Chai-Na-Ta Corp.

Chai-Na-Ta Corp.

March 14, 2005 18:49 ET

CORRECTION FROM SOURCE: Chai-Na-Ta Corp. Reports 2004 Year-end Results



OTC Bulletin Board SYMBOL: CCCFF

MARCH 14, 2005 - 18:49 ET

CORRECTION FROM SOURCE: Chai-Na-Ta Corp. Reports 2004
Year-end Results

RICHMOND, BRITISH COLUMBIA--(CCNMatthews - March 14, 2005) - Chai-Na-Ta

In the press release issued earlier today 14 March 2005, the table
showing the Consolidated Financial Highlights was not included. The
corrected updated release now follows.

Chai-Na-Ta Corp. (TSX:CC)(OTCBB:CCCFF), the world's largest supplier of
North American ginseng, today announced 2004 net earnings of $80,000, or
$0.00 per basic share, compared to 2003 net earnings of $2.6 million, or
$0.17 per basic share.

Revenue decreased to $7.4 million in 2004 from $16.6 million in 2003.
Gross margin was relatively steady at 35% in 2004 compared to 38% in

"We are disappointed that we did not meet the financial goals that we
set at the beginning of 2004. Our industry was negatively affected by a
stronger Canadian dollar and a rapid rise in ginseng root prices late in
2003 that left the market off balance, as buyers misjudged price
movements. In addition, buyers remain hesitant to buy root, due to
concerns about currency fluctuations and other market variables," said
William Zen, Chairman and Chief Executive Officer.

"Another challenge facing growers is a decision by the Chinese
government, effective November 2004, to stop the practice of importing
cultivated North American ginseng for contract processing and then
exporting it to other markets. It is unclear what impact this will have
on ginseng root prices," Mr. Zen continued.

"Due to the uncertainty in the ginseng market and the fluctuating value
of the Canadian dollar, forecasting 2005 profitability is difficult.
Regardless, we will take all necessary actions to mitigate the impact of
these factors and to facilitate the continuing profitability of
Chai-Na-Ta. As well, our balance sheet remains healthy, although not as
strong as in 2003. The ratio of current assets over current liabilities
exceeds 2:1," added Mr. Zen.

Chai-Na-Ta harvested fewer acres in 2004 than in the prior year and
produced 506,626 pounds of North American ginseng, down from 775,630
pounds in 2003. Average yield per acre rose to 2,111 pounds from 2,096
pounds. Prices softened after the winter of 2004 and the Company decided
not to sell product unless reasonable returns were attainable. About 58%
of Chai-Na-Ta's 2003 harvest and none of 2004's have been sold. The
Company's average selling price rose to about $21 per pound of ginseng
root in 2004 from about $19 per pound in 2003.

"We are confident that underlying Asian demand for our product remains
strong; buyers' and grading houses' current resistance to carrying
supply is pushing inventory back to the farm gate. In 2005, we expect
prices to stabilize and moderately improve, as a result of lower
production industry-wide," Mr. Zen said.

During 2004 Chai-Na-Ta lowered its cost per pound of root to about $13
from about $14 in 2003. The Company believes that its average production
cost is below the industry's.

Chai-Na-Ta's first processing facility in Ontario was finished on time
and on budget. With this facility completed, capital expenditures are
expected to be below $1 million in 2005, down from more than $3 million
in 2004.

"In mid-2004, we opened a showroom to display our graded root and
ginseng based herbal formulas. Sales were modest but we enhanced brand
awareness and attracted several hundred members to our preferred
customer program," Mr. Zen noted. "In 2005, some of our value-added
products will be sold in B.C.'s Asian supermarket chains."

2004 fourth quarter

During the quarter ended December 31, 2004, revenue was $1.1 million,
down from $4.8 million in the same quarter last year. Gross loss was
0.6% in the 2004 fourth quarter compared to gross margin of 51% in the
2003 period. Net loss in the 2004 fourth quarter was $660,000, or $0.03
per basic share, compared to net earnings of $1.2 million, or $0.08 per
basic share, in the same period last year.

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 manufacture of value-added ginseng-based

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.


Three Months Ended Three Months Ended
December 31 December 31 December 31 December 31
2004 2003 2004 2003
Fourth Quarter Summary Canadian $000 (i)US $000 Equivalents
(Unaudited) (except EPS and (except EPS and
shares outstanding) shares outstanding)
Revenue $ 1,079 $ 4,800 $ 829 $ 3,425
Earnings (loss)
before taxes (1,057) 1,917 (812) 1,368
Net Earnings (loss)
for the period (660) 1,176 (507) 839
Earnings (loss)
per share
- basic (0.03) 0.07 (0.02) 0.05
- fully diluted (0.03) 0.03 (0.02) 0.02
Weighted average
shares outstanding
- basic 24,299,008 17,634,073 24,299,008 17,634,073
- fully diluted 24,299,008 34,663,657 24,299,008 34,663,657

Year Ended Year Ended
December 31 December 31 December 31 December 31
2004 2003 2004 2003
Annual Summary Canadian $000 (i)US $000 Equivalents
(except EPS and (except EPS and
shares outstanding) shares outstanding)
Revenue $ 7,425 $ 16,581 $ 5,705 $ 11,831
Earnings before
taxes 128 3,606 98 2,573
Net Earnings for
the year 80 2,551 61 1,820
Earnings per share
- basic 0.00 0.17 0.00 0.12
- fully diluted 0.00 0.07 0.00 0.05
Weighted average
shares outstanding
- basic 24,290,814 15,113,823 24,290,814 15,113,823
- fully diluted 34,789,122 34,663,657 34,789,122 34,663,657

(i)US $ Equivalents - for the period ended December 31, 2004
conversion rate used is 1.3015 (0.7683)
- for the period ended December 31, 2003
conversion rate used is 1.4015 (0.7135)

Amounts in US$ are included solely for the convenience of readers
outside Canada. The inclusion of such amounts is not intended to
imply that such amounts were transacted in, realized or settled in
US$ at this rate or any other rate.


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)