Tianli Agritech, Inc., a leading producer of breeder and market hogs headquartered in Wuhan City has announced its financial results for the quarter ended 30 June 2011.

Among the second-quarter highlights are an increase in revenue of 41 per cent year-over-year to US$7.7 million due to higher selling prices and volumes. Breeder hog revenue increased by 24 per cent for the quarter, representing 37 per cent of total revenue, while net income increased 17 per cent to a record $2.5 million

Tianli's Chairwoman and CEO, Hanying Li, commented: "We benefited from steady increases in market hog pricing during the quarter as shortages continue to plague many markets, while demand for breeder hogs accelerated as customers are looking to expand their own market hog-raising capacity. Our diversification allows us to service both markets simultaneously, providing us with the flexibility that few operators in our geographic areas have. Our diversified model also helps to diminish revenue and margin fluctuations, which can occur on a quarter by quarter basis. We expect further sales growth for both breeders and market hogs as our new farms come online."

Revenue for the second quarter of 2011 increased $2.3 million, or 41 per cent, to $7.7 million from the prior year. The Company sold a total of 27,589 hogs compared to 25,815 hogs sold in the comparable 2010 period. Sales of breeder hogs increased 24 per cent to $2.8 million, with approximately 28 per cent more breeder hogs sold, as the average price per hog decreased slightly due to a greater mix of lower margin crossbred breeders sold during the second quarter of 2011.

Market hog sales increased 53 per cent to $4.8 million. The number of market hogs was relatively flat at 18,577 while the average price per hog increased 55 per cent year-over-year to $260.00 due to high market demand.

Gross profit in the second quarter of 2011 was $3.2 million, a 35 per cent increase over the same period last year. Gross margin was approximately 42 per cent and 44 per cent for the second quarter of 2011 and 2010, respectively, as increased cost of feed.

Selling, general and administrative expenses were $0.6 million in the second quarter of 2011, an increase of approximately $0.3 million. Approximately $0.2 million of the increase was related to higher public company expenses not present in the year ago period. Expenses were impacted by a $0.1 million increase in bad debt allowance which reflected a more conservative procedure on the Company's accounts receivable aging report.

Net income for the three months ended June 30, 2011 was approximately $2.5 million, up 17 per cent from $2.1 million last year. Earnings per fully diluted share were $0.24 compared to $0.26 last year due to a 25 per cent increase in the shares outstanding associated with the Company's IPO and 2.0 million shares placed with investors in July 2010.

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