TAI'AN, China, Aug. 9, 2011 /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"), today reported its
results for the three months ended June 30,
2011.
Financial highlights for the second quarter 2011
- Total sales in US dollars increased 1.9% in the second quarter
2011 to $41.7 million from the second
quarter 2010, with the benefit of 4.8% foreign exchange translation
gain. Total sales denominated in RMB decreased 2.9% in the second
quarter from the second quarter of last year.
- Gross profit decreased 8.5% to $29.2
million in the second quarter 2011 from the same period in
2010. The gross profit margin was 70.0% in the second quarter 2011
compared with 77.9% in the second quarter 2010.
- Income from operations decreased 24.3% to $17.2 million in the second quarter 2011 from the
prior second quarter.
- GAAP Net income attributable to China Biologic increased 28.3%
to $16.6 million or $0.28 per diluted share in the second quarter
2011 from the second quarter 2010.
- Excluding non-cash employee stock compensation, non-cash gain
related to change in fair value of derivative liability, and
interest on convertible notes, the non-GAAP adjusted net income
attributable to China Biologic was $8.7
million or $0.33 per diluted
share in the second quarter 2011, a 20.5% decrease from
$11.0 million or $0.41 per diluted share in last year's second
quarter.
CEO Comments
Mr. Chao Ming Zhao, Chief
Executive Officer of China Biologic, said, "We understand that
investors have concerns about the unexpected closing of four of our
plasma collection stations in Guizhou province that occurred on August 1, 2011 at the direction of the Guizhou
Provincial government's newly imposed plan and policy. These
stations accounted for about 34.1% of our total raw plasma volume
collected in 2010."
"To mitigate the effects from the closing of the 4 plasma
collection stations, we are working on alternative solutions and
opportunities that include minimizing the write-off of already
collected plasma from these 4 stations by performing all tests
required by the 90-day quarantine rules, reallocating resources
from the closed stations to maximize their utilization within the
Company, and exploring new regions for new plasma stations."
"In addition, we are adjusting our production plan and sales
strategy to leverage the available resources to maximize profit as
we respond to the changing market dynamics. For example, given the
limited supply of raw plasma in the future, we will focus on
supplying our products, which are critical and irreplaceable to
health care, via direct sales to our best customers. We remain
committed to accelerating our earnings growth in the future -- by
focusing on our direct institutional sales, broadening our
geographic reach, finding and creating new raw plasma sources,
continuing to develop a strong new product pipeline, and
considering possible prudent acquisitions, mergers and potential
international collaborations."
"Our sales, in terms of RMB, decreased slightly in the second
quarter, mainly due to weaker product pricing in a more competitive
market and lower revenue from high-value hyper-immune products due
to unavailability of specific vaccinated plasma raw material.
Additionally, we unified the labels and packaging of the products
from our two subsidiaries so that our Taibang brand becomes our
primary brand. It took us much longer to relabel and repackage the
products than we expected, which resulted in delays in shipping and
revenue recognition for IVIG products."
"Given that some factors are still evolving and it remains
uncertain how they will be resolved, we have revised our guidance
based on the current available information. For that reason, we
recommend an extra measure of caution in interpreting our revised
guidance."
"I assure you that we are working around the clock to recover
from the unexpected loss of the 4 raw plasma collection stations in
Guizhou. We plan to update you
about our progress when we reach meaningful milestones."
Results for the three months ended June 30, 2011
Our revenue increased by 1.9% to $41.7
million during the second quarter 2011 from $40.9 million for the same period in 2010. The
foreign exchange translation contributed a 4.8% increase in sales,
which translated into a 2.9% decrease in sales denominated in RMB.
The revenue decrease in terms of RMB was primarily a result of the
combined effect of the fluctuation on both price and volume of
plasma based products. Due to increased market competition, most of
the Company's plasma products experienced general price decreases
ranging from 4.2% to 16.2%.
Among all of products, only human immunoglobulin for intravenous
injection ("IVIG"), which had an approximately 3.2% average selling
price ("ASP"), increase as compared to the same quarter in 2010
year-over-year. Sales of Human Albumin remained the largest revenue
contributor, accounted for 51.3% of the total sales. While
experiencing approximately 4.2% ASP decline, sales volume of Human
Albumin increased 18.3% year-over-year.
IVIG, the second largest revenue contributor which accounted for
38.6% of total sales, experienced an average year-over-year volume
decrease of 2.7% in the second quarter of 2011.
Human Hepatitis B Immunoglobulin experienced the sharpest ASP
decrease, down 16.2% compared to the same period of prior year, and
contributed 4.5% of the total sales in the second quarter of 2011.
The price decrease in human hepatitis B immunoglobulin products was
mainly due to the Company's participation in a public health
program sponsored by PRC's Ministry of Health benefiting migrant
workers. The sales price for this public health program was lower
than the normal retail price in order to benefit migrant
workers.
Human tetanus immunoglobulin products experienced largest sales
volume increase of 77.1%, with a 5.3% ASP decline, and contributed
4.7% of total sales in the second quarter of 2011. The significant
volume variance of hyper-immune products year-over-year was
attributable to the availability of specific vaccinated plasma and
production lines.
Gross profit decreased $2.7
million or 8.5% to $29.2
million in the second quarter of 2011 from $31.8 million in the second quarter of 2010.
Gross profit margin was 70.0% in the second quarter of 2011, as
compared to the 77.9% for the same period in 2010. The decrease in
gross profit margin was primarily attributable to the decrease in
the ASP of most of products and increased cost of raw material
plasma due to our efforts to increase plasma collection volume.
Total operating expenses in the second quarter of 2011 increased
31.3% to $11.9 million, as compared
to $9.08 million in the second
quarter of 2010. As a percentage of sales, total operating expenses
increased to 28.6% in the second quarter of 2011, from 22.2% for
the same period in 2010.
Selling expenses increased by $1.2
million, or 63.6%, to $3.0
million in the second quarter of 2011 from $1.9 million in the second quarter of 2010.
Selling expenses as a percent of sales increased to 7.3% in the
second quarter of 2011 from 4.5% for the same period in 2010. The
increase in selling expenses was in line with our continuing effort
to expand our customer base in hospital and inoculation centers
throughout the PRC in a bid to counter the negative impact of the
general price decreases of our products caused by heightened
competitive pressures.
General and administrative expenses increased by $1.8 million, or 29.8%, to $7.7 million in the second quarter of 2011 from
$5.9 million in the second quarter of
2010. General and administrative expenses as a percent of sales
increased to 18.4% in the second quarter of 2011, from 14.4% in the
same period of 2010. The increase in general and administrative
expenses was primarily due to an increase in expenses related to
payroll and employee benefits, as well as an increase of
approximately $1.2 million in
non-cash employee stock compensation expenses. The increase in
payroll was mainly due to our efforts to enhance corporate
governance with the addition of two directors during the first
quarter of 2011, the addition of a new executive officer in
December 2010, and the addition of
our corporate offices in Beijing.
Research and development expenses decreased by $0.1 million, or 7.5%, to $1.2 million in the second quarter of 2011, from
$1.3 million in the second quarter of
2010. As a percent of sales, research and development expenses were
2.9% and 3.2% in the second quarter of 2011 and 2010, respectively.
The decrease in research and development expenses was primarily due
to the decreased cost associated with the development of two new
products, which we are waiting for the PRC's State Food and Drug
Administration ("SFDA") approval. Due to the delay of SFDA approval
process, we expect to receive the approval for these two new
products in early 2012.
Income from operations decreased 24.3% to $17.2 million in the second quarter of 2011, as
compared to $22.8 million in the
second quarter of 2010. The operating income margin was 41.4% and
55.7% for the quarter ended June 30,
2011 and 2010, respectively.
For the quarter ended June 30,
2011 and 2010, we recognized a gain from the change in fair
value of derivative liabilities in the amounts of $11.2 million and $2.3
million, respectively. The recognized gain from the change
in the fair value of derivative liabilities in the second quarter
of 2011 was mainly due to a decrease in the price of our common
stock from $15.96 as of March 31, 2011 to $10.20 as of June 30,
2011.
Our provision for income taxes increased to $5.3 million in the second quarter of 2011, from
$5.0 million in the second quarter of
2010, with effective income tax rate remained at 20%. The increase
of income tax provision was mainly due to the increase in
applicable income tax rate of Shandong Taibang and Guizhou Taibang
from 15% to 25% for the three months ended June 30, 2011, compared with the same period in
the prior year. Shandong Taibang is in the process of reapplying
for the High and New Technology Enterprise qualification for an
additional three years from 2011 to 2013. Guizhou Taibang, which
was entitled to a preferential income tax rate of 15% under the
previous 10-year Western Development Tax Concession, will apply for
the Tax Concession in order to continue to enjoy the 15%
preferential income tax rate from 2011 to 2020.
GAAP net income attributable to China Biologic in the second
quarter of 2011 was $16.6 million, or
$0.28 per diluted share, as compared
to $12.9 million, or $0.41 per diluted share, in the same period of
2010. Non-GAAP adjusted net income was $8.7
million, or $0.33 per diluted
share, in the second quarter of 2011, as compared to $11.0 million, or $0.41 per diluted share, in the second quarter of
2010. Non-GAAP adjusted net income and diluted earnings per share
in the second quarter 2011 excluded an aggregate $11.2 million of gains, which are related to the
change in the fair value of derivative liabilities, and added back
$1.2 million of non-cash employee
stock compensation expenses and $2.1
million of interest related to the convertible notes under
the if-converted method. Please refer to the table at the end of
this release for the reconciliation of our non-GAAP measures to the
nearest comparable GAAP measures.
Six Months Results
For the first six months ended June 30,
2011, our sales increased 12.0% to $76.1 million as compared to $68.0 million for the same period last year. The
foreign exchange translation contributed a 4.7% increase in sales,
which translated into a 7.3% increase in sales denominated in RMB.
The increase in sales during the 2011 period was primarily
attributable to a general mix of increases in prices and volumes
for certain of our plasma based products.
Gross profit for the first six months of 2011 was $54.3 million, increased 4.1% from $52.1 million in the same period in 2010. Gross
profit margin for the first six months of 2011 was 71.3%, as
compared to 76.7% for the same period in 2010. The decrease in
gross profit margin was mainly due to the price decreases of
certain of our products and increases in raw material costs.
Income from operations for the period was $31.8 million, down 11.8% from $36.0 million in the first six months of 2010.
The decrease in income from operations was mainly due to a 96.0%
increase in selling expenses and 39.2% increase in general and
administrative expenses for the period as compared to the same
period in 2010.
Net income for the first six months of 2011 was $30.5 million, down 11.6% from $34.5 million in the first six months of 2010.
Fully diluted earnings per share were $0.53 for the first six months of 2011 as
compared to $0.68 in the first six
months of 2010. Excluding non-cash employee stock 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 six months ended
June 30, 2011 was $16.7 million, or $0.62 per diluted share, a decrease of 10.0% from
non-GAAP net income of $18.6 million,
or $0.70 per diluted share, for the
six months ended June 30, 2010.
Financial Condition
As of June 30, 2011, the Company
had $76.8 million in cash and cash
equivalents, approximately $95.2
million in working capital, and a current ratio of 233.8%.
Total shareholders' equity as of June 30,
2011 was $181.6 million, as
compared with $145.0 million at
December 31, 2010.
Guidance and business outlook for 2011
China Biologic expects the revised total 2011 sales in the range
of approximately $140 million to $145
million. The Company expects 2011 adjusted net income to be
in the range of $28 million to $31
million, excluding any non-cash charge or gain related to
change in the fair value of derivative liabilities, stock-based
compensation expense, any adjustments in the U.S. federal income
tax provision in 2011 related to the look-through exception for
Subpart F income which expiring on December
31, 2011 and non-cash impairment losses associated, if any,
with the closures of 4 plasma collection stations in Guizhou. The Company has provided the revised
outlook based on the following factors:
- The unexpected closure of 4 plasma collection stations in
Guizhou, will limit our near-term
future raw plasma supply. Additionally, the unexpected closure of a
number of plasma collection stations in Guizhou may reduce China's plasma supply and could amplify the
supply and demand imbalance for plasma products in China. Therefore, we have revised our sales
and production strategies to maintain as smooth a product supply as
possible to our key customers in a longer term.
- The Company may have less imminent flexibility in reducing the
expenses for previously planned and ongoing marketing and sales
efforts (to expand its geographic markets, add new customers, and
increase direct sales to institutional customers), and in
minimizing the general and administrative expenses related to the 4
closed plasma collection stations. Therefore, we anticipate lower
adjusted net income for 2011 despite the modest anticipated growth
in sales in 2011.
Conference call
China Biologic will host a dial-in conference call at
7:00 a.m. EDT (New York) on August 10,
2011, to discuss its results for the second quarter 2011. To
participate in the conference call, please dial the appropriate
number about 10 minutes prior to the scheduled conference call
time:
The dial-in details for the live conference call are:
|
|
U.S. toll-free number
|
1 866 549
1292
|
|
Mainland China toll-free
number
|
800 876
8626
|
|
Hong Kong local
access
|
3005
2050
|
|
International toll
number
|
+852 3005 2050
|
|
Participant pass code
|
674 477#
|
|
|
|
|
|
A telephone replay of the call will be available after the
conclusion of the conference all through 7:00 a.m. EDT on August
17, 2011.
The dial-in details for the telephone replay are:
|
|
U.S. toll-free number
|
1 866 753
0743
|
|
Mainland China toll free
number
|
800 876
8594
|
|
Hong Kong local
access
|
3005
2020
|
|
International dial-in toll
number
|
+852 3005 2020
|
|
Replay pass code
|
138 012#
|
|
|
|
|
|
Use of non-GAAP financial measures
This news 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 (after adding back interest related to
the convertible notes under the if-converted method). 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
news 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 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
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,
among others, statements regarding: the Company's financial and
business outlook in 2011, the closure of the plasma collection
centers in Guizhou, its expected
effect on the Company's financial performance, business operations
and the industry, the Company's ability and plan to seek
alternative solutions and opportunities, the Company's production
plan, sales strategy and its ability to maximize profit and adapt
to changing market, the ability of the Company to achieve its
commercial objectives, the business strategy, plans, and objectives
of the Company and its subsidiaries, including its ability to
successfully implement its growth strategies, including its
strategy to expand direct sales to hospitals and inoculation
centers in order to boost future sales, 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 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 news 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 its potential inability to achieve the expected
financial performance in 2011 and growth, potential inability to
find alternative sources of plasma, potential inability to increase
production at permitted sites, potential inability to mitigate the
financial consequences through cost cutting or other efficiencies,
and potential additional regulatory restrictions on its operations
and those additional risks and uncertainties discussed in the
Company's periodic reports that are filed with the Securities and
Exchange Commission and available on the SEC 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 statements follow.
|
|
CHINA
BIOLOGIC PRODUCTS, INC. AND SUBSIDIARIES
UNAUDITED
CONSOLIDATED STATEMENTS OF INCOME
|
|
|
|
For the
three months ended
|
|
For
the six months ended
|
|
|
|
June 30,
2011
|
|
June 30,
2010
|
|
June 30,
2011
|
|
June 30,
2010
|
|
Sales
|
|
|
|
|
|
|
|
|
|
External customers
|
$
|
41,664,996
|
$
|
40,580,807
|
$
|
76,060,234
|
$
|
67,442,329
|
|
Related party
|
|
462
|
|
327,509
|
|
76,046
|
|
564,540
|
|
Total sales
|
|
41,665,458
|
|
40,908,316
|
|
76,136,280
|
|
68,006,869
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
|
|
|
|
|
|
|
External customers
|
|
12,512,359
|
|
9,012,168
|
|
21,789,563
|
|
15,811,022
|
|
Related party
|
|
210
|
|
46,738
|
|
34,604
|
|
46,738
|
|
Cost of sales
|
|
12,512,569
|
|
9,058,906
|
|
21,824,167
|
|
15,857,760
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
29,152,889
|
|
31,849,410
|
|
54,312,113
|
|
52,149,109
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
Selling expenses
|
|
3,038,143
|
|
1,856,881
|
|
5,488,056
|
|
2,799,789
|
|
General and administrative
expenses
|
|
7,665,306
|
|
5,905,950
|
|
15,129,447
|
|
10,868,202
|
|
Research and development
expenses
|
|
1,218,977
|
|
1,317,483
|
|
1,929,968
|
|
2,486,138
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
|
17,230,463
|
|
22,769,096
|
|
31,764,642
|
|
35,994,980
|
|
|
|
|
|
|
|
|
|
|
|
Other expenses /
(income)
|
|
|
|
|
|
|
|
|
|
Equity in income of equity method
investee
|
|
(463,688)
|
|
(157,114)
|
|
(734,082)
|
|
(345,655)
|
|
Change in fair value of derivative
liabilities
|
|
(11,175,384)
|
|
(2,270,829)
|
|
(12,197,249)
|
|
(6,104,406)
|
|
Interest expense
|
|
2,300,601
|
|
619,469
|
|
3,981,523
|
|
953,058
|
|
Interest income
|
|
(269,594)
|
|
(180,464)
|
|
(439,725)
|
|
(333,000)
|
|
Other expenses / (income),
net
|
|
846,051
|
|
102,465
|
|
1,070,282
|
|
(717,504)
|
|
Total other income,
net
|
|
(8,762,014)
|
|
(1,886,473)
|
|
(8,319,251)
|
|
(6,547,507)
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income tax
expense
|
|
25,992,477
|
|
24,655,569
|
|
40,083,893
|
|
42,542,487
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
5,317,249
|
|
4,961,895
|
|
9,580,465
|
|
8,033,042
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
20,675,228
|
|
19,693,674
|
|
30,503,428
|
|
34,509,445
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net income attributable to
the noncontrolling interest
|
|
4,075,523
|
|
6,757,992
|
|
7,594,748
|
|
10,910,014
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to China
Biologic Products, Inc.
|
$
|
16,599,705
|
$
|
12,935,682
|
$
|
22,908,680
|
$
|
23,599,431
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.67
|
$
|
0.55
|
$
|
0.94
|
$
|
1.01
|
|
Diluted
|
$
|
0.28
|
$
|
0.41
|
$
|
0.53
|
$
|
0.68
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used in
computation:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
24,632,774
|
|
23,511,435
|
|
24,492,728
|
|
23,449,508
|
|
Diluted
|
|
26,738,279
|
|
26,599,255
|
|
26,802,683
|
|
26,541,685
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHINA
BIOLOGIC PRODUCTS, INC. AND SUBSIDIARIES
UNAUDITED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
June
30,
2011
|
|
December
31,
2010
|
|
ASSETS
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
Cash and
cash equivalents
|
$
|
76,841,679
|
$
|
64,941,368
|
|
Accounts
receivable, net of allowance for doubtful accounts
|
|
20,392,860
|
|
9,922,111
|
|
Accounts
receivable - a related party
|
|
-
|
|
212,611
|
|
Inventories
|
|
62,598,637
|
|
52,300,447
|
|
Other
receivables
|
|
2,103,222
|
|
2,727,110
|
|
Prepayments
and prepaid expenses
|
|
2,044,279
|
|
855,338
|
|
Deferred tax
assets
|
|
2,401,806
|
|
1,860,753
|
|
Total Current Assets
|
|
166,382,483
|
|
132,819,738
|
|
|
|
|
|
|
|
Property, plant and equipment,
net
|
|
39,932,006
|
|
39,511,731
|
|
Intangible assets,
net
|
|
13,124,987
|
|
14,559,020
|
|
Land use rights, net
|
|
4,954,026
|
|
4,701,450
|
|
Prepayments and deposits for
property, plant and equipment
|
|
6,429,300
|
|
4,254,423
|
|
Goodwill
|
|
18,129,811
|
|
17,778,231
|
|
Equity method
investment
|
|
8,183,215
|
|
7,297,201
|
|
Total Assets
|
$
|
257,135,828
|
$
|
220,921,794
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
Short-term bank loans
|
$
|
18,564,000
|
$
|
3,034,000
|
|
Accounts payable
|
|
5,593,488
|
|
4,392,772
|
|
Due to
related parties
|
|
3,262,995
|
|
3,192,140
|
|
Other
payables and accrued expenses
|
|
21,738,685
|
|
21,606,730
|
|
Advance
from customers
|
|
4,496,574
|
|
3,560,018
|
|
Income
tax payable
|
|
9,555,911
|
|
6,659,805
|
|
Other
taxes payable
|
|
2,759,165
|
|
2,146,868
|
|
Convertible notes
|
|
-
|
|
1,196,233
|
|
Derivative liabilities - embedded conversion option in
convertible notes
|
|
-
|
|
14,561,661
|
|
Derivative liabilities - warrants
|
|
5,188,004
|
|
11,095,592
|
|
Total Current Liabilities
|
|
71,158,822
|
|
71,445,819
|
|
Other
payable
|
|
338,604
|
|
333,008
|
|
Deferred tax liabilities
|
|
3,999,634
|
|
4,098,834
|
|
Total Liabilities
|
|
75,497,060
|
|
75,877,661
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
|
Common
stock: par value $.0001; 100,000,000 shares authorized; 25,551,125
and 24,351,125 shares issued and outstanding at June 30, 2011 and
December 31, 2010, respectively
|
|
2,555
|
|
2,435
|
|
Additional paid-in capital
|
|
46,160,371
|
|
35,435,139
|
|
Retained earnings
|
|
78,647,781
|
|
55,739,101
|
|
Accumulated other comprehensive income
|
|
11,129,413
|
|
8,023,121
|
|
Total stockholders' equity
attributable to China Biologic Products, Inc.
|
|
135,940,120
|
|
99,199,796
|
|
|
|
|
|
|
|
Noncontrolling interest
|
|
45,698,648
|
|
45,844,337
|
|
|
|
|
|
|
|
Total Equity
|
|
181,638,768
|
|
145,044,133
|
|
|
|
|
|
|
|
Commitments
and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Equity
|
$
|
257,135,828
|
$
|
220,921,794
|
|
|
|
|
|
|
|
|
|
|
|
|
CHINA
BIOLOGIC PRODUCTS, INC. AND SUBSIDIARIES
UNAUDITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
For the six
months ended
|
|
|
|
June 30,
2011
|
|
June 30,
2010
|
|
CASH FLOWS FROM OPERATING
ACTIVITIES:
|
|
|
|
|
|
Net income
|
$
|
30,503,428
|
$
|
34,509,445
|
|
Adjustments to reconcile net
income to cash provided by operating activities:
|
|
|
|
|
|
Depreciation
|
|
2,192,436
|
|
1,670,321
|
|
Amortization
|
|
1,769,484
|
|
1,740,659
|
|
Loss on sale of property, plant and
equipment
|
|
133,218
|
|
3,020
|
|
(Reversal) / provision for doubtful
accounts, net
|
|
(14,674)
|
|
423,922
|
|
Write-down of obsolete
inventories
|
|
151,014
|
|
219,897
|
|
Deferred tax benefit
|
|
(677,477)
|
|
(311,476)
|
|
Stock compensation
|
|
2,418,287
|
|
617,841
|
|
Change in fair value of derivative
liabilities
|
|
(12,197,249)
|
|
(6,104,406)
|
|
Amortization of deferred note issuance
cost
|
|
91,945
|
|
171,667
|
|
Amortization of discount on convertible
notes
|
|
3,503,767
|
|
312,259
|
|
Equity in income of equity method
investee
|
|
(734,082)
|
|
(345,655)
|
|
Change in operating
assets and liabilities:
|
|
|
|
|
|
Accounts receivable - third
parties
|
|
(10,150,102)
|
|
(3,861,953)
|
|
Accounts receivable - a related
party
|
|
214,587
|
|
(6,264)
|
|
Other receivables
|
|
27,582
|
|
(95,231)
|
|
Inventories
|
|
(9,319,703)
|
|
(6,351,255)
|
|
Prepayments and prepaid
expenses
|
|
(1,299,510)
|
|
(849,198)
|
|
Accounts payable
|
|
1,200,716
|
|
(446,713)
|
|
Other payables and accrued
expenses
|
|
378,573
|
|
1,252,134
|
|
Accrued interest - noncontrolling
interest shareholders
|
|
-
|
|
(2,068,526)
|
|
Advance from customers
|
|
857,251
|
|
169,398
|
|
Income tax payable
|
|
2,735,990
|
|
(1,294,805)
|
|
Other taxes payable
|
|
563,983
|
|
-
|
|
Net cash provided by operating
activities
|
|
12,349,464
|
|
19,355,081
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES:
|
|
|
|
|
|
Acquisition of a
subsidiary, net of cash acquired
|
|
-
|
|
(4,022,288)
|
|
Purchase of
property, plant and equipment
|
|
(4,596,500)
|
|
(6,154,212)
|
|
Purchase of
intangible assets and land use right
|
|
(413,925)
|
|
(559,436)
|
|
Net cash used in investing
activities
|
|
(5,010,425)
|
|
(10,735,936)
|
|
|
|
|
|
|
|
|
|
|
|
|
CHINA
BIOLOGIC PRODUCTS, INC. AND SUBSIDIARIES
UNAUDTIED
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
|
|
|
|
For the six
months ended
|
|
|
|
June 30,
2011
|
|
June 30,
2010
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING
ACTIVITIES:
|
|
|
|
|
|
Proceeds from
warrants exercised
|
|
-
|
|
689,160
|
|
Proceeds from stock
option exercised
|
|
100,000
|
|
-
|
|
Proceeds from short
term bank loans
|
|
18,373,200
|
|
5,867,600
|
|
Repayment of short
term bank loans
|
|
(3,062,200)
|
|
(4,449,295)
|
|
Acquisition of
noncontrolling interest
|
|
(7,635,000)
|
|
-
|
|
Repayment of
noncontrolling interest shareholder loan
|
|
-
|
|
(3,652,500)
|
|
Dividend paid by
subsidiaries to noncontrolling interest shareholders
|
|
(5,589,920)
|
|
(4,864,240)
|
|
Net cash used in / (provided by)
financing activities
|
|
2,186,080
|
|
(6,409,275)
|
|
|
|
|
|
|
|
EFFECTS OF EXCHANGE RATE CHANGE
IN CASH
|
|
2,375,192
|
|
209,310
|
|
|
|
|
|
|
|
NET INCREASE IN CASH
|
|
11,900,311
|
|
2,419,180
|
|
|
|
|
|
|
|
Cash and cash equivalents,
beginning of period
|
|
64,941,368
|
|
53,843,951
|
|
|
|
|
|
|
|
Cash and cash equivalents, end
of period
|
$
|
76,841,679
|
$
|
56,263,131
|
|
|
|
|
|
|
|
Supplemental cash flow
information
|
|
|
|
|
|
Cash paid for
income taxes
|
$
|
7,521,952
|
$
|
9,500,399
|
|
Cash paid for
interest expense (net of capitalized interest)
|
$
|
370,918
|
$
|
161,684
|
|
Noncash investing
and financing activities:
|
|
|
|
|
|
Convertible notes conversion
|
$
|
12,972,000
|
$
|
2,498,957
|
|
Reclassification of warrant liability to paid-in capital upon
warrants conversion
|
$
|
-
|
$
|
1,747,765
|
|
Utilization of prepayments and deposits to acquire intangible
assets
|
$
|
-
|
$
|
440,070
|
|
Utilization of prepayments and deposits to acquire property,
plant and equipment
|
$
|
836,000
|
$
|
629,166
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
|
|
FOR THE
THREE MONTHS ENDED JUNE 30, 2011 AND 2010
|
|
|
|
|
|
Three months
Ended
June 30, 2011
|
|
Three months
Ended
June 30, 2010
|
|
Net Income (Loss) Diluted
EPS
|
|
Net
Income
|
|
EPS
|
|
|
Net
Income
|
|
EPS
|
|
Adjusted Net Income for diluted
net income per share - Non GAAP
|
$
|
8,744,754
|
$
|
0.33
|
|
$
|
10,994,991
|
$
|
0.41
|
|
Non-cash employee stock
compensation
|
$
|
(1,243,405)
|
|
|
|
$
|
(45,948)
|
|
|
|
Adjusted Net Income for diluted
net income per share
|
$
|
7,501,349
|
$
|
0.28
|
|
$
|
10,949,043
|
$
|
0.41
|
|
Interest on the Notes
|
$
|
(2,077,028)
|
|
|
|
$
|
(284,190)
|
|
|
|
Gain from change in fair value
of embedded conversion option in the Notes
|
$
|
5,781,624
|
|
|
|
$
|
1,752,403
|
|
|
|
Gain from change in fair value
of warrants
|
$
|
5,393,760
|
|
|
|
$
|
518,426
|
|
|
|
Net Income attributable to
controlling interest
|
$
|
16,599,705
|
|
|
|
$
|
12,935,682
|
|
|
|
Weighted average number of
Shares
|
|
26,738,279
|
|
|
|
|
26,599,255
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
|
|
FOR THE SIX
MONTHS ENDED JUNE 30, 2011 AND 2010
|
|
|
|
|
|
Six months
Ended
June 30, 2011
|
|
Six months
Ended
June 30, 2010
|
|
Net Income (Loss) Diluted
EPS
|
|
Net
Income
|
|
EPS
|
|
|
Net
Income
|
|
EPS
|
|
Adjusted Net Income for diluted
net income per share - Non GAAP
|
$
|
16,709,885
|
$
|
0.62
|
|
$
|
18,569,177
|
$
|
0.70
|
|
Non-cash employee stock
compensation
|
$
|
(2,418,287)
|
|
|
|
$
|
(617,841)
|
|
|
|
Adjusted Net Income for diluted
net income per share
|
$
|
14,291,598
|
$
|
0.53
|
|
$
|
17,951,336
|
$
|
0.68
|
|
Interest on the Notes
|
$
|
(3,580,167)
|
|
|
|
$
|
(456,311)
|
|
|
|
Gain from change in fair value
of embedded conversion option in the Notes
|
$
|
6,289,661
|
|
|
|
$
|
3,809,745
|
|
|
|
Gain from change in fair value
of warrants
|
$
|
5,907,588
|
|
|
|
$
|
2,294,661
|
|
|
|
Net Income attributable to
controlling interest
|
$
|
22,908,680
|
|
|
|
$
|
23,599,431
|
|
|
|
Weighted average number of
Shares
|
|
26,802,683
|
|
|
|
|
26,541,685
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company Contact
|
|
Mr. Y. Tristan Kuo
|
|
Chief Financial
Officer
|
|
China Biologic Products,
Inc.
|
|
Telephone:
+86-538-6202206
|
|
Email:
ir@chinabiologic.com
|
|
www.chinabiologic.com
|
|
|
|
|
SOURCE China Biologic Products, Inc.