Revenue Increases 20.6% Year Over Year to $13.6 Million
HAIKOU CITY, China, Aug. 12 /PRNewswire-Asia/ -- China Pharma Holdings, Inc. ("China Pharma") (OTC Bulletin Board: CPHI), which develops, manufactures, and markets specialty pharmaceutical products in China, today announced financial results for the second quarter ended June 30, 2009.
Second Quarter 2009 Financial Highlights
-- Revenue increased 20.6% to $13.6 million from $11.3 million in the
second quarter of 2008;
-- Gross profit was $5.92 million, compared to $5.95 million in the second
quarter of 2008;
-- Gross margin was 43.5% compared to 52.8% in the second quarter of
2008; and
-- EPS was $0.10, compared to $0.10 in the second quarter of 2008.
Revenue for the second quarter of 2009 increased approximately 20.6% to $13.6 million, from $11.3 million in the second quarter of 2008. The increase in revenue was driven by the Anti-Viral/Infection product category, which increased 19% to $5.2 million over the prior year period. Sales from CNS and Cerebral & Cardio Vascular drugs increased 4% to $5.1 million. Digestive product sales increased 101% to $0.94 million, mainly due to the sales contribution from the new product Tiopronin. In the Other Products category (including tumor drug Granisetron, and various other products), sales increased 36% to $2.3 million.
Gross profit for the second quarter of 2009 was $5.92 million, compared to $5.95 million in the second quarter of 2008. Gross margin was 43.5%, compared to 52.8% during the second quarter of 2008. Gross margin performance reflects increased sales of lower margin products during this quarter.
Operating expenses for the second quarter of 2009 decreased 31.7% to $1.1 million, from $1.6 million in the same period of 2008. Selling expenses increased 32.3% to $603,924 from $456,630 in the second quarter of 2008, due to the Company's substantial expanding investment in distribution channels and overall marketing efforts. For the period, the net recovery of bad debt was $40,147, compared to an increase in bad debt expense (net of recoveries) of $612,413 during the same period in 2008. General and administrative expenses were roughly flat at $553,607 in the second quarter of 2009 compared to $565,772 in the second quarter of 2008.
Operating income for the second quarter of 2009 increased 11.2% to $4.8 million from $4.3 million for the same period in 2008.
Net income for the second quarter of 2009 increased 6.2% to $4.3 million, up from $4.0 million reported in the same period of 2008. Diluted earnings per share was $0.10 in the second quarter of 2009, compared to $0.10 in the second quarter of 2008. The EPS calculation is based on 42.3 million fully-diluted shares, compared to 39.0 million shares in the prior year period.
Balance Sheet
As of June 30, 2009, the Company had cash and cash equivalents of $3.6 million, which represented 4.2% of total assets, compared to $5.2 million, or 8.2% of total assets, as of March 31, 2009 and $6.9 million, or 9.2% of total assets, as of June 30, 2008. The quarter over quarter decline was primarily due to investing activities in new drug development in the second quarter of 2009.
Business Update
On June 22, 2009, the Company received official approval from China's State Food and Drug Administration ("SFDA") to enter Phase I and Phase II clinical trials to test the efficacy of its cholesterol-lowering drug, Rosuvastatin. The Company plans to begin the trials in the first half of 2009, and estimates that it will receive a production license by the end of 2010.
The Company made improvements in account receivable collections during the second quarter of 2009 compared to the previous quarter of the year. Account receivable collections continue to be a focus of management and management expects further improvement in the quarters ahead.
Financial Guidance
CPHI is reiterating its guidance of 20% top line growth for the full year 2009, on a year over year basis.
China Pharma's President and CEO, Ms. Zhilin Li, stated, "We are pleased to report a quarter with continued revenue growth supported by increased marketing efforts and distribution expansion. In the second quarter of 2009, several newly-launched products started to show great potential in sales, and our existing products continued to increase their contributions to revenue. Our second quarter performance also reflects much progress managing our receivables collection efforts. We believe our efforts will result in improved collections in the coming quarters."
Conference Call
The Company will hold a conference call at 8:00 am ET on August 12, 2009 to discuss fiscal second quarter 2009 results. Listeners may access the call by dialing 1-888-396-2298 or 1-617-847-8708 for international callers, access code: 39312529. A webcast will also be available through CPHI's website at http://www.chinapharmaholdings.com . A replay of the call will be available through August 19, 2009. Listeners may access the replay by dialing 1-888-286-8010 or +1-617-801-6888 for international callers, access code: 62723349.
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.
CHINA PHARMA HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
(Unaudited)
For the three months For the six months
ended June 30, ended June 30,
2009 2008 2009 2008
Revenue $13,601,355 $11,278,803 $26,593,337 $22,995,848
Cost of revenue 7,681,845 5,325,992 14,745,072 11,235,760
Gross profit 5,919,510 5,952,811 11,848,265 11,760,088
Operating expenses:
Selling expenses 603,924 456,630 1,206,684 794,422
General and
administrative 553,607 565,772 1,041,654 914,165
Bad debt expense, net
of recoveries (40,147) 612,413 734,785 1,079,813
Total operating
expenses 1,117,384 1,634,815 2,983,123 2,788,400
Income from operations 4,802,126 4,317,996 8,865,142 8,971,688
Non-operating income
(expenses):
Interest income 10,720 5,035 21,309 5,035
Interest expense (40,471) (50,440) (78,707) (95,713)
Total non-operating
income (expense) (29,751) (45,405) (57,398) (90,678)
Income before taxes 4,772,375 4,272,591 8,807,744 8,881,010
Income tax expense (486,231) (235,292) (843,953) (653,170)
Net income $4,286,144 $4,037,299 $7,963,791 $8,227,840
Basic and diluted
earnings per share $0.10 $0.10 $0.19 $0.22
Basic and diluted
weighted average
shares outstanding 42,278,938 38,982,235 42,278,938 38,130,586
Net income $4,286,144 $4,037,299 $7,963,791 $8,227,840
Foreign currency
translation
adjustments 5,698 974,800 93,189 2,720,042
Comprehensive income $4,291,842 $5,012,099 $8,056,980 $10,947,882
CHINA PHARMA HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, December 31,
2009 2008
ASSETS
Current Assets:
Cash and cash equivalents $3,642,801 $6,927,149
Trade accounts receivable, less
allowance for doubtful accounts of
$5,248,967 and $4,474,175,
respectively 42,854,941 36,008,095
Other receivables, less allowance for
doubtful accounts of $5,257 and
$54,242, respectively 90,060 163,957
Advances to suppliers 2,332,025 3,031,694
Inventory 14,874,358 13,139,750
Deferred tax assets 577,965 461,596
Total Current Assets 64,372,150 59,732,241
Non-current Assets:
Property and equipment, net of
accumulated depreciation of
$1,709,868 and $1,483,267,
respectively 6,755,629 6,738,368
Intangible assets, net of accumulated
amortization of $904,317 and
$547,567, respectively 8,145,249 6,162,549
Advances for purchases of intangible
assets and property and equipment 6,655,560 2,838,679
Total Non-current Assets 21,556,438 15,739,596
TOTAL ASSETS $85,928,588 $75,471,837
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Trade accounts payable $3,476,675 $1,049,268
Accrued expenses 59,284 56,075
Accrued taxes payable 1,090,162 1,170,003
Other payables 50,683 42,813
Advances from customers 730,848 693,178
Other payables - related parties 75,741 75,741
Short-term notes payable 2,483,637 2,480,231
Total Current Liabilities 7,967,030 5,567,309
Long term research and development
commitments 36,524 36,474
Total Liabilities 8,003,554 5,603,783
Stockholders' Equity:
Common stock, $0.001 par value;
60,000,000 shares authorized;
42,278,938 shares issued and
outstanding 42,279 42,279
Additional paid-in capital 21,066,338 21,066,338
Retained earnings 51,003,610 43,039,819
Accumulated comprehensive income -
foreign currency translation
adjustment 5,812,807 5,719,618
Total Stockholders' Equity 77,925,034 69,868,054
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $85,928,588 $75,471,837
For more information, please contact:
China Pharma Holdings, Inc.
Tel: +86-898-6681-1730
Email: hps@chinapharmaholdings.com
ICR, Inc.
Christine Duan
Tel: +1-203-682-8200
