HOUSTON - (Business Wire)
Eternal Technologies Group, Inc. (OTCBB:ETLT) today reported net income of $2,016,517 or $.04 per share for the three months ended March 31, 2008. This compares with net income of $1,219,038 or $.03 per share for the corresponding period of the prior year.
Revenues
Revenues for the three months ended March 31, 2008 increased by $2,236,844 or 29.7% to $9,758,951 from $7,522,107 for the corresponding period of the prior year. The following schedule summarizes the revenues for each period by category.
| | Three Months Ended |
| Category | | March 31, | | March 31, |
| | 2008 | | 2007 |
| Lamb Meat | | $ | 2,653,407 | | $ | 1,724,923 |
| Embryo’s | | | 5,100,562 | | | 4,001,874 |
| Land Lease | | | 160,960 | | | 297,245 |
| E-Sea | | | 1,844,022 | | | 1,498,065 |
| Total sales | | $ | 9,758,951 | | $ | 7,522,107 |
The increase in the sale of lamb meat resulted from an increase in volume of approximately 100 tons from 700 tons to 800 tons or approximately a 14.2% increase and an increase in the price of approximately 24%. The increase in the sale of embryo’s resulted from an approximate 17.7% increase in volume while the sale price remained constant. E-Sea’s sales increase was the result of the sale of 14 additional units (48 units sold during the three months ended March 31, 2007 and 62 units sold during the comparable period in 2008). The sales price per unit declined by approximately 12% as the Company is gearing up for its next generation machine which should begin shipping in the late second or early third quarter of 2008.
Cost of Sales
Cost of sales for the three months ended March 31, 2008 increased by $1,849,516 or 31.5% to $7,712,080 from $5,862,564 from the corresponding period of the prior year. Our gross margins as a percentage decreased from 22% to 21% principally because of a larger percentage of our sales were in agricultural sales which carry a lower margin. The following schedule summarizes the cost of sales for each period by category.
| | Three Months Ended |
| Category | | March 31, | | March 31, |
| | 2008 | | 2007 |
| Lamb Meat | | $ | 1,959,954 | | $ | 1,254,992 |
| Embryos | | | 5,016,946 | | | 3,937,535 |
| Land Lease | | | 149,300 | | | 137,855 |
| E-Sea | | | 585,880 | | | 532,182 |
| Total Cost of Sales | | $ | 7,712,080 | | $ | 5,862,564 |
Gross Profits
The gross profit by category for each of the reporting periods is as follows:
| | Three Months Ended |
| Category | | March 31, | | March 31, |
| | 2008 | | 2007 |
| Lamb Meat | | 26 | % | | 27 | % |
| Embryos | | 2 | % | | 2 | % |
| Land Lease | | 7 | % | | 54 | % |
| E-Sea | | 68 | % | | 40 | % |
| Overall | | 21 | % | | 22 | % |
Depreciation and Amortization
Depreciation and amortization expense for the three months ended March 31, 2008 increased by $204,922 or 75% to $479,660 from $274,738 for the corresponding period of the prior year. This increase is attributable to increased depreciation on E-Sea assets.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the three months ended March 31, 2008 increased by $112,773 or 17% to $781,804 from $669,031 for the corresponding period of the prior year. The increase in the selling, general and administrative expenses is principally attributable to an increase in salaries of $75,328 or 20%, as additional personnel were added, an increase in marketing expense of $36,956 principally from E-Sea; an increase of $32,524 in professional fees principally because of the pending litigation and an increase in other miscellaneous expenses principally office expenses.
Other Income (Expense)
Other income increased by $775,064 to $1,229,163 for the three months ended March 31, 2008 from $454,099 for the corresponding period of the prior year. The increase resulted from a decrease in interest income of $3,689, an increase in investment income of $416,608 from short-term investments, an increase in the gain recognized on the sale of assets of $267,146 and changes in the value of derivative financial instruments of $95,000.
Income Taxes
The Company incurred income taxes of $147,354 for the three months ended March 31, 2008, an increase of $58,664 from the $88,690 of income tax expense for the corresponding period of the prior year. This increase resulted because of the increased earnings of E-Sea.
Because of the repurchase of 1,509,703 shares of its common stock and the company’s increased earnings, the company’s book value per share as of March 31, 2008 was in excess of $.153 per share and the company’s price earnings ratio is less than 4. With the company’s stock selling at less than $.50 per share, the company does not believe that the market price reflects the true value of the company’s shares. To this end, the company hopes to begin a campaign within next several months to enhance the market value on its shares.
About Eternal Technologies
Eternal is a major agricultural genetics and biopharmaceutical R&D firm operating in China with the support of the Chinese Government. Eternal's animal breeding division has a strong asset base, cash position and net income. Eternal has become one of China's leading institutions for biopharmaceutical and biotech research, pure breed cultivation and breed stock production. The Company has secured a key market niche by commercializing gene engineering technologies and providing superior breeding stock, allowing China's citizens the ability to improve their living standards. With the world's largest population, a double-digit national growth rate and entry into the WTO, Eternal Technologies has a playing field set for tremendous opportunity. As a prominent player in the agricultural genetics industry, cash in the bank and an untapped market, Eternal has the potential to become a major player in China's national growth.
For more information please visit website: http://www.eternaltechs.com.
For Eternal Technologies Group, Inc.:
Heron Public Relations Group Inc.
Annie Shi, 281-683-2395
info@heronpublic.com
