EX-99.1 2 ex99x1.htm EXHIBIT 99.1 ex99x1.htm
Exhibit 99.1
 
 
Rodobo International, Inc. Reports Fourth Quarter and
Full Year 2010 Results
 
 
Fourth Quarter revenues surged 172.6% year-over-year to a record $25.3 million
 
Fourth Quarter net income climbed 112.4% year-over-year to $3.6 million
 
HARBIN, China, December 21, 2010 /PRNewswire-Asia-FirstCall/ -- Rodobo International, Inc. (the "Company" or "Rodobo") (OTC Bulletin Board: RDBO.OB), a fast growing dairy company in China, reported financial results for the fourth quarter and full year ended September 30, 2010.
 
Fourth Quarter 2010 Highlights:
 
l  
Revenue was $25.3 million, up 172.6% from $9.3 million in 4Q09, outperformed 4Q10 guidance range of $20 - $24 million
l  
Gross profit was $9.4 million, up 87.5% from $5.0 million in 4Q09
l  
Net income was $3.6 million, up 112.4% from $1.7 million in 4Q09, outperformed 4Q10 guidance range of  $3.0 - $3.2 million
l  
Earnings per diluted share was $0.13, up from $0.10 in 4Q09

Full Year 2010 Highlights:
 
l  
Revenue was $69.8 million, up 101.2% from $34.7 million in 2009
l  
Gross profit was $28.0 million, up 59.0% from $ 17.6 million in 2009
l  
Net income was $12.4 million, up 82.5% from $6.8  million in 2009
l  
Earnings per diluted share was up to $0.53 from $0.42 in 2009

First Quarter 2011 Guidance:

Management feels confident to give its guidance for the first quarter of 2011 for revenue to be in the range of $24 - $26 million and net income to be in the range of $3.2 - $3.5 million.

“Rodobo closed its fiscal year 2010 with strong fourth quarter results and it is our fourth consecutive top line growth quarter. Our strong revenue and net income growths demonstrated the strong market demand for Rodobo’s high quality, fresh and nutritious milk powder products, the effectiveness of our strategy of expanding our production capacity, and our ability in marketing execution” stated Mr. Yanbin Wang, the Chairman and Chief Executive Officer of Rodobo. “Overall, 2010 was an extraordinary and successful year for Rodobo. The acquisition of the Beixue Group is a key groundwork of our growth strategy. As we move into 2011, we will continue to consolidate our acquisition, realign our product lines and improve our capacity utilization as we continue to expand our distribution network and further penetrate into our existing market in both formulated dairy and raw milk powder products.”
 

 
 
 
 
Fourth Quarter 2010 Financial Results

Net sales for the fourth quarter of 2010 were $25.3 million, an increase of approximately $16.0 million or 172.6%, compared to net sales for fourth quarter of 2009. This increase was primarily derived from the contribution from the acquisition of Hulunbeier Hailaer Beixue, one of the three companies comprising the Beixue Group that were acquired by the Company on February 5, 2010. We also increased the selling price of whole milk powder products produced by Hulunbeier Hailaer Beixue after the acquisition. The revenue growth was also attributed to the sales of our “Peer” infant formula product series launched in July 2009. The “Peer” series is a high-end product line with higher selling price. During the fourth quarter, we continued our efforts to develop distribution networks and expand the market areas in the 9 provinces in which we currently sell products.

During the fourth quarter of 2010, sales generated from baby/infant formula accounted for 40.7% of total sales, sales generated from middle-aged and elderly formula accounted for 13.5% of our total sales, and sales generated from whole milk powder formula accounted for 45.8% of total sales.

Our gross profit for the fourth quarter of 2010 was $9.4 million, an increase of approximately $4.4 million or 87.5%, compared to the gross profit for the fourth quarter of 2009. The overall gross profit margin for the fourth quarter of 2010 decreased to 37.0% from 53.8% for the fourth quarter of 2009.

Our overall gross profit margin was diluted due to the acquisition of lower-margin business. The newly acquired, Hulunbeier Hailaer Beixue, has a gross margin of 7.4% for the fourth quarter of 2010. Excluding the margin dilution impact of the acquisition, gross profit margin actually improved to 64.0% for the fourth quarter 2010 from 53.8% for the fourth quarter of 2009, which was primarily driven by the high-margin new baby/infant formula “Peer”, which has a gross margin of 70.8% and accounted for approximately 52.6% of total formulated milk powder product sales (excluding sales from Hulunbeier Hailaer Beixue) in the fourth quarter of 2010.

Operating expenses for the fourth quarter of 2010 were $6.3 million, an increase of approximately $2.9 million, or 85.6%, compared to the fourth quarter of 2009. Operating expenses as a percentage of net sales decreased to 24.8% in the fourth quarter of 2010 from 36.4% in the fourth quarter of 2009. The decrease of the operating expenses as a percentage of net sales was primarily due to a decrease in operating expenses, especially fewer distribution expenses expended by Hulunbei Hailaer Beixue as its whole milk powder products are sold directly to end users’ processing plants.
 
 
 
 
 
Distribution expenses for the fourth quarter of 2010 were $5.8 million, an increase of approximately $2.7 million or 90.9%, compared to $3.1 million for the fourth quarter of 2009. The increase was mainly due to sales growth and market expansion. The increase was also attributed by $0.4 million amortization of customer list that we acquired in connection with the acquisitions of the Beixue Group made on February 5, 2010.
 
General and administrative expenses for the fourth quarter of 2010 were $0.4 million, an increase of $0.1 million from $0.3 million for the fourth quarter of 2009.
 
Net income for the fourth quarter of 2010 was $3.6 million, an increase of $1.9 million or 112.4%, compared to $1.7 million for the fourth quarter of 2009. Earnings per diluted share were $0.13 for the fourth quarter of 2010, compared with $0.10 per diluted share for the fourth quarter of 2009.

Full Year 2010 Financial Results

Net sales for the full year 2010 were $69.8 million, an increase of approximately $35.1 million or 101.2%, from $34.7 million in 2009. Gross profit increased was $28.0 million, an increase of 59.0% from $17.6 million in the comparable period in 2009. Gross margin was 40.1% in 2010 compared to 50.7% in the comparable period in 2009. Income from operation was $10.0 million, an increase of 56.8% from $6.4 million in the same period a year ago. Net income for 2010 was $12.4 million or $0.53 per fully diluted share, up 82.5% from $6.8 million, or $0.42 per fully diluted share, in the comparable period in 2009.

Financial Condition

As of September 30, 2010, Rodobo had $5.2 million in cash and cash equivalents, $5.5 million in current liabilities and no long-term debt. Shareholders’ equity was $61.0 million as of September 30, 2010, up from $21.3 million as of September 30, 2009. Net cash from operating activities during 2010 was $12.8 million, compared with $3.6 million in 2009.

Conference Call Information

Management will conduct a conference call at 8:00 A.M. Eastern Time, on Tuesday, December 21, 2010. To participate in the live conference call, please dial the following number five or ten minutes prior to the scheduled conference call time: (866) 393-8606. International callers should dial +1-(706) 643-9902. When prompted by the operator, mention Conference ID number 33141799. If you are unable to participate in the call at this time, a replay will be available on Tuesday, December 21, 2010 at 11:00 a.m. Eastern Time, through Tuesday, January 4, 2011. To access the replay dial (800) 642-1687 or (706) 645-9291, and enter the passcode 33141799. Additionally, a live webcast will be available at http://intercallus.stream57.com/Rodobo_122110
 
 
 
 
 
About Rodobo International, Inc.
 
Rodobo International, Inc. is a producer and distributor of powdered milk formula products in the People’s Republic of China (“PRC” or “China”). The Company’s target consumers include infants, children, the middle-aged and the elderly in China. The Company’s products for infants and children are currently sold under the brand names of “Rodobo” and “Peer”, and its products for middle-aged and elderly consumers are currently sold under the brand name of “Healif”.
 
Safe Harbor Statement
 
This press release and the statements of representatives of Rodobo International, Inc., and its consolidated subsidiaries (collectively, the "Company") related thereto contain, or may contain, among other things, "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact included herein are "forward-looking statements," including statements regarding: the impact of the recent acquisitions on the business and operations of the Company; the ability of the Company to achieve its commercial objectives including increased growth, revenues, earnings, and production capacity; the business strategy, plans and objectives of the Company; and any other statements of non-historical information. These forward-looking statements are subject to significant known and unknown risks and uncertainties and are often identified by the use of forward-looking terminology such as "projects," "may," "could," "would," "should," "believes," "expects," "anticipates," "estimates," "intends," "plans" or similar expressions. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the periodic reports that are filed with the Securities and Exchange Commission and available on its website (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. The Company undertakes no duty to update these forward-looking statements except as required by law.
 
For additional information, please contact:
 
Xiuzhen Qiao
 
Rodobo International Inc
 
Tel:    +86-10-6216-6032
 
Email: qiaozhen1973@163.com
 
Stephen Tong
Rodobo International, Inc.
Tel:   +86-10-6216-6396
Email: tongzijian@gmail.com

 
 
 
 
RODOBO INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 
   
September 30
    
September 30
  
   
2010
    
2009
  
             
ASSETS
            
             
Current assets:
            
Cash and cash equivalents
  
$
5,163,789
    
$
1,640,259
  
Accounts receivable, net
    
8,085,248
      
2,015,044
  
Inventories
    
1,523,422
      
1,576,723
  
Prepaid expenses
    
114,215
      
24,642
  
Advances to suppliers
    
969,369
      
-
  
                 
Total current assets
    
15,856,043
      
5,256,668
  
                 
Property, plant and equipment:
                
Fixed assets, net of accumulated depreciation
    
19,575,890
      
738,537
  
Construction in progress
    
22,701,594
      
9,888,183
  
                 
     
42,277,484
      
10,626,720
  
                 
Biological assets, net
    
3,295,508
      
2,499,625
  
                 
Other assets:
                
Deposits on biological assets
    
-
      
988,818
  
Deposits on land
    
74,726
      
73,246
  
Intangible assets, net
    
10,440,131
      
4,526,117
  
                 
Total other assets
    
10,514,857
      
5,588,181
  
                 
Total Assets
  
$
71,943,892
    
$
23,971,194
  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
                
                 
Current liabilities:
                
Short-term loans
  
$
1,218,025
    
$
-
  
Accounts payable
    
1,457,624
      
1,246,818
  
Other payable
    
723,015
      
50,293
  
Accrued expenses
    
588,011
      
175,456
  
Due to related parties
    
1,491,616
      
1,185,062
  
                 
Total current liabilities
    
5,478,291
      
2,657,629
  
                 
Warrant liability
    
1,414,316
      
-
  
                 
Series A preferred stock, $0.0001 par value, 30,000,000
          
shares authorized, 2,000,000 shares issued and outstanding as of September  30, 2010 and 2009
    
4,100,000
      
-
  
                 
Stockholders' equity
                
Common stock, $0.0001 par value, 200,000,000 shares authorized,
                
28,003,726 and 16,216,717 shares  issued and outstanding
                
as of September 30, 2010 and September 30, 2009, respectively
    
2,800
      
1,622
  
Additional paid in capital
    
30,344,724
      
4,355,085
  
Additional paid in capital - warrants
    
971,788
      
971,788
  
Subscription receivable
    
(50,000
)
    
(50,000
)
Retained earnings
    
27,588,952
      
15,189,860
  
Accumulated other comprehensive income
    
2,093,022
      
845,210
  
                 
Total stockholders' equity
    
60,951,286
      
21,313,565
  
                 
Total Liabilities and Stockholders' Equity
  
$
71,943,892
    
$
23,971,194
  
  
 
 
 
 
 
RODOBO INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
 
     
Three Months Ended September 30
      
Years Ended September 30,
  
      2010       2009       2010       2009   
Net sales
   $ 25,255,868     $ 9,265,573     $ 69,797,739     $ 34,690,987  
Cost of goods sold
     15,902,672       4,276,695       41,816,236       17,089,006  
                                 
Gross profit
     9,353,197       4,988,878       27,981,503       17,601,981  
                                 
Operating expenses:
                                
Distribution expenses
     5,829,157       3,053,985       14,697,951       9,790,602  
General and administrative expenses
     433,655       320,835       3,316,680       1,454,994  
                                 
Total operating expenses
     6,262,812       3,374,820       18,014,631       11,245,596  
                                 
Operating income
     3,090,385       1,614,059       9,966,872       6,356,385  
                                 
Subsidy income
     -       241       273,897       438,971  
Gain on bargain purchase
     -       -       1,677,020       -  
Interest expenses
     (30,818 )     -       (102,257 )     -  
Change in fair value of warrants
     403,036       -       427,795       -  
Other income (expenses)
     106,970       66,492       155,766       236  
                                 
Income before income taxes
     3,569,573       1,680,792       12,399,092       6,795,593  
                                 
Provision for income taxes
     -       -       -       -  
                                 
Net income
   $ 3,569,573     $ 1,680,792     $ 12,399,092     $ 6,795,593  
                                 
Other comprehensive income:
                                
Foreign currency translation adjustment
     875,190       14,969       1,247,812       (42,274 )
                                 
Comprehensive income
   $ 4,444,763     $ 1,695,761     $ 13,646,904     $ 6,753,319  
                                 
Earnings per share
                                
Basic
   $ 0.13     $ 0.11     $ 0.55     $ 1.01  
Diluted
   $ 0.13     $ 0.10     $ 0.53     $ 0.42  
                                 
Weighted average shares outstanding
                                
Basic
     27,183,436       15,120,413       22,365,017       6,708,121  
Diluted
     28,453,824       16,466,144       23,349,810       16,026,645  

 
 
 
 
 
RODOBO INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
             
   
Years Ended September 30,
  
   
2010
    
2009
  
             
Cash flows from operating activities
            
Net income
  
$
12,399,092
    
$
6,795,593
  
Adjustments to reconcile net income to net cash provided by operating activities
          
Depreciation and amortization
    
2,904,066
      
430,620
  
Allowance for doubtful accounts
    
-
      
(66,488
)
Stock-based compensation
    
1,330,543
      
281,667
  
Gain on bargain purchase
    
(1,677,020
)
    
-
  
Change in fair value of warrants
    
(427,795
)
    
-
  
Changes in assets and liabilities:
                
(Increase) decrease in -
                
Accounts receivable, advance to employees and other receivables
    
(1,453,985
)
    
(470,664
)
Inventories
    
1,886,687
      
(589,470
)
Prepaid expenses
    
(39,020
)
    
7,321
  
Advances to suppliers
    
2,406,993
      
-
  
Increase (decrease) in -
                
Accounts payable and other payable
    
(1,722,953
)
    
(879,211
)
Accrued expenses
    
(243,625
)
    
(743,651
)
Advance from customers
    
(2,604,942
)
    
(1,154,657
)
                 
Net cash provided by operating activities
    
12,758,041
      
3,611,060
  
                 
Cash flows from investing activities
                
Purchase of fixed assets
    
(202,004
)
    
(30,360
)
Cash used for construction in progress
    
(13,686,533
)
    
(2,633,828)
  
Purchase of mature biological assets
    
-
      
(2,562,291
)
Purchase of intangible assets
    
(588,794
)
    
(585,295
)
Cash acquired in acquisitions, net of cash paid
    
1,059,896
      
-
  
Collection of loan to others
    
1,565,211
      
-
  
Collection of loan to shareholders
    
1,750,343
      
-
  
Deposits on mature biological assets
    
-
      
(987,686
)
       
 
      
 
                 
Net cash used in investing activities
    
(10,101,881
)
    
(6,799,459
)
                 
Cash flows from financing activities
                
Proceeds from issuance of common stock and warrants, net of issuance costs
    
2,652,386
      
-
  
Proceeds from subscription receivable
    
-
      
3,000,000
  
Proceeds from short-term loans
    
551,126
      
-
  
Repayment of short-term loans
    
(484,991
)
    
-
  
Proceeds from related party loans
    
588,794
      
1,185,223
  
Repayment of related party loans
    
(2,529,111
)
    
(13,225
)
                 
Net cash provided by financing activities
    
778,204
      
4,171,998
  
                 
Effect of exchange rate changes on cash and cash equivalents
    
89,166
      
(2,370
)
                 
Net increase in cash and cash equivalents
    
3,523,530
      
981,229
  
                 
Cash and cash equivalents, beginning of period
    
1,640,259
      
659,030
  
                 
Cash and cash equivalents, end of period
  
$
5,163,789
    
$
1,640,259
  
                 
Supplemental disclosures of cash flow information:
                
                 
Interest paid
  
$
7,016
    
$
4,882
  
Income taxes paid
  
$
-
    
$
-
  
                 
Non-cash investing and financing activities:
                
Common stock issued for stock-based compensation for services
  
$
225,876
    
$
3,315,000
  
Transfer deposit on land to intangible assets
  
$
-
    
$
3,486,955
  
Common stock issued for business acquisition
  
$
23,850,000
    
$
-
  
Preferred stock issued for business acquisition
  
$
4,100,000
    
$
-