HAIKOU, China, May 15, 2019 /PRNewswire/ -- China Pharma
Holdings, Inc. (NYSE American: 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 March 31,
2019.
First Quarter Highlights
- Revenue decreased 19.0% to $2.9
million in the first quarter 2019 from $3.6 million in the same period of 2018;
- Gross margin was 22.4% in the first quarter 2019, compared to
29.1% in the same period of 2018;
- Loss from operations was $0.3
million in the first quarter 2019 compared to $0.1 million in the same period of 2018, a
deterioration of $0.2 million;
- Net loss was $0.4 million in the
first quarter 2019 compared to $0.3
million in the same period of 2018. Loss per common share
was both $0.01 per basic and diluted
share in the first quarter 2019 and 2018, respectively.
In a statement from Ms. Zhilin
Li, China Pharma's Chairman and CEO, "We experienced certain
market fluctuations in the first quarter of 2019, which has
negatively impacted our revenue in this period. Management will
continue to vigorously promote sales through active participation
in recent provincial market openings to solicit new drug tender
offers and allow China Pharma to expand its presence in these
markets." Ms. Li continued, "In addition, we continued experiencing
sustained pressure from the more stringent requirements of drug
registration standards, consistency evaluations, and the
challenging environment in our industry in this period. 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 19.0% to $2.9 million for the three months ended
March 31, 2019, as compared to
$3.6 million for the three
months ended March 31, 2018. This
decrease was mainly due to market fluctuations.
Gross profit for the three months ended March 31, 2019 was $0.7 million, as compared to $1.1 million during the same period in 2018.
Our gross profit margin in the three months ended March 31, 2019 was 22.4% as compared to
29.1% during the same period in 2018. The decrease in our
gross profit margin was mainly due to the decrease in revenue
and the increased ratio of fixed cost to revenue.
Our selling expenses for the three months ended March 31, 2019 and 2018
were $0.5 million and $0.7
million, respectively. Selling expenses accounted
for 16.3% of the total revenue in the three months ended
March 31, 2019, as compared to 18.8%
during the same period in 2018. Because of adjustments in our sales
practices, due to healthcare reform policies, we had reduced
number of personnel and expenses to efficiently support
our sales and the collection of accounts receivable.
Our general and administrative expenses for the three months
ended March 31, 2019 were
$0.4 million, which represented
a decrease of $0.1 million,
as compared to $0.5 million for
the same period in 2018. General and administrative expenses
accounted for 14.6% and 13.6% of our total revenues in the three
months ended March 31, 2019 and 2018,
respectively.
Net loss for the three months ended March
31, 2019 was $0.4 million, as compared to $0.3 million for the same period a year ago.
The increase in net loss was mainly the result of decreased
revenue, whereas the expenditures did not decrease in
proportion to revenue, which was due to fixed costs. For
the three months ended March 31, 2019
and 2018, loss per basic and diluted common share was both
$0.01.
Financial Condition
As of March 31, 2019, the Company
had cash and cash equivalents of $1.0
million compared to $1.2
million as of December 31,
2018.
As of March 31, 2019, our net
accounts receivable was $0.8 million,
compared to $0.9 million as of
December 31, 2018.
For the three months ended March 31,
2019, cash flow from operating activities was $0.1 million, as compared to $0.5 million for the same period in 2018.
Conference Call
The Company will hold a conference call at 8:30 am E.T. on May 15,
2019 to discuss the results of the first quarter 2019.
Listeners may access the call by dialing 1-866-519-4004 or
65-671-350-90 for international callers, Conference ID # 2397008. A
replay of the call will be accessible through May 23, 2019 by dialing 1-855-452-5696 or
61-281-990-299 for international callers, Conference ID #
2397008.
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.
- FINANCIAL TABLES FOLLOW -
CHINA PHARMA
HOLDINGS, INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
2019
|
|
2018
|
ASSETS
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
961,277
|
|
$
1,186,587
|
Restricted
cash
|
|
976,622
|
|
1,273,940
|
Banker's
acceptances
|
|
51,424
|
|
20,579
|
Trade accounts
receivable, less allowance for doubtful
|
|
|
|
|
accounts of
$18,295,892 and $17,815,075, respectively
|
|
845,401
|
|
916,931
|
Other receivables,
less allowance for doubtful
|
|
|
|
|
accounts of $7,187
and $34,884, respectively
|
|
225,010
|
|
170,098
|
Advances to
suppliers
|
|
108,454
|
|
47
|
Inventory
|
|
4,934,248
|
|
5,054,975
|
Prepaid
expenses
|
|
118,701
|
|
123,759
|
Total Current
Assets
|
|
8,221,137
|
|
8,746,916
|
|
|
|
|
|
Advances for
purchases of intangible assets
|
|
17,490,101
|
|
17,069,587
|
Property and
equipment, net
|
|
19,067,032
|
|
19,294,379
|
Operating lease
right of use asset
|
|
212,587
|
|
-
|
Intangible assets,
net
|
|
250,266
|
|
266,443
|
TOTAL
ASSETS
|
|
$
45,241,123
|
|
$
45,377,325
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Trade accounts
payable
|
|
$
1,093,182
|
|
$
1,060,934
|
Accrued
expenses
|
|
117,241
|
|
310,804
|
Other
payables
|
|
2,838,847
|
|
3,065,508
|
Advances from
customers
|
|
526,247
|
|
525,647
|
Other payables -
related parties
|
|
1,518,756
|
|
1,633,263
|
Operating lease
liability, current portion
|
|
91,597
|
|
-
|
Current portion of
construction loan facility
|
|
2,086,092
|
|
2,181,360
|
Bankers' acceptance
notes payable
|
|
976,622
|
|
1,273,940
|
Total Current
Liabilities
|
|
9,248,584
|
|
10,051,456
|
Non-current
Liabilities:
|
|
|
|
|
Construction loan
facility
|
|
4,470,197
|
|
4,362,720
|
Operating lease
liability, net of current portion
|
|
122,229
|
|
-
|
Deferred tax
liability
|
|
783,204
|
|
764,374
|
Total
Liabilities
|
|
14,624,214
|
|
15,178,550
|
Commitments and
Contingencies (Note 13)
|
|
|
|
|
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
|
Accumulated
deficit
|
|
(5,688,089)
|
|
(5,270,358)
|
Accumulated other
comprehensive income
|
|
12,671,214
|
|
11,835,349
|
Total
Stockholders' Equity
|
|
30,616,909
|
|
30,198,775
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
$
45,241,123
|
|
$
45,377,325
|
CHINA PHARMA
HOLDINGS, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
AND COMPREHENSIVE
INCOME (LOSS)
|
(Unaudited)
|
|
|
|
|
|
|
|
For the Three
Months
|
|
|
Ended March
31,
|
|
|
2019
|
|
2018
|
Revenue
|
|
$
2,929,273
|
|
$
3,615,684
|
Cost of
revenue
|
|
2,272,743
|
|
2,561,984
|
|
|
|
|
|
Gross
profit
|
|
656,530
|
|
1,053,700
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Selling
expenses
|
|
478,691
|
|
678,330
|
General and
administrative expenses
|
|
428,817
|
|
492,010
|
Research and
development expenses
|
|
69,918
|
|
22,213
|
Bad debt
expense
|
|
13,312
|
|
1,834
|
Total operating
expenses
|
|
990,738
|
|
1,194,387
|
|
|
|
|
|
Loss from
operations
|
|
(334,208)
|
|
(140,687)
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
Interest
income
|
|
3,257
|
|
2,294
|
Interest
expense
|
|
(86,780)
|
|
(129,102)
|
Net other
expense
|
|
(83,523)
|
|
(126,808)
|
|
|
|
|
|
Loss before income
taxes
|
|
(417,731)
|
|
(267,495)
|
Income tax
expense
|
|
-
|
|
(25,985)
|
Net
loss
|
|
(417,731)
|
|
(293,480)
|
Other comprehensive
income - foreign currency
|
|
|
|
|
translation
adjustment
|
|
835,865
|
|
1,674,076
|
Comprehensive
income (loss)
|
|
$
418,134
|
|
$
1,380,596
|
Loss per
share:
|
|
|
|
|
Basic and
diluted
|
|
$
(0.01)
|
|
$
(0.01)
|
Weighted average
shares outstanding
|
|
43,579,557
|
|
43,579,557
|
CHINA PHARMA
HOLDINGS, INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
|
For the Three
Months
|
|
|
Ended March
31,
|
|
|
2019
|
|
2018
|
Cash Flows from
Operating Activities:
|
|
|
|
|
Net loss
|
|
$
(417,731)
|
|
$
(293,480)
|
Depreciation and
amortization
|
|
795,483
|
|
861,430
|
Bad debt
expense
|
|
13,312
|
|
1,834
|
Deferred income
taxes
|
|
-
|
|
25,985
|
Non cash lease
expense
|
|
1,233
|
|
-
|
Changes in assets and
liabilities:
|
|
|
|
|
Trade accounts and
other receivables
|
|
(145,935)
|
|
(266,479)
|
Advances to
suppliers
|
|
(107,839)
|
|
(237,165)
|
Inventory
|
|
389,589
|
|
427,741
|
Trade accounts
payable
|
|
6,079
|
|
196,434
|
Accrued taxes
payable
|
|
(51,879)
|
|
(163,335)
|
Other payables and
accrued expenses
|
|
(387,569)
|
|
(52,823)
|
Advances from
customers
|
|
(12,285)
|
|
20,709
|
Prepaid
expenses
|
|
8,065
|
|
2,888
|
Net Cash Provided
by Operating Activities
|
|
90,523
|
|
523,739
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
Purchases of property
and equipment
|
|
(73,866)
|
|
(3,627)
|
Net Cash Used in
Investing Activities
|
|
(73,866)
|
|
(3,627)
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
Payments of
construction term loan
|
|
(148,227)
|
|
(157,316)
|
Payments of related
party payables
|
|
(119,561)
|
|
-
|
Net Cash Used in
Financing Activities
|
|
(267,788)
|
|
(157,316)
|
|
|
|
|
|
Effect of Exchange
Rate Changes on Cash
|
|
25,821
|
|
75,025
|
Net (Decrease)
Increase in Cash and Cash Equivalents
|
|
(225,310)
|
|
437,821
|
Cash and Cash
Equivalents at Beginning of Period
|
|
1,186,587
|
|
2,030,214
|
Cash and Cash
Equivalents at End of Period
|
|
$
961,277
|
|
$
2,468,035
|
|
|
|
|
|
Supplemental Cash
Flow Information:
|
|
|
|
|
Cash paid for income
taxes
|
|
$
-
|
|
$
-
|
Cash paid for
interest
|
|
$
80,693
|
|
$
125,716
|
|
|
|
|
|
Supplemental
Noncash Investing and Financing Activities:
|
|
|
|
|
Issuance of banker's
acceptances
|
|
$
55,603
|
|
$
443,748
|
Accounts receivable
collected with banker's acceptances
|
|
175,793
|
|
133,053
|
Inventory purchased
with banker's acceptances
|
|
145,614
|
|
148,924
|
Right-of-use assets
obtained in exchange for operating lease obligations
|
|
236,055
|
|
-
|
View original
content:http://www.prnewswire.com/news-releases/china-pharma-holdings-inc-reports-first-quarter-2019-financial-results-300850584.html
SOURCE China Pharma Holdings, Inc.