Shiner International, Inc. Announces Results for Third Quarter 2011

HAIKOU, China, Nov. 14, 2011 /PRNewswire-Asia/ -- Shiner International, Inc. (Nasdaq: BEST) ("Shiner," "we," "our" or the "Company"), an emerging global supplier of packaging solutions for food, tobacco, and consumer products, today announced its financial results for the third fiscal quarter ended September 30, 2011.

Third Quarter 2011 Financial Highlights

• Total revenue for the third quarter of 2011 increased by 20.0% to $18.6 million, up from $15.5 million in the third quarter of 2010.
• Gross profit and gross margin for the third quarter of 2011 were $2.1 million and 11.4%, respectively, compared to $3.4 million and 22.1%, respectively, in the same period last year.
• Operating income and operating margin for the third quarter of 2011 were $0.3 million and 1.8%, respectively, compared to $1.6 million and 10.5%, respectively, in the third quarter of 2010.
• Net income for the third quarter of 2011 decreased 70.7% to $0.4 million, compared to $1.3 million for the third quarter of 2010.
• Earnings per diluted share were $0.01 for the third quarter of 2011, compared to earnings per diluted share of $0.05 in the same period a year ago.

The following table sets forth the percentage of total revenue generated by each of the Company's product lines for the three months ended September 30, 2011 and 2010, respectively:  

We reported total revenue of $18.6 million for the three months ended September 30, 2011, which is an increase of 19.9%, compared to the same period in 2010. The increase was mainly a result of increased sales in biaxially-oriented polypropylene (BOPP) tobacco film and color printing products, which increased 3.4 million and 0.6 million, respectively, in the third quarter of 2011, compared to the same period in 2010. Revenue from BOPP tobacco film surged 92.9% to $7.1 million, from $3.7 million, primarily due to the increasing volume from existing customers, while revenue from coated film only increased 6.7% to $6.9 million. Revenue from color printing products increased 76.2% to $1.4 million from $0.8 million, due to a new color printing sales order with Want Want China Holdings Limited, a large manufacturer and seller of snack foods and beverages in China. For the three months ended September 30, 2011, revenue from advanced film decreased 33.8% to $3.0 million from $4.5 million for the same period in 2010. This decrease was primarily due to a decline in the use of higher cost advanced film by manufacturers by the deteriorating global macroeconomic environment. Approximately 81.8%, or $15.2 million, of our total sales in the three months ended September 30, 2011 were made to customers in China.

We reported net income of $0.4 million for the three months ended September 30, 2011, which is a decrease of 70.7% compared to the same period in 2010. The decrease in net income was primarily due to increased labor costs, depreciation of the new property, no other income from a former landlord offset by an increase in subsidy income.

On September 30, 2011, we had $1.8 million in cash and cash equivalents on hand, a 79.3% decrease compared to December 31, 2010, primarily due to cash outflows for advances to suppliers. On September 30, 2011, we had working capital of $9.5 million, a 25.7% decrease compared to December 31, 2010, primarily caused by the increase of unearned revenue from our customers.

First Nine Months 2011 Financial Highlights

• Revenues for the nine months ended September 30, 2011 increased 29.9%, or $12.1 million, to $52.4 million, up from $40.3 million in same period of 2010.
• Gross margin for the nine months ended September 30, 2011 was 13.4% based on gross profit of $7.0 million, compared to a 18.7% gross margin in the same period last year.
• Operating income and operating margin for the first nine months of fiscal 2011 were $2.8 million and 5.4%, respectively, compared to an operating income of $3.7 million and operating margin of 9.1% in the first nine months of 2010.
• Net income for the nine-month period ended September 30, 2011 decreased 31.0% to $2.2 million, compared to $3.2 million for the same period of 2010.
• Earnings per diluted share were $0.08 for the nine-month period ended September 30, 2011, compared to earnings per diluted share of $0.13 in the same period a year ago.

The following table sets forth the percentage of total revenue generated by each of the Company's product lines for the nine months ended September 30, 2011 and 2010, respectively.

Recent Events

On September 1, 2011, Shiner received notice from the Listing Qualifications Department of the NASDAQ Stock Market, LLC indicating that, for the last 30 consecutive business days, the bid price for its common stock had closed below the minimum $1.00 per share required for continued inclusion on the NASDAQ Capital Market. The Company has 180 calendar days, or until February 28, 2012, to regain compliance with the minimum bid price requirement. Shiner intends to actively monitor the bid price for its common stock through February 28, 2012, and will consider all available options, including a reverse stock split, to resolve the deficiency and regain compliance with the NASDAQ minimum bid price requirements.

Management Comments

Mr. Qingtao Xing, the CEO and President of Shiner stated, "We are pleased by the promising revenue growth in the third quarter of 2011, which we believe is primarily attributable to the diligence of our employees. At the beginning of 2011, the management developed a strategy to increase sales revenue, expand market share and improve our brand influence in order to perform in today's ever-changing market conditions. We believe that our sustained growth in revenue over the last two quarters is a result of this strategy. Although our gross margin and net income decreased in connection with larger price discounts, one of our strategies, the sales volume increased from our existing BOPP tobacco film customers as well as from newly attracted global customers in the coated film sector, including Marubeni Specialty Chemicals Inc. We expect that we will be able to adjust the sale price of our products as market conditions improve or as we gain additional market share."

Mr. Xing went on to say, "In addition, on October 29, 2011, we completed the installation of a new BOPP production line at our Hainan facility, which we expect to be operational in December 2011 after testing and adjustments.  We believe that the completion of this new production line will significantly improve our ability to meet increasing demand from our customers and expand our market share."

About Shiner International, Inc.

Shiner International, Inc. ("Shiner" or the "Company") is engaged in the research and development, manufacture and sale of flexible packaging material. Products include coated packaging film, shrink-wrap film, common packaging film, anti-counterfeit laser holographic film, color-printed packaging materials and water-based latex products. The Company's flexible packaging products are used by manufacturers in the food and consumer products industry to preserve texture, flavor, hygiene, and convenience and safety of their products. The Company was founded in 1990 and is headquartered in Haikou, China.

Approximately 80% of Shiner's total revenue is derived from sales to customers located in China, with the remaining portion derived from sales to third-party distributors with customers in Southeast Asia, Europe, the Middle East and North America. Shiner holds 16 patents on products and production equipment, and has an additional ten patent applications pending. The Company's flexible packaging meets the approval of U.S. FDA requirements, as well as those required for food packaging sold in the European Union, and its product manufacturing process is certified under ISO 9001:2000. The Company's website is located at http://www.shinerinc.com.

Conference Call and Website Information

Shiner International, Inc. will host a conference call on November 18, 2011 at 08:00 a.m. Eastern Time (5:00 a.m. Pacific), to discuss the third quarter 2011 results. To participate in the live conference call, please dial +1(877)941-2068 approximately ten minutes prior to the scheduled conference call time. International callers should dial +1(480)629-9712.

If you are unable to participate in the call at this time, a replay of the call will be available for two weeks from 12 p.m. noon EDT on November 18, 2011, until 11:59 p.m. EDT on December 02, 2011. The number for the replay is 1-877-870-5176, or 1-858-384-5517 for international calls; the passcode for the replay is 4488935. In addition, a recording of the call will be available via the company's website at http://www.shinerinc.com for one year.

Safe Harbor Statement

Certain statements in this press release and oral statements made by Shiner International, Inc. on its conference call in relation to this release, constitute "forward-looking statements" for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. These statements include, without limitation, statements regarding: the ability of the Company to resolve the deficiency and regain compliance with the NASDAQ minimum bid price requirements; the continued success of the Company's strategy to increase sales revenue, expand market share and improve its brand influence;  and the ability of the Company to successfully ramp up production capacity at its new BPP production line to meet customer demand and expand its market share. 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, business conditions in China, weather and natural disasters, changing interpretations of generally accepted accounting principles; outcomes of government reviews; inquiries and investigations and related litigation; continued compliance with government regulations; legislation or regulatory environments, requirements or changes adversely affecting the businesses in which Shiner International, Inc. is engaged; limited availability of raw material and energy may constrain operating levels and reduce profit margins, environmental compliance and remediation could result in increased cost of capital as well as other relevant risks not included herein. The information set forth herein should be read in light of such risks. You 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.  

- Financial Tables Follow -

Contact Us:
Investor Relations
Shiner International, Inc.
Email: [email protected]
Web: www.shinerinc.com

SOURCE Shiner International, Inc.