omniture

Yanglin Soybean, Inc. Reports Second Quarter Fy08 Results

Yanglin Soybean, Inc.
2008-09-08 15:49 1378


-- Revenues increased 125% to $76.27 million from $33.90 million

-- Gross profit rose 92% to $4.42 million from $2.30 million

-- Net income increased 91% to $3.56 million from $1.86 million

HEILONGJIANG, China, Sept. 8 /Xinhua-PRNewswire-FirstCall/ -- Yanglin Soybean, Inc. (OTC Bulletin Board: YSYB) ("Yanglin" or the "Company"), a leading producer and processor of high-quality non-genetically modified (non-GM) soybean products in China, today announced unaudited financial results for the second quarter ended June 30, 2008.

Financial Results Overview

Revenues for the second quarter of 2008 rose 125% to $76.27 million, as compared to $33.90 million for the three months ended June 30, 2007. Revenues for soybean meal, soybean oil and salad oil all experienced triple-digit year-over-year growth; 115.2%, 134.7% and 152.3%, respectively, aided in part by the significant increases in the average selling prices of soybean products and as well as by the growth in sales volume.

"We are very pleased to have achieved our record revenue growth as strong demand for our soybean products helped us deliver another quarter of solid results," said Mr. Shulin Liu, Yanglin’s Chief Executive Officer. "In addition to achieving record revenues, gross profit continued to increase even though the cost of our raw materials has increased. We continue to build significant momentum for the future, as we will introduce several new high-value-adding soybean products in the latter part of this year and next year to complement our existing products."

In the second quarter of 2008, sales of soybean meal, soybean oil and salad oil were $42.99 million, $24.57 million, and $8.71 million, accounting for 56.4%, 32.2% and 11.4% of total revenues, respectively.

Gross profit for the second quarter of 2008 was $4.42 million, as compared to $2.30 million for the same quarter last year, reflecting a 92.3% year-over-year increase. Gross profit, as a percent of revenue, was 5.8% for the second quarter of 2008. This compares to gross profit of 10.5% for the first quarter of 2008 and 6.8% for the year-ago quarter. Gross profit for the second quarter of 2008 was impacted by higher costs of raw materials, as the run-up in soybean prices drove overall gross margins lower. Soybean is the most important raw material in our production, as it accounts for over 90% of our total cost. Gross margin for soybean meals, our biggest revenue contributor, increased from 5.0% same quarter in 2007 to 6.5% in the second quarter of 2008. Gross margin for soybean oil went from 9.2% second quarter in 2007 to 4.5% same quarter this year. Gross margin of salad oil also lowered from 9.9% second quarter in 2007.to 5.9% same quarter in 2008. The reason of lower gross margins of soybean oil and salad oil was mainly the significantly rising soybean prices in the first half of 2008, and the prices of these two products didn’t grow in line with that of soybean price. The Company is proactively looking to commence commodity-hedging strategies in an effort to stabilize the price of the raw material.

Total operating expenses for the three months ended June 30, 2008 were $616,674, an increase of 83% from $337,452 in the same period of the prior year. G&A expenses for the second quarter were $ 552,129, an increase of 93% from $285,998 in the same period of the prior year. The ongoing implementation of our Sarbanes-Oxley Act compliance project with Ernst & Young as our consultant caused a material increase in the general and administrative expense. We expect to finish this project by the end of this year. Besides, G&A expenses also increased as the result of our efforts to optimize our organizational structure and improve management institutions. Selling and marketing expenses increased 25% on a year over year basis. This was mainly due to the increase in sales-related shipping and handling expenses, which usually is related to sales volume directly.

Income from operations for the second quarter of 2008 amounted to $3.80 million, an increase of 94% compared with an operating income of $1.96 million in the same period in 2007. Operating margin was 5.0% for the second quarter of 2008 as compared to 9.3% for the first quarter of 2008 and 5.8% for the year-ago quarter.

Interest expenses for the second quarter of 2008 amounted to $264,980, compared with $108,905 for the three months ended June 30, 2007. The increase was primarily attributable to additional short-term bank borrowings on higher interest rate.

Net income for the second quarter of 2008 totaled $3.56 million, or $0.10 per diluted share. This compared to net income of $1.86 million, or $0.09 per diluted share in the same period one year ago. The disparity between the growth of the amount of net income and that of diluted EPS is because of the large increase in the weighted average number of common stock for the purpose of calculating EPS on fully diluted basis, which was caused by the issue of a large number of preferred stocks and warrants in the financing closed in October 2007.

The Company continues to enjoy a tax holiday for the remainder of 2008, as we have been recognized as a key leading enterprise in the agriculture industry by the Chinese government. After 2008, a review process is required to determine the extension of our tax exempt status. The current corporate income tax rate in China is 25%.

Balance Sheet

The Company’s balance sheet at June 30, 2008 included cash and cash equivalents of $10.53 million, compared with $9.21 million at December 31, 2007. The Company has net working capital of $28.75 million versus $20.24 million at December 31, 2007. Total shareholders’ equity increased to $85.42 million as compared to $70.73 million on December 31, 2007.

Business Outlook

The Company expects total revenues for the year ending December 31, 2008 to be in the range of US$230 million to US$240 million and net income in the range of US$13 million to US$14 million. These targets are based on the Company’s current views on the operating and market conditions, which are subject to change.

Conference Call

Management will conduct a conference call on Monday, September 8, 2008 at 8:30 a.m. Eastern Daylight Time to discuss these results. 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: +1-877-407-9210 (North America) or +1-201-689-8049 (International).

A replay of the call will be available through Monday, September 15, 2008 until 11:59 p.m. Eastern Daylight Time. For the replay, please call +1-877-660-6853 (North America) or +1-201-612-7415 (International) and use account Number: 286 and conference ID Number: 295841.

About Yanglin

Yanglin Soybean, Inc. is a leading non-genetically modified (non-GM) soybean processor in China. The Company manufactures soybean oil, salad oil and soybean meal with an annual production 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 in 2008 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 especially in the pharmaceutical industry, pricing and demand trends for the Company’s products, changes to government regulations, risk associated with operation of the Company’s new 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 applications, 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 STATEMENTS OF OPERATIONS

(In thousands, except number of share and per share data)

Six months ended June 30, Three months ended June 30,

2008 2007 2008 2007

Net sales $141,549,672 $ 69,193,036 $ 76,273,814 $ 33,899,190

Cost of sales (130,296,704) (63,580,961) (71,857,724) (31,602,970)

Gross profit $ 11,252,968 $ 5,612,075 $ 4,416,090 $ 2,296,220

Selling expenses (118,970) (69,067) (64,545) (51,454)

General and

administrative

expenses (1,244,941) (710,518) (552,129) (285,998)

Income from

operation $ 9,889,057 $ 4,832,490 $ 3,799,416 $ 1,958,768

Interest income 53,798 25,558 35,514 13,122

Interest

expenses (513,903) (219,969) (264,980) (108,905)

Other expenses (14,348) -- (14,348) --

Income from

operations

before

income taxes $ 9,414,604 $ 4,638,079 $ 3,555,602 $ 1,862,985

Income taxes -- -- -- --

Net income $ 9,414,604 $ 4,638,079 $ 3,555,602 $ 1,862,985

Foreign currency

translation

adjustment 3,872,808 955,446 1,470,797 709,619

Comprehensive

income $ 13,287,412 $ 5,593,525 $ 5,026,399 $ 2,572,604

Basic earnings

per share $ 0.47 $ 0.23 $ 0.18 $ 0.09

Diluted earnings

per share $ 0.26 $ 0.23 $ 0.10 $ 0.09

Basic weighted

average share

outstanding 20,000,003 19,998,473 20,000,003 19,998,473

Diluted weighted

average share

outstanding 36,546,084 19,998,473 37,221,146 19,998,473

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

June 30, 2008 December 31, 2007

(Unaudited) (Audited)

ASSETS

Current assets

Cash and cash equivalents $ 10,525,613 $ 9,210,121

Pledged deposits 500,000 500,000

Accounts receivable -- 13,854

Inventories 21,043,340 17,883,652

Advances to suppliers 10,269,097 5,736,267

Prepaid VAT and other taxes 3,400,284 2,457,137

Other receivables 36,587 27,896

Total current assets $ 45,774,921 $ 35,828,927

Property, plant and equipment, net 23,140,896 22,563,196

Intangible assets, net 4,716,324 3,444,081

Prepaid deposits for equipment

And construction 11,783,012 8,896,327

TOTAL ASSETS $ 85,415,153 $ 70,732,531

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

Short term bank loans $ 13,097,005 $ 12,305,000

Current portion of long term bank

Loans 50,486 47,433

Accounts payable 23,381 12,921

Other payables 75,408 44,380

Customers deposits 3,313,283 2,656,777

Accrued liabilities 468,014 521,114

Total current liabilities $ 17,027,577 $ 15,587,625

Long term liabilities

Long term bank loans 412,365 457,107

TOTAL LIABILITIES $ 17,439,942 $ 16,044,732

STOCKHOLDERS’ EQUITY

Preferred Stock - $0.001 par value

50,000,000 share authorized;

9,999,999 and 9,999,999 issued

and outstanding as of June 30,

2008 and December 31, 2007

respectively $ 2,923,815 $ 2,923,815

Common stock - $0.001 par value

100,000,000 shares authorized;

20,000,003 shares issued and

outstanding as of June 30,

2008 and December 31, 2007 20,000 20,000

Additional paid-in capital 27,277,053 27,277,053

Statutory reserves 3,490,834 3,490,834

Retained earnings 26,824,823 17,410,219

Accumulated other comprehensive

Income 7,438,686 3,565,878

$ 67,975,211 $ 54,687,799

TOTAL LIABILITIES AND

STOCKHOLDERS’ EQUITY $ 85,415,153 $ 70,732,531

For more information, please contact:

Yanglin Soybean, Inc.

Mr. Bode Xu

Chief Financial Officer

Email: yanglin_bodexu@hotmail.com

Grayling Global

Eddie Cheung

Investor Relations

Tel: +1-646-284-9414

Email: echeung@hfgcg.com

Source: Yanglin Soybean, Inc.
Keywords: Agriculture
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