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China Shengda Packaging Group Inc. Reports Full Year 2012 Results



      China Shengda Packaging Group Inc. Reports Full Year 2012 Results

PR Newswire

HANGZHOU, China, March 29, 2013

HANGZHOU, China, March 29, 2013 /PRNewswire-FirstCall/ -- China Shengda
Packaging Group Inc. (NASDAQ: CPGI), a leading Chinese paper packaging
manufacturer, today announced its financial results for the twelve months
ended December 31, 2012.

"As our customers continued to face economic headwinds throughout the year in
2012, our overall sales volume declined slightly from 321.7 million square
meters in 2011 to 317.4 million square meters in 2012. Our gross margin also
declined from 20.7% in 2011 to 18.0% in 2012 due to increase in cost of raw
materials. However, our revenues increased by 1.1% to $125.3 million from
$124.0 million as we continued to improve our sales mix in favor of color
cartons that carry higher margin and higher average sales price versus flexo
cartons," said Mr. Daliang Teng, Chief Executive Officer of China Shengda
Packaging Group.

FY 2012 Financial Highlights:

  o Revenues increased by $1.3 million, or 1.1%, to $125.3 million for 2012
    from $124.0 million for 2011.
  o Gross profit decreased by $3.1 million, or 12.0%, to $22.6 million for
    2012 from $25.7 million for 2011. Gross profit as a percentage of revenues
    was 18.0% for 2012, as compared to 20.7% for 2011.
  o Net income applicable to common stockholders decreased by $4.0 million, or
    42.2%, to $5.6 million for 2012 from $9.6 million for 2011.
  o Diluted earnings per share were $0.14 for 2012 as compared to $0.25 for
    2011.

Sales Analysis                                 2012   2011
Sales Volume (M sq meters)                     317.4  321.7
Color Cartons (% of total revenues)            28.7   27.1
Flexo Cartons (% of total revenues)            71.3   72.9
Color Cartons (avg price per sq meter)         0.42   0.44
Flexo Cartons (avg price per sq meter)         0.39   0.37
Summary Results (Millions)
Revenues                                       $125.3 $124.0
Gross Profit                                   $22.6  $25.7
Gross Margin (%)                               18.00% 20.70%
Operating Expenses                             $16.1  $14.9
Operating Income                               $6.5   $10.7
Operating Margin (%)                           5.20%  8.70%
Net Income attributable to common stockholders $5.6   $9.7
EPS Basic & Diluted                            $0.14  $0.25
Wtd Avg Shares Outstanding (millions)          38.8   39.3

Revenues for the full year of 2012 was $125.3 million, an increase of $1.3
million or 1.1% from $124.0 million for the full year of 2011, mainly due to
increase in average sales price which increased by $0.01, or 2.5%, to $0.395
for 2012 from $0.385 for 2011. Sales volume decreased 4.4 million square
meters, or 1.4%, to 317.4 million square meters from 321.7 million square
meters for 2011. The decrease in sales volume was mainly the result of
challenging macro environment.

Color cartons accounted for 28.7% of revenues and flexo cartons accounted for
71.3% of revenues for 2012, compared to 27.1% and 72.9% of revenues for 2011,
respectively. Average sales prices per square meter for color cartons and
flexo cartons were $0.42 and $0.39, respectively, for the year of 2012, as
compared to $0.44 and $0.37, respectively, for the year of 2011.

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 23.2% and 30.1% of revenues,
respectively.

Gross profit decreased by $3.1 million, or 12.0%, to $22.6 million for 2012,
from $25.7 million for 2011. Gross profit as a percentage of revenues was
18.0% for 2012, as compared to 20.7% for 2011, mainly due to increase in raw
material cost. Average cost of goods sold per square meter for 2012 was
approximately $0.32, as compared to $0.30 for 2011.

Selling expenses increased by $0.4 million, or 8.7%, to $5.1 million for 2012,
from $4.7 million for 2011. The increase in selling expenses was related to
$0.1 million increase in staff costs and $0.3 million increase in freight
expenses. As a percentage of revenues, selling expenses for 2012 increased to
4.1%, from 3.8% for 2011.

General and administrative expenses increased by $0.8 million, or 7.5%, to
$11.0 million for 2012, from $10.2 million for 2011. This was mainly
attributable to a $0.5 million increase in staff costs. As a percentage of
revenues, general and administrative expenses for 2012 increased to 8.8%, as
compared to 8.3% for 2011.

Net income attributable to common stockholders decreased by $4.0 million, or
42.2%, to $5.6 million or $ 0.14 per diluted share for 2012, from $9.6 million
or $0.25 per diluted share for 2011.

Financial Condition

As of December 31, 2012, the Company had cash and cash equivalents of $11.9
million and restricted cash of $22.6 million. Shareholders' equity was $105.0
million, compared to $98.6 million as of December 31, 2011. Net cash provided
by operating activities was $27.2 million for 2012, as compared to $4.8
million net cash used in operating activities for 2011. This was attributable
to our net income of $5.6 million, adjusted by depreciation and amortization
expenses of $4.5 million, and a net increase in cash from accounts and notes
payable of 20.2 million, and a net decrease in cash from other working capital
items of $3.1 million.

Net cash used in investing activities was $27.7 million for 2012, as compared
to $9.6 million for 2011. The $27.7 million net cash used in investing
activities during 2012 was mainly attributable to the purchases of property,
plant and equipment for our paper mill, including machinery purchases of $15.6
million and plant construction of $11.2 million.

Net cash used in financing activities was $7.0 million for 2012, as compared
to $3.0 million net cash used in financing activities for 2011. During 2012,
the Company received $11.1 million in loan proceeds, repaid $13.3 million
loans, and deposited restricted cash $5.0 million as collaterals for notes
payable and loans.

About China Shengda Packaging Group Inc.

China Shengda Packaging Group Inc. is a leading paper packaging company in
China. It is principally engaged in the design, manufacturing and sale of
flexo-printed and color-printed corrugated paper cartons in a variety of sizes
and strengths. It also manufactures corrugated paperboards, which are used for
the production of its 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. 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 develop and market new
products, 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, 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: 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
Website: http://www.weitian-ir.com 

CHINA SHENGDA PACKAGING GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Amounts in US$)
                                                    Years ended December 31,
                                                    2012          2011
Revenues                                            $125,308,951  $123,950,886
Cost of goods sold                                  102,739,063   98,295,930
Gross profit                                        22,569,888    25,654,956
Operating expenses
    Selling expenses                                5,080,011     4,675,049
    General and administrative expenses             11,019,764    10,248,426
                                                    16,099,775    14,923,475
Other income (expenses)
    Interest income                                 353,458       400,050
    Interest expense                                (717,946)     (609,600)
    Subsidy income                                  352,748       1,059,423
    Others                                          27,091        (184,120)
                                                    15,351        665,753
Income before income tax expense and                6,485,464     11,397,234
noncontrolling interest
    Income tax expense                              915,461       1,746,805
Net income                                          5,570,003     9,650,429
    Net loss attributable to noncontrolling         5,016         1,287
interest
Net income attributable to Company's common         $5,575,019    $9,651,716
stockholders
Basic and diluted earnings per share                $0.14         $0.25
Weighted-average number of shares outstanding -
basic
    and diluted                                     38,790,811    39,261,219
Comprehensive income:
Net income                                          $5,570,003    $9,650,429
    Foreign currency translation adjustment         843,196       3,543,472
Comprehensive income                                6,413,199     13, 193,901
    Comprehensive loss attributable to              5,018         1,308
noncontrolling interest
Net comprehensive income attributable to the
Company's
    common stockholders                             $6,418,217    $13,195,209
CHINA SHENGDA PACKAGING GROUP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in US$)
                                                    December 31,
ASSETS                                              2012          2011
    Current assets
        Cash and cash equivalents                   $11,903,937   $19,294,089
        Restricted cash                             22,615,099    7,851,387
        Accounts and notes receivable, net          33,203,457    36,835,095
        Inventories                                 15,543,213    19,449,954
        Prepayments and other receivables           955,953       929,126
        Amount due from related parties             207,112       133,608
    Total current assets                            84,428,771    84,493,259
    Non-current assets
        Property, plant and equipment, net          70,184,832    34,573,246
        Land use right                              11,881,160    -
        Prepayment for land use right to related    -             11,805,000
party
        Prepayment for construction in progress     -             5,424,412
        Customer relationships, net                 74,766        550,316
        Deferred tax assets                         403,121       409,845
        Goodwill                                    175,941       174,497
Total assets                                        $167,148,591  $137,430,575
LIABILITIES AND EQUITY
    Current liabilities
        Accounts and notes payable                  $45,246,615   $18,750,719
        Amounts due to related party                269,505       137,689
        Accrued expenses and other payables         2,310,270     1,651,283
        Taxes payable                               1,360,386     3,358,902
        Short-term loans                            3,500,000     10,073,600
        Current portion of long-term borrowing      4,500,000     -
    Total current liabilities                       57,186,776    33,972,193
    Non-current liabilities
        Long-term loans                             4,500,000     4,500,000
        Deferred tax liabilities                    18,691        137,579
    Total liabilities                               61,705,467    38,609,772
    Commitment and contingencies                                  -
    Equity
        Stockholders' equity
        Common stock (US$0.001 par value,           39,456        39,456
            190,000,000 shares authorized,
39,456,311
            shares issued both at December 31,
2012 and
            2011, 38,790,811 outstanding both at
            December 31, 2012 and 2011)
        Treasury stock (665,500 shares both at      (729,444)     (729,444)
            December 31, 2012 and 2011)
        Additional paid-in capital                  43,765,243    43,765,243
        Appropriated retained earnings              6,997,530     6,843,616
        Unappropriated retained earnings            45,859,324    40,438,219
        Accumulated other comprehensive income      9,101,639     8,258,441
        Total equity for stockholders of China      105,033,748   98,615,531
            Shengda Packaging
        Noncontrolling interest                     409,376       205,272
        Total equity                                105,443,124   98,820,803
        Total liabilities and equity                $167,148,591  $137,430,575
CHINA SHENGDA PACKAGING GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in US$)
                                                    Years ended December 31,
                                                    2012          2011
Cash flows from operating activities
Net income                                          $5,570,003    $9,650,429
Adjustments to reconcile net income to net cash
provided
    by operating activities:
    Depreciation and amortization expenses          4,541,247     4,062,690
Change in operating assets and liabilities:
    Restricted cash                                 (9,696,077)   9,838,977
    Accounts and notes receivable                   3,941,038     (4,058,520)
    Inventories                                     4,066,201     465,795
    Prepayments and other receivables               (14,905)      2,669,982
    Accounts and notes payable                      20,189,874    (27,399,010)
    Amount due from(to) related party               58,256        (193,679)
    Deferred tax                                    (109,870)     (52,861)
    Accrued expenses and other payables             645,088       (237,971)
    Tax payables                                    (2,025,570)   476,677
    Net cash provided by (used in) operating        27,165,285    (4,777,491)
activities
Cash flows from investing activities
    Purchase of property, plant and equipment       (27,743,857)  (4,238,079)
    Prepayment paid for construction in progress    -             (5,338,256)
    Net cash used in investing activities           (27,743,857)  (9,576,335)
Cash flows from financing activities
    Proceeds from short-term loans                  6,671,614     34,466,621
    Proceeds from long-term loan                    4,473,943     -
    Repayment of short-term loans                   (13,326,141)  (32,064,300)
    Restricted cash                                 (4,997,303)   (4,879,350)
    Cash paid for treasure stock                    -             (729,444)
    Investment from non controlling interests       209,487       207,768
    Net cash flows (used in) financing activities   (6,968,400)   (2,998,705)
    Effect of foreign currency exchange rate
fluctuation on cash and                             156,820       1,065,297
    cash equivalents
    Net changes in cash and cash equivalents        (7,390,152)   (16,287,234)
Cash and cash equivalents, beginning of period      19,294,089    35,581,323
Cash and cash equivalents, end of period            $11,903,937   $19,294,089
Cash paid during the period for:
Interest paid                                       $658,335      $609,600
Income taxes paid                                   $1,171,447    $2,731,251

SOURCE China Shengda Packaging Group Inc.

Website: http://www.cnpti.com
Website: http://www.weitian-ir.com
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