Shengtai Pharmaceutical, Inc. Reports Third Quarter Fiscal Year 2013 Financial Results

WEIFANG, SHANDONG, China, May. 15, 2013 /PRNewswire/ -- Shengtai Pharmaceutical, Inc. (OTC Bulletin Board: SGTI) (''Shengtai'' or ''the Company'' or "We" or "Us" or "Our"), 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 three months ended March 31, 2013.

"We are glad to see the increase of sales revenue during the three months ended March 31, 2013 compared to the same period last year," stated Qingtai Liu, CEO of Shengtai.

Third Quarter Fiscal Year 2013 operations results

Net sales for the three months ended March 31, 2013 were $49,723,426, an increase of $9,919,818 or 24.92%, compared with $39,803,608 for the same period in2012. The increase in net sales primarily resulted from increased sales of cornstarch products and other products as well as from increased exports for the three months ended March 31, 2013, compared to the same period in 2012. Net sales from our glucose products decreased approximately 4.38%, while net sales from our cornstarch products and other products increased approximately 27.06% and 65.87%, respectively. For the three months ended March 31, 2013, the sales quantities of our glucose products decreased approximately 5.25%, while the sales quantities of our cornstarch products and other products increased 25.81% and 65.20%, respectively, as compared to the same period in 2012. The increase in sales quantity of cornstarch is due to a substantial increase of our slurry (liquid corn starch) sales, which increased approximately 6,331 tons or 192.98% for the three months ended March 31, 2013 compared to 3,281 tons for the same period last year. The increased sales of our cornstarch products are also caused by increased sales to an old customer and a new customer. The increased sales quantities of other products is primarily due to a substantial increase of our exports of protein powder and fiber. The sales of newly developed products (categorized under other products), including corn germ meal, glucose syrup and barley malt syrup also contributed to the increase. The total sales for these new products amounted $5,272,999 and $0 for the three months ended March 31, 2013 and 2012, respectively. In total, net sales from exports for the three months ended March 31, 2013 were $11,760,111, an increase of $5,154,966 or approximately 78.04%, compared with $6,605,145 for the same period in 2012. The increase is mainly attributable to the increased exports of glucose products to customers from Taiwan and Asian countries as well as to the new exports of corn germ meal mainly to Asian countries.

Cost of sales for the three months ended March 31, 2013 was $44,327,513, an increase of $9,956,314 or 28.97%, compared with $34,371,199 for the same period in 2012. The increase in cost of sales was in line with the increase in net sales.

Gross profit for the three months ended March 31, 2013 was $5,395,913, a decrease of $36,496 or 0.67%, compared with $5,432,409 for the same period in 2012. The decrease of gross profit is due to the increased cost of sales, offset by the increase in our net sales. Gross profit margin for the three months ended March 31, 2013 was 10.85%, a decrease of 2.80% as compared to the gross profit margin of 13.65% for the same period in 2012. The reason for the decrease of gross profit margin is mainly because the price of corn, our main raw material, increased approximately 4.10% for the three months ended March 31, 2013 compared to the same period last year whereas the average sales prices of glucose products, cornstarch products and other products did not increase as much as the increase of price of corn compared to the same period last year.

For the three months ended March 31, 2013, selling, general and administrative expenses were $3,908,568, an increase of $587,299 or 17.68%, compared to $3,321,269 for the three months ended March 31 2012. The increase of selling, general, and administrative expenses is caused by increased selling expenses in PRC, offset by decreased general and administrative in PRC. The selling, general and administrative expenses from our PRC operating entities was 3,844,986, an increase of $587,803 or 18.05% for the three months ended March 31, 2013 compared to $3,257,183 for the same period in 2012. The selling expenses from our PRC operating entities are $2,506,196, an increase of $716,887 or 40.07% in the three months ended March 31, 2013 compared to the same period in 2012. The increase in selling expenses is mainly attributable to the increase in shipping and handling expenses of $625,869 as a result of increased sales quantity. The general and administrative expenses incurred in PRC decreased $129,084, or 8.79% in the three months ended March 31, 2013 compared to $1,467,875 for the same period in 2012. The decrease of general and administrative expenses is mainly attributable to the decrease in bad debt reduction of $384,889.

Net income for the three months ended March 31, 2013 was $105,218, an increase of $6,965 or 7.09%, compared with net income of $98,253 for the same period in 2012. The increase in net income was primarily attributable to the decreased interest expenses of $764,190 and increased interest income of $25,071.

Financial Condition

As of March 31, 2013, Shengtai had cash and restricted cash totaling $4.82 million. The Company's short-term loan totaled $82.44 million and long-term debt totaled $0 million. The Company's total shareholders' equity increased to $64.28 million.

Management Comments

"Despite the decreased gross profit and decreased gross profit rate, the increased revenue showed us the increased demand for our products both domestically and internationally," commented Qingtai Liu, CEO of Shengtai. Looking forward, he stated, "We had increased our inventory to meet the increasing demand. We look forward to increasing our sales as well as monitoring our gross profit rate."

About Shengtai Pharmaceutical, Inc.

Shengtai Pharmaceutical, Inc. through its wholly owned subsidiary, Shengtai Holding, Inc., 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.

For more information, please contact:

Shengtai Pharmaceutical, Inc.
Ms. Yukie Ying Gao
Investor Relations Manager
Tel: +86-536-2188831
Email: [email protected]

SOURCE Shengtai Pharmaceutical, Inc.