WEIFANG, China, May 16, 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 third quarter of fiscal 2012 ended March 31, 2012.
Third Quarter Fiscal Year 2012 Result of Operations
Net sales for the three months ended March 31, 2012 were $39,803,608, a decrease of $1,882,553 or 4.52%, compared with the same period in 2011. The decrease in net sales primarily resulted from decreased sales quantities for the three months ended March 31, 2012, compared to the same period last year. For the three months ended March 31, 2012 compared to the same period last year, the quantity of our glucose products sold increased about 3.75%, while the average unit selling price of our glucose products decreased about 3.51%. For the three months ended March 31, 2012 compared to the same period last year, the quantity of our cornstarch products sold decreased about 15.92%, while the average unit selling price of our cornstarch products decreased about 0.94%. For the three months ended March 31, 2012 compared to the same period last year, the quantity of our other products sold decreased about 19.09%, while the average unit selling price of our other products increased about 5.73%. The increased unit selling prices are caused by the increased raw material cost during the quarter ended March 31, 2012 compared to the same period last year. The sales quantity decreased mainly because of competition in the market of cornstarch and other products.
Cost of sales for the three months ended March 31, 2012 was $34,371,199, a decrease of $887,701 or 2.52%, compared with the same period in 2011. 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 March 31, 2012 was $5,432,409, a decrease of $994,852 or 15.48%, compared with the same period in 2011. The decrease of gross profit is mainly because the unit selling prices of our products did not increase as fast as the corn prices. Gross profit margin for the three months ended March 31, 2012 was 13.65%, a decrease from 15.42% for the same period in 2011. The reason for the decrease of gross profit margin is mainly because the price of corn, our main raw material, increased approximately 10.06% for the three months ended March 31, 2012 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 March 31, 2012, selling, general and administrative expenses were $3,321,269, an increase of $829,300 or 33.28%, compared to $2,491,968 for the three months ended March 31, 2011. The selling, general, and administrative expenses increased mainly due to increased shipping expenses caused by increased gas prices. The Company incurred $0 non-cash stock option expenses for the three months ended March 31, 2012 and 2011, respectively.
Net income for the three months ended March 31, 2012 was $98,253, a decrease of $2,206,924, compared with $2,305,177 for the same period in 2011. The decrease in net income was primarily attributable to the decreased gross profit and increased interest expenses.
As of March 31, 2012, Shengtai Pharmaceutical, Inc. had cash and restricted cash totaling $19.36 million. The Company's short-term bank loans totaled $60.92 million and long-term debt totaled $0 million. The Company's total shareholders' equity increased to $62.17 million.
Looking forward, Qingtai Liu, CEO of Shengtai Pharmaceutical, Inc. stated, "Going forward, Shengtai will continue to work on expanding sales network, maintaining good customer relationship, improving gross profit, and controlling the expenses. As usual, we will keep focusing on quality control."
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.
SOURCE Shengtai Pharmaceutical, Inc.