WEIFANG, Shandong, China, May 15 /PRNewswire-Asia-FirstCall/ -- Shengtai Pharmaceutical, Inc. (OTC Bulletin Board: SGTI) ("Shengtai" or "the Company"), a leading manufacturer and distributor of high-quality, pharmaceutical grade glucose products in China, today reported unaudited financial results for the third quarter of fiscal 2009 ended March 31, 2009.
"The global economic environment has impacted our operations thus far in fiscal year 2009, as our third quarter financial results generated lower sales volume and lower average selling prices for our cornstarch and other products when compared to the same period last year," said Mr. Qingtai Liu, Shengtai Pharmaceutical's CEO. "However, we are beginning to see higher level of market activities, as unit shipments for these two segments have increased on a sequential basis. Meanwhile, our glucose product unit shipments posted an 18% year-over-year growth in the last quarter. Glucose revenue growth was 6% in the same period. Lastly, we are also seeing a significant increase in customer deposits during the most recent quarter, an early indication of a pick up in sales in the subsequent quarters."
Mr. Liu continued, "The challenging market conditions have prompted us to initiate a number of cost saving measures throughout our operations which we believe will help us maintain near-term competitiveness. As market conditions improve, we are prepared to leverage our new state-of-the-art manufacturing facility to increase our production utilization rate to meet the growing glucose demand of our customers."
Third Quarter and Nine Months Fiscal 2009 Financial Results
Total revenues for the third quarter of fiscal 2009 were $16.3 million, as compared to $20.7 million the same period last year, and $14.8 million reported in the second quarter of fiscal 2009. Total revenues for the nine months ended March 31, 2009 were $49.2 million, as compared to $65 million for the same period last year.
Sales of glucose products totaled $8.4 million during the third quarter, representing 52% of revenues. Cornstarch sales totaled $3.6 million, or 22% of revenues. Sales of other products totaled $4.3 million, or 26% of revenues. Sales of glucose products for the nine months ended March 31, 2009 totaled $25.9 million, representing 53% of revenues. Cornstarch sales totaled $10.8 million, or 22% of revenues. Sales of other products totaled $12.5 million, or 25% of revenues.
Gross profit for the three months ended March 31, 2009, was $1.0 million compared with $4.5 million the same period last year. Gross margin for the quarter was 6.2%, as compared with 21.6% the same period last year. The decline in gross margin was mainly due to the lower overall sales volumes, and lower average selling prices ("ASP"). Gross profits for the nine months ended March 31, 2009 totaled $6.2 million, a decrease of $8.7 million compared to the same period last year. Gross margin for the nine months ended March 31, 2009 was 12.6%, as compared with 23% the same period last year.
Selling, general and administrative (SG&A) expenses during the quarter were $1.3 million, a decline of $281,754 compared with the third quarter last year. The Company implemented a new sales policy requiring some customers to manage their own shipping and handling, this lowered the Company's overall SG&A expense. Non-cash stock option expenses for the quarter were $158,818. Total SG&A expenses for the nine months ended March 31, 2009 totaled $6.1 million, an increase of $959,990 compared to the same period last year. Total non-cash stock option expenses for the nine months ended March 31, 2009 were $476,454, as compared with $158,818 the same period last year. The Company began granting stock options on January 4, 2008.
Operating loss for the quarter was $304,585 compared with a profit of $2.9 million in the same period last year. Operating income for the nine months ended March 31, 2009 totaled $129,436 as compared with $9.8 million the same period last year.
Net loss for the third quarter 2009 was $661,398, or $0.03 per diluted share compared with net income of $1.9 million, or $0.10 per diluted share the same period last year. Net loss for the nine months ended March 31, 2009 was $505,489, or $0.03 per diluted share compared with net income of $7.3 million, or $0.36 per diluted share the same period last year.
As of March 31, 2009, Shengtai Pharmaceutical had cash and restricted cash totaled $11.2 million. Net cash generated from operating activities for the three month ended March 31, 2009 was $2.0 million.
Mr. Liu concluded, "The current economic conditions may slow down the demand growth of our cornstarch and other products sales, nonetheless, I am encouraged that our glucose business remains stable and continues to grow. The long-term outlook for our glucose business remains on track. The recently approved healthcare reform spending is designed to expand the healthcare coverage to many people currently without healthcare. Increased government investment and greater product quality control should translate to additional sales opportunities for our high-quality glucose products. As a leading domestic supplier of pharmaceutical grade glucose, we are dedicated to producing products that meet or exceed the highest quality standards. Our modern new production facilities and added capacity, combined with our ability to produce the highest quality products, are key factors that will separate us from our competitors. We will be prepared to take advantage of any additional sales opportunities, especially glucose, resulting from the healthcare reforms. Our stringent cost controls initiatives are designed to help us to remain competitive in the near-term, as we work to build long-term shareholder value."
The Company will host a conference call and webcast on Friday, May 15, 2009 at 8:30 A.M. Eastern Daylight Time / 8:30 P.M. Beijing Time. A question and answer session will follow management's presentation. Ms. Yiru Melody Shi (Chief Financial Officer) and Ms. Haining Michelle Wang (Investor Relations Manager) will be the primary speakers on the call.
To participate, please call the following numbers ten minutes before the call start time:
Phone Number + 1 (877) 407-9205 (North America) Phone Number + 1 (201) 689-8054 (International)
A live webcast of the conference call will be available by accessing the below website at the Investor Relations page of Shengtai Pharmaceutical's website at http://www.shengtaipharmaceutical.com . Please visit the website at least 15 minutes early to register for the webcast and download any necessary audio software.
A replay of the call will be available through Thursday, May 21, 2009, at 11:59 P.M. Eastern Daylight Time. For the replay, please call:
Phone Number +1 (877) 660-6853 (North America) Phone Number +1 (201) 612-7415 (International) Account Number: 286 Conference ID Number: 323305
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 leading manufacturer and supplier of pharmaceutical grade glucose used for medical purposes. It also manufactures and supplies glucose and cornstarch products to the food, beverage and industrial production industries in China. For more information about Shengtai Pharmaceutical, Inc., please visit http://www.shengtaipharmaceutical.com .
Certain statements made in this news release, may contain 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. These factors 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 products' 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. Yiru Melody Shi Chief Financial Officer Email: email@example.com Grayling Eddie Cheung Investor Relations Tel: +1-646-284-9414 Email: firstname.lastname@example.org Tables Follow Shengtai Pharmaceutical, Inc. Consolidated Balance Sheets As of March 31, 2009 and June 30, 2008 ASSETS March 31, June 30, 2009 2008 (Unaudited) CURRENT ASSETS: Cash $ 2,249,064 $ 3,405,606 Restricted cash 8,992,823 6,763,500 Notes receivable 149,447 458,630 Accounts receivable, net of allowance for doubtful accounts of $492,918 and $440,701 as of March 31, 2009 and June 30, 2008, respectively 6,518,464 7,614,236 Other receivables 249,284 691,215 Inventories 6,929,686 5,039,278 Prepayments 371,267 310,381 Loan to related party 439,500 -- Total current assets 25,899,535 24,282,846 PLANT AND EQUIPMENT, net 71,893,618 69,943,021 OTHER ASSETS: Investment in Changle Shengshi Redian Co., Ltd. 3,739,131 3,607,912 Loan to related party - noncurrent -- 437,700 Intangible assets - land use right, net of accumulated amortization 3,494,976 3,042,183 Total other assets 7,234,107 7,087,795 Total assets $ 105,027,260 $ 101,313,662 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Notes payable - banks $ 13,185,000 $ 10,942,500 Accounts payable 6,289,009 7,669,728 Accounts payable - related parties 637,792 714,776 Short term loans 22,707,500 22,658,270 Accrued liabilities 212,595 261,187 Other payable 2,917,200 2,146,108 Employee loans 841,297 1,382,287 Employee loan - officer 43,549 53,605 Third party loan 192,642 640,228 Customer deposit 1,729,702 804,323 Taxes payable 2,618,424 4,631,252 Current portion of capital lease obligations 398,862 -- Total current liabilities 51,773,572 51,904,264 LONG TERM LIABILITIES: Capital lease obligation 4,875,368 -- Other payable - noncurrent 1,424,044 2,653,995 Total long term liabilities 6,299,412 2,653,995 Total liabilities 58,072,984 54,558,259 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY: Preferred stock, $0.001 par value, 5,000,000 shares authorized, no shares issued and outstanding -- -- Common stock, $0.001 par value, 100,000,000 shares authorized, 19,169,805 and 19,094,805 shares issued and outstanding as of December 31, 2008 and June 30, 2008, respectively 19,170 19,095 Paid-in capital 20,464,837 19,987,708 Statutory reserves 3,004,008 2,894,902 Retained earnings 18,521,982 19,136,577 Accumulated other comprehensive income 4,944,279 4,717,121 Total shareholders' equity 46,954,276 46,755,403 Total liabilities and shareholders' equity $ 105,027,260 $ 101,313,662 Shengtai Pharmaceutical, Inc. Consolidated Statements of Income and Other Comprehensive Income For the three and nine months ended March 31, 2009 and 2008 (Unaudited) Three months ended Nine months ended March 31, March 31, 2009 2008 2009 2008 SALES REVENUE $ 16,301,522 $ 20,701,577 $ 49,220,996 $ 65,028,934 COST OF SALES 15,283,929 16,220,665 43,016,707 50,085,971 GROSS PROFIT 1,017,593 4,480,912 6,204,289 14,942,963 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 1,322,178 1,603,932 6,074,853 5,114,863 INCOME (LOSS) FROM OPERATIONS (304,585) 2,876,980 129,436 9,828,100 OTHER INCOME (EXPENSE): Earnings on equity investment 59,524 43,070 92,936 192,826 Other income 60,364 67,451 115,545 177,160 Other expense (4,428) (96,191) (255,540) (300,035) Interest expense and other charges (527,987) (738,634) (591,493) (1,674,515) Interest income 7,548 55,697 104,221 154,101 Other expense, net (404,979) (668,607) (534,331) (1,450,463) (LOSS) INCOME BEFORE PROVISION FOR INCOME TAXES (709,564) 2,208,373 (404,895) 8,377,637 PROVISION FOR INCOME TAXES (48,166) 321,220 100,594 1,108,388 NET (LOSS) INCOME (661,398) 1,887,153 (505,489) 7,269,249 OTHER COMPREHENSIVE INCOME: Foreign currency translation adjustments (60,568) 1,554,258 227,158 2,966,909 COMPREHENSIVE (LOSS) INCOME $ (721,966)$ 3,441,411 $ (278,331)$ 10,236,158 (LOSS) EARNINGS PER SHARE Basic $ (0.03)$ 0.10 $ (0.03)$ 0.38 Diluted $ (0.03)$ 0.10 $ (0.03)$ 0.36 WEIGHTED AVERAGE NUMBER OF SHARES Basic 19,169,805 19,069,805 19,129,146 18,967,857 Diluted 19,169,805 19,845,195 19,129,146 19,959,689 Shengtai Pharmaceutical, Inc. Consolidated Statements of Cash Flows For the nine months ended March 31, 2009 and 2008 (Unaudited) 2009 2008 CASH FLOWS FROM OPERATING ACTIVITIES: Net (loss) income $ (505,489) $ 7,269,249 Adjustments to reconcile net income to cash provided by operating activities: Depreciation 3,612,903 2,076,992 Amortization 40,225 38,263 Allowance for bad debts 50,387 16,558 Stock based employee compensation 476,454 158,818 Loss (Gain) on equipment disposal 159,269 (91,480) Gain on disposal of land use right -- (24,783) Earnings on equity investment (92,936) (192,826) Amortization of discount on capital lease obligation 146,681 -- Change in operating assets and liabilities: Accounts receivable 1,076,312 (1,108,695) Notes receivable 310,963 380,411 Other receivables 444,622 1,987,660 Inventories (1,869,045) (1,404,996) Prepayments (471,355) (620,451) Accounts payable (1,614,791) (595,474) Accounts payable - related party (79,896) (1,252,106) Accrued liabilities (49,430) (568,922) Accrued liabilities - related party -- 482,160 Other payable 596,396 362,035 Customer deposit 921,757 297,543 Taxes payable (2,031,181) 2,261,984 Net cash provided by operating activities 1,121,846 9,471,940 CASH FLOWS FROM INVESTING ACTIVITIES: Other receivables - related party -- 2,570,100 Purchase plant and equipment (9,679) (154,262) Proceeds from equipment disposal 5,125,750 35,266 Additions to construction in progress (4,810,511) (7,725,153) Acquisition of land use right (480,356) (324,031) Purchase of software program -- (5,426) Advances on plant and equipment purchase -- (9,876,385) Loan repayment from related party -- 678,200 Proceed from land use right disposal -- 30,826 Net cash used in investing activities (174,796) (14,770,865) CASH FLOWS FROM FINANCING ACTIVITIES: Decrease in restricted cash (2,201,573) 3,407,360 Borrowings on notes payable - banks 16,607,430 5,425,600 Payments on notes payable - banks (14,410,680) (10,579,920) Borrowings on short term loans 13,722,365 12,750,160 Payments on short term loans (13,766,300) (11,380,196) Borrowings on employee loans 392,147 1,412,554 Payments on employee loans (938,635) (459,082) Borrowings on employee loan - officer -- 45,187 Other receivables - shareholder (10,252) 1,273,495 Borrowings on third party loan 113,650 2,898,529 Payments on third party loan (563,715) (2,826,195) Payment on other payable - equipment purchase (1,033,127) (614,633) Cash proceeds from warrants exercised 750 506,493 Net cash (used in) provided by financing activities (2,087,940) 1,859,352 EFFECTS OF EXCHANGE RATE CHANGE IN CASH (15,652) 248,470 DECREASE IN CASH (1,156,542) (3,191,103) CASH, beginning of period 3,405,606 6,420,439 CASH, end of period $ 2,249,064 $ 3,229,336
|SOURCE Shengtai Pharmaceutical, Inc.|
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