China Shengda Packaging Group Inc. Reports Second Quarter 2015 Financial Results
HANGZHOU, China, Aug. 14, 2015 /PRNewswire-FirstCall/ -- China Shengda Packaging Group Inc. (NASDAQ: CPGI) ("Shengda" or the "Company"), a leading Chinese paper packaging company, today reported its financial results for the second quarter ended June 30, 2015.
Second Quarter 2015 Financial Highlights:
| | • | Overall revenues increased by $2.5 million, or 6.6%, to $39.7 million for the second quarter of 2015 from $37.2 million for the same period of last year. The increase in revenues was mainly driven by increase in sales volumes and partially offset by decrease in average selling prices for both paper cartons and corrugating medium paper. Average selling price for flexo paper cartons was particularly weak during the second quarter of 2015. |
| | • | Gross profit decreased by $1.2 million, or 17.9%, to $5.3 million for the second quarter of 2015 from $6.5 million for the same period of last year. Gross margin decreased by 4 points to 13.4% for the second quarter of 2015 from 17.4% for the same period of last year. |
| | • | Operating loss was $0.05 million for the second quarter of 2015, compared to net income of $1.7 million for the same period of last year. |
| | • | Net income attributable to the Company's stockholders decreased by $1.0 million, or 88.3%, to approximately $0.1 million for the second quarter of 2015 from $1.1 million for the same period of last year. |
| | • | Basic and diluted earnings per share were $0.02 for the second quarter of 2015, compared to $0.14 for the same period of last year. |
Three Months Ended June 30, 2015 Results
| | | Three Months | | | Three Months | |
| | | Ended June 30, | | | Ended June 30, | |
| Sales Analysis (Millions) | | 2015 | | | 2014 | |
| Revenues– Paper Cartons (millions) | $ | 29.8 | | $ | 29.9 | |
| Revenues– Corrugating Medium Paper (millions) | $ | 13.3 | | $ | 10.7 | |
| Revenues– Inter-segment Transactions Elimination (millions) | | ($3.4 | ) | | ($3.4 | ) |
| Color Cartons (% of total revenues) | | 22.8% | | | 24.3% | |
| Flexo Cartons (% of total revenues) | | 52.2% | | | 56.0% | |
| Paper Cartons Sales Volume (M sq meters) | | 95.4 | | | 77.3 | |
| Corrugating Medium Paper Sales Volume ('000 tons) | | 37.8 | | | 30.1 | |
| Color Cartons (avg price per sq meter) | $ | 0.39 | | $ | 0.39 | |
| Flexo Cartons (avg price per sq meter) | $ | 0.29 | | $ | 0.38 | |
| Corrugating Medium Paper (avg price per ton) | $ | 352 | | $ | 356 | |
| | | Three Months | | | Three Months | |
| | | Ended June 30, | | | Ended June 30, | |
| Summary Results (Millions) | | 2015 | | | 2014 | |
| Revenues | $ | 39.7 | | $ | 37.2 | |
| Gross Profit | $ | 5.3 | | $ | 6.5 | |
| Gross Margin (%) | | 13.4% | | | 17.4% | |
| Operating Expenses | $ | 5.4 | | $ | 4.8 | |
| Operating Income (Loss) | | ($0.0 | ) | $ | 1.7 | |
| Operating (Loss) Margin (%) | | 0.1% | | | 4.6% | |
| Net Income Attributable to Stockholders | $ | 0.1 | | $ | 1.1 | |
| EPS - Basic & Diluted | $ | 0.02 | | $ | 0.14 | |
| Weighted Average Shares Outstanding | | 7.8 | | | 7.8 | |
Total revenues for the second quarter of 2015 increased by $2.5 million, or 6.6%, to $39.7 million from $37.2 million for the same period of last year, primarily driven by increases in sales volume of both paper cartons and other paper products and corrugating medium paper, partially offset by decreases in average selling prices of flexo cartons and corrugating medium paper. Average selling price of flexo cartons was particularly weak, decreasing from $0.38 per square meter for the second quarter of last year to $0.29 per square meter for the second quarter of 2015.
Revenues of paper cartons and other paper products decreased by $0.1 million, or 0.3%, to $29.8 million for the second quarter of 2015 from $29.9 million for the same period of last year. Sales volume of paper cartons increased by 18.1 million square meters, or 23.4%, to 95.4 million square meters for the second quarter of 2015 from 77.3 million square meters for the same period of last year while the average price of paper cartons and other paper products decreased to $0.31 per square meter for the second quarter of 2015 from $0.39 per square meter for the same period of last year. The increase in sale volume of paper cartons and other paper products was mainly contributed by Shengda Zhongtian and Shengda Concept that started their operations in the first quarter of 2015. Color and flexo cartons accounted for 22.8% and 52.2% of total revenues for the second quarter of 2015, compared to 24.3% and 56.0%, respectively, for the same period of last year. Average sales prices per square meter for color and flexo cartons were approximately $0.39 and $0.29, respectively, for the second quarter of 2015, compared to approximately $0.39 and $0.38, respectively, for the same period of last year. Consumer and industrial goods manufacturing sectors remained the Company's principal markets. Major customers remained home appliances & electronics manufacturers, and food, beverage & cigarette manufacturers in the Yangtze River Delta Region, which accounted for 18.1% and 22.3%, respectively, of total revenues for the second quarter of 2015, compared to 21.0% and 19.1%, respectively, for the same period of last year.
Revenues of corrugating medium paper increased by $2.6 million, or 23.8%, to $13.3 million for the second quarter of 2015, from $10.7 million for the same period of last year. The increase was mainly resulted from increase in sales volume and partially offset by decrease in average selling price. Sales volume and average selling price of corrugating medium paper were approximately 37.8 thousand tons and $352 per ton, respectively, for the second quarter of 2015, compared to 30.1 thousand tons and $356 per ton, respectively, for the same period of last year.
Overall gross profit decreased by $1.2 million, or $ 17.9%, to $5.3 million for the second quarter of 2015 from $6.5 million for the same period of last year, as a result of increased cost of goods sold for both paper cartons and other paper products and corrugating medium paper. Gross profit of paper cartons and other paper products decreased by $0.8 million, or 13.4%, to $5.8 million for the second quarter of 2015 from $6.6 million for the same period of last year. Gross profit of color and flexo cartons were $1.9 million and $3.9 million, respectively, for the second quarter of 2015, compared to $2.1 million and $4.5 million, respectively, for the same period of last year. Gross loss of corrugating medium paper was $0.4 million for the second quarter of 2015, compared to $0.1 million for the same period of last year. Overall gross margin decreased by 4 points to 13.4% for the second quarter of 2015 from 17.4% for the same period of last year. Gross margins for paper cartons and other paper products and corrugating medium paper were 19.3% and negative 3.2%, respectively, for the second quarter of 2015, compared to 22.2% and negative 1.4%, respectively, for the same period of last year.
Selling expenses decreased by 0.1 million, or 5.6%, to $1.5 million for the second quarter of 2015, from $1.6 million for the same period of last year. As a percentage of revenues, selling expenses decreased to 3.8% for the second quarter of 2015 from 4.3% for the same period of last year.
General and administrative expenses increased by $0.7 million, or 24.3%, to $3.9 million for the second quarter of 2015 from $3.2 million for the same period of last year. This increase was mainly due to the increase in staff costs, which include salary, benefits, social insurance and other relevant staff expenses. As a percentage of revenues, general and administrative expenses increased to 9.9% for the second quarter of 2015 from 8.5% for the same period of last year.
As a result of the forgoing, operating loss was $0.05 million for the second quarter of 2015, compared to operating income of $1.7 million for the same period of last year. Operating loss margin was 0.1% for the second quarter of 2015, compared to operating profit margin of 4.6% for the same period of last year.
Net income attributable to the Company's common stockholders decreased by approximately $1.0 million, or 88.3%, to $0.1 million for the second quarter of 2015, from $1.1 million for the same period of last year. Basic and diluted earnings per share were $0.02 for the second quarter of 2015, compared to $0.14 for the same period of last year.
Six Months Ended June 30, 2015 Results
| | | Six Months | | | Six Months | |
| | | Ended June 30, | | | Ended June 30, | |
| Sales Analysis (Millions) | | 2015 | | | 2014 | |
| Revenues– Paper Cartons (millions) | $ | 60.8 | | $ | 56.0 | |
| Revenues– Corrugating Medium Paper(millions) | $ | 21.8 | | $ | 20.1 | |
| Revenues– Inter-segment Transactions Elimination (millions) | $ | (4.9 | ) | $ | (6.6 | ) |
| Color Cartons (% of total revenues) | | 22.5% | | | 24.8% | |
| Flexo Cartons (% of total revenues) | | 55.8% | | | 55.8% | |
| Paper Cartons Sales Volume (M sq meters) | | 183.1 | | | 145.3 | |
| Corrugating Medium Paper Sales Volume ('000 tons) | | 62.1 | | | 55.5 | |
| Color Cartons (average price per sq meter) | $ | 0.39 | | $ | 0.39 | |
| Flexo Cartons (average price per sq meter) | $ | 0.31 | | $ | 0.38 | |
| Corrugating Medium Paper (average price per ton) | $ | 351 | | $ | 362 | |
| | | Six Months | | | Six Months | |
| | | Ended June 30, | | | Ended June 30, | |
| Summary Results (Millions) | | 2015 | | | 2014 | |
| Revenues | $ | 77.6 | | $ | 69.5 | |
| Gross Profit | $ | 10.3 | | $ | 10.6 | |
| Gross Margin (%) | | 13.3% | | | 15.3% | |
| Operating Expenses | $ | 10.5 | | $ | 10.1 | |
| Operating Income (Loss) | | ($0.1 | ) | $ | 0.5 | |
| Operating (Loss) Margin (%) | | (0.2% | ) | | 0.7% | |
| Net Income Attributable to Stockholders | $ | 0.1 | | $ | 0.5 | |
| EPS - Basic & Diluted | $ | 0.01 | | $ | 0.07 | |
| Weighted Average Shares Outstanding | | 7.8 | | | 7.8 | |
Total revenues for the six months ended June 30, 2015 increased by $8.1million, or 11.7%, to $77.6 million from $69.5 million for the same period of last year, primarily driven by increases in sales volume of both paper cartons and other paper products and corrugating medium paper, partially offset by decreases in average selling prices of flexo cartons and corrugating medium paper.
Revenues of paper cartons and other paper products increased by $4.8 million, or 8.5%, to $60.8 million for the six months ended June 30, 2015 from $56.0 million for the same period of last year. Sales volume of paper cartons and other paper products increased by 37.8 million square meters, or 26.0%, to 183.1 million square meters for the six months ended June 30, 2015 from 145.3 million square meters for the same period of last year while the average price of paper cartons and other paper products decreased to $0.33 per square meter for the six months ended June 30, 2015 from $0.39 per square meter for the same period of last year. The increase in sale volume of paper cartons and other paper products was mainly contributed by Shengda Zhongtian and Shengda Concept that started their operations in the first quarter of 2015. Color and flexo cartons accounted for 22.5% and 55.8% of total revenues for the six months ended June 30, 2015, compared to 24.8% and 55.8%, respectively, for the same period of last year. Average sales prices per square meter for color and flexo cartons were approximately $0.39 and $0.31, respectively, for the six months ended June 30, 2015, compared to approximately $0.39 and $0.38, respectively, for the same period of last year. Consumer and industrial goods manufacturing sectors remained the Company's principal markets. Major customers remained home appliances & electronics manufacturers, and food, beverage & cigarette manufacturers in the Yangtze River Delta Region, which accounted for 18.8% and 22.0%, respectively, of total revenues for the six months ended June 30, 2015, compared to 21.5% and 20.0%, respectively, for the same period of last year.
Revenues of corrugating medium paper increased by $1.7 million, or 8.5%, to $21.8 million for the six months ended June 30, 2015, from $20.1 million for the same period of last year. The increase was mainly resulted from increase in the sales volume and partially offset by decrease in average selling prices. Sales volume and average selling price of corrugating medium paper were approximately 62.1 thousand tons and $351 per ton, respectively, for the six months ended June 30, 2015, compared to 55.5 thousand tons and $362 per ton, respectively, for the same period of last year.
Overall gross profit decreased by $0.3 million, or $ 2.8%, to $10.3 million for the six months ended June 30, 2015 from $10.6 million for the same period of last year, as a result of increased cost of goods sold for both paper cartons and other paper products and corrugating medium paper. Gross profit of paper cartons and other paper products decreased by $0.5 million, or 4.1%, to $11.6 million for the six months ended June 30, 2015 from $12.1 million for the same period of last year. Gross profit of color and flexo cartons were $3.6 million and $8.0 million, respectively, for the six months ended June 30, 2015, compared to $3.9 million and $8.2 million, respectively, for the same period of last year. Gross loss of corrugating medium paper was $1.2 million for the six months ended June 30, 2015, down from $1.4 million for the same period of last year. Overall gross margin decreased by 2 points to 13.3% for the six months ended June 30, 2015 from 15.3% for the same period of last year. Gross margins for paper cartons and other paper products and corrugating medium paper were 19.0% and negative 5.6%, respectively, for the six months ended June 30, 2015, compared to 21.5% and negative 7.1%, respectively, for the same period of last year.
Selling expenses decreased by 0.1 million, or 2.0%, to $3.4 million for the six months ended June 30, 2015, from $3.5 million for the same period of last year. As a percentage of revenues, selling expenses decreased to 4.4% for the six months ended June 30, 2015 from 5.0% for the same period of last year.
General and administrative expenses increased by $1.2 million, or 19.1%, to $7.2 million for the six months ended June 30, 2015 from $6.0 million for the same period of last year. This increase was mainly due to the increase in staff costs, which include salary, benefits, social insurance and other relevant staff expenses. As a percentage of revenues, general and administrative expenses increased to 9.2% for the second quarter of 2015 from 8.6% for the same period of last year.
As a result of the forgoing, operating loss was $0.1 million for the six months ended June 30, 2015, compared to operating income of $0.5 million for the same period of last year. Operating loss margin was 0.2% for the six months ended June 30, 2015, compared to operating income margin of 0.7% for the same period of last year.
Net income attributable to the Company's common stockholders decreased by approximately $0.4 million, or 88.5%, to $0.1 million for the six months ended June 30, 2015, from $0.5 million for the same period of last year. Basic and diluted earnings per share were $0.01 for the six months ended June 30, 2015, compared to $0.07 for the same period of last year.
Financial Condition
As of June 30, 2015, the Company had cash and cash equivalents of $10.7 million and restricted cash of $12.7 million, compared to $10.9 million and $13.8 million, respectively, at December 31, 2014. Working capital was $25.6 million as of June 30, 2015, compared to $30.7 million at December 31, 2014. Total equity for stockholders of Shengda was $114.2 million as of June 30, 2015, compared to $113.0 million at December 31, 2014.
Net cash used in operating activities was $3.8 million for the six months ended June 30, 2015, compared to net cash provided by operating activities of $7.2 million for the same period of last year. This was attributable to net loss of $0.1 million, adjusted by depreciation and amortization expenses of $3.7 million, and a net decrease in cash from accounts and notes receivable of $3.2 million and a net decrease in cash from inventories of $4.9 million, and a net increase in cash from accounts and notes payable of $7.8 million and a net increase in cash from other working capital items of $0.5 million.
Net cash used in investing activities was $4.2 million for the six months ended June 30, 2015, compared to $2.4 million for the same period of last year. The $4.2 million was mainly used for purchases of property, plant and equipment at our subsidiaries Shuangsheng, Shengda Concept and Shengda Zhongtian.
Net cash provided by financing activities was nil for the six months ended June 30, 2015, compared to $1.9 million for the same period of last year. During the six months ended June 30, 2014, we received proceeds from loans amounting to $3.5 million, and repaid loans amounting to $3.5 million.
About China Shengda Packaging Group Inc.
China Shengda Packaging Group Inc. is a leading paper packaging company in China. It is principally engaged in design, manufacturing and sale of flexo-printed and color-printed corrugated paper cartons in a variety of sizes and strengths. It also manufactures corrugating medium paper and corrugated paperboards, which are used for the production of flexo-printed and color-printed cartons. The Company provides paper packaging solutions to a wide variety of industries, including food, beverage, cigarette, household appliance, consumer electronics, pharmaceuticals, chemicals, machinery and other consumer and industrial sectors in China.
Safe Harbor Statements
This press release may contain forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Any statements set forth above that are not historical facts are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors include, but are not limited to, the Company's ability to expand to new markets, the ability to grow business through vertical integration and geographical expansion, the ability to access capital for expansion and continued investment in R&D, the ability to acquire other companies, changes from anticipated levels of sales, changes in national or regional economic and competitive conditions, current or future volatility in the credit market and future market conditions, changes in relationships with customers, changes in profit margins of principal product and other factors discussed from time to time in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.
Company Contact:
China Shengda Packaging Group Inc.
Cindy Hu, Board Secretary
Tel: +86-571 8283 8770
E-mail:cindy.hu@cnpti.com
Website:http://www.cnpti.com
Investor Relations Contact:
Weitian Group LLC
Tina Xiao
Tel: +1-917-609-0333
Email:tina.xiao@weitian-ir.com
CHINA SHENGDA PACKAGING GROUP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in US$)
| | | June 30, | | | December 31, | |
| ASSETS | | 2015 | | | 2014 | |
| Current assets | | (Unaudited) | | | | |
| Cash and cash equivalents | $ | 10,651,972 | | $ | 10,909,547 | |
| Restricted cash | | 12,659,820 | | | 13,764,420 | |
| Accounts and notes receivable, net | | 43,968,476 | | | 40,385,615 | |
| Inventories | | 22,043,281 | | | 16,197,839 | |
| Prepayments and other receivables | | 3,750,134 | | | 1,714,052 | |
| Amount due from related parties | | 230,098 | | | 51,093 | |
| Deductable value added tax payable | | 865,139 | | | 867,869 | |
| Total current assets | | 94,168,920 | | | 83,890,435 | |
| Non-current assets | | | | | | |
| Property, plant and equipment, net | | 76,001,975 | | | 72,274,052 | |
| Land use right | | 11,624,648 | | | 11,650,850 | |
| Deferred tax assets | | 3,945,552 | | | 2,965,241 | |
| Goodwill | | 182,036 | | | 180,373 | |
| Total assets | $ | 185,923,131 | | $ | 170,960,951 | |
| LIABILITIES AND EQUITY | | | | | | |
| Current liabilities | | | | | | |
| Accounts and notes payable | $ | 50,689,405 | | $ | 41,954,268 | |
| Amounts due to related parties | | 3,554,905 | | | 2,961,704 | |
| Accrued expenses and other payables | | 4,743,444 | | | 2,964,988 | |
| Taxes payable | | 1,619,446 | | | 1,826,922 | |
| Short-term loans | | 3,500,000 | | | 3,500,000 | |
| Current portion of long-term loans | | 4,500,000 | | | - | |
| Total current liabilities | | 68,607,200 | | | 53,207,882 | |
| Non-current liabilities | | | | | | |
| Long-term loans | | - | | | 4,500,000 | |
| Total liabilities | $ | 68,607,200 | | $ | 57,707,882 | |
| Commitment and contingencies | | | | | | |
| Equity | | | | | | |
| Stockholders' equity | | | | | | |
| Common stock (US$0.001 par value, 38,000,000 shares authorized, 7,758,168 shares issued and outstanding at June 30, 2015 and December 31, 2014) (1) | | 7,758 | | | 7,758 | |
| Additional paid-in capital | | 43,067,497 | | | 43,067,497 | |
| Appropriated retained earnings | | 8,713,159 | | | 8,293,281 | |
| Unappropriated retained earnings | | 49,535,257 | | | 49,894,124 | |
| Accumulated other comprehensive income | | 12,834,475 | | | 11,778,550 | |
| Total equity for stockholders of China Shengda Packaging | | 114,158,146 | | | 113,041,210 | |
| Noncontrolling interest | | 3,157,785 | | | 211,859 | |
| Total equity | | 117,315,931 | | | 113,253,069 | |
| Total liabilities and equity | $ | 185,923,131 | | $ | 170,960,951 | |
(1) All per share amounts and shares outstanding for all periods have been retroactively restated to reflect China Shengda Packaging Group Inc.'s 1-for-5 reverse stock split, which was effect on May 18, 2015.
See notes to the consolidated financial statements
CHINA SHENGDA PACKAGING GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Amounts in US$)
| | | Three months ended June 30, | | | Six months ended June 30, | |
| | | 2015 | | | 2014 | | | 2015 | | | 2014 | |
| | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | |
| Revenues | $ | 39,703,201 | | $ | 37,237,538 | | $ | 77,630,620 | | $ | 69,527,517 | |
| Cost of goods sold | | 34,374,054 | | | 30,742,764 | | | 67,294,930 | | | 58,899,444 | |
| Gross profit | | 5,329,147 | | | 6,494,774 | | | 10,335,690 | | | 10,628,073 | |
| Operating expenses | | | | | | | | | | | | |
| Selling expenses | | 1,523,667 | | | 1,614,033 | | | 3,389,105 | | | 3,463,962 | |
| General and administrative expenses | | 3,940,021 | | | 3,168,636 | | | 7,157,482 | | | 6,011,684 | |
| (Income) loss from disposal of property, plant and equipment | | (87,538 | ) | | (5,104 | ) | | (87,538 | ) | | 636,341 | |
| | | 5,376,150 | | | 4,777,565 | | | 10,459,049 | | | 10,111,987 | |
| Other income (expenses) | | | | | | | | | | | | |
| Interest income | | 87,237 | | | 43,623 | | | 210,399 | | | 541,442 | |
| Interest expense | | (218,716 | ) | | (354,923 | ) | | (410,505 | ) | | (678,608 | ) |
| Subsidy income | | 552 | | | 214,193 | | | 13,568 | | | 214,193 | |
| | | (130,927 | ) | | (97,107 | ) | | (186,538 | ) | | 77,027 | |
| Non-operating expense (income) | | | | | | | | | | | | |
| Non-operating expense (income) | | 2,108 | | | 55,040 | | | 123,999 | | | (61,046 | ) |
| | | 2,108 | | | 55,040 | | | 123,999 | | | (61,046 | ) |
| (Loss) income before income taxexpense and noncontrolling interest | | (180,038 | ) | | 1,565,062 | | | (433,896 | ) | | 654,159 | |
| Income tax (benefit) expense | | (132,196 | ) | | 506,886 | | | (286,245 | ) | | 179,803 | |
| Net (loss) income | | (47,842 | ) | | 1,058,176 | | | (147,651 | ) | | 474,356 | |
| Less: net (loss) attributable to noncontrolling interest | | (172,448 | ) | | (9,531 | ) | | (208,662 | ) | | (55,659 | ) |
| Net income attributable to company'scommon stockholders | $ | 124,606 | | $ | 1,067,707 | | $ | 61,011 | | $ | 530,015 | |
| Basic and diluted earnings per share (1) | $ | 0.02 | | $ | 0.14 | | $ | 0.01 | | $ | 0.07 | |
| Weighted-average number of sharesoutstanding - basic and diluted (1) | | 7,758,168 | | | 7,758,168 | | | 7,758,168 | | | 7,758,168 | |
| Comprehensive income: | | | | | | | | | | | | |
| Net (loss) income | | (47,842 | ) | | 1,058,176 | | | (147,651 | ) | | 474,356 | |
| Foreign currency translation adjustment | | 583,851 | | | 132,342 | | | 1,055,160 | | | (884,446 | ) |
| Comprehensive income (loss) | | 536,009 | | | 1,190,518 | | | 907,509 | | | (410,090 | ) |
| Less: comprehensive (loss) attributable to noncontrolling interest | | (173,057 | ) | | (9,973 | ) | | (209,427 | ) | | (55,762 | ) |
| | $ | 709,066 | | $ | 1,200,491 | | $ | 1,116,936 | | | ($354,328 | ) |
(1) All per share amounts and shares outstanding for all periods have been retroactively restated to reflect China Shengda Packaging Group Inc.'s 1-for-5 reverse stock split, which was effect on May 18, 2015.
See notes to the consolidated financial statements
CHINA SHENGDA PACKAGING GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in US$)
| | | Six Months Ended June 30, | |
| | | 2015 | | | 2014 | |
| | | (Unaudited) | | | (Unaudited) | |
| Cash flows from operating activities | | | | | | |
| Net (loss) income | | (147,651 | ) | | 474,356 | |
| Adjustments to reconcile net loss to net cash provided by operating activities: | | | | | | |
| Depreciation and amortization expenses | | 3,740,846 | | | 3,913,433 | |
| Deferred tax | | (949,492 | ) | | (726,504 | ) |
| Change in operating assets and liabilities: | | | | | | |
| Restricted cash | | 1,227,000 | | | (324,200 | ) |
| Accounts and notes receivable | | (3,192,096 | ) | | 3,343,059 | |
| Inventories | | (4,892,140 | ) | | (1,246,982 | ) |
| Prepayments and other receivables | | (1,644,438 | ) | | (1,316,122 | ) |
| Accounts and notes payable | | 7,842,297 | | | 1,934,610 | |
| Amount due from(to) related party | | 385,946 | | | (199,440 | ) |
| Accrued expenses and other payables | | 1,671,235 | | | 244,698 | |
| Tax payables | | (212,805 | ) | | 1,102,166 | |
| Net cash provided by operating activities | | 3,828,702 | | | 7,199,074 | |
| Cash flows from investing activities | | | | | | |
| Purchase of property, plant and equipment | | (4,463,668 | ) | | (2,565,687 | ) |
| Proceeds from disposal of property, plant and equipment | | 278,120 | | | 175,615 | |
| Net cash (used in) investing activities | | (4,185,548 | ) | | (2,390,072 | ) |
| Cash flows from financing activities | | | | | | |
| Proceeds from short-term loans | | 3,500,000 | | | 10,998,480 | |
| Proceeds from long-term loans | | - | | | 4,497,226 | |
| Repayment of short-term loans | | (3,500,000 | ) | | (10,187,980 | ) |
| Repayment of long-term loans | | - | | | (4,497,226 | ) |
| Restricted cash | | - | | | (2,690,860 | ) |
| Net cash flows (used in) financing activities | | - | | | (1,880,360 | ) |
| Effect of foreign currency exchange rate fluctuation on cash and cash equivalents | | 99,271 | | | (46,752 | ) |
| Net changes in cash and cash equivalents | | (257,575 | ) | | 2,881,890 | |
| Cash and cash equivalents, beginning of year | | 10,909,547 | | | 6,569,495 | |
| Cash and cash equivalents, end of year | $ | 10,651,972 | | $ | 9,451,385 | |
| Cash paid during the year for: | | | | | | |
| Interest paid | $ | 385,786 | | $ | 509,851 | |
| Income taxes paid | $ | 392,621 | | $ | 982,735 | |
| Non-cash financing transactions: | | | | | | |
| Property, plant and equipment and inventory injected by noncontrolling interest | $ | 3,137,995 | | $ | - | |
