Shengtai Pharmaceutical, Inc. Reports First Quarter Fiscal Year 2013 Financial Results

Nov 14, 2012, 20:30 ET from Shengtai Pharmaceutical, Inc.

WEIFANG, Shandong, China, Nov. 14, 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 three months ended September 30, 2012.

"We are very glad to announce that we had increased sales quantities and revenue, increased gross profit and increased gross profit rate for the three months ended September 30, 2012," stated Qingtai Liu, CEO of Shengtai, "We are glad to see that the average corn prices decreased during the quarter ended September 30, 2012 compared to the same period last year. Together with our successful price and profit control, we managed to increase our gross profit rate to 10.38%. We also developed new important big clients during the quarter ended September 30, 2012."

Fiscal Quarter Fiscal Year 2013 operations results

Net sales for the three months ended September 30, 2012 were $48,744,643, an increase of $8,689,195 or 21.69%, compared with $40,055,448 for the same period in 2011. The increase in net sales primarily resulted from increased cornstarch sales for the three months ended September 30, 2012, compared to the same period last year. For the three months ended September 30, 2012 compared to the same period last year, the quantities of our glucose products, cornstarch products and other products sold increased approximately 5.82%, 53.24%, and 18.69%, respectively. The increased sales quantities of cornstarch is due to a substantial increase of our Slurry sales, which increased approximately $3,257,921 or 1654.77% for the three months ended September 30, 2012 compared to $194,507 for the same period last year. The increased sales of our cornstarch products are also caused by increased new clients and a higher demand as market supplies decreased, as some smaller competitors stop their operation or supply due to market competition. Net sales from exports for the three months ended September 30, 2012 were $8,656,325, an increase of approximately 14.15%, compared with $7,583,553 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 September 30, 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 September 30, 2012 was $43,686,665, an increase of $7,016,264 or 19.13%, compared with $36,670,401 for the same period in 2011. The increase in cost of sales was mainly due to the increase of sales offset by the decrease in the price of corn, our main raw material.

Gross profit for the three months ended September 30, 2012 was $5,057,978, an increase of $1,672,931 or 49.42%, compared with $3,385,047 for the same period in 2011. The increase of gross profit is mainly because the average corn prices increased less than the unit selling prices of our products. Gross profit margin for the three months ended September 30, 2012 was 10.38%, an increase by 1.93% as compared to the gross profit margin of 8.45% for the same period in 2011. The reason for the increase of gross profit margin is mainly because the price of corn, our main raw material, decreased approximately 1.72% for the three months ended September 30, 2012 compared to the same period last year whereas the average sales prices of glucose products, cornstarch products and other products decreased by 5.19%, 0.02%, 1.49% as compared to the same period last year. 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, benefited us in improving our profitability.

For the three months ended September 30, 2012, selling, general and administrative expenses were $3,289,698, an increase of $1,137,082 or 52.82%, compared to $2,152,615 for the three months ended September 30, 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 September 30, 2012 decreased by $104,743 compared to the same period in 2011. The decrease is mainly due to decreased salary expenses of $56,625 and decreased option expenses of $6,900 and decreased taxation expenses of $25,478. The Company incurred $0 and $6,900 non-cash stock option expenses for the three months ended September 30, 2012 and 2011, respectively. The selling, general and administrative expenses from our PRC operating entities increased by $1,241,826 for the three months ended September 30, 2012 compared to $1,931,003 for the same period in 2011. The selling expenses from our PRC operating entities increased by $816,210 or 50.15% in the quarter ended September 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 $771,713 as a result of increased gas price. The general and administrative expenses incurred in PRC increased $425,616 in the quarter ended September 30, 2012 compared to $303,320 for the same period in 2011. The increase is mainly attributable to the increase in salary expenses of $75,521 and loss for bad debt of 49,068 and other expenses of $172,171.    

Net income for the three months ended September 30, 2012 was $196,301, a decrease of $687,256 or 77.78%, compared with $883,557 for the same period in 2011. The decrease in net income was primarily attributable to the increased interest expenses of $863,147.

Financial Condition

As of September 30, 2012, Shengtai had cash and restricted cash totaling $7.01 million. The Company's short-term loan totaled $75.54 million and long-term debt totaled $0 million. The Company's total shareholders' equity increased to $62.41 million.

Management Comments

Looking forward, Qingtai Liu, CEO of Shengtai stated, "We will focus more on cost control in the coming quarter to increase our operating net income. At the same time, we will keep a good price and profit control to respond to the price changes of raw materials."

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

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited

September 30,

 June 30,  

2012

2012

ASSETS

CURRENT ASSETS:

Cash & cash equivalents

$

9,487,764

$

4,903,303

Restricted cash

7,010,195

13,084,586

Accounts receivable, net of allowance for doubtful accounts of $1,989,045 and $1,603,051,respectively

9,887,273

12,099,625

Notes receivable

4,243,459

4,590,758

Other receivables 

5,918,337

8,862,789

Inventories

32,083,824

29,457,981

Prepayments and other assets

1,986,828

1,023,154

Total current assets

70,617,681

74,022,195

PLANT AND EQUIPMENT, net

78,494,877

80,185,228

CONSTRUCTION IN PROGRESS

3,409,340

1,213,540

EQUITY INVESTMENT

11,972,328

11,704,050

ADVANCE FOR CONSTRUCTION

1,483,711

2,188,892

INTANGIBLE ASSETS, NET

3,259,903

3,271,147

Total assets

$

169,237,841

$

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 

$

7,858,443

$

5,432,615

Accounts payable and accrued liabilities - related party

980,243

405,926

Notes payable - banks

8,590,848

17,835,706

Short term bank loans

75,540,520

73,483,997

Accrued liabilities

542,819

479,593

Other payable

1,318,385

1,672,805

Employee loans

292,926

295,076

Other payable - officer

36,965

37,027

Customer deposit

10,512,128

9,610,252

Taxes payable

1,154,607

997,529

Total current liabilities

106,827,885

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 September 30, 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 September 30, 2012 and June 30, 2012

9,585

9,585

Additional paid-in capital

21,945,101

21,945,101

Statutory reserves

4,257,449

4,226,125

Retained earnings

27,229,069

27,064,092

Accumulated other comprehensive income

8,968,752

9,089,623

Total stockholders' equity

62,409,956

62,334,526

Total liabilities and stockholders' equity

$

169,237,841

$

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 OPERATIONS AND OTHER COMPREHENSIVE INCOME 

Unaudited

THREE MONTHS ENDED SEPTEMBER 30

2012

2011

NET SALES

$

48,744,643

$

40,055,448

COST OF SALES

43,686,665

36,670,401

GROSS PROFIT     

5,057,978

3,385,047

SELLING, GENERAL AND  ADMINISTRATIVE EXPENSES         

3,289,698

2,152,615

INCOME FROM OPERATIONS

1,768,280

1,232,432

OTHER INCOME (EXPENSE) :

  Earnings on equity investment

239,009

273,914

  Non-operating income 

2,991

591,467

  Non-operating expense

(160,787)

(7,481)

  Interest expense and other charges

(1,681,995)

(843,111)

  Interest income

125,128

4,726

    Other income (expense) , net

(1,475,654)

19,514

INCOME BEFORE PROVISION FOR INCOME TAXES

292,626

1,251,946

PROVISION FOR INCOME TAXES

96,326

368,389

NET INCOME 

196,301

883,557

OTHER COMPREHENSIVE ITEMS:

    Foreign currency translation adjustments

(120,872)

473,875

COMPREHENSIVE INCOME

75,429

1,357,432

EARNINGS PER SHARE

Basic and diluted

$

0.02

$

0.09

WEIGHTED AVERAGE NUMBER OF SHARES

Basic and diluted

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

THREE MONTHS ENDED SEPTEMBER 30

2012

2011

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income 

$

196,301

$

883,557

Adjustments to reconcile net income to cash (used in)

provided by operating activities:

Depreciation

2,272,344

1,896,910

Amortization

15,260

14,689

Bad debt (reduction) provision

389,134

(371,317)

Share based compensation to employees

-

6,900

Earnings on equity investment

(239,009)

(273,914)

Change in operating assets and liabilities:

Accounts receivable

1,800,161

1,088,222

Notes receivable

338,489

(4,076,734)

Other receivables

2,927,509

(5,395,534)

Inventories

(2,803,715)

(587,134)

Prepayments and other assets

(965,770)

1,635,692

Accounts payable and accrued liabilities

(351,711)

(5,993,088)

Accounts payable and accrued liabilities - related party

562,960

(586,610)

Other payable

(351,258)

(719,296)

Customer deposit

920,524

(1,283,359)

Taxes payable

159,023

(385,814)

Net cash provided by (used in) operating activities

4,870,243

(14,146,831)

CASH FLOWS FROM INVESTING ACTIVITIES:

Increase in equity investment

-

(1,249,440)

Purchase of plant and equipment

(1,079)

(1,076)

Additions to construction in progress

(0)

(6,054)

Increase in land use right

(10,323)

(2,476)

Advances for construction 

701,048

(13,732)

Loan to related party - non-current

-

-

Net cash provided by (used in) investing activities

689,646

(1,272,779)

CASH FLOWS FROM FINANCING ACTIVITIES:

Decrease in restricted cash

6,074,390

-

Borrowings on notes payable - banks

5,635,740

-

Principal payments on notes payable - banks

(14,847,369)

-

Borrowings on short term loans 

29,705,345

18,116,880

Principal payments on short term loans 

(27,506,837)

(3,201,690)

Borrowings on employee loans

-

31,236

Principal payments on employee loans

(1,581)

-

Net cash (used in) provided by financing activities

(940,312)

14,946,426

EFFECTS OF EXCHANGE RATE CHANGE IN CASH

(35,116)

39,147

INCREASE(DECREASE)IN CASH & CASH EQUIVELENTS

4,584,461

(434,036)

CASH & CASH EQUIVALENTS, beginning of year

4,903,303

4,051,349

CASH & CASH EQUIVALENTS, end of year

$

9,487,764

$

3,617,312

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash paid during the year for: 

Interest Paid

$

1,433,176

$

783,614

Income taxes

$

1,070

$

404,936

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:

Decrease of other receivable for acquisition of plant and equipment

$

221

$

20,569

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

$

114,073

$

61,400

Acquisition of plant and equipment on credit

$

2,782,286

$

779,368

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

$

733,283

$

73,204

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

SOURCE Shengtai Pharmaceutical, Inc.



RELATED LINKS

http://www.shengtaipharmaceutical.com