HAIKOU CITY, China, Nov. 15,
2017 /PRNewswire/ -- China Pharma Holdings, Inc. (NYSE MKT:
CPHI) ("China Pharma," the "Company" or "We"), an NYSE American
listed corporation with a fully-integrated specialty
pharmaceuticals subsidiary based in China, today announced financial results for
the quarter ended September 30,
2017.
Third Quarter Highlights
- Revenues were $3.2 million and
$3.1 million for the three months
ended September 30, 2017 and 2016
respectively;
- Gross profit margin was 13.3% in third quarter 2017, compared
to 11.2% in the same period of 2016.
- Loss from operations was $2.1
million in third quarter 2017 compared to $1.5 million in the same period of 2016;
- Net loss was $2.2 million in
third quarter 2017 compared to $1.7
million in the same period of 2016. Loss per common share
was $(0.05) per basic and diluted
share in third quarter 2017 compared with $(0.04) per basic and diluted share in the same
period of 2016.
"Our performance in generating revenue in the third quarter of
2017 was similar to the same period last year and we increased
gross margin slightly due to better cost control." 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 through active participation in recent
provincial market openings to receive new drug tender offers and
through further research of the basic medical market."Finally, she
stated, "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."
Third Quarter Results
Revenues were $3.2 million and
$3.1 million for the three months
ended September 30, 2017 and 2016
respectively.
Gross profit was $0.4 million and
$0.3 million for the three months
ended September 30, 2017 and 2016,
respectively. Our gross profit margin in the third quarter of
2017 was 13.3% compared to 11.2% in the same period 2016.
Our selling expenses for the three months ended September 30, 2017 were $0.7 million, which accounted for 21.7% of the
total revenue in the third quarter of 2017,compared to $1.0 million for the same period 2016, which
accounted for 29.7% of the total revenue in the third quarter of
2016 Due to many adjustments in our selling processes
under healthcare reform policies, despite the decrease in sales, we
still need to maintain personnel and continue our sales activities
to support the sales and collection of accounts receivable,
therefore our selling expenses did not decrease proportionally to
our sales.
Our general and administrative expenses for the three months
ended September 30, 2017 and
September 30, 2016, were both
$0.3 million. General and
administrative expenses accounted for 11.0% and 9.4% of our total
revenues in the third quarters of 2017 and 2016, respectively.
Our bad debt expense for the three months ended September 30, 2017 was $0.2 million, compared to a bad debt benefit of
$0.1 million in the three months
ended September 30, 2016. The change
was due to the increase of aged accounts receivables.
During the third quarter of 2017 the Company reviewed the
contracts relating to advances made for purchases of intangible
assets with independent laboratories and determined that advances
made by the Company for two formulas to two independent
laboratories were impaired. As a result, the Company recognized an
impairment loss for the advances made to these laboratories in the
amount of $1.2 million.
In the same period in 2016, the company also recognized
$0.6 million impairment loss for the
advances made to one laboratory for one formula per the
evaluation.
Net loss for three months ended September
30, 2017 was $2.2 million,
compared to net loss of $1.7 million
for the three months ended September 30,
2016. The change in the net result was mainly due to the
increase in impairment of long term asset in the third quarter of
2017 as compared to the same period of
2016.
Nine Months Results
For the nine months ended September 30,
2017, our sales revenue was $9.4
million, which represented a decrease of $0.9 million, or 9.2%, from the $10.3 million in the corresponding period of
2016.
Gross profit for the nine months ended September 30, 2017 was $1.8 million, compared to $1.5 million in the same period of 2016. Gross
profit margin for the nine months ended September 30, 2017 and 2016 were 19% and 14%,
respectively.
Our selling expenses for the nine months ended September 30, 2017 were $2.2 million, a decrease of $0.5 million, or 20%, compared to $2.8 million for the same period of 2016. Selling
expenses accounted for 23.6% and 26.7% of the total revenue in the
first nine months of 2017 and 2016 respectively.
Our general and administrative expenses for the nine months
ended September 30, 2017 and 2016
were both $1.4 million.
Our bad debt expenses for the nine months ended September 30, 2017 and 2016 were both
$1.0 million.
During the nine months ended September
30, 2017, the Company reviewed the contracts relating to
advances made for purchases of intangible assets with independent
laboratories and determined that the advances made by the Company
forthree formulas to two of the independent laboratories were
impaired. As a result, the Company recognized an impairment loss
for the advances made to these laboratories in the amount of
$2.2 million. In the same
period in 2016, the company also recognized $1.5 million impairment loss for the advances
made to three laboratory for one formula per the evaluation.
Our operating loss for the nine months ended September 30, 2017 was approximately $5.0 million, compared to $5.1 million for the same period of 2016.
Net loss was $5.5 million, or
$0.13 per basic and diluted share for
the nine months ended September 30,
2017, compared to $5.8
million, or $0.13 per basic
and diluted share, for the same period a year ago.
Financial Condition
As of September 30, 2017, the
Company had cash and cash equivalents of $1.1 million compared to $2.7 million as of December 31, 2016. Working capital decreased to
$4.6 million as of September 30, 2017 from $7.1 million as of December 31, 2016; and the current ratio was 1.4
and 1.7 times at September 30, 2017
and December 31, 2016,
respectively.
As of September 30, 2017, our net
accounts receivable was $2.9 million,
compared to $4.0 million as of
December 31, 2016.
Conference Call
The Company will hold a conference call at 8:30 am E.T. on November
15, 2017 to discuss the results of third quarter 2017.
Listeners may access the call by dialing 1-866-519-4004 or
65-671-350-90 for international callers, Conference ID #
9879855. A replay of the call will be accessible through
November 23, 2017 by dialing
1-855-452-5696 or 61-281-990-299 for international callers,
Conference ID # 9879855.
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
|
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
2017
|
|
2016
|
ASSETS
|
|
(Unaudited)
|
|
(Audited)
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
1,124,439
|
|
$
2,665,802
|
Restricted
cash
|
|
1,380,509
|
|
1,088,879
|
Bankers acceptance
notes
|
|
22,920
|
|
-
|
Trade accounts
receivable, less allowance for doubtful
|
|
|
|
|
accounts of
$17,641,435 and $15,664,496, respectively
|
|
2,908,517
|
|
3,999,809
|
Other receivables,
less allowance for doubtful
|
|
|
|
|
accounts of $55,795
and $71,548, respectively
|
|
177,002
|
|
224,373
|
Advances to
suppliers
|
|
2,387,356
|
|
2,003,792
|
Inventory
|
|
6,828,532
|
|
7,310,939
|
Prepaid
expenses
|
|
168,115
|
|
226,357
|
Total Current
Assets
|
|
14,997,390
|
|
17,519,951
|
|
|
|
|
|
Advances for
purchases of intangible assets
|
|
35,414,977
|
|
35,498,059
|
Property, plant
and equipment, net
|
|
24,153,087
|
|
24,967,448
|
Intangible assets,
net
|
|
429,052
|
|
534,682
|
TOTAL
ASSETS
|
|
$
74,994,506
|
|
$
78,520,140
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Trade accounts
payable
|
|
$
1,890,927
|
|
$
3,060,374
|
Accrued
expenses
|
|
321,005
|
|
139,830
|
Other
payables
|
|
2,560,631
|
|
2,502,694
|
Advances from
customers
|
|
585,041
|
|
811,232
|
Other payables -
related parties
|
|
1,354,567
|
|
1,354,567
|
Current portion of
construction loan facility
|
|
1,528,001
|
|
1,440,154
|
Banker's acceptance
notes payable
|
|
1,380,509
|
|
1,088,879
|
Total Current
Liabilities
|
|
9,620,681
|
|
10,397,730
|
Non-current
Liabilities:
|
|
|
|
|
Construction loan
facility
|
|
7,640,003
|
|
8,640,927
|
Deferred tax
liability
|
|
703,044
|
|
572,349
|
Total
Liabilities
|
|
17,963,728
|
|
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
|
|
19,307,138
|
|
24,757,374
|
Accumulated other
comprehensive income
|
|
14,089,856
|
|
10,517,976
|
Total
Stockholders' Equity
|
|
57,030,778
|
|
58,909,134
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
$
74,994,506
|
|
$
78,520,140
|
CHINA PHARMA
HOLDINGS, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
AND COMPREHENSIVE
LOSS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months
|
|
For the Nine
Months
|
|
|
Ended September
30,
|
|
Ended September
30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenue
|
|
$
3,162,222
|
|
$
3,125,596
|
|
$
9,364,605
|
|
$
10,308,320
|
Cost of
revenue
|
|
2,740,683
|
|
2,775,628
|
|
7,576,856
|
|
8,835,436
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
421,539
|
|
349,968
|
|
1,787,749
|
|
1,472,884
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling
expenses
|
|
686,825
|
|
927,187
|
|
2,207,896
|
|
2,753,388
|
General and
administrative expenses
|
|
348,963
|
|
294,367
|
|
1,377,640
|
|
1,394,250
|
Research and
development expenses
|
|
27,543
|
|
99,095
|
|
75,053
|
|
289,189
|
Bad debt
expense
|
|
229,466
|
|
(69,899)
|
|
954,518
|
|
1,005,949
|
Impairment of long
term assets
|
|
1,184,103
|
|
644,696
|
|
2,162,083
|
|
1,467,235
|
Total operating
expenses
|
|
2,476,900
|
|
1,895,446
|
|
6,777,190
|
|
6,910,011
|
|
|
|
|
|
|
|
|
|
Subsidy
income
|
|
-
|
|
(2,325)
|
|
-
|
|
346,347
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(2,055,361)
|
|
(1,547,803)
|
|
(4,989,441)
|
|
(5,090,780)
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Interest
income
|
|
21,947
|
|
32,434
|
|
43,296
|
|
99,149
|
Interest
expense
|
|
(130,816)
|
|
(213,740)
|
|
(411,985)
|
|
(699,932)
|
Net other
expense
|
|
(108,869)
|
|
(181,306)
|
|
(368,689)
|
|
(600,783)
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
|
(2,164,230)
|
|
(1,729,109)
|
|
(5,358,130)
|
|
(5,691,563)
|
Income tax
expense
|
|
(31,198)
|
|
(20,800)
|
|
(92,106)
|
|
(65,044)
|
Net
loss
|
|
(2,195,428)
|
|
(1,749,909)
|
|
(5,450,236)
|
|
(5,756,607)
|
Other comprehensive
income (loss) - foreign currency
|
|
|
|
|
|
|
|
|
translation
adjustment
|
|
2,083,398
|
|
(275,928)
|
|
3,571,880
|
|
(1,949,137)
|
Comprehensive
loss
|
|
$
(112,030)
|
|
$
(2,025,837)
|
|
$
(1,878,356)
|
|
$
(7,705,744)
|
Loss per
share:
|
|
|
|
|
|
|
|
|
Basic and
Diluted
|
|
$
(0.05)
|
|
$
(0.04)
|
|
$
(0.13)
|
|
$
(0.13)
|
Weighted average
shares outstanding
|
|
43,579,557
|
|
43,579,557
|
|
43,579,557
|
|
43,579,557
|
CHINA PHARMA
HOLDINGS, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
For the Nine
Months
|
|
|
Ended September
30,
|
|
|
2017
|
|
2016
|
Cash Flows from
Operating Activities:
|
|
|
|
|
Net loss
|
|
$
(5,450,236)
|
|
$
(5,756,607)
|
Depreciation and
amortization
|
|
2,447,866
|
|
2,583,066
|
Bad debt
expense
|
|
954,518
|
|
1,005,949
|
Deferred income
taxes
|
|
92,106
|
|
65,044
|
Impairment of
long-term assets
|
|
2,162,083
|
|
1,467,235
|
Changes in assets and
liabilities:
|
|
|
|
|
Trade accounts and
other receivables
|
|
21,325
|
|
(709,257)
|
Advances to
suppliers
|
|
(251,306)
|
|
(150,606)
|
Inventory
|
|
1,237,573
|
|
1,627,641
|
Trade accounts
payable
|
|
(1,303,944)
|
|
739,551
|
Accrued taxes
payable
|
|
1,719
|
|
(74,080)
|
Other payables and
accrued expenses
|
|
188,557
|
|
119,085
|
Advances from
customers
|
|
(265,092)
|
|
432,904
|
Prepaid
expenses
|
|
69,284
|
|
71,790
|
Net Cash (Used in)
Provided by Operating Activities
|
|
(95,547)
|
|
1,421,715
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
Purchases of
property, plant and equipment
|
|
(67,324)
|
|
(86,350)
|
Net Cash Used in
Investing Activities
|
|
(67,324)
|
|
(86,350)
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
Payments of
construction term loan
|
|
(1,469,349)
|
|
(1,519,932)
|
Payments of short
term debt
|
|
-
|
|
(2,279,899)
|
Net Cash Used in
Financing Activities
|
|
(1,469,349)
|
|
(3,799,831)
|
Effect of Exchange
Rate Changes on Cash
|
|
90,857
|
|
(134,255)
|
Net (Decrease)
Increase in Cash and Cash Equivalents
|
|
(1,541,363)
|
|
(2,598,721)
|
Cash and Cash
Equivalents at Beginning of Period
|
|
2,665,802
|
|
6,248,760
|
Cash and Cash
Equivalents at End of Period
|
|
$
1,124,439
|
|
$
3,650,039
|
|
|
|
|
|
Supplemental Cash
Flow Information:
|
|
|
|
|
Cash paid for income
taxes
|
|
$
-
|
|
$
-
|
Cash paid for
interest
|
|
410,509
|
|
689,773
|
|
|
|
|
|
Supplemental
Noncash Investing and Financing Activities:
|
|
|
|
|
Accounts receivable
collected with banker's acceptance notes
|
|
366,889
|
|
803,655
|
Inventory purchased
with banker's acceptance notes
|
|
344,848
|
|
781,814
|
Issuance of banker's
acceptance notes
|
|
126,652
|
|
1,490,154
|
View original
content:http://www.prnewswire.com/news-releases/china-pharma-holdings-inc-reports-third-quarter-2017-financial-results-300556249.html
SOURCE China Pharma Holdings, Inc.