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Bodisen Biotech, Inc. reports Unaudited Third Quarter Financial Results

Review & Extracts of the Form10-Q as required by the Securities & Exchange Commission

Bodisen Biotech, Inc. (the ¡°Company¡±) (OTC Pink Sheets: BBCZ; London AIM: BODI; website: www.bodisen.com) today announced its third quarter results for the period ended September 30, 2007 which are extracted fro the Company¡¯s Form 10-Q filed with the SEC.

Results of Operations

Revenue.We generated revenues of $10,494,694 for the nine months ended September 30, 2007, a decrease of $29,136,072 or 73.5%, compared to $39,630,766 for the nine months ended September 30, 2006.The significant decrease in revenue was due to the decline in our customer base, which decreased following our delisting from the Amex and, to a lesser extent, the abnormally cold Spring time weather of Shaanxi province as well as a storm and drought in the third quarter of 2007, all of which affected crop plantings and decreased the use of fertilizer.

Gross Profit.We achieved a gross profit of $4,618,129 for the nine months ended September 30, 2007, a decrease of $10,903,912 or 70.2%, compared to $15,522,041 for the nine months ended September 30, 2006.The significant decrease in gross profit was due to the significant decrease in revenue as result of decreased sales, and, to a lesser extent, increased commodities prices which increased our costs of revenues.Gross margin (gross profit as a percentage of revenues), increased, from 39.2% for the nine months ended September 30, 2006, to 44.0% for the nine months ended September 30, 2007 primarily due to changes in overall product mix comprising sales.

Operating expenses.We incurred operating expenses of $6,699,732 for the nine months ended September 30, 2007, an increase of $2,990,489 or 80.6% compared to $3,709,243 for the nine months ended September 30, 2006.The significant increase in our operating expenses is related to legal fees associated with litigation and other matters in connection with the Amex delisting and a loss of approximately $1,700,000 due to storm damage in August 2007.

Aggregated selling expenses accounted for $1,276,208 of our operating expenses for the nine months ended September 30, 2007, a decrease of $427,400 or 25.1% compared to $1,703,608 for the nine months ended September 30, 2006. The decrease in our aggregated selling expenses is primarily due the reduction in transportation costs, which continued to be negatively affected by the continued increases in petroleum prices.The reduction in our transportation costs was partially offset by increased labor costs.General and administrative expenses accounted for the remainder of our operating expenses of $5,423,524 for the nine months ended September 30, 2007, which increased $3,417,889 or 170.4% compared to $2,005,635 for the nine months ended September 30, 2006.The significant increase in our general and administrative expenses is primarily related to legal fees associated with litigation and other matters in connection with the Amex delisting and a loss of approximately $1,700,000 due to storm damage in August 2007.

Non Operating Income and Expenses.We had total non-operating income of $258,820 for the nine months ended September 30, 2007 compared to total non-operating expense of $60,432 for the nine months ended September 30, 2006.We had other expense of $143 for the nine months ended September 30, 2007 compared to other income of $500,604 for nine months ended September 30,2006.In 2006, other income was due to the effects of a foreign currency transaction gain, which we did not have in 2007. Total non-operating income includes interest income of $262,870 for the nine months ended September 30, 2007 compared to only $118,129 of interest income for the nine months ended September 30, 2006.The increasein interest income for the nine months ended September 30, 2007 is due to the full year effects of the increased cash balance that resulted from our sale of stock in the first quarter of 2006.Total non-operating income for the nine months ended September 30, 2007 also includes interest expense of only $3,907 compared to $679,165 for the nine months ended September 30, 2006.The majority of the interest expense in the nine months ended September 30, 2006 relates to the $5 million note issued December 8, 2005, which was repaid during March 2006.

Net Income (Loss).For the foregoing reasons, we had a net loss of $1,822,783 for the nine months ended September 30, 2007, a decrease of $13,575,149 or 115.5% compared to net income of $11,752,366 for the nine months ended September 30, 2006.We had earnings (loss) per share of $(0.10) for the nine months ended September 30, 2007 compared to earnings per share of $0.66 for the nine months ended September 30, 2006.

About Bodisen Biotech, Inc.

Bodisen Biotech, Inc. is a leading manufacturer of liquid and organic compound fertilizers, pesticides, insecticides and agricultural raw material certified by the Petroleum Chemical Industry Administrative office of China (Chemical Petroleum Production Administrative Bureau), Shaanxi provincial government and Chinese government.The company is headquartered in Shaanxi province and is a Delaware corporation.The company files annual and periodic reports with the U.S. Securities and Exchange Commission, which are accessible at www.sec.gov.

SafeHarbor Statement

This press release may contain forward-looking statements within the meaning of the ¡°safe harbor¡± provisions of the Private Securities Litigation Reform Act of 1995.These statements are based on the current expectations or beliefs of Bodisen Biotech, Inc. management and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

Enquiries:

Charles Stanley Securities

Rick Thompson / Philip Davies / Freddy Crossley020 7149 6000

Bodisen Biotech, Inc.

Scott King001 219 939 3073

CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS) FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006

 

 

Three Months

Ended September 30,

 

Nine Months

Ended September 30,

 

 

2007

 

2006

 

2007

 

2006

 

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

Net Revenue

$

2,314,059

$

12,713,217

$

10,494,694

 

39,630,766

 

 

 

 

 

 

 

 

 

Cost of Revenue

 

1,207,774

 

7,839,351

 

5,876,565

 

24,108,725

 

 

 

 

 

 

 

 

 

Gross profit

 

1,106,285

 

4,873,866

 

4,618,129

 

15,522,041

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

Selling expenses

 

596,921

 

557,965

 

1,276,208

 

1,703,608

General and administrative expenses

 

2,879,530

 

1,154,673

 

5,423,524

 

2,005,635

Total operating expenses

 

3,476,451

 

1,712,638

 

6,699,732

 

3,709,243

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

(2,370,166)

 

3,161,228

 

(2,081,603)

 

11,812,798

 

 

 

 

 

 

 

 

 

Non-operating income (expense):

 

 

 

 

 

 

 

 

Other income (expense)

 

(639,729)

 

(31,771)

 

(143)

 

500,604

Interest income

 

83,418

 

60,835

 

262,870

 

118,129

Interest expense

 

(1,531)

 

(247)

 

(3,907)

 

(679,165)

 

 

 

 

 

 

 

 

 

Total non-operating income (expense)

 

(557,842)

 

28,817

 

258,820

 

(60,432)

 

 

 

 

 

 

 

 

 

Net income (loss)

 

(2,928,008)

 

3,190,045

 

(1,822,783)

 

11,752,366

 

 

 

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

 

 

 

Foreign currency translation gain (loss)

 

(1,657,890)

 

662,012

 

-

 

780,115

Unrealized gain (loss) on marketable equity security

 

(2,538,435)

 

165,102

 

-

 

(928,695)

 

 

 

 

 

 

 

 

 

Comprehensive Income (loss)

$

(7,124,333)

$

4,017,159

$

(1,822,783)

$

11,603,786

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding :

 

 

 

 

 

 

 

 

Basic

 

18,310,250

 

18,176,917

 

18,310,250

 

17,859,878

Diluted

 

18,310,250

 

18,303,299

 

18,310,250

 

18,002,639

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

Basic

$

(0.16)

$

0.18

$

(0.10)

$

0.66

Diluted

$

(0.16)

$

0.17

$

(0.10)

$

0.65

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2007 AND DECEMBER 31, 2006

 

 

 

 

 

 

 

September 30,

 

December 31,

 

 

2007

 

2006

 

 

(unaudited)

 

 

ASSETS

 

 

 

 

CURRENT ASSETS:

 

 

 

 

Cash & cash equivalents

$

962,534

$

11,824,327

Accounts receivable, net of allowance for

 

 

 

 

doubtful accounts of $901,621 and $659,653

 

24,729,956

 

18,875,368

Other receivable

 

2,130,282

 

888,230

Inventory

 

1,258,339

 

1,794,585

Advances to suppliers

 

8,853,953

 

12,662,139

Prepaid expense and other current assets

 

4,452,306

 

195,821

 

 

 

 

 

Total current assets

 

42,387,370

 

46,240,470

 

 

 

 

 

PROPERTY AND EQUIPMENT, net

 

5,249,471

 

5,195,283

 

 

 

 

 

CONSTRUCTION IN PROGRESS

 

7,481,447

 

3,669,807

 

 

 

 

 

MARKETABLE SECURITY

 

14,239,999

 

6,500,869

 

 

 

 

 

INTANGIBLE ASSETS, net

 

2,032,211

 

2,054,346

 

 

 

 

 

OTHER ASSETS

 

3,698,060

 

3,553,433

 

 

 

 

 

LOAN RECEIVABLE

 

2,297,236

 

1,982,410

 

 

 

 

 

TOTAL ASSETS

$

77,385,794

$

69,196,618

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

Accounts payable

$

989,106

$

1,022,352

Accrued expenses

 

136,217

 

347,948

 

 

 

 

 

Total current liabilities

 

1,125,323

 

1,370,300

 

 

 

 

 

STOCKHOLDERS' EQUITY:

 

 

 

 

Preferred stock, $0.0001 per share; authorized 5,000,000 shares;

 

 

 

 

nil issued and outstanding

 

 

 

 

Common stock, $0.0001 per share; authorized 30,000,000 shares;

 

 

 

 

issued and outstanding 18,310,250 and 18,310,250

 

1,831

 

1,831

Additional paid-in capital

 

15,688,846

 

33,860,062

Other comprehensive income

 

15,688,846

 

5,431,910

Statutory reserve

 

4,314,488

 

4,314,488

Retained earnings

 

22,395,244

 

24,218,027

Total stockholders' equity

 

58,089,255

 

67,826,318

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

59,214,578

$

69,196,618

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006

 

 

Nine Months Ended September 30,

 

 

2007

 

2006

 

 

(unaudited)

 

(unaudited)

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

Net income (loss)

$

-

$

11,752,366

Adjustments to reconcile net income (loss) to net cash

 

 

 

 

provided by (used in) operating activities:

 

 

 

 

Depreciation and amortization

 

354,753

 

335,842

Amortization of debt discounts

 

-

 

603,886

Exchange gain (loss)

 

-

 

(16,828)

Value of vested option issued to directors

 

-

 

7,523

Allowance for bad debts

 

210,095

 

-

(Increase) / decrease in assets:

 

 

 

 

Accounts receivable

 

(5,469,096)

 

(12,336,536)

Other receivable & Loan Receivable

 

(1,407,655)

 

(4,968,421)

Inventory

 

598,013

 

(246,935)

Advances to suppliers

 

4,243,485

 

(3,599,885)

Prepaid expense

 

(4,159,646)

 

-

Other assets

 

-

 

3,960

Increase / (decrease) in current liabilities:

 

 

 

 

Accounts payable

 

(57,313)

 

99,935

Other payable

 

-

 

3,374,315

Accrued expenses

 

(221,025)

 

51,735

 

 

 

 

 

Net cash provided by (used in) operating activities

 

(5,908,389)

 

(4,939,043)

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

Acquisition of property and equipment

 

(91,381)

 

(386,268)

Additions to construction in progress

 

(3,582,845)

 

(789,911)

Investments

 

-

 

(735,536)

Payments for other assets

 

(44,168)

 

-

 

 

 

 

 

Net cash used in investing activities

 

(3,718,394)

 

(1,911,715)

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

Payments on note payable

 

-

 

(5,000,000)

Proceeds from issuance of common stock

 

-

 

26,682,511

Payment of offering costs

 

-

 

(6,132,707)

Proceeds from the exercise of warrants

 

-

 

220,160

 

 

 

 

 

Net cash provided by financing activities

 

-

 

15,769,964

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

587,773

 

27,832

 

 

 

 

 

NET INCREASE /(DECREASE) IN CASH & CASH EQUIVALENTS

 

(9,039,010)

 

8,947,038

 

 

 

 

 

CASH & CASH EQUIVALENTS, BEGINNING OF PERIOD

 

11,824,327

 

6,276,897

 

 

 

 

 

CASH & CASH EQUIVALENTS, END OF PERIOD

$

2,785,317

$

15,223,935

 

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

 

 

 

 

Interest paid

$

-

$

112,500

Income taxes paid

$

-

$

-

 

 

 

 

 

Earnings Per Share

Earnings per share for nine months ended September 30, 2007 and 2006 were determined by dividing net income for the periods by the weighted average number of both basic and diluted shares of common stock and common stock equivalents outstanding.

The following is an analysis of the differences between basic and diluted earnings per common share in accordance with Statement of Financial Accounting Standards No. 128, ¡°Earnings Per Share¡±.

 

Three Months Ended September 30,

 

2007

 

2006

 

 

 

 

 

Per

 

 

 

 

 

Per

 

Income

 

Shares

 

Share

 

Income

 

Shares

 

Share

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$(2,928,008)

 

 

 

 

 

$ 3,190,045

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighed shares outstanding

 

 

18,310,250

 

 

 

 

 

18,176,917

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$(0.16)

 

 

 

 

 

$0.18

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$(2,928,008)

 

 

 

 

 

$ 3,190,045

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighed shares outstanding

 

 

18,310,250

 

 

 

 

 

18,176,917

 

 

Effect of dilutive securities

 

 

 

 

 

 

 

 

 

 

 

Options

 

 

-

 

 

 

 

 

75,544

 

 

Warrants

 

 

-

 

 

 

 

 

50,838

 

 

 

 

 

18,310,250

 

 

 

 

 

18,303,299

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$(0.16)

 

 

 

 

 

$0.17

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September30,

 

2007

 

2006

 

 

 

 

 

Per

 

 

 

 

 

Per

 

Income

 

Shares

 

Share

 

Income

 

Shares

 

Share

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$(1,822,783)

 

 

 

 

 

$ 11,752,366

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighed shares outstanding

 

 

18,310,250

 

 

 

 

 

17,859,878

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$(0.10)

 

 

 

 

 

$0.66

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$(1,822,783)

 

 

 

 

 

$ 11,752,366

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighed shares outstanding

 

 

18,310,250

 

 

 

 

 

17,859,878

 

 

Effect of dilutive securities

 

 

 

 

 

 

 

 

 

 

 

Options

 

 

-

 

 

 

 

 

82,476

 

 

Warrants

 

 

-

 

 

 

 

 

60,285

 

 

 

 

 

18,310,250

 

 

 

 

 

18,002,639

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$(0.10)

 

 

 

 

 

$0.65

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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