Tianli Agritech Reports First Quarter 2013 Results

              Tianli Agritech Reports First Quarter 2013 Results

PR Newswire

WUHAN CITY, China, May 13, 2013

WUHAN CITY, China, May 13, 2013 /PRNewswire/ -- Tianli Agritech, Inc.
(NASDAQ:OINK) ("Tianli" or the "Company"), a leading producer of breeder hogs,
market hogs and black hogs headquartered in Wuhan City, China, today announced
its financial results for the first quarter ended March 31, 2013.

Mrs. Hanying Li, Chairwoman and CEO of Tianli Agritech commented, "The hog
industry continued to face headwinds as retail pork prices remained depressed
during the first quarter of 2013.The recent outbreak of H7N9 bird flu in
certain regions in China also negatively affected consumer confidence and
caused a temporary shift in consumer preference away from pork, putting
further pressure on the hog industry. As a result, the average selling prices
for both breeder and market hogs remained at the low levels of the fourth
quarter of 2012 and decreased 7% and 8%, respectively, from the same period of
last year. Despite these challenges, our revenue grew on both a year-over-year
and sequential basis in the first quarter of 2013 as we sold more breeder hogs
and market hogs which more than offset the decline in hog prices."

Mrs. Li continued, "Our black hog program continued to progress well. We
completed the construction of 120 farms during the first quarter of 2013,
which brought our total count of completed farms to 765 in Enshi Prefecture.
We plan to fund and construct up to an additional 33 farms in the second
quarter of 2013. Since the third quarter of 2012, we have sold 4,585 black
hogs generating over $1.1 million in revenue. With our recent entry into the
Beijing and Wuhan markets, we are excited about the prospects for our black
hog program and expect it to contribute meaningfully to our revenue and
earnings in 2013."

Q1 2013 Highlights:

                                    For the Three Months Ended March 31,
($ thousands, except per share      2013             2012             % Change
data)
Revenue                             $         $         10%
                                    7,387           6,706
Gross margin                        10.9%            19.4%            -44%
Operating margin                    -1.8%            10.0%            -118%
Net income for common shareholders  (110)            707              -116%
Diluted earnings per share          (0.01)           0.07             -114%

Revenue for the first quarter of 2013 increased 10% to $7.39 million from the
same period of 2012. This increase was primarily the result of selling more
breeder hogs and market hogs, partially offset by declines in the average
selling prices for both breeder hogs and market hogs. The Company sold a total
of 32,513 breeder and market hogs over the course of the first quarter of
2013, compared to 27,095 hogs for the same period of 2012. Revenue for the
first quarter of 2013 from breeder hog sales increased 6% to $2.13 million
with number of breeder hogs sold increasing 14% to 7,690 hogs and the average
selling price of breeder hogs decreasing 7% to $277 per hog. Revenue for the
first quarter of 2013 from market hog sales increased 12% to $5.26 million
from $4.69 million for the same period of 2012 as number of market hogs sold
grew 22% to 24,823 hogs and the average selling price of market hogs declined
8% to $212 per hog. The decline in average selling prices of both breeder and
market hogs was mainly due to market fluctuations. The recent outbreak of bird
flu (H7N9) in certain regions of China also affected pork demand and price.
During the first quarter of 2013, the Company sold 1,825 black hogs to
retailers in the Beijing market generating $0.45 million in revenue. The
sales of black hogs are included in the market hogs category in the table
below.

             For the Three Months Ended March 31,
             2013                                          2012
             No. of     Average        Sales($thousands)  No. of     Average        Sales($thousands)
             HogsSold  Price/Hog($)                      HogsSold  Price/Hog($)
Breederhogs 7,690      $        $      2,129  6,766      $        $      2,017
                         277                                          298
Market hogs  24,823     212            5,257               20,329     231            4,689
Total        32,513     227            7,387               27,095     248            6,706

Gross profit for the first quarter of 2013 was $0.81 million, a 38% decrease
from the same period of last year. Gross margin of 10.9% compared to 19.4% for
the same period of 2012. The combination of higher feed costs and lower hog
selling prices contributed to the decrease in gross margin. The gross margins
for breeder hogs and market hogs were 30% and 3%, respectively, for the first
quarter of 2013, versus 31% and 15%, respectively, for the same period of last
year.

Selling, general and administrative expenses increased by $0.31 million to
$0.94 million for the first quarter of 2013. The increase was primarily
related to our black hog program. Operating margin of (1.8%) for the first
quarter of 2013 compared to 10.0% for the same period of last year.

Net loss from continuing operations for the first quarter of 2013 was $0.18
million, compared to net income of $0.71 million for the same period of 2012.
The decrease was primarily the result of the deterioration in gross margin and
increase in selling, general and administrative expenses as explained above.
After allocating net loss attributable to non-controlling interest, net loss
attributable to common shareholders for the first quarter of 2013 was $0.11
million, or a loss of $0.01 per diluted share. This compared to net income
attributable to common shareholders of $0.71 million, or $0.07 per diluted
share for the same period of last year.

As of March 31, 2013, the Company had cash and cash equivalents of $7.98
million, compared to $7.48 million as of December 31, 2012. Working capital as
of March 31, 2013 was $9.21 million as compared to $8.98 million at December
31, 2012. Cash flow from operations was $0.93 million for the first quarter of
2013, down from the $2.04 million for the same period of last year.

Recent Developments

On May 6, 2013,  the Company began to sell Tianli-Xiduhei^TM black hog
products in Wuhan City through NEWSTAR supermarket as well as three LAO NONG
MIN retail stores.

On February 6, 2013, the Company received a letter from The NASDAQ Stock
Market notifying the Company that it is not in compliance with Marketplace
Rule 5450(a)(1) regarding the minimum closing bid price requirement. The
Company has until August 5, 2013 to regain compliance.

On January 28, 2013, Tianli-Xiduhei® black pork meat made its official debut
at HUA LIAN and YONG HUI supermarket chains in Beijing. As of March 31, 2013,
the Company had sold 1,825 black hogs in Beijing generating $0.45 million in
revenue.

On January 18, 2013, one of the Company's subsidiaries, Hubei Tianzhili Black
Hog Breeding Inc., set up a wholly owned subsidiary with limited liabilities,
Hubei Tianzhili (Hefeng) Black Hog Breeding Co., Ltd., in Hefeng City, Enshi
Prefecture.

Black Hog Program Update 

In May of 2011, Tianli announced the development of its Black Hog program
through which Tianli will breed and sell high-value black hog products. Black
hog meat is known for its increased nutritional value and better taste and
thus commands a premium to white hog meat sold at retail. The Company will
work with all of its farmers and farming co-ops in the Enshi Prefecture in
Hubei Province to ensure that the quality of the breed is maintained and to
develop standardized programs for the feed and care of the hogs. As part of
this effort, Tianli will develop an appropriate feed mix, which the farmers
will purchase from the Company. To be eligible to participate in the program
farmers will need to be able to maintain no less than 6 sows or produce at
least 100 black hogs per year. By March 31, 2013, the Company had provided
funds totaling $12.67 million and completed the construction of 765 farms for
local farmers. The Company plans to fund and construct up to an additional 33
farms in the second quarter of 2013. The Company plans to achieve a production
capacity of 30,000~50,000 black hogs during 2013 with a long run target annual
capacity of 1 million hogs.

The Company expects to benefit from the program in a number of ways,
principally by reselling the black hogs purchased from the participating
farmers and by providing the farmers with necessary feeds. In January 2013,
the Company began to sell black hogs in Beijing. In May 2013, the Company
began to sell its branded black hog meat cuts through retail outlets in Wuhan,
Hubei province.

Earnings Conference Call

Tianli will host an earnings conference call and live webcast covering its
first quarter financial results at 8:00 a.m. Eastern Time (New York) on May
14, 2013, which is also 8:00 p.m. in Beijing on May 14. To attend the call,
please use the information below for either dial-in access or webcast access.
When prompted on dial-in, ask for "Tianli 1Q13".

Conference Call
Date:                  Tuesday, May 14, 2013
Time:                  8:00 am EDT, U.S.
U.S. Dail-in:          +1 877-317-6789
International Dial-in: +1 412-317-6789
Conference ID:         Tianli 1Q 2013
Webcast Link:          http://services.choruscall.com/links/tianli130514.html

Please dial in at least 10 minutes before the call to ensure timely
participation. A playback will be available through May 24, 2013. To listen,
please call +1-877-344-7529 within the United States or +1-412-317-0088 if
calling internationally.

About Tianli Agritech, Inc.

Tianli Agritech, Inc. is in the business of breeding, raising and selling
breeder and market hogs in China and is developing a retail channel for its
pork products including high-value, black hog meat. The Company is focused on
growing high quality hogs for sale for breeding and meat purposes. The Company
conducts genetic, breeding and nutrition research to steadily improve its
production capabilities.

Forward-Looking Statements

This news release contains forward-looking statements as defined by the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
include statements concerning plans, objectives, goals, strategies, future
events or performance, and underlying assumptions and other statements that
are other than statements of historical facts. These statements are subject
to uncertainties and risks including, but not limited to, product and service
demand and acceptance, changes in technology, economic conditions, the impact
of competition and pricing, government regulation, and other risks contained
in reports filed by the company with the Securities and Exchange Commission.
All such forward-looking statements, whether written or oral, and whether made
by or on behalf of the company, are expressly qualified by the cautionary
statements and any other cautionary statements which may accompany the
forward-looking statements. In addition, the company disclaims any obligation
to update any forward-looking statements to reflect events or circumstances
after the date hereof.

For more information, please contact:

Tina Xiao
Weitian Group LLC
Phone: +1-917-609-0333
Email:tina.xiao@weitian-ir.com
Web:http://www.weitian-ir.com

TIANLI AGRITECH, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(UNAUDITED)
                                          For the Three Months Ended March 31,
                                          2013                 2012
Sales                                   $ 7,386,534       $    6,706,421
Cost of goods sold                        6,581,233            5,404,414
 Gross profit                          805,301              1,302,007
Operating expenses:
 General and administrative expenses   902,498              633,467
Selling expenses                      36,042               -
 Total operating expenses              938,540              633,467
Income (loss) from operations             (133,239)            668,540
Other income (expense):
 Interest expense                      (166,817)            (93,666)
 Subsidy income                        95,589               134,647
 Other income (expense)                25,904               1,833
 Total other income (expenses)         (45,324)             42,814
Income (loss) before income taxes         (178,563)            711,354
Income taxes                              -                    -
Net income (loss) from continuing         (178,563)            711,354
operations
Discontinued operations:
 Loss from operations of               -                    (4,656)
discontinued component, net of taxes
Net income (loss)                         (178,563)            706,698
Add:
Net loss attributable to the              68,495               -
noncontrolling interests
Net income (loss) attributable to       $ (110,068)       $    706,698
Tianli Agritech Inc. and Subsidiaries
Earnings per share - basic and
diluted:
 Continuing operations - Basic &     $ (0.02)          $    0.07
diluted
 Discontinued operations -Basic &    $ -               $    -
diluted
 Weighted-average shares               11,194,000           10,135,000
outstanding, basic and diluted
Comprehensive income:
Net income (loss) attributable to       $ (110,068)       $    706,698
Tianli Agritech Inc. and Subsidiaries
Unrealized foreign currency translation
adjustment attributable to Tianli         252,565              247,805
Agritech Inc. and Subsidiaries
Comprehensive income                    $ 142,497         $    954,503
TIANLI AGRITECH, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
                                          March 31,            December 31,
                                          2013                 2012
ASSETS                                    (Unaudited)
Current Assets:
 Cash and cash equivalents           $ 7,976,673       $    7,477,205
 Accounts receivable                   187,646              158,047
 Inventories                           10,767,087           10,232,893
 Advances to suppliers                 11,968               189,094
 Prepaid expenses                      137,414              237,247
 Restricted cash                       797,881              793,512
 Other receivables                     202,457              208,325
 Total Current Assets                 20,081,126           19,296,323
Plant and equipment, net                  25,722,163           24,400,573
Construction in progress                  480,244              1,655,901
Biological assets, net                    4,089,522            4,357,846
Long-term prepaid expenses                1,662,590            1,681,488
Intangible assets, net                    1,481,424            1,485,773
Total Assets                            $ 53,517,069      $    52,877,904
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
 Short-term loans                    $ 7,141,033       $    7,101,935
 Accounts payable and accrued          187,658              190,811
liabilities
 Other payables                        3,417,093            2,893,332
 Due to related party                  126,363              125,842
 Total Current Liabilities           10,872,147           10,311,920
Stockholders' Equity:
 Common stock ($0.001 par value,
50,000,000 shares authorized,
 11,194,000 shares issued and
outstanding as of March 31,              11,194               11,194
2013 and December 31, 2012,
respectively)
 Additional paid in capital            14,888,470           14,888,470
 Statutory surplus reserves            2,416,647            2,416,647
 Retained earnings                     21,472,209           21,582,277
 Accumulated other comprehensive       2,857,367            2,604,802
income
 Stockholders' Equity - Tianli        41,645,887           41,503,390
Agritech Inc. and Subsidiaries
 Noncontrolling interest               999,035              1,062,594
 Total Stockholders' Equity           42,644,922           42,565,984
  Total Liabilities and             $ 53,517,069      $    52,877,904
Stockholders' Equity
TIANLI AGRITECH, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
                                          For the Three Months Ended March 31,
                                          2013                 2012
CASH FLOWS FROM OPERATING ACTIVITIES
 Net income (loss)                 $ (178,563)       $    706,698
 Adjustments to reconcile net
income to net cash
  provided by operating
activities:
 Depreciation and amortization       800,471              674,203
 Amortization of prepaid expenses    100,446              74,705
 Bad debt expense                    -                    16
 Stock-based compensation            -                    5,343
 Changes in operating assets and
liabilities:
 Accounts receivable                (28,681)             3,040
 Inventories                        (317,839)            (121,318)
 Advances to suppliers              79                   (138,263)
 Prepaid expenses                   -                    69,016
 Other receivables                  7,003                75
 Accounts payable and accrued        (4,196)              (50,934)
payables
 Other payables                     546,572              815,144
  Total adjustments                 1,103,855            1,331,027
Net cash provided by operating     925,292              2,037,725
activities from continuing operations
Net cash provided by operating
activities from discontinued              -                    (1,146)
operations
Net cash provided by operating     925,292              2,036,579
activities
CASH FLOWS FROM INVESTING ACTIVITIES
  Investment in construction in    -                    (1,331,897)
progress
  Purchase of biological assets   (58,570)             (351,879)
  Purchase of plant and            (432,941)            (46,631)
equipment
 Net cash used in            (491,511)            (1,730,407)
investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
 Due to An Puluo                 -                    (7,996)
 Net cash provided by           -                    (7,996)
financing activities
EFFECT OF EXCHANGE RATE CHANGES ON       65,687               (28,049)
CASH
NET INCREASE IN CASH                    499,468              270,127
CASH, BEGINNING OF YEAR                 7,477,205            6,518,533
CASH, END OF YEAR                     $ 7,976,673       $    6,788,660
SUPPLEMENTAL DISCLOSURES:
 Cash paid during the period
for:
  Interest paid               $ 173,021         $    100,082
  Income tax paid             $ -               $    -

SOURCE Tianli Agritech, Inc.

Website: http://services.choruscall.com/links/tianli130514.html
 
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