Renmin Tianli Group, Inc. Reports Unaudited Financial Results for First Quarter 2018

WUHAN CITY, China, May 14, 2018 /PRNewswire/ -- Renmin Tianli Group, Inc. (NASDAQ:ABAC) ("Renmin Tianli" or the "Company"), a producer of breeder hogs, market hogs and black hogs, as well as specialty processed black hog pork products sold through retail outlets and the internet, with headquarters in Wuhan City, Hubei Province, China, today announced its financial results for the three months ended March 31, 2018.

Mr. Luchang Zhou, Chief Executive Officer of Renmin Tianli, commented, "With total number of hogs sold increasing by 23.7% year-over-year, our hog farming business performed well during the first quarter that more than offset the decrease in blended average selling price ("ASP") and the moderate decrease in our retail business, leading to an 8.2% increase in total revenues and improvement in both margins and profitability. Looking ahead, as we continue to focus on improving our inventory turnover rate and managing our expenses, we anticipate a stabilization in our hog farming business despite uncertainty in hog pricing and feed costs."

First Quarter 2018 Financial Results

Revenues for the first quarter of 2018 increased by $0.55 million, or 8.2%, to $7.23 million from $6.68 million for the same period of last year. The increase in overall revenues was due to an increase in revenues from regular hog sales partially offset by a decrease in revenues from our black hog program.

Revenues from hog farming, which includes sales of regular breeder hogs, regular market hogs, and black hogs, increased by $0.69 million, or 11.6%, to $6.67 million for the first quarter of 2018 from $5.97 million for the same period of last year. The Company sold a total of 37,373 regular breeder hogs, regular market hogs and black hogs with a blended average selling price of $178 per hog during the first quarter of 2018, compared to 30,217 hogs sold and a blended average selling price of $198 per hog for the same period of last year.

Revenues for the first quarter of 2018 from regular breeder hog sales increased by 44.9% to $1.01 million with the number of regular breeder hogs sold increasing by 34.3% to 3,810 hogs and the average selling price of regular breeder hogs increasing by 7.9% to $265 per hog. Revenues for the first quarter of 2018 from regular market hog sales increased by 18.9% to $3.38 million as the number of regular market hogs sold increased by 32.8% to 22,308 hogs while the average selling price of regular market hogs decreased by 10.5% to $152 per hog. Revenues for the first quarter of 2018 from black market hogs decreased by 6.5% to $2.28 million with the number of black hogs sold increasing by 6.3% to 11,255 hogs and the average selling price of black hogs decreasing by 12.0% to $202 per hog.

We sold 107,471 kilograms of specialty black hog pork products through retail at approximately $5 per kilogram, generating revenues of $0.56 million for the first quarter of 2018. This compared to136,682 kilograms sold at approximately $5 per kilogram and revenues of $0.71 million for the same period of last year. These revenues, combined with the sales of black market hogs, led to $2.84 million in revenues from our black hog program for the first quarter of 2018, compared to $3.14 million for the same period of last year.

Gross profit

Cost of goods sold increased by $0.32 million, or 5.5%, to $6.06 million for the first quarter of 2018 from $5.74 million for the same period of last year. Cost of goods sold for hog farming increased by $0.42 million, or 7.9%, to $5.68 million for the first quarter of 2018 from $5.26 million for the same period of last year. Cost of goods sold for retail decreased by $0.10 million, or 20.5%, to $0.38 million for the first quarter of 2018 from $0.48 million for the same period of last year.

Overall gross profit increased by $0.23 million, or 24.7%, to $1.17 million for the first quarter of 2018 from $0.94 million for the same period of last year. This increase in our gross profit was primarily related to an increase in gross profit of $0.28 million, or 39.2%, for our hog farming segment and partially offset by a decrease in gross profit of $0.05 million, or 20.2%, for retail. Gross profit for hog farming and retail were $0.99 million and $0.18 million, respectively, for the first quarter of 2018, compared to $0.71 million and $0.23 million, respectively, for the same period of last year.

Overall gross margin was 16.2%, with gross margins for hog farming and retail of 14.8% and 32.4%, respectively, for the first quarter of 2018. This compared to overall gross margin of 14.0%, and gross margins for hog farming and retail of 11.9% and 32.2%, respectively, for the same period of last year.

Operating income

Total operating expenses, including general and administrative expenses and selling and marketing expenses, increased by $0.08 million, or 8.3%, to $0.98 million for the first quarter of 2018 from $0.91 million for the same period of last year. Operating income increased by $0.16 million, or 551.3%, to $0.18 million for the first quarter of 2018 from $0.03 million for the same period of last year. Operating margin for the first quarter of 2018 was 2.6%, compared to 0.4% for the same period of last year.

Net income and EPS

Net income was $0.20 million, or $0.025 per basic and diluted share, for the first quarter of 2018, compared to $0.03 million, or $0.004 per basic and diluted share, for the same period of last year.

Financial Condition

As of March 31, 2018, the Company had cash and cash equivalents of $66.13 million, compared to $62.64 million at the end of 2017. Working capital as of March 31, 2018 was $68.83 million as compared to $65.12 million at December 31, 2017. Net cash provided by operating activities was $0.96 million for the first quarter of 2018, compared to $1.64 million for the same period of last year.

Recent Developments

On April 30, 2018, the Company completed the acquisition of a 10% equity interest in Youyang County Jinzhu Forestry Development Co. Ltd. ("Jinzhu Forestry"), a bamboo cultivation and processing facility located in Youyang County, Chongqing, for a total consideration of RMB 18 million (approximately $2.8 million) and 2,000,000 shares of Renmin Tianli's common stock. Jinzhu Bamboo commenced operations in April 2016. It currently operates a bamboo plantation of approximately 3,853.5 mu (approximately 635 acres) on which it will construct a bamboo processing facility.

About Renmin Tianli Group, Inc.

Renmin Tianli Group, Inc. (the "Company"), previously known as Aoxin Tianli Group, Inc., is in the business of breeding, raising and selling breeder and market hogs in China. The Company also sells specialty processed black hog pork products through supermarkets and other retail outlets, as well as the internet.

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 demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulations, 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 this cautionary statement 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:

Tony Tian, CFA
Weitian Group LLC
Phone: +1-732-910-9692
Email: [email protected]

SOURCE Renmin Tianli Group, Inc.