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

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

PR Newswire

WUHAN CITY, China, Aug. 20, 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 and six months ended June 30, 2018.

Mr. Luchang Zhou, Chief Executive Officer of Renmin Tianli, commented, "Despite a 20% increase in the number of hogs sold from our hog farming business, overall revenues decreased slightly during the second quarter primarily due to decreases in average selling prices for both hog farming and retail as well as a decline in retail sales volume. Overall margins and profitability also decreased on a year-over-year basis as the hog industry faced continued pricing pressure on the back of increased hog supply and sluggish consumer demand. However, we have seen an improving trend in hog prices since July and, if this trend continues, anticipate a gradual recovery in our business in the second half of the year."

Second Quarter 2018 Financial Results


For the Three Months Ended June 30,

($ thousands, except per share data)

2018


2017


% Change

Revenues

$               6,179


$              6,222


-0.7%

Hog farming

5,889


5,561


5.9%

Retail

290


661


-56.2%

Gross margin

3.0%


13.4%


-10.4 pp

Operating margin

-7.1%


0.9%


-8.0 pp

Net Income (loss)

(418)


64


-749.0%

Earnings (loss) per share

(0.05)


0.01


-749.3%

 

For the second quarter of 2018, revenues decreased by $0.04 million, or 0.7%, to $6.18 million from $6.22 million for the same period of last year. The slight decrease in overall revenues was due to a decrease in revenues from black market hogs and specialty black hog pork products through retail, partially offset by increases in revenues from our regular breeder hog and regular market hog sales.

Revenues from hog farming, which includes sales of regular breeder hogs, regular market hogs, and black hogs, increased by $0.33 million, or 5.9%, to $5.89 million for the second quarter of 2018 from $5.56 million for the same period of last year. The Company sold a total of 38,599 regular breeder hogs, regular market hogs and black hogs with a blended average selling price of $153 per hog during the second quarter of 2018, compared to 32,179 hogs sold and a blended average selling price of $173 per hog for the same period of last year.


For the Three Months Ended June 30,


2018


2017


No. of Hogs
Sold


Average
Price/Hog ($)


Sales
($ thousands)


No. of Hogs
Sold


Average
Price/Hog ($)


Sales
($ thousands)

Breeder hogs- regular hogs

3,806


$               262


$               999


3,344


$                247


$               827

Market hogs- regular hogs

22,923


128


2,929


17,924


144


2,582

Market hogs- black hogs

11,870


165


1,961


10,911


197


2,153

Total Hog Farming

38,599


153


5,889


32,179


173


5,561






Kilogram


Average
Price/kg ($)


Sales
($ thousands)


Kilogram


Average
Price/kg ($)


Sales
($ thousands)

Retail- specialty black hog pork products

65,319


$                   4


$               290


138,123


$                    5


$               661


 

Revenues for the second quarter of 2018 from regular breeder hog sales increased by 20.8% to $1.00 million with the number of regular breeder hogs sold increasing by 13.8% to 3,806 hogs and the average selling price of regular breeder hogs increasing by 6.2% to $262 per hog. Revenues for the second quarter of 2018 from regular market hog sales increased by 13.4% to $2.93 million as the number of regular market hogs sold increased by 27.9% to 22,923 hogs while the average selling price of regular market hogs decreased by 11.3% to $128 per hog. Revenues for the second quarter of 2018 from black market hogs decreased by 8.9% to $1.96 million with the number of black hogs sold increasing by 8.8% to 11,870 hogs and the average selling price of black hogs decreasing by 16.3% to $165 per hog.

We sold 65,319 kilograms of specialty black hog pork products through retail at approximately $4 per kilogram, generating revenues of $0.29 million for the second quarter of 2018. This compared to138,123 kilograms sold at approximately $5 per kilogram and revenues of $0.66 million for the same period of last year. These revenues, combined with the sales of black market hogs, led to $2.25 million in revenues from our black hog program for the second quarter of 2018, compared to $2.81 million for the same period of last year.

Gross profit

Cost of goods sold increased by $0.60 million, or 11.2%, to $5.99 million for the second quarter of 2018 from $5.39 million for the same period of last year. Cost of goods sold for hog farming increased by $0.81 million, or 16.4%, to $5.77 million for the second quarter of 2018 from $4.95 million for the same period of last year. Cost of goods sold for retail decreased by $0.21 million, or 48.2%, to $0.23 million for the second quarter of 2018 from $0.44 million for the same period of last year.

Overall gross profit decreased by $0.65 million, or 77.5%, to $0.19 million for the second quarter of 2018 from $0.84 million for the same period of last year. This decrease in our gross profit was the result of a decrease in gross profit of $0.49 million, or 79.7%, for our hog farming segment, combined with a decrease in gross profit of $0.16 million, or 72.0%, for retail. Gross profit for hog farming and retail were $0.12 million and $0.06 million, respectively, for the second quarter of 2018, compared to $0.61 million and $0.23 million, respectively, for the same period of last year.

Overall gross margin was 3.0%, with gross margins for hog farming and retail of 2.1% and 21.8%, respectively, for the second quarter of 2018. This compared to overall gross margin of 13.4%, and gross margins for hog farming and retail of 11.0% and 34.1%, respectively, for the same period of last year.

Operating income (loss)

Total operating expenses, including general and administrative expenses and selling and marketing expenses, decreased by $0.16 million, or 19.9%, to $0.62 million for the second quarter of 2018 from $0.78 million for the same period of last year.

Operating loss was $0.44 million for the second quarter of 2018, compared to operating income of $0.06 million for the same period of last year. Operating loss margin for the second quarter of 2018 was 7.1%, compared to operating profit margin of 0.9% for the same period of last year.

Net Income (loss) and Earnings (Loss) Per Share

Net loss was $0.42 million, or a loss share of $0.052, for the second quarter of 2018, compared to net income of $0.06 million, or earnings per share of $0.008, for the same period of last year.

First Half 2018 Financial Results


For the Six Months Ended June 30,

($ thousands, except per share data)

2018


2017


% Change

Revenues

$            13,408


$           12,903


3.9%

Hog farming

12,556


11,535


8.9%

Retail

852


1,368


-37.7%

Gross margin

10.1%


13.7%


-3.6 pp

Operating margin

-3.0%


0.6%


-3.6 pp

Net income (Loss)

(361)


98


-469.8%

Earnings (loss) per share

(0.05)


0.01


-470.0%

For the first half of 2018, revenues increased by $0.50 million, or 3.9%, to $13.41 million from $12.90 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 $1.02 million, or 8.9%, to $12.56 million for the first half of 2018 from $11.54 million for the same period of last year. The Company sold a total of 75,972 regular breeder hogs, regular market hogs and black hogs with a blended average selling price of $165 per hog during the first half of 2018, compared to 62,396 hogs sold and a blended average selling price of $185 per hog for the same period of last year.


For the Six Months Ended June 30,


2018


2017


No. of Hogs
Sold


Average
Price/Hog ($)


Sales
($ thousands)


No. of Hogs
Sold


Average
Price/Hog ($)


Sales
($ thousands)

Breeder hogs- regular hogs

7,616


$               264


$            2,008


6,181


$                246


$           1,523

Market hogs- regular hogs

45,231


140


6,313


34,716


156


5,427

Market hogs- black hogs

23,125


183


4,236


21,499


213


4,585

Total Hog Farming

75,972


165


12,556


62,396


185


11,535


















Kilogram


Average
Price/kg ($)


Sales
($ thousands)


Kilograms


Average
Price/kg ($)


Sales
($ thousands)

Retail- specialty black hog pork products

172,790


$                    5


$               852


274,804


$                    5


$           1,368

 

Revenues for the first half of 2018 from regular breeder hog sales increased by 31.8% to $2.01 million with the number of regular breeder hogs sold increasing by 23.2% to 7,616 hogs and the average selling price of regular breeder hogs increasing by 7.0% to $264 per hog. Revenues for the first half of 2018 from regular market hog sales increased by 16.3% to $6.31 million as the number of regular market hogs sold increased by 30.3% to 45,231 hogs while the average selling price of regular market hogs decreased by 10.7% to $140 per hog. Revenues for the first half of 2018 from black market hogs decreased by 7.6% to $4.24 million with the number of black hogs sold increasing by 7.6% to 23,125 hogs and the average selling price of black hogs decreasing by 14.1% to $183 per hog.

We sold 172,790 kilograms of specialty black hog pork products through retail at approximately $5 per kilogram, generating revenues of $0.85 million for the first half of 2018. This compared to 274,804 kilograms sold at approximately $5 per kilogram and revenues of $1.37 million for the same period of last year. These revenues, combined with the sales of black market hogs, led to $5.09 million in revenues from our black hog program for the first half of 2018, compared to $5.95 million for the same period of last year.

Gross profit

Cost of goods sold increased by $0.92 million, or 8.3%, to $12.05 million for the first half of 2018 from $11.13 million for the same period of last year. Cost of goods sold for hog farming increased by $1.23 million, or 12.0%, to $11.44 million for the first half of 2018 from $10.22 million for the same period of last year. Cost of goods sold for retail decreased by $0.31 million, or 33.7%, to $0.61 million for the first half of 2018 from $0.91 million for the same period of last year.

Overall gross profit decreased by $0.42 million, or 23.4%, to $1.36 million for the first half of 2018 from $1.77 million for the same period of last year. This decrease in our gross profit was the result of a decrease in gross profit of $0.21 million, or 15.7%, for our hog farming segment and a decrease in gross profit of $0.21 million, or 45.8%, for retail. Gross profits for hog farming and retail were $1.11 million and $0.25 million, respectively, for the first half of 2018, compared to $1.32 million and $0.45 million, respectively, for the same period of last year.

Overall gross margin was 10.1%, with gross margins for hog farming and retail of 8.9% and 28.9%, respectively, for the first half of 2018. This compared to overall gross margin of 13.7%, and gross margins for hog farming and retail of 11.4% and 33.2%, respectively, for the same period of last year.

Operating income (loss)

Total operating expenses, including general and administrative expenses and selling and marketing expenses, increased by $0.07 million, or 3.9%, to $1.76 million for the first half of 2018 from $1.69 million for the same period of last year.

Operating loss was $0.40 million for the first half of 2018, compared to operating income of $0.08 million for the same period of last year. Operating loss margin for the first half of 2018 was 3.0%, compared to operating profit margin of 0.6% for the same period of last year.

Net Income (loss) and Earnings (Loss) Per Share

Net loss was $0.36 million, or a loss per share of $0.045, for the first half of 2018, compared to net income of $0.10 million, or earnings per share of $0.012, for the same period of last year.

Financial Condition

As of June 30, 2018, the Company had cash and cash equivalents of $62.86 million, compared to $62.64 million at the end of 2017. Working capital as of June 30, 2018 was $65.66 million as compared to $65.12 million at December 31, 2017. Net cash provided by operating activities for the six months ended June 30, 2018 was $1.00 million, compared to $2.64 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

 

 

RENMIN TIANLI GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(AMOUNTS EXPRESSED IN US DOLLARS)




June 30, 2018


December 31, 2017



(Unaudited)



ASSETS





Current Assets:





Cash

$

62,861,569

$

62,636,484

Accounts receivable


39,314


52,276

Inventories, net


5,942,313


5,633,005

Prepaid expenses


53,151


3,038

Other receivables, net


304,502


308,454

Total Current Assets


69,200,849


68,633,257






Long-term prepaid expenses, net


1,177,439


1,246,726

Plant and equipment, net


18,615,835


20,033,880

Biological assets, net


1,476,722


1,821,780

Intangible assets, net


2,181,139


2,324,787






Total Assets

$

92,651,984

$

94,060,430






LIABILITIES AND STOCKHOLDERS' EQUITY





Current Liabilities:





Short-term bank loans

$

2,115,123

$

2,142,573

Accounts payable and accrued liabilities


17,762


3,956

Due to related party


67,525


-

Other payables


1,337,906


1,370,305

Total Liabilities


3,538,316


3,516,834






Stockholders' Equity:





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





shares authorized, 7,983,745 shares issued and
outstanding on June 30, 2018 and December 31,
2017, respectively)


31,934


31,934

Additional paid in capital


61,485,162


61,395,579

Statutory surplus reserves


2,416,647


2,416,647

Retained earnings


27,583,802


27,944,383

Accumulated other comprehensive loss


(2,403,877)


(1,244,947)

Total Stockholders' Equity


89,113,668


90,543,596

 Total Liabilities and Stockholders' Equity

$

92,651,984

$

94,060,430

 

 

RENMIN TIANLI GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(AMOUNTS EXPRESSED IN US DOLLARS)

(UNAUDITED)




For the Three Months Ended June 30,


For the Six Months Ended June 30,



2018


2017


2018


2017

Revenue

$

6,178,554

$

6,222,160

$

13,408,085

$

12,903,151

Cost of goods sold


5,990,615


5,387,139


12,050,218


11,130,023

Gross profit


187,939


835,021


1,357,867


1,773,128










General and administrative
expenses


545,471


701,029


1,595,555


1,532,989

Selling expenses


79,085


78,580


159,958


156,328

Operating expenses


624,556


779,609


1,755,513


1,689,317










Income (loss) from operations


(436,617)


55,412


(397,646)


83,811










Other income:









Interest income


17,421


7,845


34,866


11,669

Other income


1,098


1,165


2,199


2,036

Total other income


18,519


9,010


37,065


13,705










Income (loss) before income
taxes


(418,098)


64,422


(360,581)


97,516

Income taxes


-


-


-


-

Net income (loss)


(418,098)


64,422


(360,581)


97,516










Earnings per share – Basic and
Diluted

$

(0.05)

$

0.01

$

(0.05)

$

0.01

Weighted average shares
outstanding – Basic and
Diluted


7,983,745


7,983,745


7,983,745


7,987,870










Comprehensive income (loss):









Net income (loss)

$

(418,098)

$

64,422

$

(360,581)

$

97,516

Unrealized foreign currency
translation adjustment


(4,816,499)


1,423,687


(1,158,930)


2,080,452

Comprehensive income (loss)

$

(5,234,597)

$

1,488,109

$

(1,519,511)

$

2,177,968

 

 

RENMIN TIANLI GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(AMOUNTS EXPRESSED IN US DOLLARS)

(UNAUDITED)




For the Six Months Ended June 30,



2018


2017

CASH FLOWS FROM OPERATING ACTIVITIES





Net income (loss)

$

(360,581)

$

97,516

Adjustments to reconcile net income (loss) to net cash
provided by operating activities:





Depreciation and amortization


1,509,781


1,418,330

Amortization of prepaid expenses


30,398


94,422

Amortization of long-term prepaid expenses


55,433


51,606

Loss from disposal of biological assets


20,735


67,945

Stock-based compensation


89,583


4,015

Changes in operating assets and liabilities:





Accounts receivable


12,781


(9,194)

Inventories


(408,517)


892,224

Prepaid expenses


(82,543)


(19,756)

Other receivables


-


3,200

Long-term prepaid expense


-


(78,683)

Accounts payable and accrued liabilities


14,407


14,212

Other payables


121,803


105,441

Net cash provided by operating activities


1,003,280


2,641,278






CASH FLOWS FROM INVESTING ACTIVITIES





Purchase of plant and equipment


(1,649)


-

Net cash used in investing activities


(1,649)


-






CASH FLOWS FROM FINANCING ACTIVITIES




Due to (from) related party


67,525


-

     Proceeds from short-term loans


-


2,036,317

Repayment of short-term loans


-


(2,618,122)

Net cash provided by (used in) financing
activities


67,525


(581,805)






EFFECT OF EXCHANGE RATE CHANGES ON
CASH


(844,071)


1,373,600

NET INCREASE IN CASH


255,085


3,433,073

CASH AND CASH EQUIVALENTS, BEGINNING
OF PERIOD


62,636,484


54,458,026

CASH AND CASH EQUIVALENTS, END OF
PERIOD

$

62,861,569

$

57,891,099











SUPPLEMENTAL DISCLOSURES:





Cash paid during the period for:





Interest expense paid

$

63,499

$

72,817

Income tax paid

$

-

$

-






NON-CASH TRANSACTIONS OF INVESTING
AND FINANCING ACTIVITIES
:





Inventories received from prior year prepayments

$

-

$

751,068

Inventories transferred to biological assets

$

11,880

$

421,933

Cancelation of shares related to employees'
compensation

$

-

$

18







 

 

 

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SOURCE Renmin Tianli Group, Inc.

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