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"Our company continued to reap good sales revenue in the third quarter offiscal year 2010," said Mr. Qingtai Liu, Shengtai's CEO. "The operations ofthe third quarter added another $0.05 earnings per share to that of theprevious two quarters, and delivered $0.15 of the total earnings per share forthe nine months ended March 31, 2010."
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Financial Results of the Third Quarter Fiscal 2010
Net sales for the three months ended March 31, 2010 were $29,407,287, anincrease of $13,105,765, or 80.40%, compared with the same period in 2009. Theincrease in net sales primarily resulted from the increase of the Company'ssales volume and selling prices.
Net sales from exports for the three months ended March 31, 2010 increasedapproximately 212% compared with the same period in 2009. Domestic sales ofcornstarch and other products for the three months ended March 31, 2010increased approximately 88% compared with the same period last year.
The gross profit for the three months ended March 31, 2010 was $5,657,155,an increase of $4,639,562, or 455.93%, compared with the same period in 2009,and the gross profit margin for the three months ended March 31, 2010 was19.2%, an increase from 6.2% for the same period in 2009.
Selling, general and administrative expenses were $3,078,030 for the threemonths ended March 31, 2010 compared to $1,322,178 for the three months endedMarch 31, 2009. The increase was due largely to the write-off of a payment of$837,684. After deducting the write-off, selling, general and administrativeexpenses for the three months ended March 31, 2010 were $2,240,346, anincrease of $918,168, or 69.4%, from the three months ended March 31, 2009.
Net income for the three months ended March 31, 2010 was $978,125, anincrease of $1,639,523 compared with a net loss of $661,398 for the sameperiod in 2009.
Financial Results of the First Nine Months Fiscal 2010
Net sales for the nine months ended March 31, 2010 were $81,043,203, anincrease of $31,822,207, or 64.65%, compared with the same period in 2009. Theincrease in sales revenue resulted from the increase of the Company's salesvolume and selling prices.
Net sales from exports for the nine months ended March 31, 2010 increasedapproximately 181% compared with the same period in 2009. Domestic sales ofcornstarch and other products for the nine months ended March 31, 2010increased approximately 138% compared with the same period last year.
The gross profit for the nine months ended March 31, 2010 was $13,447,859,an increase of $7,243,570, or 116.75%, compared with the same period in 2009,and the gross profit margin for the nine months ended March 31, 2010 was 16.6%,an increase from 12.6% for the same period in 2009.
Selling, general and administrative expenses were $7,358,396 for the ninemonths ended March 31, 2010 compared to $6,074,853 for the nine months endedMarch 31, 2009. The increase was due largely to the write-off of a payment of$837,684. After deducting the write-off, selling, general and administrativeexpenses for the nine months ended March 31, 2010 were $6,520,712, an increaseof $445,859, or 7.3%, from the nine months ended March 31, 2009.
Net income for the nine months ended March 31, 2010 was $2,814,184, anincrease of $3,319,673 compared with a net loss of $505,489 for the sameperiod in 2009.
Financial Condition
The Company generated $7.35 million in positive cash flow from operationsduring the nine months ended March 31, 2010. As of March 31, 2010, the Companyhad cash and restricted cash position at $18.10 million. The Company'sshort-term loan totaled $36.91 million, notes payable to banks totaled $14.96million, long-term loan's current maturity totaled $2.50 million and thelong-term debt's non-current portion totaled $3.80 million. The Company'stotal shareholders' equity increased to $48.31 million. The Company expectsthat its proceeds from operating cash flows and its cash balances, togetherwith amounts available under the loans, will be sufficient to meet itsanticipated liquidity needs for the next twelve months.
Business Outlook
Based on its current outlook, and existing and anticipated businessconditions, Shengtai expects net income for the fiscal year ending June 30,2010 to be between $4 to $5 million.
"We stick to our strategies of increasing of production capacity, controlof costs, improving of product mix structure to create higher total grossprofits," said Mr. Qingtai Liu, Shengtai's CEO. "The market remainscompetitive. However, with our competitive strength and corporate strategies,we are very confident that we will have a profitable fiscal year of 2010 as wecontinue to benefit from the global and domestic economic recovery and theconsequently increasing demands by the overseas and domestic markets forglucose and starch products."
About Shengtai Pharmaceutical, Inc.
Shengtai Pharmaceutical, Inc. through its wholly owned subsidiary,Shengtai Holding, Inc. (SHI), a New Jersey corporation, and the Chineseoperating company of Weifang Shengtai Pharmaceutical Co., Ltd., is amanufacturer and distributor in China of glucose and starch products aspharmaceutical raw materials, other starch products and other glucose productssuch as corn meals, food and beverage glucose and dextrin. For moreinformation about Shengtai Pharmaceutical, Inc., please visithttp://www.shengtaipharmaceutical.com .
Forward-looking Statements
Certain statements made in this news release may contain forward-lookingstatements concerning the Company's business and products. These statementsinclude, without limitation, statements regarding our ability to prepare theCompany for growth, and predictions and guidance relating to the Company'sfuture financial performance. We have based these forward-looking statementslargely on our current expectations and projections about future events andfinancial trends that we believe may affect our financial condition, resultsof operations, business strategy and financial needs, but they involve risksand uncertainties that could cause actual results to differ materially fromthose in the forward-looking statements, which may include, but are notlimited to, such factors as unanticipated changes in product demand especiallyin the pharmaceutical industry, pricing and demand trends for the Company'sproducts, changes to government regulations, risk associated with operation ofthe Company's new facilities, risk associated with large-scale implementationof the Company's business plan, the ability to attract new customers, abilityto increase its product's applications, cost of raw materials, downturns inthe Chinese economy, and other information detailed from time to time in theCompany's filings and future filings with the United States Securities andExchange Commission. Investors are urged to consider these factors carefullyin evaluating the forward-looking statements herein and are cautioned not toplace undue reliance on such forward-looking statements, which are qualifiedin their entirety by this cautionary statement. The forward-looking statementsmade herein speak only as of the date of this press release and the Companyundertakes no duty to update any forward-looking statement to conform thestatement to actual results or changes in the Company's expectations.Financial Summary of the Third Quarter 2010 -- Revenues totaled $29.41 million -- Net income totaled $0.98 million -- Basic and diluted earnings per share of $0.05 -- Cash and restricted cash position at $18.10 million on March 31, 2010 Financial Summary of the First Nine Months 2010 -- Revenues totaled $81.04 million -- Net income totaled $2.81 million -- Basic and diluted earnings per share of $0.15 -- Operating cash flow of $7.35 million
SOURCE Shengtai Pharmaceutical, Inc.
