HONG KONG, Feb. 11, 2011 (GLOBE NEWSWIRE) -- Man Shing Agricultural Holdings, Inc. (OTCBB:MSAH) ("Man Shing" the "Company," "we," "us," or "our"), located in the Shandong Province and one of the largest Chinese exporters of fresh ginger to Japan, the United Kingdom, and the Netherlands, today announced financial results for the three and six months ended December 31, 2010.
Financial Highlights for the Three Months Ended December 31, 2010
- Revenue increased 58% year-over-year to $8.2 million
- Gross profit increased 91% to $3.3 million; gross margin increased to 41% from 34%
- Net income increased 94% to $2.3 million; basic EPS of $0.06
Mr. Shili Liu, Chairman and Chief Executive Officer of Man Shing, stated, "Our record financial results during the second quarter of fiscal 2011 were highlighted by an increase in revenue of 58% and an increase in gross profit of 91%, each as a result of an increase in the price of ginger and cost controls. In addition, gross margins improved by 7% to 41% from 34% and net income increased by 94%. The climate of the Shandong Province has enabled us to consistently increase our production capacity, and the lack of high-quality ginger from China in the international market allowed us to increase our prices by up to 35% as compared to same period in prior year."
Mr. Shili Liu continued, "Our factories' quality control standards have driven customer demand and loyalty for Man Shing's high quality ginger. By improving operating efficiencies at our thermostatic storing warehouse, where the freezing and packaging takes place after the harvesting of our ginger, we have been able to increase our operating margins. We believe that economies of scale will continue to improve our cost structure, which will benefit our profit margins going forward."
Summary Financials for Second Quarter Ended December 31, 2010:
Financial Results for the Three Months Ended December 31, 2010
Revenue for the three months ended December 31, 2010 totaled $8.2 million, an increase of 58% compared to $5.2 million for the same period in 2009. The revenue increase was due primarily to the increase in sales of frozen and fresh ginger and other agricultural products. The price of ginger reached $1,350 per ton during the quarter ended December 31, 2010, as opposed to an average price of $1,000 per ton for the same period the prior year. Other contributing factors included the expansion of business through our marketing strategy and customer loyalty.
Cost of sales for the three months ended December 31, 2010 totaled $4.8 million, or 59% of revenue, an increase of 41% compared to $3.4 million or 66% of revenue for the three months ended December 31, 2009. Cost of sales 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 increase in sales, the increased market price of ginger and more efficient utilization of raw materials.
Gross profit for the three months ended December 31, 2010 totaled $3.3 million, an increase of 91% compared to $1.7 million for the three months ended December 31, 2009. Gross profit margin increased 7% to 41% for the three months ended December 31, 2010, as compared to 34% for the three months ended December 31, 2009. This increase was primarily attributable to the increase in the selling prices of our products. During the three months ended December 31, 2010, Man Shing was also able to utilize their plantation and processing facilities more efficiently due to economies of scale from larger output volume.
Operating expenses for the three months ended December 31, 2010 and 2009 were $1 million and $573,000, respectively. Operating expenses increased primarily because of an increase in selling and marketing expenses to gain market share in both existing and new markets. Income from operations increased 94% to $2.3 million for the three months ended December 31, 2010 compared to $1.2 million for the three months ended December 31, 2009.
Net income for the three months ended December 31, 2010 totaled $2.3 million, an increase of 94% compared to $1.2 million for the three months ended December 31, 2009. Basic earnings per share for the three months ended December 31, 2010 were $0.06 based on 38 million basic shares versus earnings per share of $0.03 for the three months ended December 31, 2009 based on 34.1 million basic shares outstanding. As of February 1, 2011, Man Shing had approximately 48 million basic and 50 million fully diluted shares of common stock outstanding, after the Company canceled the preferred shares previously owned by Chairman Liu which simplifies the capital structure and improves the fully diluted EPS of the Company and issued 10 million shares of common stock in the previously announced financing of $4 million.
Mr. Shili Liu added, "To meet customer demand for our products, we are continuously evaluating options to increase our current 5.3 million square meters of farmland. We have also been presented with opportunities to partner with farmland owners in strategic locations outside of China, as evidenced by our recent partnership in Japan. We believe that partnerships outside of China will increase the price point for our product, further enhance the marketability of our company, and improve customer relations with those local to our farmland. We believe that our aggressive growth strategy, coupled with the current price appreciation of ginger and our increased operating efficiencies, will cause Man Shing to continue to grow in the foreseeable future."
Summary Financials for Six Months Ended December 31, 2010:
Financial Highlights for the Six Months Ended December 31, 2010
- Revenue increased 58% year-over-year to $15.5 million
- Gross profit increased 114% to $6.5 million; gross margin increased to 42% from 31%
- Net income increased 92% to $4.5 million; basic EPS of $0.12
Financial Results for the Six Months Ended December 31, 2010
Revenue for the six months ended December 31, 2010 totaled $15.5 million, an increase of 58% compared to $9.8 million for the same period in 2009. The increase in revenue was driven by the increased consumer demand of our products, the expansion of business through our marketing strategy and our customer loyalty, and an increase in market price of ginger. There were no product returns for either of the six months ended December 31, 2009 or 2010.
Cost of sales for the six months ended December 31, 2010 totaled $9 million or 58% of revenue, an increase of 33% compared to $6.8 million or 69% of revenue for the six months ended December 31, 2009. Cost of sales 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 increase in sales and market price and more efficient utilization of raw materials.
Gross profit for the six months ended December 31, 2010 totaled $6.5 million, an increase of 114% compared to $3 million for the same period in the 2010 fiscal year. Gross profit margin increased to 42%, as compared to 31% for the same period the prior year. This increase was primarily attributable to the increase in the selling prices of our products. 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 six months ended December 31, 2010 and 2009 were $2 million and $703,000, respectively. Operating expenses increased 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% to $4.6 million for the six months ended December 31, 2010 compared to $2.3 million for the same period during the 2010 fiscal year.
Net income for the six months ended December 31, 2010 totaled $4.5 million, an increase of 92% compared to $2.3 million for the same period in the prior year. Basic earnings per share for the six months ended December 31, 2010 were $0.12 based on 38 million shares versus earnings per share of $0.11 based on 20.2 million shares outstanding for the same period in the prior year. As of February 1, 2011, Man Shing had approximately 48 million basic and 50 million fully diluted shares of common stock outstanding. The Company has also canceled the preferred shares previously owned by Chairman Liu which simplifies the capital structure and improves the fully diluted EPS of the Company and issued 10 million shares of common stock in the previously announced financing of $4 million.
Liquidity and Capital Resources
As of December 31, 2010, Man Shing Agricultural Holdings had approximately $3.6 million in cash and cash equivalents. As of December 31, 2010, total current assets and total assets were $21.2 million and $22.5 million, respectively. During the same period, total current liabilities and total liabilities were $6.5 million and $8.0 million, respectively. Working capital increased year-over-year by $9.5 million to $14.7 million as compared to $5.2 million as of December 31, 2009. Shareholder's equity increased 51% to $14.5 million for the six months ended December 31, 2010, compared to $9.6 million for the year ended June 30, 2010.
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 ginger and other select vegetables 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 press release 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.
CONTACT: Company Contact: Man Shing Agricultural Holdings, Inc. Mr. Kenny Chow, CFO +86-536-464-4888 +852-2530-3122 kenny@msaginger.com http://www.msaginger.com/ Investor Contact: HSC Global, an affiliate of HC International, Inc. Alan Sheinwald, President (914) 669-8885 Alan.sheinwald@hscglobal.net www.hcinternational.net