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 ) recently announced its first quarter unaudited results for the period ended March 31, 2012.
Results of Operations
Three months ended March 31, 2012 compared to Three months ended March 31, 2011.
Revenue : We generated revenue of $1,080,966 for the three months ended March 31, 2012, an increase of $56,289 or 5.5%, compared to $1,024,677 for the three months ended March 31, 2011. The increase in revenue is primarily attributable to products structure change and increased demand from customers for crop production and fertilizer.
Gross Profit : We generated a gross profit of $328,624 for the three months ended March 31, 2012, a decrease of $216,836 or 39.8%, compared to $545,460 for the three months ended March 31, 2011. Gross margin (gross profit as a percentage of revenue), was 30.4% for the three months ended March 31, 2012, compared to 53.2% for the three months ended March 31, 2011. The decrease in the gross margin percentage was primarily attributable to increase in the price of the raw materials needed for our products as well as an increase in our labour costs.
Selling Expenses : Aggregated selling expenses accounted for $501,628 of our operating expenses for the three months ended March 31, 2012, a decrease of $182,269 or 26.7%, compared to $683,897 for the three months ended March 31, 2011. The decrease in our aggregated selling expense is primarily attributable to a decrease in advertising expenses in China of approximately $200,000 during the three months ended March 31, 2012 compared to the three months ended March 31, 2011.
General and Administrative Expenses : General and administrative expenses accounted for $818,609 of our operating expenses for the three months ended March 31, 2012, an increase of $301,999 or 58.5%, compared to $516,610 for the three months ended March 31, 2011. The increase is principally due to:
i. an increase in our provision for bad debt expenses of approximately $150,000 (due to the Company's strengthening its control policy over credits extended to customers) during the three months ended March 31, 2012 compared to the three months ended March 31, 2011;
ii. an increase in lease expense of approximately $37,000 for the three months ended March 31, 2012 compared to March 31, 2011.
Non Operating Income and Expenses : We had total non-operating expenses of $8,453 for the three months ended March 31, 2012 a change of $5,235 compared to $13,688 for the three months ended March 31, 2011. The decrease is principally due to:
i. a decrease in interest income of approximately $29,000 (due to fully repaid of note receivable in January 2012) during the three months ended March 31, 2012 compared to the three months ended March 31, 2011;
ii. a decrease in interest expense of approximately $24,000 (due to fully settlement of bank loan in January 2012) during the three months ended March 31, 2012 compared to the three months ended March 31, 2011.
Liquidity and Capital Resources
We are primarily a parent holding company for the operations carried out by our operating subsidiary, Yang Ling, which carries out its activities in the People's Republic of China. Because of our holding company structure, our ability to meet our cash requirements apart from our financing activities, including payment of dividends on our common stock, if any, substantially depends upon the receipt of dividends from our subsidiaries, particularly Yang Ling.
As of March 31, 2012, we had $382,022 of cash compared to $935,375 as of December 31, 2011.
Cash Flows
Operating : We used $472,517 of cash for operating activities for the three months ended March 31, 2012 compared to $1,952,514 of cash used in operating activities for the three months ended March 31, 2011. The cash used in operating consisted of a net loss of $983,160 offset by non cash expenses of depreciation and amortization of $425,281 and bad debt expense of $143,803. As a result of collection of accounts receivable the company received $ 1,938,738 in cash. In preparation for greater sales, we increased inventory by $928,359. Deferred revenues and were paid down resulting in a decrease in cash of $190,390.
Investing : Our investing activities provided $1,339,008 of cash for the three months ended March 31, 2012, representing the addition of property and equipment of $8,242 and proceeds from note receivable of $1,347,250, compared to cash used in investing activities of $525 for the three months ended March 31, 2011 representing the addition of property and equipment.
Financing . Our financing activities used $1,426,500 of cash as a result of the repayment of a note payable for the three months ended March 31, 2012 compared to $0 provided by financing activities for the three months ended March 31, 2011.
Off-Balance Sheet Arrangements
We currently do not have any material off-balance sheet arrangements except for the remaining pre-payments under the land-lease arrangement described above.
About Bodisen Biotech, Inc.
Bodisen Biotech, Inc. is a 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.
Safe Harbor 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
(Nominated Adviser)
Russell Cook / Carl Holmes 020 7149 6000
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS) FOR THE THREE MONTHS ENDED MARCH 31, 2012 AND 2011
|
|
Three Months Ended March 31, |
||
|
|
2012 |
|
2011 |
|
|
|
|
(unaudited) |
|
|
|
|
|
Revenue |
$ |
1,080,966 |
$ |
1,024,677 |
|
|
|
|
|
Cost of Revenue |
|
752,342 |
|
479,217 |
|
|
|
|
|
Gross profit |
|
328,624 |
|
545,460 |
|
|
|
|
|
Operating expenses |
|
501,628 |
|
|
Selling expenses |
|
818,609 |
|
683,897 |
General and administrative expenses |
|
1,320,237 |
|
516,610 |
Total operating expenses |
|
|
|
1,200,507 |
|
|
(991,613 |
|
|
Loss from operations |
|
|
|
(655,047) |
|
|
|
|
|
Non-operating income/(expense): |
|
|
|
|
Other income/(expense) |
|
(612) |
|
(229) |
Interest income |
|
20,376 |
|
48,067 |
Interest expense |
|
(11,311) |
|
(34,150) |
Total non-operating income |
|
8,453 |
|
13,688 |
|
|
|
|
|
Net loss |
|
(983,160) |
|
(641,359) |
|
|
|
|
|
Other comprehensive income (loss) |
|
|
|
|
Foreign currency translation gain (loss) |
|
210,955 |
|
222,439 |
Unrealized gain (loss) on marketable equity security |
|
2,392,029 |
|
(4,743,687) |
Total other comprehensive income (loss) |
|
2,602,984 |
|
(4,521,248) |
Comprehensive income/(loss) |
$ |
1,619,824 |
$ |
(5,162,607) |
|
|
|
|
|
Weighted average shares outstanding |
|
|
|
|
Basic |
|
21,510,250 |
|
21,510,250 |
Diluted |
|
21,510,250 |
|
21,510,250 |
|
|
|
|
|
Earnings per share: |
|
|
|
|
Basic |
$ |
(0.05) |
$ |
(0.03) |
Diluted |
$ |
(0.05) |
$ |
(0.03) |
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2012 AND DECEMBER 31, 2011
|
|
March 31, |
|
December 31, |
|
|
2012 |
|
2011 |
|
|
(unaudited) |
|
(audited) |
ASSETS |
|
|
|
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
Cash |
$ |
382,022 |
$ |
935,375 |
Accounts receivable and other receivable, net of allowance for doubtful accounts of $303,013 and $158,384 |
|
1,785,047 |
|
3,840,546 |
Other receivables |
|
4,178 |
|
19,215 |
Note receivable |
|
79,150 |
|
1,415,700 |
Inventory |
|
3,090,113 |
|
2,149,262 |
Advances to suppliers |
|
695,956 |
|
498,960 |
Prepaid expense and other current assets |
|
653,441 |
|
6,944 |
|
|
|
|
|
Total current assets |
|
6,689,907 |
|
8,866,002 |
|
|
|
|
|
PROPERTY AND EQUIPMENT, net |
|
21,754,616 |
|
22,003,784 |
MARKETABLE SECURITY, AVAILABLE-FOR-SALE |
|
3,603,183 |
|
1,211,154 |
INTANGIBLE ASSETS, net |
|
4,856,109 |
|
4,852,720 |
|
|
|
|
|
TOTAL ASSETS |
$ |
36,903,815 |
$ |
36,933,660 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
Accounts payable |
$ |
683,589 |
$ |
702,253 |
Accrued expenses |
|
52,744 |
|
81,437 |
Deferred revenue |
|
369,837 |
|
556,449 |
Bank loan |
|
- |
|
1,415,700 |
|
|
|
|
|
Total current liabilities |
|
1,106,170 |
|
2,755,839 |
|
|
|
|
|
Long-term bank loan |
|
- |
|
- |
|
|
|
|
|
TOTAL LIABILITIES |
|
1,106,170 |
|
2,755,839 |
|
|
|
|
|
STOCKHOLDERS' EQUITY: |
|
|
|
|
Preferred stock, $0.0001 per share; authorized 5,000,000 shares; nil issued and outstanding |
|
- |
|
- |
Common stock, $0.0001 per share; 30,000,000 shares authorized 21,510,250 and 21,510,250 shares issued and outstanding |
|
2,151 |
|
2,151 |
Additional paid-in capital |
|
35,345,542 |
|
35,345,542 |
Accumulated other comprehensive income |
|
11,479,028 |
|
8,876,044 |
Statutory reserve |
|
4,314,488 |
|
4,314,488 |
Retained Earnings |
|
(15,343,564) |
|
(14,360,404) |
Total stockholders' equity |
|
35,797,645 |
|
34,177,821 |
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
36,903,815 |
$ |
36,933,660 |
|
|
|
|
|
|
|
|
|
|