China-Biotics, a leading developer, manufacturer and distributor of probiotics products in China, announced a 62 percent revenue growth for first quarter of its 2011 fiscal year, ended June 30, 2010.
Net sales of the company in the first quarter of fiscal year 2011 increased by 61.8 percent to $24.9 million from $15.4 million in the first quarter of fiscal year 2010. The increase was primarily due to increased sales volume in retail and bulk additive products, and bulk additive products accounted for 40 percent of total quarterly net sales. Bulk sales increased by 170 percent year-over-year and 46 percent quarter-over-quarter from the fourth quarter of fiscal year 2010.
The company's gross profit has increased 56.8 percent to $17.1 million from $10.9 million in the same period of fiscal year 2010. Gross margin was 68.6 percent compared with 70.8 percent in the same period of fiscal year 2010. The decline in blended gross margin was mainly attributable to a product mix change as comparatively lower margin bulk products increasingly account for larger share of the total sales.
Mr Jinan Song, chairman, China-Biotics said, "We are very excited to report the record-setting first quarter results as our business has outperformed our expectations by all metrics. The rapidly growing sales of our bulk additive products, improving economies-of-scale, launches of new retail products all contributed to another robust quarter. In particular, the successful integration of our bulk additives facility has enabled us to quickly ramp up production to meet high demand from dairy producers and animal feed manufacturers."
The company's research and development (R&D) expenses were $1.1 million, a 60.5 percent increase from $0.7 million in the first quarter of fiscal year 2010. The increase in R&D expenses is said to be mainly due to additional research costs related to the development of new products. R&D expenses as a percentage of revenue was 4.3 percent, in line with the first quarter of fiscal year 2010.
Selling expenses for the first quarter of fiscal year 2011 were $3.1 million, compared with $2.3 million in first quarter in fiscal year 2010. This increase in selling expenses was primarily caused by the increase of overall sales. However, selling expenses as a percentage of revenue decreased from 15.2 percent in the first quarter of fiscal year 2010 to 12.3 percent for the first quarter of fiscal year 2011.
The company's total operating expenses for the first quarter of fiscal year 2011 were $5.2 million compared with $4.0 million in the first quarter of fiscal year 2010. Operating expenses as a percentage of revenue decreased from 26.3 percent in the first quarter fiscal year 2010 to 21. percent in the first quarter of fiscal year 2011.
Operating income of China Biotics was $11.9 million compared with $6.9 million in the same period of fiscal year 2010, reflecting a 72.8 percent year-over-year increase.
Mr Song said, "With favorable receptions of our bulk products in the marketplace and the higher production utilization in our recently opened new Qingpu facility, our top line growth, once again, outpaced that of our operaing expenses. We remain focused on strengthening our core competence by continuing investing in R&D and new product development. We successfully launched three retail products and recruited critical research talents."