TORONTO, ONTARIO — (Marketwire) — 11/14/12 — Hanfeng Evergreen Inc. (TSX: HF) (“Hanfeng” or the “Company”) today reported its financial results for the first quarter of fiscal 2013 ended September 30, 2012. All amounts are in Canadian dollars unless otherwise noted.
Operational Highlights:
China:
Indonesia:
Sales for the quarter ended September 30, 2012 increased to $42.3 million from $11.7 million for the same quarter last year. The quarter over quarter increase in sales is primarily due to the impact of the maintenance turnaround at the Company–s facilities in China during the first quarter of fiscal 2012.
Gross margin as a percentage of sales was higher for the quarter ended September 30, 2012 at 14.1 percent, as compared to 13.5 percent for the quarter ended September 30, 2011. Gross margins were positively impacted by higher margins from China operations and the Indonesian Joint-Venture. Gross profit increased to $6.0 million for the quarter ended September 30, 2012, as compared to $1.6 million for the quarter ended September 30, 2011 due to higher realized margins and the impact of the maintenance turnarounds in the comparative period last year.
General and Administrative (“G&A”) expenses decreased to $1.4 million for the quarter ended September 30, 2012 from $2.5 million for the quarter ended September 30, 2011, while selling and R&D expense increased by $387 thousand and $482 thousand respectively, due to higher sales and increased R&D activities in the current quarter.
EBITDA was increased to $3.8 million versus ($0.9) million in the first quarter of fiscal 2012 due to factors previously noted. The Company reported a net income of $1.4 million in the first quarter of fiscal 2013 compared to net loss of $2.0 million during the same quarter in fiscal 2012. As a result, income per share (“IPS”) was $0.02 for the first quarter of fiscal 2013, compared to negative IPS of $0.03 for the same quarter during fiscal 2012. Non-IFRS loss per share was $0.03 for the first quarter of fiscal 2012.
Liquidity and Capital Resources
Notes:
(1) Current ratio = Current Assets / Current Liabilities
The Company will also hold a conference call to discuss the financial results on Thursday November 15, 2012 at 10:00 a.m. Eastern Standard Time (EST). Mr. Niral Merchant, CFO and Mr. Loudon Owen, Non-Executive Chairman of the Board of Directors will host the call, and invite analysts and investors to participate in the conference call.
Hanfeng–s financial statements and MD&A have been filed on SEDAR and will be available at .
About Hanfeng Evergreen Inc.
Hanfeng is a leading producer and supplier of value-added fertilizer solutions in emerging markets. It is the largest producer of slow and controlled release fertilizer in two of world–s most significant agricultural markets: the People–s Republic of China (“China”) and the Republic of Indonesia. As the first company to introduce slow and controlled release fertilizers into China–s agriculture market, Hanfeng has established itself both as a market leader and innovator. A Canadian Company, Hanfeng is headquartered in Toronto, Ontario and its shares trade on the Toronto Stock Exchange under the ticker HF.
EBITDA: Earnings before interest, taxes, depreciation, and amortization (“EBITDA”) is a non-IFRS financial measure, which the Company believes is meaningful information for purposes of performance evaluation and it allows for comparisons of the Company–s performance to the industry as it eliminates the impact of financing decisions, capital structure and the cost basis of assets. Hanfeng calculates it by adding (1) net income, (2) interest expense reported on the income statements (or deducting interest income) (3) amortization expense reported as part of cost of goods sold on the income statements, (4) amortization expense reported as a line item on the income statements, (5) income tax expense reported on the income statements, (6) write-downs of intangible assets and property, plant and equipment write-down and (7) and by deducting foreign exchange gain (loss). EBITDA does not have a standard meaning prescribed under IFRS and is therefore unlikely to be comparable to similar measures presented by other companies.
This press release contains forward-looking statements based on current expectations. Forward looking statements include, without limitation, statements evaluating market and general economic conditions, and statements regarding growth strategy and future-oriented projected revenue, costs and expenditures. Actual results could differ materially from those projected and should not be relied upon as a prediction of future events. A variety of inherent risks, uncertainties and factors, many of which are beyond Hanfeng–s control, affect the operations, performance and results of Hanfeng and its business, and could cause actual results to differ materially from current expectations of estimated or anticipated events or results. Some of these risks, uncertainties and factors include the impact or unanticipated impact of: current, pending and proposed legislative or regulatory developments in the jurisdictions where Hanfeng operates, in particular in China and the Republic of Indonesia; changes in tax laws; political conditions and developments; intensifying competition from established competitors and new entrants in the fertilizer industries; technological change; currency value fluctuation and changes in foreign exchange restrictions; changes in Chinese government support or restrictions on foreign investment; general economic conditions worldwide, as well as in China and South East Asia; Hanfeng–s success in developing and introducing new products and services, constructing and operating new manufacturing facilities, expanding existing distribution channels, developing new distribution channels and realizing increased revenue from these channels. This list is not exhaustive of the factors that may affect any of Hanfeng–s forward-looking statements. Risks and uncertainties about Hanfeng–s business are more fully discussed in the Company–s disclosure materials, including its annual information form and MD&A, filed with the securities regulatory authorities in Canada. Hanfeng undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results or for any other reason. Readers are cautioned not to put undue reliance on forward-looking statements.
Contacts:
Hanfeng Evergreen Inc.
Niral V. Merchant
Chief Financial Officer
+1 (416) 368-8588
Kevin O–Connor
Investor Relations
+1 (416) 962-3300