WEIFANG, China, Nov. 16 /PRNewswire-Asia-FirstCall/ -- Shengtai Pharmaceutical, Inc. (OTC:SGTI) (BULLETIN BOARD: SGTI) ("Shengtai" or "the Company"), a leading manufacturer and distributor of high-quality, pharmaceutical grade glucose products in China, today reported financial results for the first quarter of fiscal 2010 ended September 30, 2009. First Quarter 2010 Financial Summary -- First quarter 2010 revenues totaled $23.13 million -- First quarter had positive operating cash flow of $0.83 million -- Cash and restricted cash of $12.78 million "The first quarter fiscal year 2010 brings our company back to profitable and creates a very good opening for fiscal year 2010. Our glucose revenue increased approximately 65% compared to the same period last year. The total glucose revenue accounted for 58.41% of total revenue for the three months ended September 30, 2009, compared to 45.29% the same period last year. Selling, general and administrative (SG&A) expenses for the three months ended September 30, 2009 were $2.08 million, a decrease of $345,101 compared with the same period last year. Our financial results demonstrate that our strategy of controlling cost, improving product structure to create a higher gross profit products mix, and expanding market share in pharmaceutical glucose markets has been successful," said Mr. Qingtai Liu, Shengtai Pharmaceutical's CEO. "The competition in the last year was tough but we are proud that we survived the economic crisis and are on the right track to our goal of becoming the largest pharmaceutical glucose provider." First Quarter Fiscal 2010 Financial Results First quarter 2010 revenues were $23.13 million, a 27.61% increase year-over-year compared to the $18.12 million reported in the first quarter of fiscal 2009. Sales of glucose products totaled $13.51 million during the first quarter as it accounted for 58.4% of sales. Cornstarch sales for the quarter totaled $4.65 million or 20.1% of revenues. Sales of other products totaled $4.97 million or 21.5% of revenues. With the government stimulus plan taking effect, and the recovery of the economy, and our increased competitive strength, the demand of our glucose products was increased compared to the same period last year. Gross profit for the three months ended September 30, 2009 was $3.32 million compared with $3.19 million the same period last year. Gross margin was 14.36%, a decline from 17.62% in the first quarter of fiscal 2009. The decline in gross margin in the first quarter was primarily driven by increased raw material cost and higher production cost per unit due to the idle capacity from expanded new facilities. Selling, general and administrative (SG&A) expenses for the three months ended September 30, 2009 were $2.08 million, a decrease of $345,101 compared with the same period last year. The decrease in selling, general and administrative expenses was mainly the result of our efforts in controlling our costs. We incurred $158,818 in non-cash stock option expenses for the three months ended September 30, 2009. First quarter 2010 net income was $783,833 or 4 cents per diluted share, compared to first quarter 2009 net income of $629,796 or 3 cents per diluted share. Financial Condition As of September 30, 2009, Shengtai Pharmaceutical had cash and restricted cash totaling $12.78 million. The Company generated $0.83 million in positive cash flow from operations during the first quarter. The Company's short-term loan totaled $29.63 million and long-term debt totaled $4.96 million. The Company's total shareholders' equity increased to $45.96 million. Business Outlook Based on its current outlook, and existing and anticipated business conditions, Shengtai expects net income for fiscal year ending June 30, 2010 to be between $3-$5 million. "Looking forward we see several factors that will create a continuous demand for the Company's pharmaceutical graded glucose products. First of all, this winter is abnormally cold in northern China with Swine flu a strong threat to health. More people will get flu shots and other IV treatments. In China, IV drips are the most commonly used in hospitals and clinics to treat the symptoms of cold and flu," said Mr. Qingtai Liu, Shengtai Pharmaceutical's CEO. "Second, we would also see the health care stimulus package starting to show its effects in the next twelve months and we expect increased demand for basic pharmaceutical products from newly built clinics. Third, we believe we are in a much better position than some of our key competitors in the pharmaceutical glucose field. We have expanded production capacity and have enough operating cash flow. Some of our key competitors went bankrupt, have temporarily stopped production, or are on the verge of going out of business. This is a good opportunity for us to obtain an even higher market share in the pharmaceutical glucose market. With these good external opportunities, we plan to stick to our strategy of controlling costs, improving product structure to create a higher gross profit products mix, and expanding market share in the pharmaceutical glucose market. We are very confident that our key competitive strength remains and will welcome a profitable year in fiscal year 2010." Conference Call The Company will host a conference call on Tuesday November 17, 2009 at 8:00 A.M. Eastern Standard Time / 9:00 P.M. Beijing Time. A question and answer session will follow management's presentation. Ms. Yiru Melody Shi (Chief Financial Officer), and Ms. Shenglian Iris Wang (Investor Relations Assistant 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 Tuesday, November 24, 2009, 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: 337862 About Shengtai Pharmaceutical, Inc. Shengtai Pharmaceutical, Inc. through its wholly owned subsidiary, Shengtai Holding, Inc. (SHI), a New Jersey corporation, and the Chinese operating company of Weifang Shengtai Pharmaceutical Co., Ltd., is a leading manufacturer and supplier of pharmaceutical grade glucose used for medical purposes. It also manufactures and supplies glucose and cornstarch products to the food, beverage and industrial production industries in China. For more information about Shengtai Pharmaceutical, Inc., please visit http://www.shengtaipharmaceutical.com/ . Forward-looking Statements Certain statements made in this news release, may contain 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, 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 further information, please contact: Shengtai Pharmaceutical, Inc. Ms. Yiru Melody Shi Chief Financial Officer Tel: +1-949-468-7078 Email: Shenglian Iris Wang Investor Relations Manger Tel: +86-0536-6295802 Email: DATASOURCE: Shengtai Pharmaceutical, Inc. CONTACT: Shengtai Pharmaceutical, Inc., Ms. Yiru Melody Shi, Chief Financial Officer, +1-949-468-7078, and Ms. Shenglian Iris Wang, Investor Relations Manager, +86-0536-6295802, Web site: http://www.shengtaipharmaceutical.com/

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