WEIFANG, Shandong, China, Nov. 14,
2011 /PRNewswire-Asia-FirstCall/ -- Shengtai Pharmaceutical,
Inc. (OTC Bulletin Board: SGTI) (''Shengtai'' or ''the Company'' or
"we" or "us"), 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 first quarter of fiscal 2012 ended
September 30, 2011.
"We are glad that our sales increased 15% during the last
quarter ended September 30, 2011,
compared to the same period last year. During the quarter ended
September 30, 2011, we continued our
strategy of locking in lower cost raw material." Qingtai Liu, CEO
of Shengtai Pharmaceutical, Inc. stated, "We put in more cash
resources into advances for raw material purchases to lock in the
increasing raw material cost. We put our view for the long term
success of the business and we are on the right path toward
improvement and success among competition."
First Quarter Fiscal 2012 Result
of Operations
Net sales for the three months ended September 30, 2011 were $40,055,448, an increase of $5,410,876, or 15.62%, compared with the same
period in 2010. The increase in net sales primarily resulted from
increased unit selling prices of our products. For the three months
ended September 30, 2011 compared to
the same period last year, the quantity of our glucose products
sold decreased about 2.44%, while the average unit selling price of
our glucose products increased about 18.86%. For the three months
ended September 30, 2011 compared to
the same period last year, the quantity of our cornstarch products
sold decreased about 8.14%, while the average unit selling price of
our cornstarch products increased about 11.72%. For the three
months ended September 30, 2011
compared to the same period last year, the quantity of our other
products sold decreased about 2.66%, while the average unit selling
price of our other products increased about 21.67%. The increased
unit selling prices are caused by the increased raw material cost
during the quarter ended September 30,
2011 compared to the same period last year. The sales
quantity was affected because the Company tried to maintain a
certain gross profit while the corn prices increased.
Net sales from exports for the three months ended September 30, 2011 increased approximately 26.80%
compared with the same period in 2010. The increase is mainly
attributable to the increased unit sales prices due to increased
corn prices for the three months ended September 30, 2011 compared to the same period
last year.
Cost of sales for the three months ended September 30, 2011 was $36,670,401, an increase of $8,045,186, or 28.11%, compared with the same
period in 2010. The increase in cost of sales was mainly due to
increase in the price of corn, our main raw material.
Gross profit for the three months ended September 30, 2011 was $3,385,047, a decrease of $2,634,310, or 43.76%, compared with the same
period in 2010. The decrease of gross profit is mainly because unit
selling prices of our products did not increase as fast as the corn
prices. Gross profit margin for the three months ended September 30, 2011 was 8.45%, a decrease from
17.37% for the same period in 2010. The reason for the decrease of
gross profit margin is mainly because the price of corn, our main
raw material, increased approximately 21.62% for the three months
ended September 30, 2011 compared to
the same period last year where the average selling prices did not
increase much. The Company believes that the market is taking its
time to respond to the increased corn prices and will reach a more
profitable price level in the near future. At the same time, the
Company believes that the Company's actions to improve gross profit
margin, such as expanding raw material storage facilities to reduce
the impact of fluctuation on the price of our raw materials, will
benefit us in maintaining our profitability.
For the three months ended September 30,
2011, selling, general and administrative expenses were
$2,152,615, a decrease of
$427,189, or 16.56%, compared to
$2,579,804 for the three months ended
September 30, 2010. The selling,
general, and administrative expenses remain stable as selling
expenses increased due to increased sales while general and
administrative expenses decreased mainly due to decreased bad debt
allowance as a result of better collections this quarter. The
Company incurred $6,900 and
$100,176 non-cash stock option
expenses for the three months ended September 30, 2011 and 2010, respectively. The
option expenses are included in selling, general and administrative
expenses.
Net income for the three months ended September 30, 2011 was $883,557, a decrease of $759,527 compared with $1,643,084 for the same period in 2010. The
decrease in net income was primarily attributable to the decreased
gross profit.
Financial Condition
As of September 30, 2011, Shengtai
Pharmaceutical, Inc. had cash and restricted cash totaling
$12.68 million. The Company's
short-term loan totaled $63.48
million and long-term debt totaled $0
million. The Company's total shareholders' equity increased
to $60.99 million.
Management Comments
Looking forward, Qingtai Liu, CEO of Shengtai Pharmaceutical,
Inc. stated, "Even though during the last quarter, the increased
corn prices shrank the gross margin for the industry, we still view
it as an opportunity for us. Compared to smaller companies, we had
more cash to support us in a less profitable market for a longer
time. We had stored larger raw material inventory and advanced more
cash for raw material purchases. This will allow us to have a
better margin than the competitors."
"Going forward we are confident to be the final winner of the
industry!" concluded Mr. Liu.
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:
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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: 86-536-2188831
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Email: ir-yukie@shengtaipharmaceutical.com
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SHENGTAI
PHARMACEUTICAL INC. AND SUBSIDIARIES
|
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CONSOLIDATED
CONDENSED BALANCE SHEETS
|
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AS OF
SEPTEMBER 30, 2011 AND JUNE 30, 2011
|
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(Unaudited)
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|
|
|
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A S S E T
S
|
|
|
|
|
|
|
September 30,
|
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June
30,
|
|
|
|
|
|
|
2011
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS:
|
|
|
|
|
|
|
Cash & cash
equivalents
|
$
|
3,617,312
|
$
|
4,051,349
|
|
|
Restricted cash
|
|
9,059,600
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8,972,600
|
|
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Accounts receivable, net of
allowance for doubtful accounts of $1,149,712 and $1,506,470 as of
September 30, 2011 and June 30, 2011, respectively
|
|
7,947,177
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|
8,580,973
|
|
|
Notes receivable
|
|
6,920,284
|
|
2,815,726
|
|
|
Other receivables
|
|
13,509,236
|
|
8,359,103
|
|
|
Inventories
|
|
13,669,955
|
|
13,016,399
|
|
|
Prepayments and other
assets
|
|
683,352
|
|
2,296,982
|
|
|
|
Total current assets
|
|
55,406,918
|
|
48,093,131
|
|
|
|
|
|
|
|
|
|
|
PLANT AND EQUIPMENT,
net
|
|
75,998,870
|
|
77,029,157
|
|
|
|
|
|
|
|
|
|
|
CONSTRUCTION IN
PROGRESS
|
|
5,470,017
|
|
4,693,018
|
|
|
|
|
|
|
|
|
|
|
EQUITY INVESTMENT
|
|
10,744,826
|
|
9,132,725
|
|
|
|
|
|
|
|
|
|
|
ADVANCE FOR
CONSTRUCTION
|
|
2,073,442
|
|
2,039,929
|
|
|
|
|
|
|
|
|
|
|
INTANGIBLE ASSETS,
NET
|
|
3,270,524
|
|
3,251,214
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
$
|
152,964,598
|
$
|
144,239,174
|
|
|
|
|
|
|
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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
|
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|
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|
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CURRENT LIABILITIES:
|
|
|
|
|
|
|
Accounts payable
|
$
|
4,483,824
|
$
|
9,508,512
|
|
|
Accounts payable and accrued
liabilities - related party
|
|
366,245
|
|
943,779
|
|
|
Notes payable - banks
|
|
11,558,800
|
|
11,447,800
|
|
|
Short term loans
|
|
63,478,176
|
|
48,094,740
|
|
|
Accrued liabilities
|
|
810,426
|
|
917,464
|
|
|
Other payable
|
|
1,749,450
|
|
2,642,598
|
|
|
Employee loans
|
|
295,717
|
|
261,938
|
|
|
Other payable -
officer
|
|
36,588
|
|
36,285
|
|
|
Customer deposit
|
|
7,758,145
|
|
8,954,841
|
|
|
Taxes payable
|
|
1,440,771
|
|
1,809,093
|
|
|
|
Total current
liabilities
|
|
91,978,142
|
|
84,617,050
|
|
|
|
|
|
|
|
|
|
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COMMITMENTS AND
CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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STOCKHOLDERS' 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
|
|
9,585
|
|
|
Additional paid-in
capital
|
|
21,560,399
|
|
21,553,499
|
|
|
Statutory reserves
|
|
4,179,339
|
|
4,068,822
|
|
|
Retained earnings
|
|
26,921,841
|
|
26,148,801
|
|
|
Accumulated other comprehensive
income
|
|
8,315,292
|
|
7,841,417
|
|
|
|
Total stockholders'
equity
|
|
60,986,456
|
|
59,622,124
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
152,964,598
|
$
|
144,239,174
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an
integral part of these consolidated financial
statements.
|
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|
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|
|
|
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|
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SHENGTAI
PHARMACEUTICAL INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
CONDENSED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE
INCOME
|
|
FOR THREE
MONTHS ENDED SEPTEMBER 30, 2011 AND 2010
|
|
(Unaudited)
|
|
|
|
2011
|
|
2010
|
|
NET SALES
|
$
|
40,055,448
|
$
|
34,644,572
|
|
|
|
|
|
|
|
COST OF SALES
|
|
36,670,401
|
|
28,625,215
|
|
|
|
|
|
|
|
GROSS PROFIT
|
|
3,385,047
|
|
6,019,357
|
|
|
|
|
|
|
|
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES
|
|
2,152,615
|
|
2,579,804
|
|
|
|
|
|
|
|
INCOME FROM
OPERATIONS
|
|
1,232,432
|
|
3,439,553
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSE)
:
|
|
|
|
|
|
Earnings on equity
investment
|
|
273,914
|
|
86,889
|
|
Non-operating
income
|
|
591,467
|
|
22,997
|
|
Non-operating
expense
|
|
(7,481)
|
|
(107,049)
|
|
Interest expense and other
charges
|
|
(843,111)
|
|
(1,123,116)
|
|
Interest income
|
|
4,726
|
|
1,266
|
|
Other income
(expense) , net
|
|
19,514
|
|
(1,119,012)
|
|
|
|
|
|
|
|
INCOME BEFORE PROVISION FOR
INCOME TAXES
|
|
1,251,946
|
|
2,320,541
|
|
|
|
|
|
|
|
PROVISION FOR INCOME
TAXES
|
|
368,389
|
|
677,457
|
|
|
|
|
|
|
|
NET INCOME
|
|
883,557
|
|
1,643,084
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE
ITEMS:
|
|
|
|
|
|
Foreign currency
translation adjustments
|
|
473,875
|
|
828,546
|
|
|
|
|
|
|
|
COMPREHENSIVE INCOME
|
$
|
1,357,432
|
$
|
2,471,630
|
|
|
|
|
|
|
|
EARNINGS PER SHARE
|
|
|
|
|
|
Basic and
diluted
|
$
|
0.09
|
$
|
0.17
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF
SHARES
|
|
|
|
|
|
Basic and
diluted
|
|
9,584,912
|
|
9,584,912
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an
integral part of these consolidated financial
statements.
|
|
|
|
|
|
|
CONSOLIDATED
CONDENSED STATEMENTS OF CASH FLOWS
|
|
FOR
THREE MONTHS ENDED SEPTEMBER 30,
2011 AND 2010
|
|
(Unaudited)
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
CASH FLOWS FROM OPERATING
ACTIVITIES:
|
|
|
|
|
|
|
Net income
|
$
|
883,557
|
$
|
1,643,084
|
|
|
Adjustments to reconcile net
income to cash
|
|
|
|
|
|
|
|
provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
1,896,910
|
|
1,895,046
|
|
|
|
|
Amortization
|
|
14,689
|
|
13,856
|
|
|
|
|
Bad debt (reduction)
provision
|
|
(371,317)
|
|
844,536
|
|
|
|
|
Share based compensation to
employees
|
|
6,900
|
|
100,176
|
|
|
|
|
Earnings on equity
investment
|
|
(273,914)
|
|
(200,846)
|
|
|
|
Change in operating assets and
liabilities:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
1,088,222
|
|
1,156,815
|
|
|
|
|
Notes receivable
|
|
(4,076,734)
|
|
(1,151,924)
|
|
|
|
|
Other receivables
|
|
(5,395,534)
|
|
(3,143,542)
|
|
|
|
|
Inventories
|
|
(587,134)
|
|
(5,063,226)
|
|
|
|
|
Prepayments and other
assets
|
|
1,635,692
|
|
(280,797)
|
|
|
|
|
Accounts payable and accrued
liabilities
|
|
(5,993,088)
|
|
(523,481)
|
|
|
|
|
Accounts payable and accrued
liabilities - related party
|
|
(586,610)
|
|
851,146
|
|
|
|
|
Other payable
|
|
(719,296)
|
|
4,381,514
|
|
|
|
|
Customer deposit
|
|
(1,283,359)
|
|
4,832,831
|
|
|
|
|
Taxes payable
|
|
(385,814)
|
|
(885,179)
|
|
|
|
|
|
Net cash (used in) provided by
operating activities
|
|
(14,146,831)
|
|
4,470,009
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES:
|
|
|
|
|
|
|
Increase in equity
investment
|
|
(1,249,440)
|
|
-
|
|
|
Purchase plant and
equipment
|
|
(1,076)
|
|
(2,087,021)
|
|
|
Additions to construction in
progress
|
|
(6,054)
|
|
-
|
|
|
Advances for
construction
|
|
(13,732)
|
|
1,002,821
|
|
|
Increase in land use
right
|
|
(2,476)
|
|
(37,568)
|
|
|
|
|
Net cash used in investing
activities
|
|
(1,272,779)
|
|
(1,121,768)
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING
ACTIVITIES:
|
|
|
|
|
|
|
Decrease in restricted
cash
|
|
-
|
|
15,958,104
|
|
|
Borrowings on notes payable -
banks
|
|
-
|
|
14,790,000
|
|
|
Principal payments on notes
payable - banks
|
|
-
|
|
(32,613,300)
|
|
|
Borrowings on short term
loans
|
|
18,116,880
|
|
7,927,440
|
|
|
Principal payments on short term
loans
|
|
(3,201,690)
|
|
(8,470,800)
|
|
|
Borrowings on employee
loans
|
|
31,236
|
|
(8,661)
|
|
|
Borrowings on long term
loans
|
|
-
|
|
(1,820,419)
|
|
|
|
|
Net cash provided by (used in)
financing activities
|
|
14,946,426
|
|
(4,237,636)
|
|
|
|
|
|
|
|
|
|
|
EFFECTS OF EXCHANGE RATE CHANGE
IN CASH
|
|
39,147
|
|
568,748
|
|
|
|
|
|
|
|
DECREASE IN CASH & CASH
EQUIVALENTS
|
|
(434,036)
|
|
(320,647)
|
|
|
|
|
|
|
|
CASH & CASH EQUIVALENTS,
beginning of year
|
|
4,051,349
|
|
4,121,541
|
|
|
|
|
|
|
|
CASH & CASH EQUIVALENTS, end
of year
|
$
|
3,617,312
|
$
|
3,800,894
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION:
|
|
|
|
|
|
Cash paid during the year
for:
|
|
|
|
|
|
Interest Paid
|
$
|
783,614
|
$
|
807,673
|
|
Income taxes
|
$
|
404,936
|
$
|
853,195
|
|
|
|
|
|
|
|
SUPPLEMENTAL SCHEDULE OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
|
|
|
|
|
|
Decrease of other receivable for
acquisition of plant and equipment
|
$
|
20,569
|
$
|
-
|
|
Transfers of construction in
progress-related inventory to plant and equipment
|
$
|
61,400
|
$
|
-
|
|
Acquisition of plant and
equipment on credit (accounts payable)
|
$
|
779,368
|
$
|
-
|
|
Completion of
construction-in-progress (transferred to plant and
equipment)
|
$
|
73,204
|
$
|
-
|
|
|
|
|
|
|
|
The accompanying notes are an
integral part of these consolidated financial
statements.
|
|
|
|
|
|
|
|
|
|
|
SOURCE Shengtai Pharmaceutical, Inc.