SOURCE: China Modern Agricultural Information

China Modern Agricultural Information

April 02, 2012 08:00 ET

China Modern Agricultural Information Releases Net Income Guidance of $13.8 Million or $0.31 EPS for the First Nine Months of Fiscal Year 2012

The Projected Net Income and EPS Will Grow 163% and 136% Respectively Year Over Year

HARBIN, CHINA--(Marketwire - Apr 2, 2012) - China Modern Agricultural Information Inc. ("the Company") (OTCBB: CMCI), a high-tech livestock company specializing in the breeding of cows and calves, the production and sale of milk and the sale of organic fertilizer, today releases the projected earnings for the 2012 fiscal first nine months ended March 31st, 2012. The projected net income will increase 163% to $13.8 million or $0.31 per basic and diluted earnings per share.

Review of the First Two Quarters of Fiscal Year 2012
The revenue for the first two quarters of fiscal year 2012 is $10.1 million, and the gross profit is $6.9 million. The gross profit increased $1.77 million or 34% year over year and the gross profit margin has improved from 50% to 69%. The increases are mainly due to the adaption of a new business model. Under this unique business model, the company leases the cows to the farmers and generates the profit from both milk sale and commission, which dramatically lowered the cost of goods sold and remarkably improved the gross profit margin.

On November 23, 2011, the Company completed the acquisition of 100% stock equity of Shangzhi Yulong Cattle Industry Co., Ltd. and generated $5.72 million in net income, which has been consolidated in the quarterly financial statements ended in Dec. 31, 2011. The Company generated net income of $9.48 million during the first two quarters of fiscal year 2012, an increase of $5.78 million or 157% compared to the same period of last year. The earnings per share increased from $0.10 to $0.22, an increase of 120%. The acquisition is expected to increase fresh milk production capacity by 30,000 tons per year, and generate $12 million in revenue and $4 million in net income for the fiscal year 2012.

The Projected Earnings of the Third Quarter of Fiscal Year 2012
The revenue of the fiscal 2012 third quarter ended March 31, 2012 is projected to be approximately $9.4 million, an increase of $3.3 million or 54% compared to the same period of last year. The gross profit margin is projected to increase from 50% to about 64%. The main reason for this growth in gross profit is the acquisition of Yulong Cattle Industry Co., Ltd. and higher sales price of raw milk. The net profit of the fiscal year 2012 third quarter is projected to be about $4.3 million, an increase of $2.2 million or 101% year over year.

The projected revenue of the first three quarters of the fiscal year 2012 ended March 31, 2012 is about $19.5 million, an increase of $2.3 million or 14%, compared to the same period of last year. The projected gross profit is about $13 million, an increase of $4.4 million or 51%, compared to the same period of last year. The projected net profit is $13.8 million, an increase of about $8.6 million or 163%, compared to the same period of last year. The projected net profit margin will increase to 70% from 31%, and the earning per share is projected to increase from $0.13 to about $0.31, an increase of 136% year over year.

Cautionary Statement Regarding Forward Looking Information
Certain statements in this release concerning our future growth prospects are forward-looking statements, within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding the success of our investments, risks and uncertainties regarding fluctuations in earnings, our ability to sustain our previous levels of profitability including on account of our ability to manage growth, intense competition, wage increases in China, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, our ability to successfully complete and integrate potential acquisitions, withdrawal of governmental fiscal incentives, political instability and regional conflicts and legal restrictions on raising capital or acquiring companies outside China. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our 8K/A dated March 31, 2011, and other recent filings. These filings are available at http://www.sec.gov/.

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