RESTON, Va., April 1 /PRNewswire-Asia/ -- Emerald Dairy, Inc. (OTC Bulletin Board: EMDY), a leading producer and distributor of infant and children's formula, milk powder and soybean products in China, today announced results for the fiscal year ended December 31, 2009.
Net Income for the Fiscal Year ended December 31, 2009 rose to $4,212,023, compared to $2,314,507 for the Fiscal Year ended December 31, 2008. This increase was due primarily to an increase in our gross profit and a decrease in our operating expenses.
Gross Profit rose to $20,672,675, or 46.2% of our sales for the fiscal year ended December 31, 2009, as compared to gross profit of $17,778,888, or 40.1% of sales for the fiscal year ended December 31, 2008.
Sales. The increased gross profit was due to an increase in the average selling price of our products, of $339 per metric ton, as compared to the fiscal year ended December 31, 2008, as we increased production in our high-end product line. As a result, while overall sales volume decreased by 500 metric tons or 5.6%, sales revenues increased by $404,097, or 0.9%, to $44,729,276 for the fiscal year ended December 31, 2009, up from $44,325,179 in the fiscal year ended December 31, 2008.
Cost of goods sold decreased by $2,489,690, or 9.4%, from $26,546,291 in the fiscal year ended December 31, 2008, to $24,056,601 for the fiscal year ended December 31, 2009. This decrease was directly related to a change in our sales mix during fiscal year 2009 to a mix with a lower cost per metric ton. Overall our cost per metric ton decreased by $119, or 4.0%, to $2,838 per metric ton in the fiscal year ended December 31, 2009, as compared to $2,515 per metric ton in fiscal year ended December 31, 2008.
Total Operating Expenses declined by almost $1 million, from $14,210,578 in FY 2008 to $13,498,034 in FY 2009. Selling expenses overall decreased by $554,324 or 5.2%. Advertising and promotion decreased by $871,184 or 17.8%, as the company continued to benefit from aggressive campaigns in fiscal 2008. These decreases were partially offset by an increase in selling salaries by $257,947 or 12.8% due to increased commissions to the sales staff. Rather than using a wholesaler, Emerald Diary sales people deal directly with the retail outlets. This business model has higher sales expenses compared to the traditional business model, but creates better profit margins for the company. Administrative expenses decreased by $222,841, or approximately 6.4%, from $3,494,733 in fiscal year ended December 31, 2008, to $3,271,892 for the fiscal year ended December 31, 2009.
Cash and cash equivalents at December 31, 2009 increased by approximately 83.8% to $13,496,429, from $7,343,588 at December 31, 2008. Working capital increased from approximately $10.5 million at December 31, 2008, to approximately $17.6 million at December 31, 2009, including cash generated from operations, as well as funds raised from private offerings of promissory notes and warrants we consummated in fiscal 2009. Based upon its short term liabilities, the company believes its cash and cash equivalents are adequate to satisfy working capital needs and sustain ongoing operations for the next 12 months.
Shu Kaneko, Chief Financial Officer for Emerald Dairy, said, "We are pleased with the results of this year. We have substantially increased net income and reduced operating expenses. In fiscal 2009, we raised approximately $3.3 million through the sale of promissory notes payable and warrants, and approximately $4.4 million from the exercise of warrants, which we are using for the construction and equipping of our second and larger production facility. We expect this new facility to be ready for production by mid 2010, provided we are able to raise the additional $2 million we believe will be required to complete the first production line. The Chinese dairy market today is over $13 billion and is expected to grow at a rate of 15% per year for the foreseeable future. Emerald Dairy is one of the most productive and respected businesses in the industry. Our goal is to expand production to meet the existing demand for our products."
About Emerald Dairy, Inc.:
Through its wholly-owned operating subsidiaries, Emerald Dairy, Inc. is a producer and distributor of infant and children's formula, milk powder and soybean products in the People's Republic of China. The Company's products are sold under two brand names -- "Xing An Ling," designed for low-end customers, and "Yi Bai," designed for middle and high-end customers. They are distributed throughout 20 provinces in mainland China and sold in over 5,800 retail outlets.
Certain statements in this release and other written or oral statements made by or on behalf of the Company are "forward looking statements" within the meaning of the federal securities laws. Statements regarding future events and developments and our future performance, as well as management's expectations, beliefs, plans, estimates or projections relating to the future are forward-looking statements within the meaning of these laws. The forward looking statements are subject to a number of risks and uncertainties including market acceptance of the Company's services and projects and the Company's continued access to capital and other risks and uncertainties. The actual results the Company achieves may differ materially from any forward-looking statements due to such risks and uncertainties. These statements are based on our current expectations and speak only as of the date of such statements.
For more information, please contact:
Stanley Wunderlich
Consulting for Strategic Growth 1
Tel: +1-800-625-2236
Fax: +1-646-205-7771
Email: swunderlich@cfsg1.com
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR FISCAL YEARS ENDED DECEMBER 31, 2009 AND 2008
FOLLOW.
Emerald Dairy Inc. and Subsidiaries
Consolidated Statements of Operations
For the Years Ended December 31, 2009 and 2008
2009 2008
Sales $44,729,276 $44,325,179
Cost of Goods Sold 24,056,601 26,546,291
Gross Profit 20,672,675 17,778,888
Operating Expenses
Selling expenses 10,047,861 10,602,185
Administrative expenses 3,271,892 3,494,733
Depreciation and amortization 178,281 113,660
Total operating expenses 13,498,034 14,210,578
Other Income (Expense)
Interest income 6,187 13,041
Interest expense (236,226) (426,646)
Loss on extinguishment of debt (1,405,052) --
Total other income
(expense) (1,635,091) (413,605)
Net Income Before Provision for Income Tax 5,539,550 3,154,705
Provision for Income Taxes
Current 1,327,527 840,198
1,327,527 840,198
Net Income $4,212,023 $2,314,507
Basic Earnings Per Share $0.14 $0.08
Basic Weighted Average Shares Outstanding 30,661,333 29,299,332
Diluted Earnings Per Share $0.14 $0.08
Diluted Weighted Average Shares
Outstanding 31,001,248 29,518,067
The Components of Other
Comprehensive Income
Net Income $4,212,023 $2,314,507
Foreign currency translation
adjustment (26,236) 1,767,982
Income tax related to other
comprehensive income 8,920 (601,114)
Comprehensive Income $4,194,707 $3,481,375
