- 2009 Revenue Increased 21% to $61.7 Million -
- Cashflow From Operations Increased 63% to $10.67 Million -
- 2010 Guidance Issued -
HAIKOU CITY, China, March 5 /PRNewswire-Asia/ -- China Pharma Holdings, Inc. ("China Pharma") (NYSE/Amex: CPHI), which develops, manufactures, and markets specialty pharmaceutical products in China, today announced financial results for the fiscal year ended December 31, 2009.
Full Year 2009 Financial Highlights
-- Revenue increased 21% to $61.7 million from $51.0 million for 2008;
-- Net income increased 13% to $20.2 million from $17.8 million in 2008;
-- 2009 cash flow from operations increased by 63% to $10.7 million
compared to $6.5 million for 2008; and
-- EPS was $0.48, compared to $0.44 in 2008.
In 2009, revenue increased 21% to $61.7 million from $51.0 million in 2008, due to contribution from new products as well as increased contribution from existing products. Sales of Antiviral & Respiratory drugs increased 31% to $24.7 million from the prior year. Digestive product sales increased 114% to $4.8 million, driven by Tiopronin and Omeprazole Sodium, two new drugs released in Q2 and Q4 of 2009, respectively. Sales of CNS, Cardio & Cerebro-vascular products decreased 3% to $21.5 million. Sales of other products (including tumor drug Granisetron, and various other products) increased 41% to $10.7 million from the prior year.
Gross profit in 2009 increased to $25.7 million from $25.3 million in 2008. Gross profit margin in 2009 was 42%, compared to 50% in 2008. The decrease in gross margin was largely a result of a higher proportion of lower-margin products, including EDL-listed drugs, in the sales mix.
Operating expenses decreased 45% to $3.0 million from $5.6 million, due to the change in the Company's estimate for bad debt reserve in the third quarter of 2009. Selling expenses for the year increased 33% to $2.7 million from $2.0 million in 2008 as the company expanded its distribution network. General and administrative expenses increased 28% to $2.1 million in 2009 from $1.7 million in 2008. In 2009, the Company realized a bad debt benefit of $1.8 million, compared to a bad debt expense of $1.8 million in 2008.
Operating income for the year increased 15% to $22.6 million, compared to $19.7 million in 2008.
Net income for 2009 increased 13% to $20.2 million from $17.8 million in the previous year. Earnings Per Share was $0.48 in 2009, compared to $0.44 in 2008. The share count used to calculate EPS was 42.3 million fully diluted shares, compared to 40.2 million shares in the prior year.
In the year ended December 31, 2009, cashflow from operating activity rose to $10.67 million, an increase of 63% over the $6.54 million for the same period in 2008. The main reasons for the improvement in operating cashflow were faster collection of accounts receivables and an increase of Net Income in 2009.
Balance Sheet
As of December 31, 2009, the Company had cash and cash equivalents of $3.6 million, which represented 3.6% of total assets, compared to $3.8 million, or 4.0% of total assets, as of September 30, 2009 and $6.9 million, or 9.2% of total assets, as of December 31, 2008.
Business Update
-- On January 21, 2010, the Company announced that the clinical trials for
Candesartan, an anti-hypertension drug, has been completed and the
generic drug production application has been submitted to the SFDA. In
China, nearly 60% of all urban adults aged 65 years and over suffer
from hypertension, and prevalence in urban areas is expected to reach
100 million by 2011. Candesartan is listed in the China's National
(Medical) Insurance Catalog ("NIC"), allowing patients to be reimbursed
by the government.
Financial Guidance
The Company expects revenue growth of 20% to 25% for 2010, on a year over year basis.
China Pharma's President and CEO, Ms. Zhilin Li, stated, "We are very pleased with our 2009 results, which have continued to yield a net income margin above 30%. After adding two new drugs in 2009, our core portfolio now has 20 products, and we have a number of new products in various stages of registration, including Rosuvastatin (generic for Crestor) and an antibiotic, that are in clinical trials. Going forward, we will continue to invest to strengthen our product portfolio. The Healthcare Reform in China is now moving ahead steadily but forcefully, with important implications for the pharmaceutical industry. We believe the changes will be favorable for highly profitable companies like ours with innovative drugs. We also believe the changes may cause attractive acquisition opportunities to appear. To that end, we are monitoring the market for strategic opportunities to take advantage of the current fragmented nature of the pharmaceutical industry landscape in China."
Conference Call
The Company will hold a conference call at 8:00 am ET on March 5, 2010 to discuss full year 2009 results. Listeners may access the call by dialing 1-800-237-9752 or 1-617-847-8706 for international callers, access code: 29285530. A webcast will also be available through CPHI's website at http://www.chinapharmaholdings.com . A replay of the call will be accessible through March 12, 2010 by dialing 1-888-286-8010 or 1-617-801-6888 for international callers, access code: 49104434.
About China Pharma Holdings, Inc.
China Pharma Holdings, Inc. is a specialty pharmaceutical company with rapidly growing profit that develops, manufactures, and markets treatments for a wide range of high incidence and high mortality conditions in China, including cardiovascular, CNS, infectious, and digestive diseases. The Company's cost-effective, high margin business model is driven by market demand and supported by eight scalable GMP-certified product lines covering the major dosage forms. In addition, the Company has a broad and expanding distribution network across 30 provinces, municipalities and autonomous regions. The Company is registered in Delaware, USA. Hainan Helpson Medical & Biotechnology Co., Ltd. (Helpson), located in Haikou City, Hainan Province, China, is a wholly owned subsidiary of China Pharma Holdings, Inc. For more information about China Pharma Holdings, Inc., please visit http://www.chinapharmaholdings.com .
Safe Harbor Statement
Certain statements in this press release and oral statements made by China Pharma on its conference call in relation to this release, constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Any statements set forth above that are not historical facts are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, which may include, but are not limited to, such factors as unanticipated changes in product demand, increased competition, failure to obtain or maintain intellectual property protection, downturns in the Chinese economy, uncompetitive levels of research and development, failure to obtain regulatory approvals, and other information detailed from time to time in the Company's filings and future filings with the United States Securities and Exchange Commission. The forward-looking statements made herein speak only as of the date of this press release and the Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company's expectations.
For more information, please contact:
China Pharma Holdings, Inc.
Phone: +86-898-6681-1730
Email: hps@chinapharmaholdings.com
ICR, Inc.
Christine Duan
Phone: +1-203-682-8200
CHINA PHARMA HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
December 31,
2009 2008
ASSETS
Current Assets
Cash and cash equivalents $3,634,753 $6,927,149
Trade accounts receivable, less
allowance for doubtful
accounts of $2,718,358 and
$4,474,175, respectively 51,238,339 36,008,095
Other receivables, less allowance
for doubtful accounts of $3,556
and $54,242, respectively 78,525 163,957
Advances to suppliers 1,798,446 3,031,694
Inventory 14,233,073 13,139,750
Deferred tax assets 319,820 461,596
Total Current Assets 71,302,956 59,732,241
Property and Equipment, net of
accumulated depreciation of
$2,020,462 and $1,483,267,
respectively 6,705,873 6,738,368
Intangible assets, net of accumulated
amortization of $1,359,048 and
$547,567, respectively 19,332,284 6,162,549
Advances for intangible assets and
property and equipment 3,599,949 2,838,679
TOTAL ASSETS $100,941,062 $75,471,837
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Trade accounts payable $3,957,923 $1,049,268
Accrued expenses 47,435 56,075
Accrued taxes payable 1,528,691 1,170,003
Other payables 58,191 42,813
Advances from customers 1,037,693 693,178
Other payables-related parties 75,741 75,741
Notes payable 3,802,726 2,480,231
Total Current Liabilities 10,508,400 5,567,309
Long-term research and development
commitments 36,565 36,474
Total Liabilities 10,544,965 5,603,783
Stockholders' Equity
Common stock - $0.001 par value;
60,000,000 shares authorized;
42,308,350 shares and 42,278,938
shares outstanding, respectively 42,308 42,279
Additional paid-in capital 21,178,114 21,066,338
Retained earnings 63,272,868 43,039,819
Accumulated other comprehensive
income 5,902,807 5,719,618
Total Stockholders' Equity 90,396,097 69,868,054
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $100,941,062 $75,471,837
CHINA PHARMA HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
For the Years Ended
December 31,
2009 2008
Revenue $61,696,620 $50,968,660
Cost of revenue 36,046,259 25,678,239
Gross profit 25,650,361 25,290,421
Operating expenses
Selling expenses 2,705,550 2,040,596
General and administrative expenses 2,147,081 1,671,715
Bad debt expense (benefit) (1,816,785) 1,847,806
Total operating expenses 3,035,846 5,560,117
Income from operations 22,614,515 19,730,304
Interest income 30,695 45,168
Interest expense (154,182) (131,027)
Other income (expense) 3,540 (103,177)
Income before income taxes 22,494,568 19,541,268
Provision for income taxes (2,261,519) (1,707,618)
Net income 20,233,049 17,833,650
Other comprehensive income - foreign
currency translation adjustment 183,189 2,880,314
Comprehensive income $20,416,238 $20,713,964
Basic and diluted earnings per share $0.48 $0.44
CHINA PHARMA HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended
December 31,
2009 2008
Cash Flows from Operating Activities
Net income $20,233,049 $17,833,650
Depreciation and amortization 1,368,888 719,475
Bad debt expense (benefit) (1,816,785) 1,847,806
Stock-based compensation 41,804 123,794
Changes in assets and liabilities:
Trade accounts receivable (13,366,578) (17,778,209)
Other receivables 136,587 265,813
Advances to suppliers 1,240,118 (87,978)
Inventory (1,060,083) 2,243,138
Deferred tax assets 142,846 (257,447)
Trade accounts payable 3,044,387 720,659
Accrued expenses (8,775) (219,301)
Accrued taxes payable 355,587 825,119
Other payables 15,274 (48,072)
Other payables-related parties -- (52,804)
Advances from customers 342,607 407,617
Net Cash Provided by Operating
Activities 10,668,926 6,543,260
Cash Flows from Investing Activities
Purchase of property and equipment (143,082) (4,310,690)
Construction in progress -- --
Purchase of intangible assets (12,154,561) (4,184,080)
Advances for intangible assets and
property and equipment (3,063,066) (1,946,479)
Net Cash Used in Investing Activities (15,360,709) (10,441,249)
Cash Flows from Financing Activities
Proceeds from exercise of warrants 70,001 --
Proceeds from sale of common stock -- 9,268,938
Proceeds from short-term notes
payable 3,800,681 2,441,739
Payments of short-term notes payable (2,485,060) (2,829,545)
Net Cash Provided by Financing
Activities 1,385,622 8,881,132
Effect of Exchange Rate Changes on Cash 13,765 113,671
Net Increase (Decrease) in Cash (3,292,396) 5,096,814
Cash and Cash Equivalents at
Beginning of Year 6,927,149 1,830,335
Cash and Cash Equivalents at End of
Year $3,634,753 $6,927,149
