"We are delighted to see continued revenue growth in the second quarter, as we benefited from strong volume and price increases in our retail business and increased demand from our existing bulk additives customers," said Mr. Jinan Song, Chairman and Chief Executive Officer of China-Biotics. "Our Shining retail outlet expansion resulted in an additional 27 openings during the quarter and should result in increased profits during the second half of the fiscal year. As we prepare for the completion of our new manufacturing facility, we are carefully balancing existing production capacity between our retail expansion and bulk additive business development. We signed one new bulk customer during the second quarter, and we remain in negotiations with more than 100 potential business clients."
Gross profit during the quarter increased 43.1% to $8.0 million from $5.6 million in the second quarter the prior year. Gross margin was 69.9%, compared to 71.8% a year ago. This was primarily caused by an increase in the price of electricity used to run the Company's manufacturing facility and an increase in the cost of packaging materials, including pulp and paper costs.
Selling expenses increased to $2.8 million, or 24.5% of sales, from
$1.6 million, or 20.0% of sales, in the second quarter a year ago, as the
Company significantly increased the number of retail outlets. General and
administrative expenses increased to $1.4 million, or 12.5% of sales, from
$1.1 million, or 13.9% of sales, in the second quarter of fiscal 2008. The
|SOURCE China-Biotics, Inc.|
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