Rodobo International, Inc. Reports Q2 and First Half of 2009

Revenues of $15.2M, up 63% compared to first half of 2008

HARBIN, China, May 18 /PRNewswire-Asia-FirstCall/ -- Rodobo International,
Inc. (OTC Bulletin Board: RDBO), one of the leading independent dairy
companies in China, reported financial results for the second quarter and
first six months ended March 31, 2009.
Second quarter financial highlights include:
Revenue for the second quarter ended March 31, 2009 was $6.3 million, an
increase of 19% compared to Q2 2008. This increase was primarily driven by
volume growth, with average selling price remaining flat over both periods.
The new product series "Healthy Elderly", launched in October 2008, attributed
approximately $1.1 million to the second quarter.
Sales of Whole Milk Powder Formula represented 39% of total sales in Q2
2009 compared to 27% in Q2 2008. Sales of Baby/Infant Formula represented 44%
of total sales in Q2 2009 compared to 61% in Q2 2008. Sales of Adult Formula
represented 17% of total sales in Q2 2009 compared to 12% in Q2 2008.
Gross profit for Q2 2009 was $2.3 million, down 4% compared to Q2 2008.
The overall gross margin decreased from 45% in Q2 2008 to 36% in Q2 2009. The
increase in the costs of goods sold and the decrease in gross margin was
mainly driven by a different product mix that included more sales of lower
margin products. Additionally, gross margin for Whole Milk Powder Formula
decreased in 2009 compared to 2008 due to a 24% increase in the cost of raw
milk.
Operating income in the first three months ended March 31, 2009 was $0.74
million, decrease of 34% compared to the same period last year. The decrease
is mainly attributed to higher depreciation expenses due to equipment purchase
and advertising expenses to support the growth.
Net income was $1.2 million relatively flat compared to Q2 2008.
Six months financial highlights include:
Revenue for the first half ended March 31, 2009 was $15.2 million, an
increase of 63% compared to the first six months in 2008. The growth was
primarily driven by higher volume sales and was also attributable to the
launch of the new product line "Healthy Elderly". Sales for "Healthy Elderly"
generated approximately $3 million in the period.
Sales of Whole Milk Powder Formula represented 31% of total sales compared
to 39% in the six months ended March 31, 2008. Sales of Baby/Infant Formula
represented 49% compared to 50% in the same period last year. The launch of
the "Healthy Elderly" product line generated $3 million in the six months
ended March 31, 2009, representing 20% of total sales.
Gross profit for the first six months of fiscal 2009 was $6.8 million, up
88% compared to the same period last year. The overall gross margin improved
from 39% in 2008 to 45% in 2009. The improvement was mainly driven by the
shift from low-margin products including Whole Milk Powder Formula to high-
margin products including Healthy Elderly. The gross margin for "Healthy
Elderly" was 53% for the first six months ended March 31, 2009 and the
Baby/Infant Formula gross margin increased from 45% to 60%.
Operating income in the first six months was $2.7 million up 66% compared
to $1.6 million in the same period last year.
Net income grew 77% to $3.1 million compared with $1.7 million for the six
months ended March 31, 2008. This increase in net income was mainly
attributable to the growth in sales, partially offset by an increase in cost
of goods sold and operating expenses. This increase in net income was also
attributable to an increase of subsidiary income from government support
funds,
from $0.09 million for the six months ended March 31, 2008 to $0.44 million
for the six months ending March 31, 2009.
Mr Yanbin Wang stated: "During the first six months of our fiscal year,
Rodobo International has experienced an impressive growth in revenues and
earnings. This trend slowed down during the second quarter. We keep developing
distribution networks and we're currently covering 4,463 retail stores in 6
provinces: Sichuan, Shaanxi, Henan, Shandong, Zhejiang and Fujian. The Company
provides training and support to its growing sales and marketing team that
includes: 2,320 employees. Currently, Rodobo International is building its
own organic dairy farm that will meet international standards and include top
technology equipment".
"We focus on providing high quality premium products for all our consumers
and the construction of our dairy farm demonstrates the Company's dedication
to this vision. We expect that our new and advanced dairy farm will start
operating towards the end of fiscal 2009 and this will give us a tremendous
competitive advantage in terms of high quality raw milk resources. Being
certified as "Green Food" and winning the lucrative prize: Best Quality
Control Enterprise of Dairy Products for 2008, reinforces our leading position
in the market and we believe that it will be reflected in our financial
results".
About Rodobo International, Inc.:
Rodobo International is one of the leading independent dairy companies in
China. Through its wholly-owned operating subsidiary, Rodobo International,
Inc. is a producer and distributor of high-quality formula milk powder
products for infants, children, pregnant women, nursing mothers, middle aged
and the elderly in the People's Republic of China. The Company's products are
sold under the brand name "Rodobo" and are produced in cutting edge facilities
using the highest industry standards and the best quality control systems.
Safe Harbor Statement
This press release contains forward-looking statements. Whenever we use
words such as "believe," "expect," "anticipate," "intend," "plan," "estimate"
or similar expressions, we are making forward-looking statements. Forward-
looking statements include statements regarding our goals, beliefs, future
growth strategies, objectives, plans or current expectations. For example,
when we say that our own organic dairy farm will meet international standards
and include top technology equipment, or that we focus on providing high
quality premium products for all our consumers and the construction of our
dairy farm demonstrates our dedication to this vision, or that we expect that
our new and advanced dairy farm will start operating towards the end of fiscal
2009 and this will give us a tremendous competitive advantage in terms of high
quality raw milk resources or that being certified as "Green Food" and winning
the lucrative prize: Best Quality Control Enterprise of Dairy Products for
2008, reinforces our leading position in the market and we believe that it
will be reflected in our financial results, we are using forward looking
statements. These forward-looking statements are based on the current
expectations of the management of Rodobo only, and are subject to a number of
factors and uncertainties that could cause actual results to differ materially
from those described in the forward-looking statements. The following factors,
among others, could cause actual results to differ materially from those
described in the forward-looking statements: failure to obtain required
regulatory approvals; risks associated with the effect of changing economic
conditions and/or regulatory environment in the People's Republic of China;
variations in cash flow; reliance on collaborative partners and on new product
development; variations in new product development; risks associated with
rapid technological change and the potential of introduced or undetected flaws
and defects in products; changes in technology and market requirements; loss
of market share and pressure on pricing resulting from competition, which
could cause the actual results or performance of Rodobo to differ materially
from those contemplated in such forward-looking statements. Except as
otherwise required by law, Rodobo undertakes no obligation to publicly release
any revisions to these forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events. For a more detailed description of the risk and
uncertainties affecting Rodobo, reference is made to Part I, Item 1A, "Risk
Factors" of Rodobo's Annual Report on Form 10-K for the fiscal year ended
September 30, 2008 and to other reports filed from time to time by Rodobo with
the Securities and Exchange Commission.
Table to follow:

RODOBO INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE
INCOME
FOR THE SIX AND THREE MONTHS ENDED MARCH 31, 2009 AND 2008
(UNAUDITED)

Three Months Ended Six Months Ended
March 31 March 31
2009 2008 2009 2008
Net sales $6,303,017 $5,285,705 $5,163,842 $9,318,958

Cost of goods sold 4,026,269 2,905,871 8,383,386 5,720,074

Gross profit 2,276,748 2,379,834 6,780,456 3,598,884

Operating expenses:
Distribution expenses 1,105,652 1,059,918 3,225,004 1,610,320
General and
administrative
expenses 337,217 182,149 725,899 344,753
Depreciation and
amortization
expenses 90,259 11,453 132,709 19,219

Total
operating
expenses 1,533,128 1,253,521 4,083,612 1,974,293

Operating income 743,620 1,126,314 2,696,844 1,624,592

Subsidy income 438,730 -- 438,730 94,187
Other (expenses) income 14,768 7,465 (65,850) 11,356

Income before income taxes 1,197,119 1,133,779 3,069,724 1,730,135

Provision for income taxes -- -- -- --

Net income $1,197,119 $1,133,779 $3,069,724 $1,730,135

Other comprehensive income:
Foreign currency
translation
adjustment (25,774) 210,569 (65,554) 320,874

Comprehensive income $1,171,345 $1,344,348 $3,004,170 $2,051,009

RODOBO INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

March 31, September 30,
2009 2008
(Unaudited) (Audited)

ASSETS
Current assets:
Cash and cash equivalents $904,360 $659,030
Accounts receivable - net of allowance
for bad debts of $66,602 and $66,921,
respectively 2,136,392 1,143,328
Advances to employees 6,399 185,500
Other receivables -- 162,006
Inventories 1,125,606 991,536
Prepaid expenses 43,993 26,510
Total current assets 4,216,750 3,167,910
Property, plant and equipment, net:
Fixed assets, net of accumulated
depreciation 885,307 812,079
Construction in progress -- 148,240
885,307 960,319

Other assets:
Loan to related parties 1,185,062 --
Interests receivable 13,964 --
Deposits on land and equipment 13,438,012 10,873,562
Intangible assets, net 676,800 717,978

Total other assets 15,313,838 11,591,540

Total assets $20,415,895 $15,719,769

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,376,328 $2,165,061
Other payable -- 171,286
Accrued expenses 571,756 924,580
Advance from customers -- 1,162,184
Due to related party -- 18,079

Total current liabilities 1,948,084 4,441,189

Shareholders' equity
Convertible preferred stock, $0.001 par
value, 15,000,000 shares authorized
12,976,316 shares issued and
outstanding as of March 31, 2009 and
September 30, 2008 12,976 12,976
Common stock, $0.001 par value,
1,604,278 shares authorized,
1,435,568 shares issued and
outstanding as of March 31, 2009
and September 30, 2008 1,436 1,436
Additional paid in capital 5,115,690 3,930,628
Additional paid in capital - warrants 971,788 971,788
Subscription receivable (50,000) (3,050,000)
Retained earnings 11,593,991 8,524,267
Accumulated other comprehensive income 821,930 887,484

Total shareholders' equity 18,467,811 11,278,579

Total liabilities and
shareholders' equity $20,415,895 $15,719,769

For more information, please contact:

Miri Segal
MS-IR LLC
Tel: +1-917-607-8654
Email: msegal@ms-ir.com

Xiuzhen Qiao
Rodobo International Inc
Tel: +86-451-8226-5922
Email: qiaozhen1973@163.com

SOURCE Rodobo International, Inc.

Miri Segal of MS-IR LLC, +1-917-607-8654, or msegal@ms-ir.com; Or Xiuzhen Qiao
of Rodobo International Inc, +86-451-8226-5922, or qiaozhen1973@163.com