Beijing, Nov. 15 - American Dairy, Inc. (the "Company"), one of the leading producers and distributors of milk powder in China, today announced that it will delay the filing of its Form 10-Q for the third quarter ended September 30, 2007. The Company has filed a Form 12B-25 with the Securities and Exchange Commission (SEC), which provides the Company with five additional calendar days to file its Form 10-Q.
In conjunction with the filing, the Company is providing investors with the following preliminary financial results for the third quarter of 2007:
-- revenue of $41.0 million, an increase of 26% from $32.6 million in the third quarter of 2006;
-- gross profit of $24.6 million, up 42% from $17.3 million in the same period last year;
-- gross margin of approximately 60.0%, compared to 53.2% in the prior year's period;
-- and operating income of $7.6 million, an increase of 44% from $5.2 million in the third quarter of 2006.
-- Anticipates approximately $4.4 million of interest and finance costs, mostly non-cash interest expense.
-- Anticipates an approximate $1.8 million payment for liquidation damages pursuant to a registration rights agreement.
Mr. Leng You-Bin, Chief Executive Officer of American Dairy, stated "Our preliminary third quarter results validate our growth plan to drive sales of our highest margin products. Our newest premium infant formula line, Firmus, resonated well with consumers during the quarter and continued demand for our other high margin products, like the CPP and Nucleotide series, enhanced our revenue, gross profit and operating income performance. We also realized material cost savings in our cost of goods due to fewer promotional expenses compared to prior periods. Lastly, we are currently evaluating a new accounting firm and plan to engage a new auditor in the near future, as per the terms of our recent financing."
The Company reminds investors that in connection with the recent fundraising of $80.0 million, it will recognize quarterly non-cash interest expense. In the third quarter of 2007, American Dairy expects to recognize approximately $4.4 million of interest and finance costs, of which $4.2 million are recurring non-cash interest accruals expensed in Other Income (expense). The Company also recognized a one-time payment of approximately $1.8 million for liquidation damages paid pursuant to a Registration Rights Agreement entered into in October 2006.
The results for the fiscal quarter ended September 30, 2007 remain subject to further adjustment and actual results may differ from the foregoing estimates.
About American Dairy, Inc.:
American Dairy, Inc. conducts operations in the People's Republic of China ("China") through its wholly owned subsidiary, Feihe Dairy. Founded in 1962, Feihe Dairy is one of the leading producers and distributors of milk powder in China. Feihe Dairy is located in Kedong County, China, and has been in operation since 2001. American Dairy also has a milk powder processing plant, BaiQuan Feihe Dairy in Kedong County, and a milk powder processing plant in the city of QiQiHaEr, Heilongjiang Province.