Financial Highlights -- Fiscal year Revenue up 53.6%, to $50.96 Million, exceeding guidance of 45% -- Fiscal year Net Income up 39.1%, to 17.83 Million -- Fiscal year Gross Margin 49.6%, up from 46.9% for 2007 -- EPS increased 28% reaching $0.44 per share compared to $0.35 for 2007 Recent and Upcoming Events -- Clinical Trials of Novel Antibiotic Combination Approved by SFDA and Initiated -- SFDA Production Approval Received for Tiopronin Enteric-Coated Capsules to treat Hepatitis B -- Ant-hypertension drug, Candesartan, Entered Clinical Trials -- Dry Power Production Line: Expansion Completed and Operating
HAIKOU CITY, China, March 17 /PRNewswire-Asia-FirstCall/ -- 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 year ended December 31, 2008.
For the 12 months up to December 31 2008, the Company continuously demonstrated consistent top and bottom line growth and improved financial performance. The increase in company revenue exceeded 53.9%, reaching approximately $50.97 million, compared with $33.19 million of 2007. This rapid growth was accounted for by increases in sales of existing products, and increases in the share of sales by new products. China Pharma is working closely with several pharmaceutical research institutions to develop and further launch more products to meet our customers' needs. Our focus is to create a steady increase to the bottom line. We have seen in the past that the diversified portfolio and distribution channels are keys to company operation. Diligent exploration of potential innovations of the pharmaceutical industry and of the domestic market is essential to create value for our shareholders.
For the year ended December 31 2008, sales of the Company's flag-ship product PuSen OK increased by 76.6%, and the sales of other products also improved dramatically: year-on-year Alginic Sodium Diester increased by 75.5%, Granisetron increased by 60.47%, Clarithromycin increased by 57.4%.
The financial operational performance for the 12 months ended December 31, 2008 was clearly improved compared to the 12 months ended December 31, 2007. Gross profit for 2007 was approximately $15.57 million, and the gross profit margin was 46.9%, while the 2008 gross profit was $25.29 million and the gross profit margin increased to reach 49.6%. The gross profit increased by approximately $9.72 million, or 62.5% from 2007 to 2008, which was mainly due to the continued revenue growth in 2008 and increased cost control, and also to the continued launch of new products.
The operating income for the year ended December 31, 2008 was $19,730,304, compared to $12,251,229 for the same period of 2007, an increase of $7.48 million, or 61.1%. The operating gross margin was 38.7% and 36.9%, for fiscal year 2008 and fiscal year 2007, respectively.
Due to substantial increases in sales revenue and gross profit, and effective cost control in 2008, the net income for the year ended December 31, 2008, excluding the effect of foreign exchange transactions, increased to approximately $17.83 million, which was 39.1% higher than the $12.82 million for the year ended December 31, 2007. The net profit margins were 35.0% and 38.6% respectively in fiscal year 2008 and fiscal year 2007. The decrease in net profit margin was due to the effect of the increasing income tax from 0% to 9%. The Company did not have any income tax in 2007, when the Company was still in the preferential tax period of 0%, while in 2008, due to the Company's location in the special economic zone of Hainan, the Company was granted a favorable rate of 9%. Excluding the effect of the increasing income tax, net income increased 54.4%.
Earnings per common share for the 12 months ended December 31, 2008, increased 28.0% reaching $0.44 per share compared to $0.35 per share for the 12 months ended December 31, 2007.
Analysis of balance sheet and cash flow statement
As of December 31, 2008, the Company possessed cash and cash equivalents of $6,927,149, which represented 9.2% of total assets; compared with $1,830,335 in the same period for 2007, which represented 4.2% of the total assets. Compared with the position of December 31, 2007, this was an increase of $5,096,814, or 278.5%. This was a combined result of an improvement in net cash generated from operating activities and an increase in net cash proceeds from financing activities.
In the year ended December 31, 2008, the operating activity cash flow increased to $6.54 million, a substantial increase of 222.6%, compared to $2.03 million for the same period in 2007. The main reason was the increase in revenue and net income, and improvement in accounts receivable collection.
China Pharma's President and CEO, Ms. Zhilin Li said, "We achieved the successes stated above, despite the global economic crisis and challenges within the Chinese Pharmaceutical industry. The Chinese Health Care Reform will be implemented in 2009. The build up of a national basic healthcare system will have a deep impact on the entire Chinese society and on the healthcare industry. We will continue to launch strong innovative products, and adapt to the changing policy environment with our operating model and diversified portfolio. We will explore the opportunities in this environment and work for a better future!"
Conference Call Details
The Company will hold a conference call on Wednesday 18 March at 8:30 a.m. EDT. To participate in the conference call, please dial +1 866-277-1181 (Toll Free) ten minutes prior to the scheduled conference call time. International callers should dial +1 617-597-5358. The conference pass code is 24632342. If you are unable to participate in the call at this time, a replay will be available on Wednesday March 18, 2009 at 12:00 p.m. EDT, through Wednesday March 25, 2009. To access the replay, please dial +1 888-286-8010. International callers should dial 1-617-801-6888. The conference pass code is 43849468. This conference call will be broadcast live over the Internet and can be accessed by clicking this link: http://phx.corporate-ir.net/playerlink.zhtml?c=145098&s=wm&e=2128119 .
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 a scalable GMP-certified manufacturing infrastructure. 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 Bio-pharmaceutical 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 .
CHINA PHARMA HOLDINGS, INC. CONSOLIDATED BALANCE SHEETS December 31, December 31, 2008 2007 ASSETS (Restated) Current Assets: Cash and cash equivalents $6,927,149 $1,830,335 Trade accounts receivable, less allowance for doubtful accounts of $4,474,175 and $2,440,852, respectively 36,008,095 18,572,976 Other receivables, less allowance for doubtful accounts of $54,242 and $43,908, respectively 163,957 413,596 Advances to suppliers 3,031,694 2,757,320 Inventory 13,139,750 14,448,771 Deferred tax assets 461,596 187,509 Total Current Assets 59,732,241 38,210,507 Non-current Assets: Property and equipment, net of accumulated depreciation of $1,483,267 and $1,003,802, respectively 6,738,368 2,625,216 Intangible assets, net of accumulated amortization of $547,567 and $221,715, respectively 6,162,549 2,063,252 Advances for purchases of intangible assets and property and equipment 2,838,679 807,345 Total Non-current Assets 15,739,596 5,495,813 TOTAL ASSETS $75,471,837 $43,706,320 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Trade accounts payable $1,049,268 $297,299 Accrued expenses 56,075 261,301 Accrued taxes payable 1,170,003 311,009 Other payables 42,813 86,161 Advances from customers 693,178 261,583 Other payables - related parties 75,741 -- Short-term notes payable 2,480,231 2,693,428 Total Current Liabilities 5,567,309 3,910,781 Research and development commitments 36,474 34,181 Total Liabilities 5,603,783 3,944,962 Stockholders' Equity: Common stock, $0.001 par value, 60,000,000 shares authorized, 42,278,938 and 37,278,938 shares issued and outstanding, respectively 42,279 37,279 Additional paid-in capital 21,066,338 11,678,606 Retained earnings 43,039,819 25,206,169 Foreign currency translation adjustment 5,719,618 2,839,304 Total Stockholders' Equity 69,868,054 39,761,358 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $75,471,837 $43,706,320 CHINA PHARMA HOLDINGS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME For the Years ended December 31, 2008 2007 Revenue $50,968,660 $33,186,324 Cost of revenue 25,678,239 17,619,180 Gross profit 25,290,421 15,567,144 Operating expenses: Selling expenses 2,040,596 1,436,609 General and administrative expenses 1,671,715 1,139,160 Bad debt expense 1,847,806 740,146 Total operating expenses 5,560,117 3,315,915 Income from operations 19,730,304 12,251,229 Non-operating income (expenses): Interest income 45,168 31,805 Interest expense (131,027) (237,398) Other income (expenses) (103,177) 611,025 Total non-operating income (expense) (189,036) 405,432 Income before income taxes 19,541,268 12,656,661 Income tax (expense) benefit (1,707,618) 162,872 Net income $17,833,650 $12,819,533 Comprehensive income - foreign currency translation adjustments 2,880,314 2,175,433 Comprehensive income $20,713,964 $14,994,966 Earnings Per Share: Basic $0.44 $0.35 Diluted $0.44 $0.34 Weighted Average Shares Outstanding: Basic 40,216,096 37,009,655 Diluted 40,216,096 37,259,909 CHINA PHARMA HOLDINGS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years ended December 31, 2008 2007 (Restated) Cash Flows from Operating Activities: Net income $17,833,650 $12,819,533 Depreciation and amortization 719,475 422,443 Compensation paid with warrants 123,794 -- Gain on sale of intangibles -- (580,922) Changes in assets and liabilities: Trade accounts receivable (15,937,676) (5,413,718) Other receivables 273,086 (32,234) Advances to suppliers (87,978) (1,881,451) Inventory 2,243,138 (3,325,681) Deferred tax assets (257,447) (162,872) Deferred offering costs -- 60,952 Trade accounts payable 720,659 (204,372) Accrued expenses (219,301) 73,451 Accrued taxes payable 825,119 126,812 Other payables (48,072) 20,558 Other payables - related parties (52,804) -- Advances from customers 407,617 105,573 Net Cash from Operating Activities 6,543,260 2,028,072 Cash Flows from Investing Activities: Purchase of property and equipment (199,645) (51,841) Construction in progress (4,111,045) -- Purchase of intangible assets (4,184,080) (2,937,431) Advances for purchases of intangibles property and equipment (1,946,479) 773,906 Proceeds from the sale of intangibles -- 1,509,741 Net Cash from Investing Activities (10,441,249) (705,625) Cash Flows from Financing Activities: Proceeds from sale of common stock 9,268,938 3,797,183 Proceeds from exercise of warrants -- 119,000 Proceeds from short term notes payable 2,441,739 2,586,252 Payments of short term notes payable (2,829,545) (6,705,456) Net Cash from Financing Activities 8,881,132 (203,021) Effect of Exchange Rate Changes on Cash 113,671 54,468 Net Change in Cash 5,096,814 1,173,894 Cash and Cash Equivalents at Beginning of Period 1,830,335 656,441 Cash and Cash Equivalents at End of Period $6,927,149 $1,830,335
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. Diana Huang Tel: +86-898-6681-1730 Email: email@example.com The Ruth Group Sara Ephraim Tel: +1-646-536-7002 Email: firstname.lastname@example.org
|SOURCE China Pharma Holdings, Inc.|
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