China, Heilongjiang - Chinese Dairy Company, American Dairy Inc. (OTCBB: ADIY) Annouces Profitable Q1 Results

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American Dairy meets Q1 net profit estimates and projects 2004 revenues to reach $48 million and net profits $6 million.

American Dairy, Inc. (OTC BB: ADIY), one of the leading producers and distributors of milk powder and soy bean products in China, today announces that is has filed its Form10-QSB with the SEC.

Sales revenues increased by $2,151,232 or 36% quarter-on-quarter to $8,148,001for the quarter ended March 31, 2004 compared to the same corresponding quarter in 2003 of $5,996,769. The first quarter's sales revenues represented average monthly sale revenues of $2,761,000 compared to the corresponding quarter in2003 of $1,998,923. The reasons of the favorable variance in sales revenues for the first quarter ended March 31, 2004 were as follows:

  • Increased popularity of "Feihe" brand in mainland China following the successful advertising campaigns in the in previous year;- Demand was boosted by improved and high quality ingredients for several products such as Ca+Zn , corn starch and CPP series, and the families or markets mostly accepted these products. Increase in sales quantities of several major products such as milk powder with Ca+Zn, corn starch and CPP series in the first quarter of 2004 compared to the corresponding quarter in 2003 by approximately 75.3%, 41.0% and 209%, respectively.- Extensive sales network enhances the distribution of Feihe Dairy's products to different provinces. It not only enhanced the popularity of 'Feihe' trademark, but also promoted the Feihe's products to remote areas in China.

Net income after income tax increased by $403,480 or 51% quarter-on-quarter to $1,189,955 for the quarter ended March 31, 2004 compared to the same corresponding quarter in 2003 of $786,475. The favorable variance in net income was mainly due to the excess of the substantial increases in sales revenues and increase in other revenues and economies of scale achieved.

EPS for Q1 2004 is $0.10 per share

The company's budget for 2004 reflects projected sales of $48,000,000 and net income before taxes of $6,000,000 or $0.48 per share.

Certain of the statements made herein constitute forward-looking statements that involve risks and uncertainties. In such instances, actual results could differ materially as a result of a variety of factors including the risks associated with the effect of changing economic conditions at home and abroad, variations in cash flow, reliance on collaborative retail partners, and on new product development, variations in new product and service development, risks associated with rapid technological change, and potential of introduced or undetected flaws and defects in products and services and other risk factors detailed in forms filed with the Securities and Exchange Commission from time to time.

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