Tianli Reports Return to Profitability20 November 2013
CHINA - Tianli Agritech, Inc., a leading producer of breeder hogs, market hogs and black hogs headquartered in Wuhan City, China, has announced its financial results for the third quarter ended 30 September 2013.
Mrs Hanying Li, Chairwoman and CEO of Tianli Agritech, Inc. commented, "On the back of a gradual recovery of pork prices and strong growth momentum for our black hog program and retail operations, we are very pleased to report our third quarter financial results that highlighted 33 per cent top-line growth and the return to profitability after more than a year.
"Recently, we also regained compliance with the minimum bid price requirement of $1.00 per share for continued listing of our common stock on the Nasdaq Capital Market and completed a $3.2 million Private Placement with Mr Wei Gong, a prominent investor and one of the pioneers of incubation centers in China.
"As we continue to advance our black hog program and expand our retail presence, we believe better days lie ahead of us. We want to thank our shareholders, many of whom have been with us since our IPO in 2010, for their continued patience and support."
Revenue for the third quarter of 2013 increased by $2.15 million, or 33 per cent, to $8.73 million from $6.57 million for the same period of 2012. This increase was primarily the result of selling more breeder hogs and market hogs as well as revenue contributed from retail operations resumed in April 2013.
The Company sold a total of 37,616 breeder hogs, regular market hogs, black hogs and market hogs for processed pork with a blended average selling price of $232 per hog during the third quarter of 2013, compared to 29,702 hogs sold and a blended average selling price of $221 per hog for the same period of 2012.
Revenue for the third quarter of 2013 from breeder hog sales increased 16 per cent to $2.14 million with the number of breeder hogs sold increasing 19 per cent to 7,605 hogs and the average selling price of breeder hogs decreasing 2 per cent to $282 per hog.
Revenue for the third quarter of 2013 from regular market hog sales increased 9 per cent to $5.17 million as the number of regular market hogs sold grew 3 per cent to 23,951 hogs and the average selling price of regular market hogs increased 6 per cent to $216 per hog.
Tianli also sold 5,323 black hogs at an average selling price of $230 per hog, generating $1.23 million in revenue during the third quarter of 2013. However, it did not sell black hogs in the comparable period of 2012. The Company also generated $0.19 million in revenue from our retail operations during the third quarter of 2013.
Gross profit for the third quarter of 2013 was $0.90 million, compared to $0.62 million for the same period of last year. Gross margin was 10.4 per cent and 9.5 per cent for the third quarter of 2013 and 2012, respectively. The combination of a slight decrease in feed costs and a slight increase in blended average selling prices contributed to the year-over-year increase in gross margin.
The gross margins for breeder hogs, regular market hogs, black hogs, and retail sales were 29 per cent, 4 per cent, 3 per cent and 17 per cent respectively. As a comparison, gross margins for breeder hogs and regular market hogs were 32 per cent and 1 per cent, respectively, for the same period of last year.
Selling, general and administrative expenses decreased by $0.95 million, or 59 per cent, to $0.67 million for the third quarter of 2013. The decrease primarily reflects the non-cash expense of $1.1 million resulting from the issuance of 1 million shares to our marketing consultants and employees for black hog sales in the third quarter of 2012. There was no comparable expense in 2013.
Net Income from continuing operations for the third quarter of 2013 was $0.17 million, compared to a net loss of $1.13 million for the same period of 2012. The combination of an increase in revenue and a decrease in selling, general, and administrative expenses led to the return to profitability in the third quarter of 2013.
After allocating net income attributable to non-controlling interest, net income attributable to common shareholders for the third quarter of 2013 was $0.29 million, or $0.03 per diluted share. This compared to net loss attributable to common shareholders of $1.13 million, or a loss of $0.10 per diluted share for the same period of last year.
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