Attached files
| file | filename |
|---|---|
| 8-K - Shengtai Pharmaceutical, Inc. | v211739_8k.htm |
Exhibit
99.1
Shengtai
Pharmaceutical Reports Second Quarter Fiscal 2011 Financial Results
WEIFANG,
China, Feb. 14, 2011 /PRNewswire-Asia-FirstCall/ -- Shengtai Pharmaceutical,
Inc. (OTC Bulletin Board: SGTI) ("Shengtai" or "the Company"), a leading
manufacturer and distributor of high-quality, pharmaceutical grade glucose
products in China, and a manufacturer and distributor in China of starch
products, today reported financial results for the second quarter of fiscal 2011
ended December 31, 2010.
"Sales of
our glucose products, corn products, and by products all increased during the
second quarter compared with the September quarter 2011 and compared to the same
quarter last year," said Mr. Qingtai Liu, Shengtai Pharmaceutical's CEO. "Sales
increased due to higher demand of our products from both international and
domestic markets. We expect that the demand will continue in the second half of
fiscal year 2011. With the growth of our business, we look to improve our sales
and net income greatly in 2011."
"On the
sales side, we had developed more large customers, both domestically and
internationally. With our new state-of-the-art facilities, we now have the
production capacity to meet the anticipated increase in demand." Mr. Liu
concluded.
Second
Quarter Fiscal 2011 Financial Results
Net sales
for the three months ended December 31, 2010 were $49,044,856, an increase of
$20,535,997, or 72.03%, compared with the same period in 2009. The increase in
net sales primarily resulted from increased demand of our products in all
product lines and increased unit selling prices of our glucose and cornstarch
products. For the three months ended December 31, 2010 compared to the same
period last year, the quantity of our glucose products sold increased about
21.44%, while the average unit selling price of our glucose products increase
about 19.42%. For the three months ended December 31, 2010 compared to the same
period last year, the quantity of our cornstarch products sold increased about
100%, while the average unit selling price of our cornstarch products increase
about 13%. Especially our Slurry sales increased approximately $5,361,000 or
660% for the three months ended December 31, 2010 compared to the same period
last year. For the three months ended December 31, 2010 compared to the same
period last year, the quantity of our other products sold increased about 63%,
while the average unit selling price of our other products maintained the same.
The increase in domestic sales is due to the improved economic environment
compared with the same period last year, increased demand for glucose products
due to the government stimulus plan execution, as well as company's effort in
developing new clients.
Net sales
from exports for the three months ended December 31, 2010 increased
approximately 14.89% compared with the same period in 2009. The increase is
mainly attributable to the recovery of the global economy resulting in an
increase in the international demand for the Company's glucose products compared
to the same period last year.
Gross
profit for the three months ended December 31, 2010 was $5,899,550, an increase
of $1,430,203, or 32%, compared with the same period in 2009. The increase of
gross profit is mainly in line with the increased sales.
Gross
profit margin for the three months ended December 31, 2010 was 12.03%, a
decrease from 15.68% for the same period in 2009. The reason for the decrease of
gross profit margin is mainly because the price of corn, our main raw material,
increased approximately 12% for the three months ended December 31, 2010
compared to the same period last year where the average selling prices did not
increase much. The decrease is also due to the change of product mix. In the
three months ended December 31, 2010, more lower profit products such as Slurry
were sold compared to the same period last year when more profitable products
such as glucose accounted for a larger percentage of total revenue. The Company
believes that increased sales of cornstarch and byproducts are bringing more
positive cash flow to the Company. The Company is also working on improving
pricing and profit control to improve gross profit margin. At the same time, the
Company has built and is building more raw material storage to reduce the impact
of the fluctuating cost of raw materials.
For the
three months ended December 31, 2010, selling, general and administrative
expenses were $2,103,390, a decrease by $92,286, or 4.20%, compared to
$2,195,676 for the three months ended December 31, 2009. The selling,
general, and administrative expenses remained stable as selling expenses
increased due to increased sales while general and administrative expenses
decreased due to cost control.
The
Company incurred $83,304 and $158,818 non-cash stock option expenses for the
three months ended December 31, 2010 and 2009, respectively. The option expenses
are included in selling, general and administrative expenses.
Net
income for the three months ended December 31, 2010 was $2,696,468, an increase
of $1,644,242 compared with $1,052,226 for the same period in 2009. The increase
in net income was primarily attributable to the increased sales.
Business
Outlook
"For the
second half of fiscal year 2011, we expect sales of our glucose, cornstarch and
other products will continue to grow in both domestic and international
markets," stated Mr. Qingtai Liu, Shengtai Pharmaceutical's CEO. "As we look
further into the second half of our fiscal year 2011, we expect our newly
expanded cornstarch manufacturing facility will be utilized over 50% by the end
of fiscal year 2011. The newly expanded cornstarch manufacturing facilities will
help us to satisfy the increasing demand of our cornstarch products and
byproducts. We have already built relatively large back orders for our glucose
and cornstarch products. In order to stabilize our gross profit, we have
continued to construct additional storage facilities to better control the
impact of fluctuating corn prices. Looking forward, we are also confident with
our cash position, which is enhanced by the increased sales and good accounts
receivable collection. In the coming year, we will focus on providing high
quality products as well as continue searching for higher profit high-tech
products." Mr. Liu concluded.
Financial
Condition
As of
December 31, 2010, the Company's cash and cash equivalents increased to $6.8
million. The Company's total shareholders' equity amounted to $55.21
million.
Conference
Call
The
Company will host a conference call on Tuesday February 15, 2011 at 7:00 P.M.
Eastern Standard Time. A question and answer session will follow management's
presentation. Mr. Qingtai Liu (Chief
Executive Officer), Mr. Yongqiang Wang (Chief Financial Officer), Mr. Weijie
Liu, and Ms. Yukie Ying Gao (Investor Relations Manager) will be the primary
speakers on the call.
To
participate, please call the following numbers ten minutes before the call start
time:
|
Phone
Number
|
+ 1
(877) 407-8035 (North
America)
|
|
|
Phone
Number
|
+ 1
(201)
689-8035 (International)
|
|
A replay
of the call will be available through Wednesday, February 23, 2011, at 11:59
P.M. Eastern Standard Time. For the replay, please call:
|
Phone
Number
|
+1
(877) 660-6853 (North
America)
|
|
|
Phone
Number
|
+1
(201)
612-7415 (International)
|
|
|
Account
Number:
|
286
|
|
|
Conference
ID Number:
|
367449
|
|
About
Shengtai Pharmaceutical, Inc.
Shengtai
Pharmaceutical, Inc. through its wholly owned subsidiary, Shengtai Holding, Inc.
(SHI), and the Chinese operating company of Weifang Shengtai Pharmaceutical Co.,
Ltd., is a manufacturer and distributor in China of glucose and starch products
as pharmaceutical raw materials, other starch products and other glucose
products such as corn meals, food and beverage glucose and dextrin. For more
information about Shengtai Pharmaceutical, Inc., please visit www.shengtaipharmaceutical.com.
Forward
Looking Statements
Certain
statements in this press release and oral statements made by the Company
constitute forward-looking statements concerning the Company's business and
products. These statements include, without limitation, statements regarding our
ability to prepare the Company for growth, the Company's planned capacity
expansion and predictions and guidance relating to the Company's future
financial performance. 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
pharmaceutical industry, pricing and demand trends for the Company's products,
changes to government regulations, risk associated with operation of the
Company's new facilities, risk associated with large-scale implementation of the
Company's business plan, the ability to attract new customers, ability to
increase its product's applications, cost of raw materials, 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. Investors are urged to consider these factors carefully 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.
|
For
more information, please contact:
|
|
|
Shengtai
Pharmaceutical, Inc.
|
|
|
Ms.
Yukie Ying Gao
|
|
|
Investor
Relations Manager
|
|
|
Tel:
+86-536-6295802
|
|
|
Email:
guaipaipai@hotmail.com
|
|
|
Investor
Relations
|
|
|
DME
Capital LLC
|
|
|
David
Elias
|
|
|
Tel:
+1-516-967-0205
|
|
|
Email:
dave@dmecapital.com
|
|
|
SHENGTAI
PHARMACEUTICAL INC. AND SUBSIDIARIES
|
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
AS
OF DECEMBER 31, 2010 AND JUNE 30,2010
|
|
|
(UNAUDITED)
|
|
|
ASSETS
|
||||||||
|
DECEMBER
31,
|
JUNE
30,
|
|||||||
|
2010
|
2010
|
|||||||
|
(UNAUDITED)
|
||||||||
|
CURRENT
ASSETS:
|
||||||||
|
Cash
& cash equivalents
|
$ | 6,827,127 | $ | 4,121,541 | ||||
|
Restricted
cash
|
3,640,800 | 16,556,904 | ||||||
|
Accounts
receivable, net of allowance for doubtful accounts of $2,211,523 as of
December 31, 2010 and $1,306,268 as of June 30, 2010,
respectively
|
14,064,809 | 8,365,822 | ||||||
|
Notes
receivable
|
1,124,023 | 2,410,512 | ||||||
|
Other
receivables
|
682,528 | 450,284 | ||||||
|
Inventories
|
16,539,263 | 11,072,170 | ||||||
|
Prepayments
and other assets
|
1,246,806 | 545,590 | ||||||
|
Total
current assets
|
44,125,357 | 43,522,824 | ||||||
|
PLANT
AND EQUIPMENT, net
|
80,261,536 | 75,373,851 | ||||||
|
OTHER
ASSETS:
|
||||||||
|
Investment
in Changle Shengshi Redian Co., Ltd.
|
6,859,927 | 6,372,294 | ||||||
|
Advances
for construction
|
1,349,722 | 2,334,748 | ||||||
|
Intangible
assets - land use right, net of accumulated amortization
|
3,216,590 | 3,150,894 | ||||||
|
Total
other assets
|
11,426,238 | 11,857,936 | ||||||
|
|
||||||||
|
Total
assets
|
$ | 135,813,131 | $ | 130,754,611 | ||||
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
||||||||
|
CURRENT
LIABILITIES:
|
||||||||
|
Accounts
payable and accured liabilities
|
$ | 13,508,036 | $ | 9,508,631 | ||||
|
Accounts
payable and accrued liabilities - related party
|
1,061,947 | 252,017 | ||||||
|
Notes
payable - banks
|
7,281,600 | 17,823,300 | ||||||
|
Short
term loans
|
47,724,820 | 40,153,980 | ||||||
|
Accrued
liabilities
|
652,370 | 412,555 | ||||||
|
Other
payable
|
1,070,235 | 1,315,797 | ||||||
|
Employee
loans
|
385,339 | 396,404 | ||||||
|
Other
payable - officer
|
531,116 | 515,856 | ||||||
|
Customer
deposit
|
7,685,913 | 4,162,046 | ||||||
|
Taxes
payable
|
700,172 | 1,456,474 | ||||||
|
Long
term loan-current matunties
|
640 | 2,314,983 | ||||||
|
Total
current liabilities
|
80,602,188 | 78,312,043 | ||||||
|
LONG
TERM LIABILITIES
|
||||||||
|
Other
payable - noncurrent
|
- | 3,346,336 | ||||||
|
Total
long term liabilities
|
- | 3,346,336 | ||||||
|
|
||||||||
|
Total
liabilities
|
80,602,188 | 81,658,379 | ||||||
|
|
|
|||||||
|
COMMITMENTS
AND CONTINGENCIES
|
||||||||
|
SHAREHOLDERS'
EQUITY:
|
||||||||
|
Preferred
stock, $0.001 par value, 2,500,000 shares authorized,
|
||||||||
|
no
shares issued and outstanding
|
- | - | ||||||
|
Common
stock, $0.001 par value, 50,000,000 shares authorized,
|
||||||||
|
9,584,912
shares issued and outstanding
|
9,585 | 19,170 | ||||||
|
Additional
paid-in capital
|
21,498,295 | 21,305,230 | ||||||
|
Statutory
reserves
|
3,713,669 | 3,214,800 | ||||||
|
Retained
earnings
|
23,192,455 | 19,351,772 | ||||||
|
Accumulated
other comprehensive income
|
6,796,940 | 5,205,259 | ||||||
|
Total
shareholders' equity
|
55,210,943 | 49,096,231 | ||||||
|
|
||||||||
|
Total
liabilities and shareholders' equity
|
$ | 135,813,131 | $ | 130,754,611 | ||||
The
accompanying notes are an integral part of this statement.
|
SHENGTAI
PHARMACEUTICAL INC. AND SUBSIDIARIES
|
|
CONSOLIDATE
STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
|
|
FOR
THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2010 AND
2009
|
|
(UNAUDITED)
|
|
|
|||||||||||
|
THREE
MONTHS
ENDED
DECEMBER 31
|
SIX
MONTHS
ENDED
DECEMBER 31
|
|||||||||||||||
|
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
|
NET
SALES
|
$ | 49,044,856 | $ | 28,508,859 | $ | 83,689,428 | $ | 51,635,916 | ||||||||
|
COST
OF SALES
|
43,145,306 | 24,039,512 | 71,770,521 | 43,845,212 | ||||||||||||
|
GROSS
PROFIT
|
5,899,550 | 4,469,347 | 11,918,907 | 7,790,704 | ||||||||||||
|
SELLING,
GENERAL AND ADMINISTRATIVE EXPENSES
|
2,103,390 | 2,195,676 | 4,683,194 | 4,280,366 | ||||||||||||
|
INCOME
FROM OPERATIONS
|
3,796,160 | 2,273,671 | 7,235,713 | 3,510,338 | ||||||||||||
|
OTHER
(EXPENSE) INCOME:
|
||||||||||||||||
|
Earnings
on equity investment
|
144,244 | 200,963 | 231,133 | 347,109 | ||||||||||||
|
Non-operating
income
|
54,614 | (24,229 | ) | 77,611 | 199,362 | |||||||||||
|
Non-operating
expense
|
(94,804 | ) | (9,076 | ) | (201,852 | ) | (16,346 | ) | ||||||||
|
Interest
expense and other charges
|
(427,576 | ) | (913,532 | ) | (1,550,692 | ) | (1,642,318 | ) | ||||||||
|
Interest
income
|
70,770 | (607 | ) | 72,034 | 775 | |||||||||||
|
Other
income (expense), net
|
(252,752 | ) | (746,481 | ) | (1,371,764 | ) | (1,111,418 | ) | ||||||||
|
INCOME
BEFORE PROVISION FOR INCOME TAXES
|
3,543,408 | 1,527,190 | 5,863,949 | 2,398,920 | ||||||||||||
|
PROVISION
FOR INCOME TAXES
|
846,940 | 474,964 | 1,524,397 | 562,861 | ||||||||||||
|
NET
INCOME
|
2,696,468 | 1,052,226 | 4,339,552 | 1,836,059 | ||||||||||||
|
OTHER
COMPREHENSIVE ITEMS:
|
||||||||||||||||
|
Foreign currency translation adjustments
|
763,135 | 332 | 1,591,681 | 61,634 | ||||||||||||
|
COMPREHENSIVE
INCOME
|
$ | 3,459,603 | $ | 1,052,558 | $ | 5,931,233 | $ | 1,897,693 | ||||||||
|
EARNINGS
PER SHARE
|
||||||||||||||||
|
Basic
|
$ | 0.28 | $ | 0.11 | $ | 0.45 | $ | 0.19 | ||||||||
|
Diluted
|
$ | 0.27 | $ | 0.11 | $ | 0.45 | $ | 0.19 | ||||||||
|
WEIGHTED
AVERAGE NUMBER OF SHARES
|
||||||||||||||||
|
Basic
|
9,584,912 | 9,584,903 | 9,584,912 | 9,584,903 | ||||||||||||
|
Diluted
|
9,809,676 | 9,584,903 | 9,732,089 | 9,584,903 | ||||||||||||
The
accompanying notes are an integral part of this
statement.
|
SHENGTAI
PHARMACEUTICAL INC. AND SUBSIDIARIES
|
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
FOR
THE SIX MONTHS ENDED DECEMBER 31, 2010 AND 2009
|
|
|
(UNAUDITED)
|
|
|
2010
|
2009
|
|||||||
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
|
Net
income
|
$ | 4,339,552 | $ | 1,836,059 | ||||
|
Adjustments
to reconcile net income to cash
|
||||||||
|
provided
by operating activities:
|
||||||||
|
Depreciation
|
3,560,415 | 3,830,468 | ||||||
|
Amortization
|
27,949 | 28,164 | ||||||
|
Allowance
for bad debts
|
851,731 | (254,370 | ) | |||||
|
Share
based compensation to employees
|
183,480 | 317,636 | ||||||
|
Loss
on equipment disposal
|
111,874 | - | ||||||
|
Adjustment on equipment due to
change of
capital lease
|
- | - | ||||||
|
Gain
on disposal of land use right
|
- | (739 | ) | |||||
|
Earnings
on equity investment
|
(231,133 | ) | (347,109 | ) | ||||
|
Change
in operating assets and liabilities:
|
||||||||
|
Accounts
receivable
|
(5,357,856 | ) | 1,872,130 | |||||
|
Notes
receivable
|
1,450,732 | (263,189 | ) | |||||
|
Other
receivables
|
(876,791 | ) | (227,480 | ) | ||||
|
Inventories
|
(5,111,530 | ) | (1,725,029 | ) | ||||
|
Prepayments
and advance to employees
|
(308,910 | ) | (186,545 | ) | ||||
|
Accounts
payable
|
3,653,269 | 739,842 | ||||||
|
Accrued
liabilities
|
228,578 | 18,125 | ||||||
|
Accounts
payable - related party
|
788,967 | 146,971 | ||||||
|
Other
payable
|
(746,316 | ) | 1,134,035 | |||||
|
Customer
deposit
|
3,342,622 | 789,599 | ||||||
|
Taxes
payable
|
(786,417 | ) | 1,025,045 | |||||
|
Net
cash provided by operating activities
|
5,120,215 | 8,733,614 | ||||||
|
|
||||||||
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
|
Advances-Short
term loan receivable
|
- | (837,341 | ) | |||||
|
Purchase
plant and equipment
|
(1,204,598 | ) | (2,258,175 | ) | ||||
|
Proceeds
from equipment disposal
|
(0 | ) | 2,535 | |||||
|
Additions
to construction in progress
|
(5,059,744 | ) | (5,517,268 | ) | ||||
|
Advances
for construction
|
1,037,108 | - | ||||||
|
Acquisition
of land use right
|
- | (43,415 | ) | |||||
|
Loan
to related party - non-current
|
(851,731 | ) | - | |||||
|
Net
cash used in investing activities
|
(6,078,966 | ) | (8,653,664 | ) | ||||
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
|
Decrease
in restricted cash
|
12,916,104 | 20,557,383 | ||||||
|
Borrowings
on notes payable - banks
|
- | 13,197,600 | ||||||
|
Principal
payments on notes payable - banks
|
(10,888,680 | ) | (35,252,256 | ) | ||||
|
Borrowings
on short term loans
|
12,231,120 | 14,018,784 | ||||||
|
Principal
payments on short term loans
|
(5,966,400 | ) | (6,393,504 | ) | ||||
|
Principal
payments on employee loans
|
(22,523 | ) | (266,991 | ) | ||||
|
Borrowings
on third party loan
|
335,610 | 11,986 | ||||||
|
Principal
payments on third party loan
|
- | 69,381 | ||||||
|
Borrowings
on long term loans
|
4,778,788 | - | ||||||
|
Payments
on long term loans
|
(4,778,788 | ) | - | |||||
|
Payment
on capital lease obligation
|
(5,732,806 | ) | (1,929,709 | ) | ||||
|
Dividend
paid to shareholders
|
- | - | ||||||
|
Net
cash provided by financing activities
|
2,872,424 | 4,012,675 | ||||||
|
|
||||||||
|
EFFECTS
OF EXCHANGE RATE CHANGE IN CASH
|
791,911 | 3,737 | ||||||
|
|
||||||||
|
INCREASE
IN CASH & CASH EQUIVELENTS
|
2,705,584 | 4,096,362 | ||||||
|
|
||||||||
|
CASH & CASH EQUIVELENTS,
beginning of
period
|
4,121,543 | 1,779,476 | ||||||
|
|
||||||||
|
CASH
& CASH EQUIVELENTS, end of period
|
$ | 6,827,127 | $ | 5,875,838 | ||||
|
|
||||||||
|
SUPPLEMENTAL
DISCLOSURE
|
||||||||
|
Cash
paid for Interest, net of capitalized interest
|
$ | 1,361,124 | $ | 1,827,539 | ||||
|
Cash
paid for Income taxes
|
$ | 1,672,926 | $ | - | ||||
|
Non-cash
construction in progress transferring
into plant and equipment
|
$ | 575,344 | $ | - | ||||
The
accompanying notes are an integral part of this
statement.