HARBIN, China, April 4, 2011 /PRNewswire-Asia-FirstCall/ -- Emerald Dairy, Inc. (OTC Bulleting Board: EMDY) ("Emerald Dairy" or "the Company") a leading producer and distributor of infant and children's formula products, the Company received final certification by the General Administration of Quality Supervision, Inspection and Quarantine of the People's Republic of China (AQSIQ) for its Bei'an and Hailun production facilities. Additionally, Emerald Dairy provided 2011 guidance for the 2011 year.
Beginning in October 2010, Emerald Dairy and including all infant milk formula and dairy producers in China, were subject to production certification by the General Administration of Quality Supervision, Inspection and Quarantine ("AQSIQ") of the People's Republic of China. The PRC government is conducting these reviews to ensure high food safety standards for all infant milk formula and dairy products in China. Per the regulation, all inspections would be concluded by the end of 2010, with renewal permits issued no later than March 2011. Emerald Dairy's recently completed Hailun facility was approved for full production of 10,000 tons of Xinganglig® and the Company's Xinganling® Organic formulas. The Company's Bei'an facility, where it produces Xinganling® branded formulas and Yi Bai® formula, was also inspected and received operational certification on March 23, 2011.
Emerald Dairy has a total of 19,000 tons newly certified capacity in 2011 versus 10,000 tons in 2010. The Company will focus its sales efforts on its high-margin, Xinganling® infant formulas which include infant formula milk powder, soybean milk powder and rice powder products. Revenue for 2011 is forecast to be around $70.0 million, a 27% increase over 2010. The Company expects to produce and sell approximately 15,000 tons of products in 2011 compared to 10,050 tons in 2010. Adjusted net income is forecast to be $10.5 million.
"Our re-certification process by the AQSIQ was a critical milestone," began Yongshan Yong, Chairman and CEO of Emerald Dairy. "As a Company that has implemented best product processes since we began operations in 1989, we welcomed the renewed focus on high production standards in the industry. As one of the companies in China that experienced no production restrictions from several scandals which have impacted our industry, we support any and all measures by agricultural and consumer food authorities that enhance the quality of milk based products and manufacturing methods. The industry is growing at 20% a year and our own market research has shown demand for formulas continue to outstrip supply. During the past few years, this imbalance has driven a number of smaller, undercapitalized startup formula companies into the market, many which do not meet the high safety and production standards that Emerald Dairy and other larger manufacturers adhere to. We expect the certification process to eliminate many of these companies which will create more sales opportunities for us as we move into 2011. Our growing brands in the value and mid-tier categories, combined with acceleration in the number of newborns in our target tier 3 and 4 cities, give us confidence in our ability to sell out all existing capacity by the end of 2011 and meet our guidance for the year."
About Emerald Dairy
Through its wholly-owned operating subsidiaries, Emerald Dairy, Inc. is a producer and distributor of infant and children's formula, milk powder and soybean products in the People's Republic of China. The Company's products are sold under two brand names -- "Xing An Ling," designed for middle and high-end customers, and "Yi Bai," designed for low-end customers. Emerald Dairy's products are distributed throughout 20 provinces in mainland China and sold in over 6,000 retail points. For further information about Emerald Dairy Inc., please visit the Company's website at http://www.emeralddairy.com/
About Non-GAAP Financial Measures
To supplement the Company's consolidated financial statements, which statements are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: non-GAAP adjusted net income, and non-GAAP adjusted EPS. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. The Company uses these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding the Company's performance and liquidity by excluding certain expenses and expenditures that may not be indicative of "recurring core business operating results", meaning operating performance excluding non-cash amortization charges for intangibles. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing performance and when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitate management's internal comparisons to historical performance and liquidity as well as comparisons to competitors' operating results. The Company believes these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of the business.
This press release contains certain "forward-looking statements" that involve a number of risks and uncertainties. There can be no assurance that such statements will prove to be accurate and the actual results and future events could differ materially from management's current expectations. Such factors include, but are not limited to, the Company's ability to obtain the necessary financing to continue and expand operations, to market its products in new markets and to offer products at competitive pricing, to attract and retain management, and to integrate and maintain technical information and management information systems, political and economic factors in the PRC, compliance requirement of laws and regulations of the PRC, the effects of currency policies and fluctuations, general economic conditions and other factors detailed from time to time in the Company's filings with the United States Securities and Exchange Commission and other regulatory authorities. The Company undertakes no obligation to publicly update or revise any forward- looking statements, whether as a result of new information, future events or otherwise.
For more information, please contact:
John Mattio, SVP
HC International, Inc.
Tel: US +1-203-616-5144
SOURCE Emerald Dairy, Inc.
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