SOURCE: Sen Yu International Holdings, Inc.

Sen Yu International Holdings, Inc.

November 16, 2010 07:00 ET

Sen Yu International Holdings, Inc. Reports Higher Revenues and Net Income

NEW YORK, NY--(Marketwire - November 16, 2010) -  Sen Yu International Holdings, Inc. (OTCBB: CSWG) (OTCQB: CSWG), a leading producer and distributor of breeding and commercial hogs in the People's Republic of China, today reported higher revenues and net income for its quarter ended September 30, 2010.

Quarter ended September 30, 2010 Highlights

  • Net revenues increased 8% to $23.56 million for the quarter ended September 30, 2010 from $21.89 million for the same period ended September 30, 2009
  • Gross profit increased 13% to $5.34 million for the quarter ended September 30, 2010 from $4.73 million for the quarter ended September 30, 2009
  • Net income increased 3% to $3.68 million for the quarter ended September 30, 2010 from $3.56 million for the quarter ended September 30, 2009
  • Diluted earnings per common share decreased 44% to $0.10 per share for the quarter ended September 30, 2010 from $0.18 per share for the same period ended September 30, 2009
  • Net revenues increased $1.67 million or 8% to $23.56 million for the quarter ended September 30, 2010 from $21.89 million for the same period ended September 30, 2009. The increase in net revenues resulted from increased orders from our major customers, Beijing Dahongmen and Beijing Fifth Meat Factory. Hog sales increased to 134,561 heads for the quarter ended September 30, 2010 from 121,626 heads for the period ended September 30, 2009. Net income increased $124,012 or 3% to $3.68 million for the period ended September 30, 2010 from $3.56 million for the quarter ended September 30, 2009, mainly due to the higher revenues and continuing control over expenses. However, general and administrative expenses increased by approximately $417,652 or 613%, for the quarter ended September 30, 2010 from the period ended September 30, 2009, principally due to the payment of investor relation related charges and professional fees. Diluted earnings per share decreased 44% to $0.10 per share for the quarter ended September 30, 2010 from $0.18 per share for the same period ended September 30, 2009, mainly due to an 81% increase in diluted common shares outstanding during the period ended September 30, 2010 from the quarter ended September 30, 2009.

Revenues from commercial hogs were up $1.77 million or 8% to $23.34 million for the quarter ended September 30, 2010 from $21.57 million for the quarter ended September 30, 2009. Revenues from other hogs decreased from $322,313 or 30% for the period ended September 30, 2009 to $224,269 for the same three month period ended September 30, 2010. Commercial hogs refer to the hogs purchased from Wang Da farmers. Other hogs refer to hogs raised in the Company's own breeding facilities. The increase in the commercial hogs product line was primarily attributable to the Company's policy of committing all of its available cash resources to the commercial hog market.

Gross profit margin increased by 13% to 22.67% for the quarter ended September 30, 2010 from 21.59% for the same period ended September 30, 2009 on higher unit margin. The Company's income from operations increased to $3.77 million for the quarter ended September 30, 2010 from $3.70 for the same period ended September 30, 2009.

Total other expenses decreased $160,181 or 65% to $84,686 for the three months ended September 30, 2010 from $244,867 for the quarter ended September 30, 2009, mainly due to decrease in mortality losses. Swine mortality caused an expense of $48,479 during the three months ended September 30, 2010, recorded as "losses on disposal of fixed assets" or "losses on disposal of inventories" depending on the category of the deceased hog. During the three month period ended September 30, 2009, mortality losses were $346,932.

As a result, the Company's net income increased $124,012 or 3% for the three months ended September 30, 2010, compared to $3.68 million from $3.56 million for the same period ended September 30, 2009. The Company's net profit margin before non-controlling Interest was 15.65% for the three months ended September 30, 2010 from 15.79% for the same period ended September 30, 2009.

As of September 30, 2010 there was an advance to Wang Da of $35.21 million. In order to raise quality commercial hogs, and control the quality of feeding materials and procedures, the Company entered into a cooperation agreement with Wang Da, its major feedstuff supplier, to provide Wang Da's farmers with fodder to raise their commercial hogs. The supplier offsets the advances from the Company once it delivers the Wang Da farmers commercial hogs to the Company.

The Company's cash outstanding for the three months ended September 30, 2010 was $4.99 million.

The Company's current liability and total liability for the fiscal year ended June 30, 2010 was $7.80 million, as compared to $7.82 million for the fiscal year ended June 30, 2009. The Company recorded derivative warrant liability of $4.17 million in 2010.

About Sen Yu International Holdings, Inc.

Based in Northeast China, Sen Yu International Holdings, Inc. (OTCBB: CSWG) (OTCQB: CSWG) is a leading producer and distributor of breeding and commercial hogs, engaged in the research, development and sale of breeding swine and the sale of their mature offspring in the PRC. The Company entered into the hog breeding and production business in September 2004, and has developed into one of the largest providers of breeding swine and commercial hogs in Heilongjiang Province.

Cautionary Note Regarding Forward Looking Statements

Certain statements in this release concerning our future growth prospects are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. Such statements may include, without limitation, statements with respect to the Company's plans, objectives, projections, beliefs, expectations and intentions and other statements identified by words such as "guidance," "projects," "may," "could," "would," "should," "believe," "expect," "anticipate," "estimate," "intend," "plan," or similar expressions. These statements are based upon the current beliefs and expectations of the Company's management and are subject to significant risks and uncertainties (many of which are beyond the Company's control), including, 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 filings with United States Securities and Exchange Commission. These filings are available at www.sec.gov.

We may, from time to time, make additional written and oral forward-looking statements, including statements contained in our filings with the Securities and Exchange Commission and our reports to shareholders. We do not undertake to update any forward-looking statements that may be made from time to time by or on our behalf.