QINGDAO, China and ROCKVILLE, Md., Aug. 9, 2011 /PRNewswire-Asia/ -- Synutra International, Inc. (NASDAQ: SYUT), a leading infant formula company in China and a producer, marketer and seller of nutritional products for infants, children and adults, today announced financial results for the first quarter of fiscal 2012 ended June 30, 2011.
Mr. Liang Zhang, Chairman and CEO of Synutra, remarked, “We are pleased with the continued recovery of our branded formula sales. Though there is significant room for improvement before we reach our targeted performance goals, we believe our branded formula sales demonstrate that our recovery is ongoing and sustainable. Quality, especially for domestic infant dairy producers, continues to grow in prominence in the eyes of China‘s consumers. As such, we believe we are well-positioned with our focus on premium quality brands to gain greater consumer recognition.”
Mr. Donghao Yang, Chief Financial Officer of Synutra, commented, “We do recognize our first quarter 2012 topline performance shows significant volatility versus prior quarters. This is due to two main factors. The majority of the difference is attributable to our decision not to enter into industrial milk powder sales this quarter. In the past, we have used these sales as a form of short-term financing. We are pleased to note that as our sales performance strengthened, we we were able to meet our short-term cash requirements. In addition, it is also important to note that $16.6 million of formula sales were shifted from the June quarter to early July. A series of events led to this revenue shift but it primarily reflects whey powder delivery timing from our French supplier. Our management team acted quickly to identify an alternate source and we were able to make up much of the delayed sales by early July through working overtime. More importantly, this issue has been resolved. We have secured a reliable interim supplier and our French supplier will begin regular shipments in August.”
“As an infant formula company, Synutra’s performance is best tracked through its powdered formula sales. Accounting for the shipment delay, our formula sales in the June quarter would have increased by $8.4 million from the March quarter. Furthermore, as you can see from the increase in raw materials and inventory on our balance sheet, we are quickly ramping up to meet the incoming order demand. We are proud of this achievement and believe that this marks only the first of many quarters of sustained sales growth and margin enhancement,” Mr. Yang concluded.
