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8-K - Yanglin Soybean, Inc. | v184977_8k.htm |
Yanglin
Soybean, Inc. Reports 2010 Q1 Quarterly Financial Results
HEILONGJIANG,
China, May 15 /PRNewswire-Asia-FirstCall/ -- Yanglin Soybean, Inc. (OTC Bulletin
Board: YSYB) ("Yanglin" or the "Company"), one of the leading domestic
processors of soybean products in China, today reported its unaudited financial
results for the fiscal quarter ended March 31, 2010.
Mr.
Shulin Liu, Chief Executive Officer of Yanglin, commented, "During 2009, we
experienced certain difficulties caused by the unfavorable pricing environment
for both our raw materials and end products, as a result of the combined effect
of the Chinese government's strategic reserve purchase of domestic soybeans and
large imports of soybean into China at lower prices. In the first quarter of
2010, however, we managed to generate a slight gross profit, as a result of the
improvement in the prices of our products. In addition, we generated $3.2
million of cash from operations for the three months ended March 31, 2010
compared to using $956K of cash for the comparable quarter 2009. The
cash generated in the first quarter of 2010 was primarily a result of reducing
the purchase of inventory. We believe that, as one of the largest domestic
soybean processors in Northeast China, with an annual production capacity of
520,000 metric tons, that we are well positioned in China's domestic soybean
industry, which still receives continuing support from the Chinese
government and, which we believe, has promising prospects in the long-term,
considering the growing demand for the soybean products in the
country."
Mr.
Lu continued, "In addition to the implementation of cost saving measures, we are
closely monitoring new government policy announcements. In late 2009, after
lobbying efforts of the domestic soybean industry, the Chinese government
announced that it would grant subsidies to soybean processors who purchased
domestic non-GM soybeans from farmers at a government-guided price. We believe
that this measure may help domestic soybean processors, including Yanglin, to
recover the cost of raw materials. More importantly, we believe that this
measure is a signal by the government of its willingness to render further
support to our industry. In the meantime, we intend to continue to focus on
making our operations more efficient and on providing the same high-quality
products and service our customers expect."
First
Quarter 2010 Results
Total
revenue for the first quarter of 2010 was $34.1 million, compared to $43.0
million recorded for the first quarter of 2009. The decrease in sales during
this period was mainly caused by reduced supply of raw materials, due to the
fact that China suffered from a reduction in the soybean production in 2009 due
to the conversion to corn for better economics and the unfavorable weather
conditions. Meanwhile, the average selling prices of our products increased in
the first quarter of 2010, since the demand for soybean products was
traditionally strong during the Chinese New Year and the prices of imported
soybeans were high in the first quarter, as compared to historical data. As a
result, we generated a gross profit. Gross profit for the first quarter of 2010
was $16,623, as compared to a gross loss of $1,142,022 for the first quarter of
2009.
Total
operating expenses for the first quarter of 2010 decreased to $914,818, from
$1,087,426 in the first quarter of 2009. Selling expenses for the first quarter
of 2010 decreased to $64,776, slightly lower than $69,246 for the first quarter
of 2009. General and administrative expenses for the first quarter of 2010 were
$850,042, as compared to $1,018,180 for the first quarter of 2009. The reduction
was mainly the result of the strict cost saving measures in items such as
business entertainment and travel.
Operating
loss for the first quarter of 2010 was $898,195, as compared to a loss of
$2,229,448 for the first quarter of 2009. Yanglin has been recognized as a "Key
Leading Enterprise" in the industrial sector of the important agriculture
industry by the Chinese government. The Company will benefit from its
income tax exempt status from January 2010 until June 2012.
During
2009, we adopted the provisions of FASB ASC Topic 815, "Derivatives and Hedging"
("ASC 815") (previously ElTF 07-5, "Determining Whether an instrument (or an
Embedded Feature) is Indexed to an Entity's Own Stock"). In 2009, we incurred
non-cash income of $59.4 million resulting from the change in fair value of
warrants issued to investors in conjunction with the Company's Series A
Convertible Preferred Stock in October 2007. The accounting treatment of the
warrants resulted from an anti-dilution provision to the warrant holders. In the
first quarter of 2010, the non-cash income related to the change in fair value
of these warrants was $5.1 million, as compared to $27.1 million in the first
quarter of 2009, as restated.
Net
income for the first quarter of 2010, after including the non-cash income from
the change in fair value of warrants, totaled $4.0 million, or $0.13 per diluted
share, compared with net income of $24.9 million, after including the non-cash
income from the change in fair value of the warrants, or $0.63 per diluted share
for the first quarter of 2009.
Cash
Positions
The
Company's balance sheet as of March 31, 2010 included cash of $38.0 million,
compared with $34.8 million at December 31, 2009. The Company had net working
capital of $26.1 million as of March 31, 2010 compared to $26.5 million as of
December 31, 2009. Total shareholders' equity was $34.9 million as of March 31,
2010 compared to $30.9 million as of December 31, 2009.
Business
Update
Mr.
Liu concluded, "Over the last few months of 2009, we have been pleased to see
some positive signs coming on the horizon, including news that the Chinese
government will grant a subsidy to domestic soybean processors for the soybeans
they purchased from local farmers. We believe that this policy is the start of a
series of potential further financial supports to the domestic
non-GM
soybean industry, which we believe will be favorable to our operations when
received. In addition, in the first quarter of 2010, we managed to generate a
slight gross profit, which we believe is also a positive sign. We are still
confident in the long-term prosperity of China's soybean market and business,
and we believe that we will see a recovery of our operations and
profitability."
Conference
Call
The
Company will host a conference call on Monday, May 17, 2010 at 8:30 A.M. Eastern
Time / 8:30 P.M. Beijing Time. A question and answer session will follow
management's presentation.
To
participate, please call the following numbers 10 minutes before the call start
time and ask to be connected to the Yanglin Soybean conference
call:
Telephone (North America): | 1-877-407-0782 |
Telephone (International): | 1-210-689-8567 |
A replay
of the call will be available through May 24, 2010 until 11:59 PM Eastern
Daylight Time.
For
the replay, please call:
Phone Number: | 1-877-660-6853 (North America) |
Phone Number: | 1-201-612-7415 (International) |
Account Number: | 286 |
Conference ID Number: | 350862 |
About
Yanglin
Yanglin
is one of the leading domestic soybean processors in China. The Company
manufactures soybean oil, salad oil and soybean meal with an annual processing
capacity of 520,000 metric tons in 2010. The Company's products are sold
directly to its customers or through distributors. Majority of Yanglin's
customers are located in Northern China.
2
Forward
Looking Statement
Safe
Harbor Statement under the Private Securities Litigation Reform Act of 1995:
Certain statements in this press release and oral statements made by the Company
constitute forward-looking statements for purposes of the safe harbor provisions
under The Private Securities Litigation Reform Act of 1995. These statements
include, without limitation, statements regarding our ability to prepare the
company for growth, the Company's planned capacity expansion and predictions and
guidance relating to the Company's future financial performance. We have based
these forward-looking statements largely on our current expectations and
projections about future events and financial trends that we believe may affect
our financial condition, results of operations, business strategy and financial
needs but they involve risks and uncertainties that could cause actual results
to differ materially from those in the forward-looking statements, which may
include, but are not limited to, such factors as unanticipated changes in
product demand, pricing and demand trends for the Company's products, changes to
government regulations, risk associated with operation of the Company's
facilities, risk associated with large scale implementation of the company's
business plan, the ability to attract new customers, ability to increase its
product's acceptance, cost of raw materials, downturns in the Chinese economy,
and other information detailed from time to time in the Company's filings and
future filings with the United States Securities and Exchange Commission.
Investors are urged to consider these factors carefully in evaluating the
forward-looking statements herein and are cautioned not to place undue reliance
on such forward-looking statements, which are qualified in their entirety by
this cautionary statement. The forward-looking statements made herein speak only
as of the date of this press release and the Company undertakes no duty to
update any forward-looking statement to conform the statement to actual results
or changes in the company's expectations.
For
more information, please contact
Yanglin
Soybean, Inc.
Mr.
Bode Xu
Chief
Financial Officer
Tel: +86-469-4678077
Email:
cfo@yanglinsoybean.com
3
CONSOLIDATED
STATEMENTS OF OPERATIONS INFORMATION
(Stated
in US Dollars) (unaudited and as restated)
For the quarter
ended March 31,
|
||||||||
2010
|
2009
|
|||||||
(As
restated)
|
||||||||
Net sales | $ | 34,082,815 | $ | 43,032,326 | ||||
Cost of sales | (34,066,192 | ) | (44,174,348 | ) | ||||
Gross (loss) profit | 16,623 | (1,142,022 | ) | |||||
Operating Expenses | ||||||||
Selling
expenses
|
(64,776 | ) | (69,246 | ) | ||||
General and
administrative expenses
|
(850,042 | ) | (1,018,180 | ) | ||||
Total operating
expenses
|
(914,818 | ) | (1,087,426 | ) | ||||
(Loss) income from operations | (898,195 | ) | (2,229,448 | ) | ||||
Interest
expense
|
(278,612 | ) | (93,505 | ) | ||||
Interest
income
|
|
26,253 | 71,725 | |||||
Other (expense)
income
|
(350 | ) | 29 | |||||
Changes in fair
value of warrants
|
5,121,571 | 27,114,955 | ||||||
Income before income taxes | 3,970,667 | 24,863,756 | ||||||
Income tax | - | - | ||||||
Net income | 3,970,667 | 24,863,756 | ||||||
Foreign currency translation adjustment | 9,400 | 90,645 | ||||||
Other comprehensive income | $ | 3,980,067 | $ | 24,954,401 | ||||
Earnings per share | ||||||||
Basic | $ | 0.19 | $ | 1.24 | ||||
Diluted | $ | 0.13 | $ | 0.63 | ||||
Weighted average shares outstanding | ||||||||
Basic | 20,465,119 | 20,000,003 | ||||||
Diluted | 30,445,616 | 39,177,594 |
4
CONSOLIDATED
BALANCE SHEETS INFORMATION
AS AT
MARCH 31, 2010 AND DECEMBER 31, 2009
(Stated
in US Dollars)
March 31,
2010
|
December
31,*
|
|||||||
(unaudited)
|
2009
|
|||||||
Cash | $ | 38,023,416 | $ | 34,811,611 | ||||
Total assets | 81,399,729 | 82,230,476 | ||||||
Short-term bank loans | 20,479,513 | 20,476,218 | ||||||
Total liabilities | 46,473,131 | 51,294,071 | ||||||
(Accumulated deficit) retained earnings | (5,982,379 | ) | (9,953,046 | ) | ||||
Total stockholders' equity | $ | 34,926,598 | $ | 30,936,405 |
*Condensed
from audited financial statements.
SOURCE Yanglin
Soybean, Inc.