Attached files
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EX-32.2 - Shiner International, Inc. | v235732_ex32-2.htm |
EX-32.1 - Shiner International, Inc. | v235732_ex32-1.htm |
EX-31.1 - Shiner International, Inc. | v235732_ex31-1.htm |
EX-31.2 - Shiner International, Inc. | v235732_ex31-2.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 2 to
Form 10-Q
x
|
Quarterly report pursuant Section 13 or 15(d) of the Securities Exchange Act of 1934
|
For the quarterly period ended March 31, 2011
¨
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Transition report pursuant Section 13 or 15(d) of the Securities Exchange Act of 1934
|
For the transition period from _______ to _______.
001-33960
(Commission file number)
SHINER INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Nevada
|
98-0507398
|
(State or other jurisdiction
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(IRS Employer
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of incorporation or organization)
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Identification No.)
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19/F, Didu Building, Pearl River Plaza,
No. 2 North Longkun Road
Haikou, Hainan Province
China 570125
(Address of principal executive offices)
011-86-898-68581104
(Issuer’s telephone number)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files)
Yes ¨ No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ¨
|
Accelerated filer ¨
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Non-accelerated filer ¨
|
Smaller reporting company x
|
(Do not check if a smaller reporting company)
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ¨ No x
On May 16, 2011, 27,541,491 shares of the registrant's common stock were outstanding.
EXPLANATORY NOTE
This Form 10-Q/A is being filed to provide additional segment reporting footnote disclosure to reflect four operating segments rather than two operating segments as previously reported. We have restated the accompanying unaudited Consolidated Financial Statements to revise our segment disclosure for all periods presented to reflect our operations into four reportable segments. See our revised disclosures in Note 13 to the unaudited Consolidated Financial Statements. No information in this Form 10-Q/A has been updated for any subsequent information or events from the original filing.
Conforming changes have been made to Part I, Items 1 (Notes 1, 13 and 14) and 2 of this Form 10-Q/A. The aforementioned changes have no effect on the Company’s unaudited consolidated balance sheets as of March 31, 2011 and December 31, 2010 or unaudited consolidated statements of operations and related earnings per share amounts or unaudited consolidated statements of cash flows for the three months ended March 31, 2011 and 2010.
This Amendment has been signed as of a current date, and includes Exhibits 31.1, 31.2, 32.1 and 32.2, which are currently dated.
TABLE OF CONTENTS
PART I – FINANCIAL INFORMATION
|
|||
Item 1.
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Financial Statements
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3
|
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Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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20
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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26
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Item 4.
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Controls and Procedures
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26
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PART II – OTHER INFORMATION
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|||
Item 1.
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Legal Proceedings
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26
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Item 1A.
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Risk Factors
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26
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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26
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Item 3.
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Defaults Upon Senior Securities
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26
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Item 4.
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(Removed and Reserved)
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26
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Item 5.
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Other Information
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26
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Item 6.
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Exhibits
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27
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2
CONSOLIDATED BALANCE SHEETS
March 31,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(unaudited)
|
||||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash & cash equivalents
|
$
|
3,022,375
|
$
|
8,622,035
|
||||
Accounts receivable, net of allowance for doubtful accounts of $297,899 and $262,502
|
9,480,195
|
10,005,572
|
||||||
Advances to suppliers
|
7,956,711
|
3,462,074
|
||||||
Notes receivable
|
199,896
|
26,056
|
||||||
Inventory, net
|
8,935,337
|
7,355,601
|
||||||
Prepaid expenses & other current assets
|
669,423
|
610,066
|
||||||
Total current assets
|
30,263,937
|
30,081,404
|
||||||
Property and equipment, net
|
27,740,711
|
19,399,717
|
||||||
Construction in progress
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4,784,948
|
4,017,721
|
||||||
Advance for the purchase of equipment
|
1,752,849
|
1,356,989
|
||||||
Intangible assets, net
|
1,067,039
|
1,061,855
|
||||||
TOTAL ASSETS
|
$
|
65,609,484
|
$
|
55,917,686
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Accounts payable
|
$
|
3,089,699
|
$
|
5,350,064
|
||||
Other payables
|
4,698,530
|
4,655,300
|
||||||
Unearned revenue
|
1,144,723
|
295,609
|
||||||
Accrued payroll
|
136,420
|
141,884
|
||||||
Short-term loans
|
7,635,000
|
6,826,500
|
||||||
Total current liabilities
|
16,704,372
|
17,269,357
|
||||||
Long-term loans
|
9,024,570
|
-
|
||||||
Total Liabilities
|
25,728,942
|
17,269,357
|
||||||
Commitments and contingencies
|
||||||||
EQUITY:
|
||||||||
Shiner stockholders' equity:
|
||||||||
Common stock, par value $0.001; 75,000,000 shares authorized, 27,603,336 shares issued and 27,541,491 shares outstanding at March 31, 2011 and December 31, 2010
|
27,603
|
27,603
|
||||||
Additional paid-in capital
|
14,322,179
|
14,321,484
|
||||||
Treasury stock (61,845 shares)
|
(58,036
|
)
|
(58,036
|
)
|
||||
Other comprehensive income
|
4,286,905
|
4,060,637
|
||||||
Statutory reserve
|
3,020,985
|
2,905,861
|
||||||
Retained earnings
|
18,243,434
|
17,353,554
|
||||||
Total Shiner stockholders' equity
|
39,843,070
|
38,611,103
|
||||||
Noncontrolling interest
|
37,472
|
37,226
|
||||||
Total equity
|
39,880,542
|
38,648,329
|
||||||
TOTAL LIABILITIES AND EQUITY
|
$
|
65,609,484
|
$
|
55,917,686
|
The accompanying notes are an integral part of these consolidated financial statements.
3
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER
COMPREHENSIVE INCOME (LOSS)
FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010
2011
|
2010
|
|||||||
(unaudited)
|
(unaudited)
|
|||||||
Net Revenue
|
$
|
15,906,845
|
$
|
11,586,719
|
||||
Cost of good sold
|
13,539,738
|
9,699,466
|
||||||
Gross profit
|
2,367,107
|
1,887,253
|
||||||
Operating expenses
|
||||||||
Selling
|
444,676
|
403,770
|
||||||
General and administrative
|
717,039
|
441,372
|
||||||
Total operating expenses
|
1,161,715
|
845,142
|
||||||
Income from operations
|
1,205,392
|
1,042,111
|
||||||
Non-operating income (expense):
|
||||||||
Other income, net
|
194,611
|
86,191
|
||||||
Interest income
|
6,273
|
2,286
|
||||||
Interest expense
|
(142,951
|
)
|
(42,829
|
)
|
||||
Exchange loss
|
(55,795
|
)
|
(7,461
|
)
|
||||
Total non-operating income (expense)
|
2,138
|
38,187
|
||||||
Income before income tax
|
1,207,530
|
1,080,298
|
||||||
Income tax expense
|
210,836
|
158,205
|
||||||
Net income
|
996,694
|
922,093
|
||||||
Net loss attributed to noncontrolling interest
|
8,310
|
-
|
||||||
Net income attributed to Shiner
|
$
|
1,005,004
|
$
|
922,093
|
||||
Comprehensive income (loss)
|
||||||||
Net income
|
$
|
996,694
|
$
|
922,093
|
||||
Foreign currency translation gain (loss)
|
226,514
|
(9,337
|
)
|
|||||
Comprehensive income
|
$
|
1,223,208
|
$
|
912,756
|
||||
Weighted average shares outstanding :
|
||||||||
Basic
|
27,541,491
|
24,588,155
|
||||||
Diluted
|
27,546,675
|
24,598,358
|
||||||
Earnings per share attributed to Shiner common stockholders
|
||||||||
Basic
|
$
|
0.04
|
$
|
0.04
|
||||
Diluted
|
$
|
0.04
|
$
|
0.04
|
The accompanying notes are an integral part of these consolidated financial statements.
4
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010
2011
|
2010
|
|||||||
(unaudited)
|
(unaudited)
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net income
|
$
|
1,005,004
|
$
|
922,093
|
||||
Adjustments to reconcile net income to net cash used in operating activities:
|
||||||||
Depreciation
|
518,462
|
395,917
|
||||||
Amortization
|
1,809
|
31,819
|
||||||
Stock compensation expense
|
695
|
6,318
|
||||||
Change in working capital components:
|
||||||||
Accounts receivable
|
589,310
|
(829,991
|
)
|
|||||
Inventory
|
(1,526,012
|
)
|
(1,822,659
|
)
|
||||
Advances to suppliers
|
(4,456,522
|
)
|
(958,247
|
)
|
||||
Other assets
|
(74,521
|
)
|
(186,285
|
)
|
||||
Accounts payable
|
(2,287,552
|
)
|
1,713,513
|
|||||
Unearned revenue
|
844,269
|
75,803
|
||||||
Other payables
|
14,066
|
27,353
|
||||||
Accrued payroll
|
(6,377
|
)
|
(8,941
|
)
|
||||
Net cash used in operating activities
|
(5,377,369
|
)
|
(633,307
|
)
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Issuance of notes receivable
|
(173,074
|
)
|
(205,019
|
)
|
||||
Payments for property and equipment
|
(9,089,081
|
)
|
(50,441
|
)
|
||||
Payments for construction in progress
|
(738,208
|
)
|
(1,079,695
|
)
|
||||
(Increase)/decrease in restricted cash
|
-
|
733,205
|
||||||
Net cash used in investing activities
|
(10,000,363
|
)
|
(601,950
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Repayment of short-term loans
|
(6,848,001
|
)
|
-
|
|||||
Proceeds from notes payable
|
16,602,598
|
-
|
||||||
Net cash provided by financing activities
|
9,754,597
|
-
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
23,475
|
(411
|
)
|
|||||
NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS
|
(5,599,660
|
)
|
(1,235,668
|
)
|
||||
CASH & CASH EQUIVALENTS, BEGINNING BALANCE
|
8,622,035
|
3,059,796
|
||||||
CASH & CASH EQUIVALENTS, ENDING BALANCE
|
$
|
3,022,375
|
$
|
1,824,128
|
||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
|
||||||||
Interest paid
|
$
|
142,784
|
$
|
42,829
|
||||
Income taxes paid
|
$
|
219,128
|
$
|
114,900
|
The accompanying notes are an integral part of these consolidated financial statements.
5
SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
MARCH 31, 2011 AND 2010
(unaudited)
Note 1 - Organization and Basis of Presentation
The unaudited consolidated financial statements were prepared by Shiner International, Inc., a Nevada corporation (the “Company” or “Shiner”), pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) were omitted pursuant to such rules and regulations. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K. The results for the three months ended March 31, 2011, are not necessarily indicative of the results to be expected for the full year ending December 31, 2011.
Organization and Line of Business
Shiner was incorporated in the State of Nevada on November 12, 2003. The Company, through its subsidiaries is engaged in the manufacture of BOPP tobacco film, coated films, color printing products, and advanced film selling to customers throughout China, Asia, Australia, Europe, the Middle East and North America. Our products are sold to companies in the following industries: food, tobacco, chemical, agribusiness, medical, pharmaceutical, personal care, electronics, automotive, construction, graphics, music and video publishing and other consumer goods.
Basis of Presentation
The accompanying consolidated financial statements include the accounts of Shiner and its subsidiaries as follows:
Place
|
Percentage
|
|||||
Subsidiary
|
Incorporated
|
Owned
|
Parent
|
|||
Shiner International, Inc.
|
Nevada, USA
|
|||||
Shiner Industrial Co.
|
China
|
100%
|
Shiner International, Inc.
|
|||
Shiny Day
|
China
|
100%
|
Shiner International, Inc.
|
|||
Modern Hi-Tech
|
China
|
100%
|
Shiny Day
|
|||
Zhuhai
|
China
|
100%
|
Shiny Day
|
|||
Neng Film
|
China
|
70%
|
Shiner International, Inc.
|
The accompanying consolidated financial statements were prepared in conformity with US GAAP. The Company’s functional currency is the Chinese Yuan Renminbi (“RMB”); however, the accompanying consolidated financial statements were translated and presented in United States Dollars ($ or “USD”).
6
SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2011 AND 2010
(unaudited)
Noncontrolling Interest
On September 20, 2010, the Company commenced operations of a majority-owned subsidiary, Shanghai Juneng Functional Film Company, Ltd. (“Shanghai Juneng”), with Shanghai Shifu Film Material, Co., Ltd., (‘Shanghai Shifu”). Under the terms of the agreement, Shiner owns 70% of Shanghai Juneng, and Shanghai Shifu owns the remaining 30%. The general manager of Shanghai Juneng reports directly to Shiner’s Chief Executive Officer. Shanghai Juneng will focus on pursuing sales opportunities among China’s leading food producers in the Yangtze River Delta, one of China’s largest economic centers.
The Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810, “Consolidation,” which establishes standards governing the accounting for and reporting of noncontrolling interests (NCIs) in partially owned consolidated subsidiaries and the loss of control of subsidiaries. Certain provisions of this standard indicate, among other things, that NCIs be treated as a separate component of equity, not as a liability, that increases and decreases in the parent’s ownership interest that leave control intact be treated as equity transactions rather than as step acquisitions or dilution gains or losses, and that losses of a partially owned consolidated subsidiary be allocated to the NCI even when such allocation might result in a deficit balance. This standard also required changes to certain presentation and disclosure requirements.
The net income (loss) attributed to the NCI was separately designated in the accompanying statements of operations and other comprehensive income. Losses attributable to the NCI in a subsidiary may exceed the NCI’s interests in the subsidiary’s equity. The excess attributable to the NCI is attributed to those interests. The NCI shall continue to be attributed its share of losses even if that attribution results in a deficit NCI balance.
Principles of Consolidation
The accompanying consolidated financial statements include the account of Shiner International, Inc. and its subsidiaries. All significant intercompany transactions and balances were eliminated in consolidation.
Foreign Currency Translation
The accounts of the Company’s Chinese subsidiaries are maintained in the RMB and the accounts of the U.S. parent company are maintained in the USD. The accounts of the Chinese subsidiaries are translated into USD in accordance with Accounting Standards Codification (“ASC”) Topic 830 “Foreign Currency Matters,” with the RMB as the functional currency for the Chinese subsidiaries. According to Topic 830, all assets and liabilities are translated at the exchange rate on the balance sheet date, stockholders’ equity is translated at historical rates and statement of operations items are translated at the weighted average exchange rate for the period. The resulting translation adjustments are reported under other comprehensive income in accordance with ASC Topic 220, “Comprehensive Income.” Gains and losses resulting from the translations of foreign currency transactions and balances are reflected in the statement of operations.
Note 2 - Summary of Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
Cash and cash equivalents include cash in hand and cash in time deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less.
7
SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2011 AND 2010
(unaudited)
Accounts Receivable
The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Reserves are recorded primarily on a specific identification basis.
Advances to Suppliers
The Company makes advances to certain suppliers for the purchase of its materials. The advances to suppliers are interest free and unsecured.
Inventory
Inventory is valued at the lower of the inventory’s cost (weighted average basis) or the current market price of the inventory. Management compares the cost of inventory with its market value and an allowance is made to write down inventory to market value, if lower.
Notes Receivable
Notes receivable consist of bank notes received from customers as payment of on their accounts receivable balance. The notes are guaranteed by a bank and bear no interest. The notes are generally due within six months from the date of issuance.
Property and equipment are stated at cost. Expenditures for maintenance and repairs are expenses as incurred; additions, renewals and improvements are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method for substantially all assets with estimated lives as follows:
Operating equipment
|
10 years
|
Vehicles
|
8 years
|
Office equipment
|
5 years
|
Buildings and improvements
|
20 years
|
The following are the details regarding the Company’s property and equipment at March 31, 2011 and December 31, 2010:
March 31,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(Audited)
|
||||||||
Operating equipment
|
$
|
21,884,042
|
$
|
13,028,014
|
||||
Vehicles
|
163,872
|
162,799
|
||||||
Office equipment
|
197,550
|
189,301
|
||||||
Buildings
|
9,656,124
|
9,597,807
|
||||||
Building and equipment improvements
|
632,603
|
667,050
|
||||||
32,534,191
|
23,644,971
|
|||||||
Less accumulated depreciation
|
(4,793,480
|
)
|
(4,245,254
|
)
|
||||
$
|
27,740,711
|
$
|
19,399,717
|
8
SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2011 AND 2010
(unaudited)
Construction-in-Progress and Government Grants
Construction-in-progress mainly consists of amounts expended to build a new manufacturing workshop in Hainan. The first phase of the project was completed during 2010. Once the project is completed, the project will be transferred from “Construction-in-progress” to “Property and equipment, net.” The total cost of the new Hainan manufacturing workshop is expected to be approximately $12 million. In October 2009, the Company received a government grant for this project of approximately $4.3 million from the Hainan Province Finance Bureau (“HPFB”). The Company is required to provide detailed expenses of the construction project to the HPFB. At the end of the project, the government will determine if the funds were used in accordance with the grant. At March 31, 2011 and December 31, 2010, the $4.3 million government grant was recorded as “Other payables” on the accompanying consolidated financial statements. If the government determines the funds were used for their intended purpose, the amount of the government grant will be amortized into other income over the useful life of the asset on the same basis used to depreciate the asset.
Long-Lived Assets
The Company applies the provisions of ASC Topic 360, “Property, Plant, and Equipment,” which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. ASC 360 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair values are reduced to recognize the cost of disposal. Based on its review, the Company believes that as of March 31, 2011 and December 31, 2010 (audited), there was no significant impairment of its long-lived assets.
Intangible Assets
Intangible assets consist of rights to use three plots of land in Haikou City by the Municipal Administration of China for state-owned land. For two of these plots, the Company’s rights run through January 2059 and, for the third plot, the Company’s rights run through October 2060. The Company evaluates intangible assets for impairment, at least on an annual basis and whenever events or changes in circumstances indicate the carrying value may not be recoverable from its estimated future cash flows. Recoverability of intangible assets, other long-lived assets, and goodwill is measured by comparing their net book value to the related projected undiscounted cash flows from these assets, considering a number of factors including past operating results, budgets, economic projections, market trends and product development cycles. If the net book value of the asset exceeds the related undiscounted cash flows, the asset is considered impaired, and a second test is performed to measure the amount of impairment loss.
Fair Value of Financial Instruments
For certain of the Company’s financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, advances to suppliers, accounts payable, accrued liabilities and short-term debt, the carrying amounts approximate their fair values due to their short maturities. In addition, the Company has long-term debt with financial institutions. The carrying amounts of the line of credit and other long-term liabilities approximate their fair values based on current rates of interest for instruments with similar characteristics.
ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:
9
SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2011 AND 2010
(unaudited)
|
·
|
Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.
|
|
·
|
Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in inactive markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
|
|
·
|
Level 3 inputs to the valuation methodology us one or more unobservable inputs which are significant to the fair value measurement.
|
The Company analyzes all financial instruments with features of both liabilities and equity under ASC Topic 480, “Distinguishing Liabilities from Equity,” and ASC Topic 815, “Derivatives and Hedging.”
As of March 31, 2011 and December 31, 2010 (audited), the Company did not identify any assets and liabilities that are required to be presented on the balance sheet at fair value.
Revenue Recognition
The Company’s revenue recognition policies comply with SEC Staff Accounting Bulletin 104 (codified in FASB ASC Topic 480). Sales revenue is recognized at the date of shipment to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist and collectability is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as unearned revenue.
Sales revenue consists of the invoiced value of goods, which is net of value-added tax (“VAT”). All of the Company’s products are sold in the PRC and are subject to Chinese VAT of 17% of the gross sales price. This VAT may be offset by VAT paid by the Company on raw materials and other materials included in the cost of producing their end product. The Company recorded VAT payable and VAT receivable net of payments in the financial statements. The VAT tax return is filed offsetting the payables against the receivables.
Sales and purchases are recorded net of VAT collected and paid. VAT taxes are not affected by the income tax holiday.
Sales returns and allowances was $0 for the three months ended March 31, 2011 and 2010. The Company does not provide unconditional right of return, price protection or any other concessions to its dealers or other customers.
Other Income
Included in other income for the three months ended March 31, 2010 was $73,225 arising from a payment from the Company's former landlord for vacating leased space at the request of the landlord. The Company recognizes other income in the period the Company has earned the revenue and collectability is reasonably assured.
Advertising Costs
The Company expenses the cost of advertising as incurred or, as appropriate, the first time the advertising takes place. Advertising costs for the three months ended March 31, 2011 and 2010, were not significant.
10
SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2011 AND 2010
(unaudited)
Research and Development
The Company expenses its research and development costs as incurred. Research and development costs for the three months ended March 31, 2011 and 2010 were $195,795 and $143,525, respectively, which are recorded as general and administrative expenses in the accompanying consolidated financial statements.
Stock-Based Compensation
The Company records stock-based compensation in accordance with ASC Topic 718, “Compensation – Stock Compensation.” ASC 718 requires companies to measure compensation cost for stock-based employee compensation at fair value at the grant date and recognize the expense over the employee’s requisite service period. The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees. There were 60,000 options outstanding as of March 31, 2011.
Income Taxes
The Company accounts for income taxes in accordance with ASC Topic 740, “Income Taxes.” ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is more than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The adoption had no effect on the Company’s consolidated financial statements.
Basic and Diluted Earnings Per Share
Earnings per share is calculated in accordance with the ASC Topic 260, “Earnings Per Share.” Basic earnings per share is based upon the weighted average number of common shares outstanding. Diluted earnings per share is based on the assumption that all dilutive convertible shares and stock warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. There were 60,000 options and 521,664 warrants outstanding as of March 31, 2011 with weighted-average exercise prices of $1.25 and $1.70, respectively. There were 190,000 options and 970,050 warrants outstanding as of March 31, 2010 with weighted-average exercise prices of $2.73 and $6.00, respectively. The following is a reconciliation of the number of shares (denominator) used in the basic and diluted earnings per share computations for the three months ended March 31, 2011 and 2010:
Three Months Ended
|
Three Months Ended
|
|||||||||||||||
March 31, 2011
|
March 31, 2010
|
|||||||||||||||
Per Share
|
Per Share
|
|||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||
Basic earnings per share
|
27,541,491
|
$
|
0.04
|
24,588,155
|
$
|
0.04
|
||||||||||
Effect of dilutive stock options and warrants
|
5,184
|
-
|
10,203
|
-
|
||||||||||||
Diluted earnings per share
|
27,546,675
|
$
|
0.04
|
24,598,358
|
$
|
0.04
|
11
SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2011 AND 2010
(unaudited)
The accounts of the Company’s Chinese subsidiaries are maintained in RMB and the accounts of the U.S. parent company are maintained in USD. The accounts of the Chinese subsidiaries were translated into USD in accordance with ASC Topic 830, “Foreign Currency Matters,” with the RMB as the functional currency for the Chinese subsidiaries. According to ASC Topic 830, all assets and liabilities were translated at the exchange rate on the balance sheet date, stockholders’ equity is translated at historical rates and statement of operations items are translated at the weighted average exchange rate for the period. The resulting translation adjustments are reported under other comprehensive income in accordance with ASC Topic 220, “Comprehensive Income.” Gains and losses resulting from the translations of foreign currency transactions and balances are reflected in the statement of operations.
Foreign Currency Transactions and Comprehensive Income
US GAAP generally requires recognized revenue, expenses, gains and losses be included in net income. Certain statements, however, require entities to report specific changes in assets and liabilities, such as gain or loss on foreign currency translation, as a separate component of the equity section of the balance sheet. Such items, along with net income, are components of comprehensive income. The functional currency of the Company’s Chinese subsidiaries is the RMB. Translation gains of $4,286,648 and $4,060,637 at March 31, 2011 and December 31, 2010 (audited), respectively, are classified as an item of other comprehensive income in the stockholders’ equity section of the consolidated balance sheets.
Statement of Cash Flows
In accordance ASC Topic 230, “Statement of Cash Flows,” cash flows from the Company’s operations are calculated based upon the local currencies using the average translation rates. As a result, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets.
Segment Reporting
ASC Topic 280, “Segment Reporting,” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. The Company has determined it has four reportable segments. See Note 13.
Dividends
The Company's Chinese subsidiaries have restrictions on the payment of dividends to the Company. China has adopted currency and capital transfer regulations that may require the Company's Chinese subsidiaries to comply with complex regulations for the movement of capital. These regulations include a public notice issued in October 2005 by the State Administration of Foreign Exchange (“SAFE”) requiring PRC residents, including both legal persons and natural persons, to register with the competent local SAFE branch before establishing or controlling any company outside of China. Although the Company believes its Chinese subsidiaries are in compliance with these regulations, should these regulations or the interpretation of them by courts or regulatory agencies change, the Company may not be able to pay dividends outside of China.
Recent Accounting Pronouncements
In January 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2010-06, Improving Disclosures about Fair Value Measurements (“ASU No. 2010-06”). The new standard addresses, among other things, guidance regarding activity in Level 3 fair value measurements. Portions of ASU No. 2010-06 that relate to the Level 3 activity disclosures are effective for the annual reporting period beginning after December 15, 2010. The Company will provide the required disclosures beginning with the Company’s Annual Report on Form 10-K for the year ending December 31, 2011. Based on the initial evaluation, the Company does not anticipate a material impact to the Company’s financial position, results of operations or cash flows as a result of this change.
12
SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2011 AND 2010
(unaudited)
Inventory at March 31, 2011 and December 31, 2010 consisted of the following:
|
|
March 31,
|
|
|
December 31,
|
|
||
|
|
2011
|
|
|
2010
|
|
||
|
|
|
|
|
(Audited)
|
|
||
Raw Material
|
$
|
4,597,671
|
$
|
3,099,222
|
||||
Work in process
|
1,124,918
|
842,793
|
||||||
Finished goods
|
3,365,840
|
3,547,916
|
||||||
9,088,429
|
7,489,931
|
|||||||
Less: Obsolescence Reserve
|
(153,092
|
)
|
(134,330
|
)
|
||||
$
|
8,935,337
|
$
|
7,355,601
|
Intangible assets at March 31, 2011 and December 31, 2010 consisted of the following:
|
|
March 31,
|
|
|
December 31,
|
|
||
|
|
2011
|
|
|
2010
|
|
||
(Audited)
|
||||||||
Right to use land
|
$
|
1,119,704
|
$
|
1,112,371
|
||||
Less: Accumulated amortization
|
(52,665
|
)
|
(50,516
|
)
|
||||
Intangible assets, net
|
$
|
1,067,039
|
$
|
1,061,855
|
Pursuant to the regulations of the government of the People’s Republic of China’s (“PRC”), the PRC government owns all land. The Company has recognized the amounts paid for the acquisition of rights to use land as an intangible asset and amortizing such rights over the period the Company has use of the land, which range from 54 to 57 years.
13
SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2011 AND 2010
(unaudited)
Loans at March 31, 2011 and December 31, 2010 (audited) consisted of the following:
|
|
March 31,
|
|
|
December 31,
|
|
||
|
|
2011
|
|
|
2010
|
|
||
The term of the loan is from December 20, 2010 to December 19, 2011, with an interest rate of 5.56% at December 31, 2010. The loan is collateralized by buildings and equipment
|
$
|
-
|
$
|
1,972,100
|
||||
The term of the loan is from November 12, 2010 to November 11, 2011, with an interest rate of 5.56% at December 31, 2010. The loan is collateralized by buildings and equipment
|
-
|
455,100
|
||||||
The term of the loan is from September 20, 2010 to September 19, 2011, with an interest rate of 5.56% at December 31, 2010. The loan is collateralized by buildings and equipment
|
-
|
606,800
|
||||||
The term of the loan is from July 21, 2010 to July 20, 2011, with an interest rate of 5.56% at December 31, 2010. The loan is collateralized by buildings and equipment
|
-
|
758,500
|
||||||
The term of the loan is from June 24,2010 to June 24, 2011, with an interest rate of 5.56% at December 31, 2010. The loan is collateralized by buildings and equipment
|
-
|
1,517,000
|
||||||
The term of the loan is from May 07, 2010 to May 6, 2011, with an interest rate of 5.841% at December 31, 2010. The loan is collateralized by buildings and equipment
|
-
|
1,517,000
|
||||||
The term of the loan is from December 20, 2010 to December 19, 2011, with an interest rate of 5.56% at March 31, 2011. The loan is collateralized by equipment
|
1,985,100
|
-
|
||||||
The term of the loan is from February 28, 2011 to February 28, 2012, with an interest rate of 6.06% at March 31, 2011. The loan is collateralized by equipment
|
4,122,900
|
-
|
||||||
The term of the loan is from May 7, 2010 to May 6, 2011, with an interest rate of 5.56% at March 31, 2011. The loan is collateralized by buildings and equipment
|
1,527,000
|
-
|
||||||
The term of the loan is from January 24, 2011 to January 24,2018, with an interest rate of 6.60% at March 31, 2011. The loan is collateralized by buildings and land use rights
|
2,443,200
|
-
|
||||||
The term of the loan is from February 10, 2011 to February 10, 2018, with an interest rate of 6.60% at March 31, 2011. The loan is collateralized by buildings and land use rights
|
2,748,600
|
-
|
||||||
The term of the loan is from February 16, 2011 to February 16, 2018, with an interest rate of 6.60% at March 31, 2011. The loan is collateralized by buildings and land use rights
|
2,214,150
|
-
|
||||||
The term of the loan is from February 17, 2011 to February 17, 2018, with an interest rate of 6.60% at March 31, 2011. The loan is collateralized by buildings and land use rights
|
1,206,330
|
-
|
||||||
The term of the loan is from March 25, 2011 to March 25, 2018, with an interest rate of 6.60% at March 31, 2011. The loan is collateralized by buildings and land use rights
|
412,290
|
-
|
||||||
$
|
16,659,570
|
$
|
6,826,500
|
At March 31, 2011, $7,635,000 and $9,024,570 were short term and long term, respectively. At December 31, 2010, $6,826,500 and $0 were short term and long term, respectively.
14
SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2011 AND 2010
(unaudited)
Stock Options
The following is a summary of the Company’s stock option activity for the three months ended March 31, 2011:
|
|
|
|
|
Weighted
|
|
|
|
|
|||
|
|
|
|
|
Average
|
|
|
Aggregate
|
|
|||
|
|
Options
|
|
|
Exercise Price
|
|
|
Intrinsic
|
|
|||
|
|
Outstanding
|
|
|
Price
|
|
|
Value
|
|
|||
Outstanding at December 31, 2010
|
60,000
|
1.25
|
||||||||||
Granted
|
-
|
-
|
||||||||||
Canceled
|
-
|
-
|
||||||||||
Exercised
|
-
|
-
|
||||||||||
Outstanding at March 31, 2011
|
60,000
|
$
|
1.25
|
$
|
-
|
|||||||
Exercisable at March 31, 2011
|
50,000
|
$
|
1.25
|
$
|
-
|
The number and weighted average exercise prices of all options outstanding as of March 31, 2011, are as follows:
|
|||||||||||||
|
|
|
|
|
|
|
|
Weighted
|
|
||||
|
|
|
|
|
Weighted
|
|
|
Average
|
|
||||
|
|
Number
|
|
|
Average
|
|
|
Remaining
|
|
||||
Range of
|
|
Outstanding
|
|
|
Exercise
|
|
|
Contractual Life
|
|
||||
Exercise Price
|
|
March 31, 2011
|
|
|
Price
|
|
|
(Years)
|
|
||||
$
|
1.25
|
60,000
|
$
|
1.25
|
2.18
|
||||||||
60,000
|
The number and weighted average exercise prices of all options exercisable as of March 31, 2011, are as follows:
|
|||||||||||||
|
|
|
|
|
|
|
|
Weighted
|
|
||||
|
|
|
|
|
Weighted
|
|
|
Average
|
|
||||
|
|
Number
|
|
|
Average
|
|
|
Remaining
|
|
||||
Range of
|
|
Outstanding
|
|
|
Exercise
|
|
|
Contractual Life
|
|
||||
Exercise Price
|
|
March 31, 2011
|
|
|
Price
|
|
|
(Years)
|
|
||||
$
|
1.25
|
50,000
|
$
|
1.25
|
1.98
|
||||||||
50,000
|
The compensation expense for the unvested options as of March 31, 2011, was $2,086, which will be recognized through December 31, 2011.
15
SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2011 AND 2010
(unaudited)
The following is a summary of the Company’s warrant activity for the three months ended March 31, 2011:
|
|
|
|
|
|
|
|
Weighted
|
|
|||
|
|
|
|
|
Weighted
|
|
|
Average
|
|
|||
|
|
|
|
|
Average
|
|
|
Remaining
|
|
|||
|
|
Warrants
|
|
|
Exercise Price
|
|
|
Contractual Life
|
|
|||
|
|
Outstanding
|
|
|
Price
|
|
|
(Years)
|
|
|||
Outstanding at December 31, 2010
|
521,664
|
1.70
|
||||||||||
Granted
|
-
|
-
|
||||||||||
Canceled
|
-
|
-
|
||||||||||
Exercised
|
-
|
-
|
||||||||||
Outstanding at March 31, 2011
|
521,664
|
$
|
1.70
|
1.99
|
||||||||
Exercisable at March 31, 2011
|
521,664
|
$
|
1.70
|
1.99
|
Note 9 - Employee Welfare Plans
The expense for employee common welfare was $62,814 and $36,821 for the three months ended March 31, 2011 and 2010, respectively. The Company did not record a welfare payable as of March 31, 2011 or December 31, 2010 (audited). The Chinese government abolished the 14% welfare plan policy in 2007. The Company is not required to establish welfare and common welfare reserves.
Note 10 - Statutory Common Welfare Fund
As stipulated by the Company Law of the PRC, net income after taxation can only be distributed as dividends after appropriation has been made for the following:
i.
|
Making up cumulative prior years’ losses, if any;
|
ii.
|
Allocations to the “statutory surplus reserve” of at least 10% of income after tax, as determined under PRC accounting rules and regulations, until the reserve reaches 50% of the Company’s registered capital;
|
iii.
|
Allocations of 5% to 10% of income after tax, as determined under PRC accounting rules and regulations, to the Company’s “statutory common welfare fund,” which is established for the purpose of providing employee facilities and other collective benefits to the Company’s employees; and
|
iv.
|
Allocations to the discretionary surplus reserve, if approved in the stockholders’ general meeting.
|
The Company appropriated $115,124 and $15,462 as reserve for the statutory surplus reserve and statutory common welfare fund for the three months ended March 31, 2011 and 2010, respectively.
Note 11 - Current Vulnerability Due to Certain Concentrations
Two customers accounted for 9% and 7% of the Company’s sales for the three months ended March 31, 2011. One customer accounted for 13% of the Company’s sales for the three months ended March 31, 2010.
One vendor provided 15% of the Company’s raw materials for the three months ended March 31, 2011. There was no vendor which accounted for 10% or more of the Company’s raw material purchases for the three months ended March 31, 2010.
16
SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2011 AND 2010
(unaudited)
The Company’s operations are carried out in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC and by the general state of the PRC’s economy. The Company’s business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.
Note 12 - Contingent Liabilities
At March 31, 2011, the Company is contingently liable to banks for discounted notes receivable and to vendors for endorsed notes receivable of $1,044,810.
Note 13 – Segment Information
The Company reclassified its business segment information at the end of 2010 to more closely align its financial reporting with its business structure. Prior period amounts have been restated to conform to the current presentation. The Company recognized its products as four segments: BOPP tobacco films, coated film, color printed packaging, and advanced film.
The following tables summarize the Company’s segment information for the three months ended March 30, 2011 and 2010:
Three Months Ended March 31,
|
||||||||
2011
|
2010
|
|||||||
Revenues from unrelated entities
|
||||||||
BOPP tobacco film
|
$ | 8,035,528 | $ | 4,140,101 | ||||
Coated film
|
4,919,591 | 4,674,099 | ||||||
Color printed packaging
|
1,656,174 | 687,251 | ||||||
Advanced film
|
1,295,552 | 2,085,268 | ||||||
$ | 15,906,845 | $ | 11,586,719 | |||||
Intersegment revenues
|
||||||||
BOPP tobacco film
|
$ | 1,897,087 | $ | 3,162,541 | ||||
Coated film
|
389,590 | 2,061,748 | ||||||
Color printed packaging
|
274,082 | 1,441,933 | ||||||
Advanced film
|
- | - | ||||||
$ | 2,560,759 | $ | 6,666,222 | |||||
Total Revenues
|
||||||||
BOPP tobacco film
|
$ | 9,932,615 | $ | 7,302,642 | ||||
Coated film
|
5,309,181 | 6,735,847 | ||||||
Color printed packaging
|
1,930,256 | 2,129,184 | ||||||
Advanced film
|
1,295,552 | 2,085,268 | ||||||
Less Intersegment revenues
|
(2,560,759 | ) | (6,666,222 | ) | ||||
$ | 15,906,845 | $ | 11,586,719 | |||||
Income (loss) from operations
|
||||||||
BOPP tobacco film
|
$ | 1,105,513 | $ | 787,617 | ||||
Coated film
|
262,794 | 43,828 | ||||||
Color printed packaging
|
(149,107 | ) | (126,929 | ) | ||||
Advanced film
|
81,673 | 393,080 | ||||||
Holding Company
|
(95,481 | ) | (55,485 | ) | ||||
$ | 1,205,392 | $ | 1,042,111 | |||||
Interest income
|
||||||||
BOPP tobacco film
|
$ | 2,266 | $ | 597 | ||||
Coated film
|
1,401 | 675 | ||||||
Color printed packaging
|
453 | 60 | ||||||
Advanced film
|
265 | 743 | ||||||
Holding Company
|
1,889 | 211 | ||||||
$ | 6,273 | $ | 2,286 | |||||
Interest Expense
|
||||||||
BOPP tobacco film
|
$ | 68,135 | $ | 15,114 | ||||
Coated film
|
44,550 | 20,871 | ||||||
Color printed packaging
|
18,344 | - | ||||||
Advanced film
|
11,922 | 6,844 | ||||||
Holding Company
|
- | - | ||||||
$ | 142,951 | $ | 42,829 | |||||
Income tax expense (benefit)
|
||||||||
BOPP tobacco film
|
$ | 118,859 | $ | 42,650 | ||||
Coated film
|
79,239 | 58,897 | ||||||
Color printed packaging
|
- | - | ||||||
Advanced film
|
12,738 | 56,658 | ||||||
Holding Company
|
- | - | ||||||
$ | 210,836 | $ | 158,205 | |||||
Net Income (loss)
|
||||||||
BOPP tobacco film
|
$ | 964,268 | $ | 496,812 | ||||
Coated film
|
157,427 | 137,634 | ||||||
Color printed packaging
|
(175,441 | ) | (56,618 | ) | ||||
Advanced film
|
152,392 | 399,659 | ||||||
Holding Company
|
(93,642 | ) | (55,394 | ) | ||||
$ | 1,005,004 | $ | 922,093 | |||||
Provision for depreciation
|
||||||||
BOPP tobacco film
|
$ | 275,276 | $ | 112,169 | ||||
Coated film
|
62,563 | 158,357 | ||||||
Color printed packaging
|
79,246 | 66,008 | ||||||
Advanced film
|
101,377 | 59,383 | ||||||
Holding Company
|
- | - | ||||||
$ | 518,462 | $ | 395,917 |
As of
|
As of
|
|||||||
March 31,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
Total Assets
|
||||||||
BOPP tobacco film
|
$ | 22,714,288 | $ | 14,680,846 | ||||
Coated film
|
14,851,649 | 24,720,052 | ||||||
Color printed packaging
|
6,115,385 | 4,805,203 | ||||||
Advanced film
|
10,020,825 | 10,141,213 | ||||||
Holding Company
|
11,907,337 | 1,570,372 | ||||||
$ | 65,609,484 | $ | 55,917,686 |
17
SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2011 AND 2010
(unaudited)
The geographical distribution of Shiner’s revenue for the three months ended March 31, 2011 and 2010 is as follows:
|
|
Three Months Ended March 31,
|
|
|||||
Geographical Areas
|
|
2011
|
|
|
2010
|
|
||
Chinese Main Land
|
$
|
13,084,399
|
$
|
9,214,994
|
||||
Asia (outside Mainland China)
|
1,227,574
|
1,344,543
|
||||||
Middle East
|
575,093
|
315,461
|
||||||
Australia
|
416,298
|
431,984
|
||||||
North America
|
601,418
|
183,193
|
||||||
South America
|
2,063
|
-
|
||||||
Europe
|
-
|
96,544
|
||||||
$
|
15,906,845
|
$
|
11,586,719
|
18
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2011 AND 2010
(unaudited)
The Company has evaluated all subsequent events that occurred up to the time of the Company's issuance of its financial statements.
19
CAUTIONARY STATEMENT FOR FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “would,” “expect,” “plan,” anticipate,” believe,” estimate,” continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those listed under the heading “Risk Factors” and those listed in our other SEC filings. The following discussion should be read in conjunction with our Financial Statements and related notes thereto included elsewhere in this Quarterly Report. Throughout this Quarterly Report we will refer to Shiner International, Inc., together with its subsidiaries, as “Shiner,” the “Company,” “we,” “us,” and “our.
Overview
We are a Nevada corporation engaged in the packaging and anti-counterfeit plastic film business in the People's Republic of China ("China") through our operating subsidiaries. We were incorporated on November 12, 2003 in Nevada. Since July 23, 2007, our principal place of business has been in China. As a result of a share exchange transaction in 2007, we changed our name to Shiner International, Inc. on July 24, 2007. Our principal executive offices are located at 19th Floor, Didu Building, Pearl River Plaza, No. 2 North Longkun Road, Haikou, Hainan Province, China 570125 . Our telephone number is +86-898-68581104. Our website is http: www.shinerinc.com .
Our primary business consists of the manufacture and distribution of technology driven advanced packaging film products in four business segments – BOPP tobacco films, coated film, color printed packaging, and advanced film. The following table sets forth our four segments and the percentage of total revenue each segment generated for the three months ended March 31, 2011 and 2010:
Percent of Total Revenue
|
||||||||
Product
|
2011
|
2010
|
||||||
BOPP tobacco film
|
51 | % | 36 | % | ||||
Coated film
|
31 | % | 40 | % | ||||
Color printed packaging
|
10 | % | 6 | % | ||||
Advanced film
|
8 | % | 18 | % |
All of our operations are based in China and each of our subsidiaries was formed under the laws of China. We currently conduct our business through Hainan Shiner Industrial Co., Ltd. (“Shiner Industrial”), which was incorporated on May 21, 2003 and is headquartered in Haikou, Hainan Province, Hainan Shiny-day Color Printed Packaging Co., Ltd. (“Shiny-day”), which was incorporated on March 19, 2004, and is headquartered in Hailou, Hainan Province, and Zhuhai Huanuo Packaging Material Co., Ltd. (“Zhuhai”), which was incorporated on December 25, 2006 and is headquartered in Zhuhai, Guangdong Province. Shiner Industrial, Shiny-day and Zhuhai currently produce all of our products: BOPP tobacco film, coated films, color printed packaging and advanced films).
On September 20, 2010, we commenced operations of Shanghai Juneng Functional Film Company, Ltd., a majority-owned subsidiary organized under the laws of China (“Shanghai Juneng”). We own 70% of Shanghai Juneng and Shanghai Shifu Film Material, Co., Ltd. (‘Shanghai Shifu”) owns the remaining 30%. The general manager of Shanghai Juneng reports directly to our Chief Executive Officer. Shanghai Juneng is focused on pursuing sales opportunities among the domestic food safety packaging markets and targets China’s leading food producers.
20
We are a manufacturer of BOPP tobacco film, coated films, color printing products and advanced film, selling to customers throughout China, Asia, Australasia, Europe, the Middle East and North America. Our products are sold to companies in the following industries: food, tobacco, chemical, agribusiness, medical, pharmaceutical, personal care, electronics, automotive, construction, graphics, music and video publishing and other consumer goods. The Ministry of Science and Technology of China has certified Shiner Industrial, one of our subsidiaries, as a Nationally-Focused Advanced High Technology Enterprise under the State Torch Program, which promotes the development and application of science- and technology-focused businesses in China.
We hold 16 patents and have 10 patent applications pending that relate to certain of our products and manufacturing processes that have been issued by the State Intellectual Property Office of China. These are discussed in greater detail under the heading “Intellectual Property” on page 10 of our Annual Report on Form 10-K/A for the year ended December 31, 2010. Although our patents and processes provide us with a competitive advantage, the loss of any single patent would not have a material adverse effect on our business as a whole.
Our current production capacity consists of:
|
·
|
five coated film lines with a total capacity of 15,000 tons a year;
|
|
·
|
one BOPP tobacco film production line with a total capacity of 3,500 tons a year;
|
|
·
|
one BOPP film production line with a total capacity of 7,000 tons a year;
|
|
·
|
three color printing lines; and
|
|
·
|
four anti-counterfeit film lines with a total capacity of 2,500 tons a year.
|
Three months ended March 31, 2011 compared to the three months ended March 31, 2010
|
|
For the Three Months Ended March 31,
|
|
|
$
|
|
|
%
|
|
|||||||
|
|
2011
|
|
|
2010
|
|
|
Change
|
|
|
Change
|
|
||||
Revenues
|
$
|
15,906,845
|
$
|
11,586,719
|
$
|
4,320,126
|
37.3
|
%
|
||||||||
Cost of goods sold
|
13,539,738
|
9,699,466
|
3,840,272
|
39.6
|
%
|
|||||||||||
Gross profit
|
2,367,107
|
1,887,253
|
479,854
|
25.4
|
%
|
|||||||||||
Selling, general and administrative expenses
|
1,161,715
|
845,142
|
316,573
|
37.5
|
%
|
|||||||||||
Interest expense, net of interest income
|
136,678
|
40,543
|
96,135
|
237.1
|
%
|
|||||||||||
Other income, net
|
194,611
|
86,191
|
108,420
|
125.8
|
%
|
|||||||||||
Exchange loss
|
(55,795
|
)
|
(7,461
|
)
|
(48,334
|
)
|
647.8
|
%
|
||||||||
Income tax expense
|
210,836
|
158,205
|
52,631
|
33.3
|
%
|
|||||||||||
Net income attributed to Shiner
|
$
|
1,005,004
|
$
|
922,093
|
$
|
82,911
|
9.0
|
%
|
Revenues
Revenues for the three months ended March 31, 2011 increased 37.3%, or $4.3 million, to $15.9 million compared to $11.6 million for the same 2010 period. This increase was mainly a result of increased sales across the BOPP tobacco films, coated films and color printing products and was offset by a decrease in advanced film sales of 37.7% to $1.3 million, down from $2.1 million at March 31, 2010. Biaxially Oriented Polypropylene (BOPP) tobacco revenue increased 94.1%, or $3.9 million, in the three months ended March 31, 2011 to $8.0 million from $4.1 million in the same 2010 period. Coated film revenue increased 5.2%, or $0.2 million, to $4.9 million in the three months ended March 31, 2011 from $4.7 million in the first quarter of 2010. Our advanced film revenue decreased 37.7%, or $0.8 million, to $1.3 million in the three months ended March 31, 2011 from $2.1 million in the first quarter of 2010. Our color printing product revenues increased 141%, or $0.97 million, to $1.7 million in the three months ended March 31, 2011 compared to $.7 million in the first quarter of 2010.
The increase in revenue was primarily caused by two factors: an increase in domestic product volume and an improvement in our sales prices. Approximately 82%, or $13.1 million, of our total sales in the three months ended March 31, 2011 were made domestically to Chinese companies. In the first quarter of 2010, approximately 79%, or $9.2 million, of our total sales were made domestically. The Company provides coated film to its largest customer who manufactures snack cakes and its remaining top 3 customers are tobacco manufacturers who use our BOPP tobacco film.
Internationally, we sell only three lines of products: anti-counterfeit film, coated film, and color printing. International sales for the three months ended March 31, 2011 were $2.8 million, or 18%, of our revenues in 2011 and were a $0.5 million, or 19.2%, increase from the $2.4 million in international sales in the first quarter of 2010. The increase was not significant. All international sales are indirect using a network of distributors and converters.
21
Our five largest customers accounted for 9%, 7%, 5%, 5% and 3% of our revenue for the three months ended March 31, 2011 and 13%, 8%, 7%, 5% and 5% of our revenue for the three months ended March 31, 2010.
Cost of Goods Sold
Cost of goods sold increased $3.8 million, or 39.6%, from $9.7 million for the three months ended March 31, 2010 to $13.5 million in 2011. The cost of goods sold represented 85.1% and 84% of our total revenue in the first quarters of 2011 and 2010, respectively. The principal cost component of our cost of goods sold is our raw materials cost which includes the cost of petroleum. The increase in cost of goods sold year to year was primarily caused by an increase in raw material costs due to petroleum price fluctuations. We estimate that an increase in the price of crude oil of $10 per barrel would cause our raw material cost to increase by approximately 6%. There has been some increase in the cost of our raw materials as a result of an increase in crude oil prices throughout the year. There is not a significant difference in the cost of goods sold percentages among our different product lines and therefore, any increase or decrease in our raw material costs has similar a impact to our different product lines’ profitability.
The packaging industry requirements for the food industry mandate the use of non-benzene based products. In an effort to be environmentally friendly and to improve work conditions in our factory, Shiner proactively switched to non-benzene based ink products in a corporate effort to be green. This change also positively contributed to our compliance with the FSL, as our food packaging operations are conducted in the same facility. At the time of the change, we received a favorable response from all of our customers.
The percentage increase in our cost of goods sold in the first quarter of 2011 was positively influenced by the following events:
|
·
|
The increase in raw material costs due to petroleum price fluctuations; and
|
·
|
The added depreciation of the new property which amortized into the cost of goods sold.
|
Gross Profit
Our gross profit increased $.5 million, or 25.4%, to 2.4 million for the first quarter of 2011 from $1.9 million for the three months ended March 31, 2010. The increase in gross profit was largely due to the increase in revenue from the BOPP tobacco films, coated films and color printing products. The Company experienced a gross margin of 14.9% for the first quarter of 2011, compared to 16.3% for the same period in 2010.
Selling, General and Administrative Expenses
Our selling, general and administrative expenses increased by 37.5%, or $0.3 million, to $1.2 million for the three months ended March 31, 2011 compared to $0.8 million in the 2010 period. General and administrative expenses include rent, management and staff salaries, insurance, marketing, accounting, legal, and research and development expenses. Although we have strict standards to control our general and administrative expenses, we have increased our research and development expenditures in the last year. Research and development expenses increased $0.06 million or 36.4%, to $.2 million for three months ended March 31 2011, compared to $0.14 million in 2010.
Interest Expense, net
Interest expense, net for the three months ended March 31, 2011 increased by 237.1%, or $96,135, to $136,678 compared to $40,543 in the 2010 period. We have obtained additional short-term and long-term loans in the three months ended March 31, 2011 compared with the comparable period in 2010.
Other Income
Other income increased by $108,420, or 125.8%, to $194,611 for the three months ended March 31, 2011 compared to $86,191 in 2010. The increase is related to the grant which the Chinese government has given to the Company to support the high-tech enterprise.
22
Income Tax Expense
For the three months ended March 31, 2011, we recorded a tax provision of $210,836 compared to $158,205 in the first quarter of 2010. Our effective tax rates for the three months ended March 31, 2011 and 2010 were 19% and 15%, respectively.
Net Income
Net income attributed to Shiner increased by $82,911, or 9%, to $1.0 million for the three months ended March 31, 2011 compared to $0.9 million in the same period of 2010. The increase in the net income attributed to Shiner was due to the increase in revenue from the BOPP tobacco films, coated films and color printing products.
Off-Balance Sheet Arrangements
We had no off-balance sheet arrangements as of March 31, 2011 that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our interests.
Liquidity and Capital Resources
Cash Flows
At March 31, 2011, we had $3.0 million in cash and cash equivalents on hand. Our principal demands for liquidity are: increasing capacity, purchasing raw materials, sales distribution and the possible acquisition of new subsidiaries in our industry, as well as other general corporate purposes. As of March 31, 2011, we had eight short-term and long-term loans outstanding for a total of $16.7 million, with interest rates of 5.6% to 6.6%. The loans have due dates on various dates between June 2011 through March 2018 and are collateralized by buildings and equipment. As of March 31, 2011, we had working capital of $13.6 million, an increase of $0.7 million from December 31, 2010. We anticipate we will have adequate working capital to fund our operations and growth in the foreseeable future.
Net cash flows used in operating activities for the three months ended March 31, 2011 was $5.4 million, which was comprised primarily of net income of $1.0 million, depreciation expense of $.5 million, an increase in inventory and advance to suppliers of $1.5 million and $4.5 million, respectively, and a decrease in accounts payable of $2.3 million, offset by increases in accounts receivable of $0.6 million and unearned revenue of $0.8 million.
We used $10.0 million from our investing activities during the three months ended March 31, 2011 primarily for the acquisition of property and equipment including construction in progress. We are building a new BOPP tobacco film production line to be completed in the second quarter of 2011. The new line will be a BOPP film production line in a fully automated plant equipped with state-of-the-art production machinery. The total cost of this new facility is expected to be approximately $13.2 million , of which approximately $2 million in costs are required to complete the facility. We have a 70 million RMB credit facility that we can draw down upon to pay for the cost of this property and equipment (see discussion under “Liabilities” below).
Net cash provided by financing activities was $9.8 million from the issuance of short and long-term loans. $6.8 million was paid to terminate short term loans offset by $16.6 million provided by the issuance of short and long term loans.
Assets
As of March 31, 2011, our accounts receivable decreased by $0.5 million compared with the balance as of December 31, 2010. The decrease in accounts receivable during the three months ended March 31, 2011 was due primarily to an increase of the collection of accounts receivable. We intend to continue our efforts to maintain accounts receivable at reasonable levels in relation to our sales. As of March 31, 2011, our property and equipment increased by $8.3 million compared with the balance as of December 31, 2010. The increase in the property and equipment during the three months ended March 31, 2011 was due primarily to the completion of the first phase of the new facility.
23
Liabilities
Our accounts payable decreased by $2.3 million during the three months ended March 31, 2011 primarily due to the purchase of fewer materials as the construction of our new plant in the Shiziling industrial park is nearing completion.
We have entered into a formal agreement with a vendor whereby we agreed to purchase new equipment for approximately $13.2 million. We already paid approximately $1.3 million toward the purchase of this equipment and have issued a letter of credit for the remaining amount. The equipment is expected to be installed in the second quarter of 2011, and be operational in the third quarter of 2011.
On August 2, 2010, Hainan Shiner Industrial Co., Ltd. (“Hainan Shiner”), our wholly owned subsidiary, entered into a credit facility with the Hainan Branch of the Bank of China. The credit facility is comprised of a seven-year 70 million RMB, or approximately $10.3 million, secured revolving credit facility. Hainan Shiner may not make any draw downs under this facility after December 31, 2011. On each of January 25, 2011, February 12, 2011, February 17, 2011, February 21, 2011, and March 23, 2011, Hainan Shiner made withdrawals on the credit facility of approximately $2.5 million, $2.6 million, $2.2 million, $1.2 million, and approximately $408,000, respectively. Hainan Shiner may only use the loan proceeds to improve the technology of its BOPP film and to purchase certain equipment necessary for these improvements. Proceeds under the facility not used for these purposes may be subject to a misappropriation penalty interest rate of 100% of the current interest rate on the loan.
The initial interest rate on each withdrawal from the facility will be the 5-year benchmark lending rate announced by the People’s Bank of China on the date of such withdrawal, and is subject to adjustment every 12 months based upon the this benchmark. Additional interest will be paid on an overdue loan under this credit facility of 50% of the current interest rate on the loan. Hainan Shiner and certain of its affiliates, including the Company, have provided guarantees and certain land, buildings, and property as collateral under this facility.
The credit facility includes financial covenants that prohibit Hainan Shiner from making distributions to its sole shareholder if (a) its after-tax net income for the fiscal year is zero or negative, (b) its after-tax net income is insufficient to make up its accumulated loss for the last several fiscal years, (c) its income before tax is not utilized in paying off the capital, interest and expense of the lender, or (d) the income before tax is insufficient to pay the capital, interest and expense of the lender.
We intend to meet our liquidity requirements, including capital expenditures related to the purchase of equipment, purchase of raw materials, and the expansion of our business, through cash flow provided by operations, the forgoing credit facility, and funds raised through private placement offerings of our securities. Nothing set forth in this Quarterly Report on Form 10-Q shall be deemed an offer to sell any security nor a solicitation of an offer to purchase any security.
The majority of our revenues and expenses were denominated primarily in RMB, the currency of the PRC.
There is no assurance that exchange rates between the RMB and the USD will remain stable. We do not engage in currency hedging. Inflation has not had a material impact on our business.
Critical Accounting Policies
Accounts Receivable
The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Reserves are recorded primarily on a specific identification basis.
Advances to Suppliers
The Company makes advances to certain suppliers for the purchase of its materials. The advances to suppliers are interest free and unsecured.
24
Inventory
Inventory is valued at the lower of the inventory’s cost (weighted average basis) or the current market price of the inventory. Management compares the cost of inventory with its market value and an allowance is made to write down inventory to market value, if lower.
Revenue Recognition
The Company’s revenue recognition policies comply with SEC Staff Accounting Bulletin 104. Sales revenue is recognized at the date of shipment to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist and collectability is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as unearned revenue.
Sales revenue consists of the invoiced value of goods, which is net of value-added tax (“VAT”). All of the Company’s products are sold in the PRC and are subject to Chinese VAT of 17% of the gross sales price. This VAT may be offset by VAT paid by the Company on raw materials and other materials included in the cost of producing their end product. The Company recorded VAT payable and VAT receivable net of payments in the financial statements. The VAT tax return is filed offsetting the payables against the receivables.
Sales and purchases are recorded net of VAT collected and paid. VAT taxes are not affected by the income tax holiday.
Sales returns and allowances was $0 for the three months ended March 31, 2011 and 2010. The Company does not provide unconditional right of return, price protection or any other concessions to its dealers or other customers.
Stock-Based Compensation
The Company records stock-based compensation in accordance with ASC Topic 718, “Compensation – Stock Compensation.” ASC 718 requires companies to measure compensation cost for stock-based employee compensation at fair value at the grant date and recognize the expense over the employee’s requisite service period. The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees. There were 60,000 options outstanding as of March 31, 2011.
Income Taxes
The Company accounts for income taxes in accordance with ASC Topic 740, “Income Taxes.” ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is more than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The adoption had no effect on the Company’s consolidated financial statements.
25
Basic and Diluted Earnings Per Share
Earnings per share is calculated in accordance with the ASC Topic 260, “Earnings Per Share.” Basic earnings per share is based upon the weighted average number of common shares outstanding. Diluted earnings per share is based on the assumption that all dilutive convertible shares and stock warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. There were 60,000 options and 521,664 warrants outstanding as of March 31, 2011. There were 190,000 options and 970,050 warrants outstanding as of March 31, 2010. The following is a reconciliation of the number of shares (denominator) used in the basic and diluted earnings per share computations for the three months ended March 31, 2011 and 2010:
Three Months Ended
|
Three Months Ended
|
|||||||||||||||
March 31, 2011
|
March 31, 2010
|
|||||||||||||||
Per Share
|
Per Share
|
|||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||
Basic earnings per share
|
27,541,491 | $ | 0.04 | 24,588,155 | $ | 0.04 | ||||||||||
Effect of dilutive stock options and warrants
|
5,184 | - | 10,203 | - | ||||||||||||
Diluted earnings per share
|
27,546,675 | $ | 0.04 | 24,598,358 | $ | 0.04 |
Recent Accounting Pronouncements
In January 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2010-06, Improving Disclosures about Fair Value Measurements (“ASU No. 2010-06”). The new standard addresses, among other things, guidance regarding activity in Level 3 fair value measurements. Portions of ASU No. 2010-06 that relate to the Level 3 activity disclosures are effective for the annual reporting period beginning after December 15, 2010. The Company will provide the required disclosures beginning with the Company’s Annual Report on Form 10-K for the year ending December 31, 2011. Based on the initial evaluation, the Company does not anticipate a material impact to the Company’s financial position, results of operations or cash flows as a result of this change.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not required
Item 4. Controls and Procedures
The Company carried out an evaluation, under the supervision and with the participation of its management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” (as defined in the Exchange Act Rule 13a-15(e)) as of the end of the period covered by this quarterly report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective.
There was no change in the Company’s internal control over financial reporting that occurred during the Company’s most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
There have been no material changes from the disclosure provided in Part 1, Item 3 of our Annual Report on Form 10-K/A for the year ended December 31, 2010.
Item 1A. Risk Factors
There have been no material changes from the disclosure provided in Part 1, Item 1A of our Annual Report on Form 10-K/A for the year ended December 31, 2010.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. (Removed and Reserved)
Item 5. Other Information
None.
26
Item 6. Exhibits
(a)
|
Exhibits
|
Exhibit Number
|
Description of Exhibit
|
|
2.3
|
Share Transfer Agreement, dated as of May 2, 2011, by and between Fu Zhiyong and Shiner International, Inc.*
|
|
3.1
|
Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.3 of Shiner's Current Report on Form 8-K (Commission File No. 001-33960) filed with the SEC on July 27, 2007).
|
|
|
||
3.2
|
Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 of Shiner's Current Report on Form 8-K (Commission File No. 001-33960) filed with the SEC on July 27, 2007).
|
|
|
||
10.15
|
Amendment to Securities Purchase Agreement, dated as of January 10, 2011, between the Company and the Investors thereto (incorporated by reference to Exhibit 10.15 of Shiner's Current Report on Form 8-K (Commission File No. 001-33960) filed with the SEC on January 14, 2011).
|
|
|
||
31.1
|
Certification of Principal Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended.
|
|
31.2
|
Certification of Principal Financial Officer pursuant to Rule 13a-14 and Rule 15d 14(a), promulgated under the Securities and Exchange Act of 1934, as amended.
|
|
32.1
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer).
|
|
32.2
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer).
|
* Previously filed.
27
SIGNATURES
Pursuant to the requirements of the Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized..
Shiner International, Inc.
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|
September 26, 2011
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By: /s/ Qingtao Xing
|
Name: Qingtao Xing
|
|
Title: President and Chief Executive Officer
|
Shiner International, Inc.
|
|
September 26, 2011
|
By: /s/ Xuezhu Xu
|
Name: Xuezhu Xu
|
|
Title: Interim Chief Financial Officer
|
EXHIBIT INDEX
Exhibit Number
|
Description of Exhibit
|
|
31.1
|
Certification of Principal Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended.
|
|
31.2
|
Certification of Principal Financial Officer pursuant to Rule 13a-14 and Rule 15d 14(a), promulgated under the Securities and Exchange Act of 1934, as amended.
|
|
32.1
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer).
|
|
32.2
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer).
|