Chai-Na-Ta Corp.
OTC Bulletin Board : CCCFF

Chai-Na-Ta Corp.

August 21, 2006 12:53 ET

Chai-Na-Ta Corp. Reports 2006 Second Quarter Results

All Amounts are in Canadian Currency

RICHMOND, BRITISH COLUMBIA--(CCNMatthews - Aug. 21, 2006) - Chai-Na-Ta Corp. (OTCBB:CCCFF), the world's largest supplier of North American ginseng, today announced a second quarter 2006 net loss of $355,000, or $0.01 per basic share, compared to a net loss of $1.3 million, or $0.05 per basic share, in the quarter ended June 30, 2005.

Revenue rose to $2.4 million in the second quarter of 2006 from $278,000 in the same period last year.

Gross profit margin was 1% of sales revenue in the 2006 second quarter compared to a gross loss of 10% in the same period last year.

"About 70% of our 2005 harvest root was sold by June 30, 2006 with a higher volume of sales of the lower quality roots," said William Zen, Chairman of the Company, "Chai-Na-Ta's average selling price decreased to about $5.60 per pound in the first six months of 2006 from about $13.00 per pound in the first six months of 2005."

Selling, general and administrative expenses fell to $257,000 in the second quarter of 2006, a decrease of 33% from the same period last year, due to ongoing efforts to reduce overhead costs.

The Company took a $235,000 write-down on inventory in the 2006 second quarter to reduce the carrying value of specific low grade roots to their estimated net realizable value.

In the six months ended June 30, 2006, revenue increased to $3.7 million from $429,000 in the first half of 2005. Net loss in the first half of 2006 was $567,000, or $0.02 per basic share, compared to a net loss of 1.7 million, or $0.07 per share in the same period last year.

The cash used in operations was $52,000 for the six months ended June 30, 2006, compared with cash used in operations of $1.3 million for the same period in 2005.

Chai-Na-Ta Corp., based in Richmond, British Columbia, is the world's largest supplier of North American ginseng. The Company farms, processes and distributes North American ginseng as bulk root, and supplies processed material for the manufacturing of value-added ginseng-based products.

This news release contains forward-looking statements that reflect the Company's expectations regarding future events. These forward-looking statements involve risks and uncertainties, and actual events could differ materially from those projected. Such risks and uncertainties include, but are not limited to, the success of the Company's ongoing research programs, general business conditions, and other risks as outlined in the Company's periodic filings, Annual Report, and Form 20-F.


Contact Information

  • Chai-Na-Ta Corp.
    Wilman Wong
    Chief Financial Officer/Corporate Secretary
    (604) 272-4118 or Toll Free: 1-800-406-7668
    (604) 272-4113 (FAX)
    info@chainata.com
    www.chainata.com