LANGLEY, BRITISH COLUMBIA--Chai-Na-Ta Corp. (TSX: "CC"; OTCBB:
"CCCFF") today reported its financial results for the third
quarter ended September 30, 2002.
Revenue fell to $3.8 million in the 2002 third quarter from $4.4
million in the comparable 2001 period. The net loss in the three
months ended September 30, 2002 increased to $249,000 ($0.02 per
share) from 217,000 ($0.02 per share) in the prior year period.
During the first nine months of 2002, revenue rose to $12.7
million from $12.2 million in the nine months ended September 30,
2001. The net loss was $350,000 in the 2002 period ($0.02 per
share) compared to a net loss of $312,000 ($0.02 per share) in
the first nine months of 2001.
The Company recorded a negative gross margin of 1% in the 2002
third quarter compared to a gross profit margin of 10% in the
three months ended September 30, 2001. The gross margin was 5%
for the first nine months of 2002 compared to 18% in the
comparable 2001 period. The decline was due mainly to rust, which
reduced the price of lower grade root from the 2001 British
Columbia harvest. Rust is primarily an aesthetic problem that
"We began our 2002 fall harvest in October, and we anticipate a
good crop in British Columbia with only minor yield loss in
Ontario, due to an unprecedented series of frosts in mid-May that
affected the entire industry," said William Zen, Chairman and
Chief Executive Officer. "We expect that ginseng root prices will
trend upward over the next couple of years."
"With 1,283 acres currently under cultivation, Chai-Na-Ta remains
the market leader in ginseng farming. We intend to continue to
demonstrate our ability to reduce costs, increase efficiency and
maximize production through a balanced planting strategy in
Ontario and British Columbia that will enhance the growth and
stability of our business," Mr. Zen added. "Moreover, we are on
track to achieve our forecast of near breakeven results in 2002
and a return to profitability in 2003."
Selling, general and administrative expenses decreased to
$345,000 (9% of revenue) in the 2002 third quarter from $643,000
(15% of revenue) in the same period last year. During the nine
months ended September 30, 2002, SG&A fell to $1.3 million (10%
of revenue) from $2.3 million (19% of revenue) in the comparable
Interest and financing charges for the nine months ended
September 30, 2002 were about 85% lower than in the same period
last year, as bank borrowings declined due to cash flow
The Company's net cash position at September 30, 2002 rose
sharply to $1.4 million from $437,000 as at December 31, 2001,
largely reflecting net 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.