BEIJING, Aug. 9, 2012 /PRNewswire-Asia-FirstCall/ -- China
Biologic Products, Inc. (NASDAQ: CBPO, "China Biologic" or the
"Company"), a leading fully integrated plasma-based
biopharmaceutical company in China, today announced its unaudited financial
results for the second quarter of 2012.
Second Quarter 2012 Financial Highlights
- Total sales in the second quarter of 2012 increased by
21.1% to $50.5 million from
$41.7 million in the same quarter of
2011.
- Gross profit increased by 17.8% to $34.3 million from $29.2
million in the same quarter of 2011. Gross margin was 68.0%
in the second quarter of 2012 compared with 70.0% in the second
quarter of 2011.
- Income from operations increased by 23.7% to
$21.3 million from $17.2 million. The operating margin was 42.2% in
the second quarter of 2012 compared with 41.4% in the second
quarter of 2011.
- Net income attributable to the Company was $12.8 million, a decrease of 22.7% from
$16.6 million in the same quarter of
2011. Non-GAAP adjusted net income attributable to the
Company was $13.3 million or
$0.50 per diluted share in the second
quarter of 2012, representing a 52.2% increase from $8.7 million or $0.33 per diluted share in the same quarter of
last year.
Mr. David (Xiaoying) Gao,
Chairman and chief executive officer ("CEO") of China Biologic,
commented, "The latest quarter and first half of the year
represented periods of positive change and growth at the Company.
In the second quarter, both sales and income from operations grew
over 20%. Non-GAAP adjusted net income attributable to the Company
increased 52.2% to $13.3 million. As
of the end of the first half of 2012, we have achieved over 50% of
our full-year revenue target. Our direct sales model allows us to
achieve better margins on most of our products and we also
experienced increased market demand due to industry supply shortage
for most plasma products during the period."
"We are also pleased to announce that we received the
manufacturing approval certificate from the SFDA for Human
Coagulation Factor VIII in June 2012
and expect to commence commercial production later in 2012. This is
a milestone for China Biologic, as the Company rounds out its
product portfolio and reinforces its market leadership."
Mr. Gao continued, "While focused on developing new plasma
sources to grow our market penetration, internally China Biologic
continues to strengthen its corporate governance structures as
well. During the first half of 2012, the Board of Directors
implemented key senior personnel changes, including my appointment
as Chairman and CEO, and Mr. Ming
Yang's appointment as CFO. We believe we now have a strong
executive team in place with valuable experience in China healthcare industry to implement the
Company's business strategies, ensure transparency and increase
long-term shareholder value. At the board level, we are also proud
to have added industry veteran Mr. Albert
Yeung as an independent director."
Second Quarter 2012 Financial Performances
Total sales in the second quarter of 2012 were
$50.5 million, representing an
increase of 21.1% from $41.7 million
in the same quarter of 2011. Excepting foreign exchange influence,
the increase in sales was primarily attributable to a mix of price
and volume increases in certain plasma-based products, as well as a
substantial increase in sales of placenta polypeptide products.
During the three months ended June 30,
2012, most of the Company's approved products recorded price
increases of mid-teen percentages. The general price increase for
the human albumin product and immunoglobulin product group was
primarily attributable to a shortage of supply in the first half of
2012 following the provincial government's decision to close
certain plasma stations in Guizhou.
During the three months ended June 30,
2012, human albumin products and human immunoglobulin for
intravenous injection ("IVIG") products remained the largest two
sales contributors.
- As a percentage of total sales, human albumin product revenue
decreased to 38.7% in the second quarter of 2012 from 51.3% in the
same quarter of 2011. During the three months ended June 30, 2012, sales volume of human albumin
products declined by 18.4%, mainly due to decreased production
volumes resulting from reduced raw material supply brought on by
the closure of several plasma collection stations in Guizhou in 2011.
- As a percentage of total sales, IVIG revenue increased to 42.1%
in the second quarter of 2012 from 38.6% in the same quarter of
2011. Sales volume of IVIG products increased by 15.2% in the
reporting quarter, mainly due to the increased production volume
and access to higher inventory levels built up in the later part of
2011 in anticipation of the seasonal demand associated with
Hand-Foot-and-Mouth Disease outbreaks.
Cost of sales increased by 28.9% to $16.1 million in the second quarter of 2012, from
$12.5 million in the same quarter of
2011. Cost of sales as a percentage of total sales was 32.0%,
slightly up from 30.0% in the same quarter of 2011. Volume and
percentage increases in cost of sales were mainly due to increased
sales activities and higher compensation paid to plasma donors,
which brought the company's donor compensation amounts in line with
the industry norm and helped the Company expand its plasma
collection volume and donor base.
Gross profit increased by 17.8% to $34.3 million in the second quarter of 2012, from
$29.2 million in the same quarter of
2011. Gross margin decreased slightly to 68.0% from 70.0% in
the second quarter of 2011, due to the increase in raw material
costs.
Total operating expenses in the second quarter of 2012
increased by 9.3% to $13.0 million
from $11.9 million in the same
quarter of 2011, primarily attributable to a 37.1% increase in
selling expenses, which was partly offset by a 23.7% decrease in
research and development expenses. As a percentage of total sales,
total operating expenses decreased slightly to 25.8% for the three
months ended June 30, 2012, from
28.6% in the same quarter of 2011.
Selling expenses in the second quarter of 2012 rose to
$4.2 million from $3.0 million in the same quarter of 2011,
representing an increase of 37.1%. The increase was primarily due
to higher expenses related to selling expenses associated with the
placenta polypeptide products since late December 2011. Excluding the selling expenses
associated with placenta polypeptide products, selling expenses for
plasma products were in line with the increase of sales. As a
percentage of total sales, selling expenses was 8.3% in the second
quarter of 2012, slightly up from 7.3% in the second quarter of
2011.
General and administrative expenses in the second quarter
of 2012 rose to $7.9 million from
$7.7 million in the same quarter of
2011, representing an increase of 3.5%. The increase was mainly due
to the hiring of several senior management team members during the
second quarter of 2012. As a percentage of total sales, general and
administrative expenses was 15.7% in the second quarter of 2012,
down from 18.4% in the second quarter of 2011.
Research and development expenses in the second quarter
of 2012 declined to $0.9 million from
$1.2 million in the same quarter of
2011, representing a decrease of 23.7%. The decrease in research
and development expenses was primarily due to the fact that several
research and development projects that we are currently undertaking
are still in their earlier stages and do not require substantial
investments. As a percentage of total sales, research and
development expenses for the three months ended June 30, 2012 and 2011 were 1.8% and 2.9%,
respectively.
Income from operations in the second quarter of 2012 was
$21.3 million, an increase of 23.7%
from $17.2 million in the same
quarter of 2011.
Interest expense decreased to $0.2
million in the second quarter of 2012, from $2.3 million in the same period of 2011. The
decrease was primarily due to that the convertible notes were fully
converted in June 2011 and the
short-term bank loans were repaid in May
2012.
Provision for income taxes in the second quarter of 2012
was $3.3 million, as compared to
$5.3 million in the same quarter of
2011. The effective income tax rates were 15% and 20% for the three
months ended June 30, 2012 and 2011,
respectively.
Net income decreased by 5.2% to $19.6 million for the three months ended
June 30, 2012, from $20.7 million in the same period of 2011. Net
margins were 38.8% and 49.6% for the three months ended
June 30, 2012 and 2011, respectively.
The decrease was a result of the cumulative effects of the
foregoing factors.
Net income attributable to the Company was $12.8 million, a decrease of 22.7% from
$16.6 million in the same quarter of
2011. The decrease was a result of the cumulative effects of the
foregoing factors.
Non-GAAP adjusted net income attributable to the Company
was $13.3 million or $0.50 per diluted share in the second quarter of
2012 compared with $8.7 million or
$0.33 per diluted share in the same
quarter of 2011.
Non-GAAP adjusted net income and diluted earnings per share in
the second quarter of 2012 excluded an aggregate $0.6 million gain, which was related to the
change in the fair value of derivative liabilities, and
$1.0 million of non-cash employee
share-based compensation expenses.
First Half 2012 Financial Performances
Total sales in the first half of 2012 were $97.7 million, an increase of 28.3% from
$76.1 million in the same period of
2011. The increase in sales was primarily attributable to a mix of
price and volume increases in plasma-based products, as well as a
substantial increase in sales of placenta polypeptide products.
As a percentage of total sales, sales from human albumin
products and IVIG products were 46.4% and 37.4%, respectively, for
the six months ended June 30,
2012.
Cost of sales increased by 45.9% to $31.8 million in the first half of 2012, from
$21.8 million in the same period of
2011. Cost of sales as a percentage of total sales was 32.6%, as
compared to 28.7% in the same period of 2011. Volume and percentage
increases in cost of sales was mainly due to increased sales
activities and higher compensation paid to plasma donors, which
brought the Company's donor compensation amounts in line with the
industry norm.
Gross profit increased by 21.2% to $65.8 million in the first half of 2012 from
$54.3 million in the same period of
2011. Gross margin decreased to 67.4% in the first half of
2012 from 71.3% in the same period of 2011, mainly due to the
increase in raw material costs.
Total operating expenses in the first half of 2012
increased by 14.0% to $25.7 million
from $22.5 million in the same period
of 2011, primarily attributable to a 63.8% increase in selling
expenses, which was partly offset by a 15.0% decrease in research
and development expenses. As a percentage of total sales, total
operating expenses decreased slightly to 26.3% for the six months
ended June 30, 2012, from 29.6% in
the same period of 2011.
Income from operations for the six months ended
June 30, 2012 was $40.1 million, an increase of 26.4% from
$31.8 million in the same period of
2011.
Provision for income taxes in the first half of 2012 was
$6.5 million, as compared to
$9.6 million in the same period of
2011. The effective income tax rates were 15% and 24% for the six
months ended June 30, 2012 and 2011,
respectively.
Net income attributable to the Company increased
by 12.6% to $25.8 million for the six
months ended June 30, 2012, from
$22.9 million in the same period of
2011. Net margins were 26.4% and 30.1% for the six months ended
June 30, 2012 and 2011,
respectively.
Non-GAAP adjusted net income attributable to the Company
was $26.0 million or $0.98 per diluted share for the six months ended
June 30, 2012 compared with
$16.7 million or $0.62 per diluted share in the same period of
2011.
Non-GAAP adjusted net income and diluted earnings per share in
the six months ended June 30, 2012
excluded an aggregate $1.8 million
gain, which was related to the change in the fair value of
derivative liabilities, and $2.0
million of non-cash employee share-based compensation
expenses.
As of June 30, 2012, the Company
had cash and short-term investment of $105.8 million, compared to $89.4 million as of December 31, 2011.
Net cash provided by operating activities for the six
months ended June 30, 2012 was
$32.1 million, as compared to
$12.3 million for the six months
ended June 30, 2011.
Outlook
For the full year of 2012, the Company reiterates sales guidance
of between $168 million and $176
million, representing a year-over-year growth of between
approximately 10.0% and 15.0%. The Company estimates full year
non-GAAP adjusted net income to be in the range of $38 million to $40 million.
Conference Call
The Company will host a conference call at 8:00 am, Eastern Time on Friday, August 10, 2012, which is 8:00 pm, Beijing Time on August 10, 2012, to discuss second quarter 2012
results and answer questions from investors. Listeners may
access the call by dialing:
US:
|
+1 866 549
1292
|
International:
|
+852 3005
2050
|
Hong
Kong:
|
3005
2050
|
China
Domestic:
|
800 876
8626
|
China
Domestic Mobile:
|
400 681
6949
|
|
|
Passcode:
|
674
477#
|
A telephone replay of the call will be available after the
conclusion of the conference all through 11:59 pm, Eastern Time on August 17, 2012. The dial-in details are:
US:
|
+1 866 753
0743
|
International:
|
+852 3005
2020
|
Hong
Kong:
|
3005
2020
|
China Domestic:
|
800 876
5016
|
|
|
Passcode:
|
138
012#
|
About China Biologic Products, Inc.
China Biologic Products, Inc. (Nasdaq: CBPO), is a leading fully
integrated plasma-based biopharmaceutical company in China. The Company's products are used as
critical therapies during medical emergencies and for the
prevention and treatment of life-threatening diseases and
immune-deficiency related diseases. China Biologic is headquartered
in Beijing and manufactures over
20 plasma-based products through its indirect majority-owned
subsidiaries, Shandong Taibang Biological Products Co., Ltd. and
Guiyang Dalin Biologic Technologies Co., Ltd. The Company also has
an equity investment in Xi'an Huitian Blood Products Co., Ltd. The
Company sells its products to hospitals and other healthcare
facilities in China. For
additional information, please see the Company's website
www.chinabiologic.com.
Non-GAAP Disclosure
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 these items 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.
Safe Harbor Statement
This news 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."
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 operating and financial performance in
2012, potential inability to find alternative sources of plasma,
potential inability to increase production at permitted sites,
potential inability to mitigate the financial consequences of a
temporarily reduced raw plasma supply 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 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 statements follow.
CHINA
BIOLOGIC PRODUCTS, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME
|
|
|
For the
three months ended
|
|
For the
six months ended
|
|
|
June 30, 2012
|
|
June 30, 2011
|
|
|
June 30,
2012
|
|
June 30,
2011
|
Sales
|
|
|
|
|
|
|
|
|
|
External customers
|
$
|
50,466,339
|
$
|
41,664,996
|
|
$
|
97,693,800
|
$
|
76,060,234
|
Related party
|
|
-
|
|
462
|
|
|
-
|
|
76,046
|
Total
sales
|
|
50,466,339
|
|
41,665,458
|
|
|
97,693,800
|
|
76,136,280
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
|
|
|
|
|
|
|
|
External customers
|
|
16,130,889
|
|
12,512,359
|
|
|
31,846,616
|
|
21,789,563
|
Related party
|
|
-
|
|
210
|
|
|
-
|
|
34,604
|
Cost of
sales
|
|
16,130,889
|
|
12,512,569
|
|
|
31,846,616
|
|
21,824,167
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
34,335,450
|
|
29,152,889
|
|
|
65,847,184
|
|
54,312,113
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
Selling expenses
|
|
4,165,242
|
|
3,038,143
|
|
|
8,991,349
|
|
5,488,056
|
General and administrative expenses
|
|
7,932,372
|
|
7,665,306
|
|
|
15,078,166
|
|
15,129,447
|
Research and development expenses
|
|
929,489
|
|
1,218,977
|
|
|
1,640,077
|
|
1,929,968
|
|
|
|
|
|
|
|
|
|
|
Income
from operations
|
|
21,308,347
|
|
17,230,463
|
|
|
40,137,592
|
|
31,764,642
|
|
|
|
|
|
|
|
|
|
|
Other
(income) / expenses
|
|
|
|
|
|
|
|
|
|
Equity in income of an equity method
investee
|
|
(451,891)
|
|
(463,688)
|
|
|
(1,474,303)
|
|
(734,082)
|
Change in fair value of derivative
liabilities
|
|
(559,758)
|
|
(11,175,384)
|
|
|
(1,769,140)
|
|
(12,197,249)
|
Interest expense
|
|
157,635
|
|
2,300,601
|
|
|
766,198
|
|
3,981,523
|
Interest income
|
|
(765,717)
|
|
(269,594)
|
|
|
(1,309,112)
|
|
(439,725)
|
Other expenses, net
|
|
1,797
|
|
846,051
|
|
|
102,786
|
|
1,070,282
|
Total
other (income) / expenses, net
|
|
(1,617,934)
|
|
(8,762,014)
|
|
|
(3,683,571)
|
|
(8,319,251)
|
|
|
|
|
|
|
|
|
|
|
Earnings
before income tax expense
|
|
22,926,281
|
|
25,992,477
|
|
|
43,821,163
|
|
40,083,893
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
3,333,616
|
|
5,317,249
|
|
|
6,510,331
|
|
9,580,465
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
19,592,665
|
|
20,675,228
|
|
|
37,310,832
|
|
30,503,428
|
|
|
|
|
|
|
|
|
|
|
Less: Net
income attributable to the noncontrolling interest
|
|
6,753,894
|
|
4,075,523
|
|
|
11,514,755
|
|
7,594,748
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to China Biologic Products, Inc.
|
|
12,838,771
|
|
16,599,705
|
|
|
25,796,077
|
|
22,908,680
|
|
|
|
|
|
|
|
|
|
|
Earnings
per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.50
|
$
|
0.67
|
|
$
|
1.00
|
$
|
0.94
|
Diluted
|
$
|
0.46
|
$
|
0.28
|
|
$
|
0.90
|
$
|
0.53
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares used in computation:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
25,875,164
|
|
24,632,774
|
|
|
25,738,145
|
|
24,492,728
|
Diluted
|
|
26,627,160
|
|
26,738,279
|
|
|
26,581,824
|
|
26,802,683
|
|
|
|
|
|
|
|
|
|
|
Other
Comprehensive income, net of nil income taxes
|
|
|
|
|
|
|
|
|
|
Foreign
currency translation adjustment
|
|
136,178
|
|
2,699,426
|
|
|
1,313,135
|
|
3,825,840
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
|
|
19,728,843
|
|
23,374,654
|
|
|
38,623,967
|
|
34,329,268
|
|
|
|
|
|
|
|
|
|
|
Less:
Comprehensive income attributable to the noncontrolling
interest
|
|
6,750,933
|
|
4,526,465
|
|
|
11,766,768
|
|
8,314,296
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income attributable to China Biologic
Products, Inc.
|
$
|
12,977,910
|
$
|
18,848,189
|
|
$
|
26,857,199
|
$
|
26,014,972
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHINA
BIOLOGIC PRODUCTS, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
|
December
31,
|
|
|
|
2012
|
|
|
2011
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
Cash
|
$
|
104,487,225
|
|
$
|
89,411,835
|
|
Short-term investment
|
|
1,347,250
|
|
|
-
|
|
Accounts receivable, net of allowance for doubtful
accounts
|
|
21,539,879
|
|
|
16,757,368
|
|
Inventories
|
|
69,744,364
|
|
|
71,338,590
|
|
Other receivables
|
|
1,843,139
|
|
|
2,594,461
|
|
Prepayments and prepaid expenses
|
|
2,063,454
|
|
|
1,591,696
|
|
Deferred tax assets
|
|
1,768,319
|
|
|
1,999,563
|
|
Total Current Assets
|
|
202,793,630
|
|
|
183,693,513
|
|
Property,
plant and equipment, net
|
|
40,438,504
|
|
|
40,546,539
|
|
Intangible
assets, net
|
|
5,109,949
|
|
|
6,520,671
|
|
Land use
rights, net
|
|
5,779,983
|
|
|
5,487,343
|
|
Prepayments and deposits for property, plant and
equipment
|
|
7,856,130
|
|
|
4,287,492
|
|
Equity
method investment
|
|
9,888,236
|
|
|
8,357,017
|
|
Total Assets
|
$
|
271,866,432
|
|
$
|
248,892,575
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Short-term bank loans
|
$
|
-
|
|
$
|
11,018,000
|
|
Accounts payable
|
|
3,486,567
|
|
|
4,996,463
|
|
Due to related parties
|
|
4,597,741
|
|
|
3,319,938
|
|
Other payables and accrued expenses
|
|
23,364,025
|
|
|
30,661,794
|
|
Advance from customers
|
|
5,287,022
|
|
|
4,365,523
|
|
Advance from customers – a related party
|
|
-
|
|
|
486,602
|
|
Income tax payable
|
|
3,227,566
|
|
|
5,373,633
|
|
Other taxes payable
|
|
2,280,812
|
|
|
2,189,913
|
|
Derivative liabilities - warrants
|
|
-
|
|
|
5,410,419
|
|
Total Current Liabilities
|
|
42,243,733
|
|
|
67,822,285
|
|
Other
payable
|
|
344,804
|
|
|
343,477
|
|
Deferred
tax liabilities
|
|
1,478,650
|
|
|
1,685,772
|
|
Total Liabilities
|
|
44,067,187
|
|
|
69,851,534
|
|
|
|
|
|
|
|
|
Stockholders' Equity
|
|
|
|
|
|
|
Common stock: par value $.0001; 100,000,000 shares
authorized;
26,538,625 and
25,601,125 shares issued and outstanding at
June 30, 2012 and
December 31, 2011, respectively
|
|
2,654
|
|
|
2,560
|
|
Additional paid-in capital
|
|
58,972,454
|
|
|
48,838,311
|
|
Retained earnings
|
|
99,716,888
|
|
|
73,920,811
|
|
Accumulated other comprehensive income
|
|
13,811,804
|
|
|
12,750,682
|
|
Total stockholders' equity attributable to China
Biologic Products, Inc.
|
|
172,503,800
|
|
|
135,512,364
|
|
|
|
|
|
|
|
|
Noncontrolling interest
|
|
55,295,445
|
|
|
43,528,677
|
|
|
|
|
|
|
|
|
Total Equity
|
|
227,799,245
|
|
|
179,041,041
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
Total Liabilities and Equity
|
$
|
271,866,432
|
|
$
|
248,892,575
|
|
CHINA
BIOLOGIC PRODUCTS, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
For the
six months ended
|
|
|
June 30,
2012
|
|
|
June 30,
2011
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
Net income
|
$
|
37,310,832
|
$
|
30,503,428
|
Adjustments to reconcile net income to cash provided
by operating activities:
|
|
|
|
|
Depreciation
|
|
2,281,223
|
|
2,192,436
|
Amortization
|
|
1,525,267
|
|
1,769,484
|
Loss on sale of property, plant and
equipment
|
|
60,518
|
|
133,218
|
Allowance / (reversal of allowance) for doubtful
accounts, net
|
|
57,532
|
|
(14,674)
|
Write-down of obsolete inventories
|
|
49,703
|
|
151,014
|
Deferred tax expense / (benefit), net
|
|
26,341
|
|
(677,477)
|
Stock compensation
|
|
1,992,958
|
|
2,418,287
|
Change in fair value of derivative
liabilities
|
|
(1,769,140)
|
|
(12,197,249)
|
Amortization of deferred note issuance
cost
|
|
-
|
|
91,945
|
Amortization of discount on convertible
notes
|
|
-
|
|
3,503,767
|
Equity in income of an equity method
investee
|
|
(1,474,303)
|
|
(734,082)
|
Change in operating assets and liabilities
|
|
|
|
|
Accounts receivable - third parties
|
|
(4,692,006)
|
|
(10,150,102)
|
Accounts receivable - a related party
|
|
-
|
|
214,587
|
Other receivables
|
|
179,282
|
|
27,582
|
Inventories
|
|
2,045,191
|
|
(9,319,703)
|
Prepayments and prepaid expenses
|
|
(471,755)
|
|
(1,299,510)
|
Accounts payable
|
|
(1,546,373)
|
|
1,200,716
|
Other payables and accrued expenses
|
|
(3,053,145)
|
|
378,573
|
Due to related parties
|
|
1,255,867
|
|
-
|
Advance from customers
|
|
891,890
|
|
857,251
|
Advance from customers – a related party
|
|
(490,497)
|
|
-
|
Income tax payable
|
|
(2,185,825)
|
|
2,735,990
|
Other taxes payable
|
|
75,672
|
|
563,983
|
Net
cash provided by operating activities
|
|
32,069,232
|
|
12,349,464
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
Dividend received
|
|
555,310
|
|
-
|
Purchase of property, plant and equipment
|
|
(5,098,533)
|
|
(4,596,500)
|
Purchase of intangible assets and land use
right
|
|
(796,707)
|
|
(413,925)
|
Purchase of short-term investment
|
|
(1,348,610)
|
|
-
|
Net
cash used in investing activities
|
|
(6,688,540)
|
|
(5,010,425)
|
|
|
|
|
|
|
|
CHINA
BIOLOGIC PRODUCTS, INC. AND SUBSIDIARIES
UNAUDTIED CONSOLIDATED STATEMENTS OF CASH FLOWS
(CONTINUED)
|
|
|
|
|
|
|
For the
six months ended
|
|
|
|
June 30,
2012
|
|
|
June 30,
2011
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
Proceeds from warrants exercised
|
|
4,500,000
|
|
|
-
|
|
Proceeds from stock option exercised
|
|
-
|
|
|
100,000
|
|
Proceeds from short term bank loans
|
|
-
|
|
|
18,373,200
|
|
Repayment for short term bank loans
|
|
(11,106,200)
|
|
|
(3,062,200)
|
|
Acquisition of noncontrolling interest
|
|
-
|
|
|
(7,635,000)
|
|
Dividend paid by subsidiaries to noncontrolling
interest shareholders
|
|
(4,379,016)
|
|
|
(5,589,920)
|
|
Net
cash used in financing activities
|
|
(10,985,216)
|
|
|
2,186,080
|
|
|
|
|
|
|
|
|
EFFECTS OF
EXCHANGE RATE CHANGE IN CASH
|
|
679,914
|
|
|
2,375,192
|
|
|
|
|
|
|
|
|
NET
DECREASE IN CASH
|
|
15,075,390
|
|
|
11,900,311
|
|
|
|
|
|
|
|
|
Cash,
beginning of period
|
|
89,411,835
|
|
|
64,941,368
|
|
|
|
|
|
|
|
|
Cash, end
of period
|
$
|
104,487,225
|
|
$
|
76,841,679
|
|
|
|
|
|
|
|
|
Supplemental cash flow information
|
|
|
|
|
|
|
Cash paid for income taxes
|
$
|
8,669,815
|
|
$
|
7,521,952
|
|
Cash paid for interest expense
|
$
|
204,982
|
|
$
|
370,918
|
|
Noncash investing and financing
activities:
|
|
|
|
|
|
|
Convertible notes conversion
|
$
|
-
|
|
$
|
12,972,000
|
|
Utilization of prepayments and deposits to acquire
property,
plant and
equipment
|
$
|
-
|
|
$
|
836,000
|
|
Exercise of warrants that were liability
classified
|
$
|
3,641,279
|
|
$
|
-
|
|
Acquisition of property, plant and equipment included
in payables
|
$
|
347,439
|
|
$
|
1,993,920
|
|
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
|
|
|
|
|
|
|
|
|
|
FOR THE
THREE AND SIX MONTHS ENDED JUNE 30, 2012 and 2011
|
|
|
|
|
|
|
|
|
|
|
For the
three months ended
|
|
For the
three months ended
|
|
6/30/2012
|
|
6/30/2011
|
Net Income
Diluted EPS
|
|
Net
Income
|
|
EPS
|
|
|
Net
Income
|
|
EPS
|
Adjusted
Net Income for diluted net income per share - Non GAAP
|
$
|
13,309,552
|
$
|
0.50
|
|
$
|
8,744,754
|
$
|
0.33
|
Non-cash
employee stock compensation
|
$
|
(1,030,539)
|
|
|
|
$
|
(1,243,405)
|
|
|
Adjusted
Net Income for diluted net income per share
|
$
|
12,279,013
|
$
|
0.46
|
|
$
|
7,501,349
|
$
|
0.28
|
Interest
on the Notes
|
$
|
-
|
|
|
|
$
|
(2,077,028)
|
|
|
Gain from
change in fair value of embedded conversion option in the
Notes
|
$
|
-
|
|
|
|
$
|
5,781,624
|
|
|
Gain from
change in fair value of warrants
|
$
|
559,758
|
|
|
|
$
|
5,393,760
|
|
|
Net Income
attributable to controlling interest
|
$
|
12,838,771
|
|
|
|
$
|
16,599,705
|
|
|
Weighted average numbers of Shares used in computation of Non GAAP diluted EPS
|
|
26,627,160
|
|
|
|
|
26,738,279
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
six months ended
|
|
For the
six months ended
|
|
6/30/2012
|
|
6/30/2011
|
Net Income
Diluted EPS
|
|
Net
Income
|
|
EPS
|
|
|
Net
Income
|
|
EPS
|
Adjusted
Net Income for diluted net income per share - Non GAAP
|
$
|
26,019,895
|
$
|
0.98
|
|
$
|
16,709,885
|
$
|
0.62
|
Non-cash
employee stock compensation
|
$
|
(1,992,958)
|
|
|
|
$
|
(2,418,287)
|
|
|
Adjusted
Net Income for diluted net income per share
|
$
|
24,026,937
|
$
|
0.90
|
|
$
|
14,291,598
|
$
|
0.53
|
Interest
on the Notes
|
$
|
-
|
|
|
|
$
|
(3,580,167)
|
|
|
Gain from
change in fair value of embedded conversion option in the
Notes
|
$
|
-
|
|
|
|
$
|
6,289,661
|
|
|
Gain from
change in fair value of warrants
|
$
|
1,769,140
|
|
|
|
$
|
5,907,588
|
|
|
Net Income
attributable to controlling interest
|
$
|
25,796,077
|
|
|
|
$
|
22,908,680
|
|
|
Weighted
average numbers of Shares used in computation of Non GAAP diluted
EPS
|
|
26,581,824
|
|
|
|
|
26,802,683
|
|
|
SOURCE China Biologic Products, Inc.