Oxford, MS 3/18/2011 (PennyPayDay) -- Tianli Agritech, Inc. (NASDAQ:OINK), a leading producer of breeder and market hogs headquartered in Wuhan City, China, today announced its financial results for the year and the quarter ended December 31, 2010. 2010 Financial Highlights. Breeder hog revenues in 2010 increased by 82% over the comparable 2009 period, and comprised 42% of the Company's total revenue for the year. The Company's sales of 33,033 breeder hogs in 2010 represented a 90% increase over the corresponding 2009 results, while the unit sales of market hogs increased by approximately 37%. The total increased volume of hogs sold in 2010 resulted in approximately $7.2 million of the Company's $8.7 million revenue increase in 2010, while the increased average revenue per hog sold contributed approximately $1.5 million to the increased revenue. The average selling price for breeder hogs in 2010 was $268 as compared to $280 in 2009, reflecting the increased number of breeding sows replaced and sold in 2010, at a lower price than normal breeders. The average selling price of market hogs was $190 as compared to $161 in 2009.The gross margin on the sales of breeders declined slightly to 55% from the prior year level of 59% due to the impact of the sales of breeding sows mentioned above, while the market hog margin increased to 35% from last year's level of 25%, reflecting the benefit of higher prices being only partially offset by higher feed costs.
Operating expenses in 2010 were $1.2 million as compared to $0.4 million in 2009. This increase is largely attributed to the costs associated with the growth of the capacity of the Company's farms and the additional costs pertaining to the Company's now being a public company. Separately, the Company also benefited from subsidies in 2010 of $0.2 million, equivalent to that received in 2009. As an agricultural company, Tianli is exempt from Chinese Enterprise Income Taxes ("EIT") and value added tax ("VAT"). Net income for the 2010 year ended December 31, 2010 was $8.2 million, up 80% from $4.5 million in 2009, resulting in 2010 earnings per share of $0.90 for the year based on 9.0 million average diluted shares outstanding.
Tianli's Chairwoman and CEO, Ms. Hanying Li, stated, "I am pleased that Tianli finished its first year as a public company with such strong results. We look forward to the Company's continued growth in 2011 as we are now benefiting from the production of our ninth farm and we are in the process of stocking our tenth farm, acquired in late December of 2010, with breeding sows. Our recent announcement of the pending acquisition of the AnPuluo farm, which would be our eleventh farm, illustrates how we are utilizing the funds provided by our IPO to seek out very attractive expansion opportunities, thus positioning the Company to benefit from China's strong demand for pork products."
