BEIJING, November 13, 2013 /PRNewswire/ -- Sinovac Biotech Ltd. (NASDAQ: SVA), a leading provider of biopharmaceutical products in China, announced today its unaudited third quarter financial results for for the three and nine months ended September 30, 2013.
2013 Third Quarter Financial Highlights (period-over-period comparisons to third quarter 2012)
Recent Business Highlights
In August 2013, Sinovac (the "Company") was selected by the Beijing Health Bureau as one of the four suppliers to supply the Company's seasonal influenza vaccine, Anflu, to the citizens of Beijing. Sinovac has been chosen as one of the suppliers in the Beijing tender on six separate occasions since 2007. The total volume for the 2013 tender is up to 1.8 million doses and the delivery will depend on the actual demand in Beijing. Under the prior year's tender that totaled up to 1.8 million doses, Sinovac delivered approximately 340,000 doses of Anflu to Beijing citizens.
In October 2013, Sinovac was selected by the Jiangsu Centers for Disease Control and Prevention as one of the two suppliers of inactivated hepatitis A vaccine to the pediatric population in the Jiangsu province for its 2014 Expanded Program of Immunization (or EPI program). According to the tender award contract, the tender totals 1.8 million doses of inactivated hepatitis A vaccine, and Sinovac will supply 900,000 doses of Healive.
Mr. Weidong Yin, Chairman, President and CEO, commented, "We are pleased to see another strong quarter with revenue growth of 54.5% year-over-year, which resulted in another profitable quarter on a sequential quarterly basis. With continued execution of the tailored sales strategy, Anflu sales was increased by 121% in this quarter compared to the same period of 2012, resulted from a solid support from operation. Leveraging the improved efficiency and expanded capacity of our fully operational Changping filling and packaging line, we delivered the majority of the flu vaccine that we produced at the beginning of the seasonal flu season."
Mr. Yin concluded, "Our vaccine development pipeline is continuing to advance on schedule. The China Food and Drug Administration ("CFDA") issued new guidance in late October 2013 enabling applicants to apply for Good Manufacturing Practice ("GMP") certification for its production facilities concurrently with the production site inspection during the New Drug Application ("NDA") review process, instead of waiting until after the new drug certificate is granted to commence the GMP certification process. Sinovac is poised to benefit from the agency's revised guidance, which may accelerate the entire registration process for vaccine candidates, including EV71 vaccine."
Financial Review for Third Quarter Ended September 30, 2013
An analysis of sales and gross profit is as follows:
$000 (Unaudited) | 2013Q3 | % of | 2012Q3 | % of total sales | |
Healive, Hepatitis A vaccine | 5,252 | 23.8% | 4,932 | 34.5% | |
Bilive, Hepatitis A&B vaccine | 5,355 | 24.3% | 5,548 | 38.9% | |
Anflu, seasonal flu vaccine | 8,417 | 38.1% | 3,806 | 26.6% | |
Rabend, Animal rabies vaccine | 54 | 0.2% | 1 | 0.0% | |
Mumps vaccine | (571) | -2.6% | - | - | |
Regular sales* | 18,507 | 83.8% | 14,287 | 100% | |
Panflu (H5N1), avian flu vaccine for human | 3,568 | 16.2% | - | - | |
Total sales | 22,075 | 100% | 14,287 | 100% | |
Cost of goods sold | 6,164 | 27.9% | 6,771 | 47.4% | |
Gross profit | 15,911 | 72.1% | 7,516 | 52.6% |
*Regular sales represent sales revenue generated by all commercialized products, excluding Panflu (H5N1) vaccine and Panflu.1 (H1N1) vaccine, which are produced when government issues stockpiling orders
Total sales increased by 54.5% to $22.1 million in the third quarter 2013 from $14.3 million in the third quarter of 2012. Excluding the $3.6 million H5N1 vaccine revenue recognized in the third quarter of 2013, regular sales increased by 29.5% to $18.5 million from $14.3 million in the third quarter 2012.
The growth was mainly driven by robust sales of Anflu in the third quarter of 2013 given that Sinovac's seasonal influenza vaccine was commercialized in a timely manner at the beginning of the 2013 flu season compared with the prior year, benefiting from the improved efficiency and expanded capacity of the fully operational Changping filling and packaging line.
Gross profit increased by 111.7% to $15.9 million in the third quarter of 2013 from $7.5 million in the same period of 2012. Gross margin was 72.1% in the third quarter of 2013, compared to 52.6% in the same period of 2012. The higher gross margin was primarily due to increased Anflu gross margin because a lower sales return provision as well as inventory provision was recorded and less excess capacity was charged to cost of goods sold in the third quarter of 2013, compared to the same period of 2012.
SG&A expenses in the third quarter of 2013 were $9.9 million, compared to $7.8 million in the same period of 2012. Selling expenses as a percentage of the third quarter 2013 regular sales were 32.0%, compared to 28.7% in the same period of 2012. The increase in selling expenses as a percentage of revenue was mainly due to the increased marketing efforts to generate Anflu sales this quarter.
G&A expenses in the third quarter of 2013 increased to $4.0 million from $3.7 million in the same period of 2012. The increase was mainly due to higher operating costs at the Company's Changping site as it is now fully operational. These increases were partially offset by the decrease of bonuses due to the board of directors approving certain employee bonuses to be settled from the Company's Staff Bonus and Welfare Fund, an accrued liability account, rather than charged to expense.
R&D expenses in the third quarter of 2013 decreased to $2.0 million from $3.8 million in the same period of 2012. The lower R&D expenses in the current quarter were attributable to the completion of the phase III study of EV71 vaccine candidate in the first quarter of 2013.
Depreciation of property, plant and equipment and amortization of licenses, permits and renovation costs for the third quarter of 2013 was $0.8 million, compared to $0.4 million in the same period of 2012. Depreciation increased primarily due to more assets at the Changping facility starting to be depreciated in the fourth quarter of 2012, compared to the comparative period.
Net income attributable to stockholders in the third quarter of 2013 was $2.3 million, or $ 0.04 per basic and diluted share, compared to a net loss of $3.0 million, or $0.05 per basic and diluted share, in the same period of 2012. If the $0.3 million bonus, settled from the accrued liability account, was charged to operation in third quarter of 2013, the net income of the third quarter of 2013 was approximately $2.0 million, or $0.04 per basic share and diluted share.
Financial Review for the Nine Month Period Ended September 30, 2013
An analysis of sales and gross profit is as follows:
$000 (Unaudited) | 2013 1-9 | % of | 2012 1-9 | % of | |
Healive, Hepatitis A vaccine | 18,451 | 37.2% | 10,104 | 34.1% | |
Bilive, Hepatitis A&B vaccine | 17,935 | 36.2% | 15,633 | 52.8% | |
Anflu, seasonal flu vaccine | 8,747 | 17.6% | 3,853 | 13.0% | |
Rabend, Animal rabies vaccine | 132 | 0.3% | 35 | 0.1% | |
Mumps vaccine | 746 | 1.5% | - | - | |
Regular sales* | 46,011 | 92.8% | 29,625 | 100% | |
Panflu (H5N1), avian flu vaccine for human | 3,568 | 7.2% | - | - | |
Total sales | 49,579 | 100% | 29,625 | 100% | |
Cost of goods sold | 13,017 | 26.3% | 10,402 | 35.1% | |
Gross profit | 36,562 | 73.7% | 19,223 | 64.9% |
*Regular sales represent sales revenue generated by all commercialized products, excluding Panflu (H5N1) vaccine and Panflu.1 (H1N1) vaccine, which are produced when government issues stockpiling orders.
Total sales of the first nine months of 2013 were $49.6 million, a 67.4% increase from $29.6 million in the same period of 2012, and exceeded full year 2012 sales by $363,000. Excluding the $3.6 million H5N1 vaccines revenue recognized, regular sales increased by 55.3% to $46.0 million. The increased revenue was driven by the Anflu sales growth in the third quarter as well as Healive growth in the first half of the year.
Gross profit for the first nine months of 2013 increased by 90.2% to $36.6 million from $19.2 million in the same period of 2012. Gross margin was 73.7%, compared to 64.9% in the same period of 2012. The higher gross margin was primarily due to increase of gross margin of Anflu and Healive with lower sales return provision recorded and less excess capacity charged to cost of goods sold in the third quarter of 2013, compared to the same period of 2012.
Selling, general and administrative expenses for the first nine months of 2013 were $24.6 million, compared to $18.9 million in the same period of 2012. Selling expenses as a percentage of 2013 nine months regular product sales was 31.6%, compared to 33.5% of the same period of last year. The decrease in selling expense as a percentage of regular product sales was mainly due to the higher sales achieved without significantly increasing the sales team headcount and salaries. G&A expenses in the first nine months of 2013 increased to $10.0 million from $8.9 million in the same period of last year. The factors affecting general and administrative expenses in the nine months of 2013 were the same as for the third quarter of 2013 as described above.
Research and development expenses for the first nine months of 2013 decreased to $5.9 million from $15.8 million in the same period of last year as the phase III study of EV71 vaccine candidate was completed in the first quarter of 2013.
Depreciation of property, plant and equipment and amortization of licenses, permits and renovation costs in the first nine months of 2013 was $2.1 million, compared to $1.1 million in the same period of last year. Depreciation increased because more assets at the Changping facility started to be depreciated in the last quarter of 2012.
Net income attributable to stockholders in the first nine months of 2013 was $1.6 million, or $0.03 per basic and diluted share, compared to a net loss of $10.2 million, or $0.19 per basic and diluted share, in the same period of last year. If the $1.7 million bonus, settled from an accrued liability account, was charged to operations for the nine-month period, the net loss of the first nine months of 2013 was $0.1 million, or $0.002 per basic share and diluted share.
As of September 30, 2013, cash and cash equivalents totaled $89.0 million, compared to $91.2 million as of December 31, 2012. Net cash used in operating activities was $14.7 million in the first nine months of 2013. Net cash used in investing activities was $3.4 million in the first nine months of 2013, which was mainly to acquire property, plant and equipment for the Changping facility. Net cash provided by financing activities was $15.0 million in the first nine months of 2013, including loan proceeds of $13.9 million.
Conference Call Details
The Company will host a conference call prior to the market opening on Wednesday, November 13, 2013, at 8:00 a.m. EST (November 13, 2013 at 9:00 p.m. China Standard Time) to review the Company's financial results and provide an update on recent corporate developments. To access the conference call, please dial 1-877-407-0784 (USA) or 1-201-689-8560 (International). A replay of the call will be available from 11 a.m. EST on November 13, 2013, to November 27, 2013, at midnight. To access the replay, please dial 1-877-870-5176 (USA) or 1-858-384-5517 (International) and reference the replay pin number 13572718.
A live audio webcast of the call will also be available from the investors section on the corporate web site at www.sinovac.com. A webcast replay can be accessed on the corporate website beginning November 13, 2013, and the replay will remain available for 30 days.
About Sinovac
Sinovac Biotech Ltd. is a China-based biopharmaceutical company that focuses on the research, development, manufacturing and commercialization of vaccines that protect against human infectious diseases including hepatitis A and B, seasonal influenza, H5N1 pandemic influenza (avian flu), H1N1 influenza (swine flu) and mumps, as well as animal rabies vaccine for canines. The Company recently concluded the phase III clinical trial for enterovirus 71 (against hand, foot and mouth disease) and filed new drug application with China Food & Drug Administration. In 2009, Sinovac was the first company worldwide to receive approval for its H1N1 influenza vaccine, Panflu.1, and has manufactured it for the Chinese Central Government, pursuant to the government-stockpiling program. The Company is also the only supplier of the H5N1 pandemic influenza vaccine to the government-stockpiling program. Sinovac is developing a number of new pipeline vaccines including vaccines for pneumococcal polysaccharides, pneumococcal conjugate, varicella and rubella. Sinovac sells its vaccines mainly in China and exports selected vaccines to Mongolia, Nepal, and the Philippines. Sinovac has also been granted a license to commercialize seasonal flu vaccine in Mexico.
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by words or phrases such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the business outlook and quotations from management in this press release contain forward-looking statements. Statements that are not historical facts, including statements about Sinovac's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Sinovac does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
SINOVAC BIOTECH LTD. | ||||
Incorporated in Antigua and Barbuda | ||||
Consolidated Balance Sheets | ||||
(Unaudited) | ||||
(Expressed in U.S. Dollars) | ||||
30-Sep-13 | 31-Dec-12 | |||
ASSETS | ||||
Current assets | ||||
Cash and cash equivalents | $ | 89,026,229 | $ | 91,240,956 |
Accounts receivable - net | 38,598,691 | 23,440,135 | ||
Inventories | 15,939,472 | 10,529,476 | ||
Prepaid expenses and deposits | 1,109,194 | 1,072,078 | ||
Due from related party | 18,489 | - | ||
Total current assets | 144,692,075 | 126,282,645 | ||
Property, plant and equipment | 79,277,846 | 80,083,383 | ||
Long-term inventories | - | 28,692 | ||
Long-term prepaid expenses | 178,736 | 289,766 | ||
Prepayments for acquisition of equipment | 197,938 | 483,278 | ||
Deferred tax assets | 391,491 | 445,589 | ||
Licenses | 865,437 | 1,149,914 | ||
Total assets | $ | 225,603,523 | $ | 208,763,267 |
LIABILITIES AND EQUITY | ||||
Current liabilities | ||||
Loans payable | $ | 12,613,967 | $ | 3,328,590 |
Due to related party | 3,287,582 | - | ||
Accounts payable and accrued liabilities | 26,259,560 | 24,777,808 | ||
Income tax payable | 243,071 | 238,775 | ||
Deferred revenue | 7,541,515 | 1,378,425 | ||
Deferred government grants | 438,853 | 431,097 | ||
Total current liabilities | 50,384,548 | 30,154,695 | ||
Deferred government grants | 4,571,838 | 4,068,602 | ||
Loans payable | 36,229,007 | 31,181,235 | ||
Due to related party | - | 3,230,125 | ||
Deferred revenue | - | 10,693,247 | ||
Total long term liabilities | 40,800,845 | 49,173,209 | ||
Total liabilities | 91,185,393 | 79,327,904 | ||
Commitments and contingencies | ||||
EQUITY | ||||
Preferred stock | - | - | ||
Authorized 50,000,000 shares at par value of $0.001 each | ||||
Issued and outstanding: nil | ||||
Common stock | 55,403 | 55,092 | ||
Authorized: 100,000,000 shares at par value of $0.001 each | ||||
Issued and outstanding: 55,402,061 (2012 - 55,091,561) | ||||
Additional paid-in capital | 107,201,859 | 106,245,934 | ||
Accumulated other comprehensive income | 13,205,203 | 11,770,927 | ||
Statutory surplus reserves | 11,808,271 | 11,808,271 | ||
Accumulated deficit | -10,535,905 | -12,156,414 | ||
Total stockholders' equity | 121,734,831 | 117,723,810 | ||
Non-controlling interests | 12,683,299 | 11,711,553 | ||
Total equity | 134,418,130 | 129,435,363 | ||
Total liabilities and equity | $ | 225,603,523 | $ | 208,763,267 |
SINOVAC BIOTECH LTD. | ||||||||||
Incorporated in Antigua and Barbuda | ||||||||||
Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) | ||||||||||
Three and Nine Months Ended September 30, 2013 and 2012 | ||||||||||
(Unaudited) | ||||||||||
(Expressed in U.S. Dollars) | ||||||||||
Three months ended | Nine months ended | |||||||||
30-Sep | 30-Sep | |||||||||
2013 | 2012 | 2013 | 2012 | |||||||
Sales | $ | 22,075,472 | $ | 14,287,100 | $ | 49,579,129 | $ | 29,625,199 | ||
Cost of sales | -6,164,587 | -6,770,712 | -13,017,307 | -10,401,918 | ||||||
Gross profit | 15,910,885 | 7,516,388 | 36,561,822 | 19,223,281 | ||||||
Selling, general and administrative expenses | -9,942,183 | -7,844,861 | -24,570,852 | -18,865,676 | ||||||
Provision for doubtful accounts | -171,729 | -97,067 | -1,057,520 | -97,067 | ||||||
Research and development expenses | -2,033,989 | -3,773,625 | -5,923,235 | -15,792,500 | ||||||
Depreciation of property, plant and equipment and amortization of licenses and renovation costs | -758,971 | -434,596 | -2,072,837 | -1,056,993 | ||||||
Gain on disposal and impairment of property, plant and equipment | 8 | - | 2,327 | - | ||||||
Government grants recognized in income | - | 78,053 | - | 556,028 | ||||||
Total operating expenses | -12,906,864 | -12,072,096 | -33,622,117 | -35,256,208 | ||||||
Operating income/(loss) | 3,004,021 | -4,555,708 | 2,939,705 | -16,032,927 | ||||||
Interest income | 544,062 | 464,512 | 1,567,982 | 1,561,039 | ||||||
Interest and financing expenses | -734,900 | 302,846 | -2,168,306 | -143,552 | ||||||
Other income/(expenses) | 134,126 | -47,283 | 141,221 | 85,430 | ||||||
Income/(loss) before income taxes and non-controlling interests | 2,947,309 | -3,835,633 | 2,480,602 | -14,530,010 | ||||||
Income tax recovery/(expense) | -76,672 | -5,958 | -61,889 | 794,406 | ||||||
Consolidated net income/(loss) | 2,870,637 | -3,841,591 | 2,418,713 | -13,735,604 | ||||||
Less: income/(loss) attributable to non-controlling interests | 561,189 | -839,758 | 798,204 | -3,490,578 | ||||||
$ | 2,309,448 | $ | -3,001,833 | $ | 1,620,509 | $ | -10,245,026 | |||
Net income/(loss) attributable to stockholders | ||||||||||
Net income/(loss) | $ | 2,870,637 | $ | -3,841,591 | $ | 2,418,713 | $ | -13,735,604 | ||
Other comprehensive income/(loss) | ||||||||||
Foreign currency translation adjustment | 249,027 | 878,183 | 1,601,728 | 1,055,232 | ||||||
Total comprehensive income/(loss) | 3,119,664 | -2,963,408 | 4,020,441 | -12,680,372 | ||||||
Less: comprehensive income/(loss) attributable to non-controlling interests | 588,052 | -738,068 | 965,656 | -3,351,143 | ||||||
Comprehensive income/(loss) attributable to stockholders | $ | 2,531,612 | $ | -2,225,340 | $ | 3,054,785 | $ | -9,329,229 | ||
$ | 0.04 | $ | -0.05 | $ | 0.03 | $ | -0.19 | |||
Basic and diluted earnings/(loss) per share | ||||||||||
Weighted average number of shares | ||||||||||
of common stock outstanding | ||||||||||
- Basic | 55,382,329 | 55,023,070 | 55,235,198 | 54,881,874 | ||||||
- Diluted | 55,882,837 | 55,023,070 | 55,684,691 | 54,881,874 | ||||||
SINOVAC BIOTECH LTD. | |||||||||
Incorporated in Antigua and Barbuda | |||||||||
Consolidated Statements of Cash Flows | |||||||||
Three and Nine Months Ended September 30, 2013 and 2012 | |||||||||
(Unaudited) | |||||||||
(Expressed in U.S. Dollars) | |||||||||
Three Months ended September 30 | Nine Months ended September 30 | ||||||||
2013 | 2012 | 2013 | 2012 | ||||||
Cash flows used in operating activities | |||||||||
Net income(loss) for the period | $ | 2,870,637 | $ | -3,841,591 | $ | 2,418,714 | $ | -13,735,604 | |
Adjustments to reconcile net income (loss) to net cash | |||||||||
used in operating activities: | |||||||||
- deferred income taxes | 76,672 | 5,958 | 61,889 | 72,287 | |||||
-Impairment of equipment and loss(gain) on disposal | -8 | 3,468 | -2,327 | 5,928 | |||||
- unrealized foreign exchange gain | - | - | - | -43,880 | |||||
- stock-based compensation | 71,685 | 134,138 | 209,378 | 388,104 | |||||
- inventory provision | 2,640 | 776,838 | 770,451 | 1,365,628 | |||||
- provision for doubtful accounts | 171,728 | 97,067 | 1,057,520 | 97,067 | |||||
- depreciation of property, plant and equipment, and amortization of licenses and renovation costs | 1,649,639 | 1,124,946 | 5,135,179 | 3,673,159 | |||||
- research and development expenditures qualified for government grant | - | - | -78,980 | ||||||
- deferred government grant recognized in income | - | -68,712 | -467,570 | ||||||
- accretion expenses | 19,007 | 48,560 | 71,380 | 185,349 | |||||
Changes in: | |||||||||
- accounts receivable | -7,165,298 | -6,631,251 | -15,452,983 | -7,302,483 | |||||
- inventories | 734,545 | 1,287,997 | -5,922,498 | -4,140,923 | |||||
- income tax payable | - | -375 | -3,124,852 | ||||||
- prepaid expenses and deposits | -428,282 | 560,264 | -172,739 | 1,048,642 | |||||
- deferred revenue | -3,482,735 | 1,456,127 | -4,711,378 | 1,356,605 | |||||
- accounts payable and accrued liabilities | 101,967 | -1,213,161 | 1,855,651 | -3,735,436 | |||||
Net cash used in operating activities | -5,377,803 | -6,259,727 | -14,681,763 | -24,436,959 | |||||
Cash flows from financing activities | |||||||||
- Loan proceeds | 3,073,545 | 1,288,549 | 13,858,047 | 7,298,056 | |||||
- Loan repayment | - | - | -162,162 | - | |||||
- Proceeds from issuance of common stock | 137,524 | 5,760 | 554,644 | 399,200 | |||||
- Subscriptions received | 30,638 | 32,000 | 203,094 | 34,400 | |||||
- Dividends paid to non-controlling shareholder of | - | - | - | -799,376 | |||||
Sinovac Beijing | |||||||||
- Loan from non-controlling shareholder of Sinovac Dalian | - | - | - | 3,178,164 | |||||
- Government grants received | 71,920 | - | 595,733 | 240,580 | |||||
Net cash provided by financing activities | 3,313,627 | 1,326,309 | 15,049,356 | 10,351,024 | |||||
Cash flows used in investing activities | |||||||||
- Acquisition of property, plant and equipment | -768,474 | -4,322,153 | -3,437,346 | -10,941,774 | |||||
Net cash used in investing activities | -768,474 | -4,322,153 | -3,437,346 | -10,941,774 | |||||
Exchange effect on cash and cash equivalents | -187,549 | 1,777,618 | 855,026 | 2,703,434 | |||||
Increase (decrease) in cash and cash equivalents | -3,020,199 | -7,477,953 | -2,214,727 | -22,324,275 | |||||
Cash and cash equivalents, beginning of period | 92,046,428 | 89,440,373 | 91,240,956 | 104,286,695 | |||||
Cash and cash equivalents, end of period | 89,026,229 | $ | 81,962,420 | $ | 89,026,229 | $ | 81,962,420 | ||
Cash paid for interest | 759,543 | $ | 493,244 | $ | 2,055,339 | $ | 1,375,203 | ||
Cash paid for income taxes | $ | - | $ | - | $ | - | $ | 866,693 | |
- | - | - | |||||||
Supplemental schedule of non-cash activities: | |||||||||
Acquisition of property, plant and equipment included in | |||||||||
accounts payable and accrued liabilities | $ | 3,332,952 | $ | 9,962,278 | $ | 3,332,952 | $ | 9,962,278 | |
Helen Yang/Chris Lee
Sinovac Biotech Ltd.
Tel: +86-10-8279-9659/9696
Fax: +86-10-6296-6910
Email: ir@sinovac.com
Investors:
Stephanie Carrington
The Ruth Group
Tel: +1-646-536-7017
Email: scarrington@theruthgroup.com
Media
Aaron Estrada
The Ruth Group
Tel: +1-646-536-7028
Email: aestrada@theruthgroup.com
