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

14 Feb, 2013, 21:18 ET from Shengtai Pharmaceutical, Inc.

WEIFANG, SHANDONG, China, Feb. 14, 2013 /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 December 31, 2012.

"We are glad to see the increase of sales revenue and increase of gross profit during the three months ended December 31, 2012 compared to the same period last year," stated Qingtai Liu, CEO of Shengtai. "The Company has produced a positive cash flow from operating expense during the six months ended December 31, 2012."

Second Quarter Fiscal Year 2013 operations results

Net sales for the three months ended December 31, 2012 were $64,103,621, an increase of $21,170,196 or 49.31%, compared with $42,933,425 for the same period in 2011. The increase in net sales primarily resulted from increased cornstarch and other products sales. For the three months ended December 31, 2012, the quantities of our glucose products, cornstarch products and other products sold were 33,228 tons, 55,115 tons, and 60,085 tons , respectively, increase/decrease of approximately (8.94%), 83.38%, and 93.31%, respectively. The increased sales quantities of cornstarch is due to a substantial increase of our Slurry sales, which increased approximately 6,848 tons or 687.03% for the three months ended December 31, 2012 compared to 996.74 tons for the same period in 2011. Net sales from exports for the three months ended December 31, 2012 were $16,214,168, an increase of approximately 115.79%, compared with $7,513,799 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 December 31, 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 December 31, 2012 was $58,114,822, an increase of $19,222,428 or 49.42%, compared with $38,892,394 for the same period in 2011. The increase in cost of sales was in line with increased sales.

Gross profit for the three months ended December 31, 2012 was $5,988,799, an increase of $1,947,768 or 48.20%, compared with $4,041,031 for the same period in 2011. The increase of gross profit is in line with the increased sales. Gross profit margin for the three months ended December 31, 2012 was 9.34%, a decrease by 0.07% as compared to the gross profit margin of 9.41% for the same period in 2011. The reason for the decrease of gross profit margin is mainly because the average sales prices decreased as compared to the same period last year.

For the three months ended December 31, 2012, selling, general and administrative expenses were $3,898,845, an increase of $872,383 or 28.83%, compared to $3,026,462 for the three months ended December 31, 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 December 31, 2012 decreased by $49,086 compared to the same period in 2011. The decrease is mainly due to decreased salary expenses of $57,874. The selling, general and administrative expenses from our PRC operating entities increased by $123,106 for the three months ended December 31, 2012 compared to $3,702,602 for the same period in 2011. The selling expenses from our PRC operating entities increased by $1,198,829 or 73.39% in the quarter ended December 31, 2012 compared to the same period in 2011. The increase is mainly attributable to the increase in shipping and handing expenses of $1,225,986 and other expenses of $73,717 offset by decreased package expenses of $14,274, decreased commodity inspection fee of $6,619, decreased exhibition expenses of $5,930, and decreased carfares of $79,156. The general and administrative expenses incurred in PRC increased $248,639 in the quarter ended December 31, 2012 compared to $744,713 for the same period in 2011.

Net income for the three months ended December 31, 2012 was $261,216, an increase of $326,278 or 501.49%, compared with net loss $65,062 for the same period in 2011. The increase in net income was primarily attributable to the increased gross profit of $1,947,768, offset by increased selling, general and administrative expenses of $872,383 and by increased interest expenses of $518,770.

Financial Condition

As of December 31, 2012, Shengtai had cash and restricted cash totaling $7.65 million. The Company's short-term loan totaled $77.13 million and long-term debt totaled $0 million. The Company's total shareholders' equity increased to $63.98 million.

Management Comments

Looking forward, Qingtai Liu, CEO of Shengtai stated, "We see a good demand of our products from the market during the past six months ended December 31, 2012. We will continue in focusing on providing good service to fulfill these demand as well as controlling our gross profit rate at current level." 

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: shengtai_IR@163.com

SHENGTAI PHARMACEUTICAL INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited

December 31,

 June 30,  

2012

2012

ASSETS

CURRENT ASSETS:

Cash & cash equivalents

$

11,147,724

$

4,903,303

Restricted cash

7,648,641

13,084,586

Accounts receivable, net of allowance for doubtful accounts of $1,124,954 and $1,603,051,respectively

12,033,935

12,099,625

Notes receivable

3,142,795

4,590,758

Other receivables 

3,972,063

8,862,789

Inventories

35,844,802

29,457,981

Prepayments and other assets

1,918,666

1,023,154

Total current assets

75,708,626

74,022,195

PLANT AND EQUIPMENT, net

83,556,022

80,185,228

CONSTRUCTION IN PROGRESS

368,759

1,213,540

EQUITY INVESTMENT

12,845,149

11,704,050

ADVANCE FOR CONSTRUCTION

1,486,961

2,188,892

INTANGIBLE ASSETS, NET

3,347,968

3,271,147

Total assets

$

177,313,485

$

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 

$

10,464,735

$

5,432,615

Accounts payable and accrued liabilities - related party

719,793

405,926

Notes payable - banks

12,463,973

17,835,706

Short term bank loans

77,132,764

73,483,997

Accrued liabilities

560,086

479,593

Other payable

2,440,584

1,672,805

Employee loans

358,244

295,076

Other payable - officer

37,460

37,027

Customer deposit

8,831,607

9,610,252

Taxes payable

322,588

997,529

Total current liabilities

113,331,834

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 December 31, 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 December 31, 2012 and June 30, 2012

9,585

9,585

Additional paid-in capital

21,945,101

21,945,101

Statutory reserves

4,290,884

4,226,125

Retained earnings

27,456,850

27,064,092

Accumulated other comprehensive income

10,279,230

9,089,623

Total stockholders' equity

63,981,651

62,334,526

Total liabilities and stockholders' equity

$

177,313,485

$

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 INCOME AND OTHER COMPREHENSIVE INCOME 

Unaudited

THREE MONTHS ENDED DECEMBER 31,

SIX MONTHS ENDED DECEMBER 31,

2012

2011

2012

2011

NET SALES

$

64,103,621

$

42,933,425

$

112,848,264

$

82,988,873

COST OF SALES

$

58,114,822

$

38,892,394

$

101,801,487

$

75,562,795

GROSS PROFIT     

5,988,799

4,041,031

11,046,777

7,426,078

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES         

3,898,845

3,026,462

7,188,542

5,179,077

INCOME FROM OPERATIONS

2,089,954

1,014,569

3,858,235

2,247,001

OTHER INCOME (EXPENSE) :

  Earnings on equity investment

291,815

32,977

530,824

306,890

  Non-operating income 

36,998

161,516

39,989

752,983

  Non-operating expense

(240,241)

(6,244)

(401,028)

(13,725)

  Interest expense and other charges

(1,910,036)

(1,391,266)

(3,592,031)

(2,234,377)

  Interest income

112,265

139,465

237,392

144,191

    Other income (expense) , net

(1,709,199)

(1,063,552)

(3,184,853)

(1,044,038)

INCOME BEFORE PROVISION FOR INCOME TAXES

380,755

(48,983)

673,382

1,202,963

PROVISION FOR INCOME TAXES

119,539

16,079

215,865

384,468

NET INCOME 

261,216

(65,062)

457,517

818,495

OTHER COMPREHENSIVE ITEMS:

    Foreign currency translation adjustments

1,310,479

405,636

1,189,607

879,511

COMPREHENSIVE INCOME

1,571,695

$

340,574

1,647,124

$

1,698,006

EARNINGS PER SHARE

Basic and diluted

$

0.03

$

(0.01)

$

0.05

$

0.09

WEIGHTED AVERAGE NUMBER OF SHARES

Basic and diluted

9,584,912

9,584,912

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

SIX MONTHS ENDED DECEMBER 31,

2012

2011

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income 

$

457,517

$

818,495

Adjustments to reconcile net income to cash (used in)

provided by operating activities:

Depreciation

4,826,303

3,866,186

Amortization

37,718

29,541

Bad debt reduction

(494,367)

(290,232)

Share based compensation to employees

-

-

Earnings on equity investment

(530,824)

(306,890)

Loss on equipment disposal

-

-

Change in operating assets and liabilities:

Accounts receivable

721,109

58,328

Notes receivable

1,493,704

(688,958)

Other receivables

4,954,330

1,273,594

Inventories

(5,998,907)

(4,294,968)

Prepayments and other assets

(2,343,071)

1,884,620

Accounts payable and accrued liabilities

(1,189,862)

(4,089,919)

Accounts payable and accrued liabilities - related party

193,812

(617,404)

Other payable

737,260

(1,069,555)

Customer deposit

(898,719)

(5,731,010)

Taxes payable

(680,990)

(381,549)

Net cash provided by (used in) operating activities

1,285,014

(9,539,722)

CASH FLOWS FROM INVESTING ACTIVITIES:

Increase in equity investment

(317,556)

(1,254,400)

Purchase of plant and equipment

(4,259)

(1,221)

Additions to construction in progress

0

(78,432)

Increase in land use right

(69,977)

(2,486)

Advances for construction 

2,194,522

1,342,590

Loan to related party - non-current

-

-

Net cash provided by (used in) investing activities

1,802,731

6,051

CASH FLOWS FROM FINANCING ACTIVITIES:

Decrease in restricted cash

5,435,944

7,121,261

Borrowings on notes payable - banks

12,329,401

1,844,282

Principal payments on notes payable - banks

(17,881,583)

(13,171,200)

Borrowings on short term loans 

49,625,257

36,443,550

Principal payments on short term loans 

(46,998,301)

(22,483,610)

Borrowings on employee loans

60,336

31,360

Principal payments on employee loans

(1,794)

(3,136)

Net cash (used in) provided byfinancing activities

2,569,259

9,782,506

EFFECTS OF EXCHANGE RATE CHANGE IN CASH

587,417

30,995

INCREASE (DECREASE) IN CASH & CASH EQUIVELENTS

6,244,420

279,831

CASH & CASH EQUIVALENTS, beginning of year

4,903,303

4,051,349

CASH & CASH EQUIVALENTS, end of year

$

11,147,723

$

4,331,179

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash paid during the year for: 

Interest Paid

$

2,474,288

$

1,899,711

Income taxes

$

1,799

$

705,945

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:

Decrease of other receivable for acquisition of plant and equipment

$

2,078

$

20,651

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

$

202,334

$

79,217

Acquisition of plant and equipment and construction in progress on credit                      

$

6,081,083

$

3,557,333

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

$

7,044,153

$

7,415,903

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

SOURCE Shengtai Pharmaceutical, Inc.



RELATED LINKS

http://www.shengtaipharmaceutical.com