China Shengda Packaging Group Inc. Reports First Quarter 2015 Financial Results
HANGZHOU, China, May 15, 2015 /PRNewswire-FirstCall/ -- China Shengda Packaging Group Inc. (NASDAQ: CPGI) ("Shengda" or the "Company"), a leading Chinese paper packaging company, today reported its financial results for the first quarter ended March 31, 2015.
Mr. Daliang Teng, Chief Executive Officer of Shengda, commented, "While Q1 historically had been a light quarter for our business due to the Chinese New Year, we managed to grow our overall revenues by 17.5% year-over-year mainly because our subsidiaries Shengda Zhongtian and Shengda Concept started to contribute in the first quarter of 2015. Gross margin increased by 40 basis points as we further cut losses from our corrugating medium paper business while operating loss also reduced year-over-year as we kept our expenses under tight control."
Mr. Teng continued, "Despite continuing macro weakness in the near future, we believe our further vertical integration and geographical expansion, combined with our stringent cost control, will allow us to continue to grow our business and improve our market position."
First Quarter 2015 Financial Highlights:
- Overall revenues increased by 17.5% to $37.9 million for the first quarter of 2015 mainly driven by increase in sales volume of paper cartons and other paper products mainly because Shengda Zhongtian and Shengda Concept commenced production in the first quarter of 2015.
- Overall gross margin improved by 40 basis points to 13.2% for the first quarter of 2015 from 12.8% for the same period of last year.
- Operating loss decreased to $0.1 million for the first quarter of 2015 from $0.6 million for the same period of last year as we continued our tight control over operating expenses while maintaining growth in revenues.
- Net loss attributable to the Company's stockholders decreased by $0.4 million, or 88.2%, to approximately $0.1 million for the first quarter of 2015 from $0.5 million for the same period of last year.
- Basic and diluted loss per share were $0.00 for the first quarter of 2015, compared with $0.01 for the same period of last year.
Three Months Ended March 31, 2015 Results
| Sales Analysis (Millions) |
Three Months Ended March 31, |
Three Months Ended March 31, 2014 |
| Revenues– Paper Cartons (millions) |
$31.0 |
$26.1 |
| Revenues– Corrugating Medium Paper (millions) |
$8.5 |
$9.3 |
| Revenues– Inter-segment Transactions Elimination (millions) |
($1.5) |
($3.2) |
| Color Cartons (% of total revenues) |
22.1% |
25.3% |
| Flexo Cartons (% of total revenues)) |
59.6% |
55.6% |
| Paper Cartons Sales Volume (M sq meters) |
87.6 |
67.9 |
| Corrugating Medium Paper Sales Volume ('000 tons) |
24.3 |
25.4 |
| Color Cartons (avg price per sq meter) |
$0.40 |
$0.39 |
| Flexo Cartons (avg price per sq meter) |
$0.34 |
$0.38 |
| Corrugating Medium Paper (avg price per ton) |
$349 |
$368 |
| Summary Results (Millions) |
Three Months |
Three Months |
| Revenues |
$37.9 |
$32.3 |
| Gross Profit |
$5.0 |
$4.1 |
| Gross Margin (%) |
13.2% |
12.8% |
| Operating Expenses |
$5.1 |
$4.7 |
| Operating Income (Loss) |
($0.1) |
($0.6) |
| Operating (Loss) Margin (%) |
(0.2%) |
(1.7%) |
| Net Income (Loss) Attributable to Stockholders |
($0.1) |
($0.5) |
| EPS - Basic & Diluted |
($0.00) |
($0.01) |
| Weighted Average Shares Outstanding |
38.8 |
38.8 |
Total revenues for the first quarter of 2015 increased by $5.6 million, or 17.5%, to $37.9 million from $32.3 million for the same period of last year, primarily driven by increased sales volume of paper cartons and other paper products.
Revenues of paper cartons and other paper products increased by $4.9 million, or 18.6%, to $31.0 million for the first quarter of 2015 from $26.1 million for the same period of last year. Sales volume of paper cartons increased by 19.7 million square meters, or 29%, to 87.6 million square meters for the first quarter of 2015 from 67.9 million square meters for the same period of last year while the average price of paper cartons and other paper products decreased to $0.36 per square meter for the first quarter of 2015 from $0.38 per square meter for the same period of last year. Color and flexo cartons accounted for 22.1% and 59.6% of total revenues for the first quarter of 2015, compared to 25.3% and 55.6%, respectively, for the same period of last year. Average sales prices per square meter for color and flexo cartons were approximately $0.40 and $0.34, respectively, for the first quarter of 2015, compared to approximately $0.39 and $0.38, respectively, for the same period of last year. Consumer and industrial goods manufacturing sectors remained the Company's principal markets. Major customers remained home appliances & electronics manufacturers, and food, beverage & cigarette manufacturers in the Yangtze River Delta Region, which accounted for 19.6% and 21.8%, respectively, of total revenues for the first quarter of 2015, compared to 22.1% and 21.2%, respectively, for the same period of last year.
Revenues of corrugating medium paper decreased by $0.8 million, or 9.1%, to $8.5 million for the first quarter of 2015, from $9.3 million for the same period of last year. The decrease was mainly resulted from declines in both sales volume and average selling price. Sales volume and average selling price of corrugating medium paper was approximately 24.3 thousand tons and $349 per ton, respectively, for the first quarter of 2015, compared to 25.4 thousand tons and $368 per ton, respectively, for the same period of last year.
Overall gross profit increased by $0.9 million, or $ 21.1%, to $5.0 million for the first quarter of 2015 from $4.1 million for the same period of last year, as a result of increase in revenues of our paper cartons and other paper products business as well as decline in gross loss of the corrugating medium paper business. Gross profit of paper cartons and other paper products increased by $0.4 million, or 7.2%, to $5.8 million for the first quarter of 2015 from $5.4 million for the same period of last year. Gross profit of color and flexo cartons were $1.7 million and $4.1 million, respectively, for the first quarter of 2015, compared to $1.7 million and $3.7 million, respectively, for the same period of last year. Gross loss of corrugating medium paper was $0.8 million for the first quarter of 2015, down from $1.3 million for the same period of last year. Overall gross margin improved by 40 basis points to 13.2% for the first quarter of 2015 from 12.8% for the same period of last year. Gross (loss) margins for paper cartons and other paper products and corrugating medium paper were 18.8% and negative 9.5%, respectively, for the first quarter of 2015, compared to 20.7% and negative 13.8%, respectively, for the same period of last year.
Selling expenses were $1.9 million for the first quarter of 2015, essentially unchanged from the same period of last year. As a percentage of revenues, selling expenses decreased to 4.9% for the first quarter of 2015 from 5.7% for the same period of last year.
General and administrative expenses increased by $0.4 million, or 13.2%, to $3.2 million for the first quarter of 2015 from $2.8 million for the same period of last year. This increase was mainly due to the increase in staff costs, which include salary, benefits, social insurance and other relevant staff expenses. As a percentage of revenues, general and administrative expenses decreased to 8.5% for the first quarter of 2015 from 8.8% for the same period of last year.
As a result of the forgoing, operating loss was approximately $0.1 million for the first quarter of 2015, compared to $0.6 million for the same period of last year. Operating loss margin was 0.2% or the first quarter of 2015, compared to 1.7% for the same period of last year.
Net loss attributable to the Company's common stockholders decreased by approximately $0.4 million, or 88.2%, to $0.1 million for the first quarter of 2015, from $0.5 million for the same period of last year. Basic and diluted loss per share were $0.00 for the first quarter of 2015, compared to $0.01 for the same period of last year.
Financial Condition
As of March 31, 2015, the Company had cash and cash equivalents of $8.0 million and restricted cash of $12.9 million, compared to $10.9 million and $13.8 million, respectively, at December 31, 2014. Working capital was $25.2 million as of March 31, 2015, compared to $30.7 million at December 31, 2014. Total equity for stockholders of Shengda was $113.4 million as of March 31, 2015, compared to $113.0 million at December 31, 2014.
Net cash used in operating activities was $0.8 million for the first quarter of 2015, compared to net cash provided by operating activities of $3.7 million for the same period of last year. This was attributable to net loss of $0.1 million, adjusted by depreciation and amortization expenses of $1.8 million, and a net decrease in cash from accounts and notes receivable of $2.0 million and a net decrease in cash from other working capital items of $0.5 million.
Net cash used in investing activities was $2.1 million for the first quarter of 2015, compared to $1.8 million for the same period of last year. The $2.1 million was mainly used for purchases of property, plant and equipment at our subsidiaries Shengda Concept and Shengda Zhongtian.
Net cash provided by financing activities was nil for the first quarter of 2015, compared to $1.0 million for the same period of last year. During the three months ended March 31, 2015, we did not receive proceeds from loans or repay loans.
About China Shengda Packaging Group Inc.
China Shengda Packaging Group Inc. is a leading paper packaging company in China. It is principally engaged in design, manufacturing and sale of flexo-printed and color-printed corrugated paper cartons in a variety of sizes and strengths. It also manufactures corrugating medium paper and corrugated paperboards, which are used for the production of flexo-printed and color-printed cartons. The Company provides paper packaging solutions to a wide variety of industries, including food, beverage, cigarette, household appliance, consumer electronics, pharmaceuticals, chemicals, machinery and other consumer and industrial sectors in China.
Safe Harbor Statements
This press release may contain forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Any statements set forth above that are not historical facts are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors include, but are not limited to, the Company's ability to expand to new markets, the ability to grow business through vertical integration and geographical expansion, the ability to access capital for expansion and continued investment in R&D, the ability to acquire other companies, changes from anticipated levels of sales, changes in national or regional economic and competitive conditions, current or future volatility in the credit market and future market conditions, changes in relationships with customers, changes in profit margins of principal product and other factors discussed from time to time in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.
Company Contact:
China Shengda Packaging Group Inc.
Cindy Hu, Board Secretary
Tel: +86-571 8283 8770
E-mail: [email protected]
Website: http://www.cnpti.com
Investor Relations Contact:
Weitian Group LLC
Tina Xiao
Tel: +1-917-609-0333
Email: [email protected]
| CHINA SHENGDA PACKAGING GROUP INC. AND SUBSIDIARIES |
|||||
| CONSOLIDATED BALANCE SHEETS |
|||||
| (Amounts in US$) |
|||||
| March 31, |
December 31, |
||||
| ASSETS |
2015 |
2014 |
|||
| Current assets |
(Unaudited) |
||||
| Cash and cash equivalents |
$ 8,028,542 |
$ 10,909,547 |
|||
| Restricted cash |
12,884,090 |
13,764,420 |
|||
| Accounts and notes receivable, net |
42,635,137 |
40,385,615 |
|||
| Inventories |
17,588,023 |
16,197,839 |
|||
| Prepayments and other receivables |
3,238,871 |
1,714,052 |
|||
| Amount due from related parties |
123,253 |
51,093 |
|||
| Deductable value added tax payable |
1,025,382 |
867,869 |
|||
| Total current assets |
85,523,298 |
83,890,435 |
|||
| Non-current assets |
|||||
| Property, plant and equipment, net |
76,273,465 |
72,274,052 |
|||
| Land use right |
11,634,494 |
11,650,850 |
|||
| Deferred tax assets |
3,424,414 |
2,965,241 |
|||
| Goodwill |
181,149 |
180,373 |
|||
| Total assets |
$ 177,036,820 |
$ 170,960,951 |
|||
| LIABILITIES AND EQUITY |
|||||
| Current liabilities |
|||||
| Accounts and notes payable |
$ 45,478,884 |
$ 41,954,268 |
|||
| Amounts due to related parties |
1,325,858 |
2,961,704 |
|||
| Accrued expenses and other payables |
4,047,345 |
2,964,988 |
|||
| Taxes payable |
1,422,169 |
1,826,922 |
|||
| Short-term loans |
3,500,000 |
3,500,000 |
|||
| Current portion of long-term loans |
4,500,000 |
- |
|||
| Total current liabilities |
60,274,256 |
53,207,882 |
|||
| Non-current liabilities |
|||||
| Long-term loans |
- |
4,500,000 |
|||
| Total liabilities |
$ 60,274,256 |
$ 57,707,882 |
|||
| Commitment and contingencies |
|||||
| Equity |
|||||
| Stockholders' equity |
|||||
| Common stock (US$0.001 par value, 190,000,000 shares authorized, |
38,791 |
38,791 |
|||
| Additional paid-in capital |
43,036,464 |
43,036,464 |
|||
| Appropriated retained earnings |
8,467,835 |
8,293,281 |
|||
| Unappropriated retained earnings |
49,655,975 |
49,894,124 |
|||
| Accumulated other comprehensive income |
12,250,015 |
11,778,550 |
|||
| Total equity for stockholders of China Shengda Packaging |
113,449,080 |
113,041,210 |
|||
| Noncontrolling interest |
3,313,484 |
211,859 |
|||
| Total equity |
116,762,564 |
113,253,069 |
|||
| Total liabilities and equity |
$ 177,036,820 |
$ 170,960,951 |
|||
| CHINA SHENGDA PACKAGING GROUP INC. AND SUBSIDIARIES |
|||||
| CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) |
|||||
| (Amounts in US$) |
|||||
| Three Months Ended March 31, |
|||||
| 2015 |
2014 |
||||
| (Unaudited) |
(Unaudited) |
||||
| Revenues |
$ 37,927,419 |
$ 32,289,979 |
|||
| Cost of goods sold |
32,920,876 |
28,156,680 |
|||
| Gross profit |
5,006,543 |
4,133,299 |
|||
| Operating expenses |
|||||
| Selling expenses |
1,865,438 |
1,849,929 |
|||
| General and administrative expenses |
3,217,461 |
2,843,048 |
|||
| 5,082,899 |
4,692,977 |
||||
| Other income/(expenses) |
|||||
| Interest income |
123,162 |
497,819 |
|||
| Interest expense |
(191,789) |
(323,685) |
|||
| Subsidy income |
13,016 |
- |
|||
| Other expense |
- |
(641,445) |
|||
| (55,611) |
(467,311) |
||||
| Non-operating income/(expenses) |
(121,891) |
116,086 |
|||
| Loss before income tax expense and |
(253,858) |
(910,903) |
|||
| Income tax benefit |
154,049 |
327,083 |
|||
| Net loss |
(99,809) |
(583,820) |
|||
| Net loss attributable to noncontrolling interest |
(36,214) |
(46,128) |
|||
| Net loss attributable to Company's common stockholders |
$ (63,595) |
$ (537,692) |
|||
| Basic and diluted loss per share |
$ (0.00) |
$ (0.01) |
|||
| Weighted-average number of shares |
38,790,811 |
38,790,811 |
|||
| Comprehensive income/(loss): |
|||||
| Net loss |
$ (99,809) |
$ (583,820) |
|||
| Foreign currency translation adjustment |
471,309 |
(1,016,788) |
|||
| Comprehensive income/(loss) |
371,500 |
(1,600,608) |
|||
| Comprehensive income/(loss) attributable to |
(36,370) |
(45,789) |
|||
| Net comprehensive income/(loss) attributable |
$ 407,870 |
$ (1,554,819) |
|||
| CHINA SHENGDA PACKAGING GROUP INC. AND SUBSIDIARIES |
||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||
| (Amounts in US$) |
||||
| Three Months Ended March 31, |
||||
| 2015 |
2014 |
|||
| (Unaudited) |
(Unaudited) |
|||
| Cash flows from operating activities |
||||
| Net loss |
$ (99,809) |
$ (583,820) |
||
| Adjustments to reconcile net loss to net cash |
||||
| Depreciation and amortization expenses |
1,830,116 |
2,098,987 |
||
| Deferred tax |
(444,502) |
(495,581) |
||
| Loss from disposal of property, plant and equipment |
- |
641,445 |
||
| Change in operating assets and liabilities: |
||||
| Restricted cash |
935,525 |
571,900 |
||
| Accounts and notes receivable |
(2,063,749) |
6,458,591 |
||
| Inventories |
(535,992) |
(3,042,023) |
||
| Prepayments and other receivables |
(1,470,454) |
(2,635,072) |
||
| Accounts and notes payable |
2,255,240 |
590,571 |
||
| Amount due from(to) related party |
(1,713,158) |
(301,589) |
||
| Accrued expenses and other payables |
1,030,747 |
(106,182) |
||
| Tax payables |
(563,965) |
537,051 |
||
| Net cash (used in)provided by operating activities |
(840,001) |
3,734,278 |
||
| Cash flows from investing activities |
||||
| Purchase of property, plant and equipment |
(2,002,882) |
(2,026,524) |
||
| Prepayment paid for construction in progress |
(72,515) |
- |
||
| Proceeds from disposal of property, plant and |
- |
177,023 |
||
| Net cash used in investing activities |
(2,075,397) |
(1,849,501) |
||
| Cash flows from financing activities |
||||
| Proceeds from short-term loans |
- |
4,043,582 |
||
| Proceeds from long-term loans |
- |
4,533,292 |
||
| Repayment of short-term loans |
- |
(3,226,582) |
||
| Repayment of long-term loans |
- |
(4,533,292) |
||
| Restricted cash |
- |
147,060 |
||
| Net cash flows provided by financing activities |
- |
964,060 |
||
| Effect of foreign currency exchange rate |
34,393 |
(81,117) |
||
| Net changes in cash and cash equivalents |
(2,881,005) |
2,767,720 |
||
| Cash and cash equivalents, beginning of year |
10,909,547 |
6,569,495 |
||
| Cash and cash equivalents, end of year |
$ 8,028,542 |
$ 9,337,215 |
||
| Cash paid during the year for: |
||||
| Interest paid |
$ 181,636 |
$ 171,875 |
||
| Income taxes paid |
$ 164,143 |
$ 273,681 |
||
| Non-cash financing transactions: |
||||
| Property, plant and equipment and inventory injected by |
$ 3,137,995 |
$ - |
||
SOURCE China Shengda Packaging Group Inc.
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