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China Pharma Holdings, Inc. Reports Second Quarter 2009 Financial Results and Corporate Updates

HAIKOU CITY, China, Aug. 11 /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 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 . 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 .

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.
                             AND COMPREHENSIVE INCOME

                             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
    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
     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.

                                                 June 30,        December 31,
                                                  2009              2008
    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

    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
     EQUITY                                    $85,928,588       $75,471,837

    For more information, please contact:

    China Pharma Holdings, Inc.
     Tel:   +86-898-6681-1730

    ICR, Inc.
     Christine Duan
     Tel: +1-203-682-8200

SOURCE China Pharma Holdings, Inc.
Copyright©2009 PR Newswire.
All rights reserved

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