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Rodobo International, Inc. Reports Q2 and First Half of 2009
Date:5/18/2009

HARBIN, China, May 18 /PRNewswire-Asia-FirstCall/ -- Rodobo International, Inc. (OTC Bulletin Board: RDBO), one of the leading independent dairy companies in China, reported financial results for the second quarter and first six months ended March 31, 2009.

Second quarter financial highlights include:

Revenue for the second quarter ended March 31, 2009 was $6.3 million, an increase of 19% compared to Q2 2008. This increase was primarily driven by volume growth, with average selling price remaining flat over both periods. The new product series "Healthy Elderly", launched in October 2008, attributed approximately $1.1 million to the second quarter.

Sales of Whole Milk Powder Formula represented 39% of total sales in Q2 2009 compared to 27% in Q2 2008. Sales of Baby/Infant Formula represented 44% of total sales in Q2 2009 compared to 61% in Q2 2008. Sales of Adult Formula represented 17% of total sales in Q2 2009 compared to 12% in Q2 2008.

Gross profit for Q2 2009 was $2.3 million, down 4% compared to Q2 2008. The overall gross margin decreased from 45% in Q2 2008 to 36% in Q2 2009. The increase in the costs of goods sold and the decrease in gross margin was mainly driven by a different product mix that included more sales of lower margin products. Additionally, gross margin for Whole Milk Powder Formula decreased in 2009 compared to 2008 due to a 24% increase in the cost of raw milk.

Operating income in the first three months ended March 31, 2009 was $0.74 million, decrease of 34% compared to the same period last year. The decrease is mainly attributed to higher depreciation expenses due to equipment purchase and advertising expenses to support the growth.

Net income was $1.2 million relatively flat compared to Q2 2008.

Six months financial highlights include:

Revenue for the first half ended March 31, 2009 was $15.2 million, an increase of 63% compared to the first six months in 2008. The growth was primarily driven by higher volume sales and was also attributable to the launch of the new product line "Healthy Elderly". Sales for "Healthy Elderly" generated approximately $3 million in the period.

Sales of Whole Milk Powder Formula represented 31% of total sales compared to 39% in the six months ended March 31, 2008. Sales of Baby/Infant Formula represented 49% compared to 50% in the same period last year. The launch of the "Healthy Elderly" product line generated $3 million in the six months ended March 31, 2009, representing 20% of total sales.

Gross profit for the first six months of fiscal 2009 was $6.8 million, up 88% compared to the same period last year. The overall gross margin improved from 39% in 2008 to 45% in 2009. The improvement was mainly driven by the shift from low-margin products including Whole Milk Powder Formula to high- margin products including Healthy Elderly. The gross margin for "Healthy Elderly" was 53% for the first six months ended March 31, 2009 and the Baby/Infant Formula gross margin increased from 45% to 60%.

Operating income in the first six months was $2.7 million up 66% compared to $1.6 million in the same period last year.

Net income grew 77% to $3.1 million compared with $1.7 million for the six months ended March 31, 2008. This increase in net income was mainly attributable to the growth in sales, partially offset by an increase in cost of goods sold and operating expenses. This increase in net income was also attributable to an increase of subsidiary income from government support funds, from $0.09 million for the six months ended March 31, 2008 to $0.44 million for the six months ending March 31, 2009.

Mr Yanbin Wang stated: "During the first six months of our fiscal year, Rodobo International has experienced an impressive growth in revenues and earnings. This trend slowed down during the second quarter. We keep developing distribution networks and we're currently covering 4,463 retail stores in 6 provinces: Sichuan, Shaanxi, Henan, Shandong, Zhejiang and Fujian. The Company provides training and support to its growing sales and marketing team that includes: 2,320 employees. Currently, Rodobo International is building its own organic dairy farm that will meet international standards and include top technology equipment".

"We focus on providing high quality premium products for all our consumers and the construction of our dairy farm demonstrates the Company's dedication to this vision. We expect that our new and advanced dairy farm will start operating towards the end of fiscal 2009 and this will give us a tremendous competitive advantage in terms of high quality raw milk resources. Being certified as "Green Food" and winning the lucrative prize: Best Quality Control Enterprise of Dairy Products for 2008, reinforces our leading position in the market and we believe that it will be reflected in our financial results".

About Rodobo International, Inc.:

Rodobo International is one of the leading independent dairy companies in China. Through its wholly-owned operating subsidiary, Rodobo International, Inc. is a producer and distributor of high-quality formula milk powder products for infants, children, pregnant women, nursing mothers, middle aged and the elderly in the People's Republic of China. The Company's products are sold under the brand name "Rodobo" and are produced in cutting edge facilities using the highest industry standards and the best quality control systems.

Safe Harbor Statement

This press release contains forward-looking statements. Whenever we use words such as "believe," "expect," "anticipate," "intend," "plan," "estimate" or similar expressions, we are making forward-looking statements. Forward- looking statements include statements regarding our goals, beliefs, future growth strategies, objectives, plans or current expectations. For example, when we say that our own organic dairy farm will meet international standards and include top technology equipment, or that we focus on providing high quality premium products for all our consumers and the construction of our dairy farm demonstrates our dedication to this vision, or that we expect that our new and advanced dairy farm will start operating towards the end of fiscal 2009 and this will give us a tremendous competitive advantage in terms of high quality raw milk resources or that being certified as "Green Food" and winning the lucrative prize: Best Quality Control Enterprise of Dairy Products for 2008, reinforces our leading position in the market and we believe that it will be reflected in our financial results, we are using forward looking statements. These forward-looking statements are based on the current expectations of the management of Rodobo only, and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: failure to obtain required regulatory approvals; risks associated with the effect of changing economic conditions and/or regulatory environment in the People's Republic of China; variations in cash flow; reliance on collaborative partners and on new product development; variations in new product development; risks associated with rapid technological change and the potential of introduced or undetected flaws and defects in products; changes in technology and market requirements; loss of market share and pressure on pricing resulting from competition, which could cause the actual results or performance of Rodobo to differ materially from those contemplated in such forward-looking statements. Except as otherwise required by law, Rodobo undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. For a more detailed description of the risk and uncertainties affecting Rodobo, reference is made to Part I, Item 1A, "Risk Factors" of Rodobo's Annual Report on Form 10-K for the fiscal year ended September 30, 2008 and to other reports filed from time to time by Rodobo with the Securities and Exchange Commission.

    Table to follow:



RODOBO INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE
INCOME
FOR THE SIX AND THREE MONTHS ENDED MARCH 31, 2009 AND 2008
(UNAUDITED)

                                Three Months Ended        Six Months Ended
                                      March 31                March 31
                                   2009        2008        2009        2008
    Net sales                 $6,303,017  $5,285,705  $5,163,842  $9,318,958

    Cost of goods sold         4,026,269   2,905,871   8,383,386   5,720,074

           Gross profit        2,276,748   2,379,834   6,780,456   3,598,884

    Operating expenses:
    Distribution expenses      1,105,652   1,059,918   3,225,004   1,610,320
    General and
     administrative
     expenses                    337,217     182,149     725,899     344,753
    Depreciation and
     amortization
     expenses                     90,259      11,453     132,709      19,219

           Total
            operating
            expenses           1,533,128   1,253,521   4,083,612   1,974,293


    Operating income             743,620   1,126,314   2,696,844   1,624,592


    Subsidy income               438,730          --     438,730      94,187
    Other (expenses) income       14,768       7,465     (65,850)     11,356

    Income before income taxes 1,197,119   1,133,779   3,069,724   1,730,135

    Provision for income taxes        --          --          --          --

    Net income                $1,197,119  $1,133,779  $3,069,724  $1,730,135

    Other comprehensive income:
           Foreign currency
            translation
            adjustment           (25,774)    210,569     (65,554)    320,874

    Comprehensive income      $1,171,345  $1,344,348  $3,004,170  $2,051,009



RODOBO INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

                                                    March 31,   September 30,
                                                      2009            2008
                                                  (Unaudited)       (Audited)

    ASSETS
    Current assets:
    Cash and cash equivalents                       $904,360        $659,030
    Accounts receivable - net of allowance
     for bad debts of $66,602 and $66,921,
     respectively                                  2,136,392       1,143,328
    Advances to employees                              6,399         185,500
    Other receivables                                     --         162,006
    Inventories                                    1,125,606         991,536
    Prepaid expenses                                  43,993          26,510
            Total current assets                   4,216,750       3,167,910
    Property, plant and equipment, net:
    Fixed assets, net of accumulated
     depreciation                                    885,307         812,079
    Construction in progress                              --         148,240
                                                     885,307         960,319

    Other assets:
    Loan to related parties                        1,185,062              --
    Interests receivable                              13,964              --
    Deposits on land and equipment                13,438,012      10,873,562
    Intangible assets, net                           676,800         717,978

    Total other assets                            15,313,838      11,591,540

    Total assets                                 $20,415,895     $15,719,769

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities:
    Accounts payable                              $1,376,328      $2,165,061
    Other payable                                         --         171,286
    Accrued expenses                                 571,756         924,580
    Advance from customers                                --       1,162,184
    Due to related party                                  --          18,079

            Total current liabilities              1,948,084       4,441,189

    Shareholders' equity
    Convertible preferred stock, $0.001 par
     value, 15,000,000 shares authorized
     12,976,316 shares issued and
     outstanding as of March 31, 2009 and
     September 30, 2008                               12,976          12,976
    Common stock, $0.001 par value,
     1,604,278 shares authorized,
     1,435,568 shares issued and
     outstanding as of March 31, 2009
     and September 30, 2008                            1,436           1,436
    Additional paid in capital                     5,115,690       3,930,628
    Additional paid in capital - warrants            971,788         971,788
    Subscription receivable                          (50,000)     (3,050,000)
    Retained earnings                             11,593,991       8,524,267
    Accumulated other comprehensive income           821,930         887,484

            Total shareholders' equity            18,467,811      11,278,579

            Total liabilities and
             shareholders' equity                $20,415,895     $15,719,769



    For more information, please contact:

     Miri Segal
     MS-IR LLC
     Tel:   +1-917-607-8654
     Email: msegal@ms-ir.com

     Xiuzhen Qiao
     Rodobo International Inc
     Tel:   +86-451-8226-5922
     Email: qiaozhen1973@163.com

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SOURCE Rodobo International, Inc.
Copyright©2009 PR Newswire.
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