BEIJING, March 12, 2012 /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 financial results for the
year ended December 31, 2011.
Financial highlights for the year 2011
- Total sales increased $13.4
million or 9.6% to $153.1
million for the year ended December
31, 2011, from $139.7 million
in 2010, including the benefit of a 5.0% gain from foreign exchange
translation. Total sales in terms of RMB increased 4.6% in 2011
from 2010.
- Gross profit increased $4.3
million or 4.2% to $107.1
million in 2011 from $102.7
million in 2010. The gross profit margin decreased by 3.6%
to 69.9% in 2011 from 73.5% in 2010.
- Income from operations decreased by $36.4 million or 53.0% to $32.2 million in 2011 from $68.6 million in 2010. The year 2011 included a
non-cash charge for impairment of goodwill of $18.2 million and non-cash loss on abandonment of
long-lived assets of $6.6
million.
- GAAP net income attributable to China Biologic was $18.2 million in 2011 or $0.37 per diluted share, compared with
$31.5 million or $1.30 per diluted share in 2010.
- Non-GAAP adjusted net income was $36.5
million or $1.37 per diluted
share in 2011 compared with $39.0
million or $1.61 per diluted
share in 2010.
CEO Comments
Mr. Chao Ming Zhao, Chief
Executive Officer of China Biologic, said, "As we stated in July,
the supply for raw plasma in our Guizhou facility was unfortunately impacted by
the closures of our four plasma collection stations at the
direction of the Guizhou
provincial government's then newly imposed plan. Those stations had
accounted for about 34% of our total raw plasma volume collected in
2010.
"Since then, we have developed alternative solutions and
opportunities to mitigate the negative impacts of the closures of
these plasma collection stations, reallocated resources from the
closed stations to maximize their utilization within our company,
and continued to aggressively explore new regions for new plasma
stations. The process of locating and developing new stations
includes numerous time-consuming activities and uncertainties,
including analyzing and selecting the appropriate locations for
successful plasma stations, gaining the extensive and detailed
sequential approvals at various levels of government, station
construction, equipment installation, inspections and licensing,
and donor promotion and education programs.
"We have adjusted our production plan and sales and marketing
strategy to leverage our continuing plasma resources to maximize
profit, given the changing market dynamics. We have focused on
supplying our life-saving products through our direct sales to
those facilities with patients who have the most critical medical
needs and to our best long-term customers. We are also focusing on
our most profitable products.
"In his recent statement, Mr. Zhu
Chen, China's Minister of
Health, encouraged the country to double plasma supply from 2012 to
2016, as part of China's newest
five year plan. According to Mr. Chen, the current supply of plasma
can barely meet half of the potential demand for plasma protein
products. We hope the Minister's statements will induce local
government's support and cooperation in broadening regions for
development and building of new plasma collection stations.
"The demand for most of our plasma products continues to hold
relatively strong, with China's
growing and aging population, increasing urbanization, and economic
growth, the government's promotion of health care and its
strategies and policies that encourage the expansion in plasma
collection and use of plasma products.
"We remain committed to accelerating our long-term earnings
growth in the future by focusing on broadening our research and
development pipeline, strengthening our direct institutional sales,
expanding our geographic reach, locating and creating new raw
plasma sources, pursuing possible prudent acquisitions and mergers
and potential international collaborations.
"We will continue to take the actions needed to achieve our
strategic goals to create additional value for shareholders through
outstanding products that are vital to human health."
Results for the year 2011
Revenues increased $13.4 million
or 9.6% to $153.1 million in 2011
from $139.7 million in 2010. The
increase is mainly due to higher pricing and sale volumes of
certain products and the favorable changes of foreign exchange
translation. Total sales in terms of RMB increased 4.6% in 2011
from 2010.
|
|
|
|
Percent change 2011 /
2010
|
|
|
2010
|
|
2011
|
|
Total sales
|
|
Average selling
price
|
|
|
Products
|
|
Total
sales
|
|
Total
sales
|
|
% Total
sales
|
|
In
USD
|
|
In
RMB
|
|
In
USD
|
|
In
RMB
|
|
Sales
volume
|
Human albumin
|
|
$67.1
|
|
$83.4
|
|
54.5%
|
|
+24.4%
|
|
+18.8%
|
|
+1.4%
|
|
-3.2%
|
|
+22.7%
|
Human immunoglobulin
for intravenous injection
|
|
48.0
|
|
49.5
|
|
32.3%
|
|
+3.2%
|
|
-1.5%
|
|
+7.2%
|
|
+2.3%
|
|
-3.7%
|
Human hepatitis B
immunoglobulin
|
|
10.6
|
|
7.3
|
|
4.8%
|
|
-31.3%
|
|
-34.4%
|
|
+2.8%
|
|
-1.9%
|
|
-33.2%
|
Human rabies
immunoglobulin
|
|
7.5
|
|
2.2
|
|
1.5%
|
|
-70.2%
|
|
-71.5%
|
|
+10.6%
|
|
+5.6%
|
|
-73.0%
|
Human tetanus
immunoglobulin
|
|
4.1
|
|
7.2
|
|
4.7%
|
|
+76.4%
|
|
+68.4%
|
|
-3.4%
|
|
-7.8%
|
|
+82.6%
|
Other
|
|
2.4
|
|
3.5
|
|
2.2%
|
|
+38.0%
|
|
+31.7%
|
|
|
|
|
|
|
Total
|
|
$139.7
|
|
$153.1
|
|
100.0%
|
|
+9.6%
|
|
+4.6%
|
|
|
|
|
|
|
Sales of human albumin products increased in the year 2011 at
lower average prices in RMB with higher volumes as compared to
2010. Human albumin products, which were 54.5% of total sales in
2011, had an average price increase of 1.4% from 2010. Excluding
the foreign exchange translation effect, the average price of human
albumin products in RMB decreased 3.2% from 2010, which was mainly
due to the continued increase in volume of imported products
competing with our products. Sales volume of human albumin
increased 22.7% from 2010.
Sales of human immunoglobulin for intravenous injection ("IVIG")
increased in 2011 at higher average prices with lower volumes. IVIG
products, which were 32.3% of total sales in the year 2011, had an
average price increase of 7.2% from 2010. Excluding the foreign
exchange translation effect, the average price of IVIG products in
RMB increased 2.3% from 2010, which was primarily due to the
continuing shortage in supply of such products. Sales volume of
IVIG products decreased 3.7% from 2010, mainly due to lower
occurrences of hand-foot-and-mouth disease in 2011 than in
2010.
Sales of human hepatitis B immunoglobulin decreased 31.3% in
2011 at higher average prices with lower volumes. Human hepatitis B
immunoglobulin products, which were 4.8% of total sales in 2011,
had an average price increase of 2.8% in 2011 from 2010. Excluding
the foreign exchange translation effect, the average price of human
hepatitis B immunoglobulin products in RMB decreased 1.9% in 2011
from 2010 mainly due to our participation in a public health
program sponsored by China's
Ministry of Health to benefit migrant workers in which our product
sales price was lower than the normal retail price. Sales volume of
human hepatitis B immunoglobulin products decreased 33.2% in 2011
from 2010, mainly due to lower demand as a result of a new
government program emphasizing inoculations for new-born infants
but not for pre-natal mothers.
Sales of human rabies immunoglobulin decreased 70.2% in 2011 at
higher average prices with lower volumes. Human rabies
immunoglobulin products, which were 1.5% of total sales, had an
average price increase of 10.6% in 2011 from 2010. Excluding the
foreign exchange translation effect, the average price of human
rabies immunoglobulin products in RMB increased 5.6% in 2011 from
2010, which was mainly due to less available rabies products
national wide as compared with the prior year. Sales volume of
human rabies immunoglobulin products decreased 73.0% in 2011 from
2010 mainly due to lower availability of qualified raw material
needed to manufacture the hyper-immune products.
Sales of human tetanus immunoglobulin sales increased 76.4% in
2011 at lower average prices with higher volumes. Human tetanus
immunoglobulin products, which were 4.7% of total sales in 2011,
had an average price decrease of 3.4% from 2010. Excluding the
foreign exchange translation effect, the average price of human
tetanus immunoglobulin products in RMB decreased 7.8% in 2011 from
2010 mainly due to the higher competition from an increasingly
saturated market. Sales volume of human tetanus immunoglobulin
products increased 82.6% mainly due to more prior year stored
tetanus plasma being processed.
Cost of sales increased by $9.1
million or 24.5% to $46.0
million in 2011 from $37.0
million in 2010. Cost of sales as a percent of total sales
was 30.1% in 2011 compared with 26.5% in 2010. The increase in cost
of sales, as well as the increase in cost of sales as a percent of
sales, was mainly due to the increase in sales and the increase in
cost of plasma paid to donors along with a change in the mix of
products that were sold during 2011. In an effort to increase
plasma collection volume and expand our donor base, we increased
the nutrition fees paid to donors.
Gross profit increased by $4.3
million or 4.2% to $107.1
million in 2011 from $102.7
million in 2010. The gross profit margin (gross profit as a
percent of total sales) decreased 3.6% to 69.9% in 2011 from 73.5%
in 2010 mainly due to average price and sales volume decreases in
certain products and higher raw material costs as discussed above,
which outpaced the price and sales volume increases of our other
products.
Total operating expenses increased by $40.7 million or 119.0% to $74.9 million in 2011 from $34.2 million in 2010, primarily due to a
goodwill impairment loss of $18.2
million, a loss on abandonment of long-lived assets of
$6.6 million, a 98.0% increase in
selling expenses, a 28.8% increase in general and administrative
expenses and a 70.3% increase in research and development expenses
in 2011. As a percent of total sales, total expenses increased by
24.4% to 48.9% in 2011 from 24.5% in 2010. Excluding the non-cash
charge for impairment of goodwill and loss on abandonment of
long-lived assets, operating expenses were $50.1 million, up $15.9
million or 46.6% in 2011 from 2010.
Selling expenses increased to $14.6
million or 98.0% in 2011 from $7.4
million in 2010. Selling expenses as a percent of total
sales increased by 4.2% to 9.5% in 2011 from 5.3% in 2010. The
increase in selling expenses was primarily due to our increased
promotional and conference activities as we continued our efforts
in expanding our customer base into hospitals and inoculation
centers throughout China.
General and administrative ("G&A") expenses increased
$7.1 million or 28.8% to $31.5 million from $24.5
million in 2010. As a percentage of total sales, G&A
expenses were 20.6% and 17.5% for 2011 and 2010, respectively. The
increase in G&A expenses was mainly due to an increase in
expenses related to payroll expenses and employee benefits, as well
as an increase of approximately $2.6
million in non-cash employee stock compensation, which was
partially offset by the $1.0 million
decrease in legal expenses. The increase in payroll expense was
mainly due to general salary increases in the operating
subsidiaries and the addition of our new corporate offices in
Beijing in late 2010.
Research and development expenses increased $1.6 million or 70.3% to $4.0 million from $2.3
million in 2010. As a percent of total sales, research and
development expenses were 2.6% in 2011 and 1.7% in 2010. The
increase in research and development expenses was primarily due to
the increased cost of plasma used in research and the cost in
applying for the State Food and Drug Administration ("SFDA")
approval of our two new products. Due to a delay of the SFDA
approval process, we expect to receive the approval for these two
new products in mid or late 2012.
As a result of the closure of four plasma collection stations of
Guizhou Taibang , the Company incurred a goodwill impairment loss
of $18.2 million. In addition, we
incurred a loss on abandonment of Guizhou Taibang's long-lived
assets of $6.6 million.
Income from operations decreased 53.0% to $32.2 million in 2011 from $68.6 million in 2010. The operating profit
margin (income from operations as a percent of total sales)
declined to 21.0% in 2011 from 49.1% in 2010.
The embedded derivatives (including the conversion option) in
our senior secured convertible notes and warrants issued in
June 2009 are classified as
derivative liabilities carried at fair value. In 2011, we
recognized a gain of $12.0 million
from the change in the fair value of derivative liabilities,
compared with a loss of $3.2 million
in 2010. The recognized gain from the change in the fair value of
derivative liabilities in 2011 is mainly due to a decrease in the
price of our common stock from $16.39
per share as of December 31, 2010 to
$10.46 per share as of December 31, 2011.
Interest expense, net, increased $1.4
million to $3.3 million in
2011 from $1.9 million in 2010.
Interest expense increased $2.0
million to $4.7 million in
2011 from $2.7 million in 2010
primarily due to the effective interest charges on our convertible
notes of $3.6 million in 2011 and
$1.8 million in 2010. As of
December 31, 2011, the convertible
notes had been fully converted and therefore, interest expense is
expected to decrease. Interest income increased $0.6 million to $1.4
million in 2011 from $0.8
million in 2010.
The provision for income taxes decreased $2.7 million or 19.9% to $10.9 million in 2011 from $13.6 million in 2010. The effective income tax
rate was 25.8% in 2011 and 20.7% in 2010. The increase of the
effective income tax rate was mainly due to the non-deductible
impairment loss of goodwill and loss on abandonment of long-lived
assets.
GAAP net income attributable to China Biologic decreased
$13.3 million to $18.2 million or $0.37 per diluted share in 2011 compared with the
net income attributable to China Biologic of $31.5 million or $1.30 per diluted share in 2010.
Non-GAAP adjusted net income was $36.5
million or $1.37 per diluted
share in 2011 compared with $39.0
million or $1.61 per diluted
share in
2010.
Non-GAAP adjusted net income and diluted earnings per share in
2011 excluded an aggregate $12.0
million of gains, which are related to the change in the
fair value of derivative liabilities, and added back $3.6 million of effective interest charges on
convertible notes, $4.9 million of
non-cash employee stock compensation expenses, $18.2 million of non-cash impairment loss of
goodwill, $3.6 million of loss on
assets and $0.1 million of raw
material write-off as a result of the closing of the plasma
stations of Guizhou Taibang. Please see the table at the end of
this release for the reconciliation of our non-GAAP measures to the
nearest comparable GAAP measures.
Financial Condition
To date, we have financed our operations primarily through cash
flows from operations, augmented by short-term bank borrowings and
equity contributions by our stockholders. As of December 31, 2011, we had $89,411,835 in cash, primarily consisting of cash
on hand and demand deposits.
The following table sets forth a summary of our cash flows for
the periods indicated:
Cash
Flow
|
In U.S.
dollars
|
|
|
|
|
|
Year Ended December
31,
|
|
|
2011
|
|
2010
|
|
2009
|
Net cash provided by
operating activities
|
$
|
38,469,919
|
$
|
38,787,226
|
$
|
50,300,987
|
Net cash used in
investing activities
|
|
(7,127,252)
|
|
(15,851,475)
|
|
(6,860,454)
|
Net cash provided by
(used in) financing activities
|
|
(10,076,504)
|
|
(14,278,870)
|
|
1,564,925
|
Effects of exchange rate
change in cash
|
|
3,204,304
|
|
2,440,536
|
|
23,877
|
Net increase in cash and
cash equivalents
|
|
24,470,467
|
|
11,097,417
|
|
45,029,335
|
Cash and cash
equivalents at beginning of the year
|
|
64,941,368
|
|
53,843,951
|
|
8,814,616
|
Cash and cash equivalent
at end of the year
|
$
|
89,411,835
|
$
|
64,941,368
|
$
|
53,843,951
|
Operating Activities
Net cash provided by operating activities was $38.5 million in 2011, including net income of
$31.4 million. Net cash used in
investing activities in 2011 was $7.1
million, primarily for the acquisition of property, plant
and equipment. Net cash used in financing activities in 2011
totaled $10.1 million, primarily for
the dividends paid by subsidiaries to noncontrolling interest
shareholders.
As a result, the Company's cash increased by $24.5 million in 2011, including the effects of
foreign currency exchange rate changes on cash. As of December 31, 2011, working capital (current
assets minus current liabilities) was $115.9
million, and the current ratio was 270.8%. Total
shareholders' equity was $179.0
million as of December 31,
2011 compared with $145.0
million as of December 31,
2010.
The Company believes it has sufficient cash on hand and
continuing positive cash inflow from the sale of its plasma-based
products in the Chinese market for its operations.
Guidance and business outlook for 2012
China Biologic expects 2012 revenue to be in the range of
$168 million and $176 million. This guidance assumes only organic
growth and excludes acquisitions and construction of new
facilities. The guidance necessarily assumes no significant adverse
price changes as a result of provincial tendering or additional
price control imposed by National Development and Reform Commission
(NDRC) during 2012.
The Company expects 2012 adjusted net income to be in the range
of $38 million to $40 million,
excluding any non-cash charge or gain related to change in the fair
value of derivative liabilities and stock-based compensation
expense and any adjustments in the U.S. federal income tax
provision in 2012 related to the expiration of the look-through
exception for Subpart F income on December
31, 2011. To support its business expansion, the Company
expects to have substantially higher expenses in 2012 to expand its
geographic market coverage, add new customers, and increase direct
sales to institutional customers of its products. Due to the
expected expense increase associated with our marketing and sales
efforts, we anticipate modest growth in adjusted net income for
2012 despite anticipated growth in sales in 2012.
As a corporate policy, the Company does not intend to update
this guidance during the year unless required by the applicable
laws. This forecast reflects the Company's current and preliminary
views, which are subject to change.
Conference call
China Biologic will host a dial-in conference call at
8:00 a.m. EDT (New York) on March 13,
2012 (which is 8:00 p.m. in
Beijing and Hong Kong on the same day), to discuss its
results for the year 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
|
U.K. toll-free
number
|
0 800 279
7818
|
Mainland China toll-free
number
|
800 876 8626 (land
line)
|
Mainland China toll
mobile
|
400 681 6949
(mobile)
|
Mainland China toll
mobile
|
400 889 9481
(mobile)
|
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 March 19,
2011.
The dial-in details for the telephone replay are:
The dial-in details for
the telephone replay are:
|
|
U.S. toll-free
number
|
1 866 753
0743
|
U.K. toll-free
number
|
0 808 234
7126
|
Mainland China toll free
number
|
800 876 5016 (land
line)
|
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 at
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 2012, 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 2012 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.
Company
Contact
Mr. Y. Tristan Kuo
Chief Financial Officer
China Biologic Products, Inc.
Telephone: +86 53 8620 2206
Email: ir@chinabiologic.com
www.chinabiologic.com
Financial statements follow.
CHINA BIOLOGIC
PRODUCTS, INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
|
|
|
For the Years
Ended
|
|
|
December 31,
|
|
|
December 31,
|
|
|
December 31,
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
|
|
|
|
External customers
|
$
|
152,848,726
|
|
$
|
138,674,983
|
|
$
|
118,293,137
|
Related party
|
|
243,563
|
|
|
1,020,434
|
|
|
705,018
|
Total sales
|
|
153,092,289
|
|
|
139,695,417
|
|
|
118,998,155
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
|
|
|
|
|
|
External customers
|
|
45,841,438
|
|
|
36,793,775
|
|
|
32,544,743
|
Related party
|
|
176,223
|
|
|
157,374
|
|
|
77,165
|
Total cost of
sales
|
|
46,017,661
|
|
|
36,951,149
|
|
|
32,621,908
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
107,074,628
|
|
|
102,744,268
|
|
|
86,376,247
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
Selling expenses
|
|
14,595,794
|
|
|
7,372,348
|
|
|
3,529,242
|
General and administrative
expenses
|
|
31,519,824
|
|
|
24,467,495
|
|
|
20,706,948
|
Research and development
expenses
|
|
3,978,233
|
|
|
2,336,126
|
|
|
1,662,690
|
Impairment loss of goodwill
|
|
18,160,281
|
|
|
-
|
|
|
-
|
Loss on abandonment and write-off of
long-lived assets
|
|
6,603,028
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
|
32,217,468
|
|
|
68,568,299
|
|
|
60,477,367
|
|
|
|
|
|
|
|
|
|
Other
income/(expenses)
|
|
|
|
|
|
|
|
|
Equity in income of an equity method
investee
|
|
1,858,171
|
|
|
1,070,241
|
|
|
566,984
|
Change in fair value of derivative
liabilities
|
|
11,974,834
|
|
|
(3,233,288)
|
|
|
(28,915,328)
|
Interest expense, net
|
|
(3,313,656)
|
|
|
(1,930,165)
|
|
|
(3,930,249)
|
Other (expense)/income, net
|
|
(453,949)
|
|
|
1,125,972
|
|
|
638,573
|
Total other
income/(expenses), net
|
|
10,065,400
|
|
|
(2,967,240)
|
|
|
(31,640,020)
|
|
|
|
|
|
|
|
|
|
Earnings before income
tax expense
|
|
42,282,868
|
|
|
65,601,059
|
|
|
28,837,347
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
10,899,513
|
|
|
13,608,755
|
|
|
10,013,563
|
|
|
|
|
|
|
|
|
|
Net income
|
|
31,383,355
|
|
|
51,992,304
|
|
|
18,823,784
|
|
|
|
|
|
|
|
|
|
Less: Net income
attributable to the noncontrolling interest
|
|
13,201,645
|
|
|
20,449,421
|
|
|
16,615,658
|
|
|
|
|
|
|
|
|
|
Net income attributable
to China Biologic Products, Inc.
|
$
|
18,181,710
|
|
$
|
31,542,883
|
|
$
|
2,208,126
|
|
|
|
|
|
|
|
|
|
Net income per share of
common stock:
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.73
|
|
$
|
1.34
|
|
$
|
0.10
|
Diluted
|
$
|
0.37
|
|
$
|
1.30
|
|
$
|
0.10
|
|
|
|
|
|
|
|
|
|
Weighted average shares
used in computation:
|
|
|
|
|
|
|
|
|
Basic
|
|
25,028,796
|
|
|
23,586,506
|
|
|
21,754,911
|
Diluted
|
|
26,654,662
|
|
|
24,176,432
|
|
|
21,949,638
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
31,383,355
|
|
$
|
51,992,304
|
|
$
|
18,823,784
|
|
|
|
|
|
|
|
|
|
Other Comprehensive
income
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment, net of nil income taxes
|
|
6,846,721
|
|
|
5,177,515
|
|
|
524,027
|
|
|
|
|
|
|
|
|
|
Comprehensive
income
|
|
38,230,076
|
|
|
57,169,819
|
|
|
19,347,811
|
|
|
|
|
|
|
|
|
|
Less: Comprehensive
income attributable to the noncontrolling interest
|
|
15,320,805
|
|
|
21,831,352
|
|
|
17,071,446
|
|
|
|
|
|
|
|
|
|
Comprehensive income
attributable to China Biologic Products, Inc.
|
$
|
22,909,271
|
|
$
|
35,338,467
|
|
$
|
2,276,365
|
CHINA BIOLOGIC
PRODUCTS, INC. AND SUBSIDIARIES
|
UNAUDITED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
Cash
|
$
|
89,411,835
|
|
$
|
64,941,368
|
Accounts receivable, net of
allowance for doubtful accounts
|
|
16,757,368
|
|
|
9,922,111
|
Accounts receivable - a
related party
|
|
-
|
|
|
212,611
|
Inventories
|
|
71,338,590
|
|
|
52,300,447
|
Other receivables
|
|
2,594,461
|
|
|
2,727,110
|
Prepayments and prepaid
expenses
|
|
1,591,696
|
|
|
855,338
|
Deferred tax assets
|
|
1,999,563
|
|
|
1,860,753
|
Total Current
Assets
|
|
183,693,513
|
|
|
132,819,738
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
40,546,539
|
|
|
39,511,731
|
Intangible assets,
net
|
|
6,520,671
|
|
|
14,559,020
|
Land use rights,
net
|
|
5,487,343
|
|
|
4,701,450
|
Prepayments and deposits
for property, plant and equipment
|
|
4,287,492
|
|
|
4,254,423
|
Goodwill
|
|
-
|
|
|
17,778,231
|
Equity method
investment
|
|
8,357,017
|
|
|
7,297,201
|
Total Assets
|
$
|
248,892,575
|
|
$
|
220,921,794
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Short-term bank
loans
|
$
|
11,018,000
|
|
$
|
3,034,000
|
Accounts payable
|
|
4,996,463
|
|
|
4,392,772
|
Due to related
parties
|
|
3,319,938
|
|
|
3,192,140
|
Other payables and accrued
expenses
|
|
30,661,794
|
|
|
21,606,730
|
Advance from
customers
|
|
4,365,523
|
|
|
3,560,018
|
Advance from customers – a
related party
|
|
486,602
|
|
|
-
|
Income tax payable
|
|
5,373,633
|
|
|
6,659,805
|
Other taxes payable
|
|
2,189,913
|
|
|
2,146,868
|
Convertible notes
|
|
-
|
|
|
1,196,233
|
Derivative liabilities -
embedded conversion option in convertible notes
|
|
-
|
|
|
14,561,661
|
Derivative liabilities -
warrants
|
|
5,410,419
|
|
|
11,095,592
|
Total Current
Liabilities
|
|
67,822,285
|
|
|
71,445,819
|
Other payable
|
|
343,477
|
|
|
333,008
|
Deferred tax
liabilities
|
|
1,685,772
|
|
|
4,098,834
|
Total Liabilities
|
|
69,851,534
|
|
|
75,877,661
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
|
Common stock: par value
$.0001; 100,000,000 shares authorized; 25,601,125 and 24,351,125
shares issued and outstanding at December 31, 2011 and
2010
|
|
2,560
|
|
|
2,435
|
Additional paid-in
capital
|
|
48,838,311
|
|
|
35,435,139
|
Retained earnings
|
|
73,920,811
|
|
|
55,739,101
|
Accumulated other
comprehensive income
|
|
12,750,682
|
|
|
8,023,121
|
Total stockholders' equity
attributable to China Biologic Products, Inc.
|
|
135,512,364
|
|
|
99,199,796
|
|
|
|
|
|
|
Noncontrolling
interest
|
|
43,528,677
|
|
|
45,844,337
|
|
|
|
|
|
|
Total Equity
|
|
179,041,041
|
|
|
145,044,133
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
-
|
|
|
-
|
|
|
|
|
|
|
Total Liabilities and
Equity
|
$
|
248,892,575
|
|
$
|
220,921,794
|
CHINA BIOLOGIC
PRODUCTS, INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
For the Years
Ended
|
|
|
December 31,
|
|
|
December 31,
|
|
|
December 31,
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Net
income
|
$
|
31,383,355
|
|
$
|
51,992,304
|
|
$
|
18,823,784
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
4,253,661
|
|
|
3,607,184
|
|
|
2,709,623
|
Impairment loss of goodwill
|
|
18,160,281
|
|
|
-
|
|
|
-
|
Loss on abandonment and write-off of
long-lived assets
|
|
6,603,028
|
|
|
-
|
|
|
-
|
Amortization
|
|
3,394,808
|
|
|
3,566,269
|
|
|
3,358,532
|
Loss on sale of property, plant and
equipment
|
|
166,934
|
|
|
120,224
|
|
|
224,548
|
Reversal of allowance for doubtful
accounts, net
|
|
(19,611)
|
|
|
(57,624)
|
|
|
(13,089)
|
(Reversal of)/provision for doubtful accounts - other receivables
and prepayments
|
|
(10,254)
|
|
|
475,346
|
|
|
280,796
|
Write-down of obsolete
inventories
|
|
270,929
|
|
|
451,761
|
|
|
519,333
|
Deferred tax benefit, net
|
|
(2,595,103)
|
|
|
(1,101,171)
|
|
|
(1,552,661)
|
Stock compensation
|
|
4,896,232
|
|
|
2,341,783
|
|
|
62,281
|
Change in fair value of derivative
liabilities
|
|
(11,974,834)
|
|
|
3,233,288
|
|
|
28,915,328
|
Amortization of deferred note issuance
cost
|
|
91,945
|
|
|
258,753
|
|
|
247,199
|
Amortization of discount on convertible
notes
|
|
3,503,767
|
|
|
1,590,740
|
|
|
100,253
|
Equity in income of an equity method
investee
|
|
(1,858,171)
|
|
|
(1,070,241)
|
|
|
(566,984)
|
Change in operating assets and liabilities, net of
acquisition in Dalin:
|
|
|
|
|
|
|
|
|
Accounts receivable – third
parties
|
|
(6,343,922)
|
|
|
(7,837,681)
|
|
|
(1,707,714)
|
Accounts receivable – a related
party
|
|
217,180
|
|
|
17,158
|
|
|
197,284
|
Other receivables
|
|
134,623
|
|
|
182,686
|
|
|
(1,744,794)
|
Inventories
|
|
(17,079,263)
|
|
|
(16,026,215)
|
|
|
(12,456,975)
|
Prepayments and prepaid
expenses
|
|
(846,363)
|
|
|
(91,307)
|
|
|
(248,794)
|
Accounts payable
|
|
431,836
|
|
|
505,407
|
|
|
(58,467)
|
Other payables and accrued
expenses
|
|
6,098,105
|
|
|
(596,938)
|
|
|
7,058,773
|
Accrued interest - noncontrolling
interest shareholders
|
|
-
|
|
|
(2,086,010)
|
|
|
2,068,526
|
Advance from customers
|
|
661,327
|
|
|
(429,497)
|
|
|
274,768
|
Advance from customers – a related
party
|
|
479,059
|
|
|
-
|
|
|
-
|
Income tax payable
|
|
(1,512,591)
|
|
|
(1,046,906)
|
|
|
2,943,767
|
Other taxes payable
|
|
(37,039)
|
|
|
787,913
|
|
|
865,670
|
Net cash provided by
operating activities
|
|
38,469,919
|
|
|
38,787,226
|
|
|
50,300,987
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Dividends
received
|
|
1,209,880
|
|
|
-
|
|
|
384,087
|
Acquisition
of a subsidiary, net of cash acquired
|
|
-
|
|
|
(4,063,325)
|
|
|
1,573,079
|
Acquisition
of equity method investment
|
|
-
|
|
|
-
|
|
|
(3,225,420)
|
Payment for
property, plant and equipment
|
|
(7,968,870)
|
|
|
(10,313,432)
|
|
|
(3,522,768)
|
Payment for
intangible assets and land use right
|
|
(424,971)
|
|
|
(1,474,718)
|
|
|
(2,106,203)
|
Proceeds
from sale of property, plant and equipment
|
|
56,709
|
|
|
-
|
|
|
36,771
|
Net cash used in
investing activities
|
|
(7,127,252)
|
|
|
(15,851,475)
|
|
|
(6,860,454)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHINA BIOLOGIC
PRODUCTS, INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS (CONTINUED)
|
|
|
For the Years
Ended
|
|
|
December 31,
|
|
|
December 31,
|
|
|
December 31,
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Proceeds from warrants
exercised
|
|
-
|
|
|
1,232,486
|
|
|
3,649,770
|
Proceeds from stock
option exercised
|
|
300,000
|
|
|
97,600
|
|
|
350,000
|
Proceeds
from issuance of convertible notes
|
|
-
|
|
|
-
|
|
|
8,967,516
|
Acquisition
of noncontrolling interest
|
|
(7,635,000)
|
|
|
-
|
|
|
-
|
Repayment
of former shareholders loan in a subsidiary
|
|
-
|
|
|
-
|
|
|
(2,841,302)
|
Proceeds
from short term bank loans
|
|
18,595,200
|
|
|
5,917,600
|
|
|
13,536,688
|
Repayment
of short term bank loans
|
|
(10,847,200)
|
|
|
(7,397,000)
|
|
|
(18,355,572)
|
Repayment
of noncontrolling interest shareholder loan
|
|
-
|
|
|
(3,683,377)
|
|
|
(772,803)
|
Dividends
paid by subsidiaries to noncontrolling interest
shareholders
|
|
(10,489,504)
|
|
|
(10,446,179)
|
|
|
(2,969,372)
|
Net cash (used
in)/provided by financing activities
|
|
(10,076,504)
|
|
|
(14,278,870)
|
|
|
1,564,925
|
|
|
|
|
|
|
|
|
|
EFFECT OF FOREIGN
EXCHANGE RATE CHANGES ON CASH
|
|
3,204,304
|
|
|
2,440,536
|
|
|
23,877
|
|
|
|
|
|
|
|
|
|
NET INCREASE IN
CASH
|
|
24,470,467
|
|
|
11,097,417
|
|
|
45,029,335
|
|
|
|
|
|
|
|
|
|
Cash at beginning of
year
|
|
64,941,368
|
|
|
53,843,951
|
|
|
8,814,616
|
|
|
|
|
|
|
|
|
|
Cash at end of
year
|
$
|
89,411,835
|
|
$
|
64,941,368
|
|
$
|
53,843,951
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow
information
|
|
|
|
|
|
|
|
|
Cash paid
for income taxes
|
$
|
15,007,206
|
|
$
|
15,756,832
|
|
$
|
8,021,981
|
Cash paid
for interest expense
|
$
|
890,312
|
|
$
|
810,643
|
|
$
|
1,131,271
|
Noncash
investing and financing activities:
|
|
|
|
|
|
|
|
|
Reclassification of warrant liability to paid-in
capital upon warrants exercise
|
$
|
-
|
|
$
|
3,045,704
|
|
$
|
4,921,639
|
Convertible notes conversion
|
$
|
12,972,000
|
|
$
|
7,447,095
|
|
$
|
2,187,330
|
Distribution paid by offsetting accounts receivable -
related party
|
$
|
-
|
|
$
|
-
|
|
$
|
944,036
|
Distribution paid in exchange of noncontrolling
interest shareholders loan
|
$
|
-
|
|
$
|
-
|
|
$
|
3,665,250
|
Distribution paid by offsetting loan and interest due
from holder of noncontrolling interest
|
$
|
-
|
|
$
|
-
|
|
$
|
4,647,924
|
Net assets acquired with prepayments made in prior
periods
|
$
|
-
|
|
$
|
-
|
|
$
|
14,250,492
|
Net assets acquired with unpaid investment
|
$
|
-
|
|
$
|
-
|
|
$
|
2,850,098
|
Transfer from prepayments and deposits to property,
plant and equipment
|
$
|
959,660
|
|
$
|
1,078,348
|
|
$
|
2,296,113
|
Land use right acquired with prepayments made in prior
periods
|
$
|
312,060
|
|
$
|
-
|
|
$
|
146,610
|
Acquisition of property, plant and equipment included
in payables
|
$
|
429,564
|
|
$
|
2,605,583
|
|
$
|
373,397
|
|
|
|
|
|
|
|
|
|
CHINA BIOLOGIC
PRODUCTS, INC. AND SUBSIDIARIES
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
|
FOR THE YEARS ENDED
DECEMBER 31, 2011 AND 2010
|
|
|
|
|
|
|
|
For The Year
Ended
|
|
For The Year
Ended
|
|
|
12/31/2011
|
|
12/31/2010
|
Net Income Diluted
EPS
|
|
|
Net Income
|
|
EPS
|
|
|
Net Income
|
|
EPS
|
Adjusted Net Income for
diluted net income per share - Non GAAP
|
|
$
|
36,502,178
|
|
$
|
1.37
|
|
$
|
38,967,447
|
|
$
|
1.61
|
Impairment loss of
goodwill
|
|
$
|
(18,160,281)
|
|
|
|
|
$
|
-
|
|
|
|
Loss on abandonment and
write-off of long-lived assets
|
|
$
|
(3,565,635)
|
|
|
|
|
$
|
-
|
|
|
|
Written-off of raw
material attributable to controlling interest due to closure of
plasma stations
|
|
$
|
(90,506)
|
|
|
|
|
$
|
-
|
|
|
|
Interest on the
Notes
|
|
$
|
-
|
|
|
|
|
$
|
(1,849,493)
|
|
|
|
Loss from change in fair
value of embedded conversion option in the Notes
|
|
$
|
-
|
|
|
|
|
$
|
(1,793,254)
|
|
|
|
Loss from change in fair
value of warrants
|
|
$
|
-
|
|
|
|
|
$
|
(1,668,067)
|
|
|
|
Non-cash employee stock
compensation
|
|
$
|
(4,896,232)
|
|
|
|
|
$
|
(2,341,783)
|
|
|
|
Adjusted Net Income for
diluted net income per share
|
|
$
|
9,789,524
|
|
$
|
0.37
|
|
$
|
31,314,850
|
|
$
|
1.30
|
Interest on the
Notes
|
|
$
|
(3,582,648)
|
|
|
|
|
$
|
-
|
|
|
|
Gain from change in fair
value of warrants issued to placement agent
|
|
|
-
|
|
|
|
|
|
228,033
|
|
|
|
Gain from change in fair
value of embedded conversion option in the Notes
|
|
$
|
6,289,661
|
|
|
|
|
$
|
-
|
|
|
|
Gain from change in fair
value of warrants
|
|
$
|
5,685,173
|
|
|
|
|
$
|
-
|
|
|
|
Net Income attributable
to controlling interest
|
|
$
|
18,181,710
|
|
|
|
|
$
|
31,542,883
|
|
|
|
Weighted average number
of Shares used in computation of Non GAAP diluted EPS
|
|
|
26,654,662
|
|
|
|
|
|
24,176,432
|
|
|
|
SOURCE China Biologic Products, Inc.