DAQING, Heilongjiang, China,
June 22, 2011
/PRNewswire-Asia-FirstCall/ -- China Nutrifruit Group
Limited (NYSE Amex: CNGL) ("China Nutrifruit" or "the
Company"), a leading producer of premium specialty fruit based
products in China ("PRC"), today
announced its financial results for the three months and fiscal
year ended March 31, 2011.
Fourth Quarter Fiscal Year 2011 Highlights
- Net sales increased 21.1% year-over-year to $32.0 million
- Gross profit increased 34.2% year-over-year to $15.5 million, with gross margin of 48.3%
- Operating earnings rose 44.8% year-over-year to $12.9 million, with operating margin of
40.3%
- Net income increased 42.1% year-over-year to $9.5 million, or $0.23 per diluted share
Fiscal Year 2011
Highlights
- Net sales were $87.0 million up
19.3% from $72.9 million in fiscal
2010
- Gross profit increased 22.7% year-over-year to $40.8 million, with a gross margin of 46.9%
- Operating earnings rose 29.6% year-over-year to $33.4 million, with operating margin of
38.4%
- Net income was $24.7 million, or
$0.62 per diluted share, compared to
net income of $19.2 million, or
$0.51 per diluted share, in fiscal
2010
- Exceeded net income guidance of $22
million to $23 million
"In fiscal 2011, we achieved record financial performance and
reported double digit growth in revenue and net income, which
increased 19.3% and 28.5%, respectively. During the year, we
successfully introduced our new seabuckthorn and blackcurrant
concentrate juice and glazed fruit products, which accounted for
over 8% of fiscal 2011 sales. We also expanded our customer base to
supply our products internationally through our new distributors,
Cargill Shanghai and Doehler Rizhao," commented Mr. Changjun Yu, Chairman and CEO of China
Nutrifruit. "Due to delay in beginning operations of our fruit and
vegetable powder facility, we reported lower than estimated revenue
for fiscal year 2011. However, as a result of enhanced margins,
effective cost control measures and operating efficiency, we
exceeded our net income guidance for fiscal year 2011. We expect
continued strong financial performance in fiscal year 2012 largely
driven by anticipated growth in demand for our products combined
with launch of our new fruit and vegetable powder products and
concentrate paste products."
Fourth Quarter Fiscal Year 2011 Results
Net sales for the fourth quarter of fiscal year 2011 increased
21.1% to $32.0 million, from
$26.4 million in the same quarter of
fiscal 2010. Strong sales growth during the quarter was primarily
due to increased sales volume of glazed fruit and concentrate pulp
products, and increased per unit sales price of concentrate juice
products primarily resulting from the increased cost of source
fruits crab apple, blueberry and raspberry. In addition, the
Company's recently introduced seabuckthorn and blackcurrant glazed
fruit and concentrate juice products and they contributed 10.9% of
total sales during the quarter.
In the fourth quarter of fiscal year 2011, net sales from
concentrated juice products, which accounted for 47.0% of total net
sales, were $15.0 million, up 3.1%
from $14.6 million, or 55.2% of total
net sales, in the same quarter of fiscal year 2010. Net sales from
glazed fruit products reached $10.7
million, contributing 33.3% of net sales, up 65.9% as
compared to $6.4 million, or 24.3% of
total net sales in the same period of prior year. Sales of
concentrate pulp products and nectar were $4.1 million and $2.2
million, respectively, up 37.2% and 1.1% from $3.0 million and $2.2
million, respectively, in the same period in fiscal year
2010. The Company reported no revenue from the beverage segment as
it discontinued beverage operation in March
2010, following its strategic decision to focus on its
high-margin premium products.
Gross profit for the fourth quarter of fiscal year 2011
increased 34.2% to $15.5 million from
$11.5 million for the same period a
year ago. Gross margin was 48.3% for the fourth quarter of fiscal
year 2011, up from 43.6% in the year ago period. The increase in
gross margin was mainly due to a significant increase in gross
margin of the Company's concentrate pulp products. Gross margin on
concentrate pulp products rose to 44.7% from 27.6% a year ago.
The average selling price for pear concentrate pulp increased
55.5% in the fourth quarter of fiscal 2011 compared to the same
period last fiscal year. Gross margin of glazed fruit products,
nectar and concentrate juice were 54.9%, 66.0% and 42.1% compared
to 44.7%, 68.8% and 43.3%, respectively, in the fourth quarter of
fiscal year 2010.
In the fourth quarter of fiscal year 2011, selling, general, and
administrative expenses remained stable at approximately
$2.6 million. Selling expenses were
$0.7 million, or 2.3% of net sales,
down 22.8% compared to $1.0 million,
or 3.6% of net sales, in the fourth quarter of fiscal year 2010. As
a percentage of net sales, decline in selling expenses was mainly
due to the Company's well established relationships with existing
distributors who continue to place repeat orders with higher
volume, resulting in lower sales related travel expenses. In
addition, the Company incurred no selling expenses related to
beverage products in the fourth quarter of fiscal year 2011.
General and administrative expenses were $1.9 million, or 5.8% of net sales, up 7.8% from
$1.7 million, or 6.5% of net sales a
year ago.
Operating earnings in the fourth quarter of fiscal year 2011
were $12.9 million compared to
$8.9 million in the comparable period
last fiscal year. Operating margin for the quarter improved to
40.3%, from 33.5 % a year ago.
Provision for income taxes for the quarter was $3.4 million compared to $2.5 million a year ago.
Net income in the fourth quarter of fiscal year 2011 was
$9.5 million, or $0.23 per diluted share, up 42.1% as compared to
$6.7 million, or $0.17 per diluted share, a year ago. The
calculation of diluted earnings per share for the fourth quarter of
fiscal 2011 is based on 40.1 million weighted average shares
outstanding compared to 40.0 million in the same quarter of fiscal
2010.
Fiscal Year 2011 Results
For the fiscal year ended March 31,
2011, net sales were $87.0
million, up 19.3% from $72.9
million a year ago. Net sales from concentrate juice
products, which accounted for 48.0% of total net sales in fiscal
2011, were $41.7 million, up 20.3%
from $34.7 million a year ago. Among
the Company's concentrated juice products, sales of crab apple and
raspberry concentrated juice increased 25.8% and 21.2%,
respectively. Net sales from glazed fruit, which accounted for
25.6% of net sales, were $22.3
million, up 34.1% from $16.6
million a year ago. Sales of concentrate pulp, which
accounted for 15.5% of net sales, were $13.5
million, up 43.8% from $9.4
million a year ago. Sales of nectar, which accounted for
8.3% of net sales, were $7.2 million,
up 3.9% from $7.0 million a year ago.
The Company did not record sales from beverages since it ceased the
production of beverages in March 2010
to strategically focus on its core high-margin products.
Gross profit increased 22.7% to $40.8
million from $33.3 million a
year ago. Gross margin was 46.9% in fiscal year 2011 compared to
45.6% a year ago. Income from operations was $33.4 million, up 29.6% from $25.7 million last year. Net income for fiscal
2011 was $24.7 million, or
$0.62 per diluted share, compared to
$19.2 million, or $0.51 per diluted share in fiscal 2010. The
calculation of diluted earnings per share for fiscal 2011 is based
on 40.1 million weighted average shares outstanding compared to
38.1 million in fiscal 2010.
Financial Condition
As of March 31, 2011, China
Nutrifruit had $43.5 million in cash
and equivalents, $7.7 million in
current liabilities with no long-term debt and working capital of
$55.0 million. Shareholders' equity
was $93.3 million as of March 31, 2011, up from $65.8 million as of March
31, 2010.
The Company generated $25.8
million net cash from operating activities, up from
$21.7 million generated in fiscal
year 2010. The Company used $16.4
million in prepayment for purchase of land use right,
property and equipment for the construction of the Company's new
fruit and vegetable powder facility in Daqing, which is scheduled
to begin operations in July2011.
Business Outlook
In fiscal 2012, China Nutrifruit plans to further expand
production capacity, diversify its product portfolio and increase
market penetration. The Company will launch its new fruit and
vegetable powder products, concentrate paste products, cherry
tomato glazed fruits and golden berry dried fruits in calendar year
2011.
The Company is currently constructing a new concentrate paste
production facility in Zhaoyuan, Heilongjiang Province and plans to begin trial
production in July 2011. This new
multi-purpose concentrate paste production facility will have an
annual production capacity of 9,600 tons and will catering to the
raw material requirements of the Company's new fruit and vegetable
powder production facility and will also be sold to existing
distributors.
China Nutrifruit is currently making technological upgrades to
its glazed fruit production line in Daqing and concentrate juice
production line in Mudanjiang. The Company expects to complete the
upgrade process by July 2011 in
advance of its production season. As part of the technological
upgrade process, the Company is installing additional processing
equipment at its glazed fruit production line in Daqing, which will
enable production of its new golden berry dried fruit products. In
addition, following technological and maintenance upgrades, the
Company's concentrate juice production capacity in Mudanjiang will
expand to 9,000 tons annually, up 50% from its current annual
capacity of 6,000 tons per year.
For fiscal year 2012, the Company expects to generate revenue of
approximately $110 million to $113
million and net income of approximately $29 million to $30 million,
"Looking into fiscal 2012, we continue to see strong demand for
our high quality products backed by strong customer loyalty and an
increasingly health-conscious environment," said Mr. Yu. "We are on
track to commence production of our fruit and vegetable powder
products in July 2011. In addition,
we are excited about our strong product pipeline, including cherry
tomato glazed fruit, dried fruit products and concentrate paste
products, which will be supported by our capacity expansion plans.
We will be leveraging our existing nationwide sales and
distribution network throughout 18 provinces in China to market our new products and hold a
positive outlook. With our proven business model, strong execution
capability, new product initiatives, and capacity expansion, we
believe we are well-positioned to achieve another year of record
financial performance in fiscal 2012."
Conference Call Information
Management will conduct a conference call at 9:00 a.m. Eastern Time on Wednesday, June 22, 2011, to discuss financial
results for the fourth quarter and fiscal year 2011, ended
March 31, 2011.
To participate in the conference call, please dial the following
number five to ten minutes prior to the scheduled conference call
time: (866) 759-2078. International callers should dial
+1-706-643-0585. The conference ID number for the call is
75696956.
If you are unable to participate in the call at this time, a
replay will be available on Wednesday, June
22, 2011 at 12:00 noon Eastern
Time, through Wednesday, July 6,
2011. To access the replay, dial 800-642-1687. International
callers should dial +1-706-645-9291. The conference ID number for
the replay is 75696956.
About China Nutrifruit Group Limited
Through its subsidiaries Daqing Longheda Food Company Limited
and Daqing Senyang Fruit and Vegetable Food Technology Company
Limited, China Nutrifruit, is engaged in developing, processing,
marketing and distributing a variety of food products processed
primarily from premium specialty fruits grown in Northeast China, including golden berry, crab
apple, blueberry, seabuckthorn, blackcurrant and raspberry. Its
processing facility possesses ISO9001 and HACCP series
qualifications. Currently, the Company has established an extensive
nationwide sales and distribution network throughout 18 provinces
in China. For more information,
please visit http://www.chinanutrifruit.com .
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act""). Such statements include, among
others, those concerning our new products, our new facility and
capacity expansion, and its expected impact on the Company's
business and financial performance, our expectations regarding the
market for our existing products and new products, our expected
financial performance and strategic and operational plans, as well
as all assumptions, expectations, predictions, intentions or
beliefs about future events. You are cautioned that any such
forward-looking statements are not guarantees of future performance
and that a number of risks and uncertainties could cause actual
results of the Company to differ materially from those anticipated,
expressed or implied in the forward-looking statements. The words
"believe," "expect," "anticipate," "project," "targets,"
"optimistic," "intend," "aim," "will" or similar expressions are
intended to identify forward-looking statements. All statements
other than statements of historical fact are statements that could
be deemed forward-looking statements. Risks and uncertainties that
could cause actual results to differ materially from those
anticipated include risks related to new and existing products; any
projections of sales, earnings, revenue, margins or other financial
items; any statements of the plans, strategies and objectives of
management for future operations; any statements regarding future
economic conditions or performance; uncertainties related to
conducting business in China; any
statements of belief or intention; any of the factors mentioned in
the "Risk Factors" section of our Annual Report on Form 10-K for
the year ended March 31, 2011, and
other risks and uncertainties mentioned in our other reports filed
with the Securities and Exchange Commission. The Company assumes no
obligation and does not intend to update any forward-looking
statements, except as required by law.
Company Contact:
|
Investor Relations Contact:
|
|
Mr. Colman Cheng, Chief
Financial Officer
|
Mr. Crocker Coulson,
President
|
|
China Nutrifruit Group
Limited
|
CCG Investor
Relations
|
|
Tel:+852 9039
8111
|
Tel: +1-646-213-1915 (NY
office)
|
|
Email: zsj@chinanutrifruit.com
|
Email: crocker.coulson@ccgir.com
|
|
Website: www.chinanutrifruit.com
|
Website: www.ccgirasia.com
|
|
|
|
|
|
Linda Salo, Account
Manager
|
|
|
Email:
linda.salo@ccgir.com
|
|
|
Tel: +1- 646-922-0894
(New York office)
|
|
|
|
-- Financial Tables Follow --
CHINA
NUTRIFRUIT GROUP LIMITED AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
AS OF MARCH
31,
|
|
|
|
|
|
2011
|
2010
|
|
Net sales
|
$86,953,888
|
$72,916,955
|
|
Cost of sales
|
(46,136,600)
|
(39,655,534)
|
|
Gross profit
|
40,817,288
|
33,261,421
|
|
Selling
expenses
|
(3,100,084)
|
(3,547,236)
|
|
General and administrative
expenses
|
(4,354,005)
|
(3,976,627)
|
|
Operating
earnings
|
33,363,199
|
25,737,558
|
|
Other income
(expenses)
|
|
|
|
Interest
expense
|
(4,912)
|
-
|
|
Other income
|
85,313
|
70,233
|
|
Gain on disposal of
property and equipment
|
-
|
290,407
|
|
Total other
income
|
80,401
|
360,640
|
|
Earnings
before income taxes
|
33,443,600
|
26,098,198
|
|
Provision for income
taxes
|
(8,700,366)
|
(6,849,438)
|
|
Net
earnings
|
24,743,234
|
19,248,760
|
|
Other comprehensive
income
|
|
|
|
Foreign currency
translation
|
3,510,717
|
15,039
|
|
Total
comprehensive income
|
$28,253,951
|
$19,263,799
|
|
Earnings per
share
|
|
|
|
Basic
|
$0.66
|
$0.52
|
|
Diluted
|
$0.62
|
$0.51
|
|
Weighted average number of
common stock outstanding
|
|
|
|
Basic
|
36,736,834
|
36,153,554
|
|
Diluted
|
40,056,599
|
38,050,549
|
|
|
|
|
CHINA
NUTRIFRUIT GROUP LIMITED AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
AS OF MARCH
31,
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and equivalents
|
$ 43,542,075
|
|
$ 35,994,443
|
|
Proceeds from private placement
held in escrow account
|
-
|
|
931,630
|
|
Trade receivables, net of
allowance
|
12,476,652
|
|
11,047,846
|
|
Inventory, net
|
6,419,152
|
|
4,179,910
|
|
Prepayments and
deposits
|
264,878
|
|
114,732
|
|
Other current
assets
|
1,527
|
|
1,464
|
|
Total current
assets
|
62,704,284
|
|
52,270,025
|
|
Non-current
assets:
|
|
|
|
|
Property and
equipment, net
|
20,312,005
|
|
17,066,907
|
|
Prepayments
and deposits
|
10,983,404
|
|
-
|
|
Construction
in progress
|
5,915,395
|
|
-
|
|
Deferred tax
assets
|
909,879
|
|
1,068,878
|
|
Land use
rights, net
|
188,199
|
|
185,686
|
|
Total
assets
|
$ 101,013,166
|
|
$ 70,591,496
|
|
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS'
equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Other payables and accrued
expenses
|
$ 3,312,525
|
|
$ 2,379,246
|
|
Due to a director
|
946,550
|
|
-
|
|
Trade payables
|
130,276
|
|
87,954
|
|
Income taxes payable
|
3,351,631
|
|
2,296,513
|
|
Total current
liabilities
|
7,740,982
|
|
4,763,713
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
Preferred
stock
|
331
|
|
365
|
|
Common stock
|
36,916
|
|
36,573
|
|
Additional
paid-in-capital
|
36,492,566
|
|
36,492,875
|
|
Statutory reserves –
restricted
|
6,850,422
|
|
4,564,345
|
|
Accumulated other
comprehensive income
|
3,951,431
|
|
440,714
|
|
Retained
earnings
|
45,940,518
|
|
24,292,911
|
|
TOTAL
SHAREHOLDERS' EQUITY
|
93,272,184
|
|
65,827,783
|
|
TOTAL
LIABILITIES AND SHAREHOLDERS'
EQUITY
|
$ 101,013,166
|
|
$ 70,591,496
|
|
|
|
|
|
CHINA
NUTRIFRUIT GROUP LIMITED AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH
FLOWS
YEARS ENDED
MARCH 31,
|
|
|
|
2011
|
2010
|
|
Cash flows
from operating
activities:
|
|
|
|
|
Net earnings
|
|
$ 24,743,234
|
$ 19,248,760
|
|
Adjustments
to reconcile net
earnings to net cash provided by
operating activities
|
|
|
|
|
Depreciation and
amortization
|
|
2,374,751
|
1,593,811
|
|
Gain on disposal of property and
equipment
|
|
-
|
(290,407)
|
|
Deferred income taxes
|
|
158,165
|
337,936
|
|
Share-based payments
|
|
-
|
117,000
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Trade receivables
|
|
(1,222,114)
|
391,901
|
|
Inventories
|
|
(1,840,967)
|
(481,732)
|
|
Prepayments
and deposits
|
|
(353,118)
|
364,046
|
|
Other current assets
|
|
(15)
|
1,463
|
|
Trade payables
|
|
32,580
|
(172,675)
|
|
Other payables and accrued
expenses
|
|
895,817
|
(319,909)
|
|
Income taxes payable
|
|
1,001,321
|
877,429
|
|
Net cash
provided by operating
activities
|
|
25,789,654
|
21,667,623
|
|
Cash flows
from investing
activities:
|
|
|
|
|
Purchases of property and
equipment
|
|
(4,333,519)
|
(2,738,855)
|
|
Addition of construction
in progress
|
|
(5,808,400)
|
-
|
|
Prepayment for purchase of
land use right, property and equipment
|
|
(10,543,839)
|
-
|
|
Proceeds from disposal of
property and equipment
|
|
-
|
1,038,273
|
|
Net cash
used in investing activities
|
|
(20,685,758)
|
(1,700,582)
|
|
Cash flows
from financing
activities:
|
|
|
|
|
Proceeds from private
placement held in escrow account
|
|
-
|
(931,630)
|
|
Proceeds from
borrowings
|
|
15,217,689
|
-
|
|
Repayment of
borrowings
|
|
(15,217,689)
|
-
|
|
Amount due to a
director
|
|
943,497
|
-
|
|
Proceeds from private
placement
|
|
-
|
13,309,000
|
|
Release of proceeds from
private placement held in escrow account
|
|
931,630
|
-
|
|
Dividend paid
|
|
(809,550)
|
-
|
|
Cost of raising
capital
|
|
-
|
(1,094,279)
|
|
Net cash
provided by financing
activities
|
|
1,065,577
|
11,283,091
|
|
|
|
|
|
|
Increase in
cash and equivalents
|
|
6,169,473
|
31,250,132
|
|
|
|
|
|
|
Effect of exchange rate on
cash and equivalents
|
|
1,378,159
|
(24,231)
|
|
|
|
|
|
|
Cash and
equivalents at beginning of
year
|
|
35,994,443
|
4,768,542
|
|
|
|
|
|
|
Cash and
equivalents at end of
year
|
|
$ 43,542,075
|
$ 35,994,443
|
|
|
|
|
|
|
Supplemental
disclosure of cash flows information:
|
|
|
|
|
Cash paid for:
|
|
|
|
|
Interest
|
|
$ 4,912
|
$ -
|
|
Income taxes
|
|
$ 7,574,018
|
$ 5,634,883
|
|
|
|
|
|
|
Supplemental
disclosure of non-cash information:
|
|
|
|
|
Issuance of common stock
by conversion of preferred stock
|
|
$ 343
|
$ 117,000
|
|
Issuance of
warrant
|
|
$ -
|
$ 367,155
|
|
Capital
contribution
|
|
$ -
|
$ 7,414,995
|
|
|
|
|
|
|
|
|
|
|
SOURCE China Nutrifruit Group Limited