/NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/ TSX Venture: ABC
TORONTO, May 15 /CNW/ - Asia Bio-Chem Group Corp. (TSXV: ABC) ("Asia Bio-Chem" or the "Company") today announced its interim financial statements for the three month period ending March 31, 2009.
Interim Financial Results
Highlights
- Excluding the (non-cash) stock-based compensation expense, income
from operations and EBITDA during the first quarter of 2009 was
$0.7 million and $1.1 million respectively.
- The Daqing plant construction is on schedule with approximately
$65 million of construction in progress incurred as of
March 31, 2009.
- The Company has secured debt financing from both the
China Construction Bank and Zhaoyuan County Government. The total
amount of these facilities is RMB 135 million ($25 million) of which
RMB 35 million ($6.4 million) has been drawn down as at
March 31, 2009, approximately RMB 20 million ($3.6 million) received
subsequent to March 31, 2009, and approximately RMB 80 million
($15 million) is being negotiated with the PRC government.
- As at March 31, 2009, the Company had $3.0 million in cash and
$6.4 million in bank debt.
Asia Bio-Chem, today reported first quarter sales of $19.0 million representing a 4.3% decline compared to the corresponding period of 2008. Lower selling prices and volumes contributed to this reduction.
Gross margin declined to $2.7 million during the quarter representing a 52.4% decrease over the same quarter of 2008. This reduction was primarily due to lower selling prices particularly in germ, fiber and starch products as well as a reduction in sales volume.
"The challenging market conditions from our fourth quarter continued into the first quarter of 2009 as the economic slowdown in China coupled with government purchases of corn had a negative effect on our gross profit," stated Mr. Zhiping Wang, President and CEO of Asia Bio-Chem.
During the first quarter, stock-based compensation expense of $1.2 million and higher general and administrative expenses associated with the Company's public company status caused income from operations to decline to a loss of $0.5 million.
SUMMARY FINANCIAL STATEMENTS
in thousands of Canadian dollars
except shares, per share and 3 Months to 3 Months to
percentage data 3/31/09 3/31/08
------------- --------------
Sales 19,031 19,895
Gross profit 2,423 5,085
Gross margin (% of Sales) 12.8% 25.6%
Operating expenses (x)2,923 951
Income from operations (502) 4,134
Other income (179) (441)
Income taxes 157 569
Net income (837) 3,124
Comprehensive net income 1,013 5,542
EBITDA (169) 3,869
EBITDA before Stock-based compensation 1,063 3,869
Earnings per share
Basic and diluted ($0.01) $0.08
Weighted average number of shares
Basic and diluted 76,777,025 37,540,000
Balance Sheet Highlights
As at As at
3/31/09 12/31/08
------------- --------------
Cash 3,040 10,489
Working Capital 5,836 5,154
Total assets 112,848 113,144
Current Ratio 1.38:1 1.28:1
(x) Includes a $1.2 million non-cash charge for stock-based compensation
expense
Reduced gross margins, stock-based compensation expense and the higher selling, general and administrative expenses caused net income to decline from $3.1 million during the first quarter of 2008 to a loss of $0.8 million during the first quarter of 2009.
The Company's cash position declined to $3.0 million as at March 31, 2009 as $8.1 million was used in operating activities during the quarter. A loan from the China Construction Bank in the amount of $6.3 million contributed to the Company's cash position.
Daqing Project
On September 25th, 2008, the Company announced that it had closed the acquisition of Daqing Biochemical Company Ltd. ("Daqing"). Daqing owns a partially completed, 600,000 tonne corn processing plant in Zhaoyuan County of Heilongjiang Province in China.
The Daqing plant construction is well underway with approximately $65 million of construction in progress incurred as of March 31, 2009. The remaining capital required to complete the project and current obligations associated with the project are expected to be financed with a combination of cash flow from operations, bank and government financing.
As announced on March 16th 2009 and on April 15, 2009, the Company has entered into a loan agreements with China Construction Bank and Zhaoyuan County Government. The total amount of these facilities is RMB 135 million ($25 million) of which RMB 35 million ($6.4 million) has been drawn down.
Conference Call
Asia Bio-Chem will be hosting a conference call to discuss the second
quarter results and its proposed acquisition at 2 pm Friday, May 15, 2009. The
details are as follows:
Dial in number: 1-800-731-5774 or 416-644-3421
Taped replay: 1-877-289-8525 or 416-640-1917
Pass Code: 21305265 followed by the number sign
(available until May 29th, 2009)
About Asia Bio-Chem Group Corp.
Asia Bio-Chem Group, through its wholly-owned subsidiary in the Peoples Republic of China ("PRC") is in the business of manufacturing cornstarch and related products. From its plant in Liaoning Province, the Company produces approximately 270,000 tonnes of cornstarch, corn germ, gluten and fiber per year for sale into the domestic market in the PRC. The Company is currently constructing a second facility in Heilongjiang Province which, upon completion, is expected to triple production capacity.
This news release contains certain statements that may be deemed "forward looking statements". Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects,", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although the Company believes the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. Forward looking statements are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made. The Company undertakes no obligation to update these forward looking statements, except as required by law, in the event that management's beliefs, estimates or opinions, or other factors, should change.
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