China Pharma Holdings, Inc. Reports Third Quarter 2009 Financial Results and Corporate Updates
For the three months ended September 30, 2009, we saw an increase of 23%in revenue to $15.5 million compared to the same period of last year. This isan increase of $2.9 million from the $12.6 million we generated in thecorresponding period of 2008. Notably, third quarter sales in theAnti-Viro/Infection & Respiratory product category rose by 36% over the sameperiod a year ago to approximately $6.1 million. Our CNS and Cerebral & CardioVascular drugs performed steadily by generating $5.6 million revenue duringthe third quarter, compared to $5.9 million in the same period of 2008. OurOther Products category (including our tumor drug Granisetron and variousother products) saw an increase of 36% over last year to $2.3 million. OurDigestive product sales rose by 184% to $1.5 million, mainly due to the salescontribution from our new product Tiopronin. During this quarter we sawTiopronin generating close to $800,000 in sales. This is progressing betterthan expected.
Gross Profit for the three months ended September 30, 2009 was $6.5million, which is about 7% higher compared to the $6.1 million for the thirdquarter of 2008. Gross profit margin for the current quarter is 42%, comparedto 49% in the third quarter of 2008. The lower gross profit margin in thethird quarter of 2009 was due to faster revenue growth of lower marginproducts.
Selling and G&A expenses in the third quarter of 2009 rose to $1.3 millionfrom $0.9 million as the company expanded its distribution network.
Given our good record on not losing any receivables, we now feel morecomfortable in our ability to collect our account receivables. After analyzingour receivable collection history and also a number of other factors includingmacro economy and industry bad debt experience rates, management revised baddebt allowance estimates. The change in the estimate for bad debt reserveresulted in a benefit of $2.8 million for the third quarter of 2009.
Operating income for the third quarter of 2009, including the effect ofthe change in bad debt estimate, was $8.1 million, an increase of 72% from$4.7 million for the same period in 2008.
Net income for the third quarter of 2009 (which also includes the effectof the change in bad debt estimate) increased 69% to $7.2 million, up from$4.3 million reported in the same period of 2008. Diluted earnings per sharewas $0.17 in the third quarter of 2009, compared to $0.10 in the third quarterof 2008.
As of September 30, 2009, the Company had cash and cash equivalents of$3.8 million, which represented 4.0% of total assets, compared to $6.9 million,or 9.2% of total assets, as of December 31, 2008.
CPHI is reiterating its guidance of 20% top line growth for the full year2009, on a year over year basis.
China Pharma's President and CEO, Ms. Zhilin Li, stated, "We are pleasedto report a quarter with continued revenue growth supported by increasedmarketing efforts and distribution expansion. In the third quarter of 2009,several newly-launched products started to show great potential in sales. Ourthird quarter performance also reflects the significant progress to manage ourreceivables collection efforts. With regards to our recent listing onto theNYSE Amex, we feel proud to have reached this important milestone. Our successof this listing underscores our commitment to generating long-term value forour shareholders."
The Company will hold a conference call at 8:00 am ET on November 12, 2009to discuss fiscal third quarter 2009 results. Listeners may access the call bydialing 1-866-271-6130 or 1-617-213-8894 for international callers, accesscode: 14971758. A webcast will also be available through CPHI's website athttp://www.chinapharmaholdings.com . A replay of the call will be accessiblethrough November 19, 2009 by dialing 1-888-286-8010 or 1-617-801-6888 forinternational callers, access code: 89842045.
About China Pharma Holdings, Inc.
China Pharma Holdings, Inc. is a specialty pharmaceutical company withrapidly growing profit that develops, manufactures, and markets treatments fora wide range of high incidence and high mortality conditions in China,including cardiovascular, CNS, infectious, and digestive diseases. TheCompany's cost-effective, high margin business model is driven by marketdemand and supported by eight scalable GMP-certified product lines coveringthe major dosage forms. In addition, the Company has a broad and expandingdistribution network across 30 provinces, municipalities and autonomousregions. 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 moreinformation about China Pharma Holdings, Inc., please visithttp://www.chinapharmaholdings.com .
Safe Harbor Statement
Certain statements in this press release and oral statements made by ChinaPharma on its conference call in relation to this release, constituteforward-looking statements for purposes of the safe harbor provisions underThe Private Securities Litigation Reform Act of 1995. Any statements set forthabove that are not historical facts are forward-looking statements thatinvolve risks and uncertainties that could cause actual results to differmaterially from those in the forward-looking statements, which may include,but are not limited to, such factors as unanticipated changes in productdemand, increased competition, failure to obtain or maintain intellectualproperty protection, downturns in the Chinese economy, uncompetitive levels ofresearch and development, failure to obtain regulatory approvals, and otherinformation detailed from time to time in the Company's filings and futurefilings with the United States Securities and Exchange Commission. Theforward-looking statements made herein speak only as of the date of this pressrelease and the Company undertakes no duty to update any forward-lookingstatement to conform the statement to actual results or changes in thecompany's expectations.Third Quarter 2009 Financial Highlights -- Revenue increased 23.1% to $15.5 million from $12.6 million in the third quarter of 2008; -- Net Income, including adjustment in Bad Debt Estimates, was $7.2 million, compared to $4.3 million in the third quarter of 2008; -- Year-to-Date Net Cash from Operations increased by 59% to $6.4 million compared to $4.0 million for the same period of 2008; and -- EPS was $0.17, compared to $0.10 in the third quarter of 2008.
SOURCE China Pharma Holdings, Inc.
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