Wednesday October 31, 7:00 am ET
AgFeed Sees Earnings Growth Momentum to Continue in the Fourth Quarter and in 2008
NEW YORK, NY--(MARKET WIRE)--Oct 31, 2007 -- AgFeed Industries, Inc. (NasdaqGM: FEED - News ) (website: http://www.AgFeedinc.com ), a leader in China's premix animal nutrition industry, announces today financial results for the three and nine month periods ended September 30, 2007.
AgFeed continues to benefit from a strong brand name, a solid management team focused on strategy execution, a strong balance sheet, and a favorable market environment.
The following are some of the key performance highlights:
For the three months ended September 30, 2007, AgFeed's revenues increased 488% to approximately $11.9 million and gross profit increased to approximately $3.24 million or 323% as compared to the same period in 2006. Net income increased to approximately $2.08 million or 185% compared to the same period in 2006, resulting in $0.08 per fully diluted share.
During the nine month period ended September 30, 2007, AgFeed's revenues increased 283% to approximately $23.8 million and gross profit increased to approximately $6.8 million or 189% compared to the same period in 2006. The Company's net income increased to approximately $4.3 million, up approximately 246% compared to the same period in 2006, resulting in $0.17 per fully diluted share.
OPERATIONAL HIGHLIGHTS:
AgFeed's revenue growth was accomplished through a 229% increase in total volume of feed sold, an increase in the selling price of each of its three product lines due to the Company's stronger brand name, and effective cost control and increased management efficiency.
AgFeed signed an agreement to supply premix feed to Shanghai Fenghai Enterprises, a farm with a current capacity to raise 300,000 hogs annually.
MANAGEMENT COMMENTS
Mr. Junhong Xiong, CEO of AgFeed, commented: "Our third quarter financial results reflected AgFeed's commitment to becoming the No. 1 premix animal feed company in China, particularly in the fast growing hog premix sector. We continue to see increased consumption of meat products and commercial hog farmers' increased preference towards high quality, high yield animal feed products as those offered by AgFeed. We expect our earnings growth to continue well into 2008."
GROWTH STRATEGIES
Songyan Li, PhD, Chairman of AgFeed, commented: "In addition to our continued focus and market expansion in our core premix animal feed business, AgFeed is exploring opportunities in the commercial hog raising business. This new business could become a natural vertical integration strategy and complement our current business as China raises over 500 million hogs annually and prices are at historical highs largely due to rising consumer income. Management intends to enter this new business model through mergers and acquisitions as well as building new hog farms. We believe the commercial hog farm business could contribute significant revenues to our financial performance in 2008 and beyond."
About AgFeed Industries, Inc.
AgFeed is a U.S. public company listed
on The Nasdaq Stock Market with its main operations
in China. Through its operating subsidiaries in China,
AgFeed is a leading manufacturer, marketer and distributor
of premix animal nutrition products targeting China's
growing animal feed market. China's animal feed market
was approximately $40 billion in 2006 according to China
Feed Industry Association.
Safe Harbor Statement
All statements in this press release
that are not historical are forward-looking statements
made pursuant to the "safe harbor" provisions
of the Private Securities Litigation Reform Act of 1995.
You are cautioned not to place undue reliance on any
forward-looking statements in this press release as
they reflect AgFeed's current expectations with respect
to future events and are subject to risks and uncertainties
that may cause actual results to differ materially from
those contemplated. Potential risks and uncertainties
include, but are not limited to, the risks described
in AgFeed's filings with the Securities and Exchange
Commission.
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