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China Pharma Holdings, Inc. Reports First Quarter 2012 Financial Results
Date:5/15/2012

category where sales fell by 37% to $2.0 million from $3.1 million for the same period last year. Sales in the Anti-Viro Infection & Respiratory category fell by 4% to $6.8 million from $7.1 million in the prior year period. The "Digestive" category sales revenues edged lower by 2% to $2.5 million from $2.6 million in the same period prior year. Sales of CNS Cerebral & Cardio Vascular products fell by 11% to $4.8 million from $5.4 million in the first quarter of 2011.

Gross profit for the three months ended March 31, 2012 was $5.30 million, which was approximately 23% lower compared to $6.87 million for the quarter ended March 31, 2011. Our gross margin for the first quarter of 2012 was 33%, compared to 38% in the corresponding quarter of 2011. We are seeing pricing pressure on many of our products, particularly digestive drugs, although the pressure is not uniform across product lines. Pricing pressure has become more evident over the past few quarters as the Chinese government healthcare reform is having a stronger impact on all pharmaceutical products, especially the products listed on National Essential Drug List. We expect current challenging pricing environment to persist for some time.

In terms of our gross margins by major categories, CNS Cerebral & Cardio Vascular category margin was 39.4%, lower compared to the first quarter 2011 gross margin of 45.3%. Gross margin for our Anti-Viro/Infection & Respiratory category decreased to 25.4% from 27.5% in the period one year ago. Gross margin for our Digestive Diseases category decreased to 35.7% from 48.4%, in the period one year ago. Gross margin for our Other category fell to 40.0% from 44.9% a year ago.

Selling, general and administrative expenses in the first quarter of 2012 were $1.57 million, compared to $1.52 million, in the same period of 2011.  The decrease in general and administrative expenses along with the revenue did not completely offset the increasing sell
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