Rodobo International, Inc. Announces Second Quarter 2010 Results
Revenue of $25.4 Million, up 68% compared to the first half of 2009
Net income of $6.1 Million, up 99% compared to the first half of 2009
HARBIN, China, May 17 /PRNewswire-Asia-FirstCall/ -- Rodobo International, Inc. (the "Company" or "Rodobo") (OTC Bulletin Board: RDBO), one of the leading independent dairy companies in China, reported financial results for the second quarter and the six months ended March 31, 2010.
Second Quarter 2010 Highlights:
-- Second quarter revenue was $15.3 million, up 143% from the second
quarter 2009
-- Gross profit was $6 million, an increase of 164% from the second
quarter 2009
-- Gross margin was 39% compared to 36% in the second quarter 2009
-- Net income was $3.9 million, or $0.17 per diluted share, compared to
$1.2 million, or $0.08 per diluted share, for the second quarter of
2009
-- Acquired subsidiaries, Ewenkeqi Beixue Dairy Co., Ltd. Hulunbeier
Beixue Dairy Co., Ltd., and Hulunbeier Hailaer Beixue Dairy Factory
(the "Beixue Group")
"Through acquisitions of the Beixue Group in February 2010, the Company reconsolidated the raw milk sources and distribution channels," stated Mr. Yanbin Wang, the Chairman and Chief Executive Officer of Rodobo. "These acquisitions will provide solid foundation for the Company's growth in a long term. We believe that it will contribute to the increase in our sales by the second half of the year and thereafter."
Second Quarter 2010 Results
Revenue for the second quarter ended March 31, 2010 was $15.3 million, an increase of 143% compared to the second quarter ended March 31, 2009. This increase was primarily driven by volume growth, with average selling prices remaining relatively flat over both periods. The new product series "Peers," launched in July 2009, contributed approximately $4.9 million to the second quarter revenue. The Beixue Group contributed $5.5 million to the second quarter revenue.
Gross profit for the second quarter of 2010 was $6.0 million, up 164% compared to the second quarter of 2009. The overall gross margin increased from 36% in the second quarter of 2009 to 39% in the second quarter of 2010. Overall gross margin was diluted due to the recent acquisition of lower-margin business. The Beixue Group had a gross margin of 8.4% in the second quarter of 2010. Excluding the margin dilution impact of the acquisition, gross margin actually improved from 36% in the second quarter of 2009 to 56% in the second quarter of 2010, primarily driven by the new high-margin baby/infant formula "Peer", which has a gross margin of 68% and accounted for approximately 49% of total sales (excluding sales from the Beixue Group) in the second quarter of 2010.
Operating income in the second quarter ended March 31, 2010 was $2.2 million, an increase of 193% compared to the same period last year. The increase is mainly attributed to the increase in net sales and the improvement in gross margin offsetting by the increase in operating expenses.
Net income for the second quarter ended March 31, 2010 grew 222% to $3.9 million compared with $1.2 million for the second quarter of 2009. This increase in net income was mainly attributable to the growth in sales, partially offset by an increase in cost of goods sold and operating expenses. This increase in net income was also attributable to $1.7 million of gain on bargain purchase in connection with the acquisitions completed on February 5, 2010.
Six Months Results
Revenue for the first half ended March 31, 2010 was $25.4 million, an increase of 68% compared to the first six months in 2009. The growth was primarily driven by higher volume sales and was also attributable to the launch of the new product line "Peers". Sales for "Peers" generated approximately $8.7 million in the period. Recently acquired subsidiaries, the Beixue Group, contributed $5.5 million in the period.
Gross profit for the six months ended March 31, 2010 was $11.3 million, up 67% compared to the same period last year. The overall gross margin remained flat at 45% for the first half ended March 31, 2010 compared to the same period last year. Overall gross margin was diluted due to the recent acquisition of lower-margin business. The Beixue Group has a gross margin of 8.4% for the six months ended March 31, 2010. Excluding the margin dilution impact of the acquisition, gross margin actually improved from 45% for the six months ended March 31, 2009 to 54% for the six months ended March 31, 2010, primarily driven by the high-margin new baby/infant formula "Peer", which has a gross margin of 69% and accounted for approximately 44% of total sales (excluding sales from the Beixue Group) in the six months ended March 31, 2010.
Operating income in the six months ended March 31, 2010 was $4.2 million, up 55% compared to $2.7 million in the same period last year.
Net income for the six months ended March 31, 2010 grew 99% to $6.1 million compared with $3.1 million for the six months ended March 31, 2009. This increase in net income was mainly attributable to the growth in sales, partially offset by an increase in cost of goods sold and operating expenses. This increase in net income was also attributable to a $1.7 million of gain on bargain purchase in connection with the acquisitions on February 5, 2010.
About Rodobo International, Inc.:
Rodobo International, Inc. is one of the leading non-state-owned dairy companies in China. Through its wholly-owned operating subsidiaries and variable interest entity, Rodobo International, Inc. is a producer and distributor of high-quality formula milk powder products for infants, children, the middle-aged and the elderly in China. The Company's products are sold under the brand names "Rodobo", "Healif" and "Peer" and are produced in cutting edge facilities under best quality control systems and in compliance with high industry standards.
Safe Harbor Statement
This press release and the statements of representatives of Rodobo International, Inc., and its consolidated subsidiaries (collectively, the "Company") related thereto contain, or may contain, among other things, "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact included herein are "forward-looking statements," including statements regarding: the impact of the recent acquisitions on the business and operations of the Company; the ability of the Company to achieve its commercial objectives including increased growth, revenues, earnings, and production capacity; the business strategy, plans and objectives of the Company; and any other statements of non-historical information. These forward-looking statements are subject to significant known and unknown risks and uncertainties and are often identified by the use of forward-looking terminology such as "projects," "may," "could," "would," "should," "believes," "expects," "anticipates," "estimates," "intends," "plans" or similar expressions. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward- looking statements as a result of a variety of factors, including those discussed in the periodic reports that are filed with the Securities and Exchange Commission and available on its website (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. The Company undertakes no duty to update these forward-looking statements except as required by law.
For more information, please contact:
Xiuzhen Qiao
Rodobo International Inc
Tel: +86-451-8226-5922
Email: [email protected]
Haiming Liu
Rodobo International Inc.
Tel: +86-13883931103
Email: [email protected]
Table to follow
RODOBO INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
(UNAUDITED)
For The Three Months For The Six Months Ended
Ended March 31, March 31,
2010 2009 2010 2009
Net sales $15,330,579 $6,303,017 $25,406,025 $15,163,842
Cost of goods sold 9,324,276 4,026,269 14,104,575 8,383,386
Gross profit 6,006,303 2,276,748 11,301,450 6,780,456
Operating expenses:
Distribution expenses 2,846,944 1,105,652 5,433,116 3,225,004
General and administrative
expenses 980,105 427,476 1,702,986 858,608
Total operating
expenses 3,827,049 1,533,128 7,136,102 4,083,612
Operating income 2,179,254 743,620 4,165,348 2,696,844
Subsidy income -- 438,730 273,897 438,730
Gain on bargain
purchase 1,677,020 -- 1,677,020 --
Interest expenses (25,563) -- (25,563) --
Other income (expenses) 20,499 14,768 22,889 (65,850)
Income before income
taxes 3,851,210 1,197,119 6,113,591 3,069,724
Provision for income
taxes -- -- -- --
Net income $3,851,210 $1,197,119 $6,113,591 $3,069,724
Other comprehensive
income:
Foreign currency
translation adjustment 9,230 (25,774) 7,046 (65,554)
Comprehensive income $3,860,440 $1,171,345 $6,120,637 $3,004,170
RODOBO INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, September 30,
2010 2009
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $6,295,761 $1,640,259
Accounts receivable, net 8,827,943 2,015,044
Other receivable 275,751 5,602
Loans to others 827,761 --
Inventories 2,679,354 1,576,723
Prepaid expenses 45,336 19,040
Advances to suppliers 1,847,547 --
Total current assets 20,799,453 5,256,668
Property, plant and equipment, net 19,996,180 738,537
Biological assets, net 3,355,742 2,499,625
Other assets:
Restricted cash 39,555 --
Loans to shareholders 820,904 --
Deposits on biological assets -- 988,818
Deposits on land and equipment 11,295,247 9,961,429
Intangible assets, net 10,338,783 4,526,117
Total other assets 22,494,489 15,476,364
Total Assets $66,645,864 $23,971,194
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term loans $1,677,439 $--
Accounts payable 4,824,438 1,246,818
Other payable 546,944 50,293
Accrued expenses 272,659 175,456
Advance from customers 2,026,093 --
Due to related parties 1,185,062 1,185,062
Total current liabilities 10,532,635 2,657,629
Temporary equity - series A preferred
stock, $0.0001 par value, 30,000,000
shares authorized, 2,000,000 shares
issued and outstanding as of March
31, 2010 4,100,000 --
Stockholders' equity
Common stock, $0.0001 par value,
200,000,000 shares authorized,
26,892,614 and 16,216,717 shares
issued and outstanding as of
March 31, 2010 and September
30, 2009, respectively 2,689 1,622
Additional paid in capital 33,033,045 4,355,085
Additional paid in capital - warrants 971,788 971,788
Subscription receivable (50,000) (50,000)
Retained earnings 21,303,451 15,189,860
Accumulated other comprehensive
income 852,256 845,210
Total stockholders' equity 56,113,229 21,313,565
Total Liabilities and Stockholders'
Equity $66,645,864 $23,971,194
SOURCE Rodobo International, Inc.
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