HONG KONG, April 14, 2004 (PRIMEZONE) -- New Dragon Asia Corp. (AMEX:NWD) today announced financial results for fiscal year and its fourth quarter ended December 25, 2003.
Net income for the fourth quarter increased almost 10 percent to $2.2 million or $0.05 per diluted share, from $2.0 million, or $0.05 per diluted share, a year earlier. Net sales were $10.6 million compared with $10.9 million for the comparable quarter in 2002. Gross profit for the three months ended December 25, 2003, increased 56 percent over the same period a year earlier. Gross profit as a percentage of sales was 31 percent compared with 19 percent in the fourth quarter of 2002.
For fiscal 2003, net income was $2.7 million, or $0.06 per diluted share, compared with $4.2 million, or $0.10 per diluted share, a year ago. Sales for fiscal 2003 were $30.8 million compared with $33.7 million a year earlier - reflecting the full impact of SARS especially during the March through June period.
"Results for the fourth quarter of fiscal 2003 reflect a significant improvement in business following the negative effect of SARS on operations during the first six months. As we continue in the new fiscal year, management is focused on leveraging New Dragon Asia's strength in production, distribution, brand name awareness and quality recognition within retail and commercial markets," said Heng Jing Lu, chief executive officer.
He highlighted that results for 2003, particularly the fourth quarter, reflect the implementation of a strategy to produce more premium products, which generally require a longer production cycle, and hence, resulted in lower output for the full year as the company transitions its operations. As an example of the company's changing production strategy, the company noted an order, announced in December 2003, for flour from the purchasing agents of KFC in China.
The company also said it closed three manufacturing factories in 2003: the Xinxiang facility in January 2003, due to the expiration of a sub-contracting agreement; its Xinxian factory in May 2003, and a noodle factory in Taian in December 2003, due to the impact of SARS and a decision to reduce losses in these locations and better utilize New Dragon Asia's resources.
About The Company
Headquartered in Shandong, P.R.C., with a corporate office in Hong Kong, New Dragon Asia Corp. is engaged in the milling, sale and distribution of flour and related products, including instant noodles, to retail and commercial customers throughout China. The company markets its well-established product line through a network of 216 key distributors and 16 regional offices in 27 Chinese provinces with an aggregate production capacity of approximately 110,000 tons of flour and more than 110 million packages of instant noodles.
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward- looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning the company's operations and financial performance and condition. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. The company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others, the impact of competitive products and pricing; changes in consumer preferences and tastes or perceptions of health-related issues; effectiveness of advertising or market-spending programs; changes in laws and regulations; fluctuations in costs of production, foreign exchange and interest rates; and other factors as those discussed in the Company's reports filed with the Securities and Exchange Commission from time to time.
(Financial table follows)
New Dragon Asia Corp. And Subsidiaries
Consolidated Statements of Income
(Thousands, Except Per Share Data)
For the For the
Three Months Ended Year Ended
(Unaudited) (Audited)
December 25, December 25,
2003 2002 2003 2002
---- ---- ---- ----
USD'000 USD'000 USD'000 USD'000
Net Sales $10,553 $10,870 $30,773 $33,704
Cost of Goods Sold (7,334) (8,807) (24,852) (27,596)
------- ------- -------- -------
Gross Profit 3,219 2,063 5,921 6,108
Operating Expenses
Selling & distribution
expenses (577) (381) (1,330) (1,161)
General & administrative
expenses (1,259) 53 (2,399) (601)
------- ------- -------- -------
Income from Operations 1,383 1,735 2,192 4,346
Other Income & Expenses
Interest expenses (54) (68) (249) (265)
Interest income (164) 51 4 194
Other income 1,176 487 1,226 487
------- ------- -------- -------
Income before Taxes 2,341 2,205 3,173 4,762
Provision for
Income Taxes (129) (190) (447) (609)
------- ------- -------- -------
Net Income $2,212 $2,015 $2,726 $4,153
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Per Common Share:
Net income per share:
Basic $0.05 $0.05 $0.06 $0.10
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Diluted $0.05 $0.05 $0.06 $0.10
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Weighted average common shares
outstanding:
Basic 44,949 40,911 42,108 40,911
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Diluted 44,949 40,911 42,108 40,911
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