Financial results for the 2012 fiscal first quarter ended September 30, 2011
2012 Fiscal First Quarter (USD) (unaudited)
Three Months Ended September 30,
2011
2010
CHANGE
Revenue
$7.2 million
$7.3 million
-2%
Gross Profit
$2.9 million
$3.2 million
-8.3%
Gross Profit Margin
40.5%
43.2%
-6.3%
Net Income
$2.1 million
$2.2 million
-6.8%
Basic EPS*
$0.04
$0.06
--
Diluted EPS **
$0.04
$0.03
--
* Based on 48 million and 36.4 million shares outstanding for 2012 and 2011 fiscal first quarters, respectively.
** Based on 49.8 million and 72.4 million fully diluted shares outstanding for 2012 and 2011 fiscal first quarters, respectively.
Financial Results for the 2012 Fiscal First Quarter Ended September 30, 2011
Revenue for the 2012 fiscal first quarter ended September 30, 2011 totaled $7.2 million compared to $7.3 million for the same period in fiscal 2011. The slight decrease in revenue was mainly attributable to the lower supply of high quality fresh ginger inventory available to export year over year. Demand remained at an all time high and nearly all of our existing inventory was shipped during the 2012 fiscal first quarter leading into harvest season in October.
Cost of sales for the fiscal first quarter ended September 30, 2011 totaled $4.3 million, or 60% of revenue, an increase of 2.7% compared to $4.2 million, or 57% of revenue, for the fiscal first quarter ended September 30, 2010. Cost of sales includes the costs associated with the planting, harvesting and maintaining of ginger and other agricultural products. Cost of sales as a percentage of revenues increased mainly due to the slight increase in costs of planting and production. The Company minimizes waste by storing the ginger in a thermostatic warehouse.
Gross profit for the fiscal first quarter ended September 30, 2011 totaled $2.9 million, a decrease of 8.3% compared to $3.2 million for the fiscal first quarter ended September 30, 2010. Gross profit margin was 40.5% for the 2012 fiscal first quarter as compared to 43.2% for the 2011 fiscal first quarter. The decrease in gross profit margin was due primarily to the slight increase in material costs.
Operating expenses for the fiscal first quarter ended September 30, 2011 totaled $790,000 as compared to $932,000 for the fiscal first quarter ended September 30, 2010. The decrease in operating expenses was due to the decrease in selling and marketing expenses and general and administrative expenses. Selling and marketing expenses decreased by approximately $137,000, or as a percentage of revenue from 11% to 9%, year over year due to the decrease in distribution costs.
Net income for the 2011 fiscal first quarter ended September 30, 2011 totaled $2.1 million, compared to $2.2 million for the 2011 fiscal first quarter. Basic and diluted earnings per share for the 2012 fiscal first quarter were $0.04, based on 48 million basic and 49.8 million diluted shares outstanding versus basic and diluted earnings per share of $0.06 and $0.03 for the same period the year prior, based on 36.3 million basic and 72.4 million diluted shares outstanding.
Net income margin remained stable at 29% for the 2012 fiscal first quarter as compared to 30% for the same period the prior year. The decrease in net income is attributable to the slight decrease in sales during the quarter. However, the Company was able to maintain expenses at a low level as a percentage of revenue to maintain a stable net income margin.
Liquidity and Capital Resources
As of September 30, 2011, Man Shing had approximately $11.4 million in cash and cash equivalents. As of September 30, 2011, total current assets and total assets were approximately $30.8 million and $32.4 million, respectively. During the same period, total current liabilities and total liabilities were approximately $4.7 million and $6.2 million, respectively. Working capital totaled $26 million as of September 30, 2011, as compared to $23.6 million as of June 30, 2011. Shareholder's equity totaled $26.2 million as of September
