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CNGL China growth stock? Looks like they are achieving solid returns on their efforts. Chart at bottom.
China Nutrifruit Group Limited Announces Third Quarter of Fiscal 2010 Results
- Revenue increased 28% year-over-year to $17.8 million
- Net income increased 45% to $4.6 million
- Affirms FY 2010 and FY 2011 Guidance
DAQING, China, Feb. 5 /PRNewswire-Asia-FirstCall/ --
China Nutrifruit Group Limited (NYSE Amex: CNGL) ("China Nutrifruit" or "the Company"), a leading producer of premium specialty fruit based products in China ("PRC"), today reported financial results for the third fiscal quarter ended December 31, 2009.
Third Quarter Fiscal Year ("FY") 2010 Highlights
-- Net sales increased 28.4% year-over-year to $17.8 million
-- Gross profit increased 34.8% year-over-year to $8.1 million, with gross
margin of 45.7%
-- Operating earnings increased 40.6% year-over-year to $6.2 million, with
operating margin of 34.9%
-- Net income increased 44.7% year-over-year to $4.6 million, or $0.11 per
diluted share
-- Successfully raised aggregate gross proceeds of approximately $13.3
million in private placement financing
-- Began production of new glazed fruit production line at the Company's
Daqing facility in Heilongjiang Province, China
"China Nutrifruit had a strong third quarter with solid year-over-year growth in both revenue and net income. As planned, we successfully added a new glazed fruit production line during the quarter which will further boost sales of our rapidly growing glazed fruit products," commented Mr. Changjun Yu, Chairman of China Nutrifruit. "We experienced a healthy harvest with our facilities operating at a utilization rate in excess of 90%. Our new glazed fruit production line began production in December and will help us meet the growing market demand for our products."
Third Quarter FY 2010 Results
Net sales for the third quarter of FY 2010 increased 28.4% to $17.8 million, as compared to $13.9 million in the same quarter of fiscal 2009. The strong growth in sales was attributable to the increase in sales volume driven by rising market demand and growth in consumer spending. During the third quarter, net sales from concentrated juice products, which accounted for 47.2% of total net sales, were $8.4 million. Net sales from glazed fruit reached $5.4 million, contributing 30.1% of the net sales during the quarter compared to 6.1% in the prior year primarily due to increased sales of the Company's new blueberry glazed fruit product.
Gross profit for the third quarter of FY 2010 grew 34.8% to $8.1 million, from $6.0 million for the same period a year ago. Gross margin was 45.7% for the third quarter of FY 2010 compared to 43.5% in the third quarter of FY 2009. The increase in gross margin was mainly due to product mix changes resulting in increased sales of glazed fruit products which had a higher margin of 51.9%, compared with fruit concentrate and concentrate pulp products, which had gross margins of 44.4% and 28.3%, respectively, during the quarter.
In the third quarter of FY 2010, selling, general, and administrative expenses were $1.9 million, up 18.6% from $1.6 million in the same period last year. Selling expenses were $1.1 million, or 6.1% of net sales, compared to $0.9 million, or 6.8% of net sales, in the third quarter of FY 2009. Selling expenses as a percentage of net sales declined due to lower sales related travel expenses as the Company's established customer relationships resulted in a higher volume of repeat orders from existing customers. General and administrative ("G&A") expenses were $0.8 million, up 22.9% from $0.7 million a year ago. As a percentage of net sales, G&A expenses decreased to 4.6% compared to 4.8% in the third quarter of FY 2009.
Operating earnings in the third quarter of FY 2010 rose 40.6% to $6.2 million, from $4.4 million in the comparable period last year.
Provision for income taxes was $1.6 million compared to $1.1 million a year ago.
Net income in the third quarter of FY 2010 was $4.6 million, or $0.11 per diluted share, up 44.7% from $3.2 million, or $0.09 per diluted share a year ago. The calculation of diluted earnings per share for the third quarter of fiscal 2010 is based on 40.2 million shares compared to share count of 36.1 million in the third quarter of fiscal 2009.
Nine Months Results
For the nine months ended December 31, 2009, net sales were $46.5 million, up 28.4% from $36.2 million for the nine months ended December 31, 2009. Net sales from concentrated juice products increased 10.8% to $20.1 million from $18.1 million in the comparable period last year and accounted for 43.2% of total net sales. Net sales from glazed fruit grew 110.4% to $10.2 million from $4.8 million in the same period last year and accounted for 21.9% of net sales. Sales of concentrate pulp products increased 185.1% to $6.4 million, as compared to $2.2 million in the prior year, and accounted for 13.7% of total net sales.
Gross profit increased 26.6% to $21.8 million from $17.2 million a year ago. Gross margin was 46.8% in the first nine months of FY 2010 compared to 47.5% in the comparable period a year ago. Earnings from operations were $16.8 million, up 23.4% from $13.6 million last year. Net income for the nine months ended December 31, 2009 was $12.5 million, or $0.33 per diluted share, up 25.7% from $10.0 million, or $0.51 per diluted share, in the same period of FY 2009. The calculation of diluted earnings per share for the first nine months of FY 2010 is based on 37.5 million shares compared to share count of 19.5 million in the comparable period of fiscal 2009.
Financial Condition
As of December 31, 2009, China Nutrifruit had $19.1 million in cash and cash equivalents, $3.0 million in total liabilities with no long-term debt and working capital of $39.3 million. Shareholders' equity was $58.9 million as of December 31, 2009.
In first nine months of FY2010, the Company generated $5.7 million in cash flow
from operating activities due to net income, the collection of trade receivables offset by the increase in inventory during the production season.
Business Outlook
China Nutrifruit plans to construct a new fruit and vegetable powder manufacturing facility in Daqing, Heilongjiang Province with an annual production capacity of 10,000 tons at a total cost of approximately $19.1 million. The new facility is expected to begin production in September 2010 and will produce tomato, pumpkin and other popular fruit and vegetable powders that can be used as ingredients in a variety of food products. The Company expects the new line to contribute approximately $13 to $14 million in revenue for fiscal year 2011. In addition, China Nutrifruit is seeking to maximize utilization at its new automated glazed fruit production line.
The Company affirms previously issued fiscal 2010 and 2011 guidance. For FY 2010, the Company expects approximately $72.0 - $76.0 million in revenue and $18.5 million in net income, excluding non-cash stock compensation expenses. For FY 2011, the Company expects approximately $90-$95 million in revenue, and projected net income of approximately $22-$23 million.
"We expect strong consumer spending and an increasing demand for healthy products to continue to drive demand for specialty fruit and beverage products. We have received a great deal of interest and demand from both domestic and international distributors for fruit and vegetable powder products. This high growth segment complements our existing product lines and we plan to leverage our widespread network of suppliers and distributors to sell these products," said Mr. Yu. "We intend to enhance our position as a premium food processor by continuing to introduce new products and utilizing our strong distribution network, industry relationships, and production efficiency."
Conference Call Information
Management will conduct a conference call at 9:00 a.m. Eastern Time on Friday, February 5, 2010 to discuss its third fiscal quarter 2010 results. To participate in the conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: 877-380-4607. International callers should dial +1-702-928-6995. The conference ID number for the call is 53493754. If you are unable to participate in the call at this time, a replay will be available on Friday, February 5, 2010 at 11:00 a.m. Eastern Time, through Friday, February 19, 2010. To access the replay, dial 800-642-1687. International callers should dial +1-706-645-9291. The conference ID number for the replay is 53493754.
About China Nutrifruit Group Limited
Through its subsidiary Daqing Longheda Food Company Limited, China Nutrifruit, is engaged in developing, processing, marketing and distributing a variety of food products processed primarily from premium specialty fruits grown in Northeast China, including golden berry, crab apple, blueberry and raspberry. The Company's processing facility possesses ISO9001 and HACCP series qualifications. Currently, the Company has established an extensive nationwide sales and distribution network throughout 20 Provinces in China. For more information, please visit http://www.chinanutrifruit.com/ .
Thanks and if anyone is still here besides us, Lol, my latest interest is in CGLD while under a buck, going forward into 2010.
Very sturdy little company. Take a look at their production numbers and estimates. Gold has still more to go over the next two years.
http://www.capitalgoldcorp.com/
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