American Dairy Inc. (ADY, Financial) filed Quarterly Report for the period ended 2010-06-30.
American Dairy Inc. has a market cap of $221.7 million; its shares were traded at around $9.95 with and P/S ratio of 0.8.
The average selling price per kilogram of milk powder increased by 2.3% from $7.10 in the three month period ended June 30, 2009 to $7.26 in the three month period ended June 30, 2010. This increase was primarily attributable to fewer promotional activities, including provisions of sales discounts to distributors. During the three month period ended June 30, 2009, we provided more sales discounts to distributors to compete with promotional activities of other dairy companies and to facilitate the clearance of our inventories packaged prior to the effectiveness in June 2009 of new PRC labeling requirements for dairy products. The average selling price per kilogram for raw milk powder increased by 55.6% from $2.43 in the three month period ended June 30, 2009 to $3.78 in the three month period ended June 30, 2010. This increase was primarily attributable to increased demand and market prices of raw milk.
Our cost of goods sold consist primarily of direct and indirect manufacturing costs, including production overhead costs and shipping and handling costs for the products sold. Cost of goods sold increased approximately $16.6 million, or 97.8%, from approximately $17.1 million for the three month period ended June 30, 2009 to approximately $33.7 million for the three month period ended June 30, 2010. This increase was primarily attributable to an increase in the unit purchase price of fresh milk, including an increase attributable to fresh milk sourced from our company-owned dairy farms.
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American Dairy Inc. has a market cap of $221.7 million; its shares were traded at around $9.95 with and P/S ratio of 0.8.
Highlight of Business Operations:
Our sales consist primarily of revenues generated from sales of milk powder, raw milk powder, soybean powder, rice cereal, and walnut products. Sales increased by approximately $11.0 million, or 26.7%, from approximately $41.2 million for the three month period ended June 30, 2009 to approximately $52.2 million for the three month period ended June 30, 2010. This increase was primarily attributable to expanding our market areas and distribution network throughout China, increased demand for high quality products and strong market acceptance of these products, as well as an increase in sales quantities of several high profit margin products. We net our sales against display and slotting fees associated with selling our products at retail points. During the three month period ended June 30, 2010, our display and slotting fees increased $6.1 million, or 156.4%, to $10.0 million, compared to $3.9 million during the three month period ended June 30, 2009. In addition, our sales cycles during the three months ended June 30, 2009, were impacted by new regulatory requirements in China effective in June 2009 requiring new package labeling for dairy products. With new competitors entering into our industry and old competitors aggressively attempting to reclaim market share following the melamine crisis, we expect to face increased competition.The average selling price per kilogram of milk powder increased by 2.3% from $7.10 in the three month period ended June 30, 2009 to $7.26 in the three month period ended June 30, 2010. This increase was primarily attributable to fewer promotional activities, including provisions of sales discounts to distributors. During the three month period ended June 30, 2009, we provided more sales discounts to distributors to compete with promotional activities of other dairy companies and to facilitate the clearance of our inventories packaged prior to the effectiveness in June 2009 of new PRC labeling requirements for dairy products. The average selling price per kilogram for raw milk powder increased by 55.6% from $2.43 in the three month period ended June 30, 2009 to $3.78 in the three month period ended June 30, 2010. This increase was primarily attributable to increased demand and market prices of raw milk.
Our cost of goods sold consist primarily of direct and indirect manufacturing costs, including production overhead costs and shipping and handling costs for the products sold. Cost of goods sold increased approximately $16.6 million, or 97.8%, from approximately $17.1 million for the three month period ended June 30, 2009 to approximately $33.7 million for the three month period ended June 30, 2010. This increase was primarily attributable to an increase in the unit purchase price of fresh milk, including an increase attributable to fresh milk sourced from our company-owned dairy farms.
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