Chemspec International Limited Announces Fourth Quarter and Full Year 2009 Unaudited Financial Results and Issuance of Dividend
SHANGHAI, March 10 /PRNewswire-Asia-FirstCall/ -- Chemspec International Limited (NYSE: CPC; "Chemspec" or the "Company"), a leading China-based contract manufacturer of highly-engineered specialty chemicals, today announced its unaudited financial results(1) for the fourth quarter and full fiscal year ended December 31, 2009, and guidance for the first quarter of 2010. Upon careful review of the Company's financial and operating prospects in 2010, management has decided and the board of directors has approved the issuance of a dividend of $0.003 per ordinary share ($0.18 per ADS(2)) payable on April 21, 2010 to shareholders of record as of March 31, 2010.
Fourth Quarter 2009 Financial Highlights(3)
-- Total sales were RMB 177.1 million (US$25.9 million), a decrease of
36.4% from the fourth quarter of 2008 and a decrease of 16.2% from the
third quarter of 2009.
-- Gross profit was RMB 63.0 million (US$9.2 million), a decrease of 46.7%
from the fourth quarter of 2008 and a decrease of 29.5% from the third
quarter of 2009.
-- Income from operations was RMB 28.6 million (US$4.2 million), a
decrease of 66.6% from the fourth quarter of 2008 and a decrease of
53.8% from the third quarter of 2009.
-- Net income attributable to Chemspec International Limited shareholders
was RMB 34.8 million (US$5.1 million), a decrease of 50.5% from the
fourth quarter of 2008 and a decrease of 33.5% from the third quarter
of 2009.
-- Basic and diluted earnings per ADS(2) were RMB 0.96 (US$0.14), as
compared to RMB 2.34 in the fourth quarter of 2008 and RMB 1.44 in the
third quarter of 2009.
Full Year 2009 Financial Highlights(3)
-- Total sales were RMB 820.3 million (US$120.2 million), a decrease of
13.0% from the preceding year.
-- Gross profit was RMB 324.7 million (US$47.6 million), a decrease of
17.6% from the prior year.
-- Income from operations was RMB 207.5 million (US$30.4 million), a
decrease of 29.6% from the prior year.
-- Net income attributable to Chemspec International Limited shareholders
was RMB 172.4 million (US$25.3 million), a decrease of 44.8% from the
prior year. Excluding the non-recurring income tax refund of RMB 58.8
million received in 2008, the net income attributable to Chemspec
International Limited shareholders for fiscal year 2009 would have a
decrease of 32.0% from the prior year.
-- Basic and diluted earnings per ADS were RMB 5.18 (US$0.76), compared to
RMB 10.41 and RMB 10.40 from the prior year.
Year 2009 Business Highlights
Over the past year, the Company:
-- Faced one of the most challenging years in its 13 year history, mainly
due to the global financial crisis and economic recession, the
Company's sales were largely impacted in the first quarter of 2009 by
sharply reduced demand in the electronics chemical market and in the
third and fourth quarter of 2009 by the unfavorable demand change in
the global agrochemical market. The Company's chemical products for the
pharmaceutical market remained stable with some healthy growth.
-- Successfully listed on the NYSE, raising RMB 389.0 million that helps
the Company establish a strong corporate image for new business
development and a capital market platform for future growth.
-- Recruited highly experienced industry experts across all business
segments in order to build a stronger management team.
-- Spent a record RMB 343 million in capital expenditures during the year
to expand the Company's R&D and production facilities and reduce
bottlenecks that have impeded growth, at times, in the past. Total
reactor volume increased from 1.1 million liters at the end of 2008 to
2.0 million liters at the end of 2009. Additional reactors will be
installed after the completion of the current phase of expansion in the
first half of 2010.
-- Increased total headcount from 1,171 employees at the end of 2008 to
1,585 at the end of 2009.
-- Diversified the Company's customer base and built a solid foundation
that will allow the Company to diversify its product mix from
traditional chemical intermediates manufacturing into downstream Active
Pharmaceutical Ingredients (APIs) for the pharmaceutical industry and
Active Ingredients (AIs) for the agrochemical industry.
-- Received technology grants from the central and local governments for
four out of the six manufacturing subsidiaries of the Company. Grants
totaled RMB 10.0 million in the year 2009 -- a strong recognition of
the Company's leading position in different technologies in many
industrial fields in which the Company is actively involved.
-- Increased the number of approved patents from 6 at the end of 2008 to
11 by the end of 2009. The Company currently has 28 approved and
pending approval patents.
First Quarter 2010 Guidance
-- Sales are expected to reach between RMB 205 million to 210 million in
the first quarter of 2010, which would represent an increase of between
2.3% and 4.8% from the first quarter of 2009 and an increase of between
15.8% and 18.6% from the fourth quarter of 2009. The increase is
primarily expected to be driven by a strong recovery in demand in
various end markets that incorporate the Company's products.
-- Gross profit margin is expected to be at the Company's normal
operational level of above 40%.
Declaration of Dividend
-- The Company plans to maintain an annual dividend policy, as we
discussed in the IPO prospectus, of distributing a portion of our
annual net income to shareholders. The Company's board of directors has
declared the issuance of its 2009 dividend of $0.003 per ordinary share
($0.18 per ADS), payable on April 21, 2010 to shareholders of record as
of March 31, 2010. However, the declaration, amount and payment of
future dividends to holders of common stock will be at the discretion
of the board of directors and will depend upon many factors, including,
capital requirements, cash flow trends, financial condition, earnings,
alternate investment opportunities, legal requirements, regulatory
constraints, industry practice and other factors that the board of
directors deems relevant.
Completion of Share Repurchase Program
-- The Company has substantially completed its share repurchase plan
announced on September 29, 2009. The total funds used in the share
repurchase plan were US$1.2 million.
(1) Certain Renminbi (RMB) amounts in this press release have been
translated into U.S. dollar (US$) solely for the convenience of the
reader. The conversion of RMB into US$ in this release is based on
the Federal Reserve Board certified exchange rate on December 31st,
2009, which was RMB 6.8259 to US$1.00. The percentages stated are
calculated based on RMB.
(2) 1 ADS=60 ordinary shares
(3) 2008 financial data have been adjusted. Please refer to detail
disclosure in section below "Adjustment to Financial Statements to
Reflect Acquisition of Jiangsu Kangpeng Nong Hua Limited"
Dr. Jianhua Yang, Chairman and CEO of Chemspec, commented, "2009 was clearly a difficult year for the global economy. A strong retreat in consumer demand affected the electronics markets that we supply, and unfavorable weather patterns had an impact on most agrochemical end markets. While 2009 presented a number of obstacles that we needed to overcome, it also presented an opportunity for us to prepare for future challenges.
"We remain the leader in terms of chemical process research and development in China and are highly competitive compared to our global peers. We also continue to deepen our relationships with a growing number of customers around the world.
"We devoted considerable time and effort over the past year on improving our internal operations in order to set a more solid foundation for future development. Although we just emerged from an extremely challenging year, we believe we have completed a series of projects and initiated others, as discussed above, which will strengthen our internal operations and will allow us to more effectively deal with challenges that we will face in the future."
Mr. Bing Zhu, Chief Financial Officer of Chemspec, commented, "Given the tough environment in 2009, we took a conservative look at our inventory at year-end and decided to take a provision of RMB 14.7 million to write down the value of some of our obsolete inventories. This is a specific year-end non- cash charge, and we believe it reflects the realities of our current business. However, our financial position remains strong, and excluding the write down, our gross margins in the fourth quarter of 2009 would have stayed roughly in line with prior periods."
"In terms of financial performance, we believe we began to experience a positive turn-around in early 2010 as we started to see a recovery in demand in various end markets that incorporate our products. Our guidance for first quarter 2010 sales would represent a record for that period. Although there are still some visibility issues in terms of demand in the coming quarters for some of our products, we have a high degree of confidence that we can achieve quarter-over-quarter sales growth in the next few quarters based on our usual seasonal quarterly-sales fluctuations, our understanding of global market trends in 2010 as well as feedback from our long-term and new customers."
"We decided to issue our first annual dividend for fiscal year 2009 after we completed the share repurchase program that was announced in September 2009 with only US$1.2 million in funds used. Although 2009 was a difficult year in terms of financial performance, we were still able to generate a strong stream of cash from our operations. This dividend shows the management's confidence in our financial position and operational cash generating capabilities in the years to come. We plan to maintain a dividend policy, as we discussed in the IPO prospectus, of distributing a portion of our annual net income when the management and board feel it is the best use of cash. We believe it is important to allow our shareholders to participate in our results in a direct and tangible way in future years."
Fourth Quarter 2009 Financial Results
Total Sales
For the three months ended December 31, 2009, the Company generated total sales of RMB 177.1 million (US$25.9 million), a decrease of 36.4% from the fourth quarter of 2008 and a decrease of 16.2% from the third quarter of 2009. The decrease in the fourth quarter of 2009 mainly reflects weak sales of agrochemical products.
Gross Profit and Gross Margin
Gross profit was RMB 63.0 million (US$9.2 million), a decrease of 46.7% from the fourth quarter of 2008 and a decrease of 29.5% from the third quarter of 2009. Gross margin was 35.6% in the fourth quarter of 2009. Due to the extremely difficult market situation in 2009, the Company took a conservative look at our inventory at year-end and decided to take a provision of RMB 14.7 million to write down the value of some of our obsolete inventories. Excluding the write-down, gross profit margin would have been 43.9% for the fourth quarter of 2009, which is roughly in line with 42.5% in the fourth quarter of 2008 and 42.3% in the third quarter of 2009.
Operating Expenses
Selling expenses and general and administrative expenses were RMB 23.6 million (US$3.5 million) during the fourth quarter of 2009, representing an increase of 11.1% from RMB 21.3 million in the fourth quarter of 2008 and an increase of 21.4% from RMB 19.4 million in the third quarter of 2009. The increase compared to the fourth quarter of 2008 was mainly due to higher professional and other expenses related to being a publicly traded company along with depreciation expenses that started following the Company's move into a new headquarters. The increase compared to the third quarter of 2009 was mainly due to staff salaries and professional expenses.
Research and development (R&D) expenses decreased by 22.9% to RMB 8.0 million (US$1.2 million) during the fourth quarter of 2009 from RMB 10.4 million in the fourth quarter of 2008 and increased by 13.3% from RMB 7.1 million in the third quarter of 2009. The decrease compared with the same period in 2008 was primarily due to a decrease in material consumption. Compared to the third quarter of 2009, the increase was mainly due to higher staff salaries.
Income from operations and earnings before income taxes
As a result of the factors mentioned above, income from operations was RMB 28.6 million (US$4.2 million) and earnings before income taxes were RMB 29.0 million (US$4.3 million) in the fourth quarter of 2009, decreases of 66.6% and 65.5%, respectively, from the fourth quarter of 2008, and decreases of 53.8% and 53.6%, respectively, from the third quarter of 2009.
Net income attributable to Chemspec International Limited shareholders
Net income attributable to Chemspec International Limited shareholders was RMB 34.8 million (US$5.1 million) in the fourth quarter of 2009, a decrease of 50.5% from the fourth quarter of 2008 and a decrease of 33.5% from the third quarter of 2009. The decrease in net income attributable to Chemspec International Limited shareholders was mainly caused by the decrease in sales and the one-time year-end inventory write-down.
Basic and diluted earnings per ADS were RMB 0.96 (US$0.14), as compared to RMB 2.34 in the fourth quarter of 2008 and RMB 1.44 in the third quarter of 2009.
Full Year 2009 Financial Results
Total Sales
For the twelve months ended December 31, 2009, the Company generated total sales of RMB 820.3 million (US$120.2 million), a decrease of 13.0% from 2008. The decrease was mainly due to weak demand in the Company's end markets, primarily as a result of the global financial crisis.
Gross Profit and Gross Margin
Gross profit was RMB 324.7 million (US$47.6 million), a decrease of 17.6% from 2008, due primarily to reduced sales in electronic chemicals in the first quarter of 2009 and reduced sales in agrochemicals in the third and fourth quarter of 2009.
Operating Expenses
Total operating expenses were RMB 119 million (US$17.4 million), which compares to RMB 100.5 million (US$14.7 million) in 2008. The increase was primarily due to higher personnel salaries for experienced senior level employees, higher depreciation since we moved into new headquarters and R&D buildings, and other consulting and audit fees associated with being a publicly-listed company.
Income from operations and earnings before income taxes
Income from operations totaled RMB 207.5 million (US$30.4 million), compared to RMB 294.5 (US$43.1 million) in 2008.
Net income attributable to Chemspec International Limited shareholders
Net income attributable to Chemspec International Limited shareholders for fiscal year 2009 was RMB 172.4 million (US$25.3 million), a decrease of 44.8% from RMB 312.4 million (US$45.8 million) in 2008. Excluding the non-recurring income tax refund of RMB 58.8 million received in 2008, the net income attributable to Chemspec International Limited shareholders for fiscal year 2009 would have a decrease of 32.0% from the prior year mainly due to the lower total sales, lower annual average gross profit margin as well as higher effective income tax rate.
Basic and diluted earnings per ADS for fiscal year 2009 were RMB 5.18 (US$0.76) and RMB 5.18 (US$0.76), compared to RMB 10.41 and RMB 10.40 in 2008.
Balance Sheet
As of December 31, 2009, the Company had RMB 351.1 million (US$51.4 million) in cash, as compared to RMB 180.6 million as of December 31, 2008. The increase in the Company's cash was primarily due to the proceeds of approximately RMB 389.0 million (US$57.0 million) from the Company's IPO in June 2009.
The Company's year-end 2009 inventory level increased to RMB 271.4 million (US$39.8 million) from RMB 218.3 million as of December 31, 2008. The increase reflects a change in the Company's product mix as a strong recovery in demand started in early 2010 for the Company's specialty chemical products used in the electronics field. As Chemspec's products in this field are technically highly complex and involve a long in-house production cycle, management expects the average inventory level to be approximately RMB 300 million in year 2010.
As the Company acquired the remaining non-controlling shares of Jiangsu Wei Er Chemicals Co., Ltd. and 100% of the shares of Jiangsu Kangpeng Nong Hua Limited (elaborated in section below) as well as repurchased a certain number of shares from the open market in the fourth quarter of 2009, the total equity of the Company reduced to RMB 1,192.3 million at the end of the fourth quarter of 2009 from RMB 1,228.5 million at the end of the third quarter of 2009, after netting off the net income from the fourth quarter of 2009.
Adjustment to Financial Statements to Reflect Acquisition of Jiangsu Kangpeng Nong Hua Limited
Chemspec acquired 100% equity interest of Jiangsu Kangpeng Nong Hua Limited, or Kangpeng Nong Hua, in November 2009 for RMB 25 million in cash. Since the Company's Chairman and CEO, Dr. Yang, owned more than 50% of the voting rights of both the Company and Kangpeng Nong Hua as of the date of the acquisition, the acquisition was considered a combination between entities under common control in accordance with ASC Topic 805. Therefore, the Company's consolidated financial statements have been retrospectively adjusted to reflect the combined entities for the periods during which the entities were under common control.
Accordingly, the Company's balance sheet as of December 31, 2008 and the related consolidated statements of income, shareholders' equity, comprehensive income, and cash flows for the year ended December 31, 2008 have been retrospectively adjusted to reflect the combined entities for the periods during which the entities were under common control. The effects of the change to the Company's financial statements are as follows:
RMB'000 December 31, 2008 December 31, 2009
As computed As reported
As As excluding including
Originally Adjusted Effect of Kangpeng Kangpeng Effect of
Reported Change Nong Hua Nong Hua Change
Total
assets 1,014,880 1,063,457 48,577 1,551,565 1,575,283 23,718
Total
equity 729,171 745,213 16,042 1,207,143 1,192,260 (14,883)
Year ended December 31, 2008 Year ended December 31, 2009
As computed As reported
As As excluding including
Originally Adjusted Effect of Kangpeng Kangpeng Effect of
Reported Change Nong Hua Nong Hua Change
Net
income 317,905 316,668 (1,237) 183,078 177,152 (5,926)
Total
compre-
hensive
income 320,342 319,105 (1,237) 183,133 177,207 (5,926)
Revenue 944,854 942,487 (2,367) 821,081 820,295 (786)
Earnings
per
share RMB0.17 RMB0.17 RMB0.00 RMB0.09 RMB0.09 RMB0.00
Conference Call Details
The company will host a conference call and live webcast to discuss its fourth quarter results and forward outlook at 8:00am Eastern Time (9:00 pm Beijing time) on Thursday, March 11, 2010.
- U.S. Toll Free Number: 1-866-519-4004
- International Dial-in Number: +1-718-254-1231
- Mainland China Toll Free Number: 800-819-0121 (land line)
400-620-8038 (Mobile)
- Hong Kong Toll Free Number: 852-2475-0994
- Conference ID: CPC
A live and archived webcast of the conference call will be available on the Investor Relations section of Chemspec's website at http://www.chemspec.com.cn .
A telephone replay of the call will be available after the conclusion of the conference call through midnight, March 18, 2010, Eastern Time.
The dial-in details for the replay are as follows:
- U.S. Toll Free Number +1-866-214-5335
- International Dial-in Number +61-2-8235-5000
Conference ID: 60804122
Chemspec International Limited
Unaudited Consolidated Balance Sheets
December 31, December 31, December 31,
2008 2009 2009
RMB'000 RMB'000 USD'000
(as adjusted)
ASSETS
Current assets
Cash 180,602 351,097 51,436
Pledged bank deposits 21,536 37,919 5,555
Accounts receivable, net 136,664 94,154 13,794
Bills receivable -- 1,327 194
Inventories 218,263 271,434 39,765
Prepayment and other
receivables 24,597 38,738 5,675
Amounts due from
related parties 2,500 64 9
Deferred income
tax assets 344 3,424 502
Total current assets 584,506 798,157 116,930
Investment in an affiliate -- 13,296 1,948
Property, plant and
equipment, net 405,180 699,181 102,431
Land use rights 55,175 56,064 8,213
Intangible assets 947 839 123
Goodwill 7,446 7,446 1,091
Deferred offering costs 9,843 -- --
Deferred income tax assets 360 300 44
Total assets 1,063,457 1,575,283 230,780
LIABILITIES AND EQUITY
Current liabilities
Bank borrowings 65,000 -- --
Accounts payable 81,382 81,870 11,994
Bills payable 27,562 49,738 7,287
Amounts due to
related parties 51,246 23,659 3,466
Accrued expenses and other
payables 65,413 183,266 26,849
Income taxes payable 6,395 1,298 190
Total current liabilities 296,998 339,831 49,786
Bank borrowings -- 10,000 1,465
Deferred income
tax liabilities 15,680 18,056 2,645
Deferred income 5,566 15,136 2,217
Total liabilities 318,244 383,023 56,113
Equity
Ordinary shares: HK$ 0.01
par value; 20,000,000,000
shares authorized as of
December 31, 2008 and
December 31, 2009;
1,800,000,000 and
2,167,620,000 shares
issued and outstanding as
of December 31, 2008 and
December 31, 2009,
respectively 18,446 21,686 3,177
Additional paid-in capital 39,213 326,948 47,898
Statutory reserves 45,837 63,422 9,291
Accumulated other
comprehensive income 6,749 6,803 997
Retained earnings 619,888 767,393 112,424
Total Chemspec
International Limited
shareholders' equity 730,133 1,186,252 173,787
Non-controlling interests 15,080 6,008 880
Total equity 745,213 1,192,260 174,667
Total liabilities
and equity 1,063,457 1,575,283 230,780
Chemspec International Limited
Unaudited Quarterly Consolidated Statements of Income
Three-month periods ended
Dec 31, Sept 30, Dec 31, Dec 31,
2008 2009 2009 2009
RMB'000 RMB'000 RMB'000 USD'000
(as adjusted) (as adjusted)
Sales 278,394 211,305 177,050 25,938
Cost of sales (160,036) (121,848) (114,022) (16,704)
Gross profit 118,358 89,457 63,028 9,234
Selling expenses (2,658) (2,405) (2,817) (413)
General and
administrative
expenses (18,597) (17,044) (20,792) (3,046)
Research and
development
expenses (10,387) (7,074) (8,012) (1,174)
Other operating
expenses (1,575) (1,297) (3,380) (495)
Other operating
income 620 311 236 35
Government grants -- 11 362 53
Income from
operations 85,761 61,959 28,625 4,194
Other income
(expenses):
Equity in loss
of an affiliate -- (85) (91) (13)
Interest income 991 467 482 70
Interest expense (1,007) (418) (309) (45)
Foreign currency
exchange (loss)
gain, net (1,657) 220 230 34
Other income 67 376 91 13
Earnings before
income taxes 84,155 62,519 29,028 4,253
Income tax
(expense)
benefit (11,565) (11,427) 6,169 903
Net income 72,590 51,092 35,197 5,156
Net (income) loss
attributable to
non-controlling
interests (2,345) 1,200 (433) (63)
Net income
attributable
to Chemspec
International
Limited
shareholders 70,245 52,292 34,764 5,093
Basic earnings
per share RMB 0.04 RMB 0.02 RMB 0.02 USD 0.00
Diluted earnings
per share RMB 0.04 RMB 0.02 RMB 0.02 USD 0.00
Basic earnings
per ADS RMB 2.34 RMB 1.44 RMB 0.96 USD 0.14
Diluted earnings
per ADS RMB 2.34 RMB 1.44 RMB 0.96 USD 0.14
Chemspec International Limited
Unaudited Annual Consolidated Statements of Income
Years ended
December 31, December 31, December 31,
2008 2009 2009
RMB'000 RMB'000 USD'000
(as adjusted)
Sales 942,487 820,295 120,173
Cost of sales (548,543) (495,584) (72,603)
Gross profit 393,944 324,711 47,570
Selling expenses (11,898) (11,245) (1,647)
General and
administrative
expenses (58,947) (69,871) (10,236)
Research and
development
expenses (27,483) (30,913) (4,529)
Other operating
expenses (2,188) (7,145) (1,047)
Other operating
income 1,012 953 140
Government grants 50 971 142
Income from
operations 294,490 207,461 30,393
Other income
(expenses):
Equity in loss
of an affiliate -- (176) (26)
Interest income 2,116 2,296 336
Interest expense (2,746) (2,149) (315)
Foreign currency
exchange loss, net (9,514) (1,961) (286)
Other income 82 519 76
Earnings before
income taxes 284,428 205,990 30,178
Income tax
benefit
(expense) 32,240 (28,838) (4,225)
Net income 316,668 177,152 25,953
Net income
attributable to
non-controlling
interests (4,307) (4,721) (692)
Net income
attributable
to Chemspec
International
Limited
shareholders 312,361 172,431 25,261
Basic earnings
per share RMB 0.17 RMB 0.09 USD 0.01
Diluted earnings
per share RMB 0.17 RMB 0.09 USD 0.01
Basic earnings
per ADS RMB 10.41 RMB 5.18 USD 0.76
Diluted earnings
per ADS RMB 10.40 RMB 5.18 USD 0.76
Chemspec International Limited
Unaudited Consolidated Statements of Cash Flows
Dec 31, Dec 31, Dec 31,
2008 2009 2009
RMB'000 RMB'000 USD '000
(as adjusted)
Cash flows from
operating activities
Net income 316,668 177,152 25,953
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization of
property, plant and equipment 24,700 37,204 5,450
Land use rights 998 1,132 166
Amortization of intangible assets 27 108 16
Loss on disposal of property, plant
and equipment 1,424 6,505 953
Equity in loss of an affiliate -- 176 26
Bad debt expense (241) 64 9
Write-down of inventories 1,090 14,696 2,153
Unrealized foreign exchange loss, net 1,573 93 14
Gain on transfer of land use right to
an affiliate -- (290) (42)
Share-based compensation 17,917 15,443 2,262
Deferred income tax
expense (benefit) 16,024 (644) (94)
Changes in operating assets and
liabilities net of effects of
divestiture of a subsidiary and
acquisitions of equity interest
in subsidiaries:
Pledged bank deposits related
to purchase of inventory (17,587) 994 146
Inventories (80,490) (67,867) (9,942)
Accounts receivable (48,158) 42,354 6,205
Bills receivable -- (1,327) (194)
Prepayment and other receivables 13,658 (14,141) (2,072)
Accounts payable 12,691 488 71
Bills payable related to
purchase of inventory 14,084 (5,158) (756)
Accrued expenses and other payables 15,730 13,424 1,967
Income taxes payable (1,729) (5,097) (747)
Net cash provided by
operating activities 288,379 215,309 31,544
Cash flows from investing activities
Capital expenditures, including
interest capitalized (127,846) (231,727) (33,949)
Proceeds from the sale
of a subsidiary 3,420 -- --
Proceeds from sale of property,
plant and equipment 200 -- --
Investment in an affiliate -- (11,225) (1,644)
Non-interest bearing advances to
related parties (30,900) -- --
Non-interest bearing advances
repaid by related parties 48,480 2,436 357
Net cash assumed from
acquisition of subsidiaries 11,988 -- --
Payments for land use rights (17,517) -- --
Pledged bank deposit related to
purchase of property, plant
and equipment -- (17,377) (2,546)
Net cash used in investing activities (112,175) (257,893) (37,782)
Cash flows from financing activities
Acquisition of additional equity
interest in subsidiaries (8,000) (17,500) (2,564)
Capital contributions to a subsidiary
by a non-controlling interest
shareholder -- 1,600 234
Proceeds from issuance
of ordinary shares -- 389,022 56,992
Payments for initial
public offering costs (9,843) (52,775) (7,732)
Proceeds from bank loans 70,000 25,000 3,663
Repayments of bank loans (50,000) (80,000) (11,720)
Repurchase of ordinary shares -- (8,134) (1,192)
Dividend paid by a subsidiary to
non-controlling interest shareholders -- (2,500) (366)
Proceeds from non-interest bearing
borrowings from related parties 20,400 -- --
Repayments of non-interest bearing
borrowings from related parties (75,380) (41,687) (6,107)
Net cash (used in) provided by
financing activities (52,823) 213,026 31,208
Effect of foreign
currency exchange
rate changes on cash 292 53 8
Net increase in cash 123,673 170,495 24,978
Cash at beginning of
period 56,929 180,602 26,458
Cash at end of period 180,602 351,097 51,436
Supplemental disclosures of cash
flow information:
Income taxes paid 12,725 34,579 5,066
Income taxes refund 58,767 -- --
Interest paid, net of
amounts capitalized 2,746 2,149 315
Supplemental schedule of noncash
investing and financing
activities:
Payable for purchase of property,
plant and equipment 35,547 118,174 17,313
Payable for acquisitions of
non-controlling interests in
subsidiaries -- 48,500 7,105
Bills payable for purchase of
property, plant and equipment 771 28,105 4,117
Land use right contributed to an
affiliate -- 1,957 287
About Chemspec
Chemspec is a leading China-based contract manufacturer of highly engineered specialty chemicals and the largest manufacturer of fluorinated specialty chemicals in China based on sales. In manufacturing specialty chemicals, Chemspec also provides process design and process development services, which enable efficient and rapid production of specialty chemicals that are incorporated into the products of Chemspec's end users. Chemspec's customers and end users include electronics, pharmaceutical and agrochemical companies. For more information, please visit http://www.chemspec.com.cn .
Safe Harbor Statements
This announcement contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Further information regarding these and other risks is included in Chemspec's filings with the U.S. Securities and Exchange Commission, including its registration statement on Form F-1, as amended from time to time. Chemspec does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
For further information, please contact:
Chemspec International Ltd.
In Shanghai
Bing Zhu
Chief Financial Officer
Phone: +86-21-6363-8108
Email: [email protected]
Christensen
In New York
Kathy Li
Phone: +1-212-618-1978
Email: [email protected]
In Hong Kong
Tip Fleming
Phone: +852-9212-0684
Email: [email protected]
SOURCE Chemspec International Limited
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