China Organic Agriculture, Inc. Third Quarter 2009 Financials
17 Nov 2009
PR Newswire Asia
Company Reports $40 Million Revenue, $4.5 Million Net Income and EPS of $0.06 for Q3 2009
SHENZHEN, China, Nov. 17 /PRNewswire-Asia-FirstCall/ -- China Organic Agriculture, Inc. (OTC Bulletin Board: CNOA) ("China Organic Agriculture" or the "Company"), a global diversified food products company engaged in the trading and distribution of agricultural products headquartered in the Liaoning province in China, today announced its financial results for the three and nine months ended September 30, 2009.
Financial Highlights 1) Sales revenue and gross profit for the third quarter, inclusive of the portions attributable to the minority interest in its subsidiary, Dalian Huiming, were $39.7 million and $11.1 million. Although sales decreased 15% as compared to the prior year, gross profit was approximately equal to that of last year’s comparable period, reflecting the Company’s focus on higher margin trading opportunities. 2) Sales revenue and gross profit for the nine months, inclusive of the portions attributable to the minority interest in its subsidiary, Dalian Huiming, were $106.4 million and $26.4 million, a year-over-year increase of 97.4% and 103.8% respectively. 3) Selling, general and administrative expenses declined by 9.5% for the first nine months as compared to the same period a year ago in spite of the near doubling of revenues. 4) Earnings per share from continuing operations attributable to the Company for the quarter was $0.06, a substantial decrease from the $0.15 from continuing operations recorded in the comparable period last year.
Sales for the nine months ending September 30, 2009 totaled $106.4 million compared to $53.9 million for the same period last year. This increase of $52.5 million is attributable to the Company’s acquisition of 60% of the equity of Dalian Huiming Industry Ltd. ("Dalian Huiming") in October 2008, which accounted for the substantial revenue growth for the nine-month period. Although the sales during the three months ended September 30th were lower than same period last year, because the Company achieved improved gross and operating margins its gross profit for the third quarter of 2009 was comparable to the third quarter of 2008. The increase in gross profit for the nine-month period resulted from the increased revenue was attributable to Dalian Huiming. Net income attributable to CNOA shareholders was $4.5 million for the third quarter of 2009, compared to net income of $8.5 million for the same period last year, excluding discontinued operations in 2008. Net income attributable to CNOA shareholders was $10.9 million for the nine months ended September 30, 2009, compared to net income of $8.5 million for the same period in 2008, again excluding discontinued operations. These results reflect the Company’s ownership of 60% of Dalian Huiming. Because the Company owns only 60% of Dalian Huiming, 40% of Dalian Huiming’s net income is recorded as income attributed to non-controlling interest. The basic and diluted earnings per share for the third quarter attributable to CNOA’s shareholders were $0.06, compared to last year’s third quarter results of $0.15 per share, and the basic and diluted earnings per share for the nine months ended on September 30, 2009 attributable to CNOA’s shareholders were $0.15 as compared to $0.16 per share in the comparable prior year period. The 2008 quarter and nine months results exclude $0.02 and $0.03 per share, respectively, from discontinued operations. A former operating subsidiary of the Company, ErMaPao, was sold effective September 30, 2008 and its results are now classified as discontinued operations in the attached schedules.
Financial Conditions On September 30, 2009, the Company’s cash and cash equivalents totaled $17.3 million compared to $1.6 million as of September 30, 2008. As of September 30, 2009, current assets totaled $90 million and current liabilities were $30 million. During the nine months ended September 30, 2009, the Company used 5.0 million in its operating activities, reflecting the increase in the Company’s accounts receivable due to the increased sales for the nine-month period. The Company also recorded $5.2 million of investments and $9.8 million of cash inflows from financing activities during this period.
Business Developments On February 29, 2008, the Company acquired the California based Bellisimo Vineyard, for $14.8 million. This vineyard produces Chardonnay, Merlot and Cabernet Sauvignon wine grapes. On September 30, 2008, the Company sold its subsidiary, ErMaPao for a non-interest bearing note receivable of $8.7 million which has been paid in full. In October 2008, the Company acquired 60% of the outstanding shares of Dalian Huiming for $10.6 million, Dalian Huiming is a top-tier agricultural trading company focused on soybeans, corn, and cereal crops, all major agricultural products in China.
About China Organic Agriculture China Organic Agriculture is based in China and is primarily engaged in the acquisition, trading and distribution of agricultural products. For more information, please visit: http://www.chinaorganicagriculture.com .
FORWARD-LOOKING STATEMENTS: This document includes forward-looking statements. Forward-looking statements include, but are not limited to, statements concerning future acquisitions, estimates of, and increases in, production, cash flows and values, statements relating to the continued advancement of China Organic Agriculture’s products and other statements which are not historical facts. When used in this document, words such as "could," "plan," "estimate," "expect," "intend," "may," and similar expressions denote forward-looking statements. Although China Organic Agriculture Inc. believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements include, but are not limited to, those set forth in our reports filed with the Securities and Exchange Commission, together with the risks discussed in our press releases and other communications to shareholders issued by us from time to time, such as our ability to raise capital as and when required, the availability of raw products and other supplies, competition, the costs of goods, government regulations, and political and economic factors in the People’s Republic of China in which our subsidiaries operate.
For more information, please contact:
China Organic Agriculture, Inc. Hans Shen Tel: +1-707-709-2321 Email: IR@cnoainc.com
Financial Statements
China Organic Agriculture, Inc. Consolidated Statement of Operations For Three and Nine Months Ended September 30, 2009 and 2008 (Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 2009 2008 2009 2008 Sales $39,656,537 $46,454,286 $106,402,273 $53,913,511 Cost of sales (28 ,
-- Net Income attributable to CNOA $4,510,193 $9,499,635 $10,916,474 $10,354,049 Basic and Diluted weighted average shares 73,157,232 57,655,514 73,157,232 53,599,214 Basic and Diluted Earnings per Share Income from Continuing operations $0.06 $0.15 $0.15 $0.16 attributable to CNOA shareholders Income from Discontinued operations attributable to CNOA shareholders -- 0.02 -- 0.03 Total Basic Earnings Per Share $0.06 $0.17 $0.15 $0.19
China Organic Agriculture, Inc. Consolidated Balance Sheets As of September 30, 2009 (unaudited) and December 31, 2008 (audited/restated)
Assets 09/30/2009 12/31/2008 (Unaudited) (Audited/Restated) Current Assets Cash and cash equivalents $17,306,954 $7,338,817 Restricted cash 8,786,059 -- Accounts receivable, net 44,169,190 26,448,294 Inventory 6,399,469 4,492,892 Other current assets 13,202,303 16,122,796 Total Current Assets 89,863,975 54,402,799 Goodwill 1,602,134 1,602,134 Property, plant & equipment, net 14,366,609 14,521,452 Other long term assets 1,062,163 1,199,788 Total Assets $106,894,881 $71,726,173
Liabilities and Stockholders’ Equity Current Liabilities Mortgage payable - current $210,636 $198,854 Notes payable - 8,786,059 -- Short term loans 14,637,217 1,170,515 Accounts payable and accrued expenses 2,600,963 5,048,054 Due to related party 939,894 3,630,842 Taxes payable 2,753,710 3,335,751 Total Current Liabilities 29,928,479 13,384,016
Mortgage payable - long term 8,002,222 8,161,705
Total Liabilities 37,930,701 21,545,721 Stockholders’ Equity CNOA Stockholders’ Equity 56,506,480 45,496,017 Noncontrolling interest 12,457,700 4,684,435 Total Stockholders’ Equity 68,964,180 50,180,452
Total Liabilities and Stockholders’ Equity $106,894,881 $71,726,173
China Organic Agriculture, Inc. Consolidated Statements of Cash Flows (Unaudited)
NINE MONTHS ENDED SEPTEMBER 30, 2009 2008 Cash flows used by operating activities $(5 ,
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