Qingdao, China and Rockville, Maryland, Nov. 14 - Synutra International, Inc. (Nasdaq: SYUT; "Synutra", "Company"), one of China's leading manufacturers of dairy-based nutritional products for infants, children and adults, today reported fiscal results for the second quarter ended September 30, 2007. The Company's strong operational and financial performance is detailed in its Form 10-Q, which has been filed with the US Securities and Exchange Commission.
Synutra International, Inc. Chairman and Chief Executive Officer Liang Zhang commented, "I am pleased to announce another strong quarter of performance for Synutra. Our results this quarter demonstrate our continued focus on profitable growth and successful execution of our business strategy. Revenue growth in the second quarter partially reflects the enhanced market demand due to the increase in the number of babies born in China's year of the Golden Pig. Also contributing to the Company's quarterly performance was the increased investment in our integrated marketing initiatives, such as TV-based advertising and promotional activities. The success of our marketing efforts was demonstrated by an
increase in brand recognition, new consumer trials and usage of our products, according to a study by CTR, a leading marketing research firm in China.
Chairman Zhang continued, "Building on our expanded production capacity, Synutra is implementing new production processes aimed at improving manufacturing efficiency and cost reduction. Our research and development team remain focused on improving the quality of our products and key nutritional components. We remain confident that the infant formula industry in China will continue to experience significant growth as purchasing power and consumer demand for branded products increases. Synutra is well- positioned to capture this growth through successful execution of our strategy: implementing our integrated marketing program to build brand awareness and reducing costs through improved manufacturing efficiencies."
Fiscal Second Quarter Ended September 30, 2007
Sales in the first quarter ended September 30, 2007 increased by $40.6 million, or 89.0%, to $86.2 million as compared to $45.6 million for the same three months in 2006. Gross profit was $46.6 million, or 54.1% of sales, for the three-month period. This increase was primarily a result of increased volume of products sold and increased average selling prices recorded during the period. Second quarter net income increased by $4.9 million, or 98.7%, to $9.8 million from the same three months in 2006. Earnings per share increased 80.0% to $0.18, compared to $0.10 earned in the fiscal second quarter of the prior fiscal year.
Fiscal Six Months Ended September 30, 2007
Sales in the first six months ended September 30, 2007 increased by $59.0 million, or 62.3%, to $153.7 million as compared to $94.7 million for the same six months in 2006. Gross profit was $83.7 million, or 54.5% of sales, for the first six months. Net income increased by $2.2 million, or 17.3%, to $15.1 million from a net income of $12.9 million for the first six months of 2006. Earnings per share increased 11.5% to $0.29, compared to $0.26 earned in the first six months of the prior fiscal year.
About Synutra International, Inc.
Synutra operates eight subsidiaries developing, producing, distributing and selling dairy-based nutritional products across the People's Republic of China. It offers its products for infants, children, adults and pregnant women and nursing mothers under the brand series of "Super," "U-Smart" and "U- Strong." The Group's extensive sales network covers 24 provinces, 264 cities and more than 1320 counties throughout China.