Chai-Na-Ta Corp. Reports 2004 Year-end Results.RICHMOND, British Columbia This page is for the city of Richmond, British Columbia. For the federal electoral district in this locality see Richmond (electoral district); for the provincial electoral district see Richmond (provincial electoral district). -- Chai-Na-Ta Corp. (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :CC)(OTCBB OTCBB See OTC Bulletin Board (OTCBB). :CCCFF), the world's largest supplier of North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. 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. , today announced 2004 net earnings of $80,000, or $0.00 per basic share, compared to 2003 net earnings of $2.6 million, or $0.17 per basic share. Revenue decreased to $7.4 million in 2004 from $16.6 million in 2003. Gross margin was relatively steady at 35% in 2004 compared to 38% in 2003. "We are disappointed that we did not meet the financial goals that we set at the beginning of 2004. Our industry was negatively affected by a stronger Canadian dollar Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents and a rapid rise in ginseng root prices late in 2003 that left the market off balance, as buyers misjudged price movements. In addition, buyers remain hesitant to buy root, due to concerns about currency fluctuations and other market variables," said William Zen, Chairman and Chief Executive Officer. "Another challenge facing growers is a decision by the Chinese government Ever since Republic of China founded in January 1st, 1912, China has had several regional and national governments. List
"Due to the uncertainty in the ginseng market and the fluctuating value of the Canadian dollar, forecasting 2005 profitability is difficult. Regardless, we will take all necessary actions to mitigate the impact of these factors and to facilitate the continuing profitability of Chai-Na-Ta. As well, our balance sheet remains healthy, although not as strong as in 2003. The ratio of current assets Current Assets Appearing on a company's balance sheet, it represents cash, accounts receivable, inventory, marketable securities, prepaid expenses, and other assets that can be converted to cash within one year. over current liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. exceeds 2:1," added Mr. Zen. Chai-Na-Ta harvested fewer acres in 2004 than in the prior year and produced 506,626 pounds of North American ginseng, down from 775,630 pounds in 2003. Average yield per acre rose to 2,111 pounds from 2,096 pounds. Prices softened after the winter of 2004 and the Company decided not to sell product unless reasonable returns were attainable. About 58% of Chai-Na-Ta's 2003 harvest and none of 2004's have been sold. The Company's average selling price The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. rose to about $21 per pound of ginseng root in 2004 from about $19 per pound in 2003. "We are confident that underlying Asian demand for our product remains strong; buyers' and grading houses' current resistance to carrying supply is pushing inventory back to the farm gate. In 2005, we expect prices to stabilize and moderately improve, as a result of lower production industry-wide," Mr. Zen said. During 2004 Chai-Na-Ta lowered its cost per pound of root to about $13 from about $14 in 2003. The Company believes that its average production cost is below the industry's. Chai-Na-Ta's first processing facility in Ontario was finished on time and on budget. With this facility completed, capital expenditures are expected to be below $1 million in 2005, down from more than $3 million in 2004. "In mid-2004, we opened a showroom to display our graded root and ginseng based herbal formulas. Sales were modest but we enhanced brand awareness and attracted several hundred members to our preferred customer program," Mr. Zen noted. "In 2005, some of our value-added products will be sold in B.C.'s Asian supermarket An Asian supermarket, sometimes called an "Oriental supermarket", is a grocery store in non-Asian countries that stock items imported from the many countries in East and Southeast Asia. chains." 2004 fourth quarter During the quarter ended December 31, 2004, revenue was $1.1 million, down from $4.8 million in the same quarter last year. Gross loss was 0.6% in the 2004 fourth quarter compared to gross margin of 51% in the 2003 period. Net loss in the 2004 fourth quarter was $660,000, or $0.03 per basic share, compared to net earnings of $1.2 million, or $0.08 per basic share, in the same period last year. Chai-Na-Ta Corp., based in Richmond, British Columbia, is the world's largest supplier of North American ginseng. The Company farms, processes and distributes North American ginseng as bulk root, and supplies processed material for the manufacture of value-added ginseng-based products. This news release contains forward-looking statements 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. (TSX:CC) (OTC Bulletin Board OTC Bulletin Board An electronic quotation listing of the bid and asked prices of OTC stocks that do not meet the requirements to be listed on the NASDAQ stock-listing system. :CCCFF) |
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