Skystar Bio-Pharmaceutical Reports First Quarter 2012 Results
Revenue Increased 12% to $7.9 Million; Fully Diluted EPS of $0.26 for the Period; Conference Call to Be Held May 16, 2012 at 7:45 AM EDT
(firmenpresse) - XI'AN, CHINA -- (Marketwire) -- 05/16/12 -- (NASDAQ: SKBI) , a China-based manufacturer and distributor of veterinary medicines, vaccines, micro-organisms and feed additives, today reported unaudited first quarter fiscal year 2012 earnings, for the period ended March 31, 2012.
Revenue increases 12% YoY to $7.9 million
Veterinary vaccines totaled$0.75 million, up 150% YoY
Veterinary medicines totaled $3.0 million, decreasing 38% YoY
Feed additives totaled $1.0 million, up 217% YoY
Pro-biotic micro-organism products totaled $3.1 million, up 96% YoY
Gross Profit $4.3 million up 19% for the first three months of fiscal 2012 YoY
Gross Margin of 54% for the first three months of fiscal 2012, compared to 51% in the prior 2011 period
Net Income $1.9 million or $0.26 per fully diluted share, compared with $1.9 million or $0.27 per fully diluted share in the year ago period
Company reiterates Fiscal 2012 revenue guidance range of $53 million to $57 million
Mr. Weibing Lu, Chairman and Chief Executive Officer of Skystar, commented, "Management is pleased to announce a strong start for Skystar closing the first quarter of the new fiscal year on pace to meet fiscal guidance. While 2012 marks a transitional year for the Company, Skystar continues to internally fund infrastructure projects that will increase production capability, develop product pipeline internally in addition to expanding our distribution footprint across new markets. We believe these efforts will generate meaningful new sources of revenue and profit, ultimately maximizing shareholder value.
"As a veterinary pharmaceutical manufacturer in China, Skystar is subject to periodic examinations of its manufacturing facilities every five years. Our Huxian facility which manufactures veterinary medicine in addition to the completed extension which will produce animal vaccines are currently closed for GMP inspections. We expect recertification of the medicine manufacturing plant to be completed in the third quarter of 2012 and first time GMP examination for the vaccine facility to be completed in the second half of the fiscal year. To date, the Company has submitted all application materials necessary for the medicine plant's GMP re-certification which have already been accepted by the Ministry of Agriculture. We expect that Skystar's vaccine facility will complete its GMP certification process by the second half of 2012. Unlike 2011, much of the sweeping concerns in China for human food manufacturing and safety have largely been addressed in the prior year allowing the government to shift its focus to other areas of need such as certification of newly built medical product manufacturing facilities.
"We currently have two veterinary medications plants located in Huxian and Jingzhou with Huxian being our main facility. The Jingzhou plant completed its GMP re-examination in 2011 and resumed its partial production in the first quarter of 2012 and is now under way to resume its normal production. We plan to increase the production and sales of veterinary medications in the Jingzhou plant while the Huxian facility awaits GMP re-examination.
"With this said, Skystar continues to actively position itself for the growth of its infrastructure using cash generated from operating activities and other non-dilutive measures. This fiscal quarter's results are evidence that management can successfully implement strategic growth initiatives while maintaining profitability for shareholders," concluded Mr. Lu.
Skystar reported fiscal first quarter 2012 Revenues of $7,926,337, a 12% increase compared to the $7,086,954 in revenues reported for fiscal first quarter of 2011. Gross profit for first quarter 2012 was $4,282,679, up 19.1% from first quarter 2011. Gross profit margin for the period was 54.0% and in-line with historical year over year comparables.
The breakdown for Operating Expenses is as follows: Research and development costs totaled $3,654 for the three months ended March 31, 2012 as compared to $287,472 for the three months ended March 31, 2011, a decrease of $283,818 or 98.7%. The decrease was primarily due to no significant new R&D efforts undertaken during the first quarter of 2012. However, R&D is scheduled to ramp later in the fiscal year.
Selling expenses totaled $705,616 for the three months ended March 31, 2012 as compared to $369,404 for the three months ended March 31, 2011, an increase of $336,212 or 91.0%. This increase is primarily a result of significantly increased shipping and handling costs related to delivering our products to customers as we continued to expand our market to remote areas, and to rising oil price and continuing inflation pressure in China, which resulted in higher unit costs for transportation and delivery services. Shipping and handling costs totaled $383,703 and $194,216 for the three months ended March 31, 2012 and 2011, respectively, an increase of $189,487 or 97.6%. In addition, the increases in the sales forces and selling commission due to new sales incentive programs initiated later last year also contributed to the increase in selling costs. Selling salaries totaled $105,810 and $34,811 for the three months ended March 31, 2012 and 2011, respectively, an increase of $70,999 or 204.0%. Selling commission totaled $135,617 and $79,818 for the three months ended March 31, 2012 and 2011, respectively, an increase of $55,799 or 69.9%.
General and administrative expenses totaled $1,105,435 for the three months ended March 31, 2012 as compared to $1,294,798 for the three months ended March 31, 2011, a decrease of $189,363 or 14.6%. The decrease was mainly due to decreased amortization expenses, G&A travel and office expenses during the first quarter of 2012. The decrease in amortization expense was because the patent acquired through the acquisition of Jingzhou plant was fully amortized in 2011. Amortization expenses totaled $100,373 and $230,922 for the three months ended March 31, 2012 and 2011, respectively, a decrease of $130,549 or 56.5%. In addition, the decreases in the G&A travel and office expenses due to the Company's continued efforts to optimize cost control also contributed to the decrease in G&A costs in the first quarter. G&A travel costs totaled $16,215 and $120,372 for the three months ended March 31, 2012 and 2011, respectively, a decrease of $104,157 or 86.5%. G&A office expenses totaled $31,042 and $142,140 for the three months ended March 31, 2012 and 2011, respectively, a decrease of $111,098 or 78.2%. The increase in the audit costs of $99,480 in the first quarter of 2012 partially offset the impact of the cost reduction in other G&A items.
Income from operations: increased 50.1% to $2,467,974 for first quarter fiscal 2012 as compared to $1,643,934 in the comparable fiscal 2011 period.
Net income: remained flat, decreasing slightly by 1.4% year over year to $1,904,754 or $0.26 per fully diluted share, as compared to $1,931,832 or $0.27 per fully diluted share in the year ago period.
Financial position: as of March 31, 2012 Skystar had $9,386,584 in cash, current assets of $65,028,677 and total liabilities of $19,188,340, which resulted in a net working capital of $45,840,337.
Business outlook: The Company reiterates Fiscal year 2012 revenue guidance to be in the range of $53 million to $57 million for the full year.
NASDAQ listing compliance matter: On January 12, 2012, the Company received a staff determination from the Nasdaq Stock Market ("Exchange") indicating that since the Company did not hold its 2010 annual shareholder meeting by December 31, 2011, the Company was not in compliance with Nasdaq Listing Rule 5620(a) and (b) relating to the time frame of and proxy solicitation in connection with annual shareholder meetings and, therefore, the Exchange staff determined to initiate proceedings to delist the Company's securities from Nasdaq at the open of business on January 23, 2012. On April 27, 2012, the Company held its 2011 Annual Meeting of Shareholders. On May 1, 2012, the Exchange confirmed that the Company had met the requirements of the Panel's decision dated March 26, 2012, and was in compliance with all other applicable requirements for continued listing on Nasdaq. The matter is now closed.
A conference call will be held May 16, 2012 at 7:45 AM. The webcast will be made available on the investor relations section of the Skystar corporate website at or .
Telephone access to the conference call will be available in North America by dialing +1 (877) 407-8031 or internationally by dialing +1 (201) 689-8031.
An audio replay of the conference call will be available approximately two hours following the conclusion of the call and for the following 30 day period. To access the replay in North America, dial +1 (877) 660-6853 or, when calling internationally, dial +1 (201) 612-7415, using replay account code # 286 and conference ID # 393102. An archived replay of the conference webcast will also be available on investor relations section of the Skystar corporate website at .
To be added to the Company's email distribution for future news releases, please send your request to .
Skystar is a China-based developer and distributor of veterinary healthcare and medical care products. Skystar has four product lines (veterinary medicines, micro-organisms, vaccines and feed additives) and 287 products. Skystar has formed strategic sales distribution networks covering 29 provinces throughout China. For additional information, please visit .
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Certain of the statements made in the press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the use of forward-looking terminology such as "believe," "expect," "may," "will," "should," "project," "plan," "seek," "intend," or "anticipate" or the negative thereof or comparable terminology. Such statements typically involve risks and uncertainties and may include financial projections or information regarding the progress of new product development. Actual results could differ materially from the expectations reflected in such forward-looking statements as a result of a variety of factors, including the risks associated with the Company's ability to receive timely certification and related government approvals, effect of changing economic conditions in The People's Republic of China, variations in cash flow, reliance on collaborative retail partners and on new product development, variations in new product development, risks associated with rapid technological change, and the potential of introduced or undetected flaws and defects in products, and other risk factors detailed in reports filed with the Securities and Exchange Commission from time to time.
Scott Cramer
Director - Director Corporate Development and U.S. Representative
(407) 645-4433
Christopher Chu
(646) 284-9426
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Datum: 16.05.2012 - 09:00 Uhr
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News-ID 147041
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