LANGLEY, British Columbia--(BUSINESS WIRE)--Aug. 15, 2002-- Chai-Na-Ta Corp. (OTCBB:CCCFF)(TSX:CC) today reported its financial results for the second quarter ended June 30, 2002.
Revenue decreased to $3.1 million in the 2002 second quarter from $5.3 million in the three months ended June 30, 2001. The net loss was $193,000 in the second quarter of 2002 ($0.01 per share) compared to a net loss of $261,000 ($0.02 per share) in the prior year period.
"We expect that our successful spring harvest and upcoming fall harvest will produce near breakeven operating results for 2002 as a whole. Moreover, we anticipate a return to profitability in 2003," said William Zen, Chairman and Chief Executive Officer. "Approximately 75% of the 2001 harvest root was sold by June 30 and we have commitments from purchasers to buy most of the remainder in the third quarter."
In the six months ended June 30, 2002, revenue rose 14% to $8.9 million from $7.8 million in the same period last year. The net loss was $101,000 in the second half of 2002 ($0.01 per share) compared to a net loss of $95,000 ($0.01 per share) in the prior year period.
The Company recorded a gross profit margin of 4% in the second quarter of 2002 compared to 19% in the 2001 second quarter. For the six months ended June 30, 2002 the gross margin was 7%, down from 22% in the same period last year. The decline was largely due to the impact of rust on the 2001 harvest in British Columbia. Rust is primarily an aesthetic problem that affects prices.
"Our industry association in British Columbia is currently focused on research initiatives to find methods of preventing and treating rust," said Mr. Zen. "In Ontario, our industry's principal concern is an unprecedented series of frosts in mid-May, which caused significant crop damage. However, it appears that Chai-Na-Ta experienced very little harm to seedlings; and while frost slowed the growth of our more mature gardens, they were not destroyed. We are optimistic that higher prices based on less crop availability will offset any decreased yield or increased costs as a result of the frost damage."
During the 2002 second quarter, selling, general and administrative expenses (SG&A) fell to $468,000 (15% of revenue) from $1.2 million (22% of revenue) in the prior year period. SG&A dropped to $933,000 (11% of revenue) in the 2002 first half from $1.7 million (21% of revenue) in the same period last year.
Interest and financing charges for the six months ended June 30, 2002 were about 88% below those of the prior year period. The decline was directly related to the lower bank borrowings as a result of cash flow improvement.
The Company's net cash position as at June 30, 2002 nearly tripled to $1.2 million from $437,000 as at December 31, 2001, due mainly to the proceeds from the disposition of subsidiaries, together with revenue in excess of short-term borrowings repayment and operating costs.
Chai-Na-Ta Corp., based in Langley, 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 extract powder 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.