Rodobo International, Inc. Reports Q2 and First Half of 2009
Net income of $3.1M, up 77% compared to the first six months in 2008
May 18, 2009 8:00:00 AM
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View Additional ProfilesHARBIN, China, May 18 /PRNewswire-Asia-FirstCall/ -- Rodobo International, Inc. (OTC Bulletin Board: RDBO), one of the leading independent dairy companies in China, reported financial results for the second quarter and first six months ended March 31, 2009.
Second quarter financial highlights include:
Revenue for the second quarter ended March 31, 2009 was $6.3 million, an increase of 19% compared to Q2 2008. This increase was primarily driven by volume growth, with average selling price remaining flat over both periods. The new product series "Healthy Elderly", launched in October 2008, attributed approximately $1.1 million to the second quarter.
Sales of Whole Milk Powder Formula represented 39% of total sales in Q2 2009 compared to 27% in Q2 2008. Sales of Baby/Infant Formula represented 44% of total sales in Q2 2009 compared to 61% in Q2 2008. Sales of Adult Formula represented 17% of total sales in Q2 2009 compared to 12% in Q2 2008.
Gross profit for Q2 2009 was $2.3 million, down 4% compared to Q2 2008. The overall gross margin decreased from 45% in Q2 2008 to 36% in Q2 2009. The increase in the costs of goods sold and the decrease in gross margin was mainly driven by a different product mix that included more sales of lower margin products. Additionally, gross margin for Whole Milk Powder Formula decreased in 2009 compared to 2008 due to a 24% increase in the cost of raw milk.
Operating income in the first three months ended March 31, 2009 was $0.74 million, decrease of 34% compared to the same period last year. The decrease is mainly attributed to higher depreciation expenses due to equipment purchase and advertising expenses to support the growth.
Net income was $1.2 million relatively flat compared to Q2 2008.
Six months financial highlights include:
Revenue for the first half ended March 31, 2009 was $15.2 million, an increase of 63% compared to the first six months in 2008. The growth was primarily driven by higher volume sales and was also attributable to the launch of the new product line "Healthy Elderly". Sales for "Healthy Elderly" generated approximately $3 million in the period.
Sales of Whole Milk Powder Formula represented 31% of total sales compared to 39% in the six months ended March 31, 2008. Sales of Baby/Infant Formula represented 49% compared to 50% in the same period last year. The launch of the "Healthy Elderly" product line generated $3 million in the six months ended March 31, 2009, representing 20% of total sales.
Gross profit for the first six months of fiscal 2009 was $6.8 million, up 88% compared to the same period last year. The overall gross margin improved from 39% in 2008 to 45% in 2009. The improvement was mainly driven by the shift from low-margin products including Whole Milk Powder Formula to high- margin products including Healthy Elderly. The gross margin for "Healthy Elderly" was 53% for the first six months ended March 31, 2009 and the Baby/Infant Formula gross margin increased from 45% to 60%.
Operating income in the first six months was $2.7 million up 66% compared to $1.6 million in the same period last year.
Net income grew 77% to $3.1 million compared with $1.7 million for the six months ended March 31, 2008. 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 an increase of subsidiary income from government support funds, from $0.09 million for the six months ended March 31, 2008 to $0.44 million for the six months ending March 31, 2009.
Mr Yanbin Wang stated: "During the first six months of our fiscal year, Rodobo International has experienced an impressive growth in revenues and earnings. This trend slowed down during the second quarter. We keep developing distribution networks and we're currently covering 4,463 retail stores in 6 provinces: Sichuan, Shaanxi, Henan, Shandong, Zhejiang and Fujian. The Company provides training and support to its growing sales and marketing team that includes: 2,320 employees. Currently, Rodobo International is building its own organic dairy farm that will meet international standards and include top technology equipment".
"We focus on providing high quality premium products for all our consumers and the construction of our dairy farm demonstrates the Company's dedication to this vision. We expect that our new and advanced dairy farm will start operating towards the end of fiscal 2009 and this will give us a tremendous competitive advantage in terms of high quality raw milk resources. Being certified as "Green Food" and winning the lucrative prize: Best Quality Control Enterprise of Dairy Products for 2008, reinforces our leading position in the market and we believe that it will be reflected in our financial results".
About Rodobo International, Inc.:
Rodobo International is one of the leading independent dairy companies in China. Through its wholly-owned operating subsidiary, Rodobo International, Inc. is a producer and distributor of high-quality formula milk powder products for infants, children, pregnant women, nursing mothers, middle aged and the elderly in the People's Republic of China. The Company's products are sold under the brand name "Rodobo" and are produced in cutting edge facilities using the highest industry standards and the best quality control systems.
Safe Harbor Statement
This press release contains forward-looking statements. Whenever we use words such as "believe," "expect," "anticipate," "intend," "plan," "estimate" or similar expressions, we are making forward-looking statements. Forward- looking statements include statements regarding our goals, beliefs, future growth strategies, objectives, plans or current expectations. For example, when we say that our own organic dairy farm will meet international standards and include top technology equipment, or that we focus on providing high quality premium products for all our consumers and the construction of our dairy farm demonstrates our dedication to this vision, or that we expect that our new and advanced dairy farm will start operating towards the end of fiscal 2009 and this will give us a tremendous competitive advantage in terms of high quality raw milk resources or that being certified as "Green Food" and winning the lucrative prize: Best Quality Control Enterprise of Dairy Products for 2008, reinforces our leading position in the market and we believe that it will be reflected in our financial results, we are using forward looking statements. These forward-looking statements are based on the current expectations of the management of Rodobo only, and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: failure to obtain required regulatory approvals; risks associated with the effect of changing economic conditions and/or regulatory environment in the People's Republic of China; variations in cash flow; reliance on collaborative partners and on new product development; variations in new product development; risks associated with rapid technological change and the potential of introduced or undetected flaws and defects in products; changes in technology and market requirements; loss of market share and pressure on pricing resulting from competition, which could cause the actual results or performance of Rodobo to differ materially from those contemplated in such forward-looking statements. Except as otherwise required by law, Rodobo undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. For a more detailed description of the risk and uncertainties affecting Rodobo, reference is made to Part I, Item 1A, "Risk Factors" of Rodobo's Annual Report on Form 10-K for the fiscal year ended September 30, 2008 and to other reports filed from time to time by Rodobo with the Securities and Exchange Commission.
Table to follow:
RODOBO INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE
INCOME
FOR THE SIX AND THREE MONTHS ENDED MARCH 31, 2009 AND 2008
(UNAUDITED)
Three Months Ended Six Months Ended
March 31 March 31
2009 2008 2009 2008
Net sales $6,303,017 $5,285,705 $5,163,842 $9,318,958
Cost of goods sold 4,026,269 2,905,871 8,383,386 5,720,074
Gross profit 2,276,748 2,379,834 6,780,456 3,598,884
Operating expenses:
Distribution expenses 1,105,652 1,059,918 3,225,004 1,610,320
General and
administrative
expenses 337,217 182,149 725,899 344,753
Depreciation and
amortization
expenses 90,259 11,453 132,709 19,219
Total
operating
expenses 1,533,128 1,253,521 4,083,612 1,974,293
Operating income 743,620 1,126,314 2,696,844 1,624,592
Subsidy income 438,730 -- 438,730 94,187
Other (expenses) income 14,768 7,465 (65,850) 11,356
Income before income taxes 1,197,119 1,133,779 3,069,724 1,730,135
Provision for income taxes -- -- -- --
Net income $1,197,119 $1,133,779 $3,069,724 $1,730,135
Other comprehensive income:
Foreign currency
translation
adjustment (25,774) 210,569 (65,554) 320,874
Comprehensive income $1,171,345 $1,344,348 $3,004,170 $2,051,009
RODOBO INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, September 30,
2009 2008
(Unaudited) (Audited)
ASSETS
Current assets:
Cash and cash equivalents $904,360 $659,030
Accounts receivable - net of allowance
for bad debts of $66,602 and $66,921,
respectively 2,136,392 1,143,328
Advances to employees 6,399 185,500
Other receivables -- 162,006
Inventories 1,125,606 991,536
Prepaid expenses 43,993 26,510
Total current assets 4,216,750 3,167,910
Property, plant and equipment, net:
Fixed assets, net of accumulated
depreciation 885,307 812,079
Construction in progress -- 148,240
885,307 960,319
Other assets:
Loan to related parties 1,185,062 --
Interests receivable 13,964 --
Deposits on land and equipment 13,438,012 10,873,562
Intangible assets, net 676,800 717,978
Total other assets 15,313,838 11,591,540
Total assets $20,415,895 $15,719,769
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,376,328 $2,165,061
Other payable -- 171,286
Accrued expenses 571,756 924,580
Advance from customers -- 1,162,184
Due to related party -- 18,079
Total current liabilities 1,948,084 4,441,189
Shareholders' equity
Convertible preferred stock, $0.001 par
value, 15,000,000 shares authorized
12,976,316 shares issued and
outstanding as of March 31, 2009 and
September 30, 2008 12,976 12,976
Common stock, $0.001 par value,
1,604,278 shares authorized,
1,435,568 shares issued and
outstanding as of March 31, 2009
and September 30, 2008 1,436 1,436
Additional paid in capital 5,115,690 3,930,628
Additional paid in capital - warrants 971,788 971,788
Subscription receivable (50,000) (3,050,000)
Retained earnings 11,593,991 8,524,267
Accumulated other comprehensive income 821,930 887,484
Total shareholders' equity 18,467,811 11,278,579
Total liabilities and
shareholders' equity $20,415,895 $15,719,769
For more information, please contact:
Miri Segal
MS-IR LLC
Tel: +1-917-607-8654
Email: msegal@ms-ir.com
Xiuzhen Qiao
Rodobo International Inc
Tel: +86-451-8226-5922
Email: qiaozhen1973@163.com
SOURCE Rodobo International, Inc.
----------------------------------------------
Miri Segal of MS-IR LLC
+1-917-607-8654
or msegal@ms-ir.com; Or Xiuzhen Qiao of Rodobo International Inc
+86-451-8226-5922
or qiaozhen1973@163.com
