omniture

China Pharma Holdings, Inc. Reports Fiscal Year 2018 Financial Results

2019-03-29 18:00 10661

HAIKOU, China, March 29, 2019 /PRNewswire/ -- China Pharma Holdings, Inc. (NYSE American: CPHI) ("China Pharma," the "Company" or "We"), an NYSE American-listed corporation with a fully-integrated specialty pharmaceuticals subsidiary based in China, today announced financial results for the fiscal year ended December 31, 2018.

Full Year Highlights

  • Revenue decreased 6.7% to $12.3 million in fiscal year 2018 from $13.2 million in fiscal year 2017;
  • Gross margin was 16.0% in fiscal year 2018, compared to 18.7% in fiscal year 2017.
  • Impairment loss was $6.5 million in fiscal year 2018 compared to $14.2 million in fiscal year 2017, which represented a decrease of $7.7 million;
  • Loss from operations was $10.4 million in fiscal year 2018 compared to $18.7 million in fiscal year 2017, which represented a decrease of $8.3 million;
  • Net loss was $10.8 million in fiscal year 2018 compared to $19.3 million in fiscal year 2017. Loss per common share was $(0.25) per basic and diluted share in fiscal year 2018 compared with $(0.44) per basic and diluted share in fiscal year 2017.

In a statement from Ms. Zhilin Li, China Pharma's Chairman and CEO, "We experienced certain market fluctuations in 2018, but through the continued implementation of sales promotions, our sales revenue of 2018 was comparable to the same period a year ago. Management will continue to vigorously promote sales through active participation in recent provincial market openings to solicit new drug tender offers and allow China Pharma to expand its presence in these markets." Ms. Li continued, "In addition, we continued experiencing sustained pressure from the more stringent requirements of drug registration standards, consistency evaluations, and the rising costs of clinical trials in 2018. In this challenging environment, the company actively evaluated the technical difficulty, investment demand, time requirements, and investment return rate of all applicable marketed and pipeline products, and actively advanced the compliance process for several key products in 2018."

Full Year Results

Revenue decreased by 6.7% to $12.3 million for the year ended December 31, 2018, as compared to $13.2 million for the year ended December 31, 2017. This decrease was mainly due to the negative impact associated with health insurance cost controls as well as government policies targeted at reducing drug costs as a proportion of total health-care spending, in conjunction with the Company's efforts in controlling bad debts by more rigorous screening customers and more stringent policies on payment terms.

Gross profit for the year ended December 31, 2018 was $2.0 million, compared to $2.5 million in 2017. Our gross profit margin in 2018 was 16.0% compared to 18.7% in 2017. This decline in our gross profit margin was mainly due to a decrease in our sales, and our fixed manufacturing overhead.

Our selling expenses for the year ended December 31, 2018 were $3.2 million, a decrease of $0.2 million compared to $3.5 million for the year ended December 31, 2017. Selling expenses accounted for 26.1% of the total revenue in 2018 compared to 26.2% in 2017.

Our general and administrative expenses for the year ended December 31, 2018 were $1.9 million, which was close to $2.0 million in 2017. General and administrative expenses accounted for 15.8% and 15.3% of our total revenues in 2018 and 2017, respectively.

Our bad debt expenses for the year ended December 31, 2018 was $0.6 million, which represented a decrease of $0.8 million compared to $1.4 million in 2017. The decrease in our bad debt expenses was mainly due to the change in the composition of aging of accounts receivables for the years ended December 31, 2018 compared to December 31, 2017, which came in line with the Company's more stringent scrutiny upon customers' payment history.

Impairment of intangible assets for the year ended December 31, 2018 was $6.5 million, compared to $14.2 million in 2017. As a pharmaceutical company, we have been focusing on the development and maintenance of our intangible assets, mainly in the form of medical formulas. Because of recently implemented government policies such as consistency evaluations, our management made certain assessments regarding the impairment of our intangible assets as of December 31, 2018 and December 31, 2017 respectively, and identified two formulas and six formulas in 2018 and 2017, respectively, that would likely be unable to generate positive cash flow in the foreseeable future and therefore recognized impairment loss on them accordingly.

Net loss for year ended December 31, 2018 was $10.8 million, or ($0.25) each basic and diluted share, compared to net loss of $19.3 million, or ($0.44) each basic and diluted share, for the year ended December 31, 2017. The decrease in net loss was mainly a result of the decrease in impairment of long term assets.

Financial Condition

As of December 31, 2018, the Company had cash and cash equivalents of $1.2 million compared to $2.0 million as of December 31, 2017. Working capital decreased to ($1.3) million as of December 31, 2018 from $3.1 million as of December 31, 2017.

As of December 31, 2018, our net accounts receivable was $0.9 million, compared to $2.3 million as of December 31, 2017.

For the year ended December 31, 2018, cash flow from operating activities was $1.3 million, as compared to $0.8 million in 2017.

Conference Call

The Company will hold a conference call at 8:30 am E.T. on March 29, 2019 to discuss the results of full year 2018. Listeners may access the call by dialing 1-866-519-4004 or 65-671-350-90 for international callers, Conference ID # 3784037.  A replay of the call will be accessible through April 6, 2019 by dialing 1-855-452-5696 or 61-281-990-299 for international callers, Conference ID # 3784037.

About China Pharma Holdings, Inc.

China Pharma Holdings, Inc. is a specialty pharmaceutical company that develops, manufactures and markets a diversified portfolio of products, focused on conditions with  high incidence and high mortality rates 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 new GMP-certified product lines covering the major dosage forms. In addition, the Company has a broad and expanding nationwide distribution network across all major cities and provinces in China. The Company's wholly-owned subsidiary, Hainan Helpson Medical & Biotechnology Co., Ltd., is located in Haikou City, Hainan Province. For more information about China Pharma Holdings, Inc., please visit www.chinapharmaholdings.com. The Company routinely posts important information on its website.

Safe Harbor Statement 

Certain statements in this press 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. Such risks and uncertainties may include, but are not limited to: the achievability of financial guidance; success of new product development; unanticipated changes in product demand; increased competition; downturns in the Chinese economy; uncompetitive levels of research and development; 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, except as required by applicable law or regulation.

- FINANCIAL TABLES FOLLOW -

CHINA PHARMA HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS









December 31,


December 31,



2018


2017

ASSETS





Current Assets:





Cash and cash equivalents


$    1,186,587


$    2,030,214

Restricted cash


1,273,940


709,796

Banker's acceptances


20,579


39,867

Trade accounts receivable, less allowance for doubtful





accounts of $17,815,075 and $18,209,734, respectively


916,931


2,293,120

Other receivables, less allowance for doubtful





accounts of $34,884 and $40,010, respectively


170,098


162,981

Advances to suppliers


47


461,307

Inventory


5,054,975


6,407,155

Prepaid expenses


123,759


185,647

Total Current Assets


8,746,916


12,290,087






Advances for purchases of intangible assets


17,069,587


23,722,954

Property, plant and equipment, net


19,294,379


23,541,003

Intangible assets, net


266,443


398,856

TOTAL ASSETS


$  45,377,325


$  59,952,900






LIABILITIES AND STOCKHOLDERS' EQUITY





Current Liabilities:





Trade accounts payable


$    1,060,934


$    1,141,138

Accrued expenses


310,804


276,368

Other payables


3,065,508


2,858,701

Advances from customers


525,647


581,132

Other payables - related parties


1,633,263


1,354,567

Current portion of construction loan facility


2,181,360


2,305,430

Bankers' acceptance notes payable


1,273,940


709,796

Total Current Liabilities


10,051,456


9,227,132

Non-current Liabilities:





Construction loan facility


4,362,720


6,916,291

Deferred tax liability


764,374


738,175

Total Liabilities


15,178,550


16,881,598

Commitments and Contingencies (Note 12)





Stockholders' Equity:





Preferred stock, $0.001 par value; 5,000,000 shares authorized;





no shares issued or outstanding


-


-

Common stock, $0.001 par value; 95,000,000 shares authorized;





43,579,557 shares and 43,579,557 shares outstanding, respectively


43,580


43,580

Additional paid-in capital


23,590,204


23,590,204

Retained (deficit) earnings


(5,270,358)


5,479,809

Accumulated other comprehensive income


11,835,349


13,957,709

Total Stockholders' Equity


30,198,775


43,071,302

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY


$  45,377,325


$  59,952,900

 

CHINA PHARMA HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)











For the Years




Ended December 31,




2018


2017

Revenue



$  12,330,687


$  13,212,314

Cost of revenue



10,355,839


10,743,764







Gross profit



1,974,848


2,468,550







Operating expenses:






Selling expenses



3,216,512


3,460,596

General and administrative expenses



1,949,921


2,019,949

Research and development expenses



172,384


90,474

Bad debt expense



604,388


1,393,576

Impairment of long term assets



6,479,057


14,183,969

Total operating expenses



12,422,262


21,148,564







Loss from operations



(10,447,414)


(18,680,014)







Other income (expense):






Interest income



38,516


64,414

Interest expense



(451,258)


(539,334)

Net other expense



(412,742)


(474,920)







Loss before income taxes



(10,860,156)


(19,154,934)

Income tax benefit (expense)



109,989


(122,631)

Net loss



(10,750,167)


(19,277,565)

Other comprehensive income - foreign currency





translation adjustment



(2,122,360)


3,439,733

Comprehensive income (loss)



$ (12,872,527)


$ (15,837,832)

Loss per share:






Basic and diluted



$            (0.25)


$            (0.44)

Weighted average shares outstanding



43,579,557


43,579,557

 

CHINA PHARMA HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS




For the Years



Ended December 31,



2018


2017

Cash Flows from Operating Activities:





Net loss


$ (10,750,167)


$ (19,277,565)

Depreciation and amortization


3,258,739


3,291,330

Inventory write off


954,311


118,003

Bad debt expense


604,388


1,393,576

Deferred income taxes


68,419


122,631

Impairment of long term assets


6,479,057


14,183,969

Changes in assets and liabilities:





Trade accounts and other receivables


99,400


51,024

Advances to suppliers


(449,101)


1,614,958

Inventory


688,852


1,718,336

Trade accounts payable


(16,441)


(2,045,948)

Accrued taxes payable


(147,099)


18,753

Other payables and accrued expenses


437,901


420,523

Advances from customers


(25,127)


(274,068)

Prepaid expenses


53,860


(494,306)

Net Cash Provided by Operating Activities


1,256,992


841,216






Cash Flows from Investing Activities:





Purchases of property and equipment


(51,145)


(136,479)

Net Cash Used in Investing Activities


(51,145)


(136,479)






Cash Flows from Financing Activities:





Payments of construction term loan


(2,263,877)


(1,479,944)

Advances from related party


287,423


-

Net Cash Used in Financing Activities


(1,976,454)


(1,479,944)






Effect of Exchange Rate Changes on Cash


(73,020)


139,619

Net Decrease in Cash and Cash Equivalents


(843,627)


(635,588)

Cash and Cash Equivalents at Beginning of Period


2,030,214


2,665,802

Cash and Cash Equivalents at End of Period


$    1,186,587


$    2,030,214






Supplemental Cash Flow Information:





Cash paid for income taxes


$                   -


$                   -

Cash paid for interest


$       588,191


$       525,788






Supplemental Noncash Investing and Financing Activities:




Issuance of banker's acceptances


$       625,128


$       709,796

Accounts receivable collected with banker's acceptances


579,896


531,294

Inventory purchased with banker's acceptances


597,686


492,906

 

Cision View original content:http://www.prnewswire.com/news-releases/china-pharma-holdings-inc-reports-fiscal-year-2018-financial-results-300820880.html

Source: China Pharma Holdings, Inc.
Related Stocks:
AMEX:CPHI
collection