Tianli Agritech Reports Second Quarter 2013 Results

             Tianli Agritech Reports Second Quarter 2013 Results  PR Newswire  WUHAN, China, Aug. 13, 2013  WUHAN, China, Aug. 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 second quarter ended June 30, 2013.  Mrs. Hanying Li, Chairwoman and CEO of Tianli Agritech commented, "Despite continued weakness in overall pork demand and a decline in pork prices, our revenue increased by 7% to $6.8 million in the second quarter of 2013 as the number of hogs we sold grew by 30% to a record level of 36,464 hogs which more than offset the 18% decline in average selling price per hog. We also resumed our retail operations and started to sell our Tianli-Xiduhei™ hog meat cuts through leadingsupermarket chains in the Wuhan marketduring the second quarter. Looking ahead, as we continue to focus on expanding our black hog program in Enshi prefecture and building out our retail operations, we believe Tianli is well positioned for a rebound of the hog industry in coming quarters."  Second Quarter 2013 Financial Results:                                      For the Three Months Ended June 30, ($ thousands, except per share      2013             2012             % Change data) Revenue                         $         $         7%                                     6,844           6,391 Gross margin                     -4.0%            12.5%            -132% Operating margin                 -14.4%           5.9%             -346% Net income for common shareholders (1,005)          316              -418% Diluted earnings per share         (0.09)           0.03             -388%  Revenue for the second quarter of 2013 increased by $0.45 million, or 7%, to $6.84 million from $6.39 million for 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 and market hogs. The Company sold a total of 36,464 breeder hogs, market hogs, and market hogs for processed pork products during the second quarter of 2013, compared to 28,034 hogs for the same period of 2012. Revenue for the second quarter of 2013 from breeder hog sales decreased 7% to $1.96 million with the number of breeder hogs sold increasing 12% to 7,718 hogs and the average selling price of breeder hogs decreasing 18% to $253 per hog. Revenue for the second quarter of 2013 from market hog sales increased 13% to $4.84 million as the number of market hogs sold grew 35% to 28,531 hogs and the average selling price of market hogs declined 16% to $169 per hog. The decline in average selling prices of both breeder and market hogs was mainly due to market conditions. During the second quarter of 2013, the Company also generated $0.05 million in revenue from retail operations that were resumed in April 2013. The Company sold 3,988 black hogs, generating $0.81 million in sales, during the second quarter of 2013. Sales of black hogs are included in the market hogs category in the discussion above and the table below.                For the Three Months Ended June 30,               2013                                2012               No. of    Average      Sales        No. of    Average      Sales               Hogs      Price/Hog    ($           Hogs      Price/Hog    ($               Sold      ($)          thousands)   Sold      ($)          thousands) Breeder hogs  7,718   $ 253        $ 1,956        6,883   $ 307        $ 2,110 Market hogs   28,531    169          4,836        21,151    202          4,281 Market hogs forprocessed 215       241          52           -         -            -  pork products Total         36,464    188          6,844        28,034    228          6,706  Gross profit (loss) for the second quarter of 2013 was ($0.28) million, compared to gross income of $0.80 million for the same period of last year. Gross margin (deficit) was (4.0%) and 12.5% for the second quarter of 2013 and 2012, respectively. The combination of increased feed costs and lower hog selling prices contributed to the decrease in gross margin. The gross margins (deficit) for breeder hogs and market hogs were 24% and (15%), respectively, for the second quarter of 2013, versus 34% and 2%, respectively, for the same period of last year.  Selling, general and administrative expenses increased by $0.28 million, or 67%, to $0.71 million for the second quarter of 2013. The increase was primarily related to our black hog program that generated an additional $0.24 million in administrative expenses. Operating margin (deficit) for the second quarter of 2013 was (14.4%), compared to 5.9% for the same period of last year.  Net loss from continuing operations for the second quarter of 2013 was $1.14 million, compared to net income of $0.27 million for the same period of 2012. The decrease was primarily the result of the deterioration in gross margin and the 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 second quarter of 2013 was $1.00 million, or a loss of $0.09 per diluted share. This compared to net income attributable to common shareholders of $0.32 million, or $0.03 per diluted share, for the same period of last year.  Six Months Ended June 30, 2013 Financial Results:  Revenue for the six months ended June 30, 2013 increased $1.13 million, or 9%, to $14.23 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 and market hogs. The Company sold a total of 68,977 breeder hogs, market hogs, and market hogs for processed pork products during the first half of 2013, compared to 55,129 hogs for the same period of 2012. Revenue for the six months ended June 30, 2013 from breeder hog sales decreased 1% to $4.09 million with the number of breeder hogs sold increasing 13% to 15,408 hogs and the average selling price of breeder hogs decreasing 12% to $265 per hog. Revenue for the six months ended June 30, 2013 from market hog sales increased 13% to $10.09 million as the number of market hogs sold grew 29% to 53,354 hogs and the average selling price of market hogs declined 13% to $189 per hog. The decline in average selling prices of both breeder and market hogs was mainly due to market conditions. During the first half of 2013, the Company also generated $0.05 million in revenue from retail. The Company sold 5,813 black hogs, generating $1.26 million in sales, in the first half of 2013. The sales of black hogs are included in the market hogs category in the discussion above and the table below.            For the Six Months Ended June 30,           2013                                2012           No. of    Average      Sales        No. of    Average      Sales           Hogs      Price/Hog    ($           Hogs      Price/Hog    ($           Sold      ($)          thousands)   Sold      ($)          thousands) Breeder   15,408  $ 265        $ 4,086        13,649  $ 302        $ 4,127 hogs Market    53,354    189          10,093       41,480    216          8,970 hogs Market hogs for processed 215       241          52           -         -            -  pork products Total     68,977    206          14,230       55,129    238          13,098  Gross profit for the six months ended June 30, 2013 was $0.53 million, compared to $2.10 million for the same period of last year. Gross margin was 4% and 16% for the six months ended June 30, 2013 and 2012, respectively. The impact of increased feed cost and reduced hog prices caused the significant decrease in gross margin.  Selling, general and administrative expenses increased by $0.59 million, or 56%, to $1.65 million for the six months ended June 30, 2013 from $1.06 million for the same period of last year. The increase was primarily related to our black hog program which generated an additional $0.51 million in administrative expenses. Operating margin (deficit) for the six months ended June 30, 2013 was (7.9%), compared to 8.0% for the same period of last year.  Net loss from continuing operations for the six months ended June 30, 2013 was $1.32 million, compared to net income of $0.98 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 six months ended June 30, 2013 was $1.11 million, or a loss of $0.10 per diluted share. This compared to net income attributable to common shareholders of $1.02 million, or $0.10 per diluted share, for the same period of last year.  Financial Position  As of June 30, 2013, the Company had cash and cash equivalents of $6.24 million, compared to $7.48 million as of December 31, 2012. Working capital as of June 30, 2013 was $8.62 million as compared to $8.98 million at December 31, 2012. Cash flow from operations was ($0.21) million and $4.02 million for the six months ended June 30, 2013 and 2012, respectively.  Recent Developments   On August 5, 2013, the Company announced that it received Nasdaq's approval to transfer its listing from the Nasdaq Global Market to Nasdaq Capital Market. The Company was also granted an additional 180-Day extension, or until February 3, 2014, by Nasdaq to regain compliance with the Minimum Bid Price Rule.  On July 1, 2013, the Company announced that its subsidiary, Wuhan Fengze Agricultural Science and Technology Development Co. Ltd., signed a cooperation agreement (the "Agreement") with Shenzhen Investment Banking International Marketing Group to jointly develop a direct sales program for Tianli's branded black hog meat in Shenzhen and other cities in Guangdong Province.  On May 29, 2013, the company announced that it had signed an agreement with Zhongbai Warehouse Supermarket Co., Ltd. ("ZHONGBAI")to sell cuts of Tianli-Xiduhei™ black hog meat through five of ZHONGBAI's warehouse outlets in Wuhan, Hubei province.  On May 6, 2013, the Company announced that it resumed its retail operations and began to sell Tianli-Xiduhei™ black hog products in Wuhan City through a NEWSTAR supermarket as well as three LAO NONG MIN retail stores.  Earnings Conference Call  Tianli will host an earnings conference call and live webcast covering its second quarter financial results at 8:00 a.m. EDT on August 14, 2013, which is also 8:00 p.m. in Beijing on August 14, 2013. 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".  Conference Call Date:                  Wednesday, August 14, 2013 Time:                  8:00 am EDT, U.S. U.S. Dial-in:          +1 877-317-6789 International Dial-in: +1 412-317-6789 Conference ID:         Tianli Webcast Link:          http://services.choruscall.com/links/tianli130814.html  For those unable to participate, an audio replay of the call will be available beginning approximately one hour after the end of the live call through August 26, 2013. The audio replay can be accessed by dialing +1-877-344-7529 within the United States or +1-412-317-0088 internationally, and entering access ID No. 10032808.  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 BALANCE SHEETS                                                     June 30,      December 31,                                                     2013          2012 ASSETS                                              (Unaudited) Current Assets:  Cash and cash equivalents                     $   6,241,220   $ 7,477,205  Accounts receivable                               287,343       158,047  Inventories                                       11,013,170    10,232,893  Advances to suppliers                             815,928       189,094  Prepaid expenses                                  75,104        237,247  Restricted cash                                   1,126,761     793,512  Other receivables                                 216,601       208,325   Total Current Assets                           19,776,127    19,296,323 Long-term prepaid expenses                          1,622,107     1,681,488 Plant and equipment, net of accumulated             25,965,495    24,400,573 depreciation Construction in progress                            43,377        1,655,901 Biological assets, net of accumulated               4,138,224     4,357,846 amortization Intangible assets, net                              1,481,686     1,485,773 Total Assets                                    $   53,027,016  $ 52,877,904 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities:  Short-term loans                              $   7,203,219   $ 7,101,935  Accounts payable and accrued payables             140,875       190,811  Other payables                                    3,610,735     2,893,332  Due to related party                              206,063       125,842   Total Current Liabilities                       11,160,892    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 June 30, 2013 and   December 31, 2012, respectively)                11,194        11,194  Additional paid in capital                        14,888,470    14,888,470  Statutory surplus reserves                        2,416,647     2,416,647  Retained earnings                                 20,467,534    21,582,277  Accumulated other comprehensive income            3,209,607     2,609,374   Stockholders' Equity - Tianli Agritech Inc. and 40,993,452    41,507,962 Subsidiaries Noncontrolling interest                             872,672       1,058,022  Total Stockholders' Equity                        41,866,124    42,565,984   Total Liabilities and Stockholders' Equity  $   53,027,016  $ 52,877,904    TIANLI AGRITECH, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED)                          For the Three Months Ended   For the Six Months Ended                          June 30,                     June 30,                          2013            2012         2013          2012 Sales                  $ 6,843,808    $  6,391,343  $ 14,230,342  $ 13,097,764 Cost of goods sold       7,120,087       5,589,803    13,701,320    10,994,216  Gross profit           (276,279)       801,540      529,022       2,103,548 Operating expenses:  General and administrative           627,085         425,207      1,529,583     1,058,674 expenses  Selling expenses       84,208          1,253        120,250       1,253   Total operating      711,293         426,460      1,649,833     1,059,927 expenses Income (loss) from       (987,572)       375,080      (1,120,811)   1,043,621 operations Other income (expense):  Interest expense       (162,981)       (85,692)     (329,798)     (179,358)  Subsidy income         (251)           27,339       95,338        161,986  Other income           14,235          (44,927)     40,139        (43,094) (expense)   Total other income   (148,997)       (103,280)    (194,321)     (60,466) (expenses) Income (loss) before     (1,136,569)     271,800      (1,315,132)   983,155 income taxes Income taxes             -               -            -             - Net income (loss) from   (1,136,569)     271,800      (1,315,132)   983,155 continuing operations Discontinued operations: Gain (loss) from operations of discontinued             -               43,836       -             39,179  component, net of taxes Net income (loss)        (1,136,569)     315,636      (1,315,132)   1,022,334 Add: Noncontrolling interests attributable to the noncontrolling    131,894         -            200,389       -  interests Net income (loss) attributable to Tianli   (1,004,675)     315,636      (1,114,743)   1,022,334 Agritech Inc. and Subsidiaries  Unrealized foreign currency translation adjustment                          352,240         21,566       604,805       269,371  attributable to Tianli Agritech Inc. and Subsidiaries Comprehensive income   $ (652,435)    $  337,202    $ (509,938)   $ 1,291,705 Earnings per share - basic and diluted:  Weighted-average shares outstanding,      11,194,000      10,135,000   11,194,000    10,135,000 basic and diluted   Continuing operations - Basic &   $ (0.10)       $  0.03       $ (0.12)      $ 0.10 diluted  Discontinued operations -Basic &    $ -            $  -          $ -           $ - diluted      TIANLI AGRITECH, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)                                              For the Six Months Ended June 30,                                              2013                2012 CASH FLOWS FROM OPERATING ACTIVITIES  Net income (loss)                      $ (1,315,132)    $    1,022,334  Adjustments to reconcile net income to net cash   provided by operating activities:  Depreciation and amortization            1,610,107           1,487,841  Amortization of prepaid expenses         191,998             96,293  Stock-based compensation                 -                   10,687  Loss from disposal of construction in     -                   49,344 progress  Changes in operating assets and liabilities:  Accounts receivable                  (125,409)           519   Inventories                          (467,287)           440,097   Advances to suppliers                (793,522)           (226,871)   Prepaid expenses                     -                   (149,952)   Other receivables                    (5,237)             (40,618)    Accounts payable and accrued          (51,980)            (37,595) payables    Other payables                       746,388             1,257,271   Total adjustments                 1,105,058           2,887,016     Net cash provided by operating activities from                    (210,074)           3,909,350     continuing operations Net cash provided by operating activities from                    -                   114,969     discontinued operations  Net cash provided by            (210,074)           4,024,319 operating activities CASH FLOWS FROM INVESTING ACTIVITIES  Cash collected from loan to An Puluo     -                   1,110,635 Addition to construction in progress     -                   (2,628,812) Proceeds from disposal of construction    -                   571,025 in progress  Purchase of biological assets            (435,544)           (1,346,696)  Purchase of plant and equipment          (476,301)           (161,998)   Net cash used in investing              (911,845)           (2,455,846) activities CASH FLOWS FROM FINANCING ACTIVITIES  Increase at restricted cash              (317,793)           -  Advances from due to related party       76,270              -  Repayment of short-term loans            (762,704)           (3,173,243)  Proceeds from short-term loans           762,704             761,578  Net cash provided by financing          (241,523)           (2,411,665) activities EFFECT OF EXCHANGE RATE CHANGES ON CASH    127,457             33,304 NET DECREASE IN CASH                       (1,235,985)         (809,888) CASH, BEGINNING OF YEAR                    7,477,205           6,507,742 CASH, END OF YEAR                        $ 6,241,220      $    5,697,854 SUPPLEMENTAL DISCLOSURES:  Cash paid during the period for:   Interest paid                        $ 244,782        $    191,357  Income tax paid                      $ -              $    -  SOURCE Tianli Agritech, Inc.  
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