Migao recorded 50.7% increase in Q3

"Global economic pressures remained a challenge to our bottom line, however we are encouraged by strong selling prices of our core fertilizer products," said Mr. Liu Guocai, CEO of Migao. "We remain committed to leveraging our strong reputation throughout China to grow our operations and provide the highest quality agriculture products."

For the nine months ended December 31, 2011 Migao reported revenues of $263.9 million as compared to revenues of $199.3 million for the nine-month period ended December 31, 2010. For the first three quarters of fiscal 2012, the Company reported net income of $17.6 million or $0.33 per basic share as compared to net income of $25.1 million or $0.48 per basic share for the same period one year ago.

Migao's gross profit margin decreased to 16.1% for the quarter from the previous quarter's gross margin of 21.4%. Gross margin for the quarter was negatively impacted primarily from ongoing depressed selling price for the hydrochloric acid, a high-volume co-product from the potassium sulphate production process. Similarly impacting gross margin was depressed selling prices of ammonium chloride, the co-product from the potassium nitrate production process. Gross margin for the Company's specialty compound fertilizers was within target at 17.3%. Selling prices for hydrochloric acid are impacted by global economic conditions, specifically related to the export of finished goods that consume hydrochloric acid as a raw material. Ammonium chloride pricing has improved subsequent to the end of the quarter are expected to remain at normal levels for the balance of the current quarter, improving overall gross margin.