Shengtai Pharmaceutical, Inc. Reports Second Quarter Fiscal Year 2013 Financial Results
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For best results when printing this announcement, please click on the link below: http://pdf.reuters.com/pdfnews/pdfnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:20130214:nPnCN60313 WEIFANG, SHANDONG, China, Feb. 14, 2013 /PRNewswire/ -- Shengtai Pharmaceutical, Inc. (OTC Bulletin Board: SGTI) (''Shengtai'' or ''the Company'' or "We" or "Us" or "Our"), a manufacturer and distributor in China of glucose and starch as pharmaceutical raw materials and other starch and glucose products, today reported financial results for the three months ended December 31, 2012. "We are glad to see the increase of sales revenue and increase of gross profit during the three months ended December 31, 2012 compared to the same period last year," stated Qingtai Liu, CEO of Shengtai. "The Company has produced a positive cash flow from operating expense during the six months ended December 31, 2012." Second Quarter Fiscal Year 2013 operations results Net sales for the three months ended December 31, 2012 were $64,103,621, an increase of $21,170,196 or 49.31%, compared with $42,933,425 for the same period in 2011. The increase in net sales primarily resulted from increased cornstarch and other products sales. For the three months ended December 31, 2012, the quantities of our glucose products, cornstarch products and other products sold were 33,228 tons, 55,115 tons, and 60,085 tons , respectively, increase/decrease of approximately (8.94%), 83.38%, and 93.31%, respectively. The increased sales quantities of cornstarch is due to a substantial increase of our Slurry sales, which increased approximately 6,848 tons or 687.03% for the three months ended December 31, 2012 compared to 996.74 tons for the same period in 2011. Net sales from exports for the three months ended December 31, 2012 were $16,214,168, an increase of approximately 115.79%, compared with $7,513,799 for the same period in 2011. The increase is mainly attributable to the increased exporting sales of corn germ meal during the three months ended December 31, 2012 compared to the same period last year, when the export of corn germ meal was nil. Cost of sales for the three months ended December 31, 2012 was $58,114,822, an increase of $19,222,428 or 49.42%, compared with $38,892,394 for the same period in 2011. The increase in cost of sales was in line with increased sales. Gross profit for the three months ended December 31, 2012 was $5,988,799, an increase of $1,947,768 or 48.20%, compared with $4,041,031 for the same period in 2011. The increase of gross profit is in line with the increased sales. Gross profit margin for the three months ended December 31, 2012 was 9.34%, a decrease by 0.07% as compared to the gross profit margin of 9.41% for the same period in 2011. The reason for the decrease of gross profit margin is mainly because the average sales prices decreased as compared to the same period last year. For the three months ended December 31, 2012, selling, general and administrative expenses were $3,898,845, an increase of $872,383 or 28.83%, compared to $3,026,462 for the three months ended December 31, 2011. The increase of selling, general, and administrative expenses is caused by increased selling, general and administrative expenses in PRC, offset by decreased selling, general and administrative expenses in the United States. The Company's selling, general and administrative expenses in the United States ended December 31, 2012 decreased by $49,086 compared to the same period in 2011. The decrease is mainly due to decreased salary expenses of $57,874. The selling, general and administrative expenses from our PRC operating entities increased by $123,106 for the three months ended December 31, 2012 compared to $3,702,602 for the same period in 2011. The selling expenses from our PRC operating entities increased by $1,198,829 or 73.39% in the quarter ended December 31, 2012 compared to the same period in 2011. The increase is mainly attributable to the increase in shipping and handing expenses of $1,225,986 and other expenses of $73,717 offset by decreased package expenses of $14,274, decreased commodity inspection fee of $6,619, decreased exhibition expenses of $5,930, and decreased carfares of $79,156. The general and administrative expenses incurred in PRC increased $248,639 in the quarter ended December 31, 2012 compared to $744,713 for the same period in 2011. Net income for the three months ended December 31, 2012 was $261,216, an increase of $326,278 or 501.49%, compared with net loss $65,062 for the same period in 2011. The increase in net income was primarily attributable to the increased gross profit of $1,947,768, offset by increased selling, general and administrative expenses of $872,383 and by increased interest expenses of $518,770. Financial Condition As of December 31, 2012, Shengtai had cash and restricted cash totaling $7.65 million. The Company's short-term loan totaled $77.13 million and long-term debt totaled $0 million. The Company's total shareholders' equity increased to $63.98 million. Management Comments Looking forward, Qingtai Liu, CEO of Shengtai stated, "We see a good demand of our products from the market during the past six months ended December 31, 2012. We will continue in focusing on providing good service to fulfill these demand as well as controlling our gross profit rate at current level." 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 http://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: +86-536-2188831 Email: shengtai_IR@163.com SHENGTAI PHARMACEUTICAL INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS Unaudited December 31, June 30, 2012 2012 ASSETS CURRENT ASSETS: Cash & cash equivalents $ 11,147,724 $ 4,903,303 Restricted cash 7,648,641 13,084,586 Accounts receivable, net of allowance for doubtful accounts of $1,124,954 and $1,603,051,respectively 12,033,935 12,099,625 Notes receivable 3,142,795 4,590,758 Other receivables 3,972,063 8,862,789 Inventories 35,844,802 29,457,981 Prepayments and other assets 1,918,666 1,023,154 Total current assets 75,708,626 74,022,195 PLANT AND EQUIPMENT, net 83,556,022 80,185,228 CONSTRUCTION IN PROGRESS 368,759 1,213,540 EQUITY INVESTMENT 12,845,149 11,704,050 ADVANCE FOR CONSTRUCTION 1,486,961 2,188,892 INTANGIBLE ASSETS, NET 3,347,968 3,271,147 Total assets $ 177,313,485 $ 172,585,052 L I A B I L I T I E S A N D S T O C K H O L D E R S' E Q U I T Y CURRENT LIABILITIES: Accounts payable $ 10,464,735 $ 5,432,615 Accounts payable and accrued liabilities - related party 719,793 405,926 Notes payable - banks 12,463,973 17,835,706 Short term bank loans 77,132,764 73,483,997 Accrued liabilities 560,086 479,593 Other payable 2,440,584 1,672,805 Employee loans 358,244 295,076 Other payable - officer 37,460 37,027 Customer deposit 8,831,607 9,610,252 Taxes payable 322,588 997,529 Total current liabilities 113,331,834 110,250,526 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY: Preferred stock, $0.001 par value, 2,500,000 shares authorized, no shares issued and outstanding as of December 31, 2012 and June 30, 2012 - - Common stock, $0.001 par value, 50,000,000 shares authorized, 9,584,912 shares issued and outstanding as of December 31, 2012 and June 30, 2012 9,585 9,585 Additional paid-in capital 21,945,101 21,945,101 Statutory reserves 4,290,884 4,226,125 Retained earnings 27,456,850 27,064,092 Accumulated other comprehensive income 10,279,230 9,089,623 Total stockholders' equity 63,981,651 62,334,526 Total liabilities and stockholders' equity $ 177,313,485 $ 172,585,052 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. SHENGTAI PHARMACEUTICAL INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME Unaudited THREE MONTHS ENDED DECEMBER 31, SIX MONTHS ENDED DECEMBER 31, 2012 2011 2012 2011 NET SALES $ 64,103,621 $ 42,933,425 $ 112,848,264 $ 82,988,873 COST OF SALES $ 58,114,822 $ 38,892,394 $ 101,801,487 $ 75,562,795 GROSS PROFIT 5,988,799 4,041,031 11,046,777 7,426,078 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 3,898,845 3,026,462 7,188,542 5,179,077 INCOME FROM OPERATIONS 2,089,954 1,014,569 3,858,235 2,247,001 OTHER INCOME (EXPENSE) : Earnings on equity investment 291,815 32,977 530,824 306,890 Non-operating income 36,998 161,516 39,989 752,983 Non-operating expense (240,241) (6,244) (401,028) (13,725) Interest expense and other charges (1,910,036) (1,391,266) (3,592,031) (2,234,377) Interest income 112,265 139,465 237,392 144,191 Other income (expense) , net (1,709,199) (1,063,552) (3,184,853) (1,044,038) INCOME BEFORE PROVISION FOR INCOME TAXES 380,755 (48,983) 673,382 1,202,963 PROVISION FOR INCOME TAXES 119,539 16,079 215,865 384,468 NET INCOME 261,216 (65,062) 457,517 818,495 OTHER COMPREHENSIVE ITEMS: Foreign currency translation adjustments 1,310,479 405,636 1,189,607 879,511 COMPREHENSIVE INCOME 1,571,695 $ 340,574 1,647,124 $ 1,698,006 EARNINGS PER SHARE Basic and diluted $ 0.03 $ (0.01) $ 0.05 $ 0.09 WEIGHTED AVERAGE NUMBER OF SHARES Basic and diluted 9,584,912 9,584,912 9,584,912 9,584,912 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. SHENGTAI PHARMACEUTICAL INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Unaudited SIX MONTHS ENDED DECEMBER 31, 2012 2011 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 457,517 $ 818,495 Adjustments to reconcile net income to cash (used in) provided by operating activities: Depreciation 4,826,303 3,866,186 Amortization 37,718 29,541 Bad debt reduction (494,367) (290,232) Share based compensation to employees - - Earnings on equity investment (530,824) (306,890) Loss on equipment disposal - - Change in operating assets and liabilities: Accounts receivable 721,109 58,328 Notes receivable 1,493,704 (688,958) Other receivables 4,954,330 1,273,594 Inventories (5,998,907) (4,294,968) Prepayments and other assets (2,343,071) 1,884,620 Accounts payable and accrued liabilities (1,189,862) (4,089,919) Accounts payable and accrued liabilities - related party 193,812 (617,404) Other payable 737,260 (1,069,555) Customer deposit (898,719) (5,731,010) Taxes payable (680,990) (381,549) Net cash provided by (used in) operating activities 1,285,014 (9,539,722) CASH FLOWS FROM INVESTING ACTIVITIES: Increase in equity investment (317,556) (1,254,400) Purchase of plant and equipment (4,259) (1,221) Additions to construction in progress 0 (78,432) Increase in land use right (69,977) (2,486) Advances for construction 2,194,522 1,342,590 Loan to related party - non-current - - Net cash provided by (used in) investing activities 1,802,731 6,051 CASH FLOWS FROM FINANCING ACTIVITIES: Decrease in restricted cash 5,435,944 7,121,261 Borrowings on notes payable - banks 12,329,401 1,844,282 Principal payments on notes payable - banks (17,881,583) (13,171,200) Borrowings on short term loans 49,625,257 36,443,550 Principal payments on short term loans (46,998,301) (22,483,610) Borrowings on employee loans 60,336 31,360 Principal payments on employee loans (1,794) (3,136) Net cash (used in) provided byfinancing activities 2,569,259 9,782,506 EFFECTS OF EXCHANGE RATE CHANGE IN CASH 587,417 30,995 INCREASE (DECREASE) IN CASH & CASH EQUIVELENTS 6,244,420 279,831 CASH & CASH EQUIVALENTS, beginning of year 4,903,303 4,051,349 CASH & CASH EQUIVALENTS, end of year $ 11,147,723 $ 4,331,179 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the year for: Interest Paid $ 2,474,288 $ 1,899,711 Income taxes $ 1,799 $ 705,945 SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES: Decrease of other receivable for acquisition of plant and equipment $ 2,078 $ 20,651 Transfers of construction in progress-related inventory to plant and equipment $ 202,334 $ 79,217 Acquisition of plant and equipment and construction in progress on credit $ 6,081,083 $ 3,557,333 Completion of construction-in-progress (transferred to plant and equipment) $ 7,044,153 $ 7,415,903 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. SOURCE Shengtai Pharmaceutical, Inc.
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