Attached files
| file | filename |
|---|---|
| 8-K - ShengdaTech, Inc. | v193747_8k.htm |
| EX-99.2 - ShengdaTech, Inc. | v193747_ex99-2.htm |
ShengdaTech,
Inc. Reports 27.7%
Year-over-Year Growth in Net Sales From Continuing Operations in the Second
Quarter of 2010
Press
Release Source:
ShengdaTech, Inc. On
Tuesday August 10, 2010, 8:07 am EDT
SHANGHAI,
Aug.
10 /PRNewswire-Asia-FirstCall/
-- ShengdaTech, Inc. (Nasdaq:SDTH -
News)
("ShengdaTech" or "the Company"), a leading manufacturer of nano-precipitated
calcium carbonate ("NPCC") in China,
today reported its unaudited
financial results for
the three
months and six months ended June
30, 2010.
Financial Highlights
|
--
|
Net revenue from continuing
operations rose 27.7% year-over-year to$33.2
million;
|
|
--
|
Gross margin was
41.0%;
|
|
--
|
Earnings before interest, taxes,
depreciation and
amortization (EBITDA),a non-GAAP measurement,
was $13.1 million, up 24.5% from the same quarter in
2009;
|
|
--
|
Operating income increased by
21.0% year-over-year to $11.5 million,with a 34.5% operating
margin;
|
|
--
|
Net income from continuing
operations for the second quarter of 2010 was $7.1 million, representing
diluted EPS of $0.13;
|
|
--
|
Cash was $110.6
million;
|
|
--
|
Net cash from operating activities
for the six months ended June 30,2010 was $20.4 million, up 35.7% from the
same period in 2009.
|
Mr.
Xiangzhi Chen, ShengdaTech's Chairman and CEO commented, "Our growth continued
in the second quarter of 2010 as our enhanced R&D efforts have
created much higher value-added products,
which are generating
robust sales. Our solid financial performance also comes from the
economies-of-scale contributed by our increases in production capacity. We will
continue to target the high-end markets and
industries ideal for our nano-technology
applications."
Mr.
Chen further commented, "We believe that with our increased production capacity
and on-going acquisition of limestone mining rights,
along with our strong R&D support, we are well-positioned to achieve high
gross margins. We remain confident in the industry's
growth prospects and
we are well positioned to sustain our demonstrated leadership and record of
success in this sector."
Second
Quarter 2010 Financial Results From
Continuing Operations
Net
revenues from continuing operations in the second quarter of
2010 increased by 27.7% to $33.2
million from
$26.0
million in
the second quarter of 2009. The net revenue increase is a result of expanded
production capacity to meet the growing market demand as well as an increase in
average selling price.
For
the three
months ended June
30, 2010,
sales increased by $7.2
million compared
to the same period last year. The increase was mainly due to a rise in sales
volume of 14,067 metric tons resulting in a $6.8
million sales
gain from the increased production of the Zibo,
Shandong facility
and the modest production from the mid-quarter start up of the Anhui facility.
In addition, the average selling price for the three months ended June
30, 2010 was
$485 per
metric ton, an increase of $7 per
metric ton from an average selling
price of $478 per
metric ton for the three months ended June
30, 2009.
The higher average selling price was primarily due to changes in our pricing
strategy and in our product mix based on market demands, which resulted in a
$388,669 increase
in sales.
For
the three months ended June
30, 2010,
sales of polyethylene ("PE") and latex applications increased by 15,810 and
5,234 metric tons respectively, compared to the three months ended June
30, 2009.
Sales of paint and automobile undercoating applications
remained stable compared to the three months ended June
30, 2009.
Sales for tires, PVC, paper, and ink applications for the three months ended
June
30, 2010 decreased
by 3,881, 1,280, 268, and 1,852 metric tons respectively, primarily due to
specific customers'
needs and demand, and timing of their purchases. In addition, our sales process
has adopted a strict customer screening program that evaluates customer credit
and payment capacity as qualification criteria. As a result, certain customers
were filtered
out, particularly in these application areas. We believe that this process will
be an effective means to qualify current and future customers, and will help in
identifying credit worthy customers with higher- end
applications.
Gross
profit increased 19.7%
to $13.6
million from
$11.4
million in
the same period of 2009. Gross margin decreased by 2.8 %, from 43.8 % for the
three months ended June
30, 2009 to
41.0% for the three months ended June
30, 2010.
The decrease was mainly driven by the price increase
in anthracite, one of the major components of
raw materials, and soft coal, mainly used to power plant equipment, which
combined had a negative impact to the margin by approximately 3.5%. In addition,
the margin also decreased by 0.8% due to changes in the
product mix sold during the three months ended June
30, 2010 compared
to the same period of 2009. Such negative effect was offset by approximately
1.5% increase to the margin due to the increase in the average selling
price.
Selling,
general and administrative
(SG&A) expenses amounted to $2.2
million,
an increase of $0.3
million from
$1.9
million in
the second quarter of 2009. As a percentage of total revenues, SG&A expenses
decreased to 6.5% for the second quarter of 2010 from 7.4% in the second
quarter
of 2009. Selling expenses were $616,325 in
the second quarter of 2010, up from $531,028 in
the same quarter of 2009. The increase in selling expenses was primarily due to
the investment in the Company's Shanghai-based
International Trade Department, specifically
in growing the department's sales and marketing team and funding its expanded
operations, which includes more proactive involvement in attending and
participating in industry trade shows in Europe and
the U.S., and in executing other sales support
programs. Selling expenses were 1.9% of revenue compared to 2.1% in the second
quarter of 2009. General and administrative (G&A) expenses were $1.6
million in
the second quarter of 2010, as compared with $1.4
million in
the same quarter of 2009. G&A expenses,
as a percentage of revenue, declined to 4.6% in the second quarter of 2010 from
5.3% in the second quarter of 2009. The decline in the expenses as a percent of
revenues was mainly attributable to effective cost-controls and greater
production capacity
generating higher sales and economies-of-scale.
Operating
income increased by $1,991,164 or
21.0% for the three months ended June
30, 2010,
compared to the three months ended June
30, 2009.
The increase was consistent with our increase in
sales.
Interest expense,
related primarily to our convertible notes, was $3.4
million for
the three months ended June
30, 2010,
an overall increase of $1.1
million compared
to the same period in 2009. Total interest expense included $1.4
million contractual
coupon interest
on the convertible notes, $0.3
million of
amortization of debt issuance costs,
and $1.7
million amortization
of debt discount. The $1.1
million increase
for the three months ended June
30, 2010 was
comprised of a $0.4
million increase
in the amortization
of debt discount compared with the same period last year, and the capitalized
interest for the three months ended June
30, 2010 decreased
by $665,148,
compared to the same period in 2009. The capitalized interest for the three
months ended June
30, 2010 was
immaterial.
Income
tax expense rose to $1.0
million in
the second quarter of 2010 versus $0.8
million in
the second quarter last year. The effective income tax rate was 12.9% for the
three-month period ended June
30, 2010,
a decrease from 10.4% for the second
quarter of 2009. The increase in our effective tax rate was primarily due to an
increase in our Tai'an, Shandong facility
income tax rate to 25.0% in 2010 from 12.5% in 2009.
Net
income from continuing operations in the second quarter of 2010
increased
to $7.1
million compared
with $6.6
million in
the same period last year. Fully diluted earnings per share from continuing
operations for the second quarter of 2010 were $0.13,
compared with fully diluted earnings from continuing operations per share
of
$0.12 in
the same quarter of 2009.
Fully
diluted weighted-average shares outstanding
were 54,207,569 in the second quarter of 2010, down from 66,954,996 in the same
quarter last year, primarily due to the fact that the number of potential common
shares associated
with the Company's convertible debt were anti-dilutive during the second quarter
of 2010 and therefore were excluded from the diluted earnings per share
computation.
EBITDA
was $13.1
million in
the second quarter of 2010, up 24.5% from $10.5
million in
the same quarter of 2009.
Six-Month
Results From
Continuing Operations
Total
revenue for the first six months of 2010 increased by 35.9% year-over-year to
$63.5
million from
$46.7
million in
the first six months last year. Gross profit for the first six
months of 2010 was $26.3
million,
up 32.5% from the gross profit of $19.9
million in
the same period last year. Gross margin was 41.5% for the first six months of
2010. Income from operations was $22.2
million,
up 35.4% from $16.4
million in
the first six
months of 2009, and the operating margin for the first six months of 2010 was
34.9% in line with the same period of 2009. Net income from continuing operation
for the first six months of 2010 was $13.8
million,
with fully diluted earnings per share of $0.25.
-2-
Financial
Condition
As
of June
30, 2010,
the Company had cash of $110.6
million,
compared with $116.0
million at
the end of December
2009.
The Company's cash position at June
30, 2010 exceeds
total liabilities. Days Sales Outstanding
(DSO), a measure
of receivables collection activity, were 60 days in the six months ended
June
30, 2010 and
53 days in six months ended December
31, 2009.
As of the end of June
2010,
there was no overdue accounts receivable.
Total shareholders' equity rose to $185.3
million at
June
30, 2010,
from $170.6
million at
December
31, 2009.
Net
cash flow provided by operating activities increased to $20.4
million during
the six months ended June
30, 2010,
from $15.1
million for
the same period of 2009, primarily due to the increased
sales. The Company continued to invest in expanding its capacity
in the second quarter of 2010. It spent a total of almost $26.0
million,
of which $3.8
million was
the payment for the Company's December
2009 acquisition
of Anhui facility,
$16.2
million was
for additional land use rights for
the Anhui Facility, and the remainder was for the purchase of plant and
equipment and mining rights.
Mr.
Andrew
Chen,
the Company's Chief Financial Officer, commented, "As our superior product line,
with our patent-protected
membrane-dispersion technology, enables us to gain market penetration and
strengthen pricing power, we continue to exercise prudent cash management and
focus on cash-flow generation. With our leading position in the industry,
notable financial accomplishments,
outstanding
business growth, and a track record of effective execution of our comprehensive
strategic plan, we believe we will continue to deliver increasing value to our
shareholders and the investment community."
Recent
Developments
The
Company
has established relationships with more than ten prospective asphalt customers,
and recently received favorable test feedback from these asphalt producers
indicating that its NPCC
product for the large modified- asphalt market in China holds
promising
potential. Utilizing the Company's proprietary advanced membrane-dispersion
technology, NPCC's compatibility with asphalt materials can be enhanced. Testing
has shown that NPCC improves the heat resistance of the base asphalt as well as
enhances other asphalt
properties such as spalling resistance, water stability, and wear and tear
resistance. NPCC can also lower the production cost of modified asphalt due to
reduced use of SBS modifier while at the same time maintaining the heat
resistance of the SBS-modified
asphalt.
On
June
1, 2010,
the Company entered into a land use rights transfer
agreement to purchased 335,889 square meters (approximately 83.00 acres) land
use rights with
a beneficial period of 50 years for a purchase price of RMB
94,317,631 (approximately
$13,852,720),
including title tax of RMB
3,627,601 (approximately
$532,797).
On
May
25, 2010,
the Company entered into an agreement to purchase three- year mining
rights for
approximately 11.61 million metric tons of limestone reserves for its Shaanxi facility
for RMB
1,800,000 (approximately
$264,372).
The Company paid RMB
720,000 (approximately
$105,749)
for such mining rights in
June
2010,
which has been recorded as a deposit for mining rights on
the accompanying unaudited condensed consolidated balance
sheet as of June
30, 2010.
In July
2010 the
Company paid the remaining balance of RMB
1,080,000 (approximately
$159,000)
due under the contract. The Company plans to utilize third parties for mining
and processing operations to ensure the supply of
raw material to the Shaanxi facility
and does not plan to engage in any mining or processing
operations.
Business
Outlook
ShengdaTech
completed repairs and maintenance, as well as equipment and technological
upgrades, at its recently
acquired NPCC facility
in Chaodong,
Anhui Province.
The facility began production in the second quarter of 2010 and the Company
expects to
ramp up production in the second half of 2010. This facility will have a planned
annual capacity of 10,000 metric tons.
The
total planned annual
NPCC production capacity for 2010 is expected to reach approximately 300,000
metric tons by year end with the addition of new lines totaling 40,000 metric
tons in Zibo and
the 10,000 metric tons production facility in Anhui.
The
Company maintains its 2010
guidance for revenue and net income from continuing operations to be in the
range of $123.0
million to $126.0 million and
$25.0
million to $27.0 million,
respectively.
-3-
Conference
Call
The
Company will host a conference call, to be simultaneously web
cast, on August
10, 2010,
at 9:00
a.m. Eastern Daylight Time or
9:00
p.m. Beijing
Time. Interested parties may participate in the conference call by dialing
1-877-407-9205 (North
America)
or +1 201-689-8054 (International), approximately 10 minutes before
the call start time. A live web cast of the conference call will be available on
the Company's Website at http://www.shengdatechinc.com .
A
replay will be available shortly
after the conclusion of the conference call until August
17, 2010 at
11:59
p.m. EDT or
August
18, 2010 at
11:59
a.m. Beijing
Time. To access the replay, dial 1-877-660-6853 and international callers should
dial +1 201-612-7415. The account number is 286
and the conference ID number for the replay is
354274.
About
ShengdaTech, Inc.
ShengdaTech
is engaged in the business of manufacturing, marketing, and selling NPCC
products.
The Company converts limestone
into NPCC using its proprietary
and patent-protected
technology. NPCC products are
increasingly used in tires, paper, paints,
building materials, and other chemical products.
In addition to its broad
customer base in China,
the Company currently exports to
Singapore,
Thailand,
South
Korea,
Malaysia and
India.
For more information, please log on http://www.shengdatechinc.com .
Safe Harbor Statement
Under
the Private Securities Litigation Reform Act of 1995: Certain statements in
this press release made by ShengdaTech constitute forward-looking
statements for
purposes of the safe harbor provisions under The Private Securities Litigation
Reform Act of 1995. We have based these forward-looking statements largely
on our current
expectations and projections about future events and
financial trends that we believe may affect our financial condition,
results of
operations, business strategy and financial needs but they involve risks and
uncertainties that could cause actual results to
differ materially from those in the forward-looking statements,
which may include, but are not limited to, such factors as unanticipated changes
in product demand especially in the tire industry, changes in composition of
tires, the Company's ability
to meet the planned expansion schedule for its NPCC
capacity, the Company's ability to identify acquisition targets,
changes to government regulations, risk associated with operation of the
Company's new manufacturing facility, ability to attract new customers,
ability to increase its product's
applications, ability of its customers
to sell products,
cost of raw material, downturns in the Chinese economy, and other information
detailed from time to time in the Company's filings and future filings
with the
United States Securities and Exchange Commission. You are urged to consider
these factors care in evaluating the forward-looking statements herein
and are cautioned not to place undue reliance on such forward-looking
statements,
which are qualified in their
entirety by this cautionary statement. The forward-looking statements made
herein speak only as of the date of this press release and the Company
undertakes no duty to update any forward-looking statement to conform the
statement to actual results or changes
in the company's expectations.
About
Non-GAAP Disclosure
The
Company has included in this press release certain non-GAAP financial measures.
The Company believes that both management and investors benefit from referring
to these non-GAAP financial measures
in assessing the performance of the Company and when planning and forecasting
future periods. Readers are cautioned not to view non-GAAP financial measures on
a stand-alone basis or as a substitute for GAAP measures, or as being comparable
to results reported
or forecasted by other companies, and should refer to the reconciliation of GAAP
measures with non-GAAP measures also included herein.
For more information, please
contact:
Andrew Chen
Chief Financial
Officer
ShengdaTech, Inc.
Phone:
+86-21-5835-8738
Email:
Andrew.chen@shengdatech.com
Kevin Theiss
Investor Relations
Grayling
Phone:
+1-646-284-9409
Email:
kevin.theiss@grayling.com
- Tables Follow -
-4-
SHENGDATECH, INC. AND
SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE
SHEETS
|
June 30,
|
December
31,
|
|||||||
|
2010
|
2009
|
|||||||
|
ASSETS
|
||||||||
|
Current assets:
|
||||||||
|
Cash
|
$ | 110,631,199 | $ | 115,978,763 | ||||
|
Accounts receivable
|
6,027,253 | 4,600,722 | ||||||
|
Inventories
|
2,128,634 | 2,018,283 | ||||||
|
Prepaid expenses and other
receivables
|
2,777,109 | 3,947,086 | ||||||
|
Income tax refund
receivable
|
1,455,906 | 1,455,906 | ||||||
|
Debt issuance costs
|
1,117,162 | -- | ||||||
|
Current assets of discontinued operations
|
805,351 | 801,983 | ||||||
|
Assets held for
sale
|
1,725,693 | 1,718,475 | ||||||
|
Total current assets
|
126,668,307 | 130,521,218 | ||||||
|
Property, plant and equipment,
net
|
124,784,177 | 123,099,860 | ||||||
|
Land use rights
|
31,587,224 | 15,432,743 | ||||||
|
Intangible assets
|
247,822 | 280,329 | ||||||
|
Debt issuance costs
|
-- | 1,720,209 | ||||||
|
Deposit for mining
rights
|
105,749 | |||||||
|
Total assets
|
$ | 283,393,279 | $ | 271,054,359 | ||||
|
LIABILITIES AND SHAREHOLDERS'
EQUITY
|
||||||||
|
Current
liabilities:
|
||||||||
|
Accounts payable
|
$ | 3,781,929 | $ | 3,998,532 | ||||
|
Accrued expenses and other
payables
|
4,604,115 | 4,737,356 | ||||||
|
Long-term convertible notes,
current portion
|
82,651,856 | -- | ||||||
|
Payable for
acquisition
|
-- | 3,803,060 | ||||||
|
Income taxes
payable
|
2,049,552 | 60,573 | ||||||
|
Due to related
parties
|
715,118 | 1,572,427 | ||||||
|
Current liabilities of
discontinued operations
|
42,339 | 42,068 | ||||||
|
Total current
liabilities
|
93,844,909 | 14,214,016 | ||||||
|
Long-term convertible
notes
|
-- | 79,298,539 | ||||||
|
Non-current income taxes
payable
|
1,911,791 | 1,598,237 | ||||||
|
Note payable to related
party
|
-- | 601,631 | ||||||
|
Deferred income tax
liabilities
|
2,072,621 | 4,443,810 | ||||||
|
Non-current liabilities
of discontinued
operations
|
295,945 | 294,708 | ||||||
|
Total
liabilities
|
98,125,266 | 100,450,941 | ||||||
|
Shareholders'
equity:
|
||||||||
|
Preferred Stock, par value: $0.00001, authorized: 10,000,000,
outstanding,
nil
|
-- | -- | ||||||
|
Common Stock, par value:
$0.00001, authorized: 100,000,000 issued
and outstanding:
54,202,036
|
542 | 542 | ||||||
|
Additional paid-in
capital
|
37,132,442 | 37,132,442 | ||||||
|
Statutory
reserves
|
8,455,328 | 8,455,328 | ||||||
|
Retained
earnings
|
124,857,064 | 111,197,045 | ||||||
|
Accumulated other comprehensive
income
|
14,822,637 | 13,818,061 | ||||||
|
Total shareholders'
equity
|
185,268,013 | 170,603,418 | ||||||
|
Commitments and
contingencies
|
||||||||
|
Total liabilities and shareholders'
equity
|
$ | 283,393,279 | $ | 271,054,359 | ||||
-5-
SHENGDATECH, INC. AND
SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
|
For
the Three Months
|
For
the Six Months
|
|||||||||||||||
|
Ended
June 30,
|
Ended
June 30,
|
|||||||||||||||
|
2010
|
2009
|
2010
|
2009
|
|||||||||||||
|
As
restated
|
||||||||||||||||
|
Net sales
|
$ | 33,237,656 | $ | 26,018,533 | $ | 63,464,370 | $ | 46,690,886 | ||||||||
|
Cost of goods
sold
|
19,605,230 | 14,632,413 | 37,134,149 | 26,817,640 | ||||||||||||
|
Gross
profit
|
13,632,426 | 11,386,120 | 26,330,221 | 19,873,246 | ||||||||||||
|
Operating
expenses:
|
||||||||||||||||
|
Selling
|
616,325 | 531,028 | 1,136,378 | 847,836 | ||||||||||||
|
General and administrative
|
1,558,390 | 1,388,545 | 3,023,083 | 2,646,522 | ||||||||||||
|
Total operating expenses
|
2,174,715 | 1,919,573 | 4,159,461 | 3,494,358 | ||||||||||||
|
Operating
income
|
11,457,711 | 9,466,547 | 22,170,760 | 16,378,888 | ||||||||||||
|
Other income
(expense):
|
||||||||||||||||
|
Interest
income
|
76,680 | 346,101 | 171,157 | 527,230 | ||||||||||||
|
Interest
expense
|
(3,399,506 | ) | (2,355,005 | ) | (6,665,422 | ) | (4,803,912 | ) | ||||||||
|
Gain on extinguishment of long-term
convertible notes
|
-- | -- | -- | 1,624,844 | ||||||||||||
|
Other expense,
net
|
(10,741 | ) | (57,570 | ) | (13,818 | ) | (59,827 | ) | ||||||||
|
Other expense,
net
|
(3,333,567 | ) | (2,066,474 | ) | (6,508,083 | ) | (2,711,665 | ) | ||||||||
|
Income from continuing operations before
income taxes
|
8,124,144 | 7,400,073 | 15,662,677 | 13,667,223 | ||||||||||||
|
Income tax expense
|
1,044,217 | 769,192 | 1,880,489 | 1,682,540 | ||||||||||||
|
Income from continuing operations
|
7,079,927 | 6,630,881 | 13,782,188 | 11,984,683 | ||||||||||||
|
Discontinued
operations
|
||||||||||||||||
|
Loss from discontinued operations before
income taxes
|
(65,174 | ) | (95,716 | ) | (122,169 | ) | (173,878 | ) | ||||||||
|
Income tax
expense
|
-- | -- | -- | -- | ||||||||||||
|
Loss from discontinued operations
|
(65,174 | ) | (95,716 | ) | (122,169 | ) | (173,878 | ) | ||||||||
|
Net income
|
$ | 7,014,753 | $ | 6,535,165 | $ | 13,660,019 | 11,810,805 | |||||||||
|
Basic earnings per
share:
|
||||||||||||||||
|
Income from continuing operations
|
$ | 0.13 | $ | 0.12 | $ | 0.25 | $ | 0.22 | ||||||||
|
Loss from discontinued operations
|
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||
|
Net income per
share
|
$ | 0.13 | $ | 0.12 | $ | 0.25 | $ | 0.22 | ||||||||
|
Diluted earnings per share:
|
||||||||||||||||
|
Income from continuing operations
|
$ | 0.13 | $ | 0.12 | $ | 0.25 | $ | 0.21 | ||||||||
|
Loss from discontinued operations
|
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||
|
Net income per
share
|
$ | 0.13 | $ | 0.12 | $ | 0.25 | $ | 0.21 | ||||||||
|
Weighted-average shares outstanding:
|
||||||||||||||||
|
Basic
|
54,202,036 | 54,202,036 | 54,202,036 | 54,202,036 | ||||||||||||
|
Diluted
|
54,207,569 | 66,954,996 | 54,207,601 | 67,082,801 | ||||||||||||
-6-
SHENGDATECH, INC. AND
SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
For
the Six Months Ended
|
||||||||
|
June
30,
|
||||||||
|
2010
|
|
2009
|
||||||
|
As
restated
|
||||||||
|
Cash flows from operating
activities:
|
||||||||
|
Net income
|
$ | 13,660,019 | $ | 11,810,805 | ||||
|
Loss from discontinued
operations
|
(122,169 | ) | (173,878 | ) | ||||
|
Income from continuing
operations
|
13,782,188 | 11,984,683 | ||||||
|
Adjustments to reconcile net income to
net cash provided by operating
activities:
|
||||||||
|
Depreciation
|
3,035,508 | 1,998,984 | ||||||
|
Land use rights expense
|
187,550 | 158,275 | ||||||
|
Amortization of debt issuance
costs
|
603,046 | 614,708 | ||||||
|
Amortization of debt
discount
|
3,353,317 | 2,637,671 | ||||||
|
Gain on extinguishment of
long-term convertible
notes
|
-- | (1,624,844 | ) | |||||
|
Deferred income
tax
|
(2,371,579 | ) | (807,280 | ) | ||||
|
Share-based compensation
expense
|
-- | 12,790 | ||||||
|
Changes in operating
assets and
liabilities:
|
||||||||
|
Accounts receivable
|
(1,401,821 | ) | 542,047 | |||||
|
Inventories
|
(101,484 | ) | 705,130 | |||||
|
Prepaid expenses and other
receivables
|
1,185,488 | 314,387 | ||||||
|
Accounts payable
|
124,841 | 160,678 | ||||||
|
Accrued expenses and other
payables
|
(150,373 | ) | (741,509 | ) | ||||
|
Income taxes payable/refund
receivable
|
2,287,544 | (817,448 | ) | |||||
|
Due to related
parties
|
(99,023 | ) | (83,743 | ) | ||||
|
Net cash provided by operating
activities
|
20,435,202 | 15,054,529 | ||||||
|
Cash flows from investing
activities:
|
||||||||
|
Cash paid for acquisition of
Chaodong
|
(3,808,240 | ) | -- | |||||
|
Purchase of property, plant and
equipment, including interest
capitalized
|
(5,916,498 | ) | (15,763,947 | ) | ||||
|
Purchase of land use
rights and mining rights
|
(16,291,823 | ) | -- | |||||
|
Net cash used in investing
activities
|
(26,016,561 | ) | (15,763,947 | ) | ||||
|
Cash flows from financing
activities:
|
||||||||
|
Payment to extinguish
long-term Convertible
notes
|
-- | (2,535,745 | ) | |||||
|
Net cash used in financing
activities
|
-- | (2,535,745 | ) | |||||
|
Cash flows from discontinued
operations:
|
||||||||
|
Net cash used in operating
activities
|
(122,075 | ) | (105,334 | ) | ||||
|
Net cash used in
investing
activities
|
-- | -- | ||||||
|
Net cash used in financing
activities
|
-- | -- | ||||||
|
Effects of exchange rate changes on cash
in discontinued
operations
|
399 | 29,929 | ||||||
|
Net cash used in discontinued
operations
|
(121,676 | ) | (75,405 | ) | ||||
|
Effect of exchange rate changes on
cash
|
355,471 | 31,496 | ||||||
|
Net decrease in
cash
|
(5,347,564 | ) | (3,289,072 | ) | ||||
|
Cash at beginning of
period
|
115,978,763 | 114,287,073 | ||||||
|
Cash at end of
period
|
$ | 110,631,199 | $ | 110,998,001 | ||||
|
Non-cash investing
activities:
|
||||||||
|
Accounts payable for purchase
of property, plant and
equipment
|
-- | $ | 1,386,232 | |||||
|
Due to related parties for
purchases of property, plant and
equipment
|
-- | $ | 139,084 | |||||
|
Supplemental disclosures of cash
flow information:
|
||||||||
|
Cash paid for income
taxes
|
$ | 1,964,523 | $ | 3,608,212 | ||||
|
Cash paid for interest, net of
capitalized interest
|
$ | 2,700,810 | $ | 1,487,673 | ||||
-7-
SHENGDATECH, INC. AND
SUBSIDIARIES
Reconciliation of Net Income to EBITDA
(Amounts expressed in US$)
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
|
June
30,
|
June
30,
|
|||||||||||||||
|
2010
|
2009
|
2010
|
2009
|
|||||||||||||
|
Net Income from Continuing
Operations
|
$ | 7,079,927 | $ | 6,630,881 | $ | 13,782,188 | $ | 11,984,683 | ||||||||
|
Income Tax
|
1,044,217 | 769,192 | 1,880,489 | 1,682,540 | ||||||||||||
|
Interest Expenses,
net
|
3,322,826 | 2,008,904 | 6,494,265 | 4,276,682 | ||||||||||||
|
Depreciation and Amortization
|
1,615,000 | 1,080,439 | 3,223,058 | 2,157,259 | ||||||||||||
|
EBITDA
|
13,061,970 | 10,489,416 | 25,380,000 | 20,101,164 | ||||||||||||
|
YoY Growth
|
24.5 | % | 26.3 | % | ||||||||||||
|
Note:
|
EBITDA is a financial measure that
is not defined by US GAAP. EBITDAwas derived by calculating
earnings before interest, taxes, depreciation, and amortization.
The Company's management believes that the presentation of EBITDA
provides useful information regarding ShengdaTech's
results of operations because it
assists
in analyzing and benchmarking the
performance and value of ShengdaTech's business. The
Company's calculation of EBITDA may
not be consistent with similarly
titled measures of other companies. The table above provides a
reconciliation of EBITDA to net income, the most comparable GAAP
measure.
|
-8-