HAIKOU CITY,
China, May 12, 2017 /PRNewswire/ -- China Pharma
Holdings, Inc. (NYSE MKT: CPHI) ("China Pharma," the
"Company" or "We"), an NYSE MKT listed corporation with its
fully-integrated specialty pharmaceuticals subsidiary based in
China, today announced financial
results for the quarter ended March 31,
2017.
First Quarter Highlights
- Revenue decreased 9.8% to $3.3
million in first quarter 2017 from $3.6 million in the same period of
2016;
- Gross profit margin was 21.9% in first quarter 2017,
compared to 17.6% in the same period of 2016.
- Loss from operations was $0.8
million in first quarter 2017 compared to $1.3 million in the same period of 2016, a
decrease of $0.5 million;
- Net loss was $1.0 million
in first quarter 2017 compared to $1.6
million in the same period of 2016. Loss per common
share was $(0.02) per basic and
diluted share in first quarter 2017 compared with $(0.04) per basic and diluted share in the same
period of 2016.
"We experienced a slight revenue decrease in the first
quarter of 2017 compared to the same period last year, which was
mainly due to a more significant impact from an earlier Spring
Festival holiday in 2017. However, we believed that our overall
financial performance has improved, taking into consideration the
increased gross profit margin and decreased net loss," said Ms.
Zhilin Li, China Pharma's Chairman
and CEO. Ms. Li continued, "Nevertheless, increasing sales
remains our top priority. Management will continue to vigorously
promote sales by actively participating in the recent opening of
the new provincial drug tender offer and further exploring basic medical market. We
continue to believe that demand for pharmaceutical products is huge
and steady in China. The ongoing
generic drug consistency evaluations and reform of China's drug production registration and
review policies will have a major impact on the future development
of our industry and may change its business patterns. We will
continue to actively adapt to state policy guidance and further
evaluate market conditions for our current existing products,
pipeline products, and competition in the market in order to
optimize our development strategy."
First Quarter Results
Revenue decreased by 9.8% to
$3.3 million for the three months ended
March 31, 2017, as compared to
$3.6 million for the three months ended
March 31, 2016. This decrease was
primarily due to the impact from Chinese Spring
Festival on purchase and logistic
activities.
Gross profit for the three months ended March 31, 2017 was $0.7
million, compared to $0.6
million in the same period last year. Our gross profit
margin in the three months ended March 31,
2017 was 21.9% compared to 17.6% in the same period last
year. This increase was primarily due to the increase in gross
profit margins of our major products in this period.
Our selling expenses for the three months ended
March 31, 2017 were $0.7 million, a decrease of $0.3 million, compared to $1.0 million for the three months ended
March 31, 2016. Selling expenses
accounted for 21.8% of the total revenue in the three months ended
March 31, 2017 compared to 26.6% in
the same period last year. Because of adjustments in our
sales practices resulting from health-care reform
policies, despite the overall decrease in sales, we may require
additional personnel and expenses to support our sales and the
collection of accounts receivable.
Our general and administrative expenses for the three
months ended March 31, 2017 were
$0.4 million, which represented an
increase of $0.1 million compared to
$0.3 million in the same period last
year. General and administrative expenses accounted for 12.7% and
8.7% of our total revenues in three months ended March 31, 2017 and 2016, respectively. This
increase was primarily due to several major payments
for listing maintenance happened in the three months ended
March 31, 2017.
Our bad debt expenses for the three months ended
March 31, 2017 was $0.4 million, which represented a decrease of
$0.2 million compared to $0.6 million in the same period last year. The
decline in our bad debt expenses was mainly the result of the
decline in our revenues in recent years, which also led to the
corresponding decline in the net amount of accounts receivable
aging over one year (according to our current accounting policy, we
are required to recognize a 70% bad debt allowance).
Our income tax expense was $0.03 million and $0.02
million for the three months ended March 31, 2017 and 2016, respectively.
The expense arose as a result of certain deferred tax
liabilities recognized in prior years. We renewed our "National
High-Tech Enterprise" status with the Chinese government in the
third quarter of 2013. With this designation, for the years ending
December 31, 2015 and 2016, we enjoy
a preferential tax rate of 15%, which is notably lower than the
statutory income tax rate of 25%. However, our recent net loss
results have put the Company in an unfavorable position for the
potential renewal of "National High-Tech Enterprise" status in
2017, and after evaluating the feasibility of such a
renewal, the Company has decided not to renew this
status. As a result, our tax rate for 2017 and the
foreseeable future will be 25%.
Net loss for the first quarter 2017 was $1.0 million, or $(0.02) per basic and diluted share, compared to
net loss of $1.6 million, or
$(0.04) per basic and diluted share
for the same period of 2016. The decrease in net loss was mainly a
result of the increase in gross profit margin and decrease in bad
debt expenses.
Financial Condition
As of March 31, 2017, the
Company had cash and cash equivalents of $2.5 million compared to $2.7 million as of December 31, 2016. Working capital decreased to
$6.9 million as of March 31, 2017 from $7.1
million as of December 31,
2016; and the current ratio was 1.7 times in both
March 31, 2017 and December 31, 2016, respectively.
Our accounts receivable balance decreased to $3.7 million as of March
31, 2017 from $4.0 million as
of December 31, 2016.
Conference Call
The Company will hold a conference call at 8:30 am E.T. on May 12,
2017 to discuss the results of first quarter 2017. Listeners
may access the call by dialing 1-866-519-4004 or 65-671-350-90 for
international callers, Conference ID # 20452439. A replay of
the call will be accessible through May 20,
2017 by dialing 1-855-452-5696 or 61-281-990-299 for
international callers, Conference ID # 20452439.
About China Pharma Holdings, Inc.
China Pharma Holdings, Inc. is a specialty pharmaceutical
company that develops, manufactures and markets a diversified
portfolio of products focused on conditions with a high incidence
and high mortality rates 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 new GMP-certified product lines
covering the major dosage forms. In addition, the Company has a
broad and expanding nationwide distribution network across all
major cities and provinces in China. The Company's wholly-owned subsidiary,
Hainan Helpson Medical & Biotechnology Co., Ltd., is located in
Haikou City, Hainan Province. For more information about
China Pharma Holdings, Inc., please visit
www.chinapharmaholdings.com. The Company routinely posts important
information on its website.
Safe Harbor Statement
Certain statements in this press 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 the achievability of financial
guidance, success of new product development, unanticipated changes
in product demand, increased competition, downturns in the Chinese
economy, uncompetitive levels of research and development, 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 except as required by applicable law or
regulation.
Contact:
China Pharma Holdings, Inc.
Ms.
Diana Na
Huang
Phone: +86-898-6681-1730 (China)
Email:
hps@chinapharmaholdings.com
- FINANCIAL TABLES FOLLOW
-
CHINA PHARMA
HOLDINGS, INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
2017
|
|
2016
|
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
2,523,541
|
|
$
2,665,802
|
Restricted
cash
|
|
1,718,823
|
|
1,088,879
|
Banker's
acceptances
|
|
14,513
|
|
-
|
Trade accounts
receivable, less allowance for doubtful
|
|
|
|
|
accounts of
$16,161,252 and $15,664,496, respectively
|
|
3,703,593
|
|
3,999,809
|
Other receivables,
less allowance for doubtful
|
|
|
|
|
accounts of $56,157
and $71,548, respectively
|
|
272,097
|
|
224,373
|
Advances to
suppliers
|
|
2,036,758
|
|
2,003,792
|
Inventory
|
|
6,985,965
|
|
7,310,939
|
Prepaid
expenses
|
|
205,293
|
|
226,357
|
Total Current
Assets
|
|
17,460,583
|
|
17,519,951
|
|
|
|
|
|
Advances for
purchases of intangible assets
|
|
35,771,976
|
|
35,498,059
|
Property and
equipment, net
|
|
24,422,373
|
|
24,967,448
|
Intangible assets,
net
|
|
488,044
|
|
534,682
|
TOTAL
ASSETS
|
|
$
78,142,976
|
|
$
78,520,140
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Trade accounts
payable
|
|
$
2,877,412
|
|
$
3,060,374
|
Accrued
expenses
|
|
90,232
|
|
139,830
|
Other
payables
|
|
2,355,365
|
|
2,502,694
|
Advances from
customers
|
|
703,915
|
|
811,232
|
Other payables -
related parties
|
|
1,354,567
|
|
1,354,567
|
Current portion of
construction loan facility
|
|
1,440,154
|
|
1,440,154
|
Bankers' acceptance
notes payable
|
|
1,718,823
|
|
1,088,879
|
Total Current
Liabilities
|
|
10,540,468
|
|
10,397,730
|
Non-current
Liabilities:
|
|
|
|
|
Construction loan
facility
|
|
8,573,590
|
|
8,640,927
|
Deferred tax
liability
|
|
607,090
|
|
572,349
|
Total
Liabilities
|
|
19,721,148
|
|
19,611,006
|
Stockholders'
Equity:
|
|
|
|
|
Preferred stock,
$0.001 par value; 5,000,000 shares authorized;
|
|
|
|
|
no shares issued or
outstanding
|
|
-
|
|
-
|
Common stock, $0.001
par value; 95,000,000 shares authorized;
|
|
|
|
|
43,579,557 shares and
43,579,557 shares outstanding, respectively
|
|
43,580
|
|
43,580
|
Additional paid-in
capital
|
|
23,590,204
|
|
23,590,204
|
Retained
earnings
|
|
23,790,476
|
|
24,757,374
|
Accumulated other
comprehensive income
|
|
10,997,568
|
|
10,517,976
|
Total
Stockholders' Equity
|
|
58,421,828
|
|
58,909,134
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
$
78,142,976
|
|
$
78,520,140
|
|
|
|
|
|
|
|
|
|
|
CHINA PHARMA
HOLDINGS, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
AND COMPREHENSIVE
INCOME (LOSS)
|
(Unaudited)
|
|
|
|
|
|
|
|
For the Three
Months
|
|
|
Ended March
31,
|
|
|
2017
|
|
2016
|
Revenue
|
|
$
3,285,203
|
|
$
3,640,494
|
Cost of
revenue
|
|
2,567,350
|
|
2,999,675
|
|
|
|
|
|
Gross
profit
|
|
717,853
|
|
640,819
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Selling
expenses
|
|
717,637
|
|
968,507
|
General and
administrative expenses
|
|
416,726
|
|
318,930
|
Research and
development expenses
|
|
26,060
|
|
93,433
|
Bad debt
expense
|
|
360,063
|
|
581,300
|
Total operating
expenses
|
|
1,520,486
|
|
1,962,170
|
|
|
|
|
|
Loss from
operations
|
|
(802,633)
|
|
(1,321,351)
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
Interest
income
|
|
5,033
|
|
33,592
|
Interest
expense
|
|
(138,964)
|
|
(242,309)
|
Net other
expense
|
|
(133,931)
|
|
(208,717)
|
|
|
|
|
|
Loss before income
taxes
|
|
(936,564)
|
|
(1,530,068)
|
Income tax
expense
|
|
(30,334)
|
|
(22,828)
|
Net
loss
|
|
(966,898)
|
|
(1,552,896)
|
Other comprehensive
income - foreign currency
|
|
|
|
|
translation
adjustment
|
|
479,592
|
|
480,430
|
Comprehensive
loss
|
|
$
(487,306)
|
|
$
(1,072,466)
|
Loss per
share:
|
|
|
|
|
Basic and
diluted
|
|
$
(0.02)
|
|
$
(0.04)
|
Weighted average
shares outstanding
|
|
43,579,557
|
|
43,579,557
|
|
|
|
|
|
CHINA PHARMA
HOLDINGS, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
|
|
|
|
|
For the Three
Months
|
|
|
Ended March
31,
|
|
|
2017
|
|
2016
|
Cash Flows from
Operating Activities:
|
|
|
|
|
Net loss
|
|
$
(966,898)
|
|
$
(1,552,896)
|
Depreciation and
amortization
|
|
815,394
|
|
857,195
|
Bad debt
expense
|
|
360,063
|
|
581,300
|
Deferred income
taxes
|
|
30,334
|
|
22,828
|
Changes in assets and
liabilities:
|
|
|
|
|
Trade accounts and
other receivables
|
|
(261,377)
|
|
(61,069)
|
Advances to
suppliers
|
|
(17,509)
|
|
(92,039)
|
Inventory
|
|
549,500
|
|
215,496
|
Trade accounts
payable
|
|
(206,599)
|
|
888,212
|
Accrued taxes
payable
|
|
(71,575)
|
|
(53,955)
|
Other payables and
accrued expenses
|
|
(130,772)
|
|
25,514
|
Advances from
customers
|
|
(113,615)
|
|
328,354
|
Prepaid
expenses
|
|
22,818
|
|
144,262
|
Net Cash Provided
by Operating Activities
|
|
9,764
|
|
1,303,202
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
Purchases of property
and equipment
|
|
(26,628)
|
|
(39,248)
|
Net Cash Used in
Investing Activities
|
|
(26,628)
|
|
(39,248)
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
Payments of
construction term loan
|
|
(145,176)
|
|
(305,835)
|
Net Cash Used in
Financing Activity
|
|
(145,176)
|
|
(305,835)
|
|
|
|
|
|
Effect of Exchange
Rate Changes on Cash
|
|
19,779
|
|
54,898
|
Net (Decrease)
Increase in Cash and Cash Equivalents
|
|
(142,261)
|
|
1,013,017
|
Cash and Cash
Equivalents at Beginning of Period
|
|
2,665,802
|
|
6,248,760
|
Cash and Cash
Equivalents at End of Period
|
|
$
2,523,541
|
|
$
7,261,777
|
|
|
|
|
|
Supplemental Cash
Flow Information:
|
|
|
|
|
Cash paid for
interest
|
|
$
138,964
|
|
$
242,309
|
|
|
|
|
|
Supplemental
Noncash Investing and Financing Activities:
|
|
|
|
|
Issuance of banker's
acceptances
|
|
$
621,753
|
|
$
-
|
Accounts receivable
collected with banker's acceptances
|
|
182,499
|
|
517,770
|
Inventory purchased
with banker's acceptances
|
|
$
167,981
|
|
$
403,081
|
|
|
|
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/china-pharma-holdings-inc-reports-first-quarter-2017-financial-results-300456655.html
SOURCE China Pharma Holdings, Inc.