Emerald Dairy Reports Net Income Rose for 3rd Quarter 2009; Nine-month Income Reached $3.7 Million, Up From $1.5 Million for Same Period in 20

RESTON, Va., Nov. 16 /PRNewswire-Asia-FirstCall/ -- Emerald Dairy, Inc. ("Emerald Dairy" or the "Company") (OTC Bulletin Board: EMDY.OB), a leading producer and distributor of infant and children's formula, milk powder and soybean products in China, today announced net income rose for the third fiscal quarter and first nine months ended September 30, 2009.

Net income for the three-month period ended September 30, 3009 rose to $884,625, up from $808,067 for the same period in 2008. For the nine-month period ended September 30, 2009, net income rose to $3,700,467 from $1,509,235 for the same period in 2008.

Sales revenues decreased from $11,221,019 in the third quarter of 2008 to $10,158,004 for the 2009 third quarter. Sales for the nine months totaled $31,261,491, compared to $32,560,256 for the same period in 2008. The decrease was primarily attributable to the decrease in the Company's subcontracting activities as it continued to adjust its sales mix to focus on production of higher margin products. These products take longer to package resulting in a slight reduction in the Company's output. Net income was not impacted as the Company continued to adjust its product mix to focus on higher margin products in fiscal 2009.

Cost of goods sold for the quarter decreased to $5,569,598 from $6,552,835 for the same period in 2008. For the nine-month period, cost of goods sold decreased to $17,057,583 in 2009 from $19,845,232 in 2008. This decrease was directly related to the Company's reduction in subcontracting work during the three months ended September 30, 2009.

Gross Profit was $4,588,406, or 45.2% of sales, for the three months ended September 30, 2009, as compared to gross profit of $4,668,184, or 41.6% of sales, for the same period in 2008. For the nine-month period in 2009, gross profit rose to $14,203,908, up from $12,715,024 for the same period in 2008. Cash and cash equivalents at September 30, 2009, increased by 31.8% to $9,681,007, from $7,343,588 at December 31, 2008. Working capital increased from approximately $3.5 million in 2005 to approximately $22.0 million in 2009, including cash generated from operations, as well as funds raised from private offerings of promissory notes and warrants consummated in fiscal 2008.

Shu Kaneko, Chief Financial Officer of Emerald Dairy, said: "We were pleased with the results we achieved in the third quarter of 2009. Our reputation for high quality continues to drive product demand even in the face of slower economic growth, and our careful management of resources has supported our healthy bottom line."

Mr. Kaneko continued, "We expect to complete our new production facility in the near future, which will double our production capacity and increase our revenues. This expanded capacity will help us keep up with the demand for our products, which drove our net income upward by 220% in the past three years. Our growth strategy going forward will be primarily focused on expanding production capacity and strengthening sales and advertising efforts."

China's Rapidly Growing Dairy Industry

The dairy market today in China is over $13 billion and is expected to grow at a rate of 15% per year for the foreseeable future. The Chinese government has recognized that the dairy industry is not only crucial to reforming the structure of agriculture in the country and increasing the income of farmers, it is also essential to improve the diet, health, and overall welfare of the Chinese people. In recent years, milk and dairy products have gradually become an accepted daily necessity in the life of Chinese people. As a result, the dairy market is one of the fasted growing markets in China.

About Emerald Dairy Inc.:

Through its wholly-owned operating subsidiaries, Emerald Dairy Inc. is a producer and distributor of infant and children's formula, milk powder and soybean products in the People's Republic of China. The Company's products are sold under two brand names -- "Xing An Ling," designed for high-end customers, and "Yi Bai," designed for middle and low-end customers. They are distributed throughout 20 provinces in mainland China and sold in over 5,800 retail outlets.

Certain statements in this release and other written or oral statements made by or on behalf of the Company are "forward looking statements" within the meaning of the federal securities laws. Statements regarding future events and developments and our future performance, as well as management's expectations, beliefs, plans, estimates or projections relating to the future are forward-looking statements within the meaning of these laws. The forward looking statements are subject to a number of risks and uncertainties including market acceptance of the Company's services and projects and the Company's continued access to capital and other risks and uncertainties. The actual results the Company achieves may differ materially from any forward-looking statements due to such risks and uncertainties. These statements are based on our current expectations and speak only as of the date of such statements.

    For more information, please contact:

     Stanley Wunderlich
     Consulting for Strategic Growth 1
     Tel:   +1-800-625-2236
     Fax:   +1-646-205-7771
     Email: swunderlich@cfsg1.com

SOURCE Emerald Dairy Inc.