Renmin Tianli Group, Inc. Reports Unaudited Financial Results for First Quarter 2018

Renmin Tianli Group, Inc. Reports Unaudited Financial Results for First Quarter 2018

PR Newswire

WUHAN CITY, China, May 14, 2018 /PRNewswire/ -- Renmin Tianli Group, Inc. ABAC ("Renmin Tianli" or the "Company"), a producer of breeder hogs, market hogs and black hogs, as well as specialty processed black hog pork products sold through retail outlets and the internet, with headquarters in Wuhan City, Hubei Province, China, today announced its financial results for the three months ended March 31, 2018.

Mr. Luchang Zhou, Chief Executive Officer of Renmin Tianli, commented, "With total number of hogs sold increasing by 23.7% year-over-year, our hog farming business performed well during the first quarter that more than offset the decrease in blended average selling price ("ASP") and the moderate decrease in our retail business, leading to an 8.2% increase in total revenues and improvement in both margins and profitability. Looking ahead, as we continue to focus on improving our inventory turnover rate and managing our expenses, we anticipate a stabilization in our hog farming business despite uncertainty in hog pricing and feed costs."

First Quarter 2018 Financial Results



For the Three Months Ended March 31,

($ thousands, except per share data)

2018



2017



% Change

Revenues

$          7,230



$         6,681



8.2%

Hog farming

6,667



5,974



11.6%

Retail

562



707



-20.5%

Gross margin

16.2%



14.0%



2.1 pp

Operating margin

2.6%



0.4%



2.1 pp

Net Income (loss)

204



33



515.0%

Earnings (loss) per share

0.025



0.004



515.3%

Revenues for the first quarter of 2018 increased by $0.55 million, or 8.2%, to $7.23 million from $6.68 million for the same period of last year. The increase in overall revenues was due to an increase in revenues from regular hog sales partially offset by a decrease in revenues from our black hog program.

Revenues from hog farming, which includes sales of regular breeder hogs, regular market hogs, and black hogs, increased by $0.69 million, or 11.6%, to $6.67 million for the first quarter of 2018 from $5.97 million for the same period of last year. The Company sold a total of 37,373 regular breeder hogs, regular market hogs and black hogs with a blended average selling price of $178 per hog during the first quarter of 2018, compared to 30,217 hogs sold and a blended average selling price of $198 per hog for the same period of last year.



For the Three Months Ended March 31,



2018



2017



No. of

Hogs

Sold



Average

Price/Hog

($)



Sales 

($'000)



No. of

Hogs

Sold



Average

Price/Hog

($)



Sales 

($'000)

Breeder hogs- regular hogs

3,810



$        265



$   1,009



2,837



$        245



$   696

Market hogs- regular hogs

22,308



152



3,384



16,792



169



2,845

Market hogs- black hogs

11,255



202



2,275



10,588



230



2,432

Total Hog Farming

37,373



178



6,667



30,217



198



5,974



Kilogram



Average

Price/kg

($)



Sales 

($'000)



Kilogram



Average

Price/kg

($)



Sales 

($'000)

Retail- specialty black hog pork products

107,471



$            5



$      562



136,682



$            5



$   707

Revenues for the first quarter of 2018 from regular breeder hog sales increased by 44.9% to $1.01 million with the number of regular breeder hogs sold increasing by 34.3% to 3,810 hogs and the average selling price of regular breeder hogs increasing by 7.9% to $265 per hog. Revenues for the first quarter of 2018 from regular market hog sales increased by 18.9% to $3.38 million as the number of regular market hogs sold increased by 32.8% to 22,308 hogs while the average selling price of regular market hogs decreased by 10.5% to $152 per hog. Revenues for the first quarter of 2018 from black market hogs decreased by 6.5% to $2.28 million with the number of black hogs sold increasing by 6.3% to 11,255 hogs and the average selling price of black hogs decreasing by 12.0% to $202 per hog.

We sold 107,471 kilograms of specialty black hog pork products through retail at approximately $5 per kilogram, generating revenues of $0.56 million for the first quarter of 2018. This compared to136,682 kilograms sold at approximately $5 per kilogram and revenues of $0.71 million for the same period of last year. These revenues, combined with the sales of black market hogs, led to $2.84 million in revenues from our black hog program for the first quarter of 2018, compared to $3.14 million for the same period of last year.

Gross profit

Cost of goods sold increased by $0.32 million, or 5.5%, to $6.06 million for the first quarter of 2018 from $5.74 million for the same period of last year. Cost of goods sold for hog farming increased by $0.42 million, or 7.9%, to $5.68 million for the first quarter of 2018 from $5.26 million for the same period of last year. Cost of goods sold for retail decreased by $0.10 million, or 20.5%, to $0.38 million for the first quarter of 2018 from $0.48 million for the same period of last year.

Overall gross profit increased by $0.23 million, or 24.7%, to $1.17 million for the first quarter of 2018 from $0.94 million for the same period of last year. This increase in our gross profit was primarily related to an increase in gross profit of $0.28 million, or 39.2%, for our hog farming segment and partially offset by a decrease in gross profit of $0.05 million, or 20.2%, for retail. Gross profit for hog farming and retail were $0.99 million and $0.18 million, respectively, for the first quarter of 2018, compared to $0.71 million and $0.23 million, respectively, for the same period of last year.

Overall gross margin was 16.2%, with gross margins for hog farming and retail of 14.8% and 32.4%, respectively, for the first quarter of 2018. This compared to overall gross margin of 14.0%, and gross margins for hog farming and retail of 11.9% and 32.2%, respectively, for the same period of last year.

Operating income

Total operating expenses, including general and administrative expenses and selling and marketing expenses, increased by $0.08 million, or 8.3%, to $0.98 million for the first quarter of 2018 from $0.91 million for the same period of last year. Operating income increased by $0.16 million, or 551.3%, to $0.18 million for the first quarter of 2018 from $0.03 million for the same period of last year. Operating margin for the first quarter of 2018 was 2.6%, compared to 0.4% for the same period of last year.

Net income and EPS

Net income was $0.20 million, or $0.025 per basic and diluted share, for the first quarter of 2018, compared to $0.03 million, or $0.004 per basic and diluted share, for the same period of last year.

Financial Condition

As of March 31, 2018, the Company had cash and cash equivalents of $66.13 million, compared to $62.64 million at the end of 2017. Working capital as of March 31, 2018 was $68.83 million as compared to $65.12 million at December 31, 2017. Net cash provided by operating activities was $0.96 million for the first quarter of 2018, compared to $1.64 million for the same period of last year.

Recent Developments

On April 30, 2018, the Company completed the acquisition of a 10% equity interest in Youyang County Jinzhu Forestry Development Co. Ltd. ("Jinzhu Forestry"), a bamboo cultivation and processing facility located in Youyang County, Chongqing, for a total consideration of RMB 18 million (approximately $2.8 million) and 2,000,000 shares of Renmin Tianli's common stock. Jinzhu Bamboo commenced operations in April 2016. It currently operates a bamboo plantation of approximately 3,853.5 mu (approximately 635 acres) on which it will construct a bamboo processing facility.

About Renmin Tianli Group, Inc.

Renmin Tianli Group, Inc. (the "Company"), previously known as Aoxin Tianli Group, Inc., is in the business of breeding, raising and selling breeder and market hogs in China. The Company also sells specialty processed black hog pork products through supermarkets and other retail outlets, as well as the internet.

Forward-Looking Statements

This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulations, and other risks contained in reports filed by the company with the Securities and Exchange Commission. All such forward-looking statements, whether written or oral, and whether made by or on behalf of the Company, are expressly qualified by this cautionary statement and any other cautionary statements which may accompany the forward-looking statements. In addition, the Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.

For more information, please contact:

Tony Tian, CFA

Weitian Group LLC

Phone: +1-732-910-9692

Email: ttian@weitianco.com

 

RNEMIN TIANLI GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(AMOUNTS EXPRESSED IN US DOLLARS)







March 31, 2018



December 31, 2017





(Unaudited)





ASSETS









Current Assets:









Cash

$

66,132,282

$

62,636,484

Accounts receivable



64,689



52,276

Inventories, net



6,128,184



5,633,005

Due from related party



2,520



-

Prepaid expenses



10,829



3,038

Other receivables, net



320,888



308,454

Total Current Assets



72,659,392



68,633,257











Long-term prepaid expenses, net



1,268,892



1,246,726

Plant and equipment, net



20,228,549



20,033,880

Biological assets, net



1,721,428



1,821,780

Intangible assets, net



2,358,696



2,324,787











Total Assets

$

98,236,957

$

94,060,430











LIABILITIES AND STOCKHOLDERS' EQUITY









Current Liabilities:









Short-term bank loans

$

2,228,944

$

2,142,573

Accounts payable and accrued liabilities



20,659



3,956

Other payables



1,582,672



1,370,305











Total Liabilities



3,832,275



3,516,834











Stockholders' Equity:









Common stock ($0.004 par value, 25,000,000









shares authorized, 7,983,745 shares issued and

outstanding on March 31, 2018 and December 31,

2017, respectively)



31,934



31,934

Additional paid in capital



61,395,579



61,395,579

Statutory surplus reserves



2,416,647



2,416,647

Retained earnings



28,147,900



27,944,383

Accumulated other comprehensive income



2,412,622



(1,244,947)

Total Stockholders' Equity



94,404,682



90,543,596

 Total Liabilities and Stockholders' Equity

$

98,236,957

$

94,060,430

 

 

RENMIN TIANLI GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(AMOUNTS EXPRESSED IN US DOLLARS)

(UNAUDITED)







For the Three Months Ended March 31,





2018



2017

Revenue

$

7,229,531

$

6,680,991

Cost of goods sold



6,059,603



5,742,884

Gross profit



1,169,928



938,107











General and administrative expenses



904,084



831,960

Selling expenses



80,873



77,748

Operating expenses



984,957



909,708











Income from operations



184,971



28,399











Other income:









Interest income, net



17,445



3,824

Other income, net



1,101



871

Total other income



18,546



4,695











Income before income taxes



203,517



33,094

Income taxes



-



-

Net income

$

203,517

$

33,094











Earnings per share – Basic and Diluted

$

0.03

$

*

Weighted average shares outstanding – Basic

and Diluted



7,983,745



7,987,495











Comprehensive income:









Net income

$

203,517

$

33,094

Unrealized foreign currency translation

adjustment



3,657,569



656,765

Comprehensive income

$

3,861,086

$

689,859



*: Less than $0.005

 

 

RENMIN TIANLI GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(AMOUNTS EXPRESSED IN US DOLLARS)

(UNAUDITED)







For the Three Months Ended March 31,





2018



2017

CASH FLOWS FROM OPERATING ACTIVITIES









Net income

$

203,517

$

33,094

Adjustments to reconcile net income to net cash

provided by operating activities:









Depreciation and amortization



758,717



711,532

Amortization of prepaid expenses



6,770



50,198

Amortization of long-term prepaid expenses



27,751



25,750

Loss from disposal of biological assets



10,892



40,085

Stock-based compensation



-



2,008

Changes in operating assets and liabilities:









Accounts receivable



(10,181)



(4,491)

Inventories



(269,987)



623,252

Prepaid expenses



(14,346)



(17,903)

Other receivables



-



3,193

Accounts payable and accrued liabilities



16,344



14,679

Other payables



233,176



154,000

Net cash provided by operating activities



962,653



1,635,397











CASH FLOWS FROM INVESTING ACTIVITIES









Net cash provided by (used in) investing

activities



-



-











CASH FLOWS FROM FINANCING ACTIVITIES









Due to (from) related party



(2,520)



-

Net cash used in financing activities



(2,520)



-











EFFECT OF EXCHANGE RATE CHANGES ON CASH



2,535,665



425,673

NET INCREASE IN CASH



3,495,798



2,061,070

CASH AND CASH EQUIVALENTS, BEGINNING

OF PERIOD



62,636,484



54,458,026

CASH AND CASH EQUIVALENTS, END OF

PERIOD

$

66,132,282

$

56,519,096





















SUPPLEMENTAL DISCLOSURES:









Cash paid during the period for:









Interest expense paid

$

31,130

$

37,554

Income tax paid

$

-

$

-











NON-CASH TRANSACTIONS OF INVESTING

AND FINANCING ACTIVITIES
:









Inventories received from prior year prepayments

$

-

$

282,791

Inventories transferred to biological assets

$

5,133

$

248,316

Cancelation of shares related to employees'

compensation

$

-

$

18













 

Cision View original content:http://www.prnewswire.com/news-releases/renmin-tianli-group-inc-reports-unaudited-financial-results-for-first-quarter-2018-300647901.html

SOURCE Renmin Tianli Group, Inc.

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