Feihe Intl (NYSE:ADY)

First Quarter 2012 Financial Highlights:

• Revenue of $62.9 million in 1Q 2012 vs. $67.7 million in 1Q 2011:
  • Revenue from branded milk powder products was $59.4 million, or 94.4% of total sales, in 1Q 2012 vs.$47.9 million, or 70.8% of total sales, in 1Q 2011
  • Revenue from raw milk powder was $0.9 million, or 1.4% of total sales, in 1Q 2012 vs. $16.1 million, or 23.8% of total sales, in 1Q 2011, and $24.8 million, or 28.5% of total sales in 4Q 2011
• Gross profit increased to $34.0 million, or 39.3%, in 1Q 2012 vs. $24.4 million in 1Q 2011, and up from$30.9 million in 4Q 2011
• Gross margin was 54.0% in 1Q 2012 vs. 36.0% in 1Q 2011, up from 35.5% in 4Q 2011
• Income from operations was $9.7 million in 1Q 2012 vs. $5.0 million in 1Q 2011, and up significantly from a loss of $3.8 million in 4Q 2011
• Net income was $8.3 million in 1Q 2012 vs. $4.7 million in 1Q 2011, and up significantly from a loss of $10.5 million in 4Q 2011
• Diluted net income (loss) from continuing operations per common share ("EPS") was $0.40 in 1Q 2012 vs.$0.23 in 1Q 2011, and up significantly from $(0.31) in 4Q 2011

Mr. Leng You Bin, the Company's Chairman and Chief Executive Officer, stated, "We are extremely pleased with our first quarter results. Our high margin and strongly improved net income demonstrated the effectiveness of our decision to concentrate on the sales of our premium branded infant formula products. In particular, sales of AstroBaby grew 203.2% and Feifan grew 74.6% compared to the first quarter of 2011. Net income improved 179.0% in the first quarter of 2012 compared with the fourth quarter of 2011. We will remain focused and committed to expanding sales of our premium infant formula."

Mr. Liu Hua, the Company's Vice Chairman and Chief Financial Officer, stated, "We are pleased to report our first quarter 2012 financial results today. Given our strong growth, we are very confident in our business going forward. In addition, we completed the redemption of all of Sequoia's redeemable common stock in April 2012. We are continuing our plan of focusing on sales of premium products and look forward to bringing value to consumers and our shareholders."

BEIJING and LOS ANGELES, April 30, 2012 /PRNewswire-Asia-FirstCall/ -- Feihe International, Inc. (NYSE: ADY; "Feihe International" or the "Company"), one of the leading producers and distributors of premium infant formula, milk powder and soybean, rice and walnut products in China, today announced that it has introduced the Product Inquiry System ("PIS") for infant formula products and launched Super Feifan, a new super premium infant formula series.

PIS was soft-launched in January and officially started running in March 1, 2012. Feihe International is the first Chinese dairy company using such an advanced system. Consumers can enter the system by inputting the tracing number at the bottom of each can packaged AstroBaby, Feifan and Super Feifan product and will be able to obtain important information regarding the particular product they purchased such as the product's milk producing region, production factory, production date, production batch, testing point and testing date. Consumers can also view the production process from the system.

Mr. Leng You Bin, the Company's Chairman and Chief Executive Officer, stated, "We are extremely pleased to launch our Product Inquiry System. The system is based on our vertical integration model and embodies our core competency. It is also requires advanced information and management systems. We keep our production procedures transparent to our consumers because we understand the challenges that Chinese dairy companies face today. The fact that we have not had any quality issues in our 50 years demonstrates our foremost focus on quality. We will continue to raise awareness of the premium quality of our products to consumers."

Super Feifan continues the Company's product line of premium infant formula. Super Feifan was specially designed for Chinese babies and meets the nutritional needs of infants at three different stages of development, focusing on intelligence, immunity, sleeping and digesting systems, and optimizing protein proportions.

Mr. Leng continued, "We will continue to provide more premium infant formula products for Chinese babies to improve our footprint as a leading infant formula company."

Fourth Quarter 2011 Results

• Sales increased 42.1% to $87.0 million from $61.2 million in 4Q 2010
• Net loss attributable to the Company for the fourth quarter of 2011 was $10.5 million, or diluted EPS per common share of $(0.51), a decrease from net income attributable to the Company of $0.8 million, or diluted EPS per common share of $0.10, in the fourth quarter of 2010.

Mr. Liu Hua, the Company's Vice Chairman and Chief Finance Officer, stated, "Our continued growth demonstrates that we are increasing our footprint in the Chinese infant formula industry.  Our results of $87.0 million for the fourth quarter with $60.3 million from branded milk products for 4Q are excellent indications of our continued growth in higher margin branded products.  In particular, sales of AstroBaby grew 890.2% and Feifan grew 110.1% compared to the fourth quarter of 2010.  Although we had a net loss in the fourth quarter, the loss was due to loss in long term tax liabilities, loss from discontinued operations, and loss from the sale of wholesale milk powder.  Sales from our branded infant formula products continue to increase quarter over quarter and we are confident that it will continue to grow in the future."  Mr. Liu continued, "2012 is the Company's 50th year anniversary and the fact that we have never had any product quality issues speaks to our strength in this industry.  We will continue to strive to be one of the leading infant formula producers and we look forward to another 50 years."

Third Quarter 2011 Results

SHANGHAI, July 21, 2011 /PRNewswire/ -- Cognizant (NASDAQ:CTSH - News), a leading provider of information technology, consulting, and business process outsourcing services, today announced the successful deployment of an integrated food safety solution at Feihe International, Inc. (NYSE:ADY - News), formerly known as American Dairy, Inc., one of the leading producers and distributors of premium infant formula, milk powder, and soybean, rice and walnut products in China.

This innovative end-to-end solution was developed by Cognizant in collaboration with Heilongjiang LiGao High-Tech Development Co. Ltd., a high-technology services company, and FoodlogiQ, a leading provider of traceability, food safety, and sustainability software. The solution enables Feihe International to trace foods, feeds, ingredients, and food-producing animals through all stages of production, processing, and distribution.

First Quarter Results:

• Revenue of $76.4 million in 1Q11 vs. $81.4 million in 1Q10, up 22.6% sequentially from $62.3 million in 4Q10:         
• Gross profit of $27.9 million in 1Q11 vs. $38.4 million in 1Q10, up 46.8% sequentially from $19.0 million in 4Q10;
• Gross margin was 36.5% in 1Q11 vs. 47.2% in 1Q10, up from 30.5% in 4Q10;
• Net income of $4.7 million in 1Q11 vs. net income of $5.5 million in 1Q10, up 487.5% from $0.8 million in 4Q10; and
• Diluted EPS per common share was $0.26 in 1Q11 vs. $0.25 in 1Q10, up significantly from $0.08 in 4Q10.

Mr. Leng You Bin, the Company's Chairman and Chief Executive Officer, stated, "We are extremely pleased with our first quarter results.  Our results of $76.4 million in revenue and $4.7 million in net income demonstrate the progress we have made the last few months in strengthening our brand and market position, and our footprint in the competitive Chinese milk powder industry.  With strong profits in the past few quarters, we plan to continue improving our operations across all functions, including improving the cost effectiveness of our selling expenses and increasing sales at existing retail sales points to drive greater profitability.  We remain committed to being one of the leading infant formula providers in China and we believe that we are well positioned to execute our strategic initiatives to grow sales at existing retail sales points throughout 2011 and capitalize on market opportunities."  

Mr. Liu Hua, the Company's Vice Chairman and Chief Financial Officer, stated, "We are pleased to report our first quarter 2011 financial results today.  As we approach the middle of the second quarter of 2011, we would like to reiterate our revenue guidance of approximately $290 million and net income guidance of approximately $22 - $24 million for the full year of 2011."

Fourth Quarter Highlights:

• Exceeding guidance, revenue increased 41.6% to $62.3 million from $44.0 million in 4Q 2009
• Gross profit increased to $19.0 million from a loss of $(3.0) million in 4Q 2009
• Gross margin was 30.5% in 4Q 2010 vs. a loss of (6.8%) in 4Q 2009
• Net income increased to $1.9 million from a loss of $(27.0) million in 4Q 2009
• Diluted EPS per common share increased to $0.04 from a loss of $(1.24) in 4Q 2009.

Mr. Leng You Bin, the Company's Chairman and Chief Executive Officer, stated, "Our results of $62.3 million in revenue and$1.9 million in net income are excellent indications of our footprint in the competitive Chinese milk powder industry.  We are continuing to make improvements in our operations across our sales and marketing, including improving the cost effectiveness of our selling expenses and increasing sales at existing retail sales points to drive greater profitability.  We are also pleased to announce that we renewed our manufacturing license with the Heilongjiang Bureau of Quality and Technical Supervision.  The renewal permit was granted under regulatory measures introduced by the General Administration of Quality Supervision, Inspection and Quarantine of China in late 2010. According to these new measures, infant formula and dairy product companies that fail to obtain the renewal manufacturing license by the end of March 2011 must cease production.  As one of the dairy companies which consistently provide safe and higher premium quality products, we welcome stricter regulation in the dairy industry and we believe that we are well positioned to execute our strategic initiatives to grow sales at existing retail sales points throughout 2011 and capitalize on market opportunities."  

Mr. Liu Hua, the Company's Acting Chief Financial Officer, stated, "We are pleased to report our fourth quarter and full year 2010 financial results.  As we approach the end of the first quarter of 2011, we are confident that we are taking effective measures to continue to improve our operations across all functions.  Based on cash and actual purchase orders received this quarter to date and management's estimates, we project our total revenue will be approximately $290 million and net income will be approximately $22 - $24 million in the full year of 2011."

 Second Quarter 2010 Financial Highlights:

• Revenue up 26.7% to $52.2 million vs. $41.2 million in 2Q09
• Net loss of $(20.7) million in 2Q10 vs. net income of $7.6 million in 2Q09
• EPS per diluted share down to a loss of $(0.92) vs. $0.40 in 2Q09
  

Financial Guidance:

Mr. Jonathan H. Chou, the Company's Chief Financial Officer, stated, "Despite the softness in this quarter's results, we are pleased to report three month revenue growth of 26.7% compared to the prior year period. Specifically, sales of our branded milk powder products grew 9.0% to $35.0 million compared to the prior year period. As we approach the middle of the third quarter of 2010, we are confident that we are taking effective measures to continue to improve our operations across all functions. With respect to our balance sheet, we continue to address the Company's cash needs versus debt level, which resulted in repayment of approximately $20 million equivalent in selected RMB and USD debt facilities. We will continue strengthen our balance sheet and match most ideal liabilities available to our PRC assets. Based on cash and actual purchase orders received this quarter to date, we project our total revenue will exceed $55 million in the third quarter of 2010."