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:
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Phone Number
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+ 1 (877)
407-8035 (North
America)
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Phone Number
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+ 1 (201)
689-8035 (International)
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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:
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Phone Number
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+1 (877)
660-6853 (North
America)
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Phone Number
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+1 (201)
612-7415
(International)
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Account Number:
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286
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Conference ID Number:
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367449
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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:
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Shengtai Pharmaceutical,
Inc.
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Ms. Yukie Ying Gao
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Investor Relations
Manager
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Tel:
+86-536-6295802
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Email:
guaipaipai@hotmail.com
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Investor Relations
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DME Capital LLC
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David Elias
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Tel:
+1-516-967-0205
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Email:
dave@dmecapital.com
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SHENGTAI
PHARMACEUTICAL INC. AND SUBSIDIARIES
|
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CONSOLIDATED
BALANCE SHEETS
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AS OF
DECEMBER 31, 2010 AND JUNE 30,2010
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(UNAUDITED)
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A S S E T S
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|
|
|
|
|
|
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DECEMBER
31,
|
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JUNE
30,
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|
|
|
|
|
|
2010
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|
2010
|
|
|
|
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(UNAUDITED)
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|
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CURRENT ASSETS:
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|
|
|
|
|
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Cash & cash
equivalents
|
$
|
6,827,127
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$
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4,121,541
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|
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Restricted cash
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3,640,800
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16,556,904
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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
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14,064,809
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8,365,822
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Notes receivable
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1,124,023
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2,410,512
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|
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Other receivables
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|
682,528
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|
450,284
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Inventories
|
|
16,539,263
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|
11,072,170
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Prepayments and other
assets
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1,246,806
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545,590
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|
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Total current assets
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44,125,357
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43,522,824
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|
|
|
|
|
|
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PLANT AND EQUIPMENT,
net
|
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80,261,536
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|
75,373,851
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|
|
|
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|
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OTHER ASSETS:
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|
|
|
|
|
|
Investment in Changle Shengshi
Redian Co., Ltd.
|
|
6,859,927
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|
6,372,294
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|
|
Advances for
construction
|
|
1,349,722
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|
2,334,748
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|
|
Intangible assets - land use
right, net of accumulated amortization
|
|
3,216,590
|
|
3,150,894
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|
|
|
Total other assets
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|
11,426,238
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|
11,857,936
|
|
|
|
|
|
|
|
|
|
|
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|
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Total assets
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$
|
135,813,131
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$
|
130,754,611
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|
|
|
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L I A B I L I T I E S
A N D S H A R E H O L D E R S' E Q U I T
Y
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|
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CURRENT LIABILITIES:
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Accounts payable and accured
liabilities
|
$
|
13,508,036
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$
|
9,508,631
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Accounts payable and accrued
liabilities - related party
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|
1,061,947
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|
252,017
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|
|
Notes payable - banks
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|
7,281,600
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17,823,300
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Short term loans
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47,724,820
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40,153,980
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|
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Accrued liabilities
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|
652,370
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|
412,555
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|
|
Other payable
|
|
1,070,235
|
|
1,315,797
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|
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Employee loans
|
|
385,339
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|
396,404
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Other payable -
officer
|
|
531,116
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|
515,856
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|
|
Customer deposit
|
|
7,685,913
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|
4,162,046
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|
|
Taxes payable
|
|
700,172
|
|
1,456,474
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|
|
Long term loan-current
matunties
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|
640
|
|
2,314,983
|
|
|
|
Total current
liabilities
|
|
80,602,188
|
|
78,312,043
|
|
|
|
|
|
|
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|
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LONG TERM LIABILITIES
|
|
|
|
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|
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Other payable -
noncurrent
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|
-
|
|
3,346,336
|
|
|
|
Total long term
liabilities
|
|
-
|
|
3,346,336
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|
|
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|
|
|
|
|
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|
Total liabilities
|
|
80,602,188
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|
81,658,379
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|
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|
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COMMITMENTS AND
CONTINGENCIES
|
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SHAREHOLDERS' EQUITY:
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Preferred stock, $0.001 par
value, 2,500,000 shares authorized,
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no shares issued and
outstanding
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-
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-
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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
|
|
|
|
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|
|
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|
|
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|
|
The accompanying notes are an
integral part of this statement.
|
|
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|
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|
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SHENGTAI
PHARMACEUTICAL INC. AND SUBSIDIARIES
|
|
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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
|
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|
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2010
|
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2009
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2010
|
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2009
|
|
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NET SALES
|
$
|
49,044,856
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$
|
28,508,859
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|
$
|
83,689,428
|
$
|
51,635,916
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF SALES
|
|
43,145,306
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|
24,039,512
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|
|
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Shengtai Pharmaceutical, Inc.