HARBIN, China, Aug. 14 /PRNewswire-Asia/ -- Rodobo International, Inc. (OTC Bulletin Board: RDBO), a leading manufacturer and distributor of high quality milk formula products for infants, children, middle-aged and elderly in China, today reported financial results for the third quarter of 2009 which ended June 30, 2009.
-- Q3 Revenue Increased 51.2% to 10.3 Million, Net Income Increased 73.6%
to 2.0 Million
-- Higher Margin Products: Infant Formula and Healthy Elderly Contributed
87.0% of Total Sales
-- Gross Profit Improved 96.8% to $5.8M Compared to Q3 2008
-- First Nine Months of FY2009 Revenue Increased 57.9% to $25.4 Million
and Net Income increased 76.1% to $5.1 Million
2009 Third Quarter Financial Results
Revenue for the third quarter ended June 30, 2009 was $10.3M, an increase of 51.2% compared to the third quarter in 2008. The growth was primarily driven by volume growth due to our continuous effort to develop distribution network and increase market penetration in areas where we currently sell products, and sales growth for the new product series Healthy Elderly, launched in October 2008, which represented approximately $1.8M of our revenue in the third quarter of 2009. During the third quarter of 2009, sales of Baby/Infant Formula, Healthy Elderly Formula and Whole Milk Powder represented 69%, 18%, and 13% of total sales, respectively.
Gross profit for Q3 2009 was $5.8M, up 96.8% compared to Q3 2008. The overall gross margin improved from 43.7% in Q3 2008 to 56.8% in Q3 2009. The improvement in gross profit margin was mainly driven by a shift from low-margin products (Whole Milk Powder) to high-margin products (Baby/Infant Formula and Healthy Elderly) over these periods.
During the third quarter of fiscal year 2009, the gross margin of the Baby/Infant Formula product line was 66.7%, gross margin for Healthy Elderly was 52.8%, and the gross margin of Whole Milk Powder Formula product line was 9.8% for the three months ended June 30, 2009.
Total operating expenses for the third quarter of 2009 were $3.8M versus $1.8M for the same period in 2008. Operating expenses as a percentage of revenues were 36.9% compared with 26.2% for the same period in 2008. This increase was mainly due to an increase of $2.2M in distributor rebates as a result of sales increases and market expansion. Operating income and operating margin for the quarter were $2.0M and 19.9%, versus $1.2M and 17.4% in 2008.
Net income for the third quarter of fiscal year 2009 was $2.0M, representing an increase of 73.6% from $1.2M reported in the same period of the prior year. Corresponding net profit margin was 19.9% for the quarter. In the third quarter of 2009, the basic and diluted earnings per ordinary share was $0.23 and $0.21, respectively, compared to $1.21 in the third quarter of 2008.
Nine-Month Financial Results
Revenue for the nine months ended June 30, 2009 was $25.4M, an increase of 57.9% compared to the corresponding nine months ended June 30, 2008. Sales of Whole Milk Powder Formula represented 23% of total sales in the nine months ended June 30, 2009 compared to 36% in the nine months ended June 30, 2008. Sales of Baby/Infant Formula represented 57% of total sales in the nine months ended June 30, 2009 compared to 44% in the nine months ended June 30, 2008. The product line Healthy Elderly contributed 19% of total sales.
Gross profit for the first nine months of fiscal 2009 grew 92.2% to $12.6M, compared to $6.6M for the same period last year. The overall gross profit margin improved from 40.7% in 2008 to 49.6% in 2009. The improvement in gross profit margin was mainly driven by the shift from low-margin products (Whole Milk Powder Formula) to high-margin products (Baby/Infant Formula and Healthy Elderly) over these periods.
Operating income in the first nine months was $4.7M up 68.9% compared to $2.8M in the same period last year.
Net income grew 76.1% to $5.1M compared with $2.9M for the nine months ended June 30, 2008. The increase in net income was mainly attributable to the growth in sales and to an increase in subsidy income from the government, from $0.09M in the nine months ended June 30, 2008 to $0.44M in the nine months ended June 30, 2009. In the nine months ended June 30, 2009, the basic and diluted earnings per ordinary share was $1.32 and $1.24, respectively, compared to $2.98 in the nine months ended June 30, 2008.
Balance Sheet and Cash Flow Discussion
Cash and cash equivalents by the end of third quarter reached $0.7M. The Company had $2.6M in accounts receivable. For the nine months ended June 30, 2009, Rodobo International generated approximately $1.1 million from operating activities. Stockholders' equity was $20.5M as of June 30, 2009, representing an increase of 82.0% versus last period as of September 30, 2008.
"We are very proud to report an impressive growth in the third quarter and in the first nine months of 2009," stated Mr. Yanbin Wang, Chairman and CEO of Rodobo International. "The national economy and the internal consumption growth in China create great potential for the development of the dairy industry. Our business continues to be driven by a number of fundamental factors, all centered on China's growing domestic consumer demand for high quality dairy products. In the previous quarter, we further expanded our product offerings in baby/infant formula and in middle age and elderly formula segments under the brand name of "Peer" and "Healif", which further enhanced our positioning in the high premium market. With our high-quality market position and premium brand image, we are confident that we will continue to demonstrate incremental and robust top-line and bottom-line growth."
"As part of our strategy to improve our direct access to raw milk resources and our capability to provide high quality dairy products to the Chinese consumers, we constructed our own dairy farm which started operation in July 2009. We believe that the improvement in our raw milk resources will further strengthen our product quality, our brand image and our quality control systems," Mr. Wang concluded.
About Rodobo International, Inc.:
Rodobo International is one of the leading independent dairy companies in China. Through its wholly-owned operating subsidiary, Rodobo International, Inc. is a producer and distributor of high-quality formula milk powder products for infants, children, pregnant women, nursing mothers, middle aged and the elderly in the People's Republic of China. The Company's products are sold under the brand name "Rodobo", "Peer" and "Healif" and are produced in cutting edge facilities using the highest industry standards and the best quality control systems. In 2008 Rodobo International was honored "Best Quality Control Enterprise for Dairy Products".
Safe Harbor Statement
This press release contains forward-looking statements. Whenever we use words such as "believe," "expect," "anticipate," "intend," "plan," "estimate" or similar expressions, we are making forward-looking statements. Forward- looking statements include statements regarding our goals, beliefs, future growth strategies, objectives, plans or current expectations. For example, when we say that China's economy and internal consumption growth create great potential for the development of the dairy industry and that our business continues to be driven by a number of fundamental factors, all centered on China's growing domestic consumer demand for high quality dairy products, or when we discuss our high premium market positioning and brand image and our confidence that we will continue to demonstrate incremental and robust top-line and bottom-line growth, or when we state our belief that the improvement in our raw milk resources will further strengthen our product quality, our brand image and our quality control systems, we are using forward looking statements. These forward-looking statements are based on the current expectations of the management of Rodobo only, and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: failure to obtain required regulatory approvals; risks associated with the effect of changing economic conditions and/or regulatory environment in the People's Republic of China; variations in cash flow; reliance on collaborative partners and on new product development; variations in new product development; risks associated with rapid technological change and the potential of introduced or undetected flaws and defects in products; changes in technology and market requirements; changes in consumer preferences; loss of market share and pressure on pricing resulting from competition, which could cause the actual results or performance of Rodobo to differ materially from those contemplated in such forward-looking statements. Except as otherwise required by law, Rodobo undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. For a more detailed description of the risk and uncertainties affecting Rodobo, reference is made to Part I, Item 1A, "Risk Factors" of Rodobo's Annual Report on Form 10-K for the fiscal year ended September 30, 2008 and to other reports filed from time to time by Rodobo with the Securities and Exchange Commission.
Tables to follow:
RODOBO INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE
INCOME FOR THE NINE AND THREE MONTHS ENDED JUNE 30, 2009 AND
2008 (UNAUDITED)
Three Months Ended Nine Months Ended
June 30 June 30
2009 2008 2009 2008
Net sales $10,261,572 $6,788,262 $25,425,414 $16,107,220
Cost of goods sold 4,428,925 3,824,131 12,812,311 9,544,205
Gross
profit 5,832,647 2,964,131 12,613,103 6,563,015
Operating expenses:
Distribution expenses 3,511,614 1,443,809 6,736,617 3,054,130
General and
administrative
expenses 181,962 324,363 907,862 669,116
Depreciation and
amortization expenses 93,587 12,524 226,297 31,743
Total
operating
expenses 3,787,163 1,780,695 7,870,775 3,754,989
Operating income 2,045,484 1,183,435 4,742,328 2,808,026
Subsidy income -- -- 438,730 94,187
Other (expenses) income (237) (5,299) (66,256) 2,823
Income before income
taxes 2,045,247 1,178,136 5,114,801 2,905,036
Provision for income
taxes -- -- -- --
Net income $2,045,247 $1,178,136 $5,114,801 $2,905,036
Other comprehensive
income:
Foreign currency
translation
adjustment 8,310 294,664 (57,243) 615,538
Comprehensive income $2,053,557 $1,472,800 $5,057,558 $3,520,574
Earnings per ordinary
share
Basic $0.23 $1.21 $1.32 $2.98
Diluted $0.21 $1.21 $1.24 $2.98
Weighted average
ordinary shares
outstanding
Basic 8,748,494 973,685 3,873,210 973,685
Diluted 9,548,695 973,685 4,139,944 973,685
RODOBO INTERNATIONAL, NC.
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, September 30,
2009 2008
(Unaudited) (Audited)
ASSETS
Current assets:
Cash and cash equivalents $733,497 $659,030
Accounts receivable - net of allowance for
bad debts of $66,522 and $66,921,
respectively 2,570,235 1,143,328
Advances to employees 17,826 185,500
Other receivables 13,970 162,006
Inventories 1,538,505 991,536
Prepaid expenses 20,968 26,510
Total current assets 4,895,001 3,167,910
Property, plant and equipment, net:
Fixed assets, net of accumulated depreciation 813,410 812,079
Construction in progress -- 148,240
813,410 960,319
Mature biological assets 2,503,407 --
Other assets:
Deposits on land and equipment 13,443,796 10,873,562
Intangible assets, net 658,791 717,978
Total other assets 14,102,587 11,591,540
Total assets $22,314,405 $15,719,769
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,690,218 $2,165,061
Other payable 50,000 171,286
Accrued expenses 52,987 924,580
Advance from customers -- 1,162,184
Due to related parties 1,185,062 18,079
Total current liabilities 2,978,267 4,441,189
Stockholders' equity
Convertible preferred stock, $0.001 par
value, 15,000,000 shares authorized
- 0 - and 12,976,316 shares issued and
outstanding as of June 30, 2009 and
September 30, 2008, respectively -- 12,976
Common stock, $0.001 par value, 200,000,000
shares authorized, 15,016717 and 1,435,568
shares issued and outstanding as of
June 30, 2009 and September 30, 2008,
respectively 15,017 1,436
Additional paid in capital 5,115,085 3,930,628
Additional paid in capital - warrants 971,788 971,788
Subscription receivable (50,000) (3,050,000)
Retained earnings 13,639,068 8,524,267
Accumulated other comprehensive income 830,242 887,484
Total stockholders' equity 20,521,200 11,278,579
Total liabilities and stockholders'
equity $23,499,467 $15,719,769
For more information, please contact:
Rita Jiang
Rodobo International, Inc.
VP of Finance
Tel: +1-646-691-5047
Email: rita.jiang@gmail.com
Miri Segal
MS-IR LLC
Tel: +1-917-607-8654
Email: msegal@ms-ir.com
Web: http://www.ms-ir.com
