Shiner International Announces Fourth Quarter and Fiscal 2011 Financial Results Revenues Up 29.4% from 2010

HAIKOU, China, March 31, 2012 /PRNewswire-Asia/ -- Shiner International, Inc. (Nasdaq: BEST) ("Shiner" or the "Company"), an emerging global supplier of packaging solutions for food, tobacco, and consumer products, today announced its financial results for the fourth quarter and fiscal year ended December 31, 2011.

Fiscal 2011 Financial Highlights

Revenues for fiscal 2011 increased 29.4% year-over-year to $75.3 million, up from $58.2 million in 2010.

Net income for 2011 decreased year-over-year to $1.7 million, compared to $4.2 million in 2010.

Gross profit for 2011 was $10.0 million, up 2.2% from $9.8 million in 2010.

Operating income and margin for 2011 were $2.0 million and 2.7%, respectively, compared to $4.6 and margin of 8.0% respectively in 2010.

Earnings per diluted share were $0.06 for the year, compared to earnings per diluted share of $0.17 in 2010.

The table below shows the percentage of revenue by each of our business segments for the years ended December 31, 2011 and 2010:

Fourth Quarter Financial Highlights

Revenues for the fourth quarter of fiscal 2011 increased 28.4% year-over-year to $22.9 million, up from $17.8 million in the fourth quarter of 2010.

Net income for the fourth quarter of 2011 decreased 119.9% year-over-year to $(0.3) million, compared to $1.4 million for the 2010 period.

Gross profit for the 2011 fourth quarter was $3.0 million, up 34.2% from $2.2 million in the same period last year. Gross margin for the fourth quarter of 2011 was 13.1% compared to 12.6% in 2010.

Operating income for the fourth quarter of 2011 was $(0.8) million, compared to $1.0 million for the comparable 2010 period.

Earnings per diluted share was $(0.02) for the fourth quarter of 2011, compared to earnings per diluted share of $0.04 in the same period a year ago.

Fiscal 2011 Revenue and Earnings

Shiner's revenue for the year ended December 31, 2011 increased 29.4% to $75.3 million compare to 2010. The increase in revenue was primarily caused by an increase in domestic product volume.  83.9%, or $63.2 million, of our sales in 2011 come from Chinese companies. Compared with 2010, 81.1%, or $47.2 million, of our sales were derived from domestically. The Company provides coated film to its largest customer which manufactures snack cakes and our remaining top three customers are tobacco manufacturers which use our BOPP tobacco film.

Internationally, we sell three lines of products: Advanced film (anti-counterfeit film), coated film, and color printing. International sales for 2011 were $12.1 million, or 16.1%, of our revenues in 2011 as compared to 11.0 million or 18.9% of revenue for 2010. The increase was not significant. All international sales are indirect using a network of distributors and converters.

Shiner's gross profit for 2011 was $10.0 million, a gross margin of 13.3%, a decrease of 3.6% from 16.9% for 2010. The decrease in gross margin was primarily a consequence of an increase in overhead unit rates as a result of increased labor costs, R& D expenses and depreciation of the new property.

Operating income for 2011 was $2.0 million compared to $4.6 in 2010. Selling, general and administrative ("SG&A") expenses increased by 54.3%, or $2.8 million, to $8.0 million for 2011 compared to $5.2 million in 2010.

Shiner reported net income of $1.7 million for fiscal 2011, compared to $4.2 million in the previous year. Earnings per share for the year were $0.06, compared to earnings of $0.17 per share for 2010. The decrease in our net income for 2011 compared to 2010 was mainly due to increased labor costs, R& D expenses, depreciation of the new property, no other income from a former landlord offset by an increase in subsidy income.

As of December 31, 2011, Shiner had $2.8 million in cash and cash equivalents on hand. On December 31, 2011, the Company had working capital of $7.7 million.

Fourth Quarter Revenue and Earnings

Shiner's revenue for the three months ended December 31, 2011 increased 28.4% to $22.9 million, up from $17.8 million from the same period in 2010. The year-over-year increase in revenue was attributable to higher sales volume in the Chinese market. Sales of BOPP tobacco film increased 214.0%, from $5.0 million in 2010 to $15.6 million in 2011.

International sales for the quarter ended December 31, 2011 accounted for 14.0% of Shiner's total revenues and totaled $3.2 million, up from $3.0 million for the same period in 2010. The year-over-year increase in revenue was attributable to the sales volume of coated film and advanced film to Vietnam.

Shiner's gross profit for the three months ended December 31, 2011 was $3.0 million, which represented a gross margin of 13.1%, up slightly from a margin of 12.6% for the three months ended December 31, 2010. The increase in gross margin resulted from an increase in price.

Income from operations was $(0.8) million for the fourth quarter, compared to $1.0 million for the same period in 2010. SG&A expenses increased 199%, or $2.5 million, to $3.8 million for the three months ended December 31, 2011, up from $1.3 million for the comparable period in 2010.

For the fourth quarter of fiscal 2011, Shiner reported net income of $(0.3) million, a decrease of 119.9% compared to net income of $1.4 million in the same period last year. Earnings per share for the quarter were $(0.02), compared to earnings of $0.04 per share for the fourth quarter of 2010. The decrease was mainly due to increased labor costs, depreciation of the new property, as well as a big increase in SG&A expenses.

Business Highlights

Mr. Qingtao Xing, Shiner's President and CEO, stated: "We achieved total revenue of $75.3 million in 2011, which increase 29.4% compare to last year, though the net income decreased. Sales revenue for BOPP tobacco film was $38.4 million, a significant increase compare to the same period of 2010. Meanwhile, revenues of advanced film in Southeast Asia have a big breakout, especially in Vietnam market our sales volume exceed 1,000 tons. With respect to coated film, we have attracted some multinational converters such as Marubeni acting as our regional agent to explore our market share through their sales channel and sales network."

Mr. Xing continued, "Our efforts to strengthen our R&D capability over the past 12 months have enabled us to benefit from product quality and brand reputation, which at last convert to company's core competitiveness and market shares. As a result, in 2011 our R&D expense increased a lot, our patents increase to 19 including a USA patent. We expect to generate more revenues and income through our strong R&D capability in 2012 and beyond".

Operations Outlook

Mr. Xing stated, "In 2012, we will continue to develop new market and expand our market share both in China and abroad with our efforts. We have entered into Philippines Inter-tabac Exhibition to attract more tobacco manufacturers and explore new market in March 2012. With additional 10,000-ton tobacco film production capability, we can provide higher quality product and better packaging solutions to satisfy our customers.＂

He continued, "By investing in our R&D's innovation and the high-end facility, we expect to achieve better operational performance and financial prospect in 2012."

About Shiner International, Inc.

Shiner International, Inc. is engaged in the research and development, manufacture and sale of flexible packaging material and advanced film. Its products include coated packaging film, shrink-wrap film, common packaging film, anti-counterfeit laser holographic film and color-printed packaging materials. The Company's products are used by manufacturers in the food and consumer products industry to preserve the texture, flavor, hygiene, and convenience and safety of their products. The Company was founded in 1990 and is headquartered in Haikou, China.

Approximately 80% of Shiner's current customers are located in China, with the remainder spanning Southeast Asia, Europe, the Middle East and North America. Shiner holds 19 patents on products and production equipment, and has an additional 10 patent applications pending. The Company's flexible packaging meets U.S. FDA requirements, as well as the requirements for food packaging sold in the EU. Shiner's product manufacturing process is certified under ISO 9001:2000. Additional information on Shiner is available at http://www.shinerinc.com.

Safe Harbor Statement

All statements in this press release that are not historical are forward- looking statements made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on any forward-looking statements in this press release as they reflect Shiner International, Inc.'s current expectations with respect to future events and are subject to risks and uncertainties that may cause actual results to differ materially from those contemplated. Potential risks and uncertainties include, but are not limited to, the risks described in Shiner's filings with the Securities and Exchange Commission. The information contained in this press release is made as of the date of the press release, even if subsequently made available by Shiner on its website or otherwise

Contact:

Cindy Gong
Tel: 86-898-6858 1104
Fax: 86-898-6858 1513
Email: [email protected]; [email protected]
Web: http://www.shinerinc.com

SOURCE Shiner International, Inc.

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