/NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE
TSX Venture: ABC
TORONTO, Nov. 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 September 30, 2009.
In recognition for the work undertaken in completion of the Daqing plant, the Company further announces that it has granted stock options to certain members of management of the Company.
Interim Financial Results
- Asia Bio-Chem achieved it's third consecutive quarter of improvement
in gross margin and growth in cash flow. In the third quarter gross
margin improved to 16.7% while EBITDA, excluding the (non-cash)
stock-based compensation expense, improved by 14% over the
second quarter to $2.3 million.
- The Company successfully completed the Daqing plant construction, on
budget and on schedule and began production in October 2009. Up to
September 30, 2009, the Company has invested approximately
$80.0 million on Daqing project, which, at full capacity, will triple
the Company's processing capacity to 900,000 tonnes of corn per year
- During the third quarter of 2009, the Company received the second
drawdown of RMB 20 million ($3.2 million) under its RMB 100 million
loan facility with Zhaoyuan County Government. Subsequent to
September 30, 2009, the Company received the third drawdown of
RMB 20 million ($3.2 million).
- As at September 30, 2009, the Company had $4.0 million in cash and
$25.4 million in government and bank debt outstanding.
Asia Bio-Chem, today reported third quarter sales of $23.2 million representing a 7.8% increase compared to the corresponding period of 2008. This increase was due to increased selling prices for starch, higher volumes and the improvement in the value of the Chinese RMB relative to the Canadian Dollar.
Gross profit during the third quarter was the highest achieved during fiscal 2009 at $3.9 million or 16.7% of sales. This improvement was primarily due to improved markets for starch which has been driven by higher sweetener prices.
"We are pleased to see that market conditions have begun to improve particularly for our starch product following a difficult first half. With the completion of our new Daqing facility, our Company is well positioned to take advantage of this improvement in demand." stated Mr. Zhiping Wang, President and CEO of Asia Bio-Chem.
Improved gross profit combined with lower distribution expenses and stock-based compensation charges resulted in the highest level of income from operations in 12 months at $1.4 million during the quarter.
SUMMARY FINANCIAL STATEMENTS
in thousands of Canadian dollars except 3 Months to 3 Months to
shares, per share and percentage data 9/30/09 9/30/08
Sales 23,202 21,516
Gross profit 3,877 4,438
Gross margin (% of Sales) 16.7% 20.6%
Operating expenses 2,456 2,343
Income from operations 1,421 2,095
Other income (expense) (327) 129
Income taxes 265 278
Net income 828 1,946
EBITDA 1,688 2,470
EBITDA before Stock-based compensation 2,288 3,702
Earnings per share
Basic and diluted 0.01 $0.03
Weighted average number of shares
Basic and diluted 76,777,025 76,777,025
Balance Sheet Highlights
As at As at
Cash 4,001 10,489
Working Capital 305 5,154
Total assets 128,764 113,144
Current Ratio 1.01:1 1.28:1
Compared with the previous two quarters, improved gross margin, lower stock-based compensation expense and lower distribution expenses caused net income to increase to $0.8 million during the third quarter of 2009.
During the third quarter, the Company's cash position was $4.0 million as at September 30, 2009. Additional drawdown of the long term loan facility with Zhaoyuan County Government contributed to the Company's cash position.
As of late October, the Daqing plant construction is complete and the facility is ramping up production. By the end of the current year the Daqing facility is expected to be producing in excess of 90% capacity representing annual processing capacity of over 810,000 tonnes of corn.
Long term financing which has been incurred in construction of the Daqing project currently represents RMB 160 million ($25.4) including facilities from both China Construction Bank and Zhaoyuan County Government. The remaining capital commitments relating to the Daqing construction represent $4.7 million due in the fourth quarter of 2009 and $14 million in holdbacks and notes due in 2010. These obligations are expected to be financed with a combination of cash flow and bank debt.
In recognition for the work undertaken in completion of the Daqing plant, the Company further announces that it has granted an aggregate of 800,000 stock options pursuant to its Amended and Restated 2009 Stock Option Plan to certain members of management of the Company. The options are exercisable for 5 years at an exercise price equal to the closing price of the shares as of the date of this announcement and shall vest over a 3 year period.
Asia Bio-Chem will be hosting a conference call to discuss the third quarter results at 9 am Monday, November 16, 2009. The details are as follows:
Dial in number: 1-800-594-3790 or 416-644-3423
Taped replay: 1-877-289-8525 or 416-640-1917
Pass Code: 4181683 followed by the number sign
(available until November 30th , 2009)
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
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