WEIFANG, Shandong, China, May 15 /PRNewswire-Asia-FirstCall/ -- Shengtai Pharmaceutical, Inc. (“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.
Business Outlook
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.”
Conference Call
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:
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:
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 .
Forward-looking Statements
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.
CONTACT: Yiru Melody Shi, Chief Financial Officer, Shengtai
Pharmaceutical, Inc. at shengtaicfo@hotmail.com; Or Eddie Cheung, Investor
Relations, Grayling at +1-646-284-9414 or eddie.cheung@us.grayling.com
Web site: http://www.shengtaipharmaceutical.com/
