TSX Venture: ABC
TORONTO, May 13 /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 March 31, 2010.
Interim Financial Results
- During the first quarter of 2010 the Company achieved 110% increase
in revenues to $40 million and a 179% increase in gross profit to
$6.8 million compared with the first quarter of 2009.
- The Company's first quarter performance was largely a result of the
new Daqing facility which came into commercial production during the
quarter. After addressing some logistical issues around access to
rail cars in January, production capacity at the Daqing plant
increased to 50% in February and 64% in March bringing the Company's
combined capacity utilization to 76% in March.
- The addition of Daqing coupled with continued improvement in product
pricing contributed to a 411% increase in EBITDA before stock based
compensation during the first quarter of 2010 compared with the same
period in 2009. Net income increased $2.9 million in the first
quarter of 2010 to $2.1 million compared with the same period in
- As at March 31, 2010, the Company had $4.6 million in cash and
$19.4 million in long-term government and bank debt.
- As part of the Company's June 2008 private placement, the Company
issued 2 million warrants to the syndicate of underwriters at an
exercise price of $1.20. These warrants are now nearing their June
expiration date and have begun to be exercised by the underwriters.
"We are pleased to report that our new Daqing facility is fully operational and has made a material contribution to the first quarter earnings," stated Mr. Zhiping Wang, President and CEO of Asia Bio-Chem. "Customer demand is high and product prices have continued to improve from the last half of 2009."
Sales from the Daqing plant were the primary contributor to a $20.9 million increase in sales and a $4.3 million increase in gross profit in the first quarter of 2010 compared with the first quarter of 2009.
As a percentage of sales, gross margin was 17%, which reflects the slower startup of Daqing in January. With the increased capacity utilization and improved logistics achieved throughout the quarter, gross margins increased to 19% in March.
SUMMARY FINANCIAL STATEMENTS
in thousands of Canadian dollars
except per share and percentage data Three Months Ended
March 31, 2010 March 31, 2009
Sales 39,933 19,031
Gross profit 6,769 2,423
Gross margin (% of Sales) 17.0% 12.7%
Operating expenses 3,524 2,925
Income from operations 3,245 (502)
Other income (expense) (888) (179)
Income taxes 224 157
Net income 2,133 (837)
EBITDA 4,782 (168)
EBITDA before stock-based compensation 5,438 1,064
Earnings per share
Basic 0.03 (0.01)
Diluted 0.03 (0.01)
Weighted average number of shares
Basic 76,777,025 76,777,025
Diluted 78,837,973 76,777,025
Balance Sheet Highlights As at 3/31/10 As at 12/31/09
Cash 4,580 14,119
Working Capital 4,844 1,685
Total assets 141,060 142,282
Current Ratio 1.11:1 1.04:1
With the contribution from Daqing together with strong product prices, the Company achieved EBITDA before stock based compensation of $5.4 million the highest in the Company's history.
During the first quarter, the Company's cash position declined to $4.6 million as at March 31, 2010 primarily due to higher receivables associated with the significant increase in revenues from the Daqing plant.
As reported with our year end results on March 26th 2010, the issues related to shortages of rail cars at the Daqing plant have been resolved and, as of early February of this year, the company has been receiving rail cars on a regular basis. As a result, production at Daqing has been improving with corn processing capacity utilization reaching 50% in February and 64% in March.
Continued improvements in logistics are expected from both improved rail/ship coordination and expansion of the loading dock at Daqing. Given the distance from Daqing to the sea port, it is more difficult for the company to coordinate its land shipments with the container ship schedule.
As stated on January 15, 2010 the Company is expanding its loading system at the Daqing plant to accommodate bi-modal container cars. This expansion is expected to increase throughput at the dock and therefore allow the plant to run at a higher capacity. In addition, this expansion will improve the rail-to-ship transfer and therefore allow quicker delivery to our customers. The Company expects to complete this project by the end of the second quarter.
Based on the above initiatives, management expects to achieve continued improvements in capacity utilization over the coming months.
Asia Bio-Chem will be hosting a conference call to discuss the third quarter results at 10 am Friday, May 14, 2009. The details are as follows:
Dial in number: 1-888-231-8191 or 647-427-7450
Taped replay: 1-800.642.1687 or 416.849.0833
Pass Code: 73228425 (available until May 28th, 2010)
About Asia Bio-Chem Group Corp.
Asia Bio-Chem Group, through its wholly-owned subsidiaries in the Peoples Republic of China ("PRC") is in the business of manufacturing cornstarch and related byproducts. From its plants in Liaoning and Heilongjiang Province, the Company has a total processing capacity of 900,000 tonnes of corn. The Company products include cornstarch, corn germ, gluten and fiber which are sold into the domestic Chinese market.
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.
THIS PRESS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS, IS NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AND DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO SELL ANY OF THE SECURITIES DESCRIBED HEREIN IN THE UNITED STATES. THESE SECURITIES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS UNLESS REGISTERED OR EXEMPT THEREFROM.
THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE CONTENT OF THIS NEWS RELEASE.
SOURCE Asia Bio-Chem Group Corp.
For further information: For further information: Asia Bio-Chem Group Corp., Suite 2105 - 130 Adelaide Street West, Toronto, Ontario, M5H 3P5, Attention: Robert Wilson, Tel: (416) 603-7500