BEIJING, Nov. 8, 2018
/PRNewswire/ -- Sinovac Biotech Ltd. (NASDAQ: SVA) ("Sinovac" or
the "Company"), a leading provider of biopharmaceutical products in
China, announced today its
unaudited financial results for the six months ended June 30, 2018.
Financial highlights
- Sales revenue for the first six months of 2018 was $122.5 million, compared to $66.9 million in the prior year period, an
increase of 83.1%. Sales increased primarily due to revenue
generated by the Company's EV71 vaccine.
- Net income attributable to shareholders was $14.1 million, or $0.24 per basic and diluted share, compared to
net income attributable to shareholders of $10.9 million, or $0.19 per basic and diluted share, in the prior
year period.
Business Highlights
Sales and Marketing
In the first half of 2018, sales were mainly generated from the
EV71 vaccine. The increase of EV71 vaccine sales was primarily
attributable to government advocacy regarding the benefits of this
vaccine to the public. In March 2018,
the National Health Commission of the
People's Republic of China ("NHFPC") issued a notice to
encourage vaccination to prevent hand, foot and mouth disease due
to the expected high prevalence of this disease in 2018. In
addition, since late 2017, Sinovac has been collaborating with
third party companies to improve market coverage and penetration in
the private sector of the Chinese market. As a result, the number
of customers increased over 30% in the first half of 2018 compared
to the same period in 2017. Also in the first half of 2018, the
marketing team of Sinovac expanded its activities, including
academic promotion activities at the national, provincial,
district, and county levels, which largely improved the awareness
of Sinovac's EV71 vaccine among professionals and consumers.
The Company does not expect any sales of seasonal influenza
vaccine during the 2018-2019 flu season. As was announced in
April 2018, production at the
Company's hepatitis A vaccine and flu vaccine bulk production site
was suspended when a minority shareholder of Sinovac Beijing
forcibly entered Sinovac Beijing's corporate offices along with
dozens of unnamed individuals in an attempt to wrongfully take
control of Sinovac Beijing's operations. As it was determined that
the quality and safety of the vaccines could not be sufficiently
verified to the Company's high standards following the disruption,
the vaccines in production at the time of the attack were
destroyed. Since the attacks, the Company has verified the safety
and quality of the vaccine production process, and is ready to
resume production in anticipation of next year's market demand.
Sales of flu vaccine for the 2017-2018 flu season were $13.5 million.
Research and Development
Varicella Vaccine – Sinovac filed a production license
application with the CFDA in November
2017; the CFDA's Center of Drug Evaluation completed its
review and provided comments to the Company. The Company is
preparing supplementary documents as requested by the CFDA.
Sabin Inactivated Polio Vaccine (sIPV) – In
April 2018, the phase III trial of
the sIPV candidate developed by Sinovac was unblinded. The
preliminary results showed that it was not inferior to the control
vaccine group. In June 2018, a
sequential vaccination schedule consisting of sIPV and two doses of
bOPV was conducted. Dosing and blood sampling have been completed
recently, and the Company is awaiting the results.
Quandrivalent Flu vaccine (QIV) – Sinovac is conducting a
phase III clinical study of its QIV and expects to complete this
study by the end of 2018.
Unaudited Financial Results for the First Six Months of
2018
|
|
2018
1H
|
% of
Sales
|
2017
1H
|
% of
Sales
|
|
|
(In thousands except
percentage data)
|
Hepatitis A –
Healive
|
|
25,853
|
21.1%
|
12,879
|
19.2%
|
Hepatitis A&B –
Bilive
|
|
10,344
|
8.4%
|
4,928
|
7.4%
|
Hepatitis
vaccines
subtotal
|
|
36,197
|
29.5%
|
17,807
|
26.6%
|
Influenza
vaccine
|
|
2,063
|
1.7%
|
(6)
|
0.0%
|
Enterovirus 71
vaccine
|
|
84,113
|
68.7%
|
48,751
|
72.9%
|
Mumps
vaccine
|
|
117
|
0.1%
|
356
|
0.5%
|
Total
sales
|
|
122,490
|
100.0%
|
66,908
|
100.0%
|
Cost of
sales
|
|
13,337
|
10.9%
|
7,735
|
11.6%
|
Gross
profit
|
|
109,153
|
89.1%
|
59,173
|
88.4%
|
Sales in the first half of 2018 were $122.5 million, compared to $66.9 million in the prior year period. Sales
increased primarily due to additional revenue generated by the
Company's EV71 vaccine.
Gross profit was $109.2 million,
compared to gross profit of $59.2
million in the prior year period. The increase was primarily
due to the contribution of EV71 vaccine sales in the first half of
2018. Gross margin was 89.1%, compared to 88.4% in the prior year
period.
Selling, general and administrative expenses in the first half
of 2018 were $67.8 million, compared
to $36.7 million in the same period
of 2017. The Company's selling, general and administrative expenses
increased with the higher level of sales activity. The Company
incurred $3.4 million in legal
expenses related to the facility disruption and litigation
regarding the Company's annual meeting and related matters.
R&D expenses in the first half of 2018 were $10.1 million, compared to $8.8 million in the same period of 2017.
Net income was $22.6 million,
compared to net income of $15.8
million in the prior year period.
Net income attributable to shareholders was $14.1 million, or $0.24 per basic and diluted share, compared to
net income attributable to shareholders of $10.9 million, or $0.19 per basic and diluted share, in the prior
year period.
Non-GAAP EBITDA was $34.2 million
in the first half of 2018, compared to $15.9
million in the prior year period. Non-GAAP net income from
continuing operations in the first half of 2018 was $24.0 million, compared to $16.2 million in the prior year period. Non-GAAP
diluted earnings per share from continuing operations in the first
half of 2018 were $0.26, compared to
$0.20 per share in the prior year
period. Reconciliations of non-GAAP measures to the nearest
comparable GAAP measures are included at the end of this earnings
announcement.
As of June 30, 2018, cash and cash
equivalents totaled $88.1 million,
compared to $114.4 million as of
December 31, 2017. For the six months
ended June 30, 2018, net cash used in
operating activities was $11.3
million. Net cash used in investing activities was
$2.9 million, which was for the
purchase of equipment. Net cash used in financing activities was
$8.0 million, including loan proceeds
of $13.4 million and loan repayment
of $23.8 million. As of June 30, 2018, the Company had $9.8 million of bank loans due within one year.
The Company expects that its current cash position will be able to
support its operations for at least the next 12 months.
About Sinovac
Sinovac Biotech Ltd. is a China-based biopharmaceutical company that
focuses on the research, development, manufacturing and
commercialization of vaccines that protect against human infectious
diseases. Sinovac's product portfolio includes vaccines against
enterovirus71, or EV71, hepatitis A and B, seasonal influenza, H5N1
pandemic influenza (avian flu), H1N1 influenza (swine flu), and
mumps. The EV71 vaccine, an innovative vaccine developed by Sinovac
against hand foot and mouth disease caused by EV71, was
commercialized in China in 2016.
In 2009, Sinovac was the first company worldwide to receive
approval for its H1N1 influenza vaccine, which it has supplied to
the Chinese Government's vaccination campaign and stockpiling
program. The Company is also the only supplier of the H5N1 pandemic
influenza vaccine to the government stockpiling program. The
Company is developing a number of new products including a
Sabin-strain inactivated polio vaccine, pneumococcal
polysaccharides vaccine, pneumococcal conjugate vaccine and
varicella vaccine. Sinovac primarily sells its vaccines in
China, while also exploring growth
opportunities in international markets. The Company has exported
select vaccines to over 10 countries in Asia and South America. For more
information, please visit the Company's website at
www.sinovacbio.com.
Safe Harbor Statement
This press release contains "forward-looking statements" within
the meaning of the United States
federal securities laws. Such statements involve known and unknown
risks, uncertainties and other factors that may cause our actual
results, levels of activity, performance or achievements to differ
materially from any future results, levels of activity, performance
or achievements expressed or implied by these forward-looking
statements. Factors that might cause such a difference include our
inability to compete successfully in the competitive and rapidly
changing marketplace in which we operate, failure to retain key
employees, cancellation or delay of projects, disruptions to our
operations, the results of any pending litigation, and adverse
general economic conditions in China, the United
States and elsewhere. These risks and other factors include
those listed under "Risk Factors" and elsewhere in our Annual
Report on Form 20-F as filed with the Securities and Exchange
Commission. In some cases, you can identify forward-looking
statements by terminology such as "may," "will," "should,"
"expects," "intends," "plans," "anticipates," "believes,"
"estimates," "predicts," "potential," "continue," or the negative
of these terms or other comparable terminology. Although we believe
that the expectations reflected in the forward-looking statements
are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. The Company assumes no
obligation to update the forward-looking information contained in
this release.
Non-GAAP Financial Measures
To supplement its consolidated financial statements, which are
prepared and presented in accordance with generally accepted
accounting principles in the United
States ("GAAP"), Sinovac uses the following non-GAAP
financial measures: non-GAAP EBITDA, non-GAAP net income from
continuing operations and non-GAAP diluted EPS from continuing
operations. For more information on these non-GAAP financial
measures, please refer to the table captioned "Reconciliations of
non-GAAP Measures to the Nearest Comparable GAAP Measures" in this
release.
Sinovac believes that non-GAAP EBITDA, non-GAAP net income from
continuing operations and non-GAAP diluted EPS from continuing
operations help identify underlying trends in its business that
could otherwise be distorted by the effect of certain income or
expenses that Sinovac includes in income from operations from
continuing operations, net income from continuing operations and
diluted EPS from continuing operations. Sinovac believes that
non-GAAP EBITDA, non-GAAP net income from continuing operations and
non-GAAP diluted EPS from continuing operations provide useful
information about its core operating results, enhance the overall
understanding of its past performance and future prospects and
allow for greater visibility with respect to key metrics used by
our management in its financial and operational
decision-making. Non-GAAP EBITDA, non-GAAP net income from
continuing operations and non-GAAP diluted EPS from continuing
operations should not be considered in isolation or construed as an
alternative to income from operations from continuing operations,
net income from continuing operations, diluted EPS from continuing
operations, or any other measure of performance or as an indicator
of Sinovac's operating performance. These non-GAAP financial
measures presented here may not be comparable to similarly titled
measures presented by other companies. Other companies may
calculate similarly titled measures differently, limiting their
usefulness as comparative measures to our data.
Non-GAAP EBITDA represents income (loss) from
continuing operations, excludes interest and financing expenses,
interest income, net other income (expenses) and income tax benefit
(expenses), and certain non-cash expenses, consisting of
share-based compensation expenses, amortization and depreciation
that Sinovac does not believe are reflective of the core operating
performance during the periods presented.
Non-GAAP net income from
continuing operations represents net income from
continuing operations before share-based compensation expenses, and
foreign exchange gain or loss.
Non-GAAP diluted EPS from
continuing operations represents non-GAAP net income
attributable to ordinary shareholders from continuing operations
divided by the weighted average number of shares outstanding during
the periods on a diluted basis, including accounting for the effect
of the assumed conversion of options.
Contact
Sinovac Biotech Ltd.
Helen Yang
Tel: +86-10-8279-9871
Fax: +86-10-6296-6910
Email: ir@sinovac.com
ICR Inc.
Bill Zima
U.S: 1-646-308-1707
Email: william.zima@icrinc.com
SINOVAC BIOTECH
LTD.
|
CONSOLIDATED
BALANCE SHEETS
|
As of June 30,
2018 and December 31, 2017
|
(Expressed in
thousands of U.S. Dollars)
|
|
|
|
June 30,
2018
|
|
December 31,
2017
|
Current
assets
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
88,109
|
$
|
114,415
|
Restricted
cash
|
|
1
|
|
1,549
|
Accounts receivable -
net
|
|
100,412
|
|
66,205
|
Inventories
|
|
22,050
|
|
19,618
|
Prepaid expenses and
deposits
|
|
2,488
|
|
2,101
|
Total current
assets
|
|
213,060
|
|
203,888
|
|
|
|
|
|
Property, plant and
equipment
|
|
73,763
|
|
76,430
|
Prepaid land lease
payments
|
|
8,753
|
|
9,028
|
Long-term
inventories
|
|
71
|
|
-
|
Long-term prepaid
expenses
|
|
24
|
|
25
|
Prepayment for
acquisition of equipment
|
|
1,426
|
|
528
|
Deferred tax
assets
|
|
10,570
|
|
9,320
|
Total
assets
|
|
307,667
|
|
299,219
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Short-term bank loans
and current portion of long-
term bank loans
|
|
9,810
|
|
18,152
|
Accounts payable and
accrued liabilities
|
|
68,434
|
|
59,418
|
Income tax
payable
|
|
3,843
|
|
8,862
|
Deferred
revenue
|
|
247
|
|
4,073
|
Deferred government
grants
|
|
1,464
|
|
2,038
|
Total current
liabilities
|
|
83,798
|
|
92,543
|
|
|
|
|
|
Deferred government
grants
|
|
4,366
|
|
4,474
|
Long-term bank
loans
|
|
12,644
|
|
14,849
|
Loan from a
non-controlling shareholder
|
|
6,996
|
|
7,070
|
Other non-current
liabilities
|
|
2,736
|
|
3,143
|
Total long-term
liabilities
|
|
26,742
|
|
29,536
|
|
|
|
|
|
Total
liabilities
|
|
110,540
|
|
122,079
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
Equity
|
|
|
|
|
Preferred
stock
|
|
-
|
|
-
|
Common
stock
|
|
59
|
|
57
|
Additional paid in
capital
|
|
118,182
|
|
115,339
|
Accumulated other
comprehensive income
|
|
2,366
|
|
7,075
|
Statutory surplus
reserves
|
|
19,549
|
|
19,549
|
Accumulated
earnings
|
|
23,217
|
|
9,132
|
Total
shareholders' equity
|
|
163,373
|
|
151,152
|
|
|
|
|
|
Non-controlling
interests
|
|
33,754
|
|
25,988
|
Total
equity
|
|
197,127
|
|
177,140
|
Total liabilities
and equity
|
$
|
307,667
|
|
299,219
|
SINOVAC BIOTECH
LTD.
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
|
For the six months
ended June 30, 2018 and 2017
|
(Unaudited)
|
(Expressed in
thousands of U.S. Dollars, except for numbers of shares and per
share data)
|
|
|
|
Six months
ended June 30
|
|
|
2018
|
|
2017
|
Sales
|
$
|
122,490
|
$
|
66,908
|
Cost of
sales
|
|
13,337
|
|
7,735
|
Gross
profit
|
|
109,153
|
|
59,173
|
|
|
|
|
|
Selling,
general and administrative expenses
|
|
67,826
|
|
36,719
|
Provision for
doubtful accounts
|
|
2,576
|
|
527
|
Research and
development expenses
|
|
10,074
|
|
8,779
|
Loss on
disposal of property, plant and equipment
|
|
18
|
|
13
|
Government
grants recognized in income
|
|
(47)
|
|
(4)
|
Total
operating expenses
|
|
80,447
|
|
46,034
|
Operating
income
|
|
28,706
|
|
13,139
|
|
|
|
|
|
Interest and
financing expenses
|
|
(650)
|
|
(822)
|
Interest
income
|
|
927
|
|
464
|
Other
income
|
|
146
|
|
104
|
Income
before income taxes
|
|
29,129
|
|
12,885
|
Income tax
(expense) benefit
|
|
(6,560)
|
|
2,960
|
Net
income
|
|
22,569
|
|
15,845
|
Less: Income
attributable to non-controlling interests
|
|
(8,484)
|
|
(4,992)
|
Net income
attributable to shareholders of Sinovac
|
|
14,085
|
|
10,853
|
|
|
|
|
|
Net
income
|
|
22,569
|
|
15,845
|
Other
comprehensive (income) loss, net of tax of nil
|
|
|
|
|
Foreign currency
translation adjustments
|
|
(5,427)
|
|
3,517
|
Comprehensive income
|
|
17,142
|
|
19,362
|
Less:
comprehensive income attributable to non-
controlling interests
|
|
(7,766)
|
|
(5,337)
|
Comprehensive income attributable to
shareholders
of Sinovac
|
$
|
9,376
|
$
|
14,025
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
Basic net
income per share:
|
|
0.24
|
|
0.19
|
Diluted net income
per share
|
|
0.24
|
|
0.19
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares of common
stock outstanding
|
|
|
|
|
Basic
|
|
58,356,960
|
|
57,015,223
|
Diluted
|
|
58,719,789
|
|
57,036,805
|
SINOVAC BIOTECH
LTD.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
For the six months
ended June 30, 2018 and 2017
|
(Unaudited)
|
(Expressed in
thousands of U.S. Dollars)
|
|
|
|
Six months ended
June 30
|
|
|
2018
|
|
2017
|
Cash flows
provided by (used in) operating activities
|
|
|
|
|
Net income
|
$
|
22,569
|
$
|
15,845
|
Adjustments to
reconcile net income to net cash (used in) provided by
operating activities:
|
|
|
|
|
- Deferred
income taxes
|
|
(1,463)
|
|
(2,178)
|
- Share-based
compensation
|
|
2,831
|
|
484
|
- Inventory
provision
|
|
2,476
|
|
274
|
- Provision for
doubtful accounts
|
|
2,576
|
|
527
|
- Loss on
disposal and impairment of property, plant and equipment
|
|
18
|
|
13
|
- Government
grants recognized in income
|
|
(47)
|
|
(4)
|
- Depreciation
of property, plant and equipment and amortization of
licenses
|
2,489
|
|
2,123
|
- Amortization
of prepaid land lease payments
|
|
129
|
|
117
|
Changes
in:
|
|
|
|
|
- Accounts
receivable
|
|
(39,278)
|
|
(30,705)
|
-
Inventories
|
|
(5,420)
|
|
(3,598)
|
- Income tax
payable
|
|
(5,434)
|
|
(4,289)
|
- Prepaid
expenses and deposits
|
|
(425)
|
|
440
|
- Deferred
revenue
|
|
(3,906)
|
|
(2,473)
|
- Accounts
payable and accrued liabilities
|
|
9,982
|
|
25,482
|
- Restricted
cash
|
|
1,582
|
|
3,037
|
Net cash provided
by (used in) operating activities
|
|
(11,321)
|
|
5,095
|
|
|
|
|
|
Cash flows used in
financing activities
|
|
|
|
|
- Proceeds from
bank loans
|
|
13,400
|
|
11,171
|
- Repayments of
bank loans
|
|
(23,791)
|
|
(17,948)
|
- Proceeds from
issuance of common stock, net of share issuance costs
|
|
1,631
|
|
35
|
- Government
grant received
|
|
805
|
|
92
|
Net cash used in
financing activities
|
|
(7,955)
|
|
(6,650)
|
|
|
|
|
|
Cash flows used in
investing activities
|
|
|
|
|
- Acquisition
of property, plant and equipment
|
|
(2,859)
|
|
(6,768)
|
Net cash used in
investing activities
|
|
(2,859)
|
|
(6,768)
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
(4,171)
|
|
868
|
|
|
|
|
|
Decrease in cash
and cash equivalents
|
|
(26,306)
|
|
(7,455)
|
|
|
|
|
|
Cash and cash
equivalents, beginning of period
|
|
114,415
|
|
62,434
|
|
|
|
|
|
Cash and cash
equivalents, end of period
|
$
|
88,109
|
$
|
54,979
|
SINOVAC BIOTECH
LTD.
|
RECONCILIATIONS OF
NON-GAAP MEASURES TO THE NEAREST COMPARABLE GAAP
MEASURES
|
For the six months
ended June 30, 2018 and 2017
|
(Unaudited)
|
(Expressed in
thousands of U.S. Dollars, except for numbers of shares and per
share data)
|
|
|
|
Six months
ended June 30
|
|
|
2018
|
|
2017
|
Net
income
|
$
|
22,569
|
$
|
15,845
|
Adjustments:
|
|
|
|
|
Share-based compensation
|
|
2,831
|
|
484
|
Depreciation and amortization
|
|
2,618
|
|
2,240
|
Interest
and financing expenses, net of interest income
|
|
(277)
|
|
358
|
Net
other income
|
|
(146)
|
|
(104)
|
Income
tax expense (benefit)
|
|
6,560
|
|
(2,960)
|
Non-GAAP
EBITDA
|
|
34,155
|
|
15,863
|
|
|
|
|
|
Net
income
|
$
|
22,569
|
|
15,845
|
Add:
Foreign exchange gain
|
|
(1,412)
|
|
(135)
|
Add:
Share-based compensation
|
|
2,831
|
|
484
|
Non-GAAP net
income
|
|
23,988
|
|
16,194
|
|
|
|
|
|
Net income
attributable to shareholders of Sinovac
|
|
14,085
|
|
10,853
|
Add: Non-GAAP
adjustments to net income
|
|
1,419
|
|
349
|
Non-GAAP net
income attributable to shareholders of
Sinovac for computing non-GAAP diluted earnings per
share
|
|
15,504
|
|
11,202
|
|
|
|
|
|
Weighted
average number of shares on a diluted
basis
|
|
58,719,789
|
|
57,036,805
|
Diluted
earnings per share
|
|
0.24
|
|
0.19
|
Add: Non-GAAP
adjustments to net income per share
|
|
0.02
|
|
0.01
|
Non-GAAP
Diluted earnings per share
|
|
0.26
|
|
0.20
|
View original
content:http://www.prnewswire.com/news-releases/sinovac-reports-unaudited-first-half-of-2018-financial-results-300746331.html
SOURCE Sinovac Biotech Ltd.