China Pharma Holdings, Inc. Reports Full Year 2009 Financial Results
HAIKOU CITY, China, March 5 /PRNewswire-Asia-FirstCall/ -- China Pharma Holdings, Inc. ("China Pharma") (NYSE/Amex: CPHI), which develops, manufactures, and markets specialty pharmaceutical products in China, today announced financial results for the fiscal year ended December 31, 2009.
Full Year 2009 Financial Highlights -- Revenue increased 21% to $61.7 million from $51.0 million for 2008; -- Net income increased 13% to $20.2 million from $17.8 million in 2008; -- 2009 cash flow from operations increased by 63% to $10.7 million compared to $6.5 million for 2008; and -- EPS was $0.48, compared to $0.44 in 2008.
In 2009, revenue increased 21% to $61.7 million from $51.0 million in 2008, due to contribution from new products as well as increased contribution from existing products. Sales of Antiviral & Respiratory drugs increased 31% to $24.7 million from the prior year. Digestive product sales increased 114% to $4.8 million, driven by Tiopronin and Omeprazole Sodium, two new drugs released in Q2 and Q4 of 2009, respectively. Sales of CNS, Cardio & Cerebro-vascular products decreased 3% to $21.5 million. Sales of other products (including tumor drug Granisetron, and various other products) increased 41% to $10.7 million from the prior year.
Gross profit in 2009 increased to $25.7 million from $25.3 million in 2008. Gross profit margin in 2009 was 42%, compared to 50% in 2008. The decrease in gross margin was largely a result of a higher proportion of lower-margin products, including EDL-listed drugs, in the sales mix.
Operating expenses decreased 45% to $3.0 million from $5.6 million, due to the change in the Company's estimate for bad debt reserve in the third quarter of 2009. Selling expenses for the year increased 33% to $2.7 million from $2.0 million in 2008 as the company expanded its distribution network. General and administrative expenses increased 28% to $2.1 million in 2009 from $1.7 million in 2008. In 2009, the Company realized a bad debt benefit of $1.8 million, compared to a bad debt expense of $1.8 million in 2008.
Operating income for the year increased 15% to $22.6 million, compared to $19.7 million in 2008.
Net income for 2009 increased 13% to $20.2 million from $17.8 million in the previous year. Earnings Per Share was $0.48 in 2009, compared to $0.44 in 2008. The share count used to calculate EPS was 42.3 million fully diluted shares, compared to 40.2 million shares in the prior year.
In the year ended December 31, 2009, cashflow from operating activity rose to $10.67 million, an increase of 63% over the $6.54 million for the same period in 2008. The main reasons for the improvement in operating cashflow were faster collection of accounts receivables and an increase of Net Income in 2009.
As of December 31, 2009, the Company had cash and cash equivalents of $3.6 million, which represented 3.6% of total assets, compared to $3.8 million, or 4.0% of total assets, as of September 30, 2009 and $6.9 million, or 9.2% of total assets, as of December 31, 2008.
Business Update -- On January 21, 2010, the Company announced that the clinical trials for Candesartan, an anti-hypertension drug, has been completed and the generic drug production application has been submitted to the SFDA. In China, nearly 60% of all urban adults aged 65 years and over suffer from hypertension, and prevalence in urban areas is expected to reach 100 million by 2011. Candesartan is listed in the China's National (Medical) Insurance Catalog ("NIC"), allowing patients to be reimbursed by the government.
The Company expects revenue growth of 20% to 25% for 2010, on a year over year basis.
China Pharma's President and CEO, Ms. Zhilin Li, stated, "We are very pleased with our 2009 results, which have continued to yield a net income margin above 30%. After adding two new drugs in 2009, our core portfolio now has 20 products, and we have a number of new products in various stages of registration, including Rosuvastatin (generic for Crestor) and an antibiotic, that are in clinical trials. Going forward, we will continue to invest to strengthen our product portfolio. The Healthcare Reform in China is now moving ahead steadily but forcefully, with important implications for the pharmaceutical industry. We believe the changes will be favorable for highly profitable companies like ours with innovative drugs. We also believe the changes may cause attractive acquisition opportunities to appear. To that end, we are monitoring the market for strategic opportunities to take advantage of the current fragmented nature of the pharmaceutical industry landscape in China."
The Company will hold a conference call at 8:00 am ET on March 5, 2010 to discuss full year 2009 results. Listeners may access the call by dialing 1-800-237-9752 or 1-617-847-8706 for international callers, access code: 29285530. A webcast will also be available through CPHI's website at http://www.chinapharmaholdings.com . A replay of the call will be accessible through March 12, 2010 by dialing 1-888-286-8010 or 1-617-801-6888 for international callers, access code: 49104434.
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 http://www.chinapharmaholdings.com .
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. Phone: +86-898-6681-1730 Email: email@example.com ICR, Inc. Christine Duan Phone: +1-203-682-8200 CHINA PHARMA HOLDINGS, INC. CONSOLIDATED BALANCE SHEETS December 31, 2009 2008 ASSETS Current Assets Cash and cash equivalents $3,634,753 $6,927,149 Trade accounts receivable, less allowance for doubtful accounts of $2,718,358 and $4,474,175, respectively 51,238,339 36,008,095 Other receivables, less allowance for doubtful accounts of $3,556 and $54,242, respectively 78,525 163,957 Advances to suppliers 1,798,446 3,031,694 Inventory 14,233,073 13,139,750 Deferred tax assets 319,820 461,596 Total Current Assets 71,302,956 59,732,241 Property and Equipment, net of accumulated depreciation of $2,020,462 and $1,483,267, respectively 6,705,873 6,738,368 Intangible assets, net of accumulated amortization of $1,359,048 and $547,567, respectively 19,332,284 6,162,549 Advances for intangible assets and property and equipment 3,599,949 2,838,679 TOTAL ASSETS $100,941,062 $75,471,837 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Trade accounts payable $3,957,923 $1,049,268 Accrued expenses 47,435 56,075 Accrued taxes payable 1,528,691 1,170,003 Other payables 58,191 42,813 Advances from customers 1,037,693 693,178 Other payables-related parties 75,741 75,741 Notes payable 3,802,726 2,480,231 Total Current Liabilities 10,508,400 5,567,309 Long-term research and development commitments 36,565 36,474 Total Liabilities 10,544,965 5,603,783 Stockholders' Equity Common stock - $0.001 par value; 60,000,000 shares authorized; 42,308,350 shares and 42,278,938 shares outstanding, respectively 42,308 42,279 Additional paid-in capital 21,178,114 21,066,338 Retained earnings 63,272,868 43,039,819 Accumulated other comprehensive income 5,902,807 5,719,618 Total Stockholders' Equity 90,396,097 69,868,054 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $100,941,062 $75,471,837 CHINA PHARMA HOLDINGS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME For the Years Ended December 31, 2009 2008 Revenue $61,696,620 $50,968,660 Cost of revenue 36,046,259 25,678,239 Gross profit 25,650,361 25,290,421 Operating expenses Selling expenses 2,705,550 2,040,596 General and administrative expenses 2,147,081 1,671,715 Bad debt expense (benefit) (1,816,785) 1,847,806 Total operating expenses 3,035,846 5,560,117 Income from operations 22,614,515 19,730,304 Interest income 30,695 45,168 Interest expense (154,182) (131,027) Other income (expense) 3,540 (103,177) Income before income taxes 22,494,568 19,541,268 Provision for income taxes (2,261,519) (1,707,618) Net income 20,233,049 17,833,650 Other comprehensive income - foreign currency translation adjustment 183,189 2,880,314 Comprehensive income $20,416,238 $20,713,964 Basic and diluted earnings per share $0.48 $0.44 CHINA PHARMA HOLDINGS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2009 2008 Cash Flows from Operating Activities Net income $20,233,049 $17,833,650 Depreciation and amortization 1,368,888 719,475 Bad debt expense (benefit) (1,816,785) 1,847,806 Stock-based compensation 41,804 123,794 Changes in assets and liabilities: Trade accounts receivable (13,366,578) (17,778,209) Other receivables 136,587 265,813 Advances to suppliers 1,240,118 (87,978) Inventory (1,060,083) 2,243,138 Deferred tax assets 142,846 (257,447) Trade accounts payable 3,044,387 720,659 Accrued expenses (8,775) (219,301) Accrued taxes payable 355,587 825,119 Other payables 15,274 (48,072) Other payables-related parties -- (52,804) Advances from customers 342,607 407,617 Net Cash Provided by Operating Activities 10,668,926 6,543,260 Cash Flows from Investing Activities Purchase of property and equipment (143,082) (4,310,690) Construction in progress -- -- Purchase of intangible assets (12,154,561) (4,184,080) Advances for intangible assets and property and equipment (3,063,066) (1,946,479) Net Cash Used in Investing Activities (15,360,709) (10,441,249) Cash Flows from Financing Activities Proceeds from exercise of warrants 70,001 -- Proceeds from sale of common stock -- 9,268,938 Proceeds from short-term notes payable 3,800,681 2,441,739 Payments of short-term notes payable (2,485,060) (2,829,545) Net Cash Provided by Financing Activities 1,385,622 8,881,132 Effect of Exchange Rate Changes on Cash 13,765 113,671 Net Increase (Decrease) in Cash (3,292,396) 5,096,814 Cash and Cash Equivalents at Beginning of Year 6,927,149 1,830,335 Cash and Cash Equivalents at End of Year $3,634,753 $6,927,149
SOURCE China Pharma Holdings, Inc.