Chai-Na-Ta Corp. Announces Fiscal 2000 Third Quarter Results.Business Editors LANGLEY Lang·ley , Mount A peak, 4,227.9 m (14,026 ft) high, in the Sierra Nevada of southern California. lang·ley n. pl. , B.C.--(BUSINESS WIRE)--Oct. 31, 2000 Chai-Na-Ta (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :CC.)(OTCBB OTCBB See OTC Bulletin Board (OTCBB). :CCCFF) today reported financial results for its fiscal third quarter ended August 31, 2000. Revenue declined to $573,000 in the fiscal 2000 third quarter from $3,449,000 in the same quarter of fiscal 1999, due to the completion of bulk root sales in different quarters during the two fiscal years. The Company recorded a gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. of 30% in the third quarter of fiscal 2000 compared to a gross loss of 13% in the fiscal 1999 third quarter. The net loss for the quarter ended August 31, 2000 was $13,000 ($0.00 per share), significantly better than the net loss of $1,399,000 ($0.31 per share) in the previous year period. During the fiscal 2000 third quarter, interest and financing charges were $27,000, substantially lower than interest and financing charges of $697,000 in the third quarter of fiscal 1999. The improvement resulted from the repayment Repayment The act of paying back a debt. Notes: Everyone has to repay their debts eventually. See also: Debt, Defeasance, Loan in 2000 of a line of credit and the success of a restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). plan initiated in May 2000, when a change of control gave Herb King International Limited, a subsidiary of Hong n. 1. A mercantile establishment or factory for foreign trade in China, as formerly at Canton; a succession of offices connected by a common passage and used for business or storage. Kong-based Road King Infrastructure Limited, majority ownership of Chai-Na-Ta. Other income of $861,000 in the fiscal 2000 third quarter related mainly to the winding up of a joint venture with the Skeetchestn Indian Band The Skeetchestn Indian Band is a member of the Secwepemc (Shuswap) Nation, located in the Central Interior region of the Canadian province of British Columbia. Its main Indian reserve is located at Savona, British Columbia. , and compared with a loss of $26,000 in the previous year period. In the first nine months of fiscal 2000, revenue was $11,860,000 compared to $14,316,000 in the nine months ended August 31, 1999. The Company recorded net earnings for the nine months ended August 31, 2000 of $10,206,000 ($1.14 per share), compared to a net loss of $3,644,000 ($0.87 per share) in same nine months of the prior year. Interest and financing charges of $86,000 were recorded in the first nine months of fiscal 2000, compared to interest and financing charges of $2,379,000 in the nine months ended August 31, 1999. Other income of $12,572,000 in the fiscal 2000 first nine months was related mainly to debt forgiveness Forgiveness Angelica, Suor is forgiven by the Virgin Mary for ill-considered suicide. [Ital. Opera: Puccini, Suor Angelica, Westerman, 364] Bishop of Digne associated with the Company's restructuring and compares to other income of $177,000 in the prior year period. Working capital totaled $10,096,000 at the end of fiscal 2000 third quarter, down from $12,272,000 for the same period in the previous year. The reduction reflected a writedown writedown A reduction in the value of an asset carried on a firm's financial statements. For example, the firm's accountants, believing the inventory is overvalued, may decide to take a writedown by reducing inventory valuation. of ginseng ginseng (jĭn`sĕng), common name for the Araliaceae, a family of tropical herbs, shrubs, and trees that are often prickly and sometimes grow as climbing forms. crops that contributed to fiscal 1999's operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $17,768,000. "The outlook has improved considerably for the industry and especially for Chai-Na-Ta," said Chairman and Chief Executive Officer William William, crown prince of Germany William or Frederick William, 1882–1951, crown prince of Germany, son of William II. In World War I he commanded (1914) an army on the Western Front and was nominal commander in the German attack Zen Zen Important school of Buddhism that claims to transmit the experience of enlightenment achieved by the Buddha Gautama. Arising as Chan in China in the 6th century (introduced by Bodhidharma), it divided into two schools, the Southern school, which believed in sudden . "Ginseng root prices, which reached historical lows in 1999, now exceed Chai-Na-Ta's breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations level and continue to trend higher. Many smaller growers Growers are the people, animals, plants, and various living creatures that assist in the growing of plants and other living creatures. More specifically, the term "growers" refers to individual people who put forth effort to grow plants for food and medicinal use, including the have been forced from the business and we anticipate that reduced supply will help propel pro·pel tr.v. pro·pelled, pro·pel·ling, pro·pels To cause to move forward or onward. See Synonyms at push. [Middle English propellen, from Latin the rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective in prices. "The harvest (tool, networking) Harvest - A highly scalable, customisable system for discovering resources on the Internet. Version: 1.3. http://tardis.ed.ac.uk/harvest/. is proceeding well at our farms in British Columbia British Columbia, province (2001 pop. 3,907,738), 366,255 sq mi (948,600 sq km), including 6,976 sq mi (18,068 sq km) of water surface, W Canada. Geography and Ontario Ontario, city, United States Ontario, city (1990 pop. 133,179), San Bernardino co., S Calif., near Los Angeles, in a region of vineyards; inc. 1891. . As a result of our relationship with Road King, Chai-Na-Ta is essentially debt free. We are leveraging Road King's financial and human resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. , as well as its business network in China, to aggressively pursue our two major thrusts for growth, farming and value added Value Added The enhancement a company gives its product or service before offering the product to customers. Notes: This can either increase the products price or value. product development," Mr. Zen said. Chai-Na-Ta continues to sponsor research on North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. ginseng extract To decompress. WinZip and other decompression utilities use the term to mean "pulling out" the original files from the compressed archive. See WinZip and data compression. . In September September: see month. 2000, the results of a study at the University of Toronto/St. Michael's Hospital on the use of North American ginseng in treating diabetes diabetes or diabetes mellitus (məlī`təs), chronic disorder of glucose (sugar) metabolism caused by inadequate production or use of insulin, a hormone produced in specialized cells (beta cells in the islets of were published in the journal Diabetes Care. This research showed that North American ginseng plays a positive role in controlling postprandial postprandial /post·pran·di·al/ (-pran´de-al) occurring after a meal. post·pran·di·al adj. Following a meal, especially dinner. glucose levels in type II diabetic diabetic /di·a·bet·ic/ (-bet´ik) 1. pertaining to or affected with diabetes. 2. a person with diabetes. di·a·bet·ic adj. 1. patients. "We expect that additional research will further improve public awareness of ginseng's benefits and thereby enhance the growth of our business," Mr. Zen said. Chai-Na-Ta Corp., based in Langley, British Columbia Langley, British Columbia can mean the following:
adj. Of or relating to the estimated value that is added to a product or material at each stage of its manufacture or distribution: ginseng-based products. This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that reflect the Company's expectations regarding future events. These forward-looking statements involve risks and uncertainties, and actual events could differ materially from those projected. Such risks and uncertainties include, but are not limited to, the success of the Company's ongoing research programs, general business conditions, and other risks as outlined in the Company's periodic filings, Annual Report, and Form 20-F.
CHAI-NA-TA CORP.
Consolidated Interim Financial Statements
Balance Sheets
-------------------------------------------------------------------
Unaudited
in thousands of Aug 31 Aug 31
Canadian dollars 2000 1999
-------------------------------------------------------------------
$ $
CURRENT ASSETS
Cash 602 690
Accounts receivable 1,147 2,715
Inventory 2,388 3,894
Ginseng crops 7,817 13,008
Prepaids and other current assets 665 419
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12,619 20,726
Investment - 3,285
Ginseng crops 19,743 20,230
Capital assets 10,080 11,025
Other assets 109 2,325
-------------------------------------------------------------------
42,551 57,591
-------------------------------------------------------------------
CURRENT LIABILITIES
Line of credit - 3,423
Short term borrowings 294 -
Accounts payable & accrued liabilities 2,131 4,559
Current portion of term debt 98 472
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2,523 8,454
Term debt 6,338 28,090
Deferred gain - 703
Capital due to co-venturer - 750
Deferred income taxes - 1,308
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8,861 39,305
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SHAREHOLDERS' EQUITY
Share capital 38,200 18,035
Equity component of convertible debt
and warrants 1,062 1,062
Cumulative translation adjustment (91) 368
Retained earnings (5,481) (1,179)
-------------------------------------------------------------------
33,690 18,286
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42,551 57,591
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Statements of Earnings (Loss)
-------------------------------------------------------------------
Unaudited Three months Nine months
in thousands of ended Aug 31 ended Aug 31
Canadian dollars 2000 1999 2000 1999
-------------------------------------------------------------------
$ $ $ $
Revenue 573 3,449 11,860 14,316
Cost of sales 400 3,882 11,186 14,217
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Gross profit 173 (433) 674 99
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Selling, general, and
administrative expenses 1,020 998 2,954 3,402
Interest and financing
charges 27 697 86 2,379
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1,047 1,695 3,040 5,781
-------------------------------------------------------------------
Operating Loss (874) (2,128) (2,366) (5,682)
Other income (loss) 861 (26) 12,572 177
-------------------------------------------------------------------
Income (loss) before taxes (13) (2,154) 10,206 (5,505)
Income taxes - (755) - (1,861)
-------------------------------------------------------------------
NET EARNINGS (LOSS)
FOR THE PERIOD (13) (1,399) 10,206 (3,644)
-------------------------------------------------------------------
-------------------------------------------------------------------
Basic earnings (loss)
per share $(0.00) $(0.31) $1.14 $(0.87)
-------------------------------------------------------------------
Fully diluted earnings
(loss) per share $(0.00) $(0.31) $0.58 $(0.87)
-------------------------------------------------------------------
Weighted average number of
shares used to calculate :
-------------------------------------------------------------------
Basic earnings
per share 14,264,508 4,524,053 8,990,476 4,189,053
-------------------------------------------------------------------
Fully diluted earnings
per share 34,663,657 4,524,053 17,743,565 4,189,053
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Statements of Retained Earnings (Deficits)
-------------------------------------------------------------------
Unaudited Three months Nine months
in thousands of ended Aug 31 ended Aug 31
Canadian dollars 2000 1999 2000 1999
-------------------------------------------------------------------
$ $ $ $
Balance, beginning of period (5,468) 220 (15,687) 2,465
Net loss for the period (13) (1,399) 10,206 (3,644)
-------------------------------------------------------------------
Balance, end of period (5,481) (1,179) (5,481) (1,179)
-------------------------------------------------------------------
Statements of Changes in Financial Position
-------------------------------------------------------------------
Unaudited Nine months ended
in thousands of Aug 31 Aug 31
Canadian dollars 2000 1999
-------------------------------------------------------------------
$ $
OPERATING ACTIVITIES
Net earnings (loss) for the period 10,206 (3,644)
Items not affecting cash
Depreciation and amortization 238 243
Deferred income taxes - (1,819)
Gain on forgiveness of debt (13,548) -
-------------------------------------------------------------------
Working capital provided from
(used in) operations (3,104) (5,220)
Changes in non-cash operating items (Note 1) 7,163 10,328
Changes in non-current crop costs (3,893) (3,779)
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166 1,329
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FINANCING ACTIVITIES
Line of credit (4,917) (1,176)
Issuance of share capital (Note 3) 5,000 814
Issuance (retirement) of term debt (45) (540)
Deferred gain - 38
Joint venture capital (returned to) co-venturer - (188)
-------------------------------------------------------------------
38 (1,052)
-------------------------------------------------------------------
INVESTING ACTIVITIES
Investment - 87
Purchase of capital assets, net (162) (190)
Decrease (Increase) in other assets 26 (438)
Deferred translation gain (loss) (100) (115)
-------------------------------------------------------------------
(236) (656)
-------------------------------------------------------------------
NET CHANGE INFLOW (32) (379)
CASH, BEGINNING OF PERIOD 634 1,069
-------------------------------------------------------------------
CASH, END OF PERIOD 602 690
-------------------------------------------------------------------
Notes to the Interim Consolidated Financial Statements
1. CHANGES IN NON CASH OPERATING ITEMS
-------------------------------------------------------------------
Unaudited Nine months ended
in thousands of Aug 31 Aug 31
Canadian dollars 2000 1999
-------------------------------------------------------------------
$ $
Accounts receivable 663 238
Inventory 9,549 12,656
Ginseng crops (1,802) (2,355)
Prepaids and other current assets (440) 177
Accounts payable (808) (87)
Short term borrowing 1 (301)
-------------------------------------------------------------------
7,163 10,328
-------------------------------------------------------------------
2. RECONCILIATION OF EARNINGS TO U.S. GAAP
-------------------------------------------------------------------
Unaudited Three months Nine months
in thousands of ended Aug 31 ended Aug 31
Canadian dollars 2000 1999 2000 1999
-------------------------------------------------------------------
$ $ $ $
Net earnings (loss) under
Canadian GAAP (13) (1,399) 10,206 (3,644)
Adjustment to reflect GAAP differences:
Accounting for interest - (56) - (107)
Financial instruments - 15 67 45
-------------------------------------------------------------------
Net earnings (loss) under U.S. GAAP (13) (1,440) 10,273 (3,706)
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Basic earnings (loss)
per share - US GAAP $(0.00) $(0.32) $1.14 $(0.88)
Fully diluted earnings
(loss per share - US GAAP $(0.00) $(0.32) $0.58 $(0.88)
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3. SHARE ISSUANCE
During the period, the Company issued 7,348,618 common shares for
cash. The Company also issued 1,889,337 common shares and 20,399,149
preferred shares to retire $23 million of debt and payables.
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