Man Shing Agricultural Holdings, Inc. (OTCBB: MSAH) ("Man Shing"
the "Company," "we," "us," or "our"), located in the Shandong
Province and one of the largest Chinese exporters of high quality,
fresh ginger to Japan, the United Kingdom, and the Netherlands,
today announced the financial results for the three and nine month
periods ending March 31, 2011.
Financial Highlights for the Three Months Ended March 31, 2011
-- Revenue increased 50.4% year-over-year to $8 million
-- Gross profit increased 53.4% to $3.3 million; gross margin was 41.8%
-- Net income increased 34.8% to $2.3 million
-- Diluted EPS of $0.05 based on 46.9 million weighted average shares
outstanding
Mr. Shili Liu, Chairman and Chief Executive Officer of Man
Shing, stated, "I am very pleased with yet another strong quarter
of financial growth in which revenue increased 50.4% to $8 million
and net income increased 34.8% to $2.3 million. As of March 31,
2011, fully diluted weighted average shares outstanding totaled
46.9 million, a reduction of approximately 25.2 million shares as
compared to 72.1 million shares as of March 31, 2010. Fully diluted
earnings per share for the 2011 fiscal third quarter was $0.05. Our
financial results for the 2011 fiscal third quarter are in line
with our expectations and we remain confident in our previously
stated financial guidance of $8.8 million in net income for the
2011 fiscal year ending June 30, 2011, which was previously
announced as an increase from our original guidance of $8 million
in net income for the same period."
Summary Financials for Three Months Ended March 31, 2011:
2011 Fiscal Third Quarter Results (USD) (Unaudited)
Three months ended March 31, Fiscal Q3 Fiscal Q3
2011 2011 2010 CHANGE
------------- ------------- -------------
Revenue $ 8 million $ 5.3 million +50.4%
------------- ------------- -------------
Gross Profit $ 3.3 million $ 2.2 million +53.4%
------------- ------------- -------------
Gross Profit Margin 41.8% 41.0% -
------------- ------------- -------------
Net Income $ 2.3 million $ 1.7 million +34.8%
------------- ------------- -------------
Basic EPS * $ 0.05 $ 0.05 -
------------- ------------- -------------
Diluted EPS ** $ 0.05 $ 0.02 +150%
------------- ------------- -------------
* Based on basic weighted average shares outstanding of 45.1 million and
36.1 million.
** Based on diluted weighted average shares outstanding of
46.9 million and 72.1 million.
Financial Results for the Three Months Ended March 31, 2011
Revenue for the three months ended March 31, 2011 totaled $8
million, an increase of 50.4% compared to $5.3 million for the same
period in 2010. The revenue increase was due primarily to the
increase in sales of frozen and fresh ginger and other agricultural
products. The average market price of ginger reached $1,360 per ton
during the quarter ended March 31, 2011, compared to the average
market price of $1,080 per ton for the same period the prior
year.
Cost of sales for the three months ended March 31, 2011 totaled
$4.6 million, or 58% of revenue, an increase of 48.3% compared to
$3.1 million or 59% of revenue for the three months ended March 31,
2010. Cost of sales includes the costs associated with the
planting, harvesting and maintaining of ginger and other
agricultural products. Cost of sales as a percentage of revenues
remained stable mainly due to cost controls associated with
planting and production. During the quarter there was also a high
recovery ratio of stored ginger due to the thermostatic warehouse
at which the ginger was stored.
Gross profit for the three months ended March 31, 2011 totaled
$3.3 million, an increase of 53.4% compared to $2.2 million for the
three months ended March 31, 2010. Gross profit margin remained
stable during the fiscal 2011 third quarter at 41.8% as compared to
41.0% during the fiscal 2010 third quarter. During the three months
ended March 31, 2011, Man Shing continued to focus on the efficient
utilization of plantation and processing facilities.
Operating expenses for the three months ended March 31, 2011
totaled $1 million as compared to $439,000 for the three months
ended March 31, 2010. Selling and marketing expenses were 9% of
revenues for the fiscal 2011 third quarter as compared to 7% for
the same period the prior year, primarily attributable to the
increase of sales and marketing activities in both existing and new
markets. General and administrative expenses were 4% of revenues
for the 2011 fiscal third quarter as compared to 2% for the 2010
fiscal third quarter.
Net income for the three months ended March 31, 2011 totaled
$2.3 million, an increase of 34.8% compared to $1.7 million for the
three months ended March 31, 2010. Basic earnings per share for the
three months ended March 31, 2011 were $0.05 based on 45.1 million
basic shares versus earnings per share of $0.05 for the three
months ended March 31, 2010 based on 36.1 million basic shares
outstanding. Diluted earnings per share for the three months ended
March 31, 2011 totaled $0.05 based on 46.9 million shares
outstanding as compared to $0.02 based on 72.1 million shares
outstanding during the prior year period.
Mr. Shili Liu continued, "There were several contributing
factors to our financial growth including the increase in the price
of ginger, an increase in land leased and efficient utilization of
our thermostatic warehouse. Our leased farmland grew to a total of
5.3 million square meters during the 2011 fiscal third quarter as
compared to the 3.3 million total square meters of farmland leased
during the 2010 fiscal third quarter. Our ability to warehouse our
ginger at an ideal constant temperature, maintaining freshness for
up to two years, offered us flexibility in meeting customer demand
and was a contributing factor to our financial growth."
Summary Financials for Nine Months Ended March 31, 2011:
2011 Fiscal First Nine Month Results (USD) (Unaudited)
Nine months ended March 31,
2011 Fiscal 2011 Fiscal 2010 CHANGE
-------------- -------------- --------------
Sales $ 23.4 million $ 15.1 million +55.4%
-------------- -------------- --------------
Gross Profit $ 9.8 million $ 5.2 million +88.8%
-------------- -------------- --------------
Gross Profit Margin 41.9% 34.5% +21.4%
-------------- -------------- --------------
Net Income $ 6.8 million $ 4.1 million +66.9%
-------------- -------------- --------------
Basic EPS * $ 0.17 $ 0.16 +6.3%
-------------- -------------- --------------
Diluted EPS ** $ 0.11 $ 0.07 +83.3%
-------------- -------------- --------------
* Based on basic weighted average shares outstanding of 40.4 million and
25.5 million.
** Based on diluted weighted average shares outstanding of
62.8 million and 61.7 million.
Financial Highlights for the Nine Months Ended March 31, 2011
-- Revenue increased 55.4% year-over-year to $23.4 million
-- Gross profit increased 88.8% to $9.8 million; gross margin increased to
41.9% from 34.5%
-- Net income increased 66.9% to $6.8 million; basic EPS of $0.17, diluted
EPS of $0.11
Financial Results for the Nine Months Ended March 31, 2011
Revenue for the nine months ended March 31, 2011 totaled $23.5
million, an increase of 55.4% compared to $15.1 million for the
same period in 2010. The increase in revenue was driven by the
increased consumer demand of our products, the expansion of
business through our marketing strategy and our customer loyalty,
and an increase in average market price of ginger to approximately
$1,300 per ton as compared to the average market price of $990 per
ton the prior year. There were no product returns for either of the
nine months ended March 31, 2010 or 2011.
Cost of sales for the nine months ended March 31, 2011 totaled
$13.6 million or 58% of revenue, an increase of 37.7% compared to
$9.9 million or 65% of revenue for the nine months ended March 31,
2010. Cost of sales includes the costs associated with the
planting, harvesting and maintaining of ginger and other
agricultural products. As a percentage of sales, cost of sales
decreased due to the increase in the market price of ginger and
more efficient utilization of raw materials.
Gross profit for the nine months ended March 31, 2011 totaled
$9.8 million, an increase of 88.8% compared to $5.2 million for the
same period the prior year. Gross profit margin increased to 41.9%,
as compared to 34.5% for the same period the prior year. This
increase was primarily attributable to the increase in the selling
prices of our products. During the period, we were able to utilize
our plantation and processing facilities more efficiently due to
economies of scale from an increase in output.
Operating expenses for the nine months ended March 31, 2011
totaled $2.9 million as compared to $1.1 million for the same
period in the prior year. Selling and marketing expenses as a
percentage of revenue increased to 9% for the 2011 fiscal nine
month period as compared to 5% for the same period the prior year
as an increased investment was made during the period to gain
market share in existing markets and to expand into new markets.
General and administrative expenses remained stable at 3% of
revenue for the 2011 fiscal nine month period as compared to 2% for
the same period in the prior year.
Net income for the nine months ended March 31, 2011 totaled $6.8
million, an increase of 66.9% compared to $4.1 million for the same
period in the prior year. Basic earnings per share for the nine
months ended March 31, 2011 was $0.17 based on 40.4 million shares
versus earnings per share of $0.16 based on 25.5 million shares
outstanding for the same period in the prior year. Diluted earnings
per share for the nine months ended March 31, 2011 was $0.11 based
on 62.8 million shares outstanding as compared to diluted earnings
per share of $0.07 based on 61.7 million shares outstanding for the
same period in the prior year. The difference in the fully diluted
shares outstanding for the nine month period versus the three month
period is attributable to the cancellation of preferred shares
owned by Chairman, Mr. Shili Liu.
Liquidity and Capital Resources
As of March 31, 2011, Man Shing had approximately $6.3 million
in cash and cash equivalents. As of March 31, 2011, total current
assets and total assets were approximately $25.0 million and $26.4
million, respectively. During the same period, total current
liabilities and total liabilities were approximately $3.8 million
and $5.3 million, respectively. Working capital increased
year-over-year by $10.9 million to $21.2 million as compared to
$10.3 million as of June 30, 2010. Shareholders' equity increased
119% to $21.1 million for the nine months ended March 31, 2010,
compared to $9.6 million for the year ended June 30, 2010.
Mr. Shili Liu concluded, "Our growth strategy is contingent on
our ability to lease more land. Recently we announced the lease of
an additional 2.4 million square meters of land, increasing our
total farmland by approximately 45% to 7.7 million square meters.
We were able to lease more land for two main reasons. First, we
have cultivated relationships over many years with not only our
customers, but with the PRC government and local farmland workers.
Since our company's inception, we have treated our customers, the
government and local farmland owners as partners. On April 13,
2011, a Japanese Government Official and a farmland owner from the
town of Yinayityou within the Shimane County of Japan visited our
facilities. Secondly, we have invested capital and resources in
sophisticated food safety procedures that have allowed us to export
ginger to some of the most stringent markets in the world, most
notably Japan and the United Kingdom. Those that have visited our
facilities understand and trust the high quality of our products.
Strong relationships with the local government and customers and
our focus on quality are at the heart of Man Shing's success. We
began planting on 7.7 million square meters of land last month and
are looking forward to the upcoming harvest season."
About Man Shing Agricultural Holdings, Inc.
Man Shing Agricultural Holdings, Inc., through its operating
subsidiary in Shandong of China, is focused on the production and
processing of fresh ginger and other select vegetables such as
onion and garlic. The Company produces high quality ginger which
meets the requirements of the British Retail Consortium Global Food
Standard. The Company focuses on customers located in countries
such as Japan and the European Union which are food safety
oriented. For further information about Man Shing Agricultural
Holdings, Inc., please visit the Company's website at
http://www.msaginger.com/
Forward Looking Statement:
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, and
Section 21E of the Securities Exchange Act of 1934. These
statements relate to future events or our future financial
performance. We have attempted to identify forward-looking
statements by terminology including "anticipates," "believes,"
"expects," "can," "continue," "could," "estimates," "expects,"
"intends," "may," "plans," "potential," "predict," "should" or
"will" or the negative of these terms or other comparable
terminology. These statements are only predictions. Uncertainties
and other factors may cause our actual results, levels of activity,
performance or achievements to be materially different from any
future results, levels or activity, performance or achievements
expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee
future results, levels of activity, performance or achievements.
Our expectations are as of the date hereof, and we do not intend to
update any of the forward-looking statements after the filing date
to conform these statements to actual results, unless required by
law.
We file annual reports on Form 10-K, quarterly reports on Form
10-Q, current reports on Form 8-K and proxy and information
statements and amendments to reports filed or furnished pursuant to
Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as
amended. You may read and copy these materials at the SEC's Public
Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You
may obtain information on the operation of the public reference
room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a
website (http://www.sec.gov) that contains reports, proxy and
information statements and other information regarding us and other
companies that file materials with the SEC electronically.
Man Shing Agricultural Holdings, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
As of March 31, 2011 (unaudited) and June 30, 2010 (audited)
ASSETS 3/31/2011 6/30/2010
------------ ------------
CURRENT ASSETS (Audited)
Cash and cash equivalents $ 6,299,438 $ 378,929
Accounts receivable, trade 4,713,034 $ 2,249,998
Inventory 8,423,476 $ 4,938,043
Deferred inventory costs 4,993,926 $ 5,118,558
Prepayments 523,621 $ 350,668
Other receivables 777 $ 747
------------ ------------
TOTAL CURRENT ASSETS $ 24,954,272 $ 13,036,943
------------ ------------
FIXED ASSETS
Property, plant, and equipment 1,644,161 908,105
Accumulated depreciation (253,325) (182,665)
Construction in progress 17,404 124,697
------------ ------------
NET FIXED ASSETS $ 1,408,240 $ 850,137
------------ ------------
TOTAL ASSETS $ 26,362,512 $ 13,887,080
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term borrowing $ 366,055 $ 352,087
Note payable 318,375 $ 318,375
Accounts payable 1,383,587 $ 597,791
Other payables and accrued liabilities 1,037,691 $ 1,047,529
Received in advance 407,566 $ 314,916
Tax payable 257,350 $ 128,338
------------ ------------
TOTAL CURRENT LIABILITIES $ 3,770,624 $ 2,759,037
------------ ------------
LONG-TERM LIABILITIES
Convertible Note $ 1,500,000 $ 1,500,000
------------ ------------
TOTAL LIABILITIES $ 5,270,624 $ 4,259,037
------------ ------------
STOCKHOLDERS' EQUITY
Preferred stock, $.001 par, 25,000,000
shares authorized, 176,750 and 3,535,000
shares issued and outstanding at March 31,
2011 and June 30, 2010, respectively 177 3,535
Common stock, $.001 par, 175,000,000 shares
authorized, 48,026,958 and 38,026,958 shares
issued and outstanding at March 31, 2011 and
June 30, 2010, respectively 48,027 38,027
Additional paid-in capital 4,195,545 177,187
Accumulated other comprehensive income 855,085 189,186
Statutory reserves 5,823,139 2,134,501
Accumulated earnings 10,169,915 7,085,608
------------ ------------
TOTAL STOCKHOLDERS' EQUITY $ 21,091,888 $ 9,628,043
------------ ------------
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 26,362,512 $ 13,887,080
============ ============
Man Shing Agricultural Holdings, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Operations and Comprehensive
Income
For the Three and Nine Months Ended March 31, 2011 and 2010
For the Three Months For the Nine Months
Ended Ended
---------------------- ----------------------
3/31/2011 3/31/2010 3/31/2011 3/31/2010
Revenues
Sales 7,947,540 5,283,909 23,419,274 15,074,376
Cost of sales 4,625,866 3,118,228 13,598,988 9,873,399
---------- ---------- ---------- ----------
Gross profit 3,321,674 2,165,681 9,820,286 5,200,977
Operating expenses
Selling and marketing 697,745 353,446 2,196,824 816,749
General and
administrative 320,741 85,562 716,096 305,553
---------- ---------- ---------- ----------
Total Operating Expenses 1,018,486 439,008 2,912,920 1,122,302
---------- ---------- ---------- ----------
2,303,188 1,726,673 6,907,366 4,078,675
Other income (expenses),
net
Financial income
(expenses), net (71,489) (11,302) (219,432) (27,643)
Non-operating income
(expense), net 80,167 - 80,273 4,237
---------- ---------- ---------- ----------
Total other income (loss),
net 8,678 (11,302) (139,159) (23,406)
---------- ---------- ---------- ----------
Income from Operations 2,311,866 1,715,371 6,768,207 4,055,269
Income taxes - - - -
---------- ---------- ---------- ----------
Net Income 2,311,866 1,715,371 6,768,207 4,055,269
Other comprehensive income
(loss), net
Foreign currency
translation gain
(loss), net 222,610 21,629 665,899 (19,731)
---------- ---------- ---------- ----------
Total comprehensive income 2,534,476 1,737,000 7,434,106 4,035,538
========== ========== ========== ==========
Weighted average number of
shares outstanding
Basic 45,138,069 36,068,625 40,371,280 25,456,776
========== ========== ========== ==========
Diluted 46,905,569 72,068,625 62,804,934 61,741,962
========== ========== ========== ==========
Earnings per share
Basic 0.05 0.05 0.17 0.16
========== ========== ========== ==========
Diluted 0.05 0.02 0.11 0.07
========== ========== ========== ==========
Company Contact: Man Shing Agricultural Holdings, Inc. Mr. Shili
Liu CEO, Chairman and president Email Contact Mr. Kenny Chow CFO
Email Contact +86-536-464-4888 +852-2530-3122
http://www.msaginger.com/ Investor Contact: HSC Global, an
affiliate of HC International, Inc. Alan Sheinwald President (914)
669-8885 Email Contact www.hcinternational.net
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