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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