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Shiner International, Inc. AnnouncesResults for the Second Quarter of 2012

August 15, 2012

HAIKOU, China, Aug. 15, 2012 /PRNewswire-Asia/ — Shiner International, Inc. (Nasdaq: BEST) (“Shiner” or the “Company”), an emerging global supplier of packaging solutions for food, tobacco, and consumer products, today announced its financial results for the quarter ended June 30, 2012.

(Logo: http://photos.prnewswire.com/prnh/20111122/CN11164LOGO)

Total revenue for the three months ended June 30, 2012 were $16.4 million, a decrease of $1.5 million (or 8.2%) compared to total revenue of $17.9 million for the same quarter ended June 30, 2011. The decrease was primarily attributable to decreased revenues generated from coated film and color printing, which was partially offset by increase in revenues generated from BOPP tobacco, advanced film and water-based latex. For the three months ended June 30, 2012, revenue from coated film revenue decreased $3.1 million (or 45.3%) to $3.8 million from $6.9 million for the corresponding period in 2011, and sales from color printing decreased $1.1 million (or 73.8%) to $0.4 million from $1.5 million for the corresponding period in 2011. For the three months ended June 30, 2012, revenue from BOPP tobacco increased $3.0 million (or 38.5%) to $10.6 million from $7.6 million for the corresponding period in 2011; revenue from advanced film decreased $0.3 million (or 18.2%) to $1.4 million from $1.7 million for the corresponding period in 2011; and revenue from water-based latex increased $0.1 million (or 60.9%) to $0.3 million from $0.2 million for the corresponding period in 2011.

Shiner’s gross profit for the three months ended June 30, 2012 was $0.5 million, the gross profit margin decreased to 3.0% compared to 14.1% of total revenue for the corresponding period in 2011. The decrease in gross profit margin was primarily a consequence of increased labor costs and depreciation of the new property.

Operating loss for the three months ended June 30, 2012 was $(1.5) million compared to operating income of $1.3 million for the same quarter ended June 30, 2011. Selling, general and administrative (“SG&A”) expenses increased by 61.6%, or $0.7 million, to $2 million for 2012 compared to $1.2 million for the corresponding period in 2011. The increase in “SG&A” expenses was mainly due to a $0.2 million increase in R&D expense and a $0.2 million increase in for marketing expense.

Shiner reported net income of $(1.4) million for the three months ended June 30, 2012, compared to $0.8 million in the same period of 2011. Earnings per share for the quarter were $(0.05), compared to earnings of $0.03 per share for the same period of 2011.

About Shiner International, Inc.,

Shiner International, Inc. is engaged in the research and development, manufacture and sale of flexible packaging material and advanced film. Its products include coated packaging film, shrink-wrap film, common packaging film, anti-counterfeit laser holographic film and color-printed packaging materials. The Company’s products are used by manufacturers in the food and consumer products industry to preserve the texture, flavor, hygiene, and convenience and safety of their products. The Company was founded in 1990 and is headquartered in Haikou, China.

Approximately 80% of Shiner’s current customers are located in China, with the remainder spanning Southeast Asia, Europe, the Middle East and North America. Shiner holds 20 patents on products and production equipment, and has an additional 9 patent applications pending. The Company’s flexible packaging meets U.S. FDA requirements, as well as the requirements for food packaging sold in the EU. Shiner’s product manufacturing process is certified under ISO 9001:2000. Additional information on Shiner is available at http://www.shinerinc.com.

Safe Harbor Statement

All statements in this press release that are not historical are forward- looking statements made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on any forward-looking statements in this press release as they reflect Shiner International, Inc.’s current expectations with respect to future events and are subject to risks and uncertainties that may cause actual results to differ materially from those contemplated. Potential risks and uncertainties include, but are not limited to, the risks described in Shiner’s filings with the Securities and Exchange Commission. The information contained in this press release is made as of the date of the press release, even if subsequently made available by Shiner on its website or otherwise

Contact: Cindy Gong
Tel: 86-898-6858 1104
Fax: 86-898-6858 1513
Email: rong.gong@shinerinc.com; ir@shinerinc.com
Web: http://www.shinerinc.com

                                                          SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
                                                                  CONSOLIDATED BALANCE SHEETS

                                                                                           June 30,                                  December 31,
                                                                                                          2012                                        2011
                                                                                                          ----                                        ----
                                                                                          (unaudited)
                                 ASSETS
                                 ------

    CURRENT ASSETS:
                                 Cash & equivalents                                                 $3,435,300                                  $2,831,808
                                 Restricted cash                                                       214,645                                      57,613
                                 Accounts
                                  receivable, net
                                  of allowance for
                                  doubtful
                                   accounts of
                                    $216,097 and
                                    $121,017 at 2012
                                    and 2011                                                         7,518,337                                   7,744,377
                                 Advances to
                                  suppliers                                                         12,123,083                                  10,042,214
                                 Notes receivable                                                       23,760                                       7,865
                                 Inventory, net                                                     12,601,434                                  10,252,955
                                 Prepaid expenses &
                                  other current
                                  assets                                                               597,395                                   1,072,326

                                 Total current assets                                               36,513,954                                  32,009,158

                                 Property and
                                  equipment, net                                                    35,287,561                                  27,836,253
                                 Construction in
                                  progress                                                           4,868,557                                  12,037,154
                                 Advance for the
                                  purchase of
                                  equipment                                                            786,082                                     763,427
                                 Intangible assets,
                                  net                                                                2,966,848                                   3,063,646
                                 Goodwill                                                            2,037,492                                   2,023,342
                                 TOTAL ASSETS                                                      $82,460,494                                 $77,732,980

                 LIABILITIES AND STOCKHOLDERS' EQUITY
                 ------------------------------------

     CURRENT LIABILITIES:
                                 Accounts payable                                                   $3,227,289                                  $5,133,835
                                 Other payables                                                      6,848,762                                   7,021,179
                                 Unearned revenue                                                    1,759,492                                   1,313,320
                                 Accrued payroll                                                       154,069                                     193,884
                                 Short-term loans                                                   17,676,554                                  10,684,625

                                 Total current liabilities                                          29,666,166                                  24,346,843

                                 Long-term loans                                                    11,088,000                                   9,957,090

                                 Total Liabilities                                                  40,754,166                                  34,303,933

                                 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                                                        27,603                                      27,603
                                 Additional paid-
                                  in capital                                                        14,334,424                                  14,332,392
                                 Treasury stock
                                  (61,845 shares)                                                      (58,036)                                    (58,036)
                                 Other
                                  comprehensive
                                  income                                                             5,721,604                                   5,426,393
                                 Statutory reserve                                                   3,301,528                                   3,523,273
                                 Retained earnings                                                  16,731,553                                  18,478,618

                                 Total Shiner stockholders' equity                                  40,058,676                                  41,730,243
        Noncontrolling interest                                                                      1,647,652                                   1,698,804
                                                                                                     ---------                                   ---------
                                 Total equity                                                       41,706,328                                  43,429,047

                                 TOTAL LIABILITIES
                                  AND EQUITY                                                       $82,460,494                                 $77,732,980

                                                    SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
                                    CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS)
                                                                    (unaudited)

                                                                                                                           Three Months Ended June 30,
                                                                                                                                   2012                      2011
                                                                                                                                   ----                      ----

    Net Revenue                                                                                                             $16,401,485               $17,867,227
    Cost of goods sold                                                                                                       15,913,476                15,347,733
                                                                                                                             ----------                ----------
    Gross profit                                                                                                                488,009                 2,519,494
                                                                                                                                -------                 ---------

    Operating expenses
                                                    Selling                                                                     577,500                   548,952
                                                     General and
                                                     administrative                                              1,386,968                  666,360

                                                         Total
                                                          operating
                                                          expenses                                               1,964,468                1,215,312

    Income (loss) from operations                                                                                            (1,476,459)                1,304,182

    Non-operating income (expense):
                                                    Other income, net                                                           294,712                  (122,778)
                                                    Interest income                                                               9,565                     2,191
                                                    Interest expense                                                           (323,196)                 (271,329)
                                                    Exchange (loss)                                                              (3,775)                  116,508

                                                         Total non-
                                                          operating income
                                                          (expense)                                     (22,694)               (275,408)

    Income (loss) before income tax                                                                                          (1,499,153)                1,028,774

    Income tax expense (benefit)                                                                                                (63,222)                  222,402

    Net income (loss)                                                                                                        (1,435,931)                  806,372

     Net loss attributed to noncontrolling interest                                                                             (21,641)                    7,001

    Net income (loss) attributed to Shiner                                                                                  $(1,414,290)                 $799,371
                                                                                                                            ===========                  ========

    Comprehensive income (loss)
         Net income (loss)                                                                                                  $(1,435,931)                 $806,372
         Foreign currency translation gain                                                                                       28,762                   476,031

    Comprehensive income (loss)                                                                                             $(1,407,169)               $1,282,403
                                                                                                                            ===========                ==========

    Weighted average shares outstanding :
                                                    Basic                                                                    27,541,491                27,541,491

                                                    Diluted                                                                  27,541,491                27,541,491

    Earnings (loss) per share attributed to Shiner
     common stockholders
                                                    Basic                                                                        $(0.05)                    $0.03

                                                    Diluted                                                                      $(0.05)                    $0.03

                                                                SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
                                                                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                (unaudited)
                                                                                                                                                     Six Months Ended June 30,
                                                                                                                                                             2012                        2011
                                                                                                                                                             ----                        ----

    CASH FLOWS FROM OPERATING ACTIVITIES:
                                                       Net income (loss)                                                               $(2,031,837)                 $1,803,066
                                                        Adjustments to reconcile
                                                        net income (loss) to
                                                        net cash
                                                        used in operating
                                                        activities:
                                                       Depreciation                                                                      1,654,126                   1,151,187
                                                       Amortization                                                                        118,214                      46,606
                                                        Stock
                                                        compensation
                                                        expense                                                                2,032                        1,390
                                                        Change in working
                                                        capital
                                                        components:
                                                                                   Accounts
                                                                                   receivable                                              280,177                   2,967,525
                                                                                  Inventory                                                            (2,276,621)                 (2,353,513)
                                                                                   Advances to
                                                                                   suppliers                                            (2,010,504)                (5,942,213)
                                                                                  Other assets                                                            475,505                     165,556
                                                                                   VAT
                                                                                   receivable                                                                  -                  (1,547,708)
                                                                                   Accounts
                                                                                   payable and
                                                                                   accrued
                                                                                   expenses                                             (1,942,069)                   (186,329)
                                                                                   Unearned
                                                                                   revenue                                                 439,576                   1,433,840
                                                                                   Other
                                                                                   payables                                               (219,453)                  1,409,669
                                                                                   Accrued
                                                                                   payroll                                                 (41,167)                      2,460

                                                        Net cash used in
                                                        operating activities                                              (5,552,021)                  (1,048,464)

    CASH FLOWS FROM INVESTING ACTIVITIES
                                                        Purchase of
                                                        Shimmer Sun Ltd                                                                         -                 (1,300,000)
                                                        Cash acquired in
                                                        acquisition of
                                                        Shimmer Sun Ltd                                                                        -                     248,742
                                                        Issuance of notes
                                                        receivable                                                           (23,764)                                       -
                                                        Payment on note
                                                        receivable                                                             7,925                       25,684
                                                        Payments for
                                                        property and
                                                        equipment                                                         (1,675,316)                  (8,830,790)
                                                        Payments for
                                                        construction in
                                                        progress                                                                                -                 (4,002,547)
                                                        Increase in
                                                        restricted cash                                                     (156,619)                                       -

                                                        Net cash used in
                                                        investing activities                                              (1,847,774)                 (13,858,911)

    CASH FLOWS FROM FINANCING ACTIVITIES:
                                                        Repayment of
                                                        short-term
                                                        loans                                                           (11,655,944)                   (6,880,500)
                                                        Proceeds from
                                                        short-term
                                                        loans                                                             18,572,677                    7,645,000
                                                        Proceeds from
                                                        long-term loans                                                    1,061,206                    9,036,390

                                                        Net cash provided by
                                                        financing activities                                               7,977,939                    9,800,890

    Effect of exchange rate changes on cash and cash equivalents                                                                                           25,348                      14,533

    NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS                                                                                                       603,492                  (5,091,952)

    CASH AND EQUIVALENTS, BEGINNING BALANCE                                                                                                             2,831,808                   8,622,035
                                                                                                                                                        ---------                   ---------

    CASH AND EQUIVALENTS, ENDING BALANCE                                                                                                               $3,435,300                  $3,530,083
                                                                                                                                                       ==========                  ==========

    SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
                                                       Interest paid                                                                      $546,020                    $397,998

                                                       Income taxes paid                                                                    $7,608                    $439,962

SOURCE Shiner International, Inc.


Source: PR Newswire