2014

Shengtai Pharmaceutical, Inc. Reports Financial Results for the Fiscal Year 2012

WEIFANG, Shandong, China, Sept. 28, 2012 /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 twelve months ended June 30, 2012.

"We are very glad that the Company has made some important improvements in the year ended June 30, 2012," stated Qingtai Liu, CEO of Shengtai Pharmaceutical, Inc., "The Company developed a new product, corn germ meal, which can be used as animal feed. It immediately contributed to our product revenues. Other than maintaining our current domestic customers, we also developed new customers during the year ended June 30, 2012. Even though raw material costs increased, we still managed to maintain a strong market share in the domestic pharmaceutical glucose market in China."

Fiscal Year 2012 Result of Operations

Sales revenue for the fiscal year ended June 30, 2012 was $179,029,127, an increase of $7,311,260, or 4.26% compared with $171,717,866 in the corresponding period in 2011. The increase in sales revenue resulted from an increase in the average selling prices, offset by decreased sales quantity of corn starch products. The Company's average selling prices increased 3.87% for glucose products, 5.42% for cornstarch products, and 2.52% for other products, in the year ended June 30, 2012 compared to the year ended June 30, 2011. The Company's sales quantity increased by 1.48% for glucose products, decreased by 17.87% for cornstarch products, and increased by 6.29% for other products, for the year ended June 30, 2012 compared to the year ended June 30, 2011. Net sales quantities from exports for the year ended June 30, 2012 decreased approximately 1.69 %, or 1,395 tons compared to the year ended June 30, 2011. The decrease is mainly attributable to decreased sales of glucose products and cornstarch products, offset by increased exporting sales quantities of other products. The decrease in export sales quantity of glucose products is due to a decrease in demand resulting from a price decrease in sugar substitute products in the global market. The decreased export sales quantity of corn starch products is due to increased competition in the global cornstarch market. The increase in export sales of other products is due to increased orders from our regular customers and increased sales from our other newly developed products, including corn germ meal, which can be used as animal food. Domestic sales quantity for the year ended June 30, 2012 decreased by approximately 4.83% compared to the year ended June 30, 2011. The decrease was mainly attributable to increased domestic sales quantity of our glucose products, offset by decreased domestic sales quantity of cornstarch products and other products. The increase in domestic sales quantity of our glucose products is due to increased sales from new customers. The decrease in sales quantity of our cornstarch products and other products is due to increased competition.

Costs of sales for the year ended June 30, 2012 was $161,705,181, an increase of $13,111,135, or 8.82% as compared to $148,594,046 in the corresponding period in 2011. The increase of cost of sales is mainly due to an increase in corn prices.  Gross profit for the year ended June 30, 2012 was $17,323,946, a decrease of $5,799,874, or 25.08%, as compared to $23,123,820 for the year ended June 30, 2011.  Gross profit margin for the year ended June 30, 2012 was 9.68%, a decrease from 13.47% for the year ended June 30, 2011.  The decrease in gross profit margin is because the percentage increase in the cost of sales is greater than the percentage increase in net sales.

Selling, general and administrative expenses were $11,825,104 for the year ended June 30, 2012, an increase of $2,020,060 or 20.6%, as compared to $9,805,044 for the year ended June 30, 2011. The increase of selling, general, and administrative expenses is caused by increased selling, general and administrative expenses in the 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 in the year ended June 30, 2012 decreased by $389,447 compared to the year ended June 30, 2011. The decrease is mainly due to decreased salary expenses of $364,000 and decreased option expenses of $211,082 offset by increased taxation expense expenses of $46,088. The salary expenses from the US entity decreased because during the year ended June 30, 2012 the Company's CEO agreed to give up his accrued salaries of $210,000 since April 2010 and the Company's CFO agreed to give up his accrued salaries of $154,000 since March 2010. The total accrued salary expense of $364,000 was reversed by increasing additional paid in capital in the year ended June 30, 2012. The Company incurred non-cash stock option expenses of $27,602 and $238,684 for the year ended June 30, 2012 and 2011, respectively. The selling, general and administrative expenses from our PRC operating entities increased by $2,020,060 for the year ended June 30, 2012 compared to the year ended June 30, 2011.  The selling expenses from our PRC operating entities increased by $1,451,470 in the year ended June 30, 2012 compared to the same period in 2011. The increase in selling expenses is mainly attributable to the  increase in shipping and handling expenses of $1,455,994 as a result of increased gas cost. The general and administrative expenses incurred in PRC increased $568,590 in the year ended June 30, 2012 compared to the year ended June 30, 2011. The increase is mainly attributable to the increase in depreciation expenses of $183,051 and workers' insurance expenses of $108,654.

Net income for the year ended June 30, 2012 was $1,072,594, a decrease of $6,578,457 or 85.98%, as compared to net income of $7,651,051 for the same period in 2011. The decrease in net income was primarily due to the decrease in gross profit, increase in selling and general and administrative expenses, and increase in interest expenses.

Net cash used in operating activities for the fiscal year ended June 30, 2012 was $23,737,700, a decrease of $28,807,300 or 568.24%, compared to $5,069,599 net cash provided by operating activities for the fiscal year ended June 30, 2011. The decrease is due to decreased net income, increased accounts receivables, increased payments to acquire inventories, increased payments to pay back accounts payables, and decreased customer deposit, offset by decreased other receivable, decreased prepayments and other assets, and increased deprecation during the year ended June 30, 2012 as compared to the year ended June 30, 2011.  

Net cash used in investing activities for fiscal year ended June 30, 2012 was $1,655,433, a decrease of $6,442,584 or 79.56%, compared to $8,098,017 used in investing activities for the year ended June 30, 2011.  The decrease is due to reduced investment in construction in progress during the year ended June 30, 2012 compared to the year ended June 30, 2011.

Net cash provided by financing activities for the fiscal year ended June 30, 2012 was $26,099,389, a decrease of $26,283,774 or 14,254.82%, as compared to $184,385 used in financing activities for the same period in 2011. The decrease is mainly due to increased short term bank loans, increased notes payables, less payments of notes payable, offset by increased restricted cash, more payments of short term bank loans, and less payment of capital lease during the year ended June 30, 2012 compared to the year ended June 30, 2011.

Management Comments

Looking forward, Qingtai Liu, CEO of Shengtai Pharmaceutical, Inc. stated, "Raw material costs show no sign of decline in the near future, so the Company will focus on other strategies to increase gross profit, including developing new product lines, keeping storage of raw materials to lock in lower cost, and sticking to a strict and more profitable pricing policy."

"We believe that our sound reputation, good quality products, and outstanding customer service will help us to maintain our market share and profits in the coming years," 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:


Shengtai Pharmaceutical, Inc.
Ms. Yukie Ying Gao
Investor Relations Manager
Tel: +86-536-2188831
Email: ir-yukie@shengtaipharmaceutical.com

 

SHENGTAI PHARMACEUTICAL INC. AND SUBSIDIARIES

CONSOLIDATED  BALANCE SHEETS







June 30,






2012


2011

ASSETS

CURRENT ASSETS:






Cash & cash equivalents

$

4,903,303

$

4,051,349


Restricted cash


13,084,586


8,972,600


Accounts receivable, net of allowance for doubtful accounts of $1,603,051 and $1,506,470


12,099,625


8,580,973


Notes receivable


4,590,758


2,815,726


Other receivables 


8,862,789


8,359,103


Inventories


29,457,981


13,016,399


Prepayments and other assets


1,023,154


2,296,982



Total current assets


74,022,195


48,093,131









PLANT AND EQUIPMENT, net


80,185,228


77,029,157









CONSTRUCTION IN PROGRESS


1,213,540


4,693,018









EQUITY INVESTMENT


11,704,050


9,132,725









ADVANCE FOR CONSTRUCTION


2,188,892


2,039,929









INTANGIBLE ASSETS, NET


3,271,147


3,251,214












Total assets

$

172,585,052

$

144,239,174









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 

$

5,432,615

$

9,508,512


Accounts payable and accrued liabilities - related party


405,926


943,779


Notes payable - banks


17,835,706


11,447,800


Short term loans


73,483,997


48,094,740


Accrued liabilities


479,593


917,464


Other payable


1,672,805


2,642,598


Employee loans


295,076


261,938


Other payable - officer


37,027


36,285


Customer deposit


9,610,252


8,954,841


Taxes payable


997,529


1,809,093



Total current liabilities


110,250,526


84,617,050









COMMITMENTS AND CONTINGENCIES













STOCKHOLDERS' EQUITY:






Preferred stock, $0.001 par value, 2,500,000 shares authorized,







no shares issued and outstanding as of June 30, 2012 and June 30, 2011


-


-


Common stock, $0.001 par value, 50,000,000 shares authorized,







9,584,912 shares issued and outstanding as of June 30, 2012 and June 30, 2011


9,585


9,585


Additional paid-in capital


21,945,101


21,553,499


Statutory reserves


4,226,125


4,068,822


Retained earnings


27,064,092


26,148,801


Accumulated other comprehensive income


9,089,623


7,841,417



Total stockholders' equity


62,334,526


59,622,124












Total liabilities and stockholders' equity

$

172,585,052

$

144,239,174









The accompanying notes are an integral part of these consolidated financial statements.


 

SHENGTAI PHARMACEUTICAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME 








 Ended June 30



2012


2011






NET SALES

$

179,029,127

$

171,717,866






COST OF SALES


161,705,181


148,594,046






GROSS PROFIT     


17,323,946


23,123,820






SELLING, GENERAL AND  ADMINISTRATIVE EXPENSES         


11,825,104


9,805,044






INCOME FROM OPERATIONS


5,498,842


13,318,776






OTHER INCOME (EXPENSE) :





  Earnings on equity investment


921,730


872,630

  Non-operating income 


766,287


228,746

  Non-operating expense


(191,790)


(312,552)

  Interest expense and other charges


(6,115,809)


(3,729,444)

  Interest income


192,347


119,636

    Other income (expense) , net


(4,427,235)


(2,820,984)






INCOME BEFORE PROVISION FOR INCOME TAXES


1,071,607


10,497,792






PROVISION FOR INCOME TAXES


(988)


2,846,741






NET INCOME 


1,072,594


7,651,051






OTHER COMPREHENSIVE ITEMS:





    Foreign currency translation adjustments


1,248,206


2,636,158






COMPREHENSIVE INCOME


2,320,800

$

10,287,210






EARNINGS PER SHARE





Basic and diluted

$

0.11

$

0.80






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.



SHENGTAI PHARMACEUTICAL INC. AND SUBSIDIARIES


 CONSOLIDATED STATEMENTS OF CASH FLOWS









 Ended June 30








2012


2011












CASH FLOWS FROM OPERATING ACTIVITIES:







Net income 

$

1,072,594

$

7,651,051



Adjustments to reconcile net income to cash (used in)








provided by operating activities:









Depreciation


8,001,930


7,153,155





Amortization


59,368


56,632





Bad debt (reduction) provision


60,476


131,463





Share based compensation to employees


27,602


238,684





Earnings on equity investment


(921,730)


(872,630)





Loss on equipment disposal


-


238,387




Change in operating assets and liabilities:









Accounts receivable


(3,355,898)


68,917





Notes receivable


(1,698,109)


(202,150)





Other receivables


(329,985)


(8,127,790)





Inventories


(16,087,045)


(181,050)





Prepayments and other assets


1,320,468


(1,684,476)





Accounts payable 


(9,799,190)


(5,913,395)





Accounts payable-related party


(556,931)


-





Accrued liabilities


(96,020)


-





Accrued liabilities - related party


-


663,386





Other payable


(1,026,110)


1,098,802





Customer deposit


440,311


4,477,630





Taxes payable


(849,432)


272,983






Net cash (used in) provided by operating activities


(23,737,700)


5,069,599












CASH FLOWS FROM INVESTING ACTIVITIES:







Increase in equity investment


(1,418,958)


(1,511,200)



Purchase of plant and equipment


(1,226)


(2,018,025)



Additions to construction in progress


(132,788)


(3,626,806)



Increase in land use right


(2,496)


-



Advances for construction 


(99,965)


(941,986)






Net cash used in investing activities


(1,655,433)


(8,098,017)












CASH FLOWS FROM FINANCING ACTIVITIES:







Decrease in restricted cash


(4,111,986)


7,584,304



Borrowings on notes payable - banks


19,581,857


15,263,120



Principal payments on notes payable - banks


(13,501,787)


(22,365,760)



Borrowings on short term loans 


97,832,239


56,895,225



Principal payments on short term loans 


(73,727,699)


(51,108,784)



Borrowings on employee loans


31,487


107,673



Principal payments on employee loans


(4,723)


(258,482)



Borrowings on long term loans


-


(493,544)



Payments on long term loans


-


4,841,583



Borrowings on third party loan


-


(4,841,583)



Payment on capital lease obligation


-


(5,808,137)






Net cash provided by (used in) financing activities


26,099,389


(184,385)












EFFECTS OF EXCHANGE RATE CHANGE IN CASH


145,699


1,127,605












INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS


851,954


(2,085,198)












CASH & CASH EQUIVALENTS, beginning of year


4,051,349


4,121,541












CASH & CASH EQUIVALENTS, end of year

$

4,903,303

$

2,036,343












SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:






Cash paid during the year for: 






Interest Paid

$

4,087,384

$

2,995,844


Income taxes

$

727,685

$

2,098,145












SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:






Decrease of other receivable for acquisition of plant and equipment

$

26,449

$

-


Transfers of construction in progress-related inventory to plant and equipment

$

250,877

$

-


Acquisition of plant and equipment on credit

$

5,523,141

$

5,717,226


Non-cash advances for construction 

$

-

$

1,344,561


Completion of construction-in-progress (transferred to plant and equipment)

$

8,883,222

$

15,392,980












The accompanying notes are an integral part of these consolidated financial statements.


 

SHENGTAI PHARMACEUTICAL INC. AND SUBSIDIARIES

 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY 

FOR THE YEARS ENDED JUNE 30, 2012 AND 2011




























Retained earnings


Accumulated other







Common stock


 Paid-in 


Statutory


comprehensive 







Shares


Par value


capital


Reserves


Unrestricted


income


 Totals 

BALANCE, JUNE 30, 2010


9,584,912

$

9,585

$

21,314,815

$

3,214,800

$

19,351,772

$

5,205,259

$

49,096,231



















 Net income 


-


-


-


-


7,651,051


-


7,651,051


 Option issued to employees  


-


-


238,684


-


-


-


238,684


 Adjustment to statutory reserve  


-


-


-


854,022


(854,022)


-


-


 Foreign currency translation adjustments 


-


-


-


-


-


2,636,158


2,636,158


















BALANCE, JUNE 30, 2011


9,584,912


9,585


21,553,499


4,068,822


26,148,801


7,841,417


59,622,124



















  Net income 


-


-


-


-


1,072,594


-


1,072,594


  Option issued to employees  


-


-


27,602


-


-


-


27,602


  Forgiveness of officer's compensation 




-


364,000


-


-


-


364,000


  Adjustment to statutory reserve  


-


-


-


157,303


(157,303)


-


-


  Foreign currency translation adjustments 


-


-


-


-


-


1,248,206


1,248,206


















BALANCE, JUNE 30, 2012


9,584,912

$

9,585

$

21,945,101

$

4,226,125

$

27,064,092

$

9,089,623

$

62,334,526


















The accompanying notes are an integral part of these consolidated financial statements.

SOURCE Shengtai Pharmaceutical, Inc.



RELATED LINKS
http://www.shengtaipharmaceutical.com

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.