest expenses and bank charges


(93,655)


(10,273)

Subsidy income


134,647


190,297

Other income (expense)


2,324


1,455

Total other income (expense)


43,316


181,479






Income before income taxes


706,698


1,837,469

Income taxes


-


-

Net income

$

706,698

$

1,837,469






Basic and diluted earnings per share

$

0.07

$

0.18

Basic and diluted weighted average shares


10,135,000


10,125,000






Comprehensive income:





Net income

$

706,698

$

1,837,469

Unrealized foreign currency translation adjustment


247,805


187,781

Comprehensive income

$

954,503

$

2,025,250

 

See notes to financial statements. 


TIANLI AGRITECH, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(AMOUNTS EXPRESSED IN US DOLLARS)

(UNAUDITED)



For the Three Months Ended March 31,



2012


2011

CASH FLOWS FROM OPERATING ACTIVITIES





Net income

$

706,698

$

1,837,469

Adjustments to reconcile net income to net cash





 provided by operating activities:





Depreciation and amortization


682,040


435,328

Amortization of prepaid rental expenses


74,705


-

Provision for doubtful accounts


6,840


-

Impairment on inventories


-


3,255

Stock-based compensation


5,343


90,835

Changes in operating assets and liabilities:





Accounts receivable


451,491


(117,952)

Inventories


(57,753)


(1,888,354)

Advances to suppliers


(142,095)


(525,092)

Prepaid expenses


75,126


(116,843)

Other receivables


(19,457)


232,903

Accounts payable and accrued liabilities


(152,305)


40,391

Other payables


815,144


-

Net cash provided by (used in) operating activities


2,445,777


(8,060)






CASH FLOWS FROM INVESTING ACTIVITIES





Purchase of plant and equipment


(63,687)


(1,504,405)

Deposits for purchase of equipment


-


(913,061)

Addition to construction in progress


(1,331,897)


(198,652)

Purchase of biological assets


(351,879)


(1,119,453)

Purchase of intangible assets


-


(509,025)

Net cash used in investing activities


(1,747,463)


(4,244,596)






CASH FLOWS FROM FINANCING ACTIVITIES





Due to An Puluo


(401,517)


-

Net cash used in financing activities


(401,517)


-






EFFECT OF EXCHANGE RATE CHANGES ON CASH


(26,670)


270,006

NET INCREASE (DECREASE) IN CASH


270,127


(3,982,650)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD


6,518,533


7,983,793

CASH AND CASH EQUIVALENTS, END OF PERIOD

$

6,788,660

$

4,001,143






SUPPLEMENTAL DISCLOSURES:





Cash paid during the period for:





Interest expense paid

$

100,082

$

8,066

Income tax paid

$

-

$

-







SOURCE Tianli Agritech, Inc.



RELATED LINKS
http://www.tianli-china.com
http://www.mz-ir.com
http://webcast.mzvaluemonitor.com/Home/Login/ad110092-10c8-484b-9e20-dc65b82819ba

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