HAIKOU, China, May 13 /PRNewswire-Asia/ -- Shiner International, Inc. (Nasdaq: BEST), an emerging global supplier of anti-counterfeiting and advanced packaging products, today announced financial results for the quarter ended March 31, 2010.
Financial Summary
First Quarter Results
-- Earnings per share of $0.04 for the quarter, unchanged from the prior
quarter, and up from $(0.01) in the 2009 first quarter.
-- Total revenue increased 63.9% in the first quarter from $7.1 million in
2009 to $11.6 million for the first quarter of 2010.
-- Net income of $0.92 million, compared to a net loss of $0.28 million in
the first quarter of 2009.
The following table sets forth the markets and the percentage of packaging film revenue for each market for the quarter ended March 31, 2010 and 2009, respectively:
Percent of Total Revenue
For the Quarter Ended
March 31,
2010 2009
BOPP based film 35.7% 47.4%
Coated film 40.3% 27.7%
Anti-counterfeiting film 18.0% 17.1%
Color printed packaging 6.0% 7.8%
Revenues and Earnings
Shiner's revenue for the three months ended March 31, 2010 increased 7.5% on a sequential basis from the quarter ended December 31, 2009, and increased 63.9% when compared to the same period in 2009. The quarter to quarter increases in revenue related directly to increases in sales in two of Shiner's main business lines, including a 138% increase in coated film sales from $2.0 million for the first quarter 2009 compared to $4.7 million in the quarter ended March 31, 2010. Anti-counterfeit film sales increased 73% to $2.1 million from the comparable period a year ago of $1.2 million. Revenue from BOPP tobacco film sales was $4.1 million for the quarter ended March 31, 2010, an increase of 23% from the same period one year ago. Revenue from color printing increased 25% to $0.7 million in the first quarter in 2010 from $0.5 million from the comparable period in 2009.
The table below shows a product breakdown of 1st quarter 2010 consolidated net sales (in millions) based on product and percentage variances from 2009:
Net % % %
Product Sales Change Change Change
Q1 FY Q1 FY in in
2010 2009 Volume Price
BOPP Tobacco Film 4.1 23 14 2
Coated Film 4.7 138 166 (11)
Anti-Counterfeit 2.1 73 50 47
Color Printing 0.7 25 25 --
The table below shows a product breakdown of the quarter ended March 31, 2010 domestic sales (in millions) based on product and percentage variances from 2009:
Net % % %
Product Sales Change Change Change
Q1 FY Q1 FY in in
2010 2009 Volume Price
BOPP Tobacco Film 4.1 23 14 2
Coated Film 3.8 254 291 9
Anti-Counterfeit 0.7 818 523 44
Color Printing 0.6 13 13 --
International sales for the quarter ended March 31, 2010 totaled $2.4 million and accounted for 20% of Shiner's total revenues in comparison to $1.8 million, or 25%, for the comparable period in 2009. A 29.6% or, $0.5 million, increase in international sales was primarily due to a 49% increase in
anti-counterfeit film sales.
The table below shows a product breakdown of the first quarter 2010 international sales (in millions, based on product and percentage variances from 2009:
Net % % %
Product Sales Change Change Change
Q1 FY Q1 FY in in
2010 2009 Volume Price
Coated Film 0.9 2 (9) 12
Anti-Counterfeit 1.4 49 40 7
Color Printing 0.1 -- -- --
Cost of goods sold increased 4.7% on a sequential basis from the quarter ended December 31, 2009, and increased $ 3.1 million or 47%, from $6.6 million in the first quarter of 2009 to $9.7 million in the first quarter of 2010. Cost of goods sold represented 84% and 93% of our total revenue in the quarter ended March 31, 2010 and 2009, respectively.
Our gross profit for the quarter ended March 31, 2010 was about $ 1.9 million, which represented a gross margin of 16.3% and an increase of 143% from a gross margin of 6.7% for the quarter ended March 31, 2009. The increase in gross margin was a direct consequence of an increase in the selling prices of our products, a decrease in overhead unit rates as a result of increased production volume, and lower raw material prices.
Our selling, general and administrative expenses increased by about 5.4% to $845,142 for the quarter ended March 31, 2010 compared to $801,769 for the comparable period in 2009.
Income from operations was $1.0 million for the 2010 first quarter compared to a $0.3 million loss in the same period of the prior year.
For the first quarter of fiscal 2010, Shiner reported net income of $0.9 million which compared to a net loss of $0.3 million in the same period of the prior year. Earnings per share were $0.04 for the first quarter of fiscal 2010 compared to an adjusted net loss of $0.01 for the first quarter of fiscal 2009. The improvement reflects significantly higher sales volume, increased manufacturing capacity utilization, higher selling prices, and lower raw material costs. The company's productivity and cost-cutting actions are essentially tracking according to plan.
At March 31, 2010, we had $1.8 million in cash and cash equivalents on hand. On March 31, 2010, we had five short-term loans outstanding for a total of $3.2 million and we had working capital of $11.6 million, an increase of $225,573 from December 31, 2009.
Management Comments
Mr. Qingtao Xing, Shiner's C.E.O., commented, "We are encouraged by the continued positive trends in revenue in the first quarter; our gross profit was positively impacted by improved product mix toward our higher margin products, anti counterfeit and coated film. The improvement reflects significantly higher sales volume, increased manufacturing capacity utilization, higher realized sales prices, lower raw material costs, and partly offset by fixed cost increases for growth investments. The company's productivity and cost-cutting actions are essentially tracking according to plan. Since the implementation of the Food Safety Law (FSL) in June 2009, we are experiencing an increase of inquiries from food manufacturers. This interest affects our entire breadth of products and we are confident this will lead to an overall improvement in our business. Our Hainan manufacturing facility will be completed in June 2010 and is expected to be fully operational in October. We have purchased a new BOPP line at the cost of approximately $13,200,000. The equipment is expected to be delivered early in the first quarter of 2011, installed in the latter part of the first quarter of 2011 and operational in the second quarter of 2011. With the completion of this facility and the increase in our manufacturing capacity, Shiner will be well positioned to be the prime beneficiary of increased domestic consumption, a growing world economy, and increased market penetration through the recently enacted FSL. We believe that Shiner will continue to improve its revenue and net income and provide significant value to our shareholders."
About Shiner International, Inc.
Shiner International is engaged in the research and development, manufacture and sale of flexible packaging material. Products include coated packaging film, shrink-wrap film, common packaging film, anti-counterfeit laser holographic film and color-printed packaging materials. The Company's flexible packaging products are used by manufacturers in the food and consumer products industry to preserve texture, flavor, hygiene, and convenience and safety of their products. The Company was founded in 1990 and is headquartered in Haikou China.
Approximately 69% percent of Shiner's current customers are located in China with the remainder spanning Southeast Asia, Europe, the Middle East and North America. Shiner holds 15 patents on products and production equipment, and has an additional eight patent applications pending. The Company's flexible packaging meets the approval of U.S. FDA requirements, as well as those required for food packaging sold in the EU. Shiner's product manufacturing process is certified under ISO 9001:2000. Additional information on Shiner International is available at http://www.shinerinc.com .
Safe Harbor Statements
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.
SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2010 2009
(unaudited)
ASSETS
CURRENT ASSETS:
Cash & cash equivalents $1,824,128 $3,059,796
Restricted cash -- 733,455
Accounts receivable, net of
allowance for doubtful accounts
of $353,574 and $252,008 7,206,442 6,405,741
Advances to suppliers 4,150,784 3,192,211
Notes receivable 293,400 88,311
Inventory, net 10,143,905 8,320,624
Prepaid expenses & other current
assets 515,617 299,694
Total current assets 24,134,276 22,099,832
Property and equipment, net 11,788,007 12,163,693
Construction in progress 7,653,731 6,582,805
Intangible assets, net 347,752 349,491
TOTAL ASSETS $43,923,766 $41,195,821
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $4,381,934 $2,667,835
Other payables 4,515,477 4,487,587
Unearned revenue 310,370 234,543
Accrued payroll 129,881 138,826
Short term loan 3,227,400 3,227,400
Total current liabilities 12,565,062 10,756,191
Commitments and contingencies
STOCKHOLDERS' EQUITY:
Common stock, par value $0.001;
75,000,000 shares authorized,
24,650,000 shares issued and
24,588,155 shares outstanding
at March 31, 2010 and December
31, 2009, respectively 24,650 24,650
Additional paid-in capital 11,396,074 11,389,756
Treasury stock (61,845 shares) (58,036) (58,036)
Other comprehensive income 2,970,740 2,980,077
Statutory reserve 2,888,318 2,872,856
Retained earnings 14,136,958 13,230,327
Total stockholders' equity 31,358,704 30,439,630
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $43,923,766 $41,195,821
SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE
INCOME (LOSS) FOR THE THREE MONTHS ENDED MARCH 31,
2010 2009
(unaudited) (unaudited)
Net Revenue $11,586,719 $7,070,408
Cost of Revenue 9,699,466 6,598,923
Gross profit 1,887,253 471,485
Operating expenses
Selling expenses 403,770 277,851
General and administrative expenses 441,372 523,918
Total operating expenses 845,142 801,769
Income (loss) from operations 1,042,111 (330,284)
Non-operating income (expense):
Other income (expense), net 45,129 10,873
Subsidy income 41,062 --
Interest income 2,286 7,106
Interest expense (42,829) (46,049)
Exchange gain (loss) (7,461) 1,458
Total non-operating income
(expense) 38,187 (26,612)
Income before income tax 1,080,298 (356,896)
Income tax (benefit) expense 158,205 (81,883)
Net income (loss) 922,093 (275,013)
Other comprehensive income
Foreign currency translation gain (9,337) (41,649)
Comprehensive Income (Loss) $912,756 $(316,662)
Weighted average shares outstanding:
Basic 24,588,155 24,650,000
Diluted 24,598,358 24,650,000
Earnings per share:
Basic $0.04 $(0.01)
Diluted $0.04 $(0.01)
SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2010
Additional
Common Stock Paid in Treasury
Shares Amount Capital Stock
Balance, December 31, 2008 24,650,000 24,650 11,214,071 --
Stock compensation expense for
options issued to directors -- -- 175,685 --
Purchase of 61,845 treasury
shares -- -- -- (58,036)
Foreign currency translation gain -- -- -- --
Net loss -- -- -- --
Transfer to statutory reserve -- -- -- --
Balance, December 31, 2009 24,650,000 24,650 11,389,756 (58,036)
Stock compensation expense for
options issued to directors -- -- 6,318 --
Foreign currency translation gain -- -- -- --
Net income -- -- -- --
Transfer to statutory reserve -- -- -- --
Balance, March 31, 2010
(unaudited) 24,650,000 24,650 11,396,074 (58,036)
SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2010
Other Total
Comprehensive Statutory Retained Stockholders'
Income Reserve Earnings Equity
Balance, December 31, 2008 2,977,847 2,854,686 13,348,298 30,419,552
Stock compensation expense
for options issued to
directors -- -- -- 175,685
Purchase of 61,845 treasury
shares -- -- -- (58,036)
Foreign currency translation
gain 2,230 -- -- 2,230
Net loss -- -- (99,801) (99,801)
Transfer to statutory
reserve -- 18,170 (18,170) --
Balance, December 31, 2009 2,980,077 2,872,856 13,230,327 30,439,630
Stock compensation expense
for options issued to
directors -- -- -- 6,318
Foreign currency translation
gain (9,337) -- -- (9,337)
Net income -- -- 922,093 922,093
Transfer to statutory
reserve -- 15,462 (15,462) --
Balance, March 31, 2010
(unaudited) 2,970,740 2,888,318 14,136,958 31,358,704
SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31,
2010 2009
(unaudited) (unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $922,093 $(275,013)
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities:
Depreciation 395,917 412,045
Amortization 31,819 1,737
Stock compensation expense for
options issued to directors 6,318 39,892
(Increase) / decrease in assets:
Accounts receivable (829,991) 1,008,690
Inventory (1,822,659) 383,870
Advances to suppliers (958,247) (68,470)
Notes receivable (205,019) (648,788)
Other assets (186,285) (487,507)
Increase / (decrease) in current
liabilities:
Accounts payable 1,713,513 88,203
Unearned revenue 75,803 180,826
Other payables 27,353 37,350
Accrued payroll (8,941) 9,573
Net cash provided by (used in)
operating activities (838,326) 682,408
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property and
equipment (50,441) (147,208)
Payments for construction in
progress (1,079,695) (401,973)
Decrease in restricted cash 733,205 341,080
Net cash used in investing
activities (396,931) (208,101)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of short-term loans -- (399,976)
Net cash used in financing
activities -- (399,976)
Effect of exchange rate changes on
cash and cash equivalents (411) (4,944)
NET INCREASE (DECREASE) IN CASH &
CASH EQUIVALENTS (1,235,668) 69,387
CASH & CASH EQUIVALENTS, BEGINNING
BALANCE 3,059,796 3,816,454
CASH & CASH EQUIVALENTS, ENDING
BALANCE $1,824,128 $3,885,841
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Interest paid $42,829 $44,978
Income taxes paid $114,900 $14,807
