SHENZHEN, China, March 28, 2005 (PRIMEZONE) -- New Dragon Asia Corp. (AMEX:NWD) today announced financial results for its fiscal year and fourth quarter ended December 25, 2004 -- reflecting organic growth and contributions from its new packaging and milling operations, both of which were acquired in 2004.
Net income for the fiscal fourth quarter increased 16 percent to $2.6 million, or $0.06 per diluted share, from $2.2 million, or $0.05 per diluted share, a year earlier. Net sales for the same period jumped 26.9 percent to $13.4 million from $10.6 million a year earlier. Income from operations climbed 70.2 percent to $2.4 million from $1.4 million last year, primarily as a result of a consolidation of the company's sales offices.
Net income for the full year increased 70 percent to $4.6 million, or $0.10 per diluted share, from $2.7 million, or $0.06 per diluted share, a year ago. For the same period, net sales climbed more than 27 percent to $39.2 million from $30.8 million a year earlier. Gross profit for the full year increased to $7.3 million from $5.9 million a year ago, reflecting a stable margin of 19 percent. Income from operations more than doubled to $4.5 million from $2.2 million in fiscal 2003.
"The company's strong sales and earnings performance for 2004 reflects the success of an ongoing strategy to expand through internal growth, as well as from acquisitions. Our acquisition of a manufacturing facility in Penglai City in Shandong Province last June has greatly enhanced our growth potential, with an approximately 30 percent increase in capacity on an annualized basis. Equally important, it is indicative of other acquisition opportunities and the corresponding benefits to the company's growth strategy moving forward," said Heng Jing Lu, chief executive officer.
He noted New Dragon Asia's continued focus on leveraging its strength in production, distribution, brand name awareness and quality recognition within the retail and commercial markets, with a particular emphasis on producing more premium products. Lu highlighted the company's receiving Grade A certification in 2004 for its flour products by the China Green Food Development Center, an organization solely authorized by the Chinese government to issue the "green" and organic label to food producers.
Lu said that an analysis of sales for 2004 revealed a significant expansion of its overseas sales with New Dragon now exporting to at least six countries, including: Korea, Hong Kong, Sweden, Canada, Singapore and Greece. Korea was the only export country in 2003. As previously announced, PARKnSHOP, a leading supermarket chain based in Hong Kong and a member of the A.S. Watson Group (ASW), was one of New Dragon's leading new customers in 2004, ordering approximately 1,000 tons of flour with an aggregate sales value of approximately $500,000.
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, its success with acquisitions, anticipated synergies, overseas expansion and 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 Income
(Thousands, Except Per Share Data)
For the For the
Three Months Ended Year Ended
December 25, December 25,
(Unaudited) (Audited)
2004 2003 2004 2003
---- ---- ---- ----
Net Sales $ 13,390 $ 10,553 $ 39,221 $ 30,773
Cost of Goods Sold (10,878) (7,334) (31,887) (24,852)
-------- -------- -------- --------
Gross Profit 2,512 3,219 7,334 5,921
Operating Expenses
Selling &
distribution
expenses (356) (577) (1,178) (1,330)
General &
administrative
expenses 200 (1,258) (1,611) (2,398)
-------- -------- -------- --------
Income from
Operations 2,356 1,384 4,545 2,193
Other Income &
Expenses
Interest expenses 1 (54) (72) (249)
Interest income (10) (164) 3 4
Other income 491 1,176 1,424 1,226
-------- -------- -------- --------
Income before Taxes 2,838 2,342 5,900 3,174
Provision for Income
Taxes (292) (129) (1,296) (447)
-------- -------- -------- --------
Income before
minority interests 2,546 2,213 4,604 2,727
Minority interests 30 0 41 --
-------- -------- -------- --------
Net Income $ 2,576 $ 2,213 $ 4,645 $ 2,727
======== ======== ======== ========
Per Common Share:
Net income per
share:
Basic $ 0.06 $ 0.05 $ 0.10 $ 0.06
======== ======== ======== ========
Diluted $ 0.06 $ 0.05 $ 0.10 $ 0.06
======== ======== ======== ========
Weighted average
common shares
outstanding:
Basic 45,061 44,978 45,061 42,108
======== ======== ======== ========
Diluted 45,061 44,978 45,061 42,108
======== ======== ======== ========