omniture

Yuhe International, Inc. Announces Unaudited Fourth Quarter and Fiscal Year 2010 Results and Provides 2011 Guidance

2011-03-31 19:52 1575

WEIFANG, China, March 31, 2011 /PRNewswire-Asia/ --

  • 2010 net revenue increased 43% year over year to $67.5 million
  • 2010 gross profit increased 44.5% year over year to $24.2 million
  • Adjusted net income (non-GAAP) increased 52% year over year to $19.5 million, or $1.15 per fully diluted share
  • 2011 guidance for net income between $33 million and $36 million

Yuhe International, Inc. (Nasdaq: YUII) ("Yuhe" or the "Company"), a leading supplier of day-old chickens raised for meat production, or broilers, in the People's Republic of China ("PRC"), today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2010 and its fiscal year 2011 guidance.

Fiscal Year 2010 Highlights

  • Net revenue was $67.5 million, a 43% year over year increase
  • Gross profit was $24.2 million, a 44.5% year over year increase
  • Adjusted net income (non-GAAP) was $19.5 million, a 52% year over year increase
  • In December 2010, acquired ten new breeder farms, for a capacity expansion of 950,000 sets of parent breeders
  • In July 2010, completed acquisition of five breeder farms, for a capacity expansion of 430,000 sets of parent breeders

"We are very pleased to report a strong fiscal year 2010 with solid financial and operational results." commented Mr. Zhentao Gao, Chairman and chief executive officer of Yuhe International, Inc. "Our 2010 non-GAAP net income of $19.5 million has surpassed our previously raised guidance of $18.5 million in net income. The growth was driven by an increase in both sales volume and average selling prices of our day-old broilers. In fiscal year 2010, we sold approximately 146 million day-old broilers, or an increase of 33% from 110 million in 2009. The full year 2010 average selling price for day-old broilers increased 9% year-over-year to RMB 2.97 per bird from RMB 2.74 per bird in 2009. We are particularly pleased with our gross margin performance in fiscal year 2010, which rose to 35.9% from 35.4% in 2009, due to our successful margin management in locking in favorable fixed-price supply contracts during the market downturn and capitalizing on the market rebounds during the third and fourth quarter of 2010."

"On the operational side, we have also achieved exceptional progress in fiscal year 2010. The first acquisition conducted by the Company in December 2009 of 13 breeder farms in Shandong Province started contributing to our production in fiscal year 2010, and currently nine out of the 13 farms are fully operational. The Company also completed two accretive acquisitions in Liaoning and Henan provinces of a total of 15 breeder farms in July and December 2010, to increase its production capacity to 3.15 million sets of parent breeders, or 8% of China's broiler market in capacity, and to further strengthen its position as China's largest supplier of day-old broilers. In addition, we completed construction of our third hatchery facility and the added 60 sets of hatchers commenced full operation at the year-end 2010, bringing our total sets of hatchers to 160 to absorb the increased breeding capacity" continued Mr. Gao.

Fourth Quarter 2010 Results

Net revenue increased 64.06% to $21.8 million, as compared to $13.3 million for the fourth quarter of 2009. The revenue increase was mainly driven by the 46% gain in sales volume of day-old broilers and a 16% increase in average selling prices. For the three months ended December 31, 2010, the sales volume of day-old broilers amounted to 45 million birds with an average selling price of RMB 3.18 per bird, as compared to the sales volume of 31 million birds with an average selling price of RMB 2.73 per bird in the fourth quarter of 2009. Gross profit increased 59.4% year over year to $7.5 million, with gross margin of 34.5%, as compared to $4.7 million, or 35.5% gross margin for the same period in 2009. The decrease in gross margin was mainly due to a 19% increase in average unit cost to RMB 2.11 per bird from RMB 1.77 per bird in the fourth quarter of the prior year. Net income(loss) for the three months ended December 31, 2010 was a net loss of $47.6 million, a decrease of $51.2 million from net income of $3.6 million for the same period in 2009, due mainly to incurrence of the non-recurring stock-based compensation expense of $53.81 million deriving from the share transfer between Mr. Kunio Yamamoto and Mr. Gao Zhentao. The purpose of the arrangement between Mr. Yamamoto and Mr. Gao Zhentao was to transfer Mr. Yamamoto's shares to Mr. Gao Zhentao in exchange for the services that Mr. Gao Zhentao has rendered, which resulted in the strong performance of the Company in the years 2008 and 2009. Adjusted net income (non-GAAP) for the three months ended December 31, 2010 was $6.20 million, or $0.32 per fully diluted share, up 71.13% compared with net income of $3.6 million, or $0.23 per fully diluted share for the same period in 2009. For the fourth quarter of 2010 there were 19.3 million fully diluted weighted shares outstanding versus 15.9 million fully diluted weighted shares outstanding in the prior year period.

Full Year 2010 Results

Net revenue increased 43% year over year to $67.5 million in 2010 from $47.25 million in 2009. The revenue increase was driven by the increase in sales volume of day-old broilers to 145.7 million birds, or 33%, from 109.9 million birds in 2009. In addition, the unit selling price of day-old broilers increased 9% to RMB 2.97 per bird for the year ended December 31, 2010 from RMB 2.74 per bird in 2009. The increased unit selling price reflected the pass-through of higher cost of corn and other raw materials to downstream customers. For the year ended December 31, 2010, $63.9 million, or 94.7%, of total sales was derived from the sales of day-old broilers.

Gross profit in 2010 grew 44.5% to $24.2 million, as compared to $16.7 million in 2009.  Gross margin was 35.9% for the year ended December 31, 2010, as compared to 35.4% for the year ended December 31, 2009.

General and administrative expenses increased by $54.72 million to $57.68 million for the year ended December 31, 2010, from $2.96 million for the year ended December 31, 2009. The increase in general and administrative expenses was mainly due to the non-cash non-recurring stock-based compensation expense of $53.81 million deriving from the share transfer between Mr. Kunio Yamamoto and Mr. Gao Zhentao. The stock-based compensation represented 79.70% of sales revenue in 2010. Such non-cash compensation charge is not expected to recur. Adjusted general and administrative expenses (non-GAAP) increased 30.8% to $3.87 million, from $2.96 million in 2009. The increase in the adjusted general and administrative expenses (non-GAAP) was mainly due to increased public company related expenses, prepaid expenses, advisory expenses and public offering related expenses.

Selling expenses increased 68.50% year over year to $731,401 in 2010 from $434,056 in 2009. As a percentage of net revenues, selling expenses were 1.08% for the year ended December 31, 2010, as compared to 0.92% for 2009. The increase in selling expenses was primarily due to the increase in sales volume. Selling expenses mainly comprised of packaging and sales-force travel expenses.

Net income decreased by $47.13 million to a net loss of $34.34 million for the year ended December 31, 2010 from net income of $12.79 million for the year ended December 31, 2009, primarily due to the impact of non-cash stock-based compensation related to the share transfer between Mr. Gao Zhentao and Mr. Yamamoto as explained above. Adjusted net income (non-GAAP) for the year ended December 31, 2010 increased 52% year over year to $19.47 million, as compared with $12.79 million in 2009.

Financial Condition

As of December 31, 2010, the Company held $34.5 million in cash and cash equivalents, as compared to $14.0 million at year-end 2009. Working capital was $24.5 million with a 2.04:1 current ratio. The Company had $107.8 million in shareholders' equity compared to $55.3 million at year-end 2009.

Yuhe generated $17.41 million in operating cash flow in the twelve months ended December 31, 2010. Including investing and financing activities, the total net cash inflow was $20.5 million for the twelve-month period. For the fiscal year ended December 31, 2010, the net cash outflow in investing activities was $24.87 million, mainly related to the construction and the purchase of breeder farms. The Company expects its strong working capital and operating cash flow to sufficiently meet its working capital requirements for the next 12 months.

Fiscal Year 2011 Outlook

Given the expected strong day-old broiler market in 2011 and the increased volume contribution from the Company's previous acquisitions made in December 2009 and July 2010, the management at Yuhe International forecasts its fiscal year 2011 net income to be in the range between $33 million and $36 million.

"Currently, China's day-old broiler market continues to experience higher average unit selling prices as compared with the same period of 2010. In addition, the capacity increase from our previous acquisitions made in December 2009 and July 2010 is expected to be reflected in our increased day-old broiler output throughout 2011. We have commenced construction of the fourth hatchery facility designed to have 100 sets of hatchers, which is expected to commence operation in 2011. Given the strong capacity pipeline and the prevailing higher average selling prices in the market, we are confident that the Company will continue to leverage its operational expertise in the day-old broiler industry to continue delivering superb results and to achieve our projected 2011 guidance," concluded Mr. Gao.

Conference Call

The Company will host a conference call at 9:00 a.m. Eastern Time on Thursday, March 31, 2011, to discuss the unaudited financial results for its fiscal 2010 fourth quarter and year ended December 31, 2010 and its business outlook for the fiscal year 2011. To participate in the live conference call, please dial the following number five to ten minutes prior to the scheduled conference call time. Conference ID # 52384499

USA Toll-free:

 

18662421388

 

 

China Toll-Free:

 

4006988166

 

 

International Dial-In:                  

 

+ 61288236760

 

 

 

 


A replay of the conference call will be accessible within 24 hours via Yuhe's website at:

http://www.yuhepoultry.com/newEbiz1/EbizPortalFG/portal/html/luyin.html

NON-GAAP DISCLOSURE

To supplement the Company's consolidated financial results presented in accordance with U.S. GAAP, the Company uses the following non-GAAP measures: adjusted net income, adjusted earnings per share, adjusted operating income and adjusted general and administrative expense. These measures represent net income, earnings per share, operating income and general and administrative expense, respectively, as adjusted to exclude share-based compensation expense deriving from the share transfer between Mr. Kunio Yamamoto and Mr. Gao Zhentao .

The Company believes that, in conjunction with GAAP financial measures, these non-GAAP measures provide meaningful supplemental information regarding its performance and liquidity and both management and investors benefit from referring to these non-GAAP measures in assessing the Company's performance and when planning and forecasting future periods. The calculation of these non-GAAP measures allows the Company to compare its operating results with those of other companies without giving effect to expenses related to stock-based compensation, which may vary for different companies for reasons unrelated to the overall operating performance of a company's business.

These non-GAAP measures are not measures of performance under accounting principles generally accepted in the United States (U.S. GAAP). The Company includes them in this press release in order to:

  • improve transparency for investors;
  • assist investors in their assessment of the Company's operating performance;
  • facilitate comparisons to historical performance;
  • ensure that these measures are fully understood in light of how the Company evaluates its operating results; and
  • properly define the metrics used and confirm their calculation.

These non-GAAP measures are not meant to be considered in isolation or as a substitute for items appearing on the Company's financial statements prepared in accordance with U.S. GAAP. Rather, the non-GAAP measures should be used as a supplement to U.S. GAAP results to assist the reader in better understanding the operational performance of the Company. The Company recognizes that the usefulness of these non-GAAP measures has certain limitations, including the fact that the manner in which the Company calculates these non-GAAP measures may differ from that of other companies, which limits their usefulness as comparative measures.

Management compensates for these limitations by using these non-GAAP measures as comparative tools, together with U.S. GAAP measurements, to assist in the evaluation of its operating performance. Please refer to the non-GAAP reconciliation tables at the end of this press release for a reconciliation of adjusted net income, adjusted earnings per share, adjusted operating income and adjusted general and administrative expense to net income attributable to net income, earnings per share, operating income and general and administrative expense, respectively, which are the most directly comparable U.S. GAAP financial measures.

About Yuhe International, Inc.

Yuhe International, Inc. is one of the largest day-old broiler producers in China. Founded in 1996, the Company operates in the middle of the commercial broiler chicken supply chain, where it purchases parent breeding stock from breeder farms, raises them to produce hatching eggs, and hatches the eggs to live day-old broilers, which are then sold through 38 distributors to its end-users, such as integrated chicken companies and broiler raisers. Headquartered in Weifang, Shandong province, the Company has two operational subsidiaries, Weifang Yuhe Poultry Co. Ltd. and Weifang Taihong Feed Co. Ltd., the latter of which largely supplies the Company's internal demand for chicken feed. Currently, the Company has approximately 1600 employees with 43 breeding farms and 3 hatchery facilities. Approximately 90% of the Company's current sales are in the Shandong province with a customer base across 10 Provinces in China. The Company has passed ISO9001 certification and operates imported state-of-the-art equipment, adhering to the international standards of operation. For more information on the Company and its products, please visit http://www.yuhepoultry.com.

Cautionary Statement

This press release contains forward-looking statements concerning the Company's business, products and financial results. The Company's actual results may differ materially from those anticipated in the forward-looking statements depending on a number of risk factors including, but not limited to, the following: general economic and business conditions, development, shipment, market acceptance, additional competition from existing and new competitors, changes in technology, and various other factors beyond the Company's control. All forward-looking statements are expressly qualified in their entirety by this Cautionary Statement and the risk factors detailed in the Company's reports filed with the Securities and Exchange Commission. The financial results contained in this press release are unaudited and are subject to changes. The final results are subject to the Company's  filing of its annual report on Form 10-K with the Securities and Exchange Commission. The Company undertakes no duty to revise or update the information disclosed in this press release.

Contact Information:


Yuhe International, Inc.
www.yuhepoultry.com


Ms. Serena Wu
Investor Relations Manager
+1 (646) 502-8625
Email: serena.wu@yuhepoultry.com


Mr. Vincent Hu
Chief Financial Officer
Email: vincent.hu@yuhepoultry.com

 

 

 


- FINANCIAL TABLES FOLLOW-

TABLE 1

YUHE INTERNATIONAL, INC.


CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Stated in US Dollars)


 

 

 

 

For the Year Ended

 

 

 

 

 

December 31

 

 

 

 

 

2010

 

 

 

2009

 

 

 

 

 

 

 

 

 

 

 

Net revenue

 

 

$

 

67,480,359

 

 

 

$

 

47,245,758

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

 

 

(43,289,031)

 

 

 

 

(30,504,187)

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

 

24,191,328

 

 

 

 

16,741,571

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

Selling

 

 

 

(731,401)

 

 

 

 

(434,056)

 

 

 

General and administrative expenses

 

 

 

(57,680,767)

 

 

 

 

(2,963,536)

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

 

 

(58,412,168)

 

 

 

 

(3,397,592)

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

 

(34,220,840)

 

 

 

 

13,343,979

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-operating income (expenses)

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

 

35,519

 

 

 

 

237

 

 

 

Other income (expenses)

 

 

 

5,699

 

 

 

 

849

 

 

 

(Loss) gain on disposal of fixed assets

 

 

 

238,412

 

 

 

 

24,567

 

 

 

Investment income

 

 

 

15,744

 

 

 

 

15,522

 

 

 

Interest expenses

 

 

 

(401,038)

 

 

 

 

(608,789)

 

 

 

 

 

 

 

 

 

 

 

Total other income (expenses)

 

 

 

(105,664)

 

 

 

 

(567,614)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income before income taxes

 

 

 

(34,326,504)

 

 

 

 

12,776,365

 

 

 

Income tax expenses

 

 

 

(10,843)

 

 

 

 

17,756

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

$

 

(34,337,347)

 

 

 

$

 

12,794,121

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

Foreign currency translation

 

 

 

2,502,328

 

 

 

 

106,520

 

 

 

Comprehensive income

 

 

$

 

(31,835,019)

 

 

 

$

 

12,900,641

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

 

 

 

 

Basic

 

 

$

 

(2.06)

 

 

 

$

 

0.81

 

 

 

Diluted(Anti-dilutive)

 

 

$

 

(2.06)

 

 

 

$

 

0.81

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

16,672,957

 

 

 

 

15,722,180

 

 

 

Diluted

 

 

 

16,913,054

 

 

 

 

15,792,540

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


TABLE 2

YUHE INTERNATIONAL, INC.


CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Stated in US Dollars)


 

 

 

 

For the Three Months Ended

 

 

 

 

 

December 31

 

 

 

 

 

2010

 

 

 

2009

 

 

 

 

 

 

 

 

 

 

 

Net revenue

 

 

$

 

21,801,185

 

 

 

$

 

13,288,765

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

 

 

(14,289,844)

 

 

 

 

(8,577,489)

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

 

7,511,341

 

 

 

 

4,711,276

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

Selling

 

 

 

(179,381)

 

 

 

 

(118,684)

 

 

 

General and administrative expenses

 

 

 

(55,053,021)

 

 

 

 

(799,896)

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

 

 

(55,232,402)

 

 

 

 

(918,580)

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

 

(47,721,061)

 

 

 

 

3,792,696

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-operating income (expenses)

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

 

35,294

 

 

 

 

55

 

 

 

Other income (expenses)

 

 

 

(9,416)

 

 

 

 

(682)

 

 

 

(Loss) gain on disposal of fixed assets

 

 

 

236,731

 

 

 

 

(2,131)

 

 

 

Investment income

 

 

 

87

 

 

 

 

13

 

 

 

Interest expenses

 

 

 

(144,901)

 

 

 

 

(167,553)

 

 

 

 

 

 

 

 

 

 

 

Total other income (expenses)

 

 

 

117,795

 

 

 

 

(170,298)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income before income taxes

 

 

 

(47,603,266)

 

 

 

 

3,622,398

 

 

 

Income tax expenses

 

 

 

(3,922)

 

 

 

 

17,756

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

$

 

(47,607,188)

 

 

 

$

 

3,640,154

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

Foreign currency translation

 

 

 

1,089,458

 

 

 

 

2,523

 

 

 

Comprehensive income

 

 

$

 

(46,517,730)

 

 

 

$

 

3,642,677

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

 

 

 

 

Basic

 

 

$

 

(2.49)

 

 

 

$

 

0.23

 

 

 

Diluted(Anti-dilutive)

 

 

$

 

(2.49)

 

 

 

$

 

0.23

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

19,124,563

 

 

 

 

15,722,180

 

 

 

Diluted

 

 

 

19,341,935

 

 

 

 

15,931,379

 

 

 

 

 

 

 

 

 

 

 

 

 

 


TABLE 3

YUHE INTERNATIONAL, INC.


CONSOLIDATED BALANCE SHEETS

(in US Dollars)


 

 

 

 

December 31,

 

 

 

December 31,

 

 

 

 

 

2010

 

 

 

2009

 

 

 

 

 

(audited)

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

$

 

34,541,658

 

 

 

$

 

14,047,147

 

 

 

Accounts receivable, net of allowances of $20,446 and $18,868

 

 

 

 

 

 

 

838

 

 

 

Inventories

 

 

 

13,004,698

 

 

 

 

6,560,783

 

 

 

Advances to suppliers

 

 

 

329,190

 

 

 

 

359,179

 

 

 

Deferred tax assets

 

 

 

8,527

 

 

 

 

17,766

 

 

 

Total current assets

 

 

 

47,884,073

 

 

 

 

20,985,713

 

 

 

 

 

 

 

 

 

 

 

 

 

Plant and equipment, net

 

 

 

34,588,401

 

 

 

 

29,556,712

 

 

 

Deposits paid for acquisition of long term assets

 

 

 

33,921,510

 

 

 

 

16,082,613

 

 

 

Notes receivable, net and other receivable, net

 

 

 

3,454,787

 

 

 

 

33,635

 

 

 

Unlisted investments held for sale

 

 

 

-

 

 

 

 

300,172

 

 

 

Intangible assets, net

 

 

 

1,726,082

 

 

 

 

2,851,411

 

 

 

Investment in direct financing lease

 

 

 

262,440

 

 

 

 

382,742

 

 

 

Long term prepaid rent

 

 

 

9,356,843

 

 

 

 

6,570,038

 

 

 

Total assets

 

 

$

 

131,194,136

 

 

 

$

 

76,763,036

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

 

 

5,757,951

 

 

 

 

5,740,912

 

 

 

Current portion of long term loans

 

 

 

 

 

 

 

9,433,686

 

 

 

Other payable

 

 

 

1,053,626

 

 

 

 

1,343,901

 

 

 

Short term borrowings

 

 

$

 

11,691,219

 

 

 

$

 

-

 

 

 

Accrued expenses and payroll related liabilities

 

 

 

2,934,296

 

 

 

 

2,366,134

 

 

 

Advances from customers

 

 

 

1,380,852

 

 

 

 

678,366

 

 

 

Other taxes payable

 

 

 

155,172

 

 

 

 

150,764

 

 

 

Loan from director

 

 

 

302,489

 

 

 

 

292,517

 

 

 

Other liabilities

 

 

 

148,856

 

 

 

 

143,949

 

 

 

Due to related companies

 

 

 

 

 

 

 

1,208

 

 

 

Total current liabilities

 

 

 

23,424,461

 

 

 

 

20,151,437

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

 

 

 

 

Long-term loans

 

 

 

 

 

 

 

1,360,206

 

 

 

Total liabilities

 

 

 

23,424,461

 

 

 

 

21,511,643

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

Preferred stock, $.001 par value, 1,000,000 shares authorized,
no shares issued and outstanding

 

 

 

-

 

 

 

 

-

 

 

 

Common stock, $.001 par value, 500,000,000 shares authorized, 20,249,563
and 15,722,180 equivalent shares issued and outstanding at December 31, 2010
and December 31, 2009, respectively

 

 

 

20,249

 

 

 

 

15,722

 

 

 

Additional paid-in capital

 

 

 

115,021,623

 

 

 

 

30,672,849

 

 

 

Retained earnings (deficit)

 

 

 

(11,020,553)

 

 

 

 

23,316,794

 

 

 

Accumulated other comprehensive income

 

 

 

3,748,356

 

 

 

 

1,246,028

 

 

 

Total stockholders' equity

 

 

 

107,769,675

 

 

 

 

55,251,393

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

 

$

 

131,194,136

 

 

 

$

 

76,763,036

 

 

 

 

 

 

 

 

 

 

 

 


TABLE 4

YUHE INTERNATIONAL, INC.


CONSOLIDATED STATEMENTS OF CASH FLOWS   (in US Dollars)


 

 

 

 

For the Year Ended

 

 

 

 

 

December 31

 

 

 

 

 

2010

 

 

 

2009

 

 

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

Net income

 

 

$

 

(34,337,347)

 

 

 

$

 

12,794,121

 

 

 

Adjustments to reconcile net income to net cash used in operating activities:

 

 

 

 

 

 

 

 

 

 

Stock based compensation

 

 

 

54,534,860

 

 

 

 

728,833

 

 

 

Depreciation

 

 

 

2,495,395

 

 

 

 

2,035,813

 

 

 

Amortization

 

 

 

63,907

 

 

 

 

65,541

 

 

 

Amortization of unearned rental income

 

 

 

(31,559)

 

 

 

 

 

 

 

Capitalized interest in construction in progress

 

 

 

(530,915)

 

 

 

 

(662,711)

 

 

 

Bad debts expense (recovery)

 

 

 

18,351

 

 

 

 

56,220

 

 

 

Loss (gain) on disposal of fixed assets

 

 

 

(238,412)

 

 

 

 

(24,567)

 

 

 

         Income from unlisted investment

 

 

 

-

 

 

 

 

(15,522)

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

 

(67)

 

 

 

 

66

 

 

 

Advances to suppliers

 

 

 

(37,056)

 

 

 

 

4,113,119

 

 

 

Inventories

 

 

 

(6,067,059)

 

 

 

 

100,646

 

 

 

Deferred tax assets

 

 

 

9,602

 

 

 

 

(17,756)

 

 

 

Other receivable

 

 

 

6,530

 

 

 

 

 

 

 

Long term prepaid rent

 

 

 

184,875

 

 

 

 

 

 

 

Accounts payable

 

 

 

(175,450)

 

 

 

 

760,193

 

 

 

Other payable

 

 

 

(327,088)

 

 

 

 

403,821

 

 

 

Accrued expenses and payroll related liabilities

 

 

 

489,642

 

 

 

 

235,576

 

 

 

Advances from customers

 

 

 

1,355,972

 

 

 

 

3,161

 

 

 

Other taxes payable

 

 

 

(714)

 

 

 

 

8,866

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

 

 

17,413,467

 

 

 

 

20,585,420

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

 

Deposit paid and acquisition of property, plant and equipment

 

 

 

(25,302,994)

 

 

 

 

(18,187,196)

 

 

 

Advance to notes receivable

 

 

 

(34,699)

 

 

 

 

 

 

 

Proceeds from disposal of fixed assets

 

 

 

-

 

 

 

 

27,834

 

 

 

Advance to related companies

 

 

 

-

 

 

 

 

-

 

 

 

Repayment of related companies

 

 

 

-

 

 

 

 

44,637

 

 

 

Proceeds received from related parties receivables

 

 

 

-

 

 

 

 

3,713,806

 

 

 

Purchase of leased land use rights

 

 

 

-

 

 

 

 

(5,960,354)

 

 

 

Proceeds from unlisted investments

 

 

 

302,760

 

 

 

 

-

 

 

 

    Investment in direct financing lease

 

 

 

161,624

 

 

 

 

592,004

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

 

 

 

(24,873,309)

 

 

 

 

(19,769,269)

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

 

Proceeds from loan payable

 

 

 

11,403,282

 

 

 

 

1,067,114

 

 

 

Repayment of loan payable

 

 

 

(10,886,963)

 

 

 

 

(1,067,114)

 

 

 

Proceeds from related party payable

 

 

 

-

 

 

 

 

 

 

 

Repayment of related party payable

 

 

 

-

 

 

 

 

(209,828)

 

 

 

         Proceeds from issuance of common stock

 

 

 

27,082,442

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash flows (used in) provided by financing activities:

 

 

 

27,598,761

 

 

 

 

(209,828)

 

 

 

 

 

 

 

 

 

 

 

 

 

Effect of foreign currency translation on cash and cash equivalents

 

 

 

355,592

 

 

 

 

28,619

 

 

 

 

 

 

 

 

 

 

 

 

 

Net increase in cash

 

 

 

20,494,511

 

 

 

 

634,942

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash- beginning of period

 

 

 

14,047,147

 

 

 

 

13,412,205

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash- end of period

 

 

$

 

34,541,658

 

 

 

$

 

14,047,147

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

 

 

 

 

 

Interest paid

 

 

$

 

931,952

 

 

 

$

 

1,405,500

 

 

 

Income taxes paid

 

 

$

 

-

 

 

 

$

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure

 

 

 

 

 

 

 

 

 

 

   Transfer from construction in progress to fixed assets

 

 

$

 

2,711,986

 

 

 

$

 

4,009,791

 

 

 

   Transfer from advances to suppliers and deposit paid for acquisition of
     long term assets to fixed assets

 

 

$

 

7,102,605

 

 

 

$

 

-

 

 

 

   Transfer from deposit paid for acquisition of long term assets to long
     term prepaid rent

 

 

$

 

2,684,586

 

 

 

$

 

-

 

 

 

   Cashless exercise of 142,816 warrants

 

 

$

 

87

 

 

 

$

 

-

 

 

 

   Issue 300,000 restricted shares for deposit to purchase assets

 

 

$

 

2,736,000

 

 

 

$

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 


TABLE 5

YUHE INTERNATIONAL, INC.


Non-GAAP Reconciliation


 

 

 

 

For the Year Ended December 31,

 

 

 

 

 

 

2010

 

 

 

 

2009

 

 

 

Net income (GAAP)

 

 

$

 

(34,337,347)

 

 

 

$

 

12,794,121

 

 

 

Stock-based compensation 1

 

 

 

53,806,061

 

 

 

 

 

 

 

Adjusted net income (Non-GAAP)

 

 

$

 

19,468,714

 

 

 

$

 

12,794,121

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share (GAAP)

 

 

 

 

 

 

 

 

 

 

Basic

 

 

$

 

(2.06)

 

 

 

$

 

0.81

 

 

 

Diluted(Anti-dilutive)

 

 

$

 

(2.06)

 

 

 

$

 

0.81

 

 

 

Earnings per share (Non-GAAP)

 

 

 

 

 

 

 

 

 

 

Basic

 

 

$

 

1.17

 

 

 

$

 

0.81

 

 

 

Diluted

 

 

$

 

1.15

 

 

 

$

 

0.81

 

 

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

16,672,957

 

 

 

 

15,722,180

 

 

 

Diluted

 

 

 

16,913,054

 

 

 

 

15,792,540

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (GAAP)

 

 

$

 

(34,220,840)

 

 

 

$

 

13,343,979

 

 

 

Stock-based compensation 1

 

 

 

53,806,061

 

 

 

 

 

 

 

Adjusted operating income (Non-GAAP)

 

 

$

 

19,585,221

 

 

 

$

 

13,343,979

 

 

 

 

 

 

 

 

 

 

 

 

 

Gneral and administrative expense (GAAP)

 

 

$

 

57,680,767

 

 

 

$

 

2,963,536

 

 

 

Stock-based compensation 1

 

 

 

53,806,061

 

 

 

 

 

 

 

Adjusted general and administrative expense (Non-GAAP)

 

 

$

 

3,874,707

 

 

 

$

 

2,963,536

 

 

 

*In the Company's financial statement, stock-based compensation is $54,534,860 in 2010. Stock-based compensation 1 refers to stock-based compensation to Mr Gao Zhentao of $53,806,061.


 

 

 

 

 

 

 

 

 

 

 



YUHE INTERNATIONAL, INC.


Non-GAAP Reconciliation


 

 

 

 

For the Three Months
Ended December 31,

 

 

 

 

 

 

2010

 

 

 

 

2009

 

 

 

Net income (GAAP)

 

 

$

 

(47,607,188)

 

 

 

$

 

3,640,154

 

 

 

Stock-based compensation 1

 

 

 

53,806,061

 

 

 

 

 

 

 

Adjusted net income (Non-GAAP)

 

 

$

 

6,198,873

 

 

 

$

 

3,640,154

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share (GAAP)

 

 

 

 

 

 

 

 

 

 

Basic

 

 

$

 

(2.49)

 

 

 

$

 

0.23

 

 

 

Diluted(Anti-dilutive)

 

 

$

 

(2.49)

 

 

 

$

 

0.23

 

 

 

Earnings per share (Non-GAAP)

 

 

 

 

 

 

 

 

 

 

Basic

 

 

$

 

0.32

 

 

 

$

 

0.23

 

 

 

Diluted

 

 

$

 

0.32

 

 

 

$

 

0.23

 

 

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

19,124,563

 

 

 

 

15,722,180

 

 

 

Diluted

 

 

 

19,341,935

 

 

 

 

15,931,379

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (GAAP)

 

 

$

 

(47,721,061)

 

 

 

$

 

3,792,696

 

 

 

Stock-based compensation 1

 

 

 

53,806,061

 

 

 

 

 

 

 

Adjusted operating income (Non-GAAP)

 

 

$

 

6,085,000

 

 

 

$

 

3,792,696

 

 

 

 

 

 

 

 

 

 

 

 

 

Gneral and administrative expense (GAAP)

 

 

$

 

55,053,021

 

 

 

$

 

799,896

 

 

 

Stock-based compensation 1

 

 

 

53,806,061

 

 

 

 

 

 

 

Adjusted general and administrative expense (Non-GAAP)

 

 

$

 

1,246,960

 

 

 

$

 

799,896

 

 

 

*In the Company's financial statement, stock-based compensation is $53,718,566 for the three months ended December 31,2010. Stock-based compensation 1 refers to stock-based compensation to Mr Gao Zhentao of $53,806,061.


 

 

 

 

 

 

 

 

 

 

 




Source: Yuhe International, Inc.
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