SHANGHAI, March 10 /PRNewswire-Asia-FirstCall/ -- Chemspec International Limited (NYSE: CPC; "Chemspec" or the "Company"), a leading China-based contract manufacturer of highly-engineered specialty chemicals, today announced its unaudited financial results(1) for the fourth quarter and full fiscal year ended December 31, 2009, and guidance for the first quarter of 2010. Upon careful review of the Company's financial and operating prospects in 2010, management has decided and the board of directors has approved the issuance of a dividend of $0.003 per ordinary share ($0.18 per ADS(2)) payable on April 21, 2010 to shareholders of record as of March 31, 2010.
Fourth Quarter 2009 Financial Highlights(3) -- Total sales were RMB 177.1 million (US$25.9 million), a decrease of 36.4% from the fourth quarter of 2008 and a decrease of 16.2% from the third quarter of 2009. -- Gross profit was RMB 63.0 million (US$9.2 million), a decrease of 46.7% from the fourth quarter of 2008 and a decrease of 29.5% from the third quarter of 2009. -- Income from operations was RMB 28.6 million (US$4.2 million), a decrease of 66.6% from the fourth quarter of 2008 and a decrease of 53.8% from the third quarter of 2009. -- Net income attributable to Chemspec International Limited shareholders was RMB 34.8 million (US$5.1 million), a decrease of 50.5% from the fourth quarter of 2008 and a decrease of 33.5% from the third quarter of 2009. -- Basic and diluted earnings per ADS(2) were RMB 0.96 (US$0.14), as compared to RMB 2.34 in the fourth quarter of 2008 and RMB 1.44 in the third quarter of 2009. Full Year 2009 Financial Highlights(3) -- Total sales were RMB 820.3 million (US$120.2 million), a decrease of 13.0% from the preceding year. -- Gross profit was RMB 324.7 million (US$47.6 million), a decrease of 17.6% from the prior year. -- Income from operations was RMB 207.5 million (US$30.4 million), a decrease of 29.6% from the prior year. -- Net income attributable to Chemspec International Limited shareholders was RMB 172.4 million (US$25.3 million), a decrease of 44.8% from the prior year. Excluding the non-recurring income tax refund of RMB 58.8 million received in 2008, the net income attributable to Chemspec International Limited shareholders for fiscal year 2009 would have a decrease of 32.0% from the prior year. -- Basic and diluted earnings per ADS were RMB 5.18 (US$0.76), compared to RMB 10.41 and RMB 10.40 from the prior year. Year 2009 Business Highlights Over the past year, the Company: -- Faced one of the most challenging years in its 13 year history, mainly due to the global financial crisis and economic recession, the Company's sales were largely impacted in the first quarter of 2009 by sharply reduced demand in the electronics chemical market and in the third and fourth quarter of 2009 by the unfavorable demand change in the global agrochemical market. The Company's chemical products for the pharmaceutical market remained stable with some healthy growth. -- Successfully listed on the NYSE, raising RMB 389.0 million that helps the Company establish a strong corporate image for new business development and a capital market platform for future growth. -- Recruited highly experienced industry experts across all business segments in order to build a stronger management team. -- Spent a record RMB 343 million in capital expenditures during the year to expand the Company's R&D and production facilities and reduce bottlenecks that have impeded growth, at times, in the past. Total reactor volume increased from 1.1 million liters at the end of 2008 to 2.0 million liters at the end of 2009. Additional reactors will be installed after the completion of the current phase of expansion in the first half of 2010. -- Increased total headcount from 1,171 employees at the end of 2008 to 1,585 at the end of 2009. -- Diversified the Company's customer base and built a solid foundation that will allow the Company to diversify its product mix from traditional chemical intermediates manufacturing into downstream Active Pharmaceutical Ingredients (APIs) for the pharmaceutical industry and Active Ingredients (AIs) for the agrochemical industry. -- Received technology grants from the central and local governments for four out of the six manufacturing subsidiaries of the Company. Grants totaled RMB 10.0 million in the year 2009 -- a strong recognition of the Company's leading position in different technologies in many industrial fields in which the Company is actively involved. -- Increased the number of approved patents from 6 at the end of 2008 to 11 by the end of 2009. The Company currently has 28 approved and pending approval patents. First Quarter 2010 Guidance -- Sales are expected to reach between RMB 205 million to 210 million in the first quarter of 2010, which would represent an increase of between 2.3% and 4.8% from the first quarter of 2009 and an increase of between 15.8% and 18.6% from the fourth quarter of 2009. The increase is primarily expected to be driven by a strong recovery in demand in various end markets that incorporate the Company's products. -- Gross profit margin is expected to be at the Company's normal operational level of above 40%. Declaration of Dividend -- The Company plans to maintain an annual dividend policy, as we discussed in the IPO prospectus, of distributing a portion of our annual net income to shareholders. The Company's board of directors has declared the issuance of its 2009 dividend of $0.003 per ordinary share ($0.18 per ADS), payable on April 21, 2010 to shareholders of record as of March 31, 2010. However, the declaration, amount and payment of future dividends to holders of common stock will be at the discretion of the board of directors and will depend upon many factors, including, capital requirements, cash flow trends, financial condition, earnings, alternate investment opportunities, legal requirements, regulatory constraints, industry practice and other factors that the board of directors deems relevant. Completion of Share Repurchase Program -- The Company has substantially completed its share repurchase plan announced on September 29, 2009. The total funds used in the share repurchase plan were US$1.2 million. (1) Certain Renminbi (RMB) amounts in this press release have been translated into U.S. dollar (US$) solely for the convenience of the reader. The conversion of RMB into US$ in this release is based on the Federal Reserve Board certified exchange rate on December 31st, 2009, which was RMB 6.8259 to US$1.00. The percentages stated are calculated based on RMB. (2) 1 ADS=60 ordinary shares (3) 2008 financial data have been adjusted. Please refer to detail disclosure in section below "Adjustment to Financial Statements to Reflect Acquisition of Jiangsu Kangpeng Nong Hua Limited"
Dr. Jianhua Yang, Chairman and CEO of Chemspec, commented, "2009 was clearly a difficult year for the global economy. A strong retreat in consumer demand affected the electronics markets that we supply, and unfavorable weather patterns had an impact on most agrochemical end markets. While 2009 presented a number of obstacles that we needed to overcome, it also presented an opportunity for us to prepare for future challenges.
"We remain the leader in terms of chemical process research and development in China and are highly competitive compared to our global peers. We also continue to deepen our relationships with a growing number of customers around the world.
"We devoted considerable time and effort over the past year on improving our internal operations in order to set a more solid foundation for future development. Although we just emerged from an extremely challenging year, we believe we have completed a series of projects and initiated others, as discussed above, which will strengthen our internal operations and will allow us to more effectively deal with challenges that we will face in the future."
Mr. Bing Zhu, Chief Financial Officer of Chemspec, commented, "Given the tough environment in 2009, we took a conservative look at our inventory at year-end and decided to take a provision of RMB 14.7 million to write down the value of some of our obsolete inventories. This is a specific year-end non- cash charge, and we believe it reflects the realities of our current business. However, our financial position remains strong, and excluding the write down, our gross margins in the fourth quarter of 2009 would have stayed roughly in line with prior periods."
"In terms of financial performance, we believe we began to experience a positive turn-around in early 2010 as we started to see a recovery in demand in various end markets that incorporate our products. Our guidance for first quarter 2010 sales would represent a record for that period. Although there are still some visibility issues in terms of demand in the coming quarters for some of our products, we have a high degree of confidence that we can achieve quarter-over-quarter sales growth in the next few quarters based on our usual seasonal quarterly-sales fluctuations, our understanding of global market trends in 2010 as well as feedback from our long-term and new customers."
"We decided to issue our first annual dividend for fiscal year 2009 after we completed the share repurchase program that was announced in September 2009 with only US$1.2 million in funds used. Although 2009 was a difficult year in terms of financial performance, we were still able to generate a strong stream of cash from our operations. This dividend shows the management's confidence in our financial position and operational cash generating capabilities in the years to come. We plan to maintain a dividend policy, as we discussed in the IPO prospectus, of distributing a portion of our annual net income when the management and board feel it is the best use of cash. We believe it is important to allow our shareholders to participate in our results in a direct and tangible way in future years."
Fourth Quarter 2009 Financial Results Total Sales
For the three months ended December 31, 2009, the Company generated total sales of RMB 177.1 million (US$25.9 million), a decrease of 36.4% from the fourth quarter of 2008 and a decrease of 16.2% from the third quarter of 2009. The decrease in the fourth quarter of 2009 mainly reflects weak sales of agrochemical products.
Gross Profit and Gross Margin
Gross profit was RMB 63.0 million (US$9.2 million), a decrease of 46.7% from the fourth quarter of 2008 and a decrease of 29.5% from the third quarter of 2009. Gross margin was 35.6% in the fourth quarter of 2009. Due to the extremely difficult market situation in 2009, the Company took a conservative look at our inventory at year-end and decided to take a provision of RMB 14.7 million to write down the value of some of our obsolete inventories. Excluding the write-down, gross profit margin would have been 43.9% for the fourth quarter of 2009, which is roughly in line with 42.5% in the fourth quarter of 2008 and 42.3% in the third quarter of 2009.
Operating Expenses
Selling expenses and general and administrative expenses were RMB 23.6 million (US$3.5 million) during the fourth quarter of 2009, representing an increase of 11.1% from RMB 21.3 million in the fourth quarter of 2008 and an increase of 21.4% from RMB 19.4 million in the third quarter of 2009. The increase compared to the fourth quarter of 2008 was mainly due to higher professional and other expenses related to being a publicly traded company along with depreciation expenses that started following the Company's move into a new headquarters. The increase compared to the third quarter of 2009 was mainly due to staff salaries and professional expenses.
Research and development (R&D) expenses decreased by 22.9% to RMB 8.0 million (US$1.2 million) during the fourth quarter of 2009 from RMB 10.4 million in the fourth quarter of 2008 and increased by 13.3% from RMB 7.1 million in the third quarter of 2009. The decrease compared with the same period in 2008 was primarily due to a decrease in material consumption. Compared to the third quarter of 2009, the increase was mainly due to higher staff salaries.
Income from operations and earnings before income taxes
As a result of the factors mentioned above, income from operations was RMB 28.6 million (US$4.2 million) and earnings before income taxes were RMB 29.0 million (US$4.3 million) in the fourth quarter of 2009, decreases of 66.6% and 65.5%, respectively, from the fourth quarter of 2008, and decreases of 53.8% and 53.6%, respectively, from the third quarter of 2009.
Net income attributable to Chemspec International Limited shareholders
Net income attributable to Chemspec International Limited shareholders was RMB 34.8 million (US$5.1 million) in the fourth quarter of 2009, a decrease of 50.5% from the fourth quarter of 2008 and a decrease of 33.5% from the third quarter of 2009. The decrease in net income attributable to Chemspec International Limited shareholders was mainly caused by the decrease in sales and the one-time year-end inventory write-down.
Basic and diluted earnings per ADS were RMB 0.96 (US$0.14), as compared to RMB 2.34 in the fourth quarter of 2008 and RMB 1.44 in the third quarter of 2009.
Full Year 2009 Financial Results Total Sales
For the twelve months ended December 31, 2009, the Company generated total sales of RMB 820.3 million (US$120.2 million), a decrease of 13.0% from 2008. The decrease was mainly due to weak demand in the Company's end markets, primarily as a result of the global financial crisis.
Gross Profit and Gross Margin
Gross profit was RMB 324.7 million (US$47.6 million), a decrease of 17.6% from 2008, due primarily to reduced sales in electronic chemicals in the first quarter of 2009 and reduced sales in agrochemicals in the third and fourth quarter of 2009.
Operating Expenses
Total operating expenses were RMB 119 million (US$17.4 million), which compares to RMB 100.5 million (US$14.7 million) in 2008. The increase was primarily due to higher personnel salaries for experienced senior level employees, higher depreciation since we moved into new headquarters and R&D buildings, and other consulting and audit fees associated with being a publicly-listed company.
Income from operations and earnings before income taxes
Income from operations totaled RMB 207.5 million (US$30.4 million), compared to RMB 294.5 (US$43.1 million) in 2008.
Net income attributable to Chemspec International Limited shareholders
Net income attributable to Chemspec International Limited shareholders for fiscal year 2009 was RMB 172.4 million (US$25.3 million), a decrease of 44.8% from RMB 312.4 million (US$45.8 million) in 2008. Excluding the non-recurring income tax refund of RMB 58.8 million received in 2008, the net income attributable to Chemspec International Limited shareholders for fiscal year 2009 would have a decrease of 32.0% from the prior year mainly due to the lower total sales, lower annual average gross profit margin as well as higher effective income tax rate.
Basic and diluted earnings per ADS for fiscal year 2009 were RMB 5.18 (US$0.76) and RMB 5.18 (US$0.76), compared to RMB 10.41 and RMB 10.40 in 2008.
Balance Sheet
As of December 31, 2009, the Company had RMB 351.1 million (US$51.4 million) in cash, as compared to RMB 180.6 million as of December 31, 2008. The increase in the Company's cash was primarily due to the proceeds of approximately RMB 389.0 million (US$57.0 million) from the Company's IPO in June 2009.
The Company's year-end 2009 inventory level increased to RMB 271.4 million (US$39.8 million) from RMB 218.3 million as of December 31, 2008. The increase reflects a change in the Company's product mix as a strong recovery in demand started in early 2010 for the Company's specialty chemical products used in the electronics field. As Chemspec's products in this field are technically highly complex and involve a long in-house production cycle, management expects the average inventory level to be approximately RMB 300 million in year 2010.
As the Company acquired the remaining non-controlling shares of Jiangsu Wei Er Chemicals Co., Ltd. and 100% of the shares of Jiangsu Kangpeng Nong Hua Limited (elaborated in section below) as well as repurchased a certain number of shares from the open market in the fourth quarter of 2009, the total equity of the Company reduced to RMB 1,192.3 million at the end of the fourth quarter of 2009 from RMB 1,228.5 million at the end of the third quarter of 2009, after netting off the net income from the fourth quarter of 2009.
Adjustment to Financial Statements to Reflect Acquisition of Jiangsu Kangpeng Nong Hua Limited
Chemspec acquired 100% equity interest of Jiangsu Kangpeng Nong Hua Limited, or Kangpeng Nong Hua, in November 2009 for RMB 25 million in cash. Since the Company's Chairman and CEO, Dr. Yang, owned more than 50% of the voting rights of both the Company and Kangpeng Nong Hua as of the date of the acquisition, the acquisition was considered a combination between entities under common control in accordance with ASC Topic 805. Therefore, the Company's consolidated financial statements have been retrospectively adjusted to reflect the combined entities for the periods during which the entities were under common control.
Accordingly, the Company's balance sheet as of December 31, 2008 and the related consolidated statements of income, shareholders' equity, comprehensive income, and cash flows for the year ended December 31, 2008 have been retrospectively adjusted to reflect the combined entities for the periods during which the entities were under common control. The effects of the change to the Company's financial statements are as follows:
RMB'000 December 31, 2008 December 31, 2009 As computed As reported As As excluding including Originally Adjusted Effect of Kangpeng Kangpeng Effect of Reported Change Nong Hua Nong Hua Change Total assets 1,014,880 1,063,457 48,577 1,551,565 1,575,283 23,718 Total equity 729,171 745,213 16,042 1,207,143 1,192,260 (14,883) Year ended December 31, 2008 Year ended December 31, 2009 As computed As reported As As excluding including Originally Adjusted Effect of Kangpeng Kangpeng Effect of Reported Change Nong Hua Nong Hua Change Net income 317,905 316,668 (1,237) 183,078 177,152 (5,926) Total compre- hensive income 320,342 319,105 (1,237) 183,133 177,207 (5,926) Revenue 944,854 942,487 (2,367) 821,081 820,295 (786) Earnings per share RMB0.17 RMB0.17 RMB0.00 RMB0.09 RMB0.09 RMB0.00 Conference Call Details
The company will host a conference call and live webcast to discuss its fourth quarter results and forward outlook at 8:00am Eastern Time (9:00 pm Beijing time) on Thursday, March 11, 2010.
- U.S. Toll Free Number: 1-866-519-4004 - International Dial-in Number: +1-718-254-1231 - Mainland China Toll Free Number: 800-819-0121 (land line) 400-620-8038 (Mobile) - Hong Kong Toll Free Number: 852-2475-0994 - Conference ID: CPC
A live and archived webcast of the conference call will be available on the Investor Relations section of Chemspec's website at http://www.chemspec.com.cn/ .
A telephone replay of the call will be available after the conclusion of the conference call through midnight, March 18, 2010, Eastern Time.
The dial-in details for the replay are as follows: - U.S. Toll Free Number +1-866-214-5335 - International Dial-in Number +61-2-8235-5000 Conference ID: 60804122 Chemspec International Limited Unaudited Consolidated Balance Sheets December 31, December 31, December 31, 2008 2009 2009 RMB'000 RMB'000 USD'000 (as adjusted) ASSETS Current assets Cash 180,602 351,097 51,436 Pledged bank deposits 21,536 37,919 5,555 Accounts receivable, net 136,664 94,154 13,794 Bills receivable -- 1,327 194 Inventories 218,263 271,434 39,765 Prepayment and other receivables 24,597 38,738 5,675 Amounts due from related parties 2,500 64 9 Deferred income tax assets 344 3,424 502 Total current assets 584,506 798,157 116,930 Investment in an affiliate -- 13,296 1,948 Property, plant and equipment, net 405,180 699,181 102,431 Land use rights 55,175 56,064 8,213 Intangible assets 947 839 123 Goodwill 7,446 7,446 1,091 Deferred offering costs 9,843 -- -- Deferred income tax assets 360 300 44 Total assets 1,063,457 1,575,283 230,780 LIABILITIES AND EQUITY Current liabilities Bank borrowings 65,000 -- -- Accounts payable 81,382 81,870 11,994 Bills payable 27,562 49,738 7,287 Amounts due to related parties 51,246 23,659 3,466 Accrued expenses and other payables 65,413 183,266 26,849 Income taxes payable 6,395 1,298 190 Total current liabilities 296,998 339,831 49,786 Bank borrowings -- 10,000 1,465 Deferred income tax liabilities 15,680 18,056 2,645 Deferred income 5,566 15,136 2,217 Total liabilities 318,244 383,023 56,113 Equity Ordinary shares: HK$ 0.01 par value; 20,000,000,000 shares authorized as of December 31, 2008 and December 31, 2009; 1,800,000,000 and 2,167,620,000 shares issued and outstanding as of December 31, 2008 and December 31, 2009, respectively 18,446 21,686 3,177 Additional paid-in capital 39,213 326,948 47,898 Statutory reserves 45,837 63,422 9,291 Accumulated other comprehensive income 6,749 6,803 997 Retained earnings 619,888 767,393 112,424 Total Chemspec International Limited shareholders' equity 730,133 1,186,252 173,787 Non-controlling interests 15,080 6,008 880 Total equity 745,213 1,192,260 174,667 Total liabilities and equity 1,063,457 1,575,283 230,780 Chemspec International Limited Unaudited Quarterly Consolidated Statements of Income Three-month periods ended Dec 31, Sept 30, Dec 31, Dec 31, 2008 2009 2009 2009 RMB'000 RMB'000 RMB'000 USD'000 (as adjusted) (as adjusted) Sales 278,394 211,305 177,050 25,938 Cost of sales (160,036) (121,848) (114,022) (16,704) Gross profit 118,358 89,457 63,028 9,234 Selling expenses (2,658) (2,405) (2,817) (413) General and administrative expenses (18,597) (17,044) (20,792) (3,046) Research and development expenses (10,387) (7,074) (8,012) (1,174) Other operating expenses (1,575) (1,297) (3,380) (495) Other operating income 620 311 236 35 Government grants -- 11 362 53 Income from operations 85,761 61,959 28,625 4,194 Other income (expenses): Equity in loss of an affiliate -- (85) (91) (13) Interest income 991 467 482 70 Interest expense (1,007) (418) (309) (45) Foreign currency exchange (loss) gain, net (1,657) 220 230 34 Other income 67 376 91 13 Earnings before income taxes 84,155 62,519 29,028 4,253 Income tax (expense) benefit (11,565) (11,427) 6,169 903 Net income 72,590 51,092 35,197 5,156 Net (income) loss attributable to non-controlling interests (2,345) 1,200 (433) (63) Net income attributable to Chemspec International Limited shareholders 70,245 52,292 34,764 5,093 Basic earnings per share RMB 0.04 RMB 0.02 RMB 0.02 USD 0.00 Diluted earnings per share RMB 0.04 RMB 0.02 RMB 0.02 USD 0.00 Basic earnings per ADS RMB 2.34 RMB 1.44 RMB 0.96 USD 0.14 Diluted earnings per ADS RMB 2.34 RMB 1.44 RMB 0.96 USD 0.14 Chemspec International Limited Unaudited Annual Consolidated Statements of Income Years ended December 31, December 31, December 31, 2008 2009 2009 RMB'000 RMB'000 USD'000 (as adjusted) Sales 942,487 820,295 120,173 Cost of sales (548,543) (495,584) (72,603) Gross profit 393,944 324,711 47,570 Selling expenses (11,898) (11,245) (1,647) General and administrative expenses (58,947) (69,871) (10,236) Research and development expenses (27,483) (30,913) (4,529) Other operating expenses (2,188) (7,145) (1,047) Other operating income 1,012 953 140 Government grants 50 971 142 Income from operations 294,490 207,461 30,393 Other income (expenses): Equity in loss of an affiliate -- (176) (26) Interest income 2,116 2,296 336 Interest expense (2,746) (2,149) (315) Foreign currency exchange loss, net (9,514) (1,961) (286) Other income 82 519 76 Earnings before income taxes 284,428 205,990 30,178 Income tax benefit (expense) 32,240 (28,838) (4,225) Net income 316,668 177,152 25,953 Net income attributable to non-controlling interests (4,307) (4,721) (692) Net income attributable to Chemspec International Limited shareholders 312,361 172,431 25,261 Basic earnings per share RMB 0.17 RMB 0.09 USD 0.01 Diluted earnings per share RMB 0.17 RMB 0.09 USD 0.01 Basic earnings per ADS RMB 10.41 RMB 5.18 USD 0.76 Diluted earnings per ADS RMB 10.40 RMB 5.18 USD 0.76 Chemspec International Limited Unaudited Consolidated Statements of Cash Flows Dec 31, Dec 31, Dec 31, 2008 2009 2009 RMB'000 RMB'000 USD '000 (as adjusted) Cash flows from operating activities Net income 316,668 177,152 25,953 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of property, plant and equipment 24,700 37,204 5,450 Land use rights 998 1,132 166 Amortization of intangible assets 27 108 16 Loss on disposal of property, plant and equipment 1,424 6,505 953 Equity in loss of an affiliate -- 176 26 Bad debt expense (241) 64 9 Write-down of inventories 1,090 14,696 2,153 Unrealized foreign exchange loss, net 1,573 93 14 Gain on transfer of land use right to an affiliate -- (290) (42) Share-based compensation 17,917 15,443 2,262 Deferred income tax expense (benefit) 16,024 (644) (94) Changes in operating assets and liabilities net of effects of divestiture of a subsidiary and acquisitions of equity interest in subsidiaries: Pledged bank deposits related to purchase of inventory (17,587) 994 146 Inventories (80,490) (67,867) (9,942) Accounts receivable (48,158) 42,354 6,205 Bills receivable -- (1,327) (194) Prepayment and other receivables 13,658 (14,141) (2,072) Accounts payable 12,691 488 71 Bills payable related to purchase of inventory 14,084 (5,158) (756) Accrued expenses and other payables 15,730 13,424 1,967 Income taxes payable (1,729) (5,097) (747) Net cash provided by operating activities 288,379 215,309 31,544 Cash flows from investing activities Capital expenditures, including interest capitalized (127,846) (231,727) (33,949) Proceeds from the sale of a subsidiary 3,420 -- -- Proceeds from sale of property, plant and equipment 200 -- -- Investment in an affiliate -- (11,225) (1,644) Non-interest bearing advances to related parties (30,900) -- -- Non-interest bearing advances repaid by related parties 48,480 2,436 357 Net cash assumed from acquisition of subsidiaries 11,988 -- -- Payments for land use rights (17,517) -- -- Pledged bank deposit related to purchase of property, plant and equipment -- (17,377) (2,546) Net cash used in investing activities (112,175) (257,893) (37,782) Cash flows from financing activities Acquisition of additional equity interest in subsidiaries (8,000) (17,500) (2,564) Capital contributions to a subsidiary by a non-controlling interest shareholder -- 1,600 234 Proceeds from issuance of ordinary shares -- 389,022 56,992 Payments for initial public offering costs (9,843) (52,775) (7,732) Proceeds from bank loans 70,000 25,000 3,663 Repayments of bank loans (50,000) (80,000) (11,720) Repurchase of ordinary shares -- (8,134) (1,192) Dividend paid by a subsidiary to non-controlling interest shareholders -- (2,500) (366) Proceeds from non-interest bearing borrowings from related parties 20,400 -- -- Repayments of non-interest bearing borrowings from related parties (75,380) (41,687) (6,107) Net cash (used in) provided by financing activities (52,823) 213,026 31,208 Effect of foreign currency exchange rate changes on cash 292 53 8 Net increase in cash 123,673 170,495 24,978 Cash at beginning of period 56,929 180,602 26,458 Cash at end of period 180,602 351,097 51,436 Supplemental disclosures of cash flow information: Income taxes paid 12,725 34,579 5,066 Income taxes refund 58,767 -- -- Interest paid, net of amounts capitalized 2,746 2,149 315 Supplemental schedule of noncash investing and financing activities: Payable for purchase of property, plant and equipment 35,547 118,174 17,313 Payable for acquisitions of non-controlling interests in subsidiaries -- 48,500 7,105 Bills payable for purchase of property, plant and equipment 771 28,105 4,117 Land use right contributed to an affiliate -- 1,957 287 About Chemspec
Chemspec is a leading China-based contract manufacturer of highly engineered specialty chemicals and the largest manufacturer of fluorinated specialty chemicals in China based on sales. In manufacturing specialty chemicals, Chemspec also provides process design and process development services, which enable efficient and rapid production of specialty chemicals that are incorporated into the products of Chemspec's end users. Chemspec's customers and end users include electronics, pharmaceutical and agrochemical companies. For more information, please visit http://www.chemspec.com.cn/ .
Safe Harbor Statements
This announcement contains forward-looking statements. These statements constitute "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, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Further information regarding these and other risks is included in Chemspec's filings with the U.S. Securities and Exchange Commission, including its registration statement on Form F-1, as amended from time to time. Chemspec does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
For further information, please contact: Chemspec International Ltd. In Shanghai Bing Zhu Chief Financial Officer Phone: +86-21-6363-8108 Email: ir@chemspec.com.cn Christensen In New York Kathy Li Phone: +1-212-618-1978 Email: kli@christensenir.com In Hong Kong Tip Fleming Phone: +852-9212-0684 Email: tfleming@christensenir.com
Chemspec International Limited
CONTACT: Chemspec International Ltd., Bing Zhu (In Shanghai), Chief
Financial Officer, +86-21-6363-8108, or ir@chemspec.com.cn; Or Christensen,
Kathy Li (In New York), +1-212-618-1978, or kli@christensenir.com; Tip Fleming
(In Hong Kong), +852-9212-0684,or tfleming@christensenir.com
Web site: http://www.chemspec.com.cn/
