WEIFANG, China, Feb. 15, 2012
/PRNewswire-Asia/ -- 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 second quarter of fiscal 2012 ended
December 31, 2011.
"During the quarter ended December 31,
2011, corn prices continued to increase. Shengtai continued
its focus on controlling the gross profit," Qingtai Liu, CEO of
Shengtai Pharmaceutical, Inc. stated, "We completed the corn
warehouse expansion in October 2011.
Currently we have 50,000 tons storage capacity. We refused lower
profit sales to keep our long-term success. 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."
Second Quarter Fiscal Year 2012 Result of Operations
Net sales for the three months ended December 31, 2011 were $42,933,425, a decrease of $6,111,431 or 12.46%, compared with the same
period in 2010. The decrease in net sales primarily resulted from
decreased sales quantities for the three months ended December 31, 2011, compared to the same period
last year. For the three months ended December 31, 2011 compared to the same period
last year, the quantity of our glucose products sold decreased
about 10.58%, while the average unit selling price of our glucose
products increased about 11.91%. For the three months ended
December 31, 2011 compared to the
same period last year, the quantity of our cornstarch products sold
decreased about 47.03%, while the average unit selling price of our
cornstarch products increased about 10.45%. For the three
months ended December 31, 2011
compared to the same period last year, the quantity of our other
products sold decreased about 15.62%, while the average unit
selling price of our other products increased about 5.44%. The
increased unit selling prices are caused by the increased raw
material cost during the quarter ended December 31, 2011 compared to the same period
last year. The sales quantity decreased mainly because the Company
tried to maintain a certain gross profit while the corn prices
increased.
Net sales from exports for the three months ended December 31, 2011 decreased approximately 8.48%
compared with the same period in 2010. The decrease is mainly
attributable to the decreased sales quantities offset by the
increased unit sales ended December 31,
2011 compared to the same period last year. The increased
unit price is related to the increased corn prices. The sales
quantity decreased mainly because the Company tried to maintain a
certain gross profit while corn prices increased.
Cost of sales for the three months ended December 31, 2011 was $38,892,394, an decrease of $4,252,912 or 9.86%, compared with the same
period in 2010. The decrease in cost of sales was mainly due to the
decrease of sales offset by the increase in the price of corn, our
main raw material.
Gross profit for the three months ended December 31, 2011 was $4,041,031, a decrease of $1,858,519, or 31.50%, compared with the same
period in 2010. The decrease of gross profit is mainly because the
unit selling prices of our products did not increase as fast as
corn prices. Gross profit margin for the three months ended
December 31, 2011 was 9.41%, a
decrease from 12.03% 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 17.71% for the
three months ended December 31, 2011
compared to the same period last year whereas the average selling
prices did not increase as 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 December 31,
2011, selling, general and administrative expenses were
$3,026,462, an increase of
$923,072 or 43.88%, compared to
$2,103,390 for the three months ended
December 31, 2010. The selling,
general, and administrative expenses increased mainly due to
increased shipping expenses caused by increased gas prices. The
Company incurred $0 and $83,304 non-cash stock option expenses for the
three months ended December 31,2011
and 2010, respectively. The option expenses are included in
selling, general and administrative expenses.
Net (loss) income for the three months ended December 31, 2011 was $(65,062), a decrease of $2,761,530, compared with $2,696,468 for the same period in 2010. The
decrease in net income was primarily attributable to the decreased
gross profit and increased selling, general, and administrative
expenses.
Financial Condition
As of December 31, 2011, Shengtai
Pharmaceutical, Inc. had cash and restricted cash totaling
$6.18 million. The Company's
short-term loans totaled $62.95
million and long-term debt totaled $0
million. The Company's total shareholders' equity increased
to $61.32 million .
Management Comments
Looking forward, Qingtai Liu, CEO of Shengtai Pharmaceutical,
Inc. stated, "Even though Shengtai is facing industry pressure
caused by continually increasing corn prices, we believe that we
are taking the right strategy to keep our competitive position in
the industry. We estimate that we still occupy more than 30% of the
pharmaceutical glucose market. We are vertically integrated which
allows us to provide high quality cornstarch to manufacture
glucose. We will continue our focus on keeping our leader position
in pharmaceutical glucose market and focus on controlling our gross
profit for the cornstarch and other products gross profit
margin.
"Going forward we are confident that we will be the dominant
player in 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
Manage r
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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
|
CONSOLIDATED
CONDENSED BALANCE SHEETS
|
UNAUDITED
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
June 30,
|
|
|
|
|
|
2011
|
|
2011
|
ASSETS
|
CURRENT
ASSETS:
|
|
|
|
|
|
Cash & cash
equivalents
|
$
|
4,331,179
|
$
|
4,051,349
|
|
Restricted
cash
|
|
1,851,339
|
|
8,972,600
|
|
Accounts receivable, net
of allowance for doubtful accounts of $1,241,419 and
$1,506,470,respectively
|
|
8,963,530
|
|
8,580,973
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|
Notes
receivable
|
|
3,556,464
|
|
2,815,726
|
|
Other
receivables
|
|
7,205,798
|
|
8,359,103
|
|
Inventories
|
|
17,488,039
|
|
13,016,399
|
|
Prepayments and other
assets
|
|
445,240
|
|
2,296,982
|
|
|
Total current
assets
|
|
43,841,589
|
|
48,093,131
|
|
|
|
|
|
|
|
|
PLANT AND EQUIPMENT,
net
|
|
82,106,021
|
|
77,029,157
|
|
|
|
|
|
|
|
|
CONSTRUCTION IN
PROGRESS
|
|
900,053
|
|
4,693,018
|
|
|
|
|
|
|
|
|
EQUITY
INVESTMENT
|
|
10,859,384
|
|
9,132,725
|
|
|
|
|
|
|
|
|
ADVANCE FOR
CONSTRUCTION
|
|
727,804
|
|
2,039,929
|
|
|
|
|
|
|
|
|
INTANGIBLE ASSETS,
NET
|
|
3,280,799
|
|
3,251,214
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
$
|
141,715,650
|
$
|
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
|
$
|
9,285,530
|
$
|
9,508,512
|
|
Accounts payable and
accrued liabilities - related party
|
|
340,485
|
|
943,779
|
|
Notes payable -
banks
|
|
277,339
|
|
11,447,800
|
|
Short term
loans
|
|
62,947,502
|
|
48,094,740
|
|
Accrued
liabilities
|
|
782,275
|
|
917,464
|
|
Other payable
|
|
1,614,868
|
|
2,642,598
|
|
Employee
loans
|
|
294,841
|
|
261,938
|
|
Other payable -
officer
|
|
36,831
|
|
36,285
|
|
Customer
deposit
|
|
3,358,191
|
|
8,954,841
|
|
Taxes payable
|
|
1,457,659
|
|
1,809,093
|
|
|
Total current
liabilities
|
|
80,395,521
|
|
84,617,050
|
|
|
|
|
|
|
|
|
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
|
|
21,553,499
|
|
21,553,499
|
|
Statutory
reserves
|
|
4,184,163
|
|
4,068,822
|
|
Retained
earnings
|
|
26,851,955
|
|
26,148,801
|
|
Accumulated other
comprehensive income
|
|
8,720,928
|
|
7,841,417
|
|
|
Total stockholders'
equity
|
|
61,320,130
|
|
59,622,124
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
141,715,651
|
$
|
144,239,174
|
|
|
|
|
|
|
|
|
The accompanying notes
are an integral part of these consolidated financial
statements.
|
SHENGTAI
PHARMACEUTICAL INC. AND SUBSIDIARIES
|
CONSOLIDATED
CONDENSED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE
INCOME
|
(Unaudited)
|
|
|
|
Three Months
Ended December 31,
|
|
Six Months Ended December 31,
|
|
|
2011
|
|
2010
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
NET SALES
|
$
|
42,933,425
|
|
49,044,856
|
|
|
82,988,873
|
$
|
83,689,428
|
|
|
|
|
|
|
|
|
|
|
COST OF SALES
|
$
|
38,892,394
|
$
|
43,145,306
|
|
$
|
75,562,795
|
$
|
71,770,521
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT
|
|
4,041,031
|
|
5,899,550
|
|
|
7,426,078
|
|
11,918,907
|
|
|
|
|
|
|
|
|
|
|
SELLING, GENERAL
AND ADMINISTRATIVE
EXPENSES
|
|
3,026,462
|
|
2,103,390
|
|
|
5,179,077
|
|
4,683,194
|
|
|
|
|
|
|
|
|
|
|
INCOME FROM
OPERATIONS
|
|
1,014,569
|
|
3,796,160
|
|
|
2,247,001
|
|
7,235,713
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSE)
:
|
|
|
|
|
|
|
|
|
|
Earnings on equity
investment
|
|
32,977
|
|
144,244
|
|
|
306,890
|
|
231,133
|
Non-operating income
|
|
161,516
|
|
54,614
|
|
|
752,983
|
|
77,611
|
Non-operating expense
|
|
(6,244)
|
|
(94,803)
|
|
|
(13,725)
|
|
(201,852)
|
Interest expense and other
charges
|
|
(1,391,266)
|
|
(427,576)
|
|
|
(2,234,377)
|
|
(1,550,692)
|
Interest income
|
|
139,465
|
|
70,770
|
|
|
144,191
|
|
72,036
|
Other income (expense) ,
net
|
|
(1,063,552)
|
|
(252,751)
|
|
|
(1,044,038)
|
|
(1,371,764)
|
|
|
|
|
|
|
|
|
|
|
INCOME (LOSS) BEFORE
PROVISION FOR INCOME TAXES
|
|
(48,983)
|
|
3,543,409
|
|
|
1,202,963
|
|
5,863,949
|
|
|
|
|
|
|
|
|
|
|
PROVISION FOR INCOME
TAXES
|
|
16,079
|
|
846,940
|
|
|
384,468
|
|
1,524,397
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
|
|
(65,062)
|
|
2,696,468
|
|
|
818,495
|
|
4,339,552
|
|
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE
ITEMS:
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
|
405,636
|
|
763,135
|
|
|
879,511
|
|
1,591,681
|
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE
INCOME
|
$
|
340,574
|
|
3,459,603
|
|
|
1,698,006
|
$
|
5,931,233
|
|
|
|
|
|
|
|
|
|
|
(LOSS)EARNINGS PER
SHARE
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
$
|
(0.01)
|
$
|
0.28
|
|
$
|
0.09
|
$
|
0.45
|
|
|
|
|
|
|
|
|
|
|
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 consolidated financial
statements.
|
SHENGTAI PHARMACEUTICAL
INC. AND SUBSIDIARIES
|
CONSOLIDATED CONDENSED STATEMENTS OF
CASH FLOWS
|
(Unaudited)
|
|
|
|
|
|
Six Months Ended December 31,
|
|
|
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
Net income
|
$
|
818,495
|
$
|
4,339,552
|
|
Adjustments to reconcile
net income to cash (used in)
|
|
|
|
|
|
|
provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation
|
|
3,866,186
|
|
3,560,415
|
|
|
|
Amortization
|
|
29,541
|
|
27,949
|
|
|
|
Bad debt (reduction)
provision
|
|
(290,232)
|
|
851,731
|
|
|
|
Share based compensation
to employees
|
|
-
|
|
183,480
|
|
|
|
Earnings on equity
investment
|
|
(306,890)
|
|
(231,133)
|
|
|
|
Loss on equipment
disposal
|
|
-
|
|
111,874
|
|
|
Change in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
58,328
|
|
(5,357,856)
|
|
|
|
Notes
receivable
|
|
(688,958)
|
|
1,450,732
|
|
|
|
Other
receivables
|
|
1,273,594
|
|
(876,791)
|
|
|
|
Inventories
|
|
(4,294,968)
|
|
(5,111,530)
|
|
|
|
Prepayments and other
assets
|
|
1,884,620
|
|
(308,910)
|
|
|
|
Accounts payable and
accrued liabilities
|
|
(4,089,919)
|
|
3,881,847
|
|
|
|
Accounts payable and
accrued liabilities - related party
|
|
(617,404)
|
|
788,967
|
|
|
|
Other payable
|
|
(1,069,555)
|
|
(746,316)
|
|
|
|
Customer
deposit
|
|
(5,731,010)
|
|
3,342,622
|
|
|
|
Taxes payable
|
|
(381,549)
|
|
(786,417)
|
|
|
|
|
Net cash (used in)
provided by operating activities
|
|
(9,539,722)
|
|
5,120,215
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
Increase in equity
investment
|
|
(1,254,400)
|
|
-
|
|
Purchase plant and
equipment
|
|
(1,221)
|
|
(1,204,598)
|
|
Additions to
construction in progress
|
|
(78,432)
|
|
(5,059,744)
|
|
Advances for
construction
|
|
1,342,590
|
|
1,037,108
|
|
Increase in land use
right
|
|
(2,486)
|
|
-
|
|
Loan to related party -
non-current
|
|
-
|
|
(851,731)
|
|
|
|
|
Net cash provided by
(used in) investing activities
|
|
6,051
|
|
(6,078,966)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
Decrease in restricted
cash
|
|
7,121,261
|
|
12,916,104
|
|
Borrowings on notes
payable - banks
|
|
1,844,282
|
|
-
|
|
Principal payments on
notes payable - banks
|
|
(13,171,200)
|
|
(10,888,680)
|
|
Borrowings on short term
loans
|
|
36,443,550
|
|
12,231,120
|
|
Principal payments on
short term loans
|
|
(22,483,610)
|
|
(5,966,400)
|
|
Borrowings on employee
loans
|
|
31,360
|
|
|
|
Principal payments on
employee loans
|
|
(3,136)
|
|
(22,523)
|
|
Borrowings on long term
loans
|
|
-
|
|
4,778,788
|
|
Capital contribution
receivable
|
|
-
|
|
|
|
Payments on long term
loans
|
|
-
|
|
(4,778,788)
|
|
Borrowings on third
party loan
|
|
-
|
|
335,610
|
|
Payment on capital lease
obligation
|
|
-
|
|
(5,732,806)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
financing activities
|
|
9,782,506
|
|
2,872,424
|
|
|
|
|
|
|
|
|
|
EFFECTS OF EXCHANGE RATE
CHANGE IN CASH
|
|
30,995
|
|
791,911
|
|
|
|
|
|
|
|
|
|
INCREASE IN CASH &
CASH EQUIVELENTS
|
|
279,831
|
|
2,705,584
|
|
|
|
|
|
|
|
|
|
CASH & CASH
EQUIVALENTS, beginning of year
|
|
4,051,349
|
|
4,121,543
|
|
|
|
|
|
|
|
|
|
CASH & CASH
EQUIVALENTS, end of year
|
$
|
4,331,179
|
$
|
6,827,127
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURES
OF CASH FLOW INFORMATION:
|
|
|
|
|
Cash paid during the
year for:
|
|
|
|
|
Interest Paid
|
$
|
1,899,711
|
$
|
1,361,124
|
Income taxes
|
$
|
705,945
|
$
|
1,672,926
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL SCHEDULE OF
NONCASH INVESTING AND FINANCING ACTIVITIES:
|
|
|
|
|
Decrease of other
receivable for acquisition of plant and equipment
|
$
|
20,651
|
$
|
-
|
Transfers of
construction in progress-related inventory to plant and
equipment
|
$
|
79,217
|
$
|
-
|
Acquisition of plant and
equipment on credit on account
|
$
|
3,557,333
|
$
|
-
|
Completion of
construction-in-progress (transferred to plant and
equipment)
|
$
|
7,415,903
|
$
|
575,344
|
|
|
|
|
|
|
|
|
|
The accompanying notes
are an integral part of these consolidated financial
statements.
|
SOURCE Shengtai Pharmaceutical, Inc.