HAIKOU CITY, China, Nov. 15,
2018 /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, announced today
its financial results for the quarter ended September 30, 2018.
Third Quarter Highlights
- Revenue was $2.3 million for the
three months ended September 30,
2018, which represented a decrease of 27.3% compared
to $3.2 million for the three months
ended September 30, 2017;
- Gross profit was $0.5 million and
$0.4 million for the three months
ended September 30, 2018 and 2017,
respectively. Our gross profit margin in the third quarter of 2018
was 22.3%, compared to 13.3% in the same period 2017;
- Loss from operations was $1.9
million in the third quarter of 2018, compared to
$2.1 million in the same period of
2017;
- Net loss was $1.9 million in the
third quarter of 2018, compared to $2.2
million in the same period of 2017. Loss per common
share was $(0.04) per basic and
diluted share in the third quarter of 2018, compared to
$(0.05) per basic and diluted share
in the same period of 2017.
In a statement from Ms. Zhilin
Li, China Pharma's Chairman and CEO, "It is the Company's
top priority to actively and steadily increase sales. We
experienced certain market fluctuations in the third quarter of
2018, but through the continued implementation of sales promotions,
our sales revenue in the first nine months of 2018 was comparable
to the same period a year ago. Management will continue to
vigorously promote sales through active participation in recent
provincial market openings to receive new drug tender offers and
through further penetration into the market." Ms. Li continued,
"The ongoing generic drug consistency evaluations and reform of
China's drug production
registration and review policies will continue to have a
significant impact on the current performance and future
development of Chinese pharmaceutical manufacturers, including us,
and may gradually change business patterns of the industry. 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
Revenue was $2.3 million for the
three months ended September 30,
2018, compared to $3.2 million
for the three months ended September 30,
2017. This decrease was mainly due to market volatility.
Gross profit was $0.5 million and
$0.4 million for the three months
ended September 30, 2018 and 2017,
respectively. Our gross profit margin in the third quarter of 2018
was 22.3%, compared to 13.3% in the same period 2017.
Our selling expenses for the three months ended September 30, 2018 were $0.9 million, which accounted for 40.3% of the
total revenue in the third quarter of 2018. For the same
period in 2017, our selling expenses were $0.7 million, which accounted for 21.7% of the
total revenue in the third quarter of 2017. When comparing selling
expenses in 2018 to those in 2017, the increase in the percentage
of selling expenses to total revenue was mainly due to the decrease
in revenue in this quarter, along with 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.
Our general and administrative expenses for the three months
ended September 30, 2018 and
September 30, 2017, were both
$0.3 million. General and
administrative expenses accounted for 14.2% and 11.0% of our total
revenues in the third quarters of 2018 and 2017, respectively.
Net loss for the three months ended September 30, 2018 was $1.9 million, compared to $2.2 million for the three months ended
September 30, 2017. The change in the
net result was mainly due to the decrease in revenue, and the
increase in selling expenses being offset by a decrease in
impairment of long term assets in the third quarter of 2018, as
compared to the same period of 2017.
Nine Months Results
Revenue decreased by 3.0% to $9.1
million for the nine months ended September 30, 2018, as compared to $9.4 million for the nine months ended
September 30, 2017.
Gross profit for the nine months ended September 30, 2018 was $2.1 million, compared to $1.8 million in the same period of 2017. Gross
profit margins for the nine months ended September 30, 2018 and 2017 were 24% and 19%,
respectively. The increase was mainly due to the increase in
sales of higher margin products in the nine months ended
September 30, 2018.
Our net losses for the nine months ended September 30, 2018 and 2017 were $3.2 million and $5.5
million, respectively, which represented an improvement of
$2.3 million for the period in
2018.
Financial Condition
As of September 30, 2018, the
Company had cash and cash equivalents of $0.7 million, compared to $2.0 million as of December 31, 2017.
Our accounts receivable balance was $0.8
million as of September 30,
2018, compared to $2.3 million
as of December 31, 2017.
Conference Call
The Company will hold a conference call at 8:30am E.T. on November
15, 2018, to discuss the financial results of the third
quarter 2018. Listeners may access the call by dialing
1-866-519-4004 for domestic callers or 65-671-350-90 for
international callers, Conference ID # 4389333. A recording of the
call will be accessible through November 23,
2018 by dialing 1-855-452-5696 or 61-281-990-299 for
international callers, Conference ID #4389333.
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 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. Such risks and uncertainties may
include, but are not limited to: 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,
|
|
|
2018
|
|
2017
|
ASSETS
|
|
(Unaudited)
|
|
(Audited)
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
667,629
|
|
$
2,030,214
|
Restricted
cash
|
|
1,476,344
|
|
709,796
|
Banker's
acceptances
|
|
-
|
|
39,867
|
Trade accounts
receivable, less allowance for doubtful
|
|
|
|
|
accounts of
$18,658,490 and $18,209,734, respectively
|
|
793,779
|
|
2,293,120
|
Other receivables,
less allowance for doubtful
|
|
|
|
|
accounts of $39,323
and $40,010, respectively
|
|
177,314
|
|
162,981
|
Advances to
suppliers
|
|
332,698
|
|
461,307
|
Inventory
|
|
6,099,999
|
|
6,407,155
|
Prepaid
expenses
|
|
162,628
|
|
185,647
|
Total Current
Assets
|
|
9,710,391
|
|
12,290,087
|
|
|
|
|
|
Advances for
purchases of intangible assets
|
|
22,478,660
|
|
23,722,954
|
Property, plant
and equipment, net
|
|
20,056,635
|
|
23,541,003
|
Intangible assets,
net
|
|
289,054
|
|
398,856
|
TOTAL
ASSETS
|
|
$
52,534,740
|
|
$
59,952,900
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Trade accounts
payable
|
|
$
588,717
|
|
$
1,141,138
|
Accrued
expenses
|
|
182,692
|
|
276,368
|
Other
payables
|
|
3,347,444
|
|
2,858,701
|
Advances from
customers
|
|
632,852
|
|
581,132
|
Other payables -
related parties
|
|
1,354,567
|
|
1,354,567
|
Current portion of
construction loan facility
|
|
2,184,508
|
|
2,305,430
|
Bankers' acceptance
notes payable
|
|
1,476,344
|
|
709,796
|
Total Current
Liabilities
|
|
9,767,124
|
|
9,227,132
|
Non-current
Liabilities:
|
|
|
|
|
Construction loan
facility
|
|
4,369,016
|
|
6,916,291
|
Deferred tax
liability
|
|
765,477
|
|
738,175
|
Total
Liabilities
|
|
14,901,617
|
|
16,881,598
|
Commitments and
Contingencies (Note 12)
|
|
|
|
|
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
|
|
2,321,761
|
|
5,479,809
|
Accumulated other
comprehensive income
|
|
11,677,578
|
|
13,957,709
|
Total
Stockholders' Equity
|
|
37,633,123
|
|
43,071,302
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
$
52,534,740
|
|
$
59,952,900
|
CHINA PHARMA
HOLDINGS, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
AND COMPREHENSIVE
INCOME (LOSS)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months
|
|
For the Nine
Months
|
|
|
Ended September
30,
|
|
Ended September
30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Revenue
|
|
$
2,298,472
|
|
$
3,162,222
|
|
$
9,087,867
|
|
$
9,364,605
|
Cost of
revenue
|
|
1,785,927
|
|
2,740,683
|
|
6,942,141
|
|
7,576,856
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
512,545
|
|
421,539
|
|
2,145,726
|
|
1,787,749
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
22.3
|
|
13.3
|
|
23.6
|
|
19.1
|
Selling
expenses
|
|
925,654
|
|
686,825
|
|
2,320,204
|
|
2,207,896
|
General and
administrative expenses
|
|
327,161
|
|
348,963
|
|
1,172,314
|
|
1,377,640
|
Research and
development expenses
|
|
62,059
|
|
27,543
|
|
107,946
|
|
75,053
|
Bad debt
expense
|
|
1,129,105
|
|
229,466
|
|
1,481,786
|
|
954,518
|
Impairment of long
term assets
|
|
-
|
|
1,184,103
|
|
-
|
|
2,162,083
|
Total operating
expenses
|
|
2,443,979
|
|
2,476,900
|
|
5,082,250
|
|
6,777,190
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(1,931,434)
|
|
(2,055,361)
|
|
(2,936,524)
|
|
(4,989,441)
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Interest
income
|
|
16,113
|
|
21,947
|
|
27,931
|
|
43,296
|
Interest
expense
|
|
(101,683)
|
|
(130,816)
|
|
(361,365)
|
|
(411,985)
|
Net other
expense
|
|
(85,570)
|
|
(108,869)
|
|
(333,434)
|
|
(368,689)
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
|
(2,017,004)
|
|
(2,164,230)
|
|
(3,269,958)
|
|
(5,358,130)
|
Income tax benefit
(expense)
|
|
160,485
|
|
(31,198)
|
|
111,910
|
|
(92,106)
|
Net
loss
|
|
(1,856,519)
|
|
(2,195,428)
|
|
(3,158,048)
|
|
(5,450,236)
|
Other comprehensive
income - foreign currency
|
|
|
|
|
|
|
|
|
translation
adjustment
|
|
(1,535,424)
|
|
2,083,398
|
|
(2,280,131)
|
|
3,571,880
|
Comprehensive
income (loss)
|
|
$
(3,391,943)
|
|
$
(112,030)
|
|
$
(5,438,179)
|
|
$
(1,878,356)
|
Loss per
share:
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
(0.04)
|
|
$
(0.05)
|
|
$
(0.07)
|
|
$
(0.13)
|
Weighted average
shares outstanding
|
|
43,579,557
|
|
43,579,557
|
|
43,579,557
|
|
43,579,557
|
CHINA PHARMA
HOLDINGS, INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
For the Nine
Months
|
|
|
Ended September
30,
|
|
|
2018
|
|
2017
|
Cash Flows from
Operating Activities:
|
|
|
|
|
Net loss
|
|
$
(3,158,048)
|
|
$
(5,450,236)
|
Depreciation and
amortization
|
|
2,499,114
|
|
2,447,866
|
Bad debt
expense
|
|
1,481,786
|
|
954,518
|
Deferred income
taxes
|
|
69,614
|
|
92,106
|
Impairment of long
term assets
|
|
-
|
|
2,162,083
|
Changes in assets and
liabilities:
|
|
|
|
|
Trade accounts and
other receivables
|
|
(514,428)
|
|
21,325
|
Advances to
suppliers
|
|
106,981
|
|
(251,306)
|
Inventory
|
|
471,995
|
|
1,237,573
|
Trade accounts
payable
|
|
(516,263)
|
|
(1,303,944)
|
Accrued taxes
payable
|
|
(114,432)
|
|
1,719
|
Other payables and
accrued expenses
|
|
580,689
|
|
188,557
|
Advances from
customers
|
|
86,675
|
|
(265,092)
|
Prepaid
expenses
|
|
14,005
|
|
69,284
|
Net Cash Provided
by (Used In) Operating Activities
|
|
1,007,688
|
|
(95,547)
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
Purchases of property
and equipment
|
|
(33,332)
|
|
(67,324)
|
Net Cash Used in
Investing Activities
|
|
(33,332)
|
|
(67,324)
|
|
|
|
|
|
Cash Flows from
Financing Activity:
|
|
|
|
|
Payments of
construction term loan
|
|
(2,303,410)
|
|
(1,469,349)
|
Net Cash Used in
Financing Activity
|
|
(2,303,410)
|
|
(1,469,349)
|
|
|
|
|
|
Effect of Exchange
Rate Changes on Cash
|
|
(33,531)
|
|
90,857
|
Net (Decrease)
Increase in Cash and Cash Equivalents
|
|
(1,362,585)
|
|
(1,541,363)
|
Cash and Cash
Equivalents at Beginning of Period
|
|
2,030,214
|
|
2,665,802
|
Cash and Cash
Equivalents at End of Period
|
|
$
667,629
|
|
$
1,124,439
|
|
|
|
|
|
Supplemental Cash
Flow Information:
|
|
|
|
|
Cash paid for income
taxes
|
|
$
-
|
|
$
-
|
Cash paid for
interest
|
|
$
351,206
|
|
$
410,509
|
|
|
|
|
|
Supplemental
Noncash Investing and Financing Activities:
|
|
|
|
|
Issuance of banker's
acceptances
|
|
$
847,527
|
|
$
126,652
|
Accounts receivable
collected with banker's acceptances
|
|
462,642
|
|
366,889
|
Inventory purchased
with banker's acceptances
|
|
502,473
|
|
344,848
|
View original
content:http://www.prnewswire.com/news-releases/china-pharma-holdings-inc-reports-third-quarter-2018-financial-results-300750831.html
SOURCE China Pharma Holdings, Inc.