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China Biopharmaceuticals Holdings Announces First Quarter 2007 Financial Results

China Biopharmaceuticals Holdings, Inc.
2007-05-16 23:38 643

BEIJING, May 16 /Xinhua-PRNewswire-FirstCall/ --

-- Net Sales Increase 36% to $7.5 million for Q1 2007

-- Income from Operations Increase 39% to $640,364

China Biopharmaceuticals Holdings, Inc. (OTC Bulletin Board: CHBP), a leading Chinese pharmaceutical company focused on the development, manufacturing and marketing of innovative drugs in China, today announced its results for the first quarter ended March 31, 2007.

Revenue for the three months ended March 31, 2007 totaled $7.5 million compared to $5.5 million for the period ended March 31, 2006, representing an increase of approximately 36%. The increase in sales was primarily attributable to the acquisition of Enshi in June 2006.

Cost of goods sold for the first quarter of 2007 was $5.5 million compared to $4.1 million for the same period in 2006. Cost of good sold as a percentage of sales revenues were approximately 73% for the first quarter of 2007 compared to 74% for the first quarter of 2006.

Gross profit for the period ended March 31, 2007 totaled $2 million compared to $1.4 million for the same period in 2006, representing an increase of approximately 40%. Gross profit margin for the three months ended March 31, 2007 was 27% compared to 26% for the three months ended March 31, 2006. Erye’s higher gross margins were the main contributor to the Company’s increased gross profit for the quarter.

Income from operations totaled $640,364 for the first quarter of 2007 compared to $461,722 for the first quarter of 2006, representing an increase of approximately 39%. The increase is mainly due to the significant increase in Erye’s performance.

The Company reported a net loss of $88,268 for the first quarter of 2007 compared to a net income of $193,992 for the first quarter of 2006. Much of the loss is attributable to higher accrued interest expenses as a result of the loan from RimAsia for the acquisition of Enshi. EBITDA for the Company was approximately $910,000 for Q1 2007, compared to approximately $619,000 for the comparable quarter in 2006. This represents an increase of approximately $291,000 or 47%.

Mr. Chris Peng Mao, CEO of CHBP, stated, "While I am disappointed in our net loss for the quarter, I am pleased with our improved EBITDA and the progress and development of our three subsidiaries. While we continue to address the problems announced recently surrounding our acquisition of Enshi, we have made strong progress reinforcing our board, hiring a new chief operating officer, and reinforcing the accounting and business controls for our entire business."

Ms. ZHANG Jian, Chairwoman of the Board, commented, "It is a pleasure to join the team of China Biopharmaceuticals as the Chairwoman of the Board. I am confident that the financial outcome in the first quarter of 2007 will be a starting point from which we will build upon," Ms. ZHANG continued, "With the addition of Mr. SHI Mingsheng, COO, and Mr. DING Weihua to the board of directors, I believe that we have significantly enhanced management and management oversight. It is my goal to lead our experienced team back to solid profitability and growth in the near future."

About China Biopharmaceuticals Holdings, Inc.

China Biopharmaceuticals Holdings, Inc (Symbol: CHBP) is a vertically integrated pharmaceutical company dedicated to the discovery, development, manufacturing and marketing of small and large molecule pharmaceutical products, including medicines, vaccines, and active pharmaceutical ingredients for various categories of diseases. CHBP’s product portfolio includes 260 drugs already approved for manufacturing and marketing by the Chinese State Food and Drug Administration (SFDA). CHBP also has submitted 15 drug applications to the SFDA for its review during the calendar year of 2006. CHBP is a U.S.-listed public company with operating subsidiaries and senior management based in China. For further information, please visit our website at http://www.cbioinc.com .

Safe Harbor Statement

The statements contained herein that are not historical facts are "forward looking statements" within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may be identified by, among other things, the use of forward-looking terminology such as "believes," "expects," "may," "will," "should," or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. In particular, our statements regarding the potential growth of the markets are examples of such forward- looking statements. The forward-looking statements include risks and uncertainties, including but not limited to, general economic conditions and regulatory developments, not within our control. The factors discussed herein and expressed from time to time in our filings with the Securities and Exchange Commission could cause actual results and developments to be materially different from those expressed or implied by such statements. The forward looking statements are made only as of the date of this filing, and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

CONSOLIDATED BALANCE SHEET

AS OF MARCH 31, 2007

March 31,

2007

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Unaudited

ASSETS

CURRENT ASSETS:

Cash $ 2,484,059

Accounts receivable, trade, net of allowance

for doubtful accounts of $999,045 5,530,362

Accounts receivable, related parties 92,219

Other receivables 3,093,034

Other receivables - related parties 2,628,454

Advances to suppliers 919,402

Prepaid expenses 65,055

Inventories 7,941,033

Loan to shareholders 42,143

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Total current assets 22,795,761

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PLANT AND EQUIPMENT, net 12,202,860

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OTHER ASSETS:

Intangible asset, net 12,634,295

Long term notes receivable 753,563

Long term other receivables - related parties 620,000

Restricted cash 1,029,766

Other assets 74,219

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Total other assets 15,111,843

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Total assets $ 50,110,464

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LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES:

Accounts payable $ 5,781,676

Accounts payable - related parties 388,500

Short-term loans 17,003,750

Other payables - related parties 2,823,613

Customer deposits 1,991,888

Notes payable 2,434,600

Taxes payable 1,221,942

Other accrued liabilities 657,515

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Total current liabilities 32,303,484

------------

LONG TERM LIABILITIES 162,799

Total liabilities 32,466,283

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COMMITMENTS AND CONTINGENCIES --

------------

MINORITY INTEREST 4,574,194

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SHAREHOLDERS’ EQUITY:

Preferred stock, $0.01 par value, 10,000,000

shares authorized; 417,500 shares issued and

outstanding 4,175

Common stock, $0.01 par value, 200,000,000 shares

authorized; 36,340,312 shares issued and

outstanding 363,404

Paid-in capital 13,057,500

Capital receivable (252,471)

Deferred compensation (18,000)

Statutory reserves 2,606,440

Retained earnings (deficit) (3,593,544)

Accumulated other comprehensive income 902,483

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Total shareholders’ equity 13,069,987

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Total liabilities and shareholders’ equity $ 50,110,464

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CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006

2007 2006

------------ -------------

(Unaudited) (Unaudited)

< S > < C > < C >

REVENUES $ 7,532,122 $ 5,549,923

COST OF GOODS SOLD 5,523,280 4,116,154

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GROSS PROFIT 2,008,842 1,433,769

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OPERATING EXPENSES

Research and development 43,163 258,075

Selling, general and administrative 1,325,315 713,972

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Total Operating Expenses 1,368,478 972,047

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INCOME FROM OPERATIONS 640,364 461,722

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OTHER INCOME (EXPENSE)

Interest income (expense), net (363,357) (46,742)

Other income (expense), net (2,674) (17,406)

------------ -------------

Total Other Income (expense),

net (366,031) (64,148)

------------ -------------

INCOME BEFORE INCOME TAXES AND

MINORITY INTEREST 274,333 397,574

PROVISION FOR INCOME TAXES 9,606 --

------------ -------------

INCOME BEFORE MINORITY INTEREST 264,727 397,574

MINORITY INTEREST 352,995 246,298

------------ -------------

INCOME (LOSS) FROM CONTINUING OPERATIONS (88,268) 151,276

INCOME FROM DISCONTINUED OPERATIONS,

net of tax -- 42,716

----------- -------------

NET (LOSS) INCOME (88,268) 193,992

OTHER COMPREHENSIVE INCOME:

Foreign currency translation

adjustment 34,954 117,967

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COMPREHENSIVE (LOSS) INCOME $ (53,314) $ 311,959

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INCOME (LOSS) PER SHARE OF COMMON STOCK

BASIC

CONTINUING OPERATIONS $ (0.002) $ 0.005

DISCONTINUED OPERATIONS -- 0.001

------------ -------------

NET (LOSS) INCOME $ (0.002) $ 0.006

------------ ------------

DILUTED

CONTINUING OPERATIONS $ (0.002) $ 0.005

DISCONTINUED OPERATIONS -- 0.001

------------ -------------

NET (LOSS) INCOME $ (0.002) $ 0.006

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WEIGHTED AVERAGED NUMBER OF SHARES

OUTSTANDING - BASIC 36,027,615 30,267,875

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WEIGHTED AVERAGED NUMBER OF SHARES

OUTSTANDING - DILUTED 36,719,560 31,420,375

For more information, please contact:

HCI Emerging Growth

Alan Sheinwald, Partner

Tel: +1-914-669-0222

Email: alan.sheinwald@HCInternational.com

Source: China Biopharmaceuticals Holdings, Inc.
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