SGTI: PE under 10 for FY 2007 +43.5% Revenues . And so did the profit (excluding a special profit) about the same rate.
Shengtai Pharmaceutical, Inc. Reports Record 2007 Annual Results
FRIDAY, SEPTEMBER 28, 2007 5:40 PM
- PR Newswire
WEIFANG, China, Sept 28, 2007 /Xinhua-PRNewswire-FirstCall via COMTEX/ -- Shengtai Pharmaceutical, Inc. (SGTI) ("Shengtai Pharmaceutical" or "the Company"), a leading manufacturer and distributor of high-quality, pharmaceutical grade glucose products in China and glucose and starch products that serve as raw materials for food, beverage and industrial production, today reported record annual financial results ended June 30, 2007.
Fiscal Year 2007 Highlights
-- Net sales increased 43.5% to $51.7 million
-- Gross profit rose 43.9% to $12.2 million
-- Gross profit margin was 23.6%
-- Operating income increased 62.1% to $7.5 million
-- Net income increased 69.8% to $7.1 million
-- Fully diluted EPS was $0.62 versus $0.42
Fiscal Year 2007 Results
For the fiscal year 2007, net revenues increased 43.5% to $51.7 million from $36.0 million in fiscal 2006. This increase was largely due to strong sales of glucose and cornstarch products, as well as higher product selling prices. In addition, the Company's new cornstarch plant began production in 2007, maximizing the production of its glucose manufacturing facility and the sale of additional cornstarch to outside customers.
"Our 2007 fiscal year was a record for Shengtai Pharmaceutical. We will continue to identify and pursue innovative products and technology to our increase market share and optimize our cost structure," said Chief Financial Officer Philips Zhang. "Our ability to meet increased customer demand and remain profitable will however, still depend on factors such as our production capacity and working capital."
Gross profit in fiscal year 2007 was $12.2 million, an increase of 43.9% from $8.5 million a year ago. Gross profit margin for the year ended June 30, 2007 was 23.6%, a slight improvement from 2006. Shengtai Pharmaceutical produced some new products with higher profit margins, which was offset by rising sales of lower gross margin cornstarch to customers.
Selling, general and administrative expenses for the year ended June 30, 2007 was $4.7 million, an increase of $0.8 million, or 22% compared with the corresponding period in 2006. The increase in selling, general and administrative expenses was the result of the expansion of the Company's domestic sales network, higher worker insurance requirements and environmental related expenditures.
The Company achieved higher operating leverage for the year. Operating income in fiscal year 2007 increased 62.1% to $7.5 million from $4.6 million in prior year. Operating margin during fiscal 2007 was 14.5% in 2006, up from 12.9% a year ago.
Net income for the year ended June 30, 2007 was $7.1 million, an increase of $2.9, or 69.8% compared with 2006. The increase in net income was due to higher production levels, sales volumes, as well as a net gain of approximately $1.3 million derived from both the gain of surrendering its land use rights for property in downtown Changle to the local government and the loss of fixed assets' early retirement. Diluted weighted average earnings per share were $0.62 for fiscal year of 2007, which compared to $0.42 in fiscal year of 2006.
As of June 30, 2007, Shengtai Pharmaceutical had cash and restricted cash of $12.0 million and working capital of $(7.2) million. In fiscal 2007, the Company generated $5.1 million in cash flow from operations. At June 30, 2007, the Company had $42.1 million in total debt, and $31.6 million of shareholders' equity.
Shengtai Pharmaceutical's market share in the PRC for pharmaceutical grade glucose products, especially dextrose monohydrate, has increased. Dextrose monohydrate is widely used for restorative and nutritional purposes, as well as for transfusions and intravenous drips. The company's newly established cornstarch production facility with annual capacity to produce 240,000 tons is close to the existing glucose production plant. This allows the company to produce its own cornstarch, replacing other suppliers, reduces shipping costs, and resulting in lower manufacturing costs. The research and development team has been very active to improve production techniques, and to develop new technologies and higher value-added products such as sodium gluconate and Avermectins, which have higher profit margins.
After acquiring the rights to use 85,880 square meters of new land in Changle Economic and Technology Development Zone in April 2007, Shengtai Pharmaceutical planned to develop the land and build a new glucose production complex with an expected production capacity of 150,000 tons per year. The Company commenced construction in early July 2007 and expects construction to be completed in the first half of calendar year 2008. "Nevertheless, among our total 253,746 square meters of land, approximately only 60% is being utilized, leaving room for future expansion," said Mr. Zhang.
"The 2008 fiscal year presents tremendous opportunities for Shengtai Pharmaceutical, as we expect higher living standards, rising purchasing power, public awareness of quality health care products will continue to lead to higher consumption of pharmaceutical dextrose," said Mr. Zhang. "We believe that through manufacturing innovative products to meet market demand, we would be able to command higher profit margins and diversify our operating risks."
About Shengtai Pharmaceutical, Inc.
Shengtai Pharmaceutical, Inc. through its wholly-owned subsidiary Shengtai Holding, Inc. (SHI), a New Jersey corporation, and the holding company for Weifang Shengtai Pharmaceutical Co., Ltd., is a leading manufacturer and supplier of glucose products, which include pharmaceutical grade glucose used for medical purposes, and glucose and cornstarch products for the food and beverage industry and for industrial production in China. For more information about Shengtai Pharmaceutical, Inc. please visit http://www.chinaglucose.com