Sunshine Agri-Tech Inc. (TSX VENTURE:SAI) ("Sunshine" or the
"Company") today announced its interim financial results for the
period ending September 30, 2011. The Company also announces that
it has changed its fiscal year from September 30th to December
31st. As a result of this change in year end, the 12 month results
for the period ending September 30, 2011 will be included in the
transition year audited financial statements for the 15 month
period ended December 31, 2011.
Interim Financial Results
Highlights
-- During the quarter ended September 30, 2011 the Company has successfully
tripled its biofeed production capacity thru a Strategic Agreement with
Jilin University announced on June 28, 2011.
-- The Company has refocused its business on the pig sector in China and
achieved a 163% increase in sales of its pig mix products. This increase
coupled with higher pig mix prices contributed to a 37.9% improvement in
revenues during the quarter compared with the same period in 2010.
-- The absence of royalty income during the quarter ended September 30,
2011 resulted in a reduction in gross margin to 12.8% compared with
19.9% during the same period of 2010.
-- Lower stock based compensation expense caused net loss to fall to
$136,138 during the quarter ended September 30, 2011 compared with a
loss of $290,962 during the corresponding period of 2010.
-- The Company maintains a strong balance sheet with $2.15 million in cash
and no debt.
"The Strategic Agreement we entered into with Jilin University
provides the production capacity to triple our biofeed business to
30,000 tonnes per year. We have made good progress with our sales
efforts into the pig marketplace thru our Pig Mix product category
and are comfortable that we can continue to grow this business with
our new capacity" stated Mr. Baojun Zhang, President and CEO of
Sunshine. "We continue to strengthen our position in the organic
feed industry thru research and development in the area of
microbial feed. Our R&D activities have been expanded thru our
Strategic Agreement with Jilin University as well as collaboration
agreements with the University of Maryland.
During the quarter ended September 30, 2011 revenues increased
by 37.9% compared with the same period of 2010. This increase in
sales coupled with lower stock based compensation resulted in a
reduction in operating losses to $136,138 during the quarter ended
September 30, 2011 compared with the loss of $436,297 during the
same period of 2010.
SUMMARY FINANCIAL STATEMENTS
--------------------------------------
Three-Month Period Ended
(Unaudited)
--------------------------------------
September 30, 2011 September 30, 2010
--------------------------------------
Sales 1,438,075 1,042,777
Gross profit 184,334 207,260
Gross margin (% of Sales) 12.8% 19.9%
Operating expenses 320,472 670,557
Loss from operations (136,138) (463,297)
Other income - 232,228
Income taxes - 59,893
Net loss (136,138) (290,962)
EBITDA (121,595) (228,973)
EBITDA before stock-based compensation (121,595) 269,107
Earnings per share
Basic - -
Diluted - -
Weighted average number of shares
Basic 72,006,250 49,801,167
Diluted 72,006,250 50,537,771
--------------------------------------
The absence of royalty income caused earnings before interest,
tax, depreciation and amortization (EBITDA) before stock based
compensation to decline to negative $121,595 for the quarter ended
September 30, 2011 from a profit of $269,107 during the same period
of 2010.
Net loss for the quarter was $136,138 ($0.00 per share) for the
quarter ended September 30, 2011 compared with a loss of $290,962
($0.00 per share) during the corresponding quarter of 2010.
As at September 30, 2011 the Company maintained positive working
capital of $2.5 million with a cash position of $2.15 million and
no bank debt.
Strategic Agreement with Jilin University
On June 28th, 2011 the Company announced that it has signed a
production and research and development agreement (the "Agreement")
with Jilin University. Under the Agreement, Jilin University, one
of China's most prestigious universities, will provide Sunshine
Agri-Tech with access to its new feed production line for the
production and sale of bio-feed products. This new production line
is highly automated and has a capacity of 30,000 tonnes per year.
Based on the Company's existing capacity of 10,000 tonnes per year,
this agreement will triple the capacity of infeedmill
production.
The agreement also provides for cooperation in research and
development in the areas of animal husbandry, livestock feed
development and a veterinary science under the Faculty of
Agriculture.
About Sunshine Agri-Tech Inc.:
Sunshine Agri-Tech Inc. (TSX VENTURE:SAI) is a public company
listed on the TSX Venture exchange. The Company is engaged in the
research, development, production and sales of bio-feed, microbial
feed additives and related products that aim to improve the health
and performance of animals. The Company's line of products include:
(a) bio-feed; and, (b) microbial feed additives. The Company
currently sells its products throughout China and Japan, and is
beginning expansion into Southeast Asia. The Company is based in
the city of Dalian in the Peoples Republic of China.
This news release contains certain statements that may be deemed
"forward looking statements". Forward looking statements are
statements that are not historical facts and are generally, but not
always, identified by the words "expects,", "plans", "anticipates",
"believes", "intends", "estimates", "projects", "potential" and
similar expressions, or that events or conditions "will", "would",
"may", "could" or "should" occur. Although the Company believes the
expectations expressed in such forward looking statements are based
on reasonable assumptions, such statements are not guarantees of
future performance and actual results may differ materially from
those in forward looking statements. Forward looking statements are
based on the beliefs, estimates and opinions of the Company's
management on the date the statements are made. The Company
undertakes no obligation to update these forward looking
statements, except as required by law, in the event that
management's beliefs, estimates or opinions, or other factors,
should change.
Contacts: EWC Corporation Robert Wilson
416-603-7500EWCCorp@me.comwww.sunshineagritech.com
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