/NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/ TSX Venture: ABC
TORONTO, Aug. 14 /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 June 30, 2009.
Interim Financial Results
Highlights
- Excluding the (non-cash) stock-based compensation expense, income
from operations and EBITDA during the second quarter of 2009 was
$1.5 million and $2.0 million respectively.
- The Company achieved gross profit of $3.6 million during the
second quarter representing 15.3% of sales. This improvement arose
as a result of improved product prices achieved during the
quarter.
- The Daqing plant construction is on schedule and on budget with
about $65.5 million of construction in progress incurred as of
June 30, 2009. Outstanding commitments in 2009 relating to Daqing
represent $16.9 million which will be satisfied from cash flow and
bank loans.
- During the second quarter of 2009, the Company obtained RMB 100
million ($16.9 million) term loan from China Construction Bank and
RMB 100 million ($16.9 million) term loan from Zhaoyuan County
Government. As of June 30, 2009, RMB 20 million ($3.4 million) of
the Zhaoyuan County Government loan facility had been advanced.
The remaining RMB 80 million ($13.5 million) of the loan is under
negotiation with the Zhaoyuan County Government.
- As at June 30, 2009, the Company had $10.3 million in cash and
$24.5 million in bank debt.
Asia Bio-Chem, today reported second quarter sales of $23.3 million representing a 8.9% increase compared to the corresponding period of 2008. This increase was due to the improvement in the value of the Chinese RMB relative to the Canadian Dollar which offset lower selling prices and volumes when compared with the second quarter of 2008.
Gross profit declined to $3.6 million during the quarter representing a 26.6% decrease over the same quarter of 2008. This reduction was primarily due to lower selling prices particularly in germ as well as 6.3% higher corn cost experienced during the quarter compared with the second quarter of 2008.
"We are pleased to see that market conditions have begun to improve for our products following a difficult first quarter. We expect that the continued recovery in our industry will bode well for our Company as our new facility comes on stream in the fourth quarter of this year." stated Mr. Zhiping Wang, President and CEO of Asia Bio-Chem.
During the second quarter, stock-based compensation expense of $0.9 million and higher selling and distribution expenses contributed to a decline in income from operations to $0.6 million.
SUMMARY FINANCIAL STATEMENTS
in thousands of Canadian dollars except
shares, per share and percentage data 3 Months to 3 Months to
6/30/09 6/30/08
------------ ------------
Sales 23,299 21,398
Gross profit 3,558 4,850
Gross margin (% of Sales) 15.3% 22.7%
Operating expenses (x)2,957 1,297
Income from operations 601 3,554
Other income (expense) (107) 17
Income taxes 65 633
Net income 430 2,938
EBITDA 1,088 3,760
EBITDA before Stock-based compensation 2,007 3,965
Earnings per share
Basic and diluted 0.01 $0.06
Weighted average number of shares
Basic and diluted 76,777,025 53,271,948
Balance Sheet Highlights
As at As at
6/30/09 12/31/08
------------ ------------
Cash 10,334 10,489
Working Capital 18,566 5,154
Total assets 120,506 113,144
Current Ratio 2.61:1 1.28:1
(x) Includes a $918,624 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 $2.9 million during the second quarter of 2008 to $0.4 million during the second quarter of 2009.
During the second quarter, the Company's cash position increased to $10.3 million as at June 30, 2009. Drawdown of the long term loan facility from the China Construction Bank in the amount of $16.9 million contributed to the Company's cash position.
Daqing Project
The Daqing plant construction is near completion with approximately $65.5 million of construction in progress incurred as of June 30, 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 and the recently announced financings from both China Construction Bank and Zhaoyuan County Government. The total amount of these facilities is RMB 200 million ($34 million) of which RMB 120 million ($20 million) has been drawn down as at June 30, 2009.
Conference Call
Asia Bio-Chem will be hosting a conference call to discuss the second quarter results and its proposed acquisition at 9 am Tuesday, August 18, 2009. The details are as follows:
Dial in number: 1-800-732-9307 or 416-644-3416
Taped replay: 1-877-289-8525 or 416-640-1917
Pass Code: 21312873 followed by the number sign
(available until September 1st , 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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