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China Dasheng Biotechnology Company Reports Unaudited Third Quarter FY2009 Financial Results

Posted on: Monday, 18 May 2009, 07:39 CDT

GANSU, China, May 18 /PRNewswire-Asia-FirstCall/ -- China Dasheng Biotechnology Company ("China Dasheng" or "the Company") (OTC Bulletin Board: CDBT), a leading producer and distributor of organic bacteria based additives for crops and livestock feeds in the PRC, announced unaudited financial results for the third quarter of fiscal year 2009, which ended March 31, 2009.

Highlights for Q3 FY2009 (all figures in US$) included: -- Total revenue grew approximately 43% to $5.3 million in the third quarter of 2009, compared with $3.7 million in the prior year quarter; -- Gross margin improved by 50% to $2.6 million in the third quarter of 2009, compared with $1.8 million in the prior year quarter; -- Operating expenses, as a percentage of revenue, were reduced by over 900 basis points to 20.2% in the third quarter of 2009, compared to 29.9% in the prior year quarter; -- Income from operations increased by 140% to $1.6 million in the third quarter of 2009, compared to $0.7 million in the prior year quarter; -- Net income rose over 200% to $1.3 million in the third quarter of 2009, or $0.04 per diluted share, compared with $0.4 million, or $0.01 per share in the prior year quarter; -- $10.4 million of cash on the balance sheet as of the quarter end, March 31, 2009.

Chairman of the Board, Mr. Jinjun Qi commented, "China Dasheng reported another successful quarter, demonstrating the power and continued strength of our core business offerings. There is a growing demand in China at both the national and local level for "going Green" agriculture and the Company is uniquely position to capitalize on this trend with our proprietary products and leading market position.

During the third quarter we posted solid year-over-year revenue growth all while continuing to deliver sustained and growing cash flows, enabling us to fund our future growth. We also had a very strong quarter from an expense management perspective, as we intensified our focus on those measures that would allow us to increase productivity and expand margins. It is clear that the financial disciplines we put in place are bearing fruit."

About China Dasheng Biotechnology Company

China Dasheng Biotechnology Company, a leading producer and distributor of organic bacteria based additives for crops and livestock feeds through its three subsidiary segments, Gansu Dasheng Biotechnology Company, Hainan Lushen Biology Technology Company and Yangling Elemiss Foods Company, operates within the biological products and fertilizer agents market including organic fertilizers, non-chemical agents, and biological agents based additives. The major product line of AM/HM biological bacterial crop and live stock feed additive were certified by the China Green Product Development Center as a "Grade A Green Food Raw Material." To learn more about the Company visit http://www.chinadashengbio.com .

Safe Harbor Statement

The statements contained herein that are not historical facts are "forward-looking statements" within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may be identified by, among other things, the use of forward-looking terminology such as "believes," "expects," "may," "will," "should," or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. In particular, our statements regarding the potential growth of the markets are examples of such forward-looking statements. The forward-looking statements include risks and uncertainties, including but not limited to, general economic conditions and regulatory developments, not within our control. The factors discussed herein and expressed from time to time in our filings with the Securities and Exchange Commission could cause actual results and developments to be materially different from those expressed or implied by such statements. The forward-looking statements are made only as of the date of this filing, and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

For More information, please contact: China Dasheng Biotechnology Company James Gao, Vice President, Investor Relations Tel: +1-908-938-2025 Email: gaojingbo@chinadashengbio.com

CHINA DASHENG BIOTECHNOLOGY COMPANY (FORMERLY NAMED AS MAX NUTRITION INC.) CONSOLIDATED BALANCE SHEETS (Unaudited) AS OF MARCH 31, 2009 and JUNE 30, 2008

(in US DOLLARS) 31-Mar-09 30-Jun-08 ASSETS Current assets: Cash & cash equivalents $ 10,413,273 $ 1,561,403 Accounts receivable, net of allowance for doubtful accounts of $22,794 and $16,303, respectively 3,670,524 3,244,476 Inventory 476,832 561,883 Advances to suppliers 20,886 1,486,379 Due from related parties 94,093 1,580,820 Prepayments and other current assets 89,073 35,675 Total current assets 14,764,681 8,470,636 Investment in Real Estate Ventures 5,401,954 6,483,437 Property, plant and equipment, net of accumulated depreciation 2,859,290 1,618,829 Other Assets Land use right, net of accumulated amortization 1,453,481 1,531,555 Notes receivable 1,066,449 998,502 Long-term prepayments 818,882 1,150,082 Total other assets 3,338,812 3,680,139 Total Assets $ 26,364,737 $ 20,253,041 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,425,217 $ 725,680 Accrued expenses and other payables 784,142 809,463 Payable to related parties 18,134 -- Total current liabilities 2,227,493 1,535,143 Long-term payable - land use right 1,464,575 1,459,137 Minority Interest 3,447,892 2,282,109 Stockholders' Equity: Preferred stock, $0.001 par value, 1,000,000 shares authorized, - 0 - shares issued and outstanding at March 31,2009 and June 30, 2008 -- -- Common stock, $0.001 par value, 74,000,000 and 74,000,000 shares authorized, 30,000,000 and 30,000,000 shares issued and outstanding at March 31, 2009 and June 30, 2008, respectively 30,000 30,000 Additional paid-in-capital 3,846,035 3,846,035 Statutory surplus reserve and common welfare fund 2,643,339 1,837,187 Retained earnings 11,568,237 8,009,800 Accumulated other comprehensive income 1,137,166 1,253,630 Total stockholders' equity 19,224,777 14,976,652 Total Liabilities and Stockholders' Equity $ 26,364,737 $ 20,253,041

CHINA DASHENG BIOTECHNOLOGY COMPANY (FORMERLY NAMED AS MAX NUTRITION INC.) CONSOLIDATED STATEMENTS OF OPERATION (Unaudited) FOR THE NINE AND THREE MONTHS

ENDED MARCH 31, 2009 and 2008 (in US DOLLARS) For the nine months For the three months ended ended March 31, March 31, 2009 2008 2009 2008 Net Sales $16,076,862 $ 11,421,215 $ 5,308,553 $ 3,706,091 Cost of Sales (8,270,673) (6,135,328) (2,665,814) (1,945,490) Gross profit 7,806,189 5,285,887 2,642,739 1,760,601 Operating Expenses: Selling expenses 966,504 603,492 316,595 202,689 General and administration expense 1,583,324 1,388,148 758,157 904,209 Total operating expenses 2,549,828 1,991,640 1,074,752 1,106,898 Income from Operations 5,256,361 3,294,247 1,567,987 653,703 Other Income and Expenses: Interest income (expenses) 83,245 (31,837) 29,653 (3,194) Other income 2,925 -- -- -- Other expenses (4,363) (58,468) 646 (1,319) Total other income and (expense) 81,807 (90,305) 30,299 (4,513) Income before income taxes and minority interest 5,338,168 3,203,942 1,598,286 649,190 Minority Interest (973,579) (607,097) (293,613) (215,623) Net income $ 4,364,589 $ 2,596,845 $ 1,304,673 433,567 Other Comprehensive Income: Foreign currency translation adjustment (116,464) 1,070,681 31,683 542,545 Comprehensive income $ 4,248,125 $ 3,667,526 $ 1,336,356 $ 976,112 Basic and Diluted Income per common share Basic $ 0.15 $ 0.09 $ 0.04 $ 0.01 Diluted $ 0.15 $ 0.09 $ 0.04 $ 0.01 Weighted average common share outstanding Basic 30,000,000 30,000,000 30,000,000 30,000,000 Diluted 30,000,000 30,000,000 30,000,000 30,000,000

CHINA DASHENG BIOTECHNOLOGY COMPANY (FORMERLY NAMED AS MAX NUTRITION INC.)

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) FOR THE NINE MONTHS ENDED

MARCH 31, 2009 AND 2008 (in US DOLLARS) For the nine months ended March 31, 2009 2008 Cash Flows From Operating Activities: Net income $ 4,364,589 $ 2,596,845 Adjustments to reconcile net income to net cash provided by operating activities: Minority interest in net income of consolidated subsidiaries 973,579 607,097 Bad debt expense 6,424 -- Depreciation expense 236,961 236,690 Amortization expense 170,027 110,544 Loss on disposal of fixed asset 4,922 -- Changes in operating assets and liabilities: Accounts receivable (420,370) (512,552) Inventory (83,626) 196,945 Advance to suppliers 1,471,038 -- Prepayments and other current assets 199,819 1,119,869 Accounts payable 867,602 (310,613) Accrued expenses and other current liabilities (28,342) (2,010,476) Cash provided (used) by operating activities 7,762,623 2,034,349 Cash Flows From Investing Activities: Purchases of property, plant and equipment (1,488,893) (28,405) Notes Receivables (64,221) -- Cash dividends received from real estate investments 1,105,676 -- Cash used in investing activities (447,438) (28,405) Cash Flows From Financing Activities: Repayment of long-term debt -- (1,197,946) Amounts received from related parties 1,510,758 938,601 Cash provided by financing activities 1,510,758 (259,345) Effect of currency exchange rate on cash and cash equivalents 25,927 277,319 Increase in cash and cash equivalents 8,851,870 2,023,918 Cash and Cash Equivalents - Beginning of the year 1,561,403 1,316,569 Cash and Cash Equivalents - Ending of the year $ 10,413,273 $ 3,340,487 Supplemental disclosures of cash flow information: Interest paid $ 41,760 $ -- Income Taxes paid -- --

SOURCE China Dasheng Biotechnology Company


Source: PR Newswire

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