HEILONGJIANG, China, Aug. 20 /PRNewswire-Asia/ -- Yanglin Soybean, Inc. (OTC Bulletin Board: YSYB) ("Yanglin" or the "Company"), one of the leading domestic processors of soybean products in China, today reported unaudited financial results for the second quarter ended June 30, 2009.
Mr. Shulin Liu, Chief Executive Officer of Yanglin Soybean Inc., commented, "Our second quarter results were impacted by the Chinese government's strategic reserve purchase of domestic soybeans, which pushed soybean prices higher than normal. Now that the government just ended these strategic purchases of domestic soybeans in June, we have turned more optimistic for the second half of the year. With over $25 million in cash and cash equivalents, our solid market reputation and relatively long operating history, we are well-positioned to meet the rising demand for soybean meal and soybean oil products when pricing returns to normal levels for our raw materials."
"During the second quarter, to counter the pricing pressures caused by the strategic reserve purchases, we have continued our strict cost-saving policies, including reducing overall production volume until higher profitability can be achieved. At the same time, we still remained focused on providing the same high-quality products and service to our customers, as we were seeing still robust demand for soybean products in China," Mr. Liu stated.
Second Quarter 2009 Results
Total revenues for the second quarter of 2009 were $39.8 million, compared to $76.3 million recorded for the same period in 2008. Sales decreased during the 2009 second quarter as the Company significantly reduced its production volume in reaction to the unfavorable pricing environment for soybeans, mainly due to the higher prices of soybeans caused by the Chinese government's national strategic reserve purchase of soybeans, which began in late 2008 and ended in June 2009.
Net sales
(in thousand US$)
Three Months Ended
June, 30
2009 2008 % Change
Soybean Meal $24,255.2 $42,986.2 -43.6%
Soybean Oil $10,327.3 $24,574.4 -58.0%
Salad Oil $1,883.0 $8,713.2 -78.4%
Squeezed Oil $358.0 $0 NA
Soy Protein Concentrate $355.1 $0 NA
Low-temp Soy Meal $2,575.0 $0 NA
Total Net Sales $39,753.6 $76,273.8 -47.9%
Gross loss for the second quarter of 2009 was $4.2 million, as compared to a gross profit of $4.4 million for the same period in 2008.
Total operating expenses for the second quarter of 2009 decreased to $608,892, from $616,674 in the same period last year. Selling expenses for the second quarter of 2009 decreased to $60,303 as compared to $64,545 in the 2008 second quarter. General and administrative expenses for the second quarter of 2009 were $548,589, as compared to $552,129 in the year-ago quarter. Total operating expenses accounted for 1.6% of total revenue in the second quarter, as compared to 0.8% in the same period in 2008.
Operating loss for the second quarter of 2009 was $4.8 million, as compared with of an operating profit of $3.8 million for the same period in 2008.
Interest expenses decreased by $170,889 on a year-over-year for the quarter ended June 30, 2009. Interest expenses declined during the quarter mainly because of lower bank borrowings, as we reduced our production volumes, which lowered our need for working capital. As a percentage of sales revenue, interest expenses accounted for 0.2% for the 2009 quarter.
The Company continues to benefit from its income tax exempt status during the entire fiscal year 2009. The status will be up for review at the end of 2009. Given the size of the Company's operations and its leading status within the soybean industry, the Company expects to continue to receive preferential tax treatment from the local and central governments going forward.
Net loss for the second quarter of 2009 totaled $4.9 million, or $0.15 per diluted share, compared with net income of $3.6 million, or $0.10 per diluted share in the same period one year ago.
Balance Sheet
The Company's balance sheet as of June 30, 2009 included cash and cash equivalents of $25.5 million, compared with $30.4 million at December 31, 2008. The Company has net working capital of $31.7 million at the end of June 30, 2009. Total shareholders' equity was $65.8 million.
Business Update
Mr. Liu concluded, "Over the past few weeks, we have been pleased to see some positive elements coming together indicating a potential rebound in our business. The most welcoming news is that the Chinese government, after finishing its strategic purchase of domestic soybeans in June, has begun to sell some of its soybean from the reserve to the market, probably combined with a subsidy system, which we expect will ease our raw material pricing pressures ahead of the fall harvests. In addition, reduced soybean production in South America this year due to unfavorable weather could also help bring down the total amount of soybean imports into China. These tangible signs of an improving operating environment, along with our focus on cost management and customer relations, give us comfort that we will see a recovery in the second half of this year."
Conference Call
The Company will host a conference call on Thursday, August 20, 2009 at 8:30 A.M. Eastern Daylight 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:
Phone Number: +1-877-407-0782 (North America)
Phone Number: +1-201-689-8567 (International)
A replay of the call will be available through Thursday, August 27, 2009 until 11:59 P.M. 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: 330654
About Yanglin
Yanglin Soybean, Inc. 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 2008. The Company's products are sold directly to its customers or through distributors. Majority of Yanglin Soybean's customers are located in Northern China.
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.
Consolidated Balance Sheets
As at June 30, 2009 and December 31, 2008
(Stated in US Dollars)
June 30, 2009 December 31, 2008
ASSETS (unaudited)
Current assets
Cash $25,492,115 $30,365,413
Cash - restricted 484,000 484,000
Trade receivables, net 67,847 8,043
Inventories 7,650,016 3,896,334
Advances to suppliers 8,340,976 10,597,701
Prepaid VAT and other taxes 3,220,365 920,083
Other receivables 76,455 114,990
Total current assets $45,331,775 $46,386,564
Property, plant and equipment, net 29,966,756 31,529,936
Intangible assets, net 4,518,532 4,619,716
Prepaid deposits for equipment
and construction -- 13,021
TOTAL ASSETS $79,817,062 $82,549,237
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities
Short-term bank loans $10,665,030 $6,711,214
Loans from related parties - current 59,169 55,149
Accounts payable 721 13,753
Other payables 836,514 683,403
Customers deposits 1,418,972 1,187,582
Accrued liabilities 654,223 591,979
Total current liabilities $13,634,629 $9,243,080
Long-term liabilities
Loans from related parties - non-
current 403,224 434,678
TOTAL LIABILITIES $14,037,853 $9,677,758
STOCKHOLDERS' EQUITY
Convertible preferred stock - Series
A $0.001 par value, 50,000,000
shares authorized; 10,000,000 shares
issued and outstanding as of June
30, 2009 and December 31, 2008 $10,000 $10,000
Common stock - $0.001 par value
100,000,000 shares authorized;
20,000,003 shares issued and
outstanding as of June 30, 2009 and
December 31, 2008 20,000 20,000
Additional paid-in capital 38,389,635 38,389,635
Statutory reserves 5,628,636 5,628,636
Retained earnings 14,471,196 21,664,524
Accumulated other comprehensive
income 7,259,742 7,158,684
$65,779,209 $72,871,479
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $79,817,062 $82,549,237
Consolidated Statements of Operations and Comprehensive Income
For the three and six months ended June 30, 2009 and 2008
(Stated in US Dollars) (Unaudited)
For the three months For the six months
ended June 30, ended June 30,
2009 2008 2009 2008
Net sales $39,753,637 $76,273,814 $82,787,863 141,549,672
Cost of sales (43,973,079) (71,857,724) (88,143,629) (130,296,704)
Gross (loss) profit $(4,219,442) $4,416,090 $(5,355,766) 11,252,968
Operating expenses
Selling expenses (60,303) (64,545) (129,553) (118,970)
General and
administrative
Expenses (548,589) (552,129) (1,580,773) (1,244,941)
Total operating
expenses (608,892) (616,674) (1,710,326) (1,363,911)
(Loss) income from
operation $(4,828,334) $3,799,416 $(7,066,092) 9,889,057
Interest expenses (94,091) (264,980) (245,517) (513,903)
Interest income 71,795 35,514 119,312 53,798
Other expenses -- (14,348) (1,060) (14,348)
Other Income -- -- 29 --
(Loss) income from
operations
before income taxes $(4,850,630) $3,555,602 $(7,193,328) 9,414,604
Income taxes -- -- -- --
Net (loss) income $(4,850,630) $3,555,602 $(7,193,328) 9,414,604
Foreign currency
translation
adjustment (16,447) 1,470,797 101,058 3,872,808
Comprehensive (loss)
income $(4,867,077) $5,026,399 $(7,092,270) 13,287,412
Basic (loss) earnings
per share $(0.24) $0.18 $(0.36) 0.47
Diluted (loss)
earnings per share $(0.15) $0.10 $(0.23) 0.26
Basic weighted
average
share outstanding 20,000,003 20,000,003 20,000,003 20,000,003
Diluted weighted
average
share outstanding 31,610,172 37,221,147 31,949,768 36,546,085
For further information, please contact:
Yanglin Soybean, Inc.
Mr. Bode Xu
Chief Financial Officer
Email: cfo@yanglinsoybean.com
Grayling
Eddie Cheung / Valentine Ding
Investor Relations
Tel: +1-646-284-9414
Email: eddie.cheung@us.grayling.com / valentine.ding@us.grayling.com
