China Pharma Holdings, Inc. Reports Second Quarter 2018 Financial Results
HAIKOU CITY, China, Aug. 15, 2018 /PRNewswire/ -- China Pharma Holdings, Inc. (NYSE MKT: 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 quarter ended June 30, 2018.
Second Quarter Highlights
-- Revenue increased8.8% to $3.2million in the second quarter 2018 from
$3.0million in the same period of 2017;
-- Gross profit was$0.6 million for each of the three months ended June 30,
2018 and 2017, respectively. Gross margin was 18.3% in the second
quarter of 2018, compared to 22.2% in the same period of 2017;
-- Loss from operations was $0.9million in the second quarter of 2018
compared to $2.1 million in the same period of 2017, a decrease of $1.2
million;
-- Net loss was $1.0 million in the second quarter of 2018 compared to $2.3
million in the same period of 2017. Loss per common share was $(0.02)
per basic and diluted share in the second quarter of 2018 compared
to$(0.05) per basic and diluted share in the same period of 2017.
In a statement from Ms. Zhilin Li, China Pharma's Chairman and CEO, "It is the Company's top priority to actively and steadily increase sales and it is encouraging to see increasing revenue in this quarter. Management will continue to vigorously promote sales through active participation in recent provincial market openings to receive new drug tender offers and through further penetration into the market."Ms. Li continued, "The ongoing generic drug consistency evaluations and reform of China's drug production registration and review policies will continue to have a significant impact on the current performance and future development of Chinese pharmaceutical manufacturers, including us, and may gradually change business patterns of the industry. We will continue to actively adapt to state policy guidance and further evaluate market conditions for our current existing products, pipeline products, and competition in the market in order to optimize our development strategy."
Second Quarter Results
Revenue increased by 8.8% to $3.2 million for the three months ended June 30, 2018, as compared to $3.0 million for the three months ended June 30, 2017. This increase was mainly due to market volatility.
Gross profit was $0.6 million for each of the three months ended June 30, 2018 and 2017. Our gross profit margin in the three months ended June 30, 2018 was 18.3% compared to 22.2% in the same period last year. This decrease was primarily due to an increase in sales of lower margin products during this period compared to the sales performance in the same period last year.
Our selling expenses for the three months ended June 30, 2018 were $0.7 million, a decrease of $0.1 million, compared to $0.8 million for the three months ended June 30, 2017. Selling expenses accounted for 22.5% of the total revenue in the three months ended June 30, 2018 compared to 27.5% in the same period last year.
Our general and administrative expenses for the three months ended June 30, 2018 were $0.4 million, which represented a decrease of $0.3 million compared to $0.6 million in the same period last year. General and administrative expenses accounted for 11.1% and 21.0% of our total revenues in three months ended June 30, 2018 and 2017, respectively.
Net Loss for the three months ended June 30, 2018 was $1.0 million, compared to net loss of $2.3 million for the three months ended June 30, 2017.
Six Months Results
Revenue increased by 9.5% to $6.8 million for the six months ended June 30, 2018, as compared to $6.2 million for the six months ended June 30, 2017. This increase was mainly due to market volatility.
Gross profit for the six months ended June 30, 2018 was $1.6 million, compared to $1.4 million in the same period in 2017. The gross profit margin in the six months ended June 30, 2018 was 24.1% compared to 22.0% in the same period in 2017. The increase was mainly due to the increase in sales of higher margin products in the first half of 2018.
Net loss for the six months ended June 30, 2018 was $1.3 million, compared to net loss of $3.3 million in the same period 2017. The decrease in net loss was mainly the result of increase in revenue and decreased expenses in the six months ended June 30, 2018.
Financial Condition
As of June 30, 2018, the Company had cash and cash equivalents of $1.9 million compared to $2.0 million as of December 31, 2017. Working capital increased to $3.4 million as of June 30, 2018 from $3.1 million as of December 31, 2017; and the current ratio was both 1.3 times at June 30, 2018 and December 31, 2017, respectively.
Our net accounts receivable balance was $2.4 million as of June 30, 2018, compared to $2.3 million as of December 31, 2017.
Conference Call
The Company will hold a conference call at 8:30am E.T. on August 15, 2018, to discuss the financial results of the second quarter 2018. Listeners may access the call by dialing 1-866-519-4004 for domestic callers or 65-671-350-90 for international callers, Conference ID # 6869537. A recording of the call will be accessible through August 23, 2018 by dialing 1-855-452-5696 or 61-281-990-299 for international callers, Conference ID #6869537.
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 a 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, which may include, but are not limited to, such factors as 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.
Contact:
China Pharma Holdings, Inc.
Ms. Diana Na Huang
Phone: +86-898-6681-1730 (China)
Email: hps@chinapharmaholdings.com
- FINANCIAL TABLES FOLLOW -
CHINA PHARMA HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, December 31,
2018 2017
---- ----
ASSETS (Unaudited) (Audited)
Current Assets:
Cash and cash equivalents $1,935,527 $2,030,214
Restricted cash 1,626,352 709,796
Banker's acceptances 19,612 39,867
Trade accounts receivable, less allowance for doubtful
accounts of $18,238,248 and $18,209,734, respectively 2,367,188 2,293,120
Other receivables, less allowance for doubtful
accounts of $40,069 and $40,010, respectively 188,177 162,981
Advances to suppliers 341,200 461,307
Inventory 6,377,507 6,407,155
Prepaid expenses 221,132 185,647
Total Current Assets 13,076,695 12,290,087
Advances for purchases of intangible assets 23,319,133 23,722,954
Property, plant and equipment, net 21,584,492 23,541,003
Intangible assets, net 327,759 398,856
TOTAL ASSETS $58,308,079 $59,952,900
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Trade accounts payable $1,152,539 $1,141,138
Accrued expenses 195,046 276,368
Other payables 2,682,230 2,858,701
Advances from customers 586,282 581,132
Other payables - related parties 1,354,567 1,354,567
Current portion of construction loan facility 2,115,107 2,305,430
Bankers' acceptance notes payable 1,626,352 709,796
Total Current Liabilities 9,712,123 9,227,132
Non-current Liabilities:
Construction loan facility 6,798,559 6,916,291
Deferred tax liability 772,331 738,175
------- -------
Total Liabilities 17,283,013 16,881,598
---------- ----------
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 earnings 4,178,280 5,479,809
Accumulated other comprehensive income 13,213,002 13,957,709
Total Stockholders' Equity 41,025,066 43,071,302
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $58,308,079 $59,952,900
----------- -----------
CHINA PHARMA HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS
(Unaudited)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
-------------- --------------
2018 2017 2018 2017
---- ---- ---- ----
Revenue $3,173,711 $2,917,180 $6,789,395 $6,202,383
Cost of revenue 2,594,230 2,268,823 5,156,214 4,836,173
--------- --------- --------- ---------
Gross profit 579,481 648,357 1,633,181 1,366,210
------- ------- --------- ---------
Operating expenses:
Selling expenses 716,220 803,434 1,394,550 1,521,071
General and administrative expenses 353,143 611,951 845,153 1,028,677
Research and development expenses 23,674 21,450 45,887 47,510
Bad debt expense 350,847 364,989 352,681 725,052
Impairment of long term assets - 977,980 - 977,980
-------
Total operating expenses 1,443,884 2,779,804 2,638,271 4,300,290
--------- --------- --------- ---------
Loss from operations (864,403) (2,131,447) (1,005,090) (2,934,080)
-------- ---------- ---------- ----------
Other income (expense):
Interest income 9,524 16,316 11,818 21,349
Interest expense (130,580) (142,205) (259,682) (281,169)
Net other expense (121,056) (125,889) (247,864) (259,820)
-------- -------- -------- --------
Loss before income taxes (985,459) (2,257,336) (1,252,954) (3,193,900)
Income tax expense (22,590) (30,574) (48,575) (60,908)
------- ------- ------- -------
Net loss (1,008,049) (2,287,910) (1,301,529) (3,254,808)
Other comprehensive income (loss) - foreign
currency translation adjustment (2,418,783) 1,008,890 (744,707) 1,488,482
Comprehensive loss $(3,426,832) $(1,279,020) $(2,046,236) $(1,766,326)
----------- ----------- ----------- -----------
Loss per share:
Basic and diluted $(0.02) $(0.05) $(0.03) $(0.07)
------ ------ ------ ------
Weighted average shares outstanding 43,579,557 43,579,557 43,579,557 43,579,557
---------- ---------- ---------- ----------
CHINA PHARMA HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Six Months
Ended June 30,
--------------
2018 2017
---- ----
Cash Flows from Operating Activities:
Net loss $(1,301,529) $(3,254,808)
Depreciation and amortization 1,714,328 1,628,380
Bad debt expense 352,681 725,052
Deferred income taxes 48,575 60,908
Inventory write off 148,565 -
Impairment of long term assets - 977,980
Changes in assets and liabilities:
Trade accounts and other receivables (767,978) (6,262)
Advances to suppliers 113,520 (9,933)
Inventory 57,850 439,865
Trade accounts payable 35,235 (974,197)
Accrued taxes payable (94,416) (144,739)
Other payables and accrued expenses (157,893) (87,949)
Advances from customers 15,639 (173,692)
Prepaid expenses (40,178) 45,817
Net Cash Provided by Operating Activities 124,399 (773,578)
------- --------
Cash Flows from Investing Activities:
Purchases of property, plant and equipment (29,982) (51,808)
Net Cash Used in Investing Activities (29,982) (51,808)
------- -------
Cash Flows from Financing Activity:
Payments of construction term loan (157,071) (145,750)
Net Cash Used in Financing Activity (157,071) (145,750)
-------- --------
Effect of Exchange Rate Changes on Cash (32,033) 50,900
------- ------
Net (Decrease) Increase in Cash and Cash Equivalents (94,687) (920,236)
Cash and Cash Equivalents at Beginning of Period 2,030,214 2,665,802
Cash and Cash Equivalents at End of Period $1,935,527 $1,745,566
---------- ----------
Supplemental Cash Flow Information:
Cash paid for income taxes $ - $ -
------------------------ ------------------------
Cash paid for interest $125,716 $410,509
-------- --------
Supplemental Noncash Investing and Financing Activities:
Issuance of banker's acceptances $965,468 $1,435,381
Accounts receivable collected with banker's acceptances 268,630 227,274
Inventory purchased with banker's acceptances 288,982 210,787
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SOURCE China Pharma Holdings, Inc.
