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 Sep. 18, 2012 Source: AgFeed Industries, Inc. news release AgFeed Industries, Inc. (PINK SHEETS: FEED, NYSE Alternext: ALHOG), an international agribusiness company with hog production operations in the U.S. and one of the largest independent hog producers and manufacturers of animal nutrients in China, today provided an update on its business. The Company reported unaudited total revenue for the six months ended June 30, 2012 of $177.4 million, comprised as follows for its four reporting segments (in thousands): Animal nutrition $ 30,599 Hog production - United States 114,434 Hog production - China 29,089 Western-style hog farms 3,310 Total $177,432 The Company also estimates that it incurred a net loss for the first half of 2012 in the range of $2.0 million - $3.5 million, which included $2.9 million (after tax) of legal and other expenses associated with the previously announced investigation by the Special Committee of the Board and the resulting professional fees and expenses related to the restatement of the Company's financial statements. Cash and cash equivalents totaled $8.6 million at June 30, 2012. All figures are unaudited. The above first half 2012 amounts do not include the potential effects, if any, of the Company's ongoing restatement process described below. As reported on January 31, 2012, the Special Committee of the Board completed its investigation into certain accounting issues in the animal nutrition and legacy farm hog operations in China. During the investigation by the Special Committee and subsequent further evaluation by management, accounting irregularities were uncovered in both of those segments. The Board and management continue to work closely with McGladrey & Pullen, LLP, the Company's independent public accountants, and the Company's predecessor accounting firm on restating the Company's financial statements for the 2008 fiscal year and subsequent periods through the first two quarters of 2011. The auditors are currently conducting their fieldwork in connection with the audit of the restated financial statements. The Company believes that the effect of the restatements will be non-cash items and will not affect current liquidity. "Our U.S. operations and our animal nutrition business demonstrated stable operating performance in the first half of 2012," said K. Ivan F. Gothner, chairman and chief executive officer. "We commenced breeding at our second western-style facility in China during the second quarter and this business segment has begun to generate meaningful revenue. "First half results were affected by a difficult operating environment in China. Hog prices in China declined in the second quarter and hog production volume was also down as we rationalized underperforming Chinese farms and reduced the overall herd. We believe these actions will improve the efficiency of our Chinese operations and position us well for the future. Ongoing high prices for corn and soybean affected our China hog margin in the first half of 2012 and we expect high input prices and lower margins to continue. Despite these cyclical trends, we continue to receive a favorable reaction to the quality, reliability and pricing of our western-style hog production in the Chinese market. "We believe we have adequate liquidity under current market conditions to fund our operations for the remainder of 2012. We look forward to filing restated financial statements and returning to a regular reporting schedule later this year." Tweet |
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