Asia Bio-Chem Group Corp. Announces Fourth Quarter and Fiscal Year End
Financial Results

TSX Venture: ABC

TORONTO, March 26 /CNW/ - Asia Bio-Chem Group Corp. (TSXV: ABC) ("Asia Bio-Chem" or the "Company") today announced its interim financial statements for the three month and fiscal year ending December 31, 2009. The Company will also provide an update on its operations at the newly opened Daqing plant

Interim Financial Results

Highlights

    
    -   In October of 2009 the Company began trial production at its new
        Daqing facility and began ramping up the production in January 2010.
        The Daqing facility is among the largest of its kind in China.

    -   During fiscal 2009 the Company's Changtu plant continued to operate
        at above industry average utilization rates generating more than
        270,000 tonnes of cornstarch and related by-products and revenues of
        $88.7 million.

    -   After experiencing extremely challenging market conditions in the
        first quarter of 2009, the market for the Company's products has
        improved significantly throughout the year. Driven by improved
        economic activity and higher prices for sweeteners, the Company has
        experienced improved gross margins for the past three consecutive
        quarters to 19.6% in the fourth quarter.

    -   Cash flow and earnings have continuously improved throughout the
        year, as EBITDA before stock based compensation has risen from
        $1 million in the first quarter to $3.0 million in the fourth quarter
        to a total of $8.3 million for the year. Net income increased to
        $1.7 million in the fourth quarter to total of $2.1 million for the
        year.

    -   The Company has been successful in securing $52 million in debt
        financing during fiscal 2009 at attractive terms. The company secured
        operating loans for both of its facilities and a six year term loan
        from China Construction bank. In addition, the Company was successful
        in securing a five year term loan from the local government at a cost
        of only 1% per year. As at December 31, 2009, the Company had
        $14.1 million in cash and $48.9 million in carrying balance for the
        government and bank debt.

    -   Daqing Update:
        The disruptions at the Daqing plant relating to coal supply and rail
        car availability have been resolved. During February the Daqing plant
        achieved continuous production and volumes surpassed those of the
        Changtu facility.
    

"We are pleased to report that the market for our products have improved steadily through the year and we are now achieving near our historical gross margins. The Daqing facility is now fully operational and our Company is well positioned to take advantage of this improvement in demand." stated Mr. Zhiping Wang, President and CEO of Asia Bio-Chem.

Gross profit, EBITDA and earnings have all improved each quarter during fiscal 2009 primarily due to improved markets for starch which has been driven by higher sweetener prices.

Given the depressed state of the market for the Company's products during the first part of the fiscal 2009, gross profit was down on a year over year basis to $14.4 million. Income from operations during 2009 was $3.0 million reflecting the impacted of lower gross margins and higher operating costs. After adjusting for non-cash, stock based compensation, EBITDA was $8.3 million for 2009 compared with $14.4 million in fiscal 2008.

SUMMARY FINANCIAL STATEMENTS

    
    in thousands of Canadian dollars except           Twelve Months Ended
    per share and percentage data                         December 31,
                                                  ---------------------------
                                                          2009          2008
                                                  ------------- -------------
    Sales                                               88,731        84,449
    Gross profit                                        14,396        18,486
    Gross margin (% of Sales)                            16.2%         21.9%
    Operating expenses *                              11,429         7,473
    Income from operations                               2,967        11,013
    Other income (expense)                                  82         (393)
    Income taxes                                           940         1,896
    Net income                                           2,109         8,723
    EBITDA                                               4,962        11,691
    EBITDA before stock-based compensation               8,341        14,361
    Earnings per share
      Basic                                               0.03          0.14
      Diluted                                             0.03          0.14
    Weighted average number of shares
      Basic                                         76,777,025    61,177,213
      Diluted                                       76,777,025    61,177,213
    Balance Sheet Highlights                             As at         As at
                                                      12/31/09      12/31/08
    Cash                                                14,119        10,489
    Working Capital                                      1,685         5,154
    Total assets                                       142,282       113,144
    Current Ratio                                       1.04:1        1.28:1

    * Includes non-cash charge for stock-based compensation expense of
        $3.38 million in 2009 and $2.67 million in 2008.
    

During the fourth quarter, the Company's cash position increased to $14.1 million as at December 31, 2009. Drawdown of the China Construction bank operating line of credit in the fourth quarter of 2009 enabled the company to finance its working capital buildup at Daqing while contributed to the Company's cash position.

Daqing Update

As reported on January 15th 2010, the Daqing plant had been experiencing some production disruptions due to shortages in rail cars and limited coal supply. The company is pleased to announce that as of early February of this year, these issues have been resolved and the plant has achieved continuous production.

On a combined basis from both the Company's facilities, for January and February, the Company experienced over 50% capacity even after lower Daqing January volumes. Managements expects to achieve continued improvements in capacity over the coming months.

The remaining commitments in 2010 relating to the Daqing plant represent $4.4 million in construction payments, $7.4 million in vendor notes due and $1.5 million repayment of the current portion of a bank loan. These obligations are expected to be financed with a combination of cash and cash flow from operations.

Conference Call

Asia Bio-Chem will be hosting a conference call to discuss the third quarter results at 10 am Friday, March 26, 2009. The details are as follows:

    
    Dial in number:    1-888-231-8191 or 647-427-7451
    Taped replay:      1-800-642-1687 or 416-849-0833
                       Pass Code: 59455725 (available until April 9th , 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: For Corporate Information: Asia Bio-Chem Group Corp., Suite 2105 - 130 Adelaide Street West, Toronto, Ontario, M5H 3P5, Attention: Robert Wilson, Tel: (416) 603-7500

Organization Profile

Asia Bio-Chem Group Corp.

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