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

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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. (NASDAQ: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







 

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SOURCE Renmin Tianli Group, Inc.

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