Mr. Shili Liu, Chairman and Chief Executive Officer of Man Shing, stated, “We are pleased with the stable financial results we achieved during the quarter. Our financial results for the first quarter of our 2013 fiscal year were in line with our expectations. Our quarterly results on a year-over-year comparable basis were flat mostly due to a slight decrease in volume and slight increases in production costs. Overall the demand for our products remained stable with margins at approximately 40%. During the quarter, we managed our inventory as we approached the October harvest season. We are encouraged that we were able to complete the harvesting on our 7.7 million square meters of farmland. The harvest will allow us to increase our inventory and fulfill outstanding purchase orders.”
Cost of sales for the 2013 and 2012 fiscal first quarters totaled approximately $4.3 million. Cost of sales includes the costs associated with the planting, harvesting, and storing of ginger and other agricultural products such as ginger seeds and fertilizers. Cost of revenues as a percentage of total revenue increased slightly to 61% in fiscal 2013 as compared to 60% for the same period the year prior, due primarily to an increase in costs of planting and production.
Gross profit for the 2013 fiscal first quarter totaled $2.8 million, a decrease of 5% compared to $2.9 million for the 2012 fiscal first quarter. Gross profit margin decreased to 39% during the 2013 fiscal first quarter as compared to 41% for the same period the prior year. The decrease in gross profit margin during the period was due primarily to an increase in material costs and a decrease in sales.
Net income for the 2013 fiscal first quarter totaled $2 million, a decrease of 4% as compared to $2.1 million for the same period the prior year. Net income margin was down slightly to 28% for the 2013 fiscal first quarter as compared to 29% for the same period the prior year. Basic and diluted earnings per share for the 2013 and 2012 fiscal first quarters were $0.04, based on 48.2 million basic and diluted shares outstanding for the 2013 fiscal period and 48 million basic and 49.8 million diluted shares outstanding for the 2012 fiscal period.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Our expectations are as of the date hereof, and we do not intend to update any of the forward-looking statements after the filing date to conform these statements to actual results, unless required by law.