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Toronto, Ontario, August 14, 2009 – 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
6/30/09 | 3 Months to
6/30/08 | | Sales | 23,299 | 21,398 | | Gross profit | 3,558 | 4,850 | | Gross margin (% of Sales) | 15.3% | 22.7% | | Operating expenses | *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 6/30/09 | As at 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 | *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# (available until September 1st , 2009)
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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