WEIFANG,
Second Quarter 2010 Highlights -- Net revenue increased 26.9% to $12.5 million year-over-year -- Sales volume increased 34.4% to 34.6 million birds -- Gross profit increased 47.1% to $4.1 million -- Gross margin increased 450 basis points to 33.0% -- Operating income increased 51.1% to $3.1 million -- Operating margin increased 400 basis points to 24.9% -- Net income increased 46.1% to $3.1 million -- Diluted EPS increased 46.2% to $0.19
"The second quarter of 2010 was another successful quarter for Yuhe,"
commented Mr.
Second Quarter 2010 Results
Net revenue for the second quarter of 2010 increased 26.9% to
Gross profit increased 47.1% year over year to
Operating income increased 51.1% to
Net income increased 46.1% to
Six Month Results
In the six months ended
Financial Condition
As of
Recent Developments
On
As of
Outlook
The Company's management expects sales volume and net income to rise in
the second half of the year, given the seasonality of the business and the
fact that the new parent breeders that were purchased in 2009 and 2010 will
begin to generate revenue in the fourth quarter of 2010. Therefore, management
re-affirms its previously issued guidance for 2010 with production of 150
million broilers in total and net income of approximately
Considering the contribution of the five newly acquired breeder farms,
management expects the output of broilers in 2011 to reach 250 million.
Management also believes their existing sales network is capable of absorbing
the increased output in the short run. The Company plans to build sales
networks gradually around those production facilities outside
The construction of Yuhe's new hatchery was, to some extent, affected by
the recent hot weather because the Chinese government enforces shorter working
hours for construction workers on high temperature days. Management expects
the new hatchery to commence operations in
Mr. Gao added, "We believe Yuhe is very well positioned to capitalize on the opportunities in our market. With our recently closed and announced acquisitions and the construction of our new hatchery, we are confident that we are making the right investments today to position our Company for profitable growth. We have a very experienced team that understands our market very well and is adept at optimizing our input costs and maximizing our sales potential to drive both sales and earnings. We are very pleased with our first half performance. As we enter the second half of the year, we are encouraged by the market environment. We previously stated that we believe there will be a supply shortage in our market going forward and we are beginning to see tangible signs of this. Our day-old broilers are currently commanding average selling prices that are up significantly from the prices we were seeing in the second quarter. We believe that demand and prices for high-quality day-old broilers will stay strong through at least the second half of the year. This together with our expanding capacity gives us confidence that we will be able to deliver strong results for our shareholders through the balance of the year and beyond."
Conference Call
The Company will host a conference call at
A replay will be available for two weeks beginning on
About Yuhe International, Inc.
Founded in 1996, Yuhe is the largest day-old broiler breeders in
Cautionary Statement
This press release contains forward-looking statements concerning the Company's business, products and financial results. The Company's actual results may differ materially from those anticipated in the forward-looking statements depending on a number of risk factors including, but not limited to, the following: general economic and business conditions, development, shipment, market acceptance, additional competition from existing and new competitors, changes in technology, and various other factors beyond the Company's control. All forward-looking statements are expressly qualified in their entirety by this Cautionary Statement and the risk factors detailed in the Company's reports filed with the Securities and Exchange Commission. The Company undertakes no duty to revise or update any forward-looking statements to reflect events or circumstances after the date of this release.
For more information, please contact: Yuhe International, Inc. Mr. Vincent Hu, CFO Phone: +86-536-7300-667 Email: vincent.hu@yuhepoultry.com Mr. Jason Wang, Director of IR Phone: +1-765-409-1844 Email: jason.wang@yuhepoultry.com Web: http://www.yuhepoultry.com CCG Investor Relations Inc. Mr. Athan Dounis, Account Manager Phone: +1-646-213-1916 Email: athan.dounis@ccgir.com Web: http://www.ccgir.com - FINANCIAL TABLES FOLLOW- YUHE INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Stated in US Dollars) June 30, December 31, 2010 2009 (unaudited) US$ ASSETS Current assets: Cash and cash equivalents $ 19,633,056 $ 14,047,147 Accounts receivable, net of allowances of $18,947 and $18,868 842 838 Inventories 9,344,534 6,560,783 Advances to suppliers 264,991 359,179 Deferred tax assets 11,888 17,766 Total current assets 29,255,311 20,985,713 Plant and equipment, net 32,625,090 29,556,712 Deposits paid for acquisition of long-term assets 11,342,811 16,082,613 Notes receivable, net and other receivable, net 52,866 33,635 Unlisted investments held for sale 301,433 300,172 Intangible assets, net 2,830,463 2,851,411 Net investment in direct financing lease 400,436 382,742 Long-term prepaid rent 8,118,188 6,570,038 Total assets $ 84,926,598 $ 76,763,036 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 6,008,463 $ 5,740,912 Current portion of long term loans 2,026,848 9,433,686 Other payable 1,061,094 1,343,901 Accrued expenses and payroll related liabilities 3,001,702 2,366,134 Advances from customers 1,860,833 678,366 Other taxes payable 149,941 150,764 Loan from director 293,746 292,517 Other liabilities 144,553 143,949 Due to related companies 1,208 1,208 Total current liabilities 14,548,388 20,151,437 Non-current liabilities Long-term loans 8,518,638 1,360,206 Total liabilities 23,067,026 21,511,643 Stockholders' Equity Preferred stock, $.001 par value, 1,000,000 shares authorized, no shares issued and outstanding -- -- Common stock, $.001 par value; authorized 500,000,000 shares, 15,809,563 and 15,722,180 shares issued and outstanding at June 30, 2010 and December 31, 2009, respectively 15,809 15,722 Additional paid-in capital 31,034,149 30,672,849 Retained earnings 29,299,177 23,316,794 Accumulated other comprehensive income 1,510,437 1,246,028 Total stockholders' equity 61,859,572 55,251,393 Total liabilities and stockholders' equity $84,926,598 $76,763,036 YUHE INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED) (Stated in US Dollars) For The Three Months For The Six Months Ended June 30 Ended June 30 2010 2009 2010 2009 US$ Net revenue $12,478,631 $9,834,373 $24,235,548 $20,748,763 Cost of revenue (8,355,543) (7,031,426) (16,212,105) (13,883,779) Gross profit $4,123,088 2,802,947 $8,023,443 $6,864,984 Operating Expenses Selling expenses (201,568) (108,656) (312,515) (201,596) General and administrative expenses (810,623) (635,247) (1,631,139) (1,379,237) Total operating expenses $(1,012,191) (743,903) $(1,943,654) $(1,580,833) Income from operations 3,110,897 2,059,044 6,079,789 5,284,151 Non-operating income (expenses) Interest income 81 45 139 141 Other income (expenses) (3,081) 5,126 8,084 4,661 (Loss) gain on disposal of fixed assets -- 27,778 (176) 27,778 Investment income 3 -- 15,615 15,509 Interest expenses (49,188) -- (115,138) (325,427) Total other income (expenses) $(52,185) 32,949 $(91,476) $(277,338) Net income before income taxes 3,058,712 2,091,993 5,988,313 5,006,813 Income tax expenses (3,329) -- (5,930) -- Net income $3,055,383 $2,091,993 $5,982,383 $5,006,813 Other comprehensive income Foreign currency translation 255,534 3,806 264,409 52,078 Comprehensive income $3,310,917 $2,095,799 $6,246,792 $5,058,891 Earnings per share Basic $0.19 $0.13 $0.38 $0.32 Diluted $0.19 $0.13 $0.37 $0.32 Weighted average shares outstanding Basic 15,809,563 15,722,180 15,772,872 15,722,180 Diluted 16,029,036 15,722,180 16,041,393 15,722,180 YUHE INTERNATIONAL, INC. CONDENSED UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (Stated in US Dollars) For The Six Months Ended June 30 2010 2009 US$ Cash flows from operating activities Net income $ 5,982,383 $ 5,006,813 Adjustments to reconcile net income to net cash used in operating activities: Stock based compensation 361,387 361,421 Depreciation 1,123,534 1,027,465 Amortization 32,800 32,759 Capitalized interest in construction in progress (370,223) (302,058) Loss (gain) on disposal of fixed assets 176 (27,778) Changes in operating assets and liabilities: Accounts receivable -- (75) Advances to suppliers 10,128 (526,528) Inventories (2,745,647) 199,889 Deferred tax assets 5,930 29,459 Long-term prepaid rent 104,930 -- Accounts payable 242,505 1,011,712 Other payable (287,265) 254,103 Accrued expenses and payroll related liabilities 624,891 344,100 Advances from customers 1,175,104 588,416 Other taxes payable (1,451) 9,090 Net investment in direct financing lease (16,025) -- Net cash provided by operating activities 6,243,157 8,008,788 Cash flows from investing activities Deposit paid and acquisition of property, plant and equipment (438,884) (4,371,637) Advance to notes receivable (11,370) (23,602) Advance to related parties (3,022,463) (144,350) Proceeds from related parties 3,022,463 Proceeds from disposal of fixed assets -- 27,778 Proceeds received from related parties receivables -- -- Net cash used in investing activities (450,254) (4,511,811) Cash flows from financing activities Repayment of loan payable (292,622) -- Proceeds from related party payable -- 360,094 Net cash flows (used in) provided by financing activities: (292,622) 360,094 Effect of foreign currency translation on cash and cash equivalents 85,628 20,210 Net increase in cash 5,585,909 3,877,281 Cash- beginning of period 14,047,147 13,412,205 Cash- end of period $19,633,056 $17,289,486 Cash paid during the period for: Interest paid $ 447,091 $ 448,487 Income taxes paid $ -- $ -- Supplemental disclosure Transfer from construction in progress to fixed assets $2,656,342 $ 1,831,131 Transfer from advances to suppliers and deposit paid for acquisition of long-term assets to fixed assets $3,316,607 $ -- Transfer from deposit paid for acquisition of long-term assets to long-term prepaid rent $1,619,664 $ -- Cashless exercise of 142,816 warrants $ 87 $ --
SOURCE Yuhe International, Inc.