BEIJING and CLAREMONT, Calif., Nov. 12, 2008 (GLOBE NEWSWIRE) -- Kiwa Bio-Tech Products Group Corporation (OTCBB:KWBT) announced that despite a reduction in revenues for the third quarter, revenues for the first nine months of 2008 were $7,539,083 an increase of 21.3% over $6,214,712 in the first nine months of 2007.
Review of Third Quarter:
Revenues for the third quarter of 2008 were $2,327,315 a decrease of 21.3% compared to $2,957,972 in the third quarter of 2007. This decrease was in part due to restrictions in truck transport related to Olympics traffic contingencies and the traffic control period that started on July 1 and end on September 20, 2008 for a total of 82 days.
Cost of sales was $2,271,772 and $2,718,712 for the three months ended September 30, 2008 and 2007, respectively. The decrease of $446,940 or 16.4% in cost of sales was primarily due to the rapid decrease of sales. Gross profit was $55,543 and $239,260, respectively, in the three months ended September 30, 2008 and 2007. The significant decrease in gross profit margin in the bio-enhanced feed business was due to an increase in our purchasing prices of raw materials. Although we adjusted the prices of our products in response, materials prices rose faster than we could adjust product prices.
Net loss for the third quarter of 2008 was $567,770 (including non-cash expenses of $214,793), a decrease of $30,751 or 5.1% as compared to net loss in the same period of 2007, which was $598,521. This decrease resulted from the following factors: (1) decrease in gross profit of $183,717 or 76.8%; (2) decrease in operating expenses of $163,906 or 25.2%; (3) decrease in interest expenses of $28,875 or 16.8%; and (4) minority interest in subsidiary in the third quarter of 2008 was $5,988 and negative $15,699 for the same period of 2007.
Please refer to documents filed today with the Securities and Exchange Commission for additional information on the results for the third quarter and first nine months of 2008.
The management and board of Kiwa in meetings held over the past few weeks has decided to concentrate the Company's financial resources on business fundamentals and operations. Mr. Wei Li, CEO and Chairman, noted, "We are already seeing a catch up in orders for fertilizer for October, November and December to make up for the reduced shipping in August/September. The entire company has been given incentives to encourage focus on selling fertilizer. Employees at all levels of the company are being encouraged to reach their sales targets."
ABOUT KIWA BIO-TECH PRODUCTS GROUP CORPORATION
The Company develops, manufactures, distributes and markets innovative, cost-effective, and environmentally safe bio-technological products for agricultural and natural resources and environmental conservation. The Company's products are designed to enhance the quality of human life by increasing the value, quality and productivity of crops and decreasing the negative environmental impact of chemicals and other wastes. For more information about the Company, please review documents filed with the SEC (www.sec.gov) or visit the Company's website at www.kiwabiotech.com.
This press release contains information that constitutes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements involve risk and uncertainties that could cause actual results to differ materially from any future results described by the forward-looking statements. Risk factors that could contribute to such differences include those matters more fully disclosed in the Company's reports filed with the Securities and Exchange Commission. The forward-looking information provided herein represents the Company's estimates as of the date of the press release, and subsequent events and developments may cause the Company's estimates to change. The Company specifically disclaims any obligation to update the forward-looking information in the future. Therefore, this forward-looking information should not be relied upon as representing the Company's estimates of its future financial performance as of any date subsequent to the date of this press release.
KIWA BIO-TECH PRODUCTS GROUP CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (UNAUDITED)
Item Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ------------------------
2008 2007 2008 2007
---------- ---------- ----------- -----------
Net sales $2,327,315 $2,957,972 $ 7,539,083 $ 6,214,712
Cost of sales 2,271,772 2,718,712 7,353,634 5,763,387
---------- ---------- ----------- -----------
Gross profit 55,543 239,260 185,449 451,325
Operating
expenses
Consulting and
professional
fees 54,980 161,241 243,757 618,380
Officers'
compensation 59,690 58,811 178,153 213,280
General and
admini-
strative 211,493 275,532 686,010 651,055
Selling
expenses 41,051 77,650 155,632 284,916
Research and
development 42,922 41,931 144,054 134,730
Depreciation
and amortiz-
ation 33,930 35,234 86,748 96,098
Allowance and
provision 42,367 (60) 42,309 604
---------- ---------- ----------- -----------
Total operating
expenses 486,433 650,339 1,536,663 1,999,063
---------- ---------- ----------- -----------
Operating loss (430,890) (411,079) (1,351,214) (1,547,738)
Interest
expenses (142,868) (171,743) (565,728) (573,647)
---------- ---------- ----------- -----------
Loss before
minority
interest in
a subsidiary's
deficit (573,758) (582,822) (1,916,942) (2,121,385)
Minority
interest in a
subsidiary's
deficit
(profit) 5,988 (15,699) 31,956 (8,778)
---------- ---------- ----------- -----------
Loss from
continuing
operations (567,770) (598,521) (1,884,986) (2,130,163)
Loss on
discontinued
operations:
Discountinued
urea entrepot
trade -
Commission
paid to a
related party -- -- -- (414,509)
---------- ---------- ----------- -----------
Net loss $ (567,770) $ (598,521) $(1,884,986) $(2,544,672)
========== ========== =========== ==========
Other
comprehensive
loss
Translation
adjustment (3,834) (7,653) (40,075) (34,234)
---------- ---------- ----------- -----------
Comprehensive
loss $(571,604) $ (606,174) $(1,925,061) $(2,578,906)
========== ========== =========== ==========
Net (loss)
from
continuing
operations
per common
share - basic
and diluted $ (0.006) $ (0.008) $ (0.022) $ (0.029)
========== ========== =========== ===========
Net loss on
discontinued
operations
per common
share - basic
and diluted $ -- $ -- $ -- $ (0.006)
========== ========== =========== ===========
Weighted
average
number of
common shares
outstanding-
basic and
diluted 93,551,551 76,122,358 87,788,767 74,033,591
========== ========== =========== ===========
KIWA BIO-TECH PRODUCTS GROUP CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
----------- -----------
Item September December
30, 2008 31, 2007
----------- -----------
(UNAUDITED) (AUDITED)
ASSETS
Current assets
Cash and cash equivalents $ 43,161 $ 61,073
Accounts receivable, net
of allowance for doubtful
accounts of $339,365 and
$277,140, respectively 747,754 470,298
Inventories 645,281 818,329
Prepaid expenses 17,959 70,460
Other current assets 133,235 67,372
----------- -----------
Total current assets 1,587,390 1,487,532
Property, Plant and Equipment
Buildings 1,244,940 1,162,060
Machinery and equipment 707,367 660,273
Automobiles 81,586 76,154
Office equipment 109,025 93,231
Computer software 10,582 9,877
----------- -----------
Property, plant and equipment
- total 2,153,500 2,001,595
Less: accumulated depreciation (562,056) (433,690)
----------- -----------
Property, plant and equipment
- net 1,591,444 1,567,905
Construction in progress 72,059 67,262
Intangible asset - net 265,918 296,245
Deferred financing costs 68,293 129,793
Deposit to purchase proprietary
technology 126,443 126,443
----------- -----------
Total assets $ 3,711,547 $ 3,675,180
=========== ===========
LIABILITIES AND SHAREHOLDERS'
EQUITY (DEFICIENCY)
Current liabilities
Accounts payable $ 2,052,608 $ 1,635,490
Advances from customers 286,444 169,553
Construction costs payable 299,904 316,902
Due to related parties - trade 271,328 177,970
Due to related parties -
non-trade 557,497 551,654
Current portion of long-term
liabilities 1,072,489 2,889
----------- -----------
Total current liabilities 4,540,270 2,854,458
Long-term liabilities, less
current portion
Unsecured loans payable 1,686,637 1,574,350
Bank notes payable 12,904 17,988
Long-term convertible notes
payable 798,303 2,058,625
Less: discount relating
to long-term convertible
notes payable (504,180) (856,308)
----------- -----------
Long-term convertible
notes payable - net 294,123 1,202,317
----------- -----------
Total long-term liabilities 1,993,664 2,794,655
Minority interest in a subsidiary 85,931 110,838
Shareholders' equity (deficiency)
Common stock - $0.001 par value
Authorized 200,000,000 shares.
Issued and outstanding
95,331,706 and 81,519,676
shares at September 30, 2008
and December 31, 2007 95,332 81,520
Preferred stock - $0.001 par
value Authorized 20,000,000
shares, none issued -- --
Additional paid-in capital 10,182,144 9,217,876
Stock-based compensation
reserve (183,619) (307,053)
Deficit accumulated (12,959,508) (11,074,522)
Accumulated other
comprehensive income (42,667) (2,592)
----------- -----------
Total shareholders' equity
(deficiency) (2,908,318) (2,084,771)
----------- -----------
Total liabilities and
stockholders' equity $ 3,711,547 $ 3,675,180
=========== ===========