SHENZHEN, China, Nov. 9, 2004 (PRIMEZONE) -- New Dragon Asia Corp. (AMEX:NWD) today reported record results for its third quarter ended September 25, 2004 -- reflecting increased market demand for its products, particularly flour.
Net income for the third quarter climbed 51.7 percent to $1.2 million, or $0.03 per diluted share, from $786,000, or $0.02 per share, a year earlier. Net sales for the quarter increased 20.7 percent to $9.9 million from $8.2 million a year earlier.
For the nine month-period, net income jumped more than four-fold to $2.1 million, or $0.05 per diluted share, from $514,000, or $0.01 per share, a year earlier. Net sales for the nine months climbed 27.8 percent to $25.8 million from $20.2 million in fiscal 2003.
"Results for the third quarter of 2004 reflect strength of our flour business and a recovery from SARS which impacted the company last year. In addition, New Dragon benefited from solid revenue contributions from our Longyuan operation and the Penglai facility, located in Shandong Province, which was acquired in the second quarter and has now been consolidated with existing operations," said Peter Mak, newly appointed chief financial officer.
Gross profit for the quarter was $1.9 million compared with $1.7 million a year ago. Gross profit as a percentage of sales for the quarter was 20 percent compared with 21 percent in the same period a year earlier, reflecting the impact of necessary modifications to the company's production line at its Penglai manufacturing facility. Mak indicated that the company expects these improvements will enhance production in the fourth quarter of 2004.
Gross profit for the nine months climbed to $4.8 million from $2.7 million for the same period last year. Gross profit as a percentage of sales for the nine-month period improved significantly to 19 percent from 13 percent a year ago, reflecting better utilization of production capacity.
About The Company
Headquartered in Shandong Province, P.R.C., with a corporate office in Shenzhen, New Dragon Asia Corp. is engaged in the milling, sale and distribution of flour and related products, including instant noodles, to retail and commercial customers throughout China. The company markets its well-established product line through a network of more than 200 key distributors and 16 regional offices in 27 Chinese provinces with an aggregate production capacity of approximately 110,000 tons of flour and more than 1.1 billion packages of instant noodles.
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward- looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning the company's operations and financial performance and condition. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. The company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others, the impact of competitive products and pricing; changes in consumer preferences and tastes or perceptions of health-related issues; effectiveness of advertising or market-spending programs; changes in laws and regulations; fluctuations in costs of production, foreign exchange and interest rates; and other factors as those discussed in the Company's reports filed with the Securities and Exchange Commission from time to time.
(Financial table follows)
NEW DRAGON ASIA CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Three months ended Nine months ended
September 25, September 25,
------------------ ------------------
2004 2003 2004 2003
-------- -------- -------- --------
Revenue $ 9,886 $ 8,194 $ 25,831 $ 20,220
Cost of goods sold (7,958) (6,472) (21,009) (17,518)
-------- -------- -------- --------
Gross profit 1,928 1,722 4,822 2,702
Selling and distribution
expenses (198) (263) (822) (753)
General and
administrative expenses (686) (468) (1,811) (1,140)
-------- -------- -------- --------
Income from operations 1,044 991 2,189 809
Other income (expenses):
Interest expense (1) (67) (73) (195)
Interest income -- 60 13 168
Other income 492 19 933 50
-------- -------- -------- --------
Income before taxes 1,535 1,003 3,062 832
Provision for income
taxes (346) (217) (1,004) (318)
-------- -------- -------- --------
Income before minority
interests 1,189 786 2,058 514
Minority interests 3 -- 11 --
-------- -------- -------- --------
Net income $ 1,192 $ 786 $ 2,069 $ 514
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Basic and diluted
earnings per common
share $ 0.03 $ 0.02 $ 0.05 $ 0.01
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Weighted average common
shares outstanding 45,061 41,700 45,061 41,175
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