updated 11/16/2010 8:17:22 AM ET 2010-11-16T13:17:22

HONG KONG, Nov. 16, 2010 (GLOBE NEWSWIRE) -- Man Shing Agricultural Holdings, Inc. (OTCBB:MSAH) ("Man Shing," the "Company," "we," "us," or "our"), one of the largest Chinese exporters of fresh ginger to Japan, United Kingdom, and the Netherlands located in the Shandong Province of China, today announced strong financial results for the fiscal 2011 first quarter ending September 30, 2010.

Financial Highlights for the Three Months Ended September 30, 2010

  • Revenue increased 58.7% year-over-year to $7.3 million
  • Gross profit increased 145.4% to $3.2 million; gross margin increased 150 basis points to 43.2%
  • Net income increased 90.8% to $2.2 million; basic EPS of $0.06; fully diluted EPS of $0.03

"Our strong financial results during the quarter were driven by several factors including the increase in demand of our frozen and fresh ginger product line, more efficient utilization of our raw materials, economies of scale at our facility and increase in market price. The acceleration of our revenue led to significant margin expansion year-over-year and an increase in net income of over 90%," stated Eddie Cheung, Chief Executive Officer of Man Shing. "Today we remain one of the largest ginger exporters in China with over 5.3 million square meters of farmland strategically located in the Shandong Province of northern China. Our processing factory conforms with the food safety standards of the British Retail Consortium Global Food Standard requirements for food safety and also meets the Operational HACCP Specification requirements. Our resources and implemented safety standards, which enable us to provide the highest quality ginger, have presented our company with a strategic competitive advantage within the industry and opportunity to continue gaining market share."

Financial results for the three months ended September 30, 2010

Revenue for the fiscal first quarter of 2011 ending September 30, 2010 totaled $7.3 million an increase of 58.7% compared to $4.6 million for the same period in 2009. The increase in revenue was driven by the increased consumer demand of our products, marketing strategy and quality of the Company's frozen and fresh ginger product line and increase in market price.

Cost of sales for the period ending September 30, 2010 totaled $4.2 million or 57% of revenue, an increase of 25%, compared to $3.3 million or 72% of revenue for the period ending September 30, 2009. Cost of sales primarily includes the costs associated with the planting, harvesting and maintaining of ginger and other agricultural products. As a percentage of sales, cost of sales decreased due to the large increase in sales and market price and more efficient utilization of raw materials.

Gross profit for the fiscal first quarter of 2011 totaled $3.2 million, an increase of 145.4%, compared to $1.3 million for the fiscal first quarter of 2010. Gross profit margin increased 150 basis points to 43% for the fiscal first quarter of 2011 as compared to 28% for the fiscal first quarter of 2010. This increase was primarily attributable to the increase in the selling prices of our products and the reduction in the cost of material and overhead. During the quarter we were able to utilize our plantation and processing facilities more efficiently due to economies of scale from larger output volume. 

Operating expenses for the three months ended September 30, 2010 and 2009 were $932,000 and $130,000, respectively. Operating expenses increased during the quarter primarily because of an increase in selling and marketing expenses to gain market share in both existing and new markets. Income from operations increased 92.6% to $2.2 million for the fiscal first quarter of 2011 compared to $1.2 million for the fiscal first quarter of 2010.

Net income for the fiscal first quarter of 2011 totaled $2.2 million, an increase of 90.8% compared to $1.2 million for the fiscal first quarter of 2010. Basic earnings per share for the fiscal first quarter of 2011 were $0.06 and diluted earnings per share were $0.03.

Liquidity and Capital Resources

As of September 30, 2010 Man Shing Agricultural Holdings had approximately $3.8 million in cash and cash equivalents or approximately $0.10 per share. As of September 30, 2010 total current assets and total assets were $18 million and $19 million, respectively. During the same period total current liabilities and total liabilities were $5.4 million and $6.9 million, respectively. Working capital increased year-over-year by $2.3 million of 22% to $12.6 million as compared to $10.3 million the previous year. Shareholder's equity increased 25.5% to $12.1 million compared to $9.6 million the previous year.

Eddie Cheung continued, "In the near future we anticipate the worldwide ginger industry to continue to grow and consumer demand for high quality ginger to continue to increase. Today we lease 5.3 million square meters of farmland and to satisfy this demand we are enacting an aggressive growth strategy to expand to 8 million square meters. Additionally, we anticipate further penetrating the existing markets we export our products to, including Japan and the UK, through the long existing customer relationships we have in those regions and increased marketing of our products. Our goal is to enhance the market share we currently possess as a Chinese exporter of ginger and remain confident in our ability to attain our previously stated guidance of $8 million in net income for the fiscal year 2011."

About Man Shing Agricultural Holdings, Inc.

Man Shing Agricultural Holdings, Inc., through its operating subsidiary in Shandong of China, is focused on the production and processing of fresh vegetables, including mainly ginger and others such as onion and garlic. The Company produces high quality ginger which meets the requirements of the British Retail Consortium Global Food Standard. The Company focuses on customers located in countries such as Japan and the European Union which are food safety oriented. For further information about Man Shing Agricultural Holdings, Inc, please visit the Company's website at http://www.msaginger.com/

Forward Looking Statement:

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These statements relate to future events or our future financial performance. We have attempted to identify forward-looking statements by terminology including "anticipates," "believes," "expects," "can," "continue," "could," "estimates," "expects," "intends," "may," "plans," "potential," "predict," "should" or "will" or the negative of these terms or other comparable terminology. These statements are only predictions. Uncertainties and other factors may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels or activity, performance or achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Our expectations are as of the date hereof, and we do not intend to update any of the forward-looking statements after the filing date to conform these statements to actual results, unless required by law.

We file annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and proxy and information statements and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended. You may read and copy these materials at the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the public reference room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a website ( http://www.sec.gov ) that contains reports, proxy and information statements and other information regarding us and other companies that file materials with the SEC electronically.

 

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