SOURCE: China Modern Agricultural Information

China Modern Agricultural Information

May 21, 2012 08:05 ET

China Modern Releases Net Income Guidance of $16.4 Million or $0.35 EPS for the Fiscal Year 2012

The Projected Net Income and EPS Will Grow 86% and 52% Respectively Year Over Year

HARBIN, CHINA--(Marketwire - May 21, 2012) - China Modern Agricultural Information Inc. ("the Company", "China Modern") (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 fiscal year 2012 ended June 30, 2012. The forecasted net income will be increased by 86% year over year to $16.4 million or $0.35 per basic and diluted earnings per share.

Review of the First Three Quarters of Fiscal Year 2012
Revenue for the first three quarters of fiscal year 2012 was $19.5 million. It was increased by $2.3 million or 13%, compared to $17.2 million for the three quarters ended March 31, 2011. The gross profit was increased by $4.4 million or 52% to $13 million. The gross profit margin has been improved from 50% to 67% compared with the same period last year. The increases are mainly due to the adoption of a new business model. Under this special business model, it provides the company with a revenue stream for which it incurs very little direct costs and so the gross profit margin was remarkably improved.

On November 23, 2011, the Company successfully acquired 100% ownership of Shangzhi Yulong Cattle Industry Co., Ltd. A bargain purchase gain of $5.72 million was generated from this acquisition, which has been consolidated in the quarterly financial statements ended in Dec. 31, 2011.

For the three quarters ended March 31, 2012, net income was increased by $8.40 million or 149% to $14.0 million, compared to $5.7 million for the three quarters ended March 31, 2011. The net profit margin was increased from 33% to 72%. The earnings per share was increased from $0.14 to $0.31, an increase of $0.17 or 120%.

The Projected Earnings of the Fiscal Year 2012
The projected revenue for the year ended June 30, 2012 is forecasted as approximate $27.6 million, an increase of $2.6 million or 10% compared to $25.0 million for the year ended June 30, 2011. The revenues from sales of raw milk and the sales commission from farmers are forecasted as $18.3 million and $9.3 million respectively. The projected gross profit is $18.0 million, an increase of $5 million or 38% compared with the same period last year. The gross profit margin is projected to be increased from 52% to approximate 65%. The projected net income is $16.4 million, an increase of about $7.6 million or 86%, compared to the same period of last year. The projected net profit margin will be increased to 59% from 35%, and the earning per share is projected to be increased from $0.23 to about $0.35, an increase of 52% 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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