-- 4Q18 Total Sales Up 27.5% YoY in USD terms,
or 33.5% YoY in RMB terms;
Net Income Up $59.4 Million YoY to $34.8
Million;
Non-GAAP Adjusted Net Income Up 23.9% YoY
in RMB terms --
-- FY18 Total Sales Up 26.1% YoY in USD terms,
or 23.5% YoY in RMB terms;
Net Income Up 88.7% YoY to
$128.1 Million;
Non-GAAP
Adjusted Net Income Up 0.6% YoY in RMB terms --
-- Issues Forecast for FY19 --
-- Board of Directors Extends previously
Approved Share Repurchase Program --
BEIJING, March 6, 2019 /PRNewswire/ -- China Biologic
Products Holdings, Inc. (NASDAQ: CBPO, "China Biologic" or the
"Company"), a leading fully integrated plasma-based
biopharmaceutical company in China, today announced its financial results
for the fourth quarter and fiscal year of 2018.
Fourth Quarter 2018 Financial Highlights
- Total sales in the fourth quarter of 2018 increased by
33.5% in RMB terms and 27.5% in USD terms to $114.9 million from $90.1
million in the same quarter of 2017.
- Gross profit increased by 30.4% to $77.3 million from $59.3
million in the same quarter of 2017. Gross margin
increased to 67.3% from 65.8% in the same quarter of 2017.
- Income from operations increased by 116.8% to
$42.5 million from $19.6 million in the same quarter of 2017.
Operating margin increased to 37.0% from 21.8% in the same
quarter of 2017. Excluding TianXinFu, income from operations
increased by 120.6% in RMB terms and 110.7% in USD terms in the
fourth quarter of 2018 compared to the same quarter of 2017, and
operating margin increased to 38.9% from 21.8% in the same
quarter of 2017.
- Non-GAAP adjusted income from operations increased by
36.0% in RMB terms and 29.6% in USD terms to $39.8 million from $30.7
million in the same quarter of 2017. Excluding TianXinFu,
non-GAAP adjusted income from operations increased by 25.5% in
RMB terms and 19.9% in USD terms in the fourth quarter of 2018
compared to the same quarter of 2017.
- Net income attributable to the Company,
increased by $59.4 million to
$34.8 million from a net loss of
$24.6 million factoring in
$40.3 million repatriation tax charge
in the same quarter of 2017. Fully diluted
earnings per share was $0.87 compared to fully diluted loss per share of
$0.86 in the same quarter of
2017.
- Non-GAAP adjusted net income attributable to the Company
increased by 23.9% in RMB terms and 18.5% in USD terms to
$30.7 million from $25.9 million in the same quarter of 2017.
Non-GAAP adjusted earnings per
share decreased to $0.76
from $0.90 in the same quarter of
2017. Excluding TianXinFu, non-GAAP adjusted net income
attributable to the Company increased by 19.2% in RMB terms and
13.9% in USD terms in the fourth quarter of 2018 compared to the
same quarter of 2017.
Fiscal Year 2018 Financial Highlights
- Total sales in 2018 increased by 23.5% in RMB terms, or
26.1% in USD terms, to $466.9 million
from $370.4 million in 2017.
- Gross profit increased by 30.7% to $320.1 million from $244.9
million in 2017. Gross margin increased to 68.6% in 2018
from 66.1% in 2017.
- Income from operations increased by 7.6% to $146.2 million from $135.9
million in 2017. Operating margin decreased to 31.3% in 2018
from 36.7% in 2017. Excluding TianXinFu, income from
operations decreased by 7.2% in RMB terms and 5.1% in USD terms
in 2018 compared to 2017, and operating margin decreased to
30.6% in 2018 from 36.7% in 2017.
- Non-GAAP adjusted income from operations increased by
0.7% in RMB terms and 3.6% in USD terms to $177.7 million from $171.6
million in 2017. Excluding TianXinFu, non-GAAP adjusted
income from operations decreased by 13.7% in RMB terms and
11.4% in USD terms in 2018 compared to 2017.
- Net income attributable to the Company, factoring in
$7.5 million repatriation tax
reversal and $40.3 million
repatriation tax charge, respectively in 2018 and 2017, increased
by 81.9% in RMB terms and 88.7% in USD terms to $128.1 million from $67.9
million in 2017. Fully diluted
earnings per share was $3.53 compared to $2.38 in 2017. Excluding TianXinFu, net
income attributable to the Company increased by 63.6%
in RMB terms and 69.4% in USD terms in 2018 compared to 2017.
- Non-GAAP adjusted net income attributable to the
Company increased by 0.6% in RMB terms, or 3.3% in USD
terms, to $145.9 million from
$141.2 million in 2017. Fully diluted
non-GAAP adjusted net income per share decreased to $4.02 from $4.95 in
2017. Excluding TianXinFu, non-GAAP adjusted net income
attributable to the Company decreased by 12.3% in RMB terms and
10.0% in USD terms in 2018 compared to 2017.
"While China's plasma industry continues to adapt to a changing
regulatory environment and intensified competition, we delivered
results in line with our previously revised guidance. While we
anticipate that policy headwinds will continue to be challenging in
the short term, we remain confident in our vision of building a
world-class biopharmaceutical and biotechnology company," said
Joseph Chow, Chairman of the China
Biologic Board of Directors. "I am thankful for the confidence that
the Board has placed in me as Chairman and I look forward to
continuing to work with the Board and management team to develop
strategies to realize our vision and create greater value for our
shareholders."
Dr. Bing Li, CEO of China Biologic, commented, "We made
meaningful progress in improving our sales and marketing
capabilities during the fourth quarter of fiscal year 2018,
including hiring new industry talent, further broadening our sales
channel coverage, and reducing inventory levels. In particular, the
task of improving inventory levels for IVIG at our Guizhou subsidiary was well executed, and I am
confident that we are on the right track for a return to healthy
inventory levels in the future. We are also glad that Dr.
Homer He, with over 30 years of
experience working with global healthcare leaders in China and overseas, has joined us as Chief
Business Officer to help accelerate the transformation of our sales
efforts. We look forward to Dr. He's leadership and contributions
as we expand our business."
"Looking to the year ahead, we will continue to focus on
strengthening China Biologic's commercial capabilities and
expanding our sales force penetration at the hospital level, as
well as managing inventories and hiring key industry talent. We
will further increase our efforts to educate Chinese doctors about
the benefits of IVIG, PCC and other coagulation factor products in
treating patients across a wide range of clinical indications. We
are also significantly increasing our research and development
efforts to support expanded product pipelines in our plasma and
medical device businesses, and in particular, the clinical
development of key late-stage products. We are pleased with our
Board's recent approval of our capital expansion plan to build a
replacement fractionation facility in Guizhou with the aim of improving China
Biologic's ability to meet the increasing market demand for plasma
therapeutics in China and
enhancing our production efficiency and quality with
state-of-the-art technologies. As part of our core strategy, we
will also consider suitable acquisition targets that will position
China Biologic for long-term growth."
Extension to Share Repurchase Program
On March 4, 2019, the Board of
Directors of the Company approved the extension to the Company's
previously authorized $100 million
share repurchase program for another six months until October 31, 2019. The Company's repurchases may
be made from time to time on the open market at prevailing market
prices, in negotiated transactions off the market, in block trades
or through other legally permissible means. The timing and extent
of any purchases will depend upon market conditions, the trading
price of its shares and other factors, and are subject to the
restrictions relating to volume, price and timing under applicable
law.
Fourth Quarter 2018 Financial
Performance
Total sales in the fourth quarter of 2018 increased
by 33.5% in RMB terms, or 27.5% in USD terms, to $114.9 million from $90.1
million in the same quarter of 2017. The increase in total
sales was partly attributable to an $8.8
million contribution from TianXinFu, which accounted for
approximately 7.7% of total sales for the quarter. Excluding
TianXinFu, total sales in the fourth quarter of 2018 increased by
23.2% in RMB terms, mainly attributable to the sales increases in
human albumin and IVIG products. For plasma products, total sales
in the fourth quarter of 2018 increased by 25.2% in RMB terms, or
19.8% in USD terms, to $90.3 million
from $75.4 million in the same
quarter of 2017.
Cost of sales increased by 22.1% to $37.6 million in the fourth quarter of 2018 from
$30.8 million in the same quarter of
2017. As a percentage of total sales, cost of sales decreased to
32.7% from 34.1% in the same quarter of 2017. The decrease in cost
of sales as a percentage of total sales mainly reflected the higher
gross margin of TianXinFu. Excluding TianXinFu, cost of sales
increased to 35.1% of total sales, mainly because of lower sales
prices for the Company's human albumin and IVIG products, which was
partly offset by a higher sales price of its placenta polypeptide
product.
Gross profit increased by 30.4% to $77.3 million in the fourth quarter of 2018 from
$59.3 million in the same quarter of
2017. Gross margin was 67.3% and 65.8% in the fourth quarter
of 2018 and 2017, respectively.
Total operating expenses in the fourth quarter of
2018 decreased by $4.9 million, or
12.3%, to $34.8 million from
$39.7 million in the same quarter of
2017. As a percentage of total sales, total operating expenses
decreased to 30.3% in the fourth quarter of 2018 from 44.1% in the
same quarter of 2017. Excluding TianXinFu, total operating expenses
decreased by $12.1 million, or 30.5%,
to $27.6 million in the fourth
quarter of 2018. This decrease mainly consisted of a decrease of
$13.1 million in general and
administrative expenses, excluding TianXinFu.
Income from operations for the fourth quarter of
2018 increased by 127.7% in RMB terms, or 116.8% in USD terms, to
$42.5 million from $19.6 million in the same period of 2017.
Excluding TianXinFu, income from operations increased by
120.6% in RMB terms, or 110.7% in USD terms, in the fourth quarter
of 2018 compared to the same quarter of 2017.
Income tax expense was $8.2
million for the fourth quarter of 2018 compared to
$44.7 million in the same quarter of
2017. Income tax expense in the fourth quarter of 2017 included a
one-time charge of $40.3 million,
which represented management's estimate of the amount of U.S.
corporate income tax based on the deemed repatriation to
the United States of the Company's
accumulated earnings mandated by the new U.S. income tax law that
went into effect on December 22, 2017
(the "U.S. Tax Reform"). Excluding the impact of the income
tax charge in 2017, the effective income tax rate was 17.5% and
19.5% for the fourth quarter of 2018 and 2017, respectively.
Net income attributable to the Company, increased
to $34.8 million from a net loss of $24.6 million, factoring in the one-time
$40.3 million income tax charge in
the same quarter of 2017. Fully diluted
earnings per share was $0.87 compared to fully diluted loss per
share of $0.86 in the same
quarter of 2017.
Non-GAAP adjusted income from operations increased
by 36.0% in RMB terms and 29.6% in USD terms to $39.8 million from $30.7 million in the same quarter of 2017.
Excluding TianXinFu, non-GAAP adjusted income from
operations increased by 25.5% in RMB terms and 19.9% in USD
terms in the fourth quarter of 2018 compared to the same quarter of
2017.
Non-GAAP adjusted net income attributable to the Company
increased by 23.9% in RMB terms, and 18.5% in USD terms, to
$30.7 million in the fourth quarter
of 2018 from $25.9 million in the
same quarter of 2017. Non-GAAP net margin decreased to 26.7%
in the fourth quarter of 2018 from 28.7% in the same quarter of
2017. Excluding TianXinFu, non-GAAP adjusted net income
attributable to the Company increased by 19.2% in RMB terms and
13.9% in USD terms in the fourth quarter of 2018 compared to the
same quarter of 2017.
Non-GAAP adjusted net income per diluted share decreased
to $0.76 in the fourth quarter of
2018 from $0.90 in the same quarter
of 2017.
Non-GAAP adjusted income from operations for the
fourth quarter of 2018 excludes $4.6
million in reversal of non-cash employee share-based
compensation expenses, and $1.8
million in amortization expense of intangible assets and
land use rights related to the acquisition of TianXinFu.
Non-GAAP adjusted net income and diluted earnings per
share for the fourth quarter of 2018 exclude $5.4 million in reversal of non-cash employee
share-based compensation expenses, and $1.2
million in amortization of acquired intangible assets and
land use rights related to the acquisition of TianXinFu.
Fiscal Year 2018 Financial Performance
Total sales in 2018 increased by 23.5% in RMB terms
and 26.1% in USD terms to $466.9
million from $370.4 million in
2017. The increase in sales for 2018 was partly attributable to a
$44.7 million contribution from
TianXinFu, which accounted for approximately 9.6% of total sales
for 2018. Excluding TianXinFu, total sales in 2018 increased by
11.7% in RMB terms as a result of increases in the sales of
placenta polypeptide products, human albumin products, certain
special immunoglobulin products, and coagulation factor products,
which was partly offset by decreases in the sales of IVIG products.
For plasma products, total sales in 2018 increased by 8.0% in RMB
terms, or 10.2% in USD terms, to $354.0
million from $321.2 million in
2017.
During 2018, human albumin and IVIG products remained the
Company's two largest sales contributors. Revenue from human
albumin increased by 10.4% in RMB terms, or 12.8% in USD terms,
from $132.5 million in 2017 to
$149.4 million in 2018. Revenue from
IVIG products decreased by 5.7% in RMB terms, or 3.4% in USD terms,
from $117.5 million in 2017 to
$113.5 million in 2018. As a
percentage of total sales, sales from human albumin and IVIG
products were 32.0% and 24.3%, respectively, in 2018. Excluding the
contribution from TianXinFu, human albumin and IVIG products
represented 35.4% and 26.9% of total sales, respectively, compared
to 35.8% and 31.7%, respectively, in 2017. The large decrease of
IVIG sales' percentage mainly reflected the combined effects of
decreased sales volume and decreased sales prices year over
year.
The sales volume of human albumin products increased by 17.0%,
primarily due to increased sales volumes in the distributor and
pharmacy channels, which was partly offset by decreased
prescription volumes at various hospitals due to the ongoing
healthcare regulatory changes in China. The sales volume of IVIG products
decreased by 3.4% for 2018, mainly reflecting decreased
prescription volumes at various hospitals.
The average prices for human albumin and IVIG products decreased
by 5.6% and 2.3%, respectively, in RMB terms in 2018 compared to
2017 because of greater sales volume in the distributor channel and
lower prices to certain distributors reflecting intensified market
competition for major plasma products. In USD terms, the average
price for human albumin decreased by 3.6% in 2018 compared to 2017,
and the average price for IVIG remained stable in 2018 compared to
2017.
Revenue from other immunoglobulin products increased by 18.8% in
2018 compared to 2017, reaching 12.7% of total sales as compared to
13.5% of total sales in 2017, mainly attributable to the increase
in sales volume of both human rabies immunoglobulin and human
tetanus immunoglobulin products.
Revenue from other plasma products, including human coagulation
factor VIII, human prothrombin complex concentrate, and the newly
launched human fibrinogen products, increased by 47.9% in RMB
terms, or 49.8% in USD terms, in 2018 compared to 2017,
representing 6.8% of total sales in 2018. The growth mainly came
from the launch of our human fibrinogen products in the beginning
of 2018, and the increased sales volumes of the Company's human
coagulation factor VIII and human prothrombin complex concentrate
products, which is reflective of the Company's ongoing medical
marketing activities.
Revenue from placenta polypeptide products increased by 38.5%
for 2018 as compared to 2017, reaching 14.6% of total sales, which
was supported by higher unit selling prices in connection with the
wider implementation of the two-invoice policy. However, the sales
volume of placenta polypeptide products declined as a result of
their inclusion in regional adjuvant drug lists, which put pressure
on their prescription volume.
Cost of sales was $146.8
million in 2018 compared to $125.5
million in 2017. As a percentage of total sales, cost of
sales decreased to 31.4% from 33.9% in 2017. The decrease in cost
of sales as a percentage of total sales mainly reflected the higher
gross margin of TianXinFu. Excluding TianXinFu, cost of sales
decreased to 33.6% of total sales, mainly because of a higher sales
price for the Company's placenta polypeptide product, which was
partly offset by lower sales prices for its human albumin and IVIG
products.
Gross profit increased by 30.7% to $320.1 million in 2018 from $244.9 million in 2017. Gross margin was
68.6% and 66.1% in 2018 and 2017, respectively.
Total operating expenses in 2018 increased by 59.5%
to $173.9 million from $109.0 million in 2017. As a percentage of total
sales, total expenses increased to 37.3% for 2018 from 29.4% for
2017. Excluding TianXinFu, total operating expenses increased by
$42.5 million, or 39.0%, to
$151.5 million for 2018. This
increase (excluding TianXinFu) mainly consisted of an increase of
$43.6 million in selling expenses,
partly offset by a decrease of $1.8
million in general and administrative expenses.
Selling expenses in 2018 increased by $60.8 million, or 174.7%, to $95.6 million from $34.8
million for 2017. Nearly half of the increase came from
selling expenses associated with placenta polypeptide products with
the remainder related to the sales of plasma products and
TianXinFu's sales of its dura mater products. For placenta
polypeptide products and certain hyper-immune products, as certain
previous multi-layer distribution channels were disqualified due to
the two-invoice policy, the Company implemented new sales
strategies including using internal sales force or engaging
third-party contract service entities to promote our products. For
other plasma products, in order to strengthen our competitiveness
in front of distribution channel customers, the Company incurred
additional promotion and marketing costs. TianXinFu's selling
expenses included an amortization expense of $7.7 million for the intangible asset of customer
relationships associated with the Company's acquisition of
TianXinFu. Excluding this intangible asset amortization expense,
selling expenses accounted for 18.8% of total sales in 2018
compared to 9.4% in 2017.
General and administrative expenses in 2018 increased by
$1.1 million, or 1.6%, to
$68.8 million from $67.7 million for 2017. As a percentage of total
sales, general and administrative expenses decreased to 14.8% for
2018 from 18.3% for 2017. The slight increase in general and
administrative expenses from 2017 to 2018 was a combined result of
1) general and administrative expenses of TianXinFu; 2) increased
legal fees mainly in relation to the lawsuit filed against the
Company in the Cayman Islands by
Mr. David (Xiaoying) Gao, the former
Chairman and CEO of the Company whose employment with the Company
had previously been terminated for cause; and 3) Shandong Taibang's
increased depreciation expenses and property tax for its new
facility, which was partially offset by a decrease in share-based
compensation expenses.
Research and development expenses in 2018 increased
by $3.0 million, or 46.2%, to
$9.5 million from $6.5 million for 2017. In 2018 and 2017, the
Company received government grants totaling $0.7 million and $0.4
million, respectively, and the Company recognized them as a
reduction of our research and development expenses. Excluding this
impact, our research and development expenses increased by
$3.3 million for 2018 from 2017. As a
percentage of total sales, our research and development expenses,
excluding the impact of these recognized government grants,
increased to 2.2% for 2018 from 1.9% for 2017. The increase mainly
consisted of TianXinFu's research and development expenses.
Income from operations in 2018 increased by 5.0% in
RMB terms and 7.6% in USD terms, to $146.2
million from $135.9 million in
2017. Operating margin decreased to 31.3% in 2018 from 36.7%
in 2017. Excluding TianXinFu, income from operations in 2018
decreased by 7.2% in RMB terms, and 5.1% in USD terms, to
$129.0 million, and operating margin
decreased to 30.6%.
Income tax expense in 2018 decreased by $46.2 million, or 72.0%, to $18.0 million for 2018 from $64.2 million for 2017. For the year ended
December 31, 2017, the Company
recorded a one-time income tax charge of $40.3 million, which represented the management's
estimate of the amount of U.S. corporate income tax based on the
deemed repatriation to the United
States of the Company's accumulated earnings mandated by the
U.S. Tax Reform. Based on new regulations and rules issued by the
U.S. Department of the Treasury in August
2018, the management reassessed the amount and an amount of
$7.5 million was reversed in the
third quarter of 2018. Excluding the impact of repatriation tax,
our effective income tax rate was 15.4% and 16.3% for 2018 and
2017, respectively.
Net income attributable to the
Company increased by 81.9% in RMB terms, or 88.7% in USD
terms, to $128.1 million in 2018 from
$67.9 million in 2017. Net
margin increased to 27.4% in 2018 from 18.3% in 2017.
Diluted net earnings per share increased to $3.53 in 2018 compared to $2.38 in 2017. Excluding TianXinFu, net income
attributable to the Company increased by 63.6% in RMB terms, or
69.4% in USD terms, in 2018 compared to 2017, and net margin
increased to 27.2%.
Non-GAAP adjusted income from operations increased
by 0.7% in RMB terms, or 3.6% in USD terms, to $177.7 million in 2018 from $171.6 million in 2017. Excluding TianXinFu,
non-GAAP adjusted income from operations decreased by 13.7% in
RMB terms, or 11.4% in USD terms in 2018 compared to 2017.
Non-GAAP adjusted net income attributable to the Company
increased by 0.6% in RMB terms and 3.3% in USD terms, to
$145.9 million in 2018 from
$141.2 million in 2017.
Non-GAAP net margin decreased to 31.2% in 2018 from 38.1% in
2017. Non-GAAP adjusted net income per diluted share
decreased to $4.02 in 2018 from
$4.95 in 2017. Excluding
TianXinFu, non-GAAP adjusted net income attributable to the
Company decreased by 12.3% in RMB terms, or 10.0% in USD terms,
in 2018 compared to 2017.
Non-GAAP adjusted income from operations for 2018
excludes $23.1 million in non-cash
employee share-based compensation expenses, and $8.4 million in amortization expense of
intangible assets and land use rights related to the acquisition of
TianXinFu.
Non-GAAP adjusted net income and diluted earnings per
share for 2018 exclude $19.7
million in non-cash employee share-based compensation
expenses, $5.7 million in
amortization of acquired intangible assets and land use rights
related to the acquisition of TianXinFu, and an income tax benefit
of $7.5 million related to U.S. Tax
Reform.
As of December 31, 2018, the
Company had $338.9 million in cash on
hand and demand deposits, $537.5
million in time deposits, and $76.0
million in short term investments.
Net cash provided by operating activities for 2018
was $103.9 million, including a
$21.8 million contribution from
TianXinFu, as compared to $102.2
million for 2017. Excluding TianXinFu, the $20.1
million decrease in net cash
provided by operating activities was mainly attributable to the
increase in accounts receivable and decrease in income tax
payable.
Excluding TianXinFu, accounts receivable increased by
$53.5 million during 2018 as compared
to $39.9 million during 2017. The
accounts receivable turnover days for plasma products increased to
95 days during 2018 from 58 days during 2017, reflecting longer
credit terms to hospitals as a result of the nationwide
implementation of healthcare reform measures and intensified
competition in the distribution channel.
Excluding TianXinFu, income tax payable increased by
$43.1 million in 2017 and decreased
by $12.6 million in 2018. The
increase in 2017 was mainly because of the one-time repatriation
tax charge of $40.3 million. In the
first half of 2018, the Company made the first batch of tax payment
of approximately $3.3 million. Based
on new regulations and rules issued by the U.S. Department of the
Treasury in August 2018, the
management reassessed the total repatriation tax amount and an
amount of $7.5 million was reversed
in the third quarter of 2018.
Excluding TianXinFu, inventories increased by $42.1 million in 2017 and $42.5 million in 2018, reflecting a slow-down of
production and sales in reaction to the weaker market demand due to
more-aggressive-than-expected implementation of government
healthcare reform policies.
Net cash used in investing activities for 2018 was
$558.9 million as compared to
$60.9 million for 2017. In 2018, the
Company paid $36.6 million for the
acquisition of property, plant and equipment, intangible assets and
land use rights, $10.8 million
prepayments for investments in equity securities and the Company
also purchased time deposit and short term investments in the
amount of $2,726.8 million. This was
partly offset by $97.7 million in
cash received upon acquisition of TianXinFu and $2,117.6 million from the maturity of time
deposits and short term investments. In 2017, the Company paid
$38.3 million for the acquisition of
property, plant and equipment, intangible assets, and land use
rights and the Company also made time deposit of $22.7 million.
Net cash provided by financing activities for 2018 was
$571.3 million as compared to net
cash used in financing activities of $18.3
million for 2017. Net cash provided by financing activities
for 2018 mainly included proceeds of $590.3
million from the issuance and sale of an aggregate of
5,850,000 ordinary shares of the Company to certain investors, and
$1.1 million from stock options
exercised, partially offset by a dividend of $10.1 million paid by Shandong Taibang to its
non-controlling interest shareholders and $10.0 million prepayment to an investment bank
for potential share repurchases. Net cash used in financing
activities in 2017 mainly consisted of a dividend payment of
$18.8 million made by the Company's
subsidiary to the non-controlling interest shareholder, which was
partially offset by proceeds of $0.9
million from stock options exercised.
Financial Outlook
For the full year of 2019, the Company expects both non-GAAP
adjusted income from operations and non-GAAP adjusted net income to
increase by 4% to 6% in RMB terms over full year 2018 financial
results.
This guidance does not factor in any potential foreign currency
translation impact. Having previously adopted an exchange rate of
approximately RMB6.59 = $1.00 based on weighted average quarterly
exchange rates in 2018 in translating 2018 financial results, the
Company expects that the total sales and non-GAAP adjusted net
income in USD terms in 2019 could be affected by the foreign
currency translation impact.
This guidance excludes potential acquisitions, and necessarily
assumes no significant adverse product price changes during 2019.
This forecast reflects the Company's current and preliminary views,
which are subject to change.
Conference Call
The Company will host a conference call at 7:30 am Eastern Time on March 7, 2019, which is 8:30 pm Beijing Time on March 7, 2019, to discuss its fourth quarter and
fiscal 2018 results and answer questions from investors. Listeners
may access the call by dialing:
US:
|
1 888 346
8982
|
International:
|
1 412 902
4272
|
Hong
Kong:
|
800 905
945
|
China:
|
400 120
1203
|
A telephone replay will be available one hour after the
conclusion of the conference all through March 14, 2019. The dial-in details are:
US:
|
1 877 344
7529
|
International:
|
1 412 317
0088
|
Passcode:
|
10129171
|
A live and archived webcast of the conference call will be
available through the Company's investor relations website at
http://chinabiologic.investorroom.com.
About China Biologic Products Holdings, Inc.
China Biologic Products Holdings, 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 different dosage forms of plasma products through its indirect
majority-owned subsidiary, Shandong Taibang Biological Products
Co., Ltd. and its wholly owned subsidiary, Guizhou Taibang
Biological Products Co., Ltd. The Company also has an equity
investment in Xi'an Huitian Blood Products Co., Ltd. Since the
acquisition of TianXinFu (Beijing)
Medical Appliance Co., Ltd. in 2018, China Biologic is also engaged
in the manufacturing and sale of medical devices, primarily
regenerative medical biomaterial products. The Company sells its
products to hospitals, distributors 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 and
restricted shares granted to employees and directors under the
Company's 2008 Equity Incentive Plan, amortization of acquired
intangible assets and land use rights, and an income tax benefit
related to U.S. Tax Reform. To supplement the Company's 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 its presentation of non-GAAP
financial measures provides useful supplementary information to and
facilitates additional analysis by investors. 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.
In addition, as the Company evaluates certain key items of its
financial results on a local currency basis (i.e., in RMB) in
addition to the reporting currency (i.e., in USD), this news
release contains local currency information that eliminates the
impact of fluctuations in foreign currency exchange rates. The
Company believes that, given its operations primarily based in
China, providing local currency
information on such key items enhances the understanding of its
financial results and evaluation of performance in comparison to
prior periods. Changes in local currency percentages are calculated
by comparing financial results denominated in RMB from period to
period.
Safe Harbor Statement
This news release may contain certain "forward-looking
statements" relating to the business of China Biologic Products
Holdings, 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 "intend,"
"believe," "expect," "are expected to," "will," or similar
expressions, and involve known and unknown risks and uncertainties.
Among other things, the management's quotations and forecast of the
Company's financial performance in this news release contain
forward-looking statements. 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, without limitation,
quality of purchased source plasma, potential delay or failure to
complete construction of new collection facilities, potential
inability to pass government inspection and certification process
for existing and new facilities, potential inability to achieve the
designed collection capacities at the new collection facilities,
potential inability to achieve the expected operating and financial
performance, 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.
Contact:
China Biologic Products Holdings, Inc.
Mr. Ming Yin
Senior Vice President
Email: ir@chinabiologic.com
The Foote Group
Mr. Philip Lisio
Phone: +86-135-0116-6560
Email: phil@thefootegroup.com
(Financial statements on the following pages)
CHINA BIOLOGIC
PRODUCTS HOLDINGS, INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
|
For the Years
Ended
|
|
|
December 31,
2018
|
|
December 31,
2017
|
|
December 31,
2016
|
|
|
USD
|
|
USD
|
|
USD
|
Sales
|
|
466,877,569
|
|
370,406,840
|
|
341,169,426
|
|
|
|
|
|
|
|
Cost of
sales
|
|
146,787,236
|
|
125,517,021
|
|
124,034,448
|
Gross
profit
|
|
320,090,333
|
|
244,889,819
|
|
217,134,978
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
Selling expenses
|
|
95,575,830
|
|
34,843,935
|
|
11,679,242
|
General and administrative expenses
|
|
68,817,340
|
|
67,683,667
|
|
54,519,122
|
Research and development expenses
|
|
9,524,412
|
|
6,503,712
|
|
7,021,992
|
Income from
operations
|
|
146,172,751
|
|
135,858,505
|
|
143,914,622
|
|
|
|
|
|
|
|
Other income
(expenses)
|
|
|
|
|
|
|
Equity in income of an equity method
investee
|
|
2,368,995
|
|
3,509,071
|
|
2,519,201
|
Interest income
|
|
13,706,750
|
|
7,623,624
|
|
7,815,780
|
Interest expense
|
|
(338,136)
|
|
(583,432)
|
|
(254,471)
|
Loss from disposal of a subsidiary
|
|
-
|
|
-
|
|
(75,891)
|
Other income, net
|
|
4,092,935
|
|
-
|
|
-
|
Total other income,
net
|
|
19,830,544
|
|
10,549,263
|
|
10,004,619
|
|
|
|
|
|
|
|
Income before income
tax expense
|
|
166,003,295
|
|
146,407,768
|
|
153,919,241
|
|
|
|
|
|
|
|
Income tax
expense
|
|
18,036,180
|
|
64,171,809
|
|
25,125,820
|
|
|
|
|
|
|
|
Net income
|
|
147,967,115
|
|
82,235,959
|
|
128,793,421
|
|
|
|
|
|
|
|
Less: Net income
attributable to noncontrolling interest
|
|
19,910,813
|
|
14,292,924
|
|
24,014,114
|
|
|
|
|
|
|
|
Net income
attributable to China Biologic Products Holdings, Inc.
|
|
128,056,302
|
|
67,943,035
|
|
104,779,307
|
|
|
|
|
|
|
|
Earnings per share of
ordinary share:
|
|
|
|
|
|
|
Basic
|
|
3.54
|
|
2.40
|
|
3.79
|
Diluted
|
|
3.53
|
|
2.38
|
|
3.74
|
Weighted average
shares used in computation:
|
|
|
|
|
|
|
Basic
|
|
35,304,294
|
|
27,361,561
|
|
26,848,445
|
Diluted
|
|
35,432,959
|
|
27,605,623
|
|
27,249,144
|
|
|
|
|
|
|
|
Net income
|
|
147,967,115
|
|
82,235,959
|
|
128,793,421
|
|
|
|
|
|
|
|
Other comprehensive
(losses)/income:
|
|
|
|
|
|
|
Foreign currency
translation adjustment, net of nil income taxes
|
|
(60,783,829)
|
|
36,861,394
|
|
(31,303,262)
|
|
|
|
|
|
|
|
Comprehensive
income
|
|
87,183,286
|
|
119,097,353
|
|
97,490,159
|
|
|
|
|
|
|
|
Less: Comprehensive
income attributable to noncontrolling interest
|
|
12,794,989
|
|
17,876,743
|
|
19,026,592
|
|
|
|
|
|
|
|
Comprehensive income
attributable to China Biologic Products Holdings, Inc.
|
|
74,388,297
|
|
101,220,610
|
|
78,463,567
|
CHINA BIOLOGIC
PRODUCTS HOLDINGS, INC. AND SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
|
|
December 31, 2018
|
|
December 31, 2017
|
|
|
USD
|
|
USD
|
ASSETS
|
|
|
|
|
Current
Assets
|
|
|
|
|
Cash and cash
equivalents
|
|
338,880,559
|
|
219,336,848
|
Time
deposits
|
|
537,478,040
|
|
22,895,200
|
Short term
investments
|
|
76,048,594
|
|
-
|
Accounts receivable,
net of allowance for doubtful accounts
|
|
125,115,842
|
|
77,267,275
|
Loan receivable -
current
|
|
-
|
|
45,912,000
|
Inventories
|
|
243,295,512
|
|
209,570,835
|
Prepayments and other
current assets, net of allowance for doubtful accounts
|
|
36,369,275
|
|
18,139,453
|
Total Current
Assets
|
|
1,357,187,822
|
|
593,121,611
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
178,327,361
|
|
166,812,749
|
Intangible assets,
net
|
|
53,258,871
|
|
536,338
|
Land use rights,
net
|
|
32,204,342
|
|
24,853,163
|
Equity method
investment
|
|
15,428,028
|
|
14,903,908
|
Prepayments for
investments in equity securities
|
|
10,812,893
|
|
-
|
Loan receivable - non
current
|
|
39,942,591
|
|
-
|
Goodwill
|
|
313,588,803
|
|
-
|
Other non-current
assets
|
|
9,227,970
|
|
8,829,648
|
Total
Assets
|
|
2,009,978,681
|
|
809,057,417
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
Accounts
payable
|
|
11,404,642
|
|
7,548,909
|
Income tax
payable
|
|
11,010,347
|
|
14,258,544
|
Other payables and
accrued expenses
|
|
99,933,793
|
|
75,827,864
|
Total Current
Liabilities
|
|
122,348,782
|
|
97,635,317
|
|
|
|
|
|
Deferred
income
|
|
2,824,212
|
|
3,476,877
|
Non-current income
tax payable
|
|
26,899,038
|
|
37,067,138
|
Other
liabilities
|
|
13,203,485
|
|
6,553,088
|
Total
Liabilities
|
|
165,275,517
|
|
144,732,420
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
|
|
Ordinary
share:
|
|
|
|
|
par value
$0.0001;
|
|
|
|
|
100,000,000 shares
authorized;
|
41,616,320 and
29,866,545 shares issued at December 31, 2018 and 2017,
respectively;
|
|
|
|
|
39,361,616 and
27,611,841 shares outstanding at December 31, 2018 and 2017,
respectively
|
|
4,162
|
|
2,987
|
Additional paid-in
capital
|
|
1,189,698,494
|
|
140,230,395
|
Treasury share:
2,254,704 shares at December 31, 2018 and 2017, respectively, at
cost
|
|
(56,425,094)
|
|
(56,425,094)
|
Retained
earnings
|
|
634,482,738
|
|
506,426,436
|
Accumulated other
comprehensive (losses)/income
|
|
(45,710,701)
|
|
7,957,304
|
Total equity
attributable to China Biologic Products Holdings, Inc.
|
|
1,722,049,599
|
|
598,192,028
|
|
|
|
|
|
Noncontrolling
interest
|
|
122,653,565
|
|
66,132,969
|
|
|
|
|
|
Total Shareholders'
Equity
|
|
1,844,703,164
|
|
664,324,997
|
|
|
|
|
|
Commitments and
contingencies
|
|
-
|
|
-
|
|
|
|
|
|
Total Liabilities and
Shareholders' Equity
|
|
2,009,978,681
|
|
809,057,417
|
CHINA BIOLOGIC
PRODUCTS HOLDINGS, INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
For the Years
Ended
|
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
|
2018
|
|
2017
|
|
2016
|
|
|
USD
|
|
USD
|
|
USD
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
Net
income
|
|
147,967,115
|
|
82,235,959
|
|
128,793,421
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
Depreciation
|
|
13,809,041
|
|
11,691,731
|
|
11,962,983
|
Amortization
|
|
9,416,310
|
|
1,216,959
|
|
775,053
|
Loss on disposal of
property, plant and equipment
|
|
1,001,000
|
|
3,228,845
|
|
293,098
|
Allowance for
doubtful accounts - accounts receivable, net
|
|
655,148
|
|
23,783
|
|
123,239
|
Allowance for
doubtful accounts – prepayments and other
receivables
|
|
96,267
|
|
-
|
|
65,341
|
Impairment for other
non-current assets
|
|
2,671,528
|
|
-
|
|
1,225,200
|
Write-down of
obsolete inventories
|
|
-
|
|
-
|
|
256,862
|
Deferred income tax
benefit
|
|
(4,159,890)
|
|
(3,252,516)
|
|
(3,006,541)
|
Share-based
compensation
|
|
23,130,570
|
|
33,903,283
|
|
24,405,511
|
Equity in income of
an equity method investee
|
|
(2,368,995)
|
|
(3,509,071)
|
|
(2,519,201)
|
Loss from disposal of
a subsidiary
|
|
-
|
|
-
|
|
75,891
|
Excess tax benefits
from share-based compensation arrangements
|
|
-
|
|
-
|
|
(2,613,831)
|
Change in
operating assets and liabilities, net of effect of acquisition of
TianXinFu:
|
|
|
|
|
|
|
Accounts
receivable
|
|
(53,879,876)
|
|
(39,918,939)
|
|
(10,971,773)
|
Inventories
|
|
(42,594,485)
|
|
(42,078,261)
|
|
(40,077,384)
|
Prepayments and other
current assets
|
|
(9,387,783)
|
|
(1,777,783)
|
|
1,946,800
|
Accounts
payable
|
|
8,140,553
|
|
977,152
|
|
2,966,885
|
Income tax
payable
|
|
(3,575,544)
|
|
6,047,808
|
|
6,022,145
|
Other payables and
accrued expenses
|
|
23,693,979
|
|
16,821,694
|
|
4,221,669
|
Deferred
income
|
|
(504,886)
|
|
(493,897)
|
|
(686,757)
|
Non-current income
tax payable
|
|
(10,168,100)
|
|
37,067,138
|
|
-
|
Net cash provided by
operating activities
|
|
103,941,952
|
|
102,183,885
|
|
123,258,611
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
Cash acquired from
acquisition of TianXinFu
|
|
97,702,278
|
|
-
|
|
-
|
Purchase of time
deposits
|
|
(1,871,773,012)
|
|
(22,669,000)
|
|
-
|
Proceeds from
maturity of time deposit
|
|
1,349,949,821
|
|
-
|
|
-
|
Purchase of short
term investments
|
|
(855,074,467)
|
|
-
|
|
-
|
Proceeds from
maturity of short term investments
|
|
767,654,706
|
|
-
|
|
-
|
Payment for property,
plant and equipment
|
|
(31,743,146)
|
|
(37,504,440)
|
|
(49,371,318)
|
Payment for
intangible assets and land use rights
|
|
(4,973,244)
|
|
(786,691)
|
|
(1,635,891)
|
Refund of payments
and deposits related to land use right
|
|
-
|
|
-
|
|
10,297,893
|
Proceeds from
disposal of property, plant and equipment and land use
rights
|
|
124,560
|
|
64,914
|
|
393,019
|
Loans lent to a third
party
|
|
-
|
|
-
|
|
(12,332,718)
|
Proceeds from
disposal of a subsidiary
|
|
-
|
|
-
|
|
128,654
|
Prepayments for
investments in equity securities
|
|
(10,812,893)
|
|
-
|
|
-
|
Net cash used in
investing activities
|
|
(558,945,397)
|
|
(60,895,217)
|
|
(52,520,361)
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
Proceeds from stock
option exercised
|
|
1,184,534
|
|
867,546
|
|
3,558,796
|
Proceeds from
short-term bank loans
|
|
-
|
|
23,009,280
|
|
-
|
Repayment of
short-term bank loans
|
|
-
|
|
(23,412,060)
|
|
-
|
Maturity of deposit
as security for bank loans
|
|
-
|
|
-
|
|
37,756,405
|
Excess tax benefits
from share-based compensation arrangements
|
|
-
|
|
-
|
|
2,613,831
|
Dividend paid by
subsidiaries to noncontrolling interest shareholders
|
|
(10,145,395)
|
|
(18,789,151)
|
|
(7,921,952)
|
Proceeds from
issuance of ordinary shares
|
|
590,265,000
|
|
-
|
|
-
|
Prepayment to an
investment bank for potential share repurchase
|
|
(10,000,000)
|
|
-
|
|
-
|
Payment to
noncontrolling interest shareholders in connection with their
capital withdrawal
|
|
-
|
|
-
|
|
(58,091,018)
|
Net cash provided
by/(used in) financing activities
|
|
571,304,139
|
|
(18,324,385)
|
|
(22,083,938)
|
|
|
|
|
|
|
|
EFFECT OF FOREIGN
EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
|
|
3,243,017
|
|
12,607,032
|
|
(9,826,672)
|
|
|
|
|
|
|
|
NET INCREASE IN CASH
AND CASH EQUIVALENTS
|
|
119,543,711
|
|
35,571,315
|
|
38,827,640
|
|
|
|
|
|
|
|
Cash and cash
equivalents at beginning of year
|
|
219,336,848
|
|
183,765,533
|
|
144,937,893
|
|
|
|
|
|
|
|
Cash and cash
equivalents at end of year
|
|
338,880,559
|
|
219,336,848
|
|
183,765,533
|
|
|
|
|
|
|
|
Supplemental cash
flow information
|
|
|
|
|
|
|
Cash paid for income
taxes
|
|
35,449,581
|
|
24,691,429
|
|
22,210,476
|
Cash paid for
interest expense
|
|
-
|
|
252,353
|
|
84,664
|
Noncash investing and
financing activities:
|
|
|
|
|
|
|
Acquisition of
property, plant and equipment included in payables
|
|
3,687,742
|
|
7,548,964
|
|
4,912,937
|
Set-off loan
receivable against accounts payable
|
|
3,784,297
|
|
-
|
|
5,848,400
|
Fair value of noncash
assets acquired and liabilities assumed in acquisition of
Tianxinfu
|
|
337,186,892
|
|
-
|
|
-
|
CHINA BIOLOGIC
PRODUCTS HOLDINGS, INC. AND SUBSIDIARIES
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
2018
|
|
2017
|
|
|
|
USD
|
|
USD
|
Income from
Operations
|
|
|
42,644,418
|
|
19,594,582
|
Non-cash employee
share-based compensation
|
|
(4,563,509)
|
|
9,187,749
|
Amortization of
acquired intangible assets and land use rights
|
|
1,750,585
|
|
-
|
Expenses related to
change of domicile and acquisition of TianXinFu
|
|
-
|
|
1,872,012
|
Adjusted Income from
Operations - Non GAAP
|
|
39,831,494
|
|
30,654,343
|
|
|
|
|
|
|
Net Income
Attributable to the Company
|
|
34,907,015
|
|
(24,644,413)
|
Non-cash employee
share-based compensation
|
|
(5,419,386)
|
|
8,396,403
|
Income tax expense
related to U.S. Tax Reform
|
|
-
|
|
40,290,367
|
Amortization of
acquired intangible assets and land use rights
|
|
1,190,398
|
|
-
|
Expenses related to
change of domicile and acquisition of TianXinFu
|
|
-
|
|
1,872,012
|
Adjusted Net Income
Attributable to the Company - Non GAAP
|
|
30,678,027
|
|
25,914,369
|
Diluted EPS - Non
GAAP
|
|
|
0.76
|
|
0.90
|
|
|
|
|
|
|
Weighted average
number of shares used in computation of Non GAAP diluted
EPS
|
|
39,452,458
|
|
27,812,319
|
|
|
|
|
|
|
|
|
|
For the Years
Ended
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
2018
|
|
2017
|
|
|
|
USD
|
|
USD
|
Income from
Operations
|
|
|
146,172,751
|
|
135,858,505
|
Non-cash employee
share-based compensation
|
|
23,130,570
|
|
33,903,283
|
Amortization of
acquired intangible assets and land use rights
|
|
8,366,196
|
|
-
|
Expenses related to
change of domicile and acquisition of TianXinFu
|
|
-
|
|
1,872,012
|
Adjusted Income from
Operations - Non GAAP
|
|
177,669,517
|
|
171,633,800
|
|
|
|
|
|
|
Net Income
Attributable to the Company
|
|
128,056,302
|
|
67,943,035
|
Non-cash employee
share-based compensation
|
|
19,706,585
|
|
31,108,910
|
Amortization of
acquired intangible assets and land use rights
|
|
5,689,013
|
|
-
|
Income tax expense
(benefit) related to U.S. Tax Reform
|
|
(7,519,674)
|
|
40,290,367
|
Expenses related to
change of domicile and acquisition of TianXinFu
|
|
-
|
|
1,872,012
|
Adjusted Net Income
Attributable to the Company - Non GAAP
|
|
145,932,226
|
|
141,214,324
|
Diluted EPS - Non
GAAP
|
|
|
4.02
|
|
4.95
|
|
|
|
|
|
|
Weighted average
number of shares used in computation of Non GAAP diluted
EPS
|
|
35,432,959
|
|
27,605,623
|
View original
content:http://www.prnewswire.com/news-releases/china-biologic-reports-financial-results-for-the-fourth-quarter-and-fiscal-year-2018-300807687.html
SOURCE China Biologic Products Holdings, Inc.