AgFeed Industries, Inc. Announces Preliminary Results for the Second Quarter
Aug 02, 2011, 11:30 ET
NEW YORK, Aug. 2, 2011 /PRNewswire-Asia/ -- AgFeed Industries, Inc. (Nasdaq: FEED, NYSE Alternext: ALHOG) ("AgFeed" or the "Company"), an international agribusiness with operations in the U.S. and China, today at its annual shareholders' meeting announced its preliminary results for the second quarter of 2011.
Today, AgFeed is on the verge of completing its transition from a company whose sole focus was China to one which has the majority of its operations in the United States and views its business operations and opportunities on a global basis.
Our strategy is to establish a global and vertically integrated controlled production system. We will efficiently breed and raise hogs to market weight and deliver live animals or specified harvested parts to production/consumer marketing partners in core markets. Our global production system will be structured to assure our clients and business partners a reliable supply of competitively priced pork. We expect to initially supply pork from our established production base in the United States and our burgeoning production base in China. Longer term, we will consider establishing production bases or sources of supply in other low cost pork production centers. We will be driven by food safety, operating efficiency, sustainability and environmental stewardship.
For the second quarter of 2011, the Company expects to report revenues of approximately $84.0 million and a net loss of approximately $17 million for the three months ended June 30, 2011. This loss includes an expense of $9.2 million related to the collection of outstanding accounts receivable in the Company's Chinese animal nutrition business and an additional $5.0 million of bad debt allowance to increase its bad debt provision from $1.9 million to $7.0 million. Accordingly, we expect accounts receivable to decrease by approximately $14.2 million. The operating pressures facing the Company's customers has led management and the board to be aggressive in establishing reserves due to concerns regarding credit quality. The Company's leadership remains committed to pursuing every available remedy to collect all amounts due.
The Company also announced that it will withdraw the registration statement filed on Form F-1 relating to the spin-off of its animal nutrition business due to market conditions.
In its ongoing effort to rationalize its capital structure, the Company also noted that it had exchanged a majority of the warrants issued in May 2009 for shares of common stock. This exchange reduced the number of fully diluted shares outstanding by 349,447.
ABOUT AGFEED INDUSTRIES, INC.
NASDAQ Global Market Listed AgFeed Industries (www.agfeedinc.com) is an international agribusiness with operations in the U.S. and China. AgFeed has two business lines: animal nutrition in premix, concentrates and complete feeds and hog production. In the U.S., AgFeed's hog production unit, M2P2, is a market leader in setting new standards for production efficiency and productivity. AgFeed believes the transfer of these processes, procedures and techniques will allow its new Western-style Chinese hog production units to set new standards for production in China. China is the world's largest pork market consuming 50% of global production and over 62% of total protein consumed in China is pork. Hog production in China currently enjoys income tax free status.
SAFE HARBOR DISCLOSURE NOTICE
Certain statements regarding AgFeed Industries set forth in this press release contain forward-looking information and speak only as of the date of such statement. You can identify these statements by the fact that they use words such as "will," "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "target," "forecast" and other words and terms of similar meaning in connection with any discussion of future operating or financial performance or business plans and prospects. This forward-looking information is subject to numerous material risks, uncertainties and assumptions, certain of which are beyond the control of AgFeed Industries, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, environmental risks, competition from other industry participants, stock market volatility, ability to access sufficient capital from internal and external sources. Readers are cautioned that the material assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise. Actual results, performance or achievement could differ materially from those expressed in, or implied by, this forward-looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits that AgFeed Industries will derive therefrom. AgFeed Industries disclaim any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. For additional information and risk factors that could affect AgFeed Industries, see its filings with the Securities and Exchange Commission, including "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations," including "Cautionary Statement for Forward-Looking Statements," set forth in the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2011. The information contained in this press release is made as of the date of the press release, even if subsequently made available by AgFeed Industries on its website or otherwise.
Contact: Investor Relations: AgFeed Industries, Inc.
Tel: (917) 804-3584
Email: [email protected]
The Company's policy is to handle all questions by email to [email protected] and they will be answered as soon as possible.
SOURCE AgFeed Industries, Inc.
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