RESTON, Va., April 16 /Xinhua-PRNewswire/ -- Emerald Dairy, Inc. (OTC Bulletin Board: EMDY), today announced fourth quarter and full year 2007 financial results. The Company plans to file its 2007 Form 10K today.
Key Highlights from 2007 include:
-- Revenue increased 57.4% year over year to $29.6 million from $18.8
million in 2006
-- Gross profit increased 57.2% year over year to $10.6 million from $6.7
million in 2006
-- Net income increased 31.9% year over year to $3.6 million, or $0.14
per diluted share from $2.7 million, or $0.13 per diluted share in 2006
Mr. Yang Yong Shan, Chief Executive Officer of Emerald Dairy stated, "We are pleased to update our investors with today's results since we completed our reverse merger in October 2007. We demonstrated strong financial performance as a result of the continued popularity of our products. Despite significant expenses associated with being a public company, we increased our net income by 31.8% for the year. In 2008, we are committed to expanding our production capacity to meet growing demands from our customers and building long-term value for our shareholders."
For the year ended December 31, 2007, revenue increased 57.4% to $29.6 million from $18.8 million in 2006. The increase of market share in the twenty provinces in which the Company sells its products continued to drive revenue growth in 2007. During the same period, gross profit improved 57.2% to $10.6 million from $6.7 million in 2006.
Income from operations increased 34.4% to $3.7 million from $2.7 million in 2006, reflecting a 72.8% increase in operating expenses to $6.9 million from $4.0 million in 2006. Selling expenses increased by 53.1% to $5.3 million from $3.5 million in 2006, reflecting continued spending in advertising, promotion and distribution activities. Administrative expenses increased by 225.3% to $1.5 million, primarily due to the increases in office expenses and staff salaries directly related to the Company's growth and costs associated with being a public company during the fourth quarter of 2007.
Net income increased 31.9% to $3.6 million, or $0.14 per diluted share in 2007 from $2.7 million, or $0.13 per diluted share in 2006.
Key Highlights from the Fourth Quarter of 2007 include:
-- Revenue increased 24.7% year over year to $8.6 million from $6.9
million in 4Q06
-- Gross profit increased 42.5% year over year to $3.4 million, gross
margin of 39.7%
-- Net income was $0.6 million, or $0.02 per diluted share
Revenue for the fourth quarter of 2007 was $8.6 million, up 24.7% from $6.9 million in the fourth quarter of 2006. Revenue increase was primarily attributable to the continued popularity of the Company's products and an approximately 23% increase in the average selling price in the fourth quarter of 2007. Gross profit increased 42.5% to $3.4 million from $2.4 million in the fourth quarter of 2006. Gross margin increased to 39.7% in the fourth quarter of 2007 from 34.8% in the prior year's period, primarily reflecting the increase in the average selling price during the fourth quarter of 2007.
Income from operations was $0.6 million, compared with $1.3 million in the fourth quarter of 2006. The decrease was the result of an increase in operating expenses, which increased 150.7% to $2.9 million from $1.1 million in the fourth quarter of 2006. The Company's selling expenses increased 90.3% to $1.9 million, which reflects continued spending in advertising, promotion and distribution activities. Administrative expenses increased 644.3% to $0.9 million during the fourth quarter of 2007 from $0.1 million in the prior year's period, as a result of costs associated with being a public company during the fourth quarter of 2007 and continued increases in office expenses and staff salaries.
Net income was $0.6 million, or $0.02 per diluted share in the fourth quarter of 2007, down from $1.3 million, or $0.06 per diluted share in the fourth quarter of 2006.
Balance Sheet
As of December 31, 2007, the Company had $6.6 million of cash, compared to $3.8 million at September 30, 2007 and $2.2 million at June 30, 2007. Emerald Dairy had working capital of approximately $13.1 million at December 31, 2007. The Company had no long-term debt.
Business Update
-- Capacity expansion: the Company currently operates at the capacity of
approximately 7,000 tons per year. In 2008, it expects to expand
capacity to 9,000 tons per year by adding a third shift to the
existing two shift schedule. Management also plans to build a new
facility with annual production capacity of 9,000 tons of milk powder
in 2008, which is expected to start production in 2009.
-- Organic label: the Company obtained organic product certification in
the first quarter of 2008 and expects to launch new organic labeling
in the second half of 2008.
Financial Outlook
For the fiscal year of 2008, the Company expects revenue and net income growth of approximately 30%, based on an increased production capacity to 9,000 tons per year by the end of 2008.
About Emerald Dairy Inc.:
Through its wholly-owned operating subsidiaries, Emerald Dairy Inc. is a producer and distributor of infant and children's formula, milk powder and soybean products in the People's Republic of China. The Company's products are sold under two brand names -- "Xing An Ling" and "Yi Bai."
Certain statements in this release and other written or oral statements made by or on behalf of the Company are "forward looking statements" within the meaning of the federal securities laws. Statements regarding future events and developments and our future performance, as well as management's expectations, beliefs, plans, estimates or projections relating to the future are forward-looking statements within the meaning of these laws. The forward looking statements are subject to a number of risks and uncertainties including market acceptance of the Company's services and projects and the Company's continued access to capital and other risks and uncertainties. The actual results the Company achieves may differ materially from any forward-looking statements due to such risks and uncertainties. These statements are based on our current expectations and speak only as of the date of such statements.
Emerald Dairy Inc. and Subsidiaries
Consolidated Statements of Operations
For the Three Months Ended December 31, 2007 and 2006
2007 2006
Sales $8,646,453 $6,933,742
Cost of Goods Sold 5,211,615 4,523,134
Gross Profit 3,434,838 2,410,608
Operating Expenses
Selling expenses 1,904,162 1,000,819
Administrative 934,537 125,561
Depreciation and amortization 14,222 11,469
Total operating expenses 2,852,921 1,137,849
Other Income (Expense)
Interest income 6,127 20
Interest expense (5,117) (38)
Total other income (expense) 1,010 (18)
Net Income Before Provision for
Income Tax 582,927 1,272,741
Provision for Income Taxes
Current (30,269) 2,915
Deferred -- --
(30,269) 2,915
Net Income $552,658 $1,275,656
Basic Earnings Per Share $0.02 $0.06
Basic Weighted Average Shares
Outstanding 28,499,124 20,416,658
Diluted Earnings Per Share $0.02 $0.06
Diluted Weighted Average Shares
Outstanding 29,744,825 20,416,658
The Components of Other
Comprehensive Income
Net Income $552,658 $1,275,656
Foreign currency translation
adjustment 422,662 47,021
Comprehensive Income $975,320 $1,322,677
Emerald Dairy Inc. and Subsidiaries
Consolidated Statements of Operations
For the Years Ended December 31, 2007 and 2006
2007 2006
Sales $29,618,008 $18,816,499
Cost of Goods Sold 19,064,905 12,102,136
Gross Profit 10,553,103 6,714,363
Operating Expenses
Selling expenses 5,331,489 3,481,631
Administrative 1,492,642 458,870
Depreciation and amortization 51,066 37,915
Total operating expenses 6,875,197 3,978,416
Other Income (Expense)
Interest income 9,724 678
Interest expense (19,167) (4,651)
Total other income (expense) (9,443) (3,973)
Net Income Before Provision for
Income Tax 3,668,463 2,731,974
Provision for Income Taxes
Current 118,325 39,349
Deferred -- --
118,325 39,349
Net Income $3,550,138 $2,692,625
Basic Earnings Per Share $0.15 $0.13
Basic Weighted Average Shares
Outstanding 24,211,872 20,416,658
Diluted Earnings Per Share $0.14 $0.13
Diluted Weighted Average Shares
Outstanding 24,539,845 20,416,658
The Components of Other
Comprehensive Income
Net Income $3,550,138 $2,692,625
Foreign currency translation
adjustment 635,079 143,889
Comprehensive Income $4,185,217 $2,836,514
Emerald Dairy Inc. and Subsidiaries
Consolidated Balance Sheet
December 31, 2007
ASSETS
2007
Current Assets
Cash and cash equivalents $6,560,931
Trade accounts receivable 5,096,828
Inventory 1,000,427
Advance to suppliers and other receivables 761,409
Deposits 3,175,342
Total current assets 16,594,937
Property, plant and equipment, net 3,320,081
Intangible assets, net 115,228
$20,030,246
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses $2,395,190
Advances from employees 301,644
Taxes payable 313,333
Notes payable 273,973
Loan from shareholder 196,526
Total current liabilities 3,480,666
Put/Call Liability 3,169,444
6,650,110
Stockholders' Equity
Preferred stock ($0.001 par value, 10,000,000 shares
authorized, none issued and outstanding at December
31, 2007) --
Common stock ($0.001 par value, 100,000,000 shares
authorized, 31,241,276 issued and outstanding at
December 31, 2007) 31,241
Treasury Stock (1,944,444 shares at December 31, 2007) (1,944)
Additional paid-in capital 4,666,244
Retained earnings 7,791,895
Accumulated other comprehensive income 892,700
Total stockholders' equity 13,380,136
$20,030,246