SOURCE: Sunwin International Neutraceuticals, Inc.

Sunwin International Neutraceuticals, Inc.

December 15, 2011 13:28 ET

Sunwin International Reports Financial Results for the Second Quarter and First Six Months of Fiscal 2012 Ended October 31, 2011

QUFU, CHINA--(Marketwire - Dec 15, 2011) - Sunwin International Neutraceuticals, Inc. "Sunwin International" (OTCBB: SUWN), one of the top global providers of high quality stevia extracts including Rebaudioside A 98, announced today its financial results for the second quarter and first six months of fiscal 2012.

Total revenues reached $3.6 million in the second quarter of fiscal 2012, an increase of 55% compared to the same period in fiscal 2011 and an increase of 25% sequentially from the first quarter of fiscal 2012. Total revenues for the first six months of fiscal 2012 reached $6.4 million, an increase of 39% compared to the same period in fiscal 2011. The increase in revenues was evident in both of our business segments: Stevioside and Chinese Medicine. Stevioside revenues increased due to higher sales volume of lower grades stevia products in the domestic market to Chinese manufacturers who use our products as raw materials coupled with a moderate increase in sales volume in the international market. The increase in Chinese Medicine revenues was driven by seasonally higher demand for livestock breeding in preparation for the Chinese holiday season thereby driving up demand for our products. Gross profit in the second quarter was $0.7 million, up by 63% from the second quarter of fiscal 2011. For the first six months of fiscal 2012, gross profit was $1.1 million, up by 9% from the same period in fiscal 2011. The consolidated gross profit margin for the second quarter improved to 19.4% compared to 18.5% for the same period in fiscal 2011 and 12.8% for the first quarter of fiscal 2012. The improvement in gross margin was primarily due to higher margins experienced in the Stevioside segment offset by a decline in margins in the Chinese Medicine segment, due to significantly higher raw material and energy costs for this segment.

Total operating expenses for the second quarter of fiscal 2012 were $1.4 million compared to $0.9 million in fiscal 2011. For the first six months of fiscal 2012, operating expenses were $2.8 million compared to $1.8 million for the same period in fiscal 2011. The increase in operating expenses for the second quarter and the first six months of fiscal 2012 was largely attributable to a $0.7 million loss on disposition of obsolete property and equipment. We reported a net loss attributable to Sunwin International of $741,000 or ($0.00) per share for the second quarter, compared to a net loss of $443,000 or ($0.00) per share in the second quarter of fiscal 2011. For the first six months of fiscal 2012, we reported a net loss attributable to Sunwin International of $1.7 million or ($0.01) per share, compared to a net loss of $876,000 or ($0.00) per share for the same period in fiscal 2011.

At October 31, 2011, cash was $8.0 million with working capital of $13.6 million compared to April 30, 2010 where cash was $10.6 million with working capital of $14.2 million. Shareholder's Equity attributable to Sunwin International increased to $29.3 million, up from $28.3 million at April 30, 2010.

Commenting on the results for the second quarter and first six months of fiscal 2012, Dongdong Lin, CEO of Sunwin International, stated, "We are pleased with the sales growth we have achieved in our Stevioside segment in the second quarter of fiscal 2012. We anticipate that the foundation we have built in our partnerships including our recently announced distribution agreement with Domino Foods, Inc. will begin to finally accelerate future sales in the North American marketplace. Additionally, the approval of stevia in November, for use in the food and beverage industry in the EU has opened one of the largest worldwide marketplaces for our higher grade stevia products. We believe that Sunwin has positioned itself to be in the forefront of these markets with our distribution partners and anticipate potential sales growth for our stevia extracts as food and beverage companies around the world begin to adopt all natural stevia as the best alternative for their products in the no calorie and low calorie segments."

About Sunwin International Neutraceuticals, Inc.

Sunwin International Neutraceuticals, Inc. engages in the areas of zero calorie, all natural sweeteners (Sunwin Stevia™ Extracts) and essential traditional Chinese medicine. As an industry leader in agricultural processing, Sunwin has built an integrated global firm with the sourcing and production capabilities to meet the needs of consumers throughout the world. For more info about Sunwin, please visit http://www.sunwininternational.com

SUNWIN INTERNATIONAL NEUTRACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
October 31, 2011 April 30, 2011
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS:
Cash $ 7,994,100 $ 10,563,413
Accounts receivable, net of allowance for doubtful accounts of $1,164,678 and $1,098,240, respectively 2,028,933 2,080,332
Accounts receivable - related party 688,870 204,664
Notes receivable 523,699 505,260
Inventories, net 4,282,908 3,327,914
Prepaid taxes 4,873 43,359
Prepaid expenses and other current assets 1,349,213 62,664
Total Current Assets 16,872,596 16,787,606
Property and equipment, net 13,353,426 13,967,964
Land use rights 2,336,515 2,303,112
Total Assets $ 32,562,537 $ 33,058,682
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 3,271,897 $ 2,495,776
Taxes payable 28,312 118,351
Derivative liability 5,203 5,203
Total Current Liabilities 3,305,412 2,619,330
STOCKHOLDERS' EQUITY:
Preferred stock, $0.001 par value; 1,000,000 shares authorized; no shares issued and outstanding - -
Common stock, $.001 par value, 200,000,000 shares authorized; 156,856,137 and 155,522,809 shares issued and outstanding on October 31 and April 30, 2011, respectively 156,856 155,523
Additional paid-in capital 30,941,122 28,390,279
Accumulated deficit (6,881,176 ) (4,477,522 )
Accumulated other comprehensive income 5,040,323 4,262,044
Total Sunwin International Neutraceuticals, Inc. stockholders' equity 29,257,125 28,330,324
Noncontrolling interest - 2,109,028
Total Stockholders' Equity 29,257,125 30,439,352
Total Liabilities and Stockholders' Equity $ 32,562,537 $ 33,058,682
SUNWIN INTERNATIONAL NEUTRACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
For the Three Months Ended October 31, For the Six Months Ended October 31,
2011 2010 2011 2010
Revenues:
Revenues $ 2,874,189 $ 2,275,210 $ 5,501,240 $ 4,502,226
Revenues - related party 692,981 25,851 914,376 129,390
Total revenues 3,567,170 2,301,061 6,415,616 4,631,616
Cost of revenues 2,876,034 1,875,606 5,360,624 3,667,748
Gross profit 691,136 425,455 1,054,992 963,868
Operating expenses:
Loss on equity investment - 28,413 - 95,967
Loss on disposition of property and equipment 674,675 - 674,675 -
Selling expenses 253,314 142,770 402,397 257,298
General and administrative expenses 482,725 736,812 1,734,070 1,441,282
Total operating expenses 1,410,714 907,995 2,811,142 1,794,547
Operating loss (719,578 ) (482,540 ) (1,756,150 ) (830,679 )
Other income:
Gain on change in fair value of derivative liability - 3,344 - 6,634
Other (expense) income (57,080 ) 2,681 (57,056 ) 455
Interest income 16,264 8,434 32,493 18,197
Total other (expense) income (40,816 ) 14,459 (24,563 ) 25,286
Loss from continuing operations before income taxes and noncontrolling interest (760,394 ) (468,081 ) (1,780,713 ) (805,393 )
Discontinued operations:
Loss from discontinued operations - (444 ) - (135,736 )
Gain on disposal of discontinued operations - - - 11,450
Total loss from discontinued operations - (444 ) - (124,286 )
Loss before income taxes and noncontrolling interest (760,394 ) (468,525 ) (1,780,713 ) (929,679 )
Income taxes - (5,082 ) - (10,087 )
Net loss (760,394 ) (473,607 ) (1,780,713 ) (939,766 )
Less: loss attributable to noncontrolling interest 19,679 30,666 54,258 64,055
Net loss attributable to Sunwin International Neutraceuticals, Inc. $ (740,715 ) $ (442,941 ) $ (1,726,455 ) $ (875,711 )
Comprehensive Income (Loss):
Net loss (760,394 ) (473,607 ) (1,780,713 ) (939,766 )
Gain on foreign currency translation 379,940 568,981 778,279 852,017
Total Comprehensive income (loss) $ (380,454 ) $ 95,374 $ (1,002,434 ) $ (87,749 )
Basic and diluted loss per common share:
Loss from continuing operations $ (0.00 ) $ (0.00 ) $ (0.01 ) $ (0.00 )
Loss from discontinue operations (0.00 ) (0.00 ) (0.00 ) (0.00 )
Loss per common share $ (0.00 ) $ (0.00 ) $ (0.01 ) $ (0.01 )
Weighted average common shares outstanding - basic and diluted 156,856,137 155,595,888 156,713,593 159,019,533
Amount attributable to Sunwin International Neutraceuticals, Inc.
Loss from continuing operations, net of tax $ (740,715 ) $ (442,497 ) $ (1,726,455 ) $ (751,425 )
Loss from discontinued operations, net of tax - (444 ) - (124,286 )
Net loss attributable to Sunwin International Neutraceuticals, Inc. $ (740,715 ) $ (442,941 ) $ (1,726,455 ) $ (875,711 )

Safe Harbor Statement

Sunwin International Neutraceuticals, Inc., is hereby providing cautionary statements identifying important factors that could cause our actual results to differ materially from those projected in forward-looking statements (as defined in such act). Any statements that are not historical facts and that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, indicated through the use of words or phrases such as "will likely result," "are expected to," "will continue," "is anticipated," "estimated," "intends," "plans," "believes" and "projects") may be forward-looking and may involve estimates and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. These statements include, but are not limited to, our guidance and expectations regarding revenues, net income and earnings.

We caution that the factors described herein could cause actual results to differ materially from those expressed in any forward-looking statements we make and that investors should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time, and it is not possible for us to predict all of such factors. Further, we cannot assess the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. This press release is qualified in its entirety by the cautionary statements and risk factor disclosure contained in our Securities and Exchange Commission filings, including our Annual Report on Form 10-K for the fiscal year ended April 30, 2011.

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