HARBIN, China, Dec. 21, 2010 /PRNewswire-Asia-FirstCall/ -- Rodobo International, Inc. (the "Company" or "Rodobo") (OTC Bulletin Board: RDBO), a fast growing dairy company in China, reported financial results for the fourth quarter and full year ended September 30, 2010.
Fourth Quarter 2010 Highlights:
-- Revenue was $25.3 million, up 172.6% from $9.3 million in 4Q09, outperformed 4Q10 guidance range of $20 - $24 million -- Gross profit was $9.4 million, up 87.5% from $5.0 million in 4Q09 -- Net income was $3.6 million, up 112.4% from $1.7 million in 4Q09, outperformed 4Q10 guidance range of $3.0 - $3.2 million -- Earnings per diluted share was $0.13, up from $0.10 in 4Q09
Full Year 2010 Highlights:
-- Revenue was $69.8 million, up 101.2% from $34.7 million in 2009 -- Gross profit was $28.0 million, up 59.0% from $ 17.6 million in 2009 -- Net income was $12.4 million, up 82.5% from $6.8 million in 2009 -- Earnings per diluted share was up to $0.53 from $0.42 in 2009
First Quarter 2011 Guidance:
Management feels confident to give its guidance for the first quarter of 2011 for revenue to be in the range of $24 - $26 million and net income to be in the range of $3.2 - $3.5 million.
"Rodobo closed its fiscal year 2010 with strong fourth quarter results and it is our fourth consecutive top line growth quarter. Our strong revenue and net income growths demonstrated the strong market demand for Rodobo's high quality, fresh and nutritious milk powder products, the effectiveness of our strategy of expanding our production capacity, and our ability in marketing execution" stated Mr. Yanbin Wang, the Chairman and Chief Executive Officer of Rodobo. "Overall, 2010 was an extraordinary and successful year for Rodobo. The acquisition of the Beixue Group is a key groundwork of our growth strategy. As we move into 2011, we will continue to consolidate our acquisition, realign our product lines and improve our capacity utilization as we continue to expand our distribution network and further penetrate into our existing market in both formulated dairy and raw milk powder products."
Fourth Quarter 2010 Financial Results
Net sales for the fourth quarter of 2010 were $25.3 million, an increase of approximately $16.0 million or 172.6%, compared to net sales for fourth quarter of 2009. This increase was primarily derived from the contribution from the acquisition of Hulunbeier Hailaer Beixue, one of the three companies comprising the Beixue Group that were acquired by the Company on February 5, 2010. We also increased the selling price of whole milk powder products produced by Hulunbeier Hailaer Beixue after the acquisition. The revenue growth was also attributed to the sales of our "Peer" infant formula product series launched in July 2009. The "Peer" series is a high-end product line with higher selling price. During the fourth quarter, we continued our efforts to develop distribution networks and expand the market areas in the 9 provinces in which we currently sell products.
During the fourth quarter of 2010, sales generated from baby/infant formula accounted for 40.7% of total sales, sales generated from middle-aged and elderly formula accounted for 13.5% of our total sales, and sales generated from whole milk powder formula accounted for 45.8% of total sales.
Our gross profit for the fourth quarter of 2010 was $9.4 million, an increase of approximately $4.4 million or 87.5%, compared to the gross profit for the fourth quarter of 2009. The overall gross profit margin for the fourth quarter of 2010 decreased to 37.0% from 53.8% for the fourth quarter of 2009.
Our overall gross profit margin was diluted due to the acquisition of lower-margin business. The newly acquired, Hulunbeier Hailaer Beixue, has a gross margin of 7.4% for the fourth quarter of 2010. Excluding the margin dilution impact of the acquisition, gross profit margin actually improved to 64.0% for the fourth quarter 2010 from 53.8% for the fourth quarter of 2009, which was primarily driven by the high-margin new baby/infant formula "Peer", which has a gross margin of 70.8% and accounted for approximately 52.6% of total formulated milk powder product sales (excluding sales from Hulunbeier Hailaer Beixue) in the fourth quarter of 2010.
Operating expenses for the fourth quarter of 2010 were $6.3 million, an increase of approximately $2.9 million, or 85.6%, compared to the fourth quarter of 2009. Operating expenses as a percentage of net sales decreased to 24.8% in the fourth quarter of 2010 from 36.4% in the fourth quarter of 2009. The decrease of the operating expenses as a percentage of net sales was primarily due to a decrease in operating expenses, especially fewer distribution expenses expended by Hulunbei Hailaer Beixue as its whole milk powder products are sold directly to end users' processing plants.
Distribution expenses for the fourth quarter of 2010 were $5.8 million, an increase of approximately $2.7 million or 90.9%, compared to $3.1 million for the fourth quarter of 2009. The increase was mainly due to sales growth and market expansion. The increase was also attributed by $0.4 million amortization of customer list that we acquired in connection with the acquisitions of the Beixue Group made on February 5, 2010.
General and administrative expenses for the fourth quarter of 2010 were $0.4 million, an increase of $0.1 million from $0.3 million for the fourth quarter of 2009.
Net income for the fourth quarter of 2010 was $3.6 million, an increase of $1.9 million or 112.4%, compared to $1.7 million for the fourth quarter of 2009. Earnings per diluted share were $0.13 for the fourth quarter of 2010, compared with $0.10 per diluted share for the fourth quarter of 2009.
Full Year 2010 Financial Results
Net sales for the full year 2010 were $69.8 million, an increase of approximately $35.1 million or 101.2%, from $34.7 million in 2009. Gross profit increased was $28.0 million, an increase of 59.0% from $17.6 million in the comparable period in 2009. Gross margin was 40.1% in 2010 compared to 50.7% in the comparable period in 2009. Income from operation was $10.0 million, an increase of 56.8% from $6.4 million in the same period a year ago. Net income for 2010 was $12.4 million or $0.53 per fully diluted share, up 82.5% from $6.8 million, or $0.42 per fully diluted share, in the comparable period in 2009.
Financial Condition
As of September 30, 2010, Rodobo had $5.2 million in cash and cash equivalents, $5.5 million in current liabilities and no long-term debt. Shareholders' equity was $61.0 million as of September 30, 2010, up from $21.3 million as of September 30, 2009. Net cash from operating activities during 2010 was $12.8 million, compared with $3.6 million in 2009.
Conference Call Information
Management will conduct a conference call at 8:00 A.M. Eastern Time, on Tuesday, December 21, 2010. To participate in the live conference call, please dial the following number five or ten minutes prior to the scheduled conference call time: (866) 393-8606. International callers should dial +1-(706) 643-9902. When prompted by the operator, mention Conference ID number 33141799. If you are unable to participate in the call at this time, a replay will be available on Tuesday, December 21, 2010 at 11:00 a.m. Eastern Time, through Tuesday, January 4, 2011. To access the replay dial (800) 642-1687 or (706) 645-9291, and enter the passcode 33141799. Additionally, a live webcast will be available at http://intercallus.stream57.com/Rodobo_122110
About Rodobo International, Inc.
Rodobo International, Inc. is a producer and distributor of powdered milk formula products in the People's Republic of China ("PRC" or "China"). The Company's target consumers include infants, children, the middle-aged and the elderly in China. The Company's products for infants and children are currently sold under the brand names of "Rodobo" and "Peer", and its products for middle-aged and elderly consumers are currently sold under the brand name of "Healif".
Safe Harbor Statement
This press release and the statements of representatives of Rodobo International, Inc., and its consolidated subsidiaries (collectively, the "Company") related thereto contain, or may contain, among other things, "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact included herein are "forward-looking statements," including statements regarding: the impact of the recent acquisitions on the business and operations of the Company; the ability of the Company to achieve its commercial objectives including increased growth, revenues, earnings, and production capacity; the business strategy, plans and objectives of the Company; and any other statements of non-historical information. These forward-looking statements are subject to significant known and unknown risks and uncertainties and are often identified by the use of forward-looking terminology such as "projects," "may," "could," "would," "should," "believes," "expects," "anticipates," "estimates," "intends," "plans" or similar expressions. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the periodic reports that are filed with the Securities and Exchange Commission and available on its website (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. The Company undertakes no duty to update these forward-looking statements except as required by law.
For additional information, please contact: Xiuzhen Qiao Rodobo International Inc Tel: +86-10-6216-6032 Email: qiaozhen1973@163.com Stephen Tong Rodobo International, Inc. Tel: +86-10-6216-6396 Email: tongzijian@gmail.com
RODOBO INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
September September 30 30 2010 2009 ---- ---- ASSETS Current assets: Cash and cash equivalents $5,163,789 $1,640,259 Accounts receivable, net 8,085,248 2,015,044 Inventories 1,523,422 1,576,723 Prepaid expenses 114,215 24,642 Advances to suppliers 969,369 - ------- --- Total current assets 15,856,043 5,256,668 ---------- --------- Property, plant and equipment: Fixed assets, net of accumulated depreciation 19,575,890 738,537 Construction in progress 22,701,594 9,888,183 ---------- --------- 42,277,484 10,626,720 ---------- ---------- Biological assets, net 3,295,508 2,499,625 --------- --------- Other assets: Deposits on biological assets - 988,818 Deposits on land 74,726 73,246 Intangible assets, net 10,440,131 4,526,117 ---------- --------- Total other assets 10,514,857 5,588,181 ---------- --------- Total Assets $71,943,892 $23,971,194 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term loans $1,218,025 $ - Accounts payable 1,457,624 1,246,818 Other payable 723,015 50,293 Accrued expenses 588,011 175,456 Due to related parties 1,491,616 1,185,062 --------- --------- Total current liabilities 5,478,291 2,657,629 --------- --------- Warrant liability 1,414,316 - --------- --- Series A preferred stock, $0.0001 par value, 30,000,000 shares authorized, 2,000,000 shares issued and outstanding as of September 30, 2010 and 2009 4,100,000 - --------- --- Stockholders' equity Common stock, $0.0001 par value, 200,000,000 shares authorized, 28,003,726 and 16,216,717 shares issued and outstanding as of September 30, 2010 and September 30, 2009, respectively 2,800 1,622 Additional paid in capital 30,344,724 4,355,085 Additional paid in capital - warrants 971,788 971,788 Subscription receivable (50,000) (50,000) Retained earnings 27,588,952 15,189,860 Accumulated other comprehensive income 2,093,022 845,210 --------- ------- Total stockholders' equity 60,951,286 21,313,565 ---------- ---------- Total Liabilities and Stockholders' Equity $71,943,892 $23,971,194 =========== ===========
RODOBO INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
Three Months Ended September 30 2010 2009 ---- ---- Net sales $25,255,868 $9,265,573 Cost of goods sold 15,902,672 4,276,695 ---------- --------- Gross profit 9,353,197 4,988,878 --------- --------- Operating expenses: Distribution expenses 5,829,157 3,053,985 General and administrative expenses 433,655 320,835 ------- ------- Total operating expenses 6,262,812 3,374,820 --------- --------- Operating income 3,090,385 1,614,059 Subsidy income - 241 Gain on bargain purchase - - Interest expenses (30,818) - Change in fair value of warrants 403,036 - Other income (expenses) 106,970 66,492 ------- ------ Income before income taxes 3,569,573 1,680,792 Provision for income taxes - - --- --- Net income $3,569,573 $1,680,792 Other comprehensive income: Foreign currency translation adjustment 875,190 14,969 ------- ------ Comprehensive income $4,444,763 $1,695,761 ========== ========== Earnings per share Basic $0.13 $0.11 ===== ===== Diluted $0.13 $0.10 ===== ===== Weighted average shares outstanding Basic 27,183,436 15,120,413 ========== ========== Diluted 28,453,824 16,466,144 ========== ==========
Years Ended September 30, 2010 2009 ---- ---- Net sales $69,797,739 $34,690,987 Cost of goods sold 41,816,236 17,089,006 ---------- ---------- Gross profit 27,981,503 17,601,981 ---------- ---------- Operating expenses: Distribution expenses 14,697,951 9,790,602 General and administrative expenses 3,316,680 1,454,994 --------- --------- Total operating expenses 18,014,631 11,245,596 ---------- ---------- Operating income 9,966,872 6,356,385 Subsidy income 273,897 438,971 Gain on bargain purchase 1,677,020 - Interest expenses (102,257) - Change in fair value of warrants 427,795 - Other income (expenses) 155,766 236 ------- --- Income before income taxes 12,399,092 6,795,593 Provision for income taxes - - --- --- Net income $12,399,092 $6,795,593 Other comprehensive income: Foreign currency translation adjustment 1,247,812 (42,274) --------- ------- Comprehensive income $13,646,904 $6,753,319 =========== ========== Earnings per share Basic $0.55 $1.01 ===== ===== Diluted $0.53 $0.42 ===== ===== Weighted average shares outstanding Basic 22,365,017 6,708,121 ========== ========= Diluted 23,349,810 16,026,645 ========== ==========
RODOBO INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended September 30, 2010 2009 ---- ---- Cash flows from operating activities Net income $12,399,092 $6,795,593 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 2,904,066 430,620 Allowance for doubtful accounts - (66,488) Stock-based compensation 1,330,543 281,667 Gain on bargain purchase (1,677,020) - Change in fair value of warrants (427,795) - Changes in assets and liabilities: (Increase) decrease in - Accounts receivable, advance to employees and other receivables (1,453,985) (470,664) Inventories 1,886,687 (589,470) Prepaid expenses (39,020) 7,321 Advances to suppliers 2,406,993 - Increase (decrease) in - Accounts payable and other payable (1,722,953) (879,211) Accrued expenses (243,625) (743,651) Advance from customers (2,604,942) (1,154,657) ---------- ---------- Net cash provided by operating activities 12,758,041 3,611,060 ---------- --------- Cash flows from investing activities Purchase of fixed assets (202,004) (30,360) Cash used for construction in progress (13,686,533) (2,633,828) Purchase of mature biological assets - (2,562,291) Purchase of intangible assets (588,794) (585,295) Cash acquired in acquisitions, net of cash paid 1,059,896 - Collection of loan to others 1,565,211 - Collection of loan to shareholders 1,750,343 - Deposits on mature biological assets - (987,686) Net cash used in investing activities (10,101,881) (6,799,459) ----------- ---------- Cash flows from financing activities Proceeds from issuance of common stock and warrants, net of issuance costs 2,652,386 - Proceeds from subscription receivable - 3,000,000 Proceeds from short-term loans 551,126 - Repayment of short-term loans (484,991) - Proceeds from related party loans 588,794 1,185,223 Repayment of related party loans (2,529,111) (13,225) ---------- ------- Net cash provided by financing activities 778,204 4,171,998 ------- --------- Effect of exchange rate changes on cash and cash equivalents 89,166 (2,370) ------ ------ Net increase in cash and cash equivalents 3,523,530 981,229 Cash and cash equivalents, beginning of period 1,640,259 659,030 --------- ------- Cash and cash equivalents, end of period $5,163,789 $1,640,259 ========== ========== Supplemental disclosures of cash flow information: Interest paid $7,016 $4,882 ====== ====== Income taxes paid $ - $ - === === === Non-cash investing and financing activities: Common stock issued for stock-based compensation for services $225,876 $3,315,000 ======== ========== Transfer deposit on land to intangible assets $ - $3,486,955 === === ========== Common stock issued for business acquisition $23,850,000 $ - =========== === === Preferred stock issued for business acquisition $4,100,000 $ - ========== === ===
SOURCE Rodobo International, Inc.