China-Biotics, Inc. Reports Fourth Quarter and Full Year Fiscal 2008 Financi...(of stores to 60 in Shanghai and five oth...)

-- Joined International Probiotics Association

-- Launched new products such as Shining Probiotics Protein Powder

-- Signed contracts to supply probiotics to dairy and food manufacturers as additives

-- Launched new corporate and investor relations Web site

Fourth Quarter 2008 Results

During the fourth quarter of the 2008 fiscal year, net sales increased 51.5% to $12.7 million from $8.4 million a year ago. The increase primarily resulted from significant growth in the sales of new products, most of which were sold in the Company's Shining-branded retail outlets. The sales of new products accounted for 19% of total sales in the fourth quarter of 2008, compared to 3% in the same quarter the prior year.

"We concluded the 2008 fiscal year with a strong finish, continuing to achieve high growth in revenues and net income, as our combined strategy of company-owned retail stores and traditional sales through distributors was a great success," said Mr. Jinan Song, Chairman and Chief Executive Officer of China-Biotics. "We look forward to another promising fiscal year in 2009, as we remain on schedule to complete construction and begin production at our new bulk additives facility in the latter part of the 2008 calendar year. By then, we expect to become the dominant supplier of naturally occurring probiotic bacteria in China."

Gross profit for the quarter increased 40.7% to $8.4 million from $6.0 million a year ago. Gross margin was 66.4% in the fourth quarter, compared to 71.5% in the same period of fiscal 2007, as a 30% increase in pulp and paper costs resulted in greater packaging costs. The Company is working with suppliers of its packaging materials to bring down such costs in the future.

Operating expenses were $3.5 million, compared to $2.1 million in the fourth quarter of fiscal 2007. The increase was primarily due to setup and oper
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