TAI'AN, China, Nov. 16, 2010 /PRNewswire-Asia-FirstCall/ --
China Biologic Products, Inc. (Nasdaq: CBPO) ("China Biologic" or
the "Company"), one of the leading plasma-based biopharmaceutical
companies in the People's Republic of
China ("PRC"), operating through its indirect majority-owned
subsidiaries, Shandong Taibang Biological Products Co., Ltd.
("Shandong Taibang") and Guiyang Dalin Biologic Technologies Co.,
Ltd. ("Dalin"), and its equity investment in Xi'an Huitian Blood
Products Co., Ltd. ("Huitian"), today reported financial results
for the third quarter ended September 30,
2010.
Third Quarter 2010 Highlights
- Revenues increased 33.2% period-over-period to $36.0 million
- Gross profit rose 36.1% period-over-period to $27.3 million, representing a gross margin of
75.9%, as compared to 74.3% a year ago
- Income from operations grew 34.2% to $18.8 million
- GAAP net income attributable to controlling interest was
$13.7 million, or $0. 53 per diluted
share, including a $3.8 million
non-cash gain from change in the fair value of derivative
liabilities
- Excluding the non-cash gain from change in fair value of
derivative liabilities, interest on convertible notes and non-cash
employee compensation, non-GAAP adjusted net income was
$10.5 million or $0.39 per diluted share, a 48.7% increase from
$7.1 million, or $0.33 per diluted share a year ago
- The Company established Ning Yang Taibang Plasma Company and Yi
Shui Taibang Plasma Company in July
2010 for the purpose of operating two new plasma stations in
Shandong Province, PRC
"Our 2010 third quarter results were very strong, with 33.2%
growth in revenues and 48.7% growth in adjusted net income, driven
by robust demand and an overall favorable pricing environment for
our plasma-based products," said Mr. Chao
Ming Zhao, Chief Executive Officer of China Biologic.
"During the quarter, we established two new plasma collection
stations in Yishui and Ninyang counties in Shandong Province, and we expect to begin
trial collections at the Yishui station by the end of the year and
at the Ninyang station by early 2011. We expect that when
these sites are at their full capacity, we will realize up to 80
metric tons of incremental plasma collection capacity."
Third Quarter 2010 Results
Revenue for the third quarter of 2010 increased 33.2% to
$36.0 million, from $27.0 million in the same period of 2009. Revenue
growth was primarily attributable to price increases ranging from
6.2% to 55.8% across the Company's approved product categories,
with the exception of human albumin products and human
immunoglobulin products, which registered price declines of 4.3%
and 11.8%, respectively. Pricing of human albumin products
decreased period-over-period due to higher industry supply
primarily from imports. Nonetheless, strong volume growth led to a
51.3% period-over-period increase in human albumin revenue to
$17.5 million, or 48.6% of total
sales, making it the Company's largest revenue contributor.
Human Immunoglobulin for Intravenous Injection, the Company's
second largest revenue contributor at 36.3% of total sales,
experienced average period-over-period price increases of 27.0% in
third quarter 2010. Human Hepatitis B Immunoglobulin
experienced the sharpest average price increase among the Company's
product categories, up 55.8%, compared to the prior year period,
and contributed 7.1% of total revenues in third quarter 2010. The
average price for human tetanus immunoglobulin products, which
contributed 4.1% of total revenues, increased 6.2%
period-over-period. The average price for human rabies
immunoglobulin products, which contributed 2.9% of total revenues,
increased 51.4% period-over-period. The average price for human
immunoglobulin products, which contributed 0.5% of total revenues,
decreased 11.8%, as compared to the same period in 2009.
Gross profit for the third quarter of 2010 was $27.3 million, up 36.1% from $20.1 million in the third quarter of 2009. Gross
profit margin expanded to 75.9%, from 74.3% in the same period a
year ago. The gross margin expansion was primarily attributable to
increases in the average selling price of four of the Company's six
top product categories.
Operating expenses in the third quarter increased 40.4% to
$8.5 million, from $6.1 million in the same period last year. Higher
expenses primarily reflected a 64.6% increase in research and
development spending, mostly related to development of two late
stage pipeline products for which the Company expects to receive
State Food and Drug Administration ("SFDA") approval in early 2011.
Selling expenses increased 259.9% period-over-period to
$2.2 million due to intensified
promotional and conference activities as the Company continues its
efforts in expanding its reach into hospital and inoculation
centers. General and administrative expenses increased 12.8%
period-over-period in the third quarter of 2010 to $5.8 million, or 16.2% of total sales, versus
$5.2 million, or 19.1% of total sales
for the same period in 2009.
Income from operations in the 2010 third quarter was
$18.8 million, a 34.2% increase from
$14.0 million during the same period
a year ago. Operating margin rose to 52.3%, from 51.9% in the same
period last year.
Total other income was $3.5
million in the 2010 third quarter, as compared to net other
expense of $14.3 million in the same
period last year. For the three months ended September 30, 2010 and 2009, the Company
recognized an income from the change in the fair value of warrant
liabilities in the amount of $3.8
million and a loss of $13.2
million, respectively.
Income taxes increased to $3.5
million in the 2010 third quarter, from $2.5 million in the prior year. Net income
attributable to controlling interest for the 2010 third quarter was
$13.7 million, or $0.53 per diluted share, as compared to
$(6.2) million, or $(0.29) per diluted share, during the 2009 third
quarter.
Excluding non-cash employee compensation expenses, change in the
fair value of derivative liabilities and interest related to the
convertible notes under the if-converted method, non-GAAP adjusted
net income for the three months ended September 30, 2010 was $10.5 million, or $0.39 per diluted share, up 48.7% from
$7.1 million, or $0.33 per diluted share, in the same 2009
period.
Nine Months Results
For the first nine months of 2010, total revenue was
$104.0 million, up 27.8% from the
first nine months of 2009. Gross profit for the first nine months
of 2010 was $77.9 million, up 31.9%
from $59.0 million in the comparable
period a year ago. Gross margin for the first nine months of 2010
was 74.9%, as compared to 72.5% for the same period in 2009. The
increase in gross margin was due mainly to increased selling
prices, ranging from 15.1% to 213.6%, across all of the Company's
products, except for human albumin products, which decreased by
0.6%. Income from operations for the period was $54.8 million, up 35.0% from $40.6 million in the first nine months of 2009.
Net income attributable to controlling interest for the first nine
months of 2010 was $37.2 million, up
637.9% from $5.0 million in the first
nine months of 2009. Fully diluted earnings per share were
$1.44 for the first nine months of
2010, compared to $0.23 in the first
nine months of 2009. Excluding non-cash employee compensation
expenses, change in the fair value of derivative liabilities and
interest related to the convertible notes under the if-converted
method, non-GAAP adjusted net income for the nine months ended
September 30, 2010 was $28.9 million, or $1.09 per diluted share, an increase of 44.5%
from non-GAAP net income of $20.0
million, or $0.92 per fully
diluted share, for the nine months ended September 30, 2009.
Financial Condition
As of September 30, 2010, the
Company had $64.6 million in cash and
cash equivalents, approximately $75.3
million in working capital, and a current ratio of 2.6.
Total stockholders' equity at the end of the quarter was
$93.8 million, up 89.7% from
$49.5 million at the end of 2009.
The Company generated $31.3
million in net cash from operating activities during the
first nine months of 2010, as compared to $35.5 million in the same period of 2009, which
included a $4.2 million
advanced receipt from customers.
The increase in cash outflow for inventory during the first nine
months of 2010, compared to the same period last year, is a direct
result of the implementation of the 90-day quarantine period by the
PRC government, which caused a longer staging period for its raw
material plasma inventory. During the first nine months of 2010, as
the Company increased its sales directly to end-users, hospitals
and inoculation centers, it also experienced a slower turn-over of
its accounts receivable compared to the same period last year.
Net cash used in investing activities for the nine months ended
September 30, 2010 was $11.6 million, as compared to $6.1 million in the same period of 2009. During
the first nine months ended September 30,
2010, $1.5 million was used
for the acquisition of Ziguang
Bio-tech Company, $2.5 million
for the final payment for the Dalin acquisition, $1.8 million for equipment for Shandong Taibang,
and $5.8 million for the Company's
plasma companies' buildings and construction in process in
Dalin.
Net cash used in financing activities for the nine months ended
September 30, 2010 totaled
$10.2 million, as compared to
$12.1 million provided by financing
activities in the same period of 2009.
Recent Events and Updates
Acquisition of the 17.24% Minority Interest of Taibang
Medical
On July 8, 2010, Logic China
entered into an equity transfer agreement to purchase 100% of the
equity interest in Taibang Medical from the Company's indirect
majority-owned subsidiary Shandong Taibang, with a cash purchase
price of RMB 6,440,000 (approximately
$947,327). The equity transfer was
registered with the local Administration for Industry and Commerce
("AIC") on September 10, 2010 and the
purchase price was fully paid on September
23, 2010. With this equity transfer, Taibang Medical
is now an indirect wholly-owned subsidiary of the Company and the
Company will be able to consolidate its resources in the sales and
marketing of Shandong Taibang and Qianfeng's products.
Distributions declaration by Shandong Taibang
On October 9, 2010, the board of
directors of Shandong Taibang declared a RMB
70,000,000 (approximately $10,479,000) distribution to its 82.76%
shareholder, Logic Express, the Company's wholly-owned subsidiary,
and to its 17.24% shareholder, the Shandong Institute. The
distribution to Logic Express was used to pay off the RMB 55,000,000 (approximately $8,233,500) loan due to Shandong Taibang, and the
distribution to the Shandong Institute was made on October 25, 2010.
Redemption of Convertible Notes
On November 10, 2010, the
remaining holder of the Company's convertible notes, issued in the
Company's June 2009 financing,
exercised its right to convert $2,800,000 payable under its note into an
aggregate of 700,000 shares of the Company's common stock. As
a result, only a convertible note in the principal amount of
$4,700,000 remains outstanding as of
November 16, 2010.
2010 Guidance and Business Outlook
China Biologic reaffirms its guidance for 2010 of revenues in
the range of $142 million and
$149 million and adjusted net income
between $34 million and $36 million.
Guidance for 2010 adjusted net income excludes any non-cash gain or
loss related to change in the fair value of derivative liabilities,
stock-based compensation expense and any adjustments in the U.S.
federal income tax provision in 2010 related to the expiration of
the look-through exception for Subpart F income on December 31, 2009, and excludes any acquisitions,
new product approvals or operational impact from new plasma
stations. The guidance also does not assume any material price or
volume increases during the year.
Mr. Zhao added, "We believe that the results for the first nine
months of 2010 reinforce the merits of China Biologic's strategy to
acquire or build new locations, scale up our existing plasma
infrastructure, and advance exciting products through our pipeline.
From investing in strategic marketing to drive collection center
donor volumes, to developing closer relationships with hospitals
and inoculation centers, we intend to maximize the utilization of
our growing plasma network. We expect that our strong balance sheet
and solid operating cash flow will provide us with the resources to
take advantage of opportunities created by rising consumer demand
and tight supply conditions based on strict government regulation.
On the research and development front, we continue to expect our
applications for production of Human Prothrombin Complex Conentrate
and Human Coagulation Factor VIII to be approved by the SFDA in
early 2011. Heading into next year, we intend to leverage our
expertise in the field to capitalize further on China's under-pentrated plasma market and
build value for our shareholders."
Conference Call
China Biologic will host a conference call at 9:00 a.m. EST on Tuesday,
November 16, 2010, to discuss the third quarter 2010
financial results. To participate in the live conference call,
please dial the following number five to ten minutes prior to the
scheduled conference call time: 877-409-5468. International callers
should dial +1-702-894-2400. The pass code for the call is
23890623. A replay will be available for 14 days starting on
Tuesday, November 16, 2010 at
11:00 a.m. EST. To access the replay,
dial 800-642-1687, international callers should dial
+1-706-645-9291. The conference pass code is 23890623.
CHINA
BIOLOGIC PRODUCTS, INC. AND SUBSIDIARIES
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RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
|
|
FOR THE
THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2010, AND 2009
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|
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Three Months
Ended
|
Three Months
Ended
|
Nine Months
Ended
|
Nine Months
Ended
|
|
|
September
30, 2010
|
September
30, 2009
|
September
30, 2010
|
September
30, 2009
|
|
|
Net
Income
|
Diluted EPS
|
Net
Income
|
Diluted EPS
|
Net
Income
|
Diluted EPS
|
Net
Income
|
Diluted EPS
|
|
Adjusted net income - non
GAAP
|
10,489,724
|
$0.39
|
7,056,078
|
$0.33
|
28,942,653
|
$1.09
|
20,028,863
|
$0.92
|
|
Non-cash employee
compensation (1)
|
63,812
|
$0.00
|
7,314
|
$0.00
|
681,653
|
$0.03
|
62,281
|
$0.00
|
|
Loss (income) in fair
value of derivative liabilities (2)
|
(3,792,793)
|
$(0.14)
|
13,242,333
|
$0.61
|
(9,897,199)
|
$(0.37)
|
14,931,088
|
$0.69
|
|
Net income attributable to
controlling interest for diluted EPS (3)
|
14,218,705
|
$0.53
|
(6,193,569)
|
$(0.29)
|
38,158,199
|
$1.44
|
5,034,494
|
$0.23
|
|
Interest
add-back on
convertible notes
|
543,814
|
|
-
|
|
1,000,125
|
|
-
|
|
|
Net income attributable to
controlling interest
|
13,674,891
|
|
(6,193,569)
|
|
37,158,074
|
|
5,035,494
|
|
|
Weighted average number of
shares - diluted
|
26,578,471
|
|
21,632,793
|
|
26,575,801
|
|
21,767,086
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|
|
|
|
|
|
|
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|
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|
|
(1) Non-cash
compensation expenses related to options granted to employees and
directors under the Company's 2008 Equity Incentive Plan
(2)Adoption of
a new accounting rule effective January 1, 2009 requires changes in
the fair value of derivative liabilities to be recognized in
earnings each quarter.
(3)Net Income
attributable to controlling interest for calculating diluted
earnings per share includes interest add-back on
Convertible Notes.
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|
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|
|
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|
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Use of Non-GAAP Financial Measures
This press release contains non-GAAP financial measures that
exclude non-cash compensation expenses related to options granted
to employees and directors under the Company's 2008 Equity
Incentive Plan and changes in the fair value of derivative
liabilities, including warrants and derivative instruments
(including the conversion option) embedded in the Company's Senior
Secured Convertible Notes. To supplement the Company's condensed
consolidated financial statements presented on a GAAP basis, the
Company has provided non-GAAP financial information excluding the
impact of this item in this release. The Company's management
believes that these non-GAAP measures provide investors with a
better understanding of how the results relate to the Company's
historical performance. A reconciliation of the adjustments to GAAP
results appears in the table accompanying this press release. This
additional non-GAAP information is not meant to be considered in
isolation or as a substitute for GAAP financials. The non-GAAP
financial information that the Company provides also may differ
from the non-GAAP information provided by other companies.
About China Biologic Products, Inc.
China Biologic Products, Inc., through its indirect
majority-owned subsidiaries, Shandong Taibang Biological Products
Co., Ltd. and Guiyang Dalin Biologic Technologies Co., Ltd. and its
equity investment in Xi'an Huitian Blood Products Co., Ltd., is
currently one of the leading plasma-based biopharmaceutical
companies in China. The Company is
a fully integrated biologic products company with plasma
collection, production and manufacturing, research and development
and commercial operations. The Company's plasma-based
biopharmaceutical products are irreplaceable during medical
emergencies and are used for the prevention and treatment of
various diseases. The Company sells its products to hospitals and
other healthcare facilities in China. Please see the Company's website
http://www.chinabiologic.com for additional information.
Safe Harbor Statement
This release may contain certain "forward-looking statements"
relating to the business of China Biologic Products, Inc. and its
subsidiaries. All statements, other than statements of historical
fact included herein are "forward-looking statements," including
statements regarding: the ability of the Company to achieve the
financial guidance provided by the management; the likelihood that
customer demand will continue to rise and the continued ability of
the Company to take advantage of opportunities created by such
consumer demand and tight supply conditions based on strict
government regulation; the ability of the Company to win SFDA
approval for its research and development pipeline projects, and
commercially launch new products;; the Company's ability to
otherwise achieve its commercial objectives, including its ability
to continue building new or expanding existing plasma collection
stations to increase plasma collection capacity and maximizing the
utilization of its growing plasma network, and to gain market share
and further strengthen the Company's leadership in the PRC plasma
market; the business strategy, plans and objectives of the Company
and its subsidiaries; and any other statements of non-historical
information. These forward-looking statements are often identified
by the use of forward-looking terminology such as "believes,"
"expects" or similar expressions, and involve known and unknown
risks and uncertainties. Although the Company believes that the
expectations reflected in these forward-looking statements are
reasonable, they do involve assumptions, risks and uncertainties,
and these expectations may prove to be incorrect. Investors should
not place undue reliance on these forward-looking statements, which
speak only as of the date of this press release. The Company's
actual results could differ materially from those anticipated in
these forward-looking statements as a result of a variety of
factors, including those discussed in the Company's periodic
reports that are filed with the Securities and Exchange Commission
and available on its website (http://www.sec.gov). All
forward-looking statements attributable to the Company or persons
acting on its behalf are expressly qualified in their entirety by
these factors. Other than as required under the securities laws,
the Company does not assume a duty to update these forward-looking
statements.
–FINANCIAL TABLES FOLLOW –
CHINA
BIOLOGIC PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
AS OF SEPTEMBER 30, 2010 and
DECEMBER 31, 2009
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|
ASSETS
|
|
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
|
2010
|
|
|
2009
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
CURRENT ASSETS:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
64,579,098
|
|
$
|
53,843,951
|
|
|
Accounts receivable, net of
allowance for doubtful accounts of $1,274,406 and $1,254,955 as of
September 30, 2010 and December 31, 2009, respectively
|
|
6,338,162
|
|
|
1,767,076
|
|
|
Accounts receivable - related
party
|
|
247,702
|
|
|
222,617
|
|
|
Other receivables
|
|
2,678,276
|
|
|
2,186,441
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|
|
Inventories, net of allowance
for obsolete of $653,340 and $519,333 as of September 30, 2010 and
December 31, 2009, respectively
|
|
46,584,094
|
|
|
35,132,724
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|
|
Prepayments and deferred
expense
|
|
1,679,041
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|
|
1,299,125
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|
|
Deferred tax assets
|
|
1,285,733
|
|
|
1,053,771
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|
|
Total current assets
|
|
123,392,106
|
|
|
95,505,705
|
|
|
|
|
|
|
|
|
|
|
PLANT AND EQUIPMENT,
net
|
|
36,992,255
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|
|
28,873,413
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OTHER ASSETS:
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|
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|
Investment in unconsolidated
affiliate
|
|
7,443,372
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|
|
6,627,355
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|
|
Prepayments -
non-current
|
|
3,470,787
|
|
|
3,223,960
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|
|
Intangible assets,
net
|
|
19,198,734
|
|
|
21,180,322
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|
|
Goodwill
|
|
12,425,589
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|
|
12,425,589
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|
|
Total other assets
|
|
42,538,482
|
|
|
43,457,226
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|
|
|
|
|
|
|
|
|
|
Total assets
|
$
|
202,922,843
|
|
$
|
167,836,344
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
|
|
Accounts payable
|
$
|
3,787,455
|
|
$
|
3,701,843
|
|
|
Notes payable
|
|
-
|
|
|
48,598
|
|
|
Short term loans -
bank
|
|
6,062,850
|
|
|
4,474,350
|
|
|
Short term loans - holder of
noncontrolling interest
|
|
-
|
|
|
3,652,500
|
|
|
Other payables and accrued
liabilities
|
|
22,632,005
|
|
|
19,246,814
|
|
|
Other payable - related
parties
|
|
3,150,659
|
|
|
3,087,527
|
|
|
Accrued interest - holder of
noncontrolling interest
|
|
-
|
|
|
2,068,526
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|
|
Customer deposits
|
|
4,120,667
|
|
|
3,868,577
|
|
|
Taxes payable
|
|
7,415,225
|
|
|
8,774,079
|
|
|
Investment payable
|
|
74,816
|
|
|
2,195,365
|
|
|
Current maturities of notes
payable, net of discount of $6,639,846 as of September 30,
2010
|
|
860,154
|
|
|
-
|
|
|
Total current
liabilities
|
|
48,103,831
|
|
|
51,118,179
|
|
|
|
|
|
|
|
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|
|
OTHER
LIABILITIES:
|
|
|
|
|
|
|
|
Other payable - land use
right
|
|
329,086
|
|
|
323,687
|
|
|
Derivative liability -
conversion option
|
|
11,255,816
|
|
|
19,960,145
|
|
|
Fair value of derivative
instruments
|
|
7,133,071
|
|
|
12,701,262
|
|
|
Notes payable, net of discount
of $8,464,380 as of December 31, 2009
|
|
-
|
|
|
89,760
|
|
|
Total other
liabilities
|
|
18,717,973
|
|
|
33,074,854
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
66,821,804
|
|
|
84,193,033
|
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND
CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY:
|
|
|
|
|
|
|
|
Common stock, $0.0001 par value,
100,000,000 shares authorized, 23,513,533 and 23,056,442 shares
issued and outstanding at September 30 ,2010 and December 31, 2009,
respectively
|
|
2,351
|
|
|
2,305
|
|
|
Additional
paid-in-capital
|
|
28,134,566
|
|
|
22,517,077
|
|
|
Statutory reserves
|
|
26,307,589
|
|
|
17,414,769
|
|
|
Retained earnings
|
|
33,567,859
|
|
|
5,302,605
|
|
|
Accumulated other comprehensive
income
|
|
5,835,101
|
|
|
4,227,394
|
|
|
Total shareholders'
equity
|
|
93,847,466
|
|
|
49,464,150
|
|
|
|
|
|
|
|
|
|
|
NONCONTROLLING
INTEREST
|
|
42,253,573
|
|
|
34,179,161
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
136,101,039
|
|
|
83,643,311
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
equity
|
$
|
202,922,843
|
|
$
|
167,836,344
|
|
|
|
|
|
|
|
|
|
|
|
CHINA
BIOLOGIC PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
(LOSS)
FOR THE THREE AND NINE MONTHS
ENDED SEPTEMBER 30, 2010 AND 2009
(Unaudited)
|
|
|
|
Three months
ended
|
|
|
Nine months
ended
|
|
|
|
|
September
30,
|
|
|
September
30,
|
|
|
|
|
2010
|
|
|
2009
|
|
|
2010
|
|
|
2009
|
|
|
REVENUES
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
35,847,351
|
|
$
|
26,924,616
|
|
$
|
103,289,680
|
|
$
|
80,861,353
|
|
|
Revenues - related
party
|
|
156,414
|
|
|
115,123
|
|
|
720,954
|
|
|
508,529
|
|
|
Total revenues
|
|
36,003,765
|
|
|
27,039,739
|
|
|
104,010,634
|
|
|
81,369,882
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF REVENUES
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
8,682,502
|
|
|
6,960,901
|
|
|
26,126,366
|
|
|
22,337,596
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT
|
|
27,321,263
|
|
|
20,078,838
|
|
|
77,884,268
|
|
|
59,032,286
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling expenses
|
|
2,229,685
|
|
|
619,467
|
|
|
5,029,474
|
|
|
2,313,577
|
|
|
General and administrative
expenses
|
|
5,832,118
|
|
|
5,169,137
|
|
|
16,700,320
|
|
|
14,996,846
|
|
|
Research and development
expenses
|
|
431,991
|
|
|
262,500
|
|
|
1,332,025
|
|
|
1,098,083
|
|
|
Total operating
expenses
|
|
8,493,794
|
|
|
6,051,104
|
|
|
23,061,819
|
|
|
18,408,506
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME FROM
OPERATIONS
|
|
18,827,469
|
|
|
14,027,734
|
|
|
54,822,449
|
|
|
40,623,780
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER (INCOME)
EXPENSE :
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in loss (income) of
unconsolidated affiliate
|
|
(323,015)
|
|
|
(31,051)
|
|
|
(668,670)
|
|
|
19,092
|
|
|
Change in fair value of
derivative liabilities
|
|
(3,792,793)
|
|
|
13,242,333
|
|
|
(9,897,199)
|
|
|
14,931,088
|
|
|
Interest expense, net
|
|
511,287
|
|
|
724,771
|
|
|
1,131,345
|
|
|
1,979,538
|
|
|
Other income - related
party
|
|
(453)
|
|
|
-
|
|
|
(915,191)
|
|
|
-
|
|
|
Other expense, net
|
|
142,736
|
|
|
337,645
|
|
|
339,970
|
|
|
372,955
|
|
|
Total other (income) expense ,
net
|
|
(3,462,238)
|
|
|
14,273,698
|
|
|
(10,009,745)
|
|
|
17,302,673
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE PROVISION
FOR INCOME TAXES AND NONCONTROLLING INTEREST
|
|
22,289,707
|
|
|
(245,964)
|
|
|
64,832,194
|
|
|
23,321,107
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION FOR INCOME
TAXES
|
|
3,499,558
|
|
|
2,535,023
|
|
|
11,782,505
|
|
|
7,547,318
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
(LOSS)
|
|
18,790,149
|
|
|
(2,780,987)
|
|
|
53,049,689
|
|
|
15,773,789
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net income
attributable to noncontrolling interest
|
|
5,115,258
|
|
|
3,412,582
|
|
|
15,891,615
|
|
|
10,738,295
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME ATTRIBUTABLE TO
CONTROLLING INTEREST
|
|
13,674,891
|
|
|
(6,193,569)
|
|
|
37,158,074
|
|
|
5,035,494
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE INCOME
(LOSS) :
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation
adjustments
|
|
1,980,488
|
|
|
(61,912)
|
|
|
2,412,606
|
|
|
349,415
|
|
|
Comprehensive (income) loss
attributable to noncontrolling interest
|
|
(666,131)
|
|
|
(43,287)
|
|
|
(804,899)
|
|
|
(437,227)
|
|
|
COMPREHENSIVE INCOME
ATTRIBUTABLE TO CONTROLLING INTEREST
|
$
|
14,989,248
|
|
$
|
(6,298,768
|
|
$
|
38,765,781
|
|
$
|
4,947,682
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC EARNINGS PER
SHARE :
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
shares
|
|
23,513,533
|
|
|
21,632,793
|
|
|
23,471,084
|
|
|
21,504,002
|
|
|
Earnings per
share
|
$
|
0.58
|
|
$
|
(0.29)
|
|
$
|
1.58
|
|
$
|
0.23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DILUTED EARNINGS PER
SHARE :
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
shares
|
|
26,578,471
|
|
|
21,632,793
|
|
|
26,575,801
|
|
|
21,767,086
|
|
|
Earnings per share
|
$
|
0.53
|
|
$
|
(0.29)
|
|
$
|
1.44
|
|
$
|
0.23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHINA
BIOLOGIC PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 2010 AND 2009
(Unaudited)
|
|
|
|
2010
|
|
|
2009
|
|
|
CASH FLOWS FROM OPERATING
ACTIVITIES:
|
|
|
|
|
|
|
|
Net income attributable to
controlling interest
|
$
|
37,158,074
|
|
$
|
5,035,494
|
|
|
Net income attributable to
noncontrolling interest
|
|
15,891,615
|
|
|
10,738,295
|
|
|
Consolidated net
income
|
|
53,049,689
|
|
|
15,773,789
|
|
|
Adjustments to reconcile net
income to cash provided by operating activities:
|
|
|
|
|
|
|
|
Depreciation
|
|
2,379,794
|
|
|
2,158,206
|
|
|
Amortization
|
|
2,614,637
|
|
|
2,654,269
|
|
|
Loss on disposal of
equipment
|
|
9,685
|
|
|
114,246
|
|
|
Recovery of bad debt previously
reserved
|
|
(6,694)
|
|
|
(9,621)
|
|
|
Allowance for bad debt -
accounts receivables
|
|
-
|
|
|
90,442
|
|
|
Allowance for bad debt - other
receivables and prepayment
|
|
434,105
|
|
|
659,788
|
|
|
Allowance for obsolete
inventories
|
|
121,244
|
|
|
-
|
|
|
Deferred tax assets
|
|
(206,758)
|
|
|
-
|
|
|
Stock based
compensation
|
|
681,653
|
|
|
62,281
|
|
|
Change in fair value of
derivative liabilities
|
|
(9,897,199)
|
|
|
14,931,088
|
|
|
Amortization of deferred note
issuance cost
|
|
258,753
|
|
|
110,938
|
|
|
Amortization of discount on
convertible notes
|
|
784,822
|
|
|
45,175
|
|
|
Equity in (income) loss of
unconsolidated affiliate
|
|
(668,670)
|
|
|
19,092
|
|
|
Change in operating assets and
liabilities:
|
|
|
|
|
|
|
|
Accounts receivable
|
|
(4,450,082)
|
|
|
(1,306,293)
|
|
|
Accounts receivable - related
party
|
|
(20,176)
|
|
|
378,308
|
|
|
Other receivables
|
|
(439,357)
|
|
|
(485,641)
|
|
|
Inventories
|
|
(10,666,230)
|
|
|
(9,729,616)
|
|
|
Prepayments and deferred
expenses
|
|
(746,863)
|
|
|
(511,819)
|
|
|
Accounts payable
|
|
9,738
|
|
|
(149,764)
|
|
|
Other payables and accrued
liabilities
|
|
1,456,220
|
|
|
4,236,622
|
|
|
Accrued interest - holder of
noncontrolling interest
|
|
(2,068,526)
|
|
|
1,319,555
|
|
|
Customer deposits
|
|
176,961
|
|
|
4,154,255
|
|
|
Taxes payable
|
|
(1,510,679)
|
|
|
942,929
|
|
|
Net cash provided by operating
activities
|
|
31,296,067
|
|
|
35,458,229
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES:
|
|
|
|
|
|
|
|
Cash acquired through
acquisition
|
|
-
|
|
|
11,945,303
|
|
|
Proceeds from dividend
receivable
|
|
-
|
|
|
147,256
|
|
|
Payments made for
acquisition
|
|
(4,026,415)
|
|
|
(10,373,854)
|
|
|
Payments made for unconsolidated
affiliate
|
|
-
|
|
|
(3,224,980)
|
|
|
Purchase of plant and
equipment
|
|
(6,225,041)
|
|
|
(2,323,903)
|
|
|
Additions to intangible
assets
|
|
(88,238)
|
|
|
(1,374,146)
|
|
|
Proceeds from sale of
equipment
|
|
-
|
|
|
513
|
|
|
Advances on non-current
assets
|
|
(1,249,980)
|
|
|
(855,298)
|
|
|
Net cash used in investing
activities
|
|
(11,589,674)
|
|
|
(6,059,109)
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING
ACTIVITIES:
|
|
|
|
|
|
|
|
Proceeds from warrants
conversion
|
|
689,160
|
|
|
3,455,059
|
|
|
Proceeds from issuance of
convertible notes
|
|
-
|
|
|
8,967,516
|
|
|
Repayments of former
shareholders loan in acquiring company
|
|
-
|
|
|
(2,840,914)
|
|
|
Proceeds from short term loans -
bank
|
|
5,884,000
|
|
|
13,515,598
|
|
|
Payments on short term loans -
bank
|
|
(4,413,000)
|
|
|
(2,814,528)
|
|
|
Payments on long term loan -
bank
|
|
-
|
|
|
(5,863,600)
|
|
|
Repayments of non-controlling
shareholder loan
|
|
(3,652,500)
|
|
|
-
|
|
|
Payments on notes
payables
|
|
(48,731)
|
|
|
(29,318)
|
|
|
Distribution paid to
noncontrolling interest shareholders
|
|
(8,628,886)
|
|
|
(2,293,888)
|
|
|
Net cash (used in) provided by
financing activities
|
|
(10,169,957)
|
|
|
12,095,925
|
|
|
|
|
|
|
|
|
|
|
EFFECTS OF EXCHANGE RATE
CHANGE IN CASH
|
|
1,198,711
|
|
|
38,472
|
|
|
|
|
|
|
|
|
|
|
INCREASE IN
CASH
|
|
10,735,147
|
|
|
41,533,517
|
|
|
|
|
|
|
|
|
|
|
CASH and CASH EQUIVALENTS,
beginning of periods
|
|
53,843,951
|
|
|
8,814,616
|
|
|
|
|
|
|
|
|
|
|
CASH and CASH EQUIVALENTS,
end of periods
|
$
|
64,579,098
|
|
$
|
50,348,133
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION
|
|
|
|
|
|
|
|
Income taxes paid
|
$
|
13,477,608
|
|
$
|
7,525,262
|
|
|
Interest paid
|
$
|
247,649
|
|
$
|
911,846
|
|
|
Non-cash investing and financing
activities:
|
|
|
|
|
|
|
|
Reclassification of derivative
liability to equity related to conversion of convertible
notes
|
$
|
2,498,957
|
|
$
|
5,712,822
|
|
|
Reclassification of derivative
liability to equity related to exercise of warrants
|
$
|
1,747,765
|
|
$
|
-
|
|
|
Distribution paid in exchange of
holder of noncontrolling interest loan
|
$
|
-
|
|
$
|
3,737,283
|
|
|
Distribution paid by offsetting
accounts receivable - related party
|
$
|
-
|
|
$
|
943,907
|
|
|
Distribution paid by offsetting
loan due from holder of noncontrolling interest
|
$
|
-
|
|
$
|
4,470,995
|
|
|
Net assets acquired with
prepayments made in prior periods
|
$
|
-
|
|
$
|
14,248,548
|
|
|
Net assets addition with unpaid
investment
|
$
|
-
|
|
$
|
2,849,710
|
|
|
Plant and equipment addition
with unpaid commitment
|
$
|
1,485,944
|
|
$
|
-
|
|
|
Intangible assets acquired with
prepayments made in prior periods
|
$
|
441,300
|
|
$
|
131,931
|
|
|
Plant and equipment acquired
with prepayments made in prior periods
|
$
|
630,925
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
Contact:
|
Investor
Relations Contact:
|
|
Mr. Y. Tristan
Kuo
|
Mr.
Kalle Ahl, CFA,
Account Manager
|
|
Chief Financial
Officer
|
CCG Investor
Relations
|
|
China Biologic Products,
Inc.
|
Phone:
+1-646-833-3417
|
|
Tel:
+86-538-620-2206
|
Email: kalle.ahl@ccgir.com
|
|
Email:
IR@chinabiologic.com
|
www.ccgirasia.com
|
|
www.chinabiologic.com
|
|
|
|
Mr. Crocker Coulson,
President
|
|
|
Phone:
+1-646-213-1915
|
|
|
Email:
crocker.coulson@ccgir.com
|
|
|
|
SOURCE China Biologic Products, Inc.