--2Q19 Total Sales Up 12.7% YoY in USD terms,
or 20.4% YoY in RMB terms; Net Income Up 45.5% YoY to
$41.6 Million; Non-GAAP
Adjusted Net Income Up 29.1% YoY in RMB terms --
--1H19 Total Sales Up 14.0%
YoY in USD terms, or 21.3% YoY in RMB terms; Net Income Up
31.7% YoY to $79.3 Million;
Non-GAAP Adjusted Net Income Up 21.6% YoY in RMB terms
--
--Board appoints Joseph Chow as
CEO--
BEIJING, Aug. 5, 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 unaudited financial
results for the second quarter of 2019.
Second Quarter 2019 Financial Highlights
- Total sales in the second quarter of 2019 increased by
20.4% in RMB terms and 12.7% in USD terms to $135.7 million from $120.4
million in the same quarter of 2018.
- Gross profit increased by 9.9% to $90.9 million from $82.7
million in the same quarter of 2018. Gross margin
decreased to 67.0% from 68.7% in the same quarter of 2018.
- Income from operations increased by 34.3% to
$48.2 million from $35.9 million in the same quarter of 2018.
Operating margin increased to 35.5% from 29.8% in the same
quarter of 2018.
- Non-GAAP adjusted income from operations increased by
23.1% in RMB terms and 15.2% in USD terms to $56.7 million from $49.2
million in the same quarter of 2018.
- Net income attributable to the Company
increased by 55.2% in RMB terms and 45.5% in USD terms, to
$41.6 million from $28.6 million in the same quarter of 2018.
Fully diluted earnings per share
increased to $1.06 compared to
$0.83 in the same quarter of
2018.
- Non-GAAP adjusted net income attributable to the Company
increased by 29.1% in RMB terms and 21.1% in USD terms to
$48.7 million from $40.2 million in the same quarter of 2018.
Non-GAAP adjusted earnings per share increased
to $1.24 from $1.17 in the same quarter of 2018.
"China Biologic continued to deliver solid financial
results in the second quarter, driven primarily by
higher-than-usual sales volumes of albumin and a high growth in
sales volume for certain hyper-immunoglobulin products. However,
IVIG sales remained sluggish, and the growth of albumin sales
slowed down. While we closely monitor the impact of changes in the
policy and market environment, we maintain our outlook for the
year," said Joseph Chow, Chairman
and CEO of China Biologic.
"As expected, the growth in albumin sales that we had
experienced in the first quarter decelerated during the second
quarter, reflecting the alleviation of the albumin supply shortage
situation in the market due to relaxation of import constraints
imposed in the earlier months of 2019. We expect growth in albumin
sales to slow down further during the second half of the year, as a
result of our relatively fixed level of annual production of
albumin and the large volume of albumin which was oversold in the
first half of the year. Sales of IVIG products during the second
quarter still lagged behind our expectations, reflecting the
continued negative impact of the policy controls on
higher-unit-cost prescription drugs. Looking ahead, our polypeptide
products may be included in China's national and regional key drug lists
for monitoring and prescription control, which we expect would
significantly impact its sales. In
addition, due to the increase of our account receivable turnover
days relative to peer companies in the last two quarters, we have
decided to begin a comprehensive review of our existing credit sale
policies regarding pricing and credit terms, and to increase
collection efforts to ensure our credit exposure is within the
limits of our risk tolerance level. These measures could
potentially impact our sales in the near term."
"In June, we obtained approval from the China National Medical
Products Administration to begin human clinical trials on a Human
von Willebrand Factor (VWF)
product, which is intended to be used for the treatment of bleeding
episodes including surgical bleeding in patients with von
Willebrand disease. We expect that it will take approximately three
years to complete the clinical trials. In late July, we received
the operating permit for our new Wenchang plasma collection station
in Hainan Province and immediately
commenced commercial operations. We are also pleased to announce
that in early August we completed the acquisition of the remaining
20% interest in TianXinFu and made it an indirect wholly-owned
subsidiary of the Company, which will allow us to fully capture the
growth potential of this leading
player in the regenerative medical bio-material industry, better
realize the synergies between TianXinFu's business and China
Biologic's high-end coagulation factor business, and receive the
full benefits and earnings accretion from existing and future
TianXinFu products."
"Moving forward, with a stable and experienced team in place, we
will continue our efforts to execute our sales and marketing
strategies, including expanding our sales coverage and enhancing
promotion of IVIG and high-end coagulation factor products to
improve their prescription volumes in hospitals."
Appointment of Joseph Chow as CEO
The Company today announced that its board of directors (the
"Board") has appointed Mr. Joseph
Chow as the CEO of the Company, effective August 5, 2019.
Mr. Chow is an experienced executive and has held managerial
positions in various public and private companies. Mr. Chow has
been a member of our Board since November
2014, our Chairman since February
2019 and our acting CEO since May
2019. After the departure of our former CEO in May 2019, the Board formed a search committee to
seek a new CEO for the Company. After several months' search and
evaluation of both internal and external candidates, the search
committee recommended Mr. Chow to the Board and the Board approved
his appointment. The Board believes that, with his deep
understanding of the Company and extensive experience in corporate
finance and management, Mr. Chow is well qualified for the position
and will lead the Company towards long-term sustainable growth.
Mr. Chow will continue to serve as a director and the Chairman
of the Company. In order to fully devote to the affairs of the
Company, Mr. Chow has resigned from all positions he previously
held at Centurium Capital and no longer holds any interest in
Centurium Capital or funds managed by it.
Mr. Chow stated, "I am thankful for the confidence and trust the
Board has placed in me as the Company's new CEO. I am looking
forward to working with the management, employees and partners to
redevelop the future roadmap for our business that charts its
course and ensures long-term improved and sustainable growth."
Share Repurchase Program
In May 2019, the Board authorized
a share repurchase program under which China Biologic may
repurchase up to US$150 million worth
of shares over a 12-month period. As of June
30, 2019, the Company had repurchased 121,852 shares at a
total of $11.0 million under this
program.
Second Quarter 2019 Financial
Performance
Total sales in the second quarter of 2019 increased by
20.4% in RMB terms, or 12.7% in USD terms, to $135.7 million from $120.4
million in the same quarter of 2018.
Total sales for biopharmaceutical products (including plasma
products and placenta polypeptide products) increased by 21.6% in
RMB terms, or 14.0% in USD terms, to $122.3
million from $107.3 million in
the same quarter of 2018, as a result of increased sales of human
albumin products, certain hyper-immune products and coagulation
factor products, which was partly offset by decreased sales of
placenta polypeptide products. For plasma products, total sales in
the second quarter of 2019 increased by 31.2% in RMB terms, or
22.8% in USD terms, to $111.0 million
from $90.3 million in the same
quarter of 2018.
Total sales for biomaterial products in the second quarter of
2019 increased by 9.9% in RMB terms, or 3.1% in USD terms, to
$13.4 million from $13.0 million in the same quarter of 2018, as a
result of higher sales concentration of higher-unit-price
artificial dura mater products.
During the second quarter of 2019, human albumin and IVIG
products remained the Company's two largest sales contributors.
Revenue from human albumin increased by 36.9% in RMB terms, or
28.3% in USD terms, from $38.1
million in the second quarter of 2018 to $48.9 million in the second quarter of 2019.
Revenue from IVIG products increased by 4.0% in RMB terms, or
decreased by 2.5% in USD terms, from $28.1
million in the second quarter of 2018 to $27.4 million in the second quarter of 2019. As a
percentage of total sales, sales from human albumin and IVIG
products were 36.0% and 20.2%, respectively, in the second quarter
of 2019.
Sales volume of human albumin products increased by 38.2% for
the second quarter of 2019, primarily due to increased sales
volumes in the distributor and pharmacy channels, supplemented by
increased direct sales to hospitals and inoculation centers. The
sales volume of IVIG products increased by 5.3% for the second
quarter of 2019 as a result of increased sales through the direct
sales channel.
The average prices for human albumin and IVIG products decreased
by 0.9% and 1.2%, respectively, in RMB terms in the second quarter
of 2019 compared to the same quarter of 2018 because of higher
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
and IVIG products decreased by 7.2% and 7.5%, respectively, in the
second quarter of 2019 compared to the same quarter of 2018.
Revenue from other immunoglobulin products increased by 31.9% in
RMB terms, or 23.5% in USD terms in the second quarter of 2019
compared to the same quarter of 2018, reaching 14.0% of total sales
as compared to 12.8% of total sales in the same quarter of 2018.
The revenue increase was mainly attributable to increased sales
volume of human rabies immunoglobulin and human tetanus
immunoglobulin products.
Revenue from other plasma products, including human coagulation
factor VIII, human prothrombin complex concentrate, and human
fibrinogen products, increased by 92.7% in RMB terms, or 80.5% in
USD terms, in the second quarter of 2019 compared to the same
quarter of 2018, representing 11.5% of total sales in the second
quarter of 2019. The growth mainly came from increased sales
through the distributor channel.
Revenue from placenta polypeptide products decreased by 29.0% in
RMB terms, or 33.5% in USD terms for the second quarter of 2019 as
compared to the same quarter of 2018, accounting for 8.3% of total
sales compared to 14.1% of total sales in the second quarter of
2018, mainly in line with a decrease in sales volume as a result of
the inclusion of placenta polypeptide products in regional adjuvant
drug lists, which put a downward pressure on their prescription
volume.
Cost of sales increased by 19.1% to $44.8 million in the second quarter of 2019 from
$37.6 million in the same quarter of
2018. As a percentage of total sales, cost of sales increased to
33.0% from 31.2% in the same quarter of 2018, mainly due to
decreased sales prices for most of the Company's plasma products
and increased plasma collection costs.
Gross profit increased by 9.9% to $90.9 million in the second quarter of 2019 from
$82.7 million in the same quarter of
2018. Gross margin was 67.0% and 68.7% in the second quarter
of 2019 and 2018, respectively.
Total operating expenses in the second quarter of
2019 decreased by $4.2 million, or
9.0%, to $42.7 million from
$46.9 million in the same quarter of
2018. This decrease mainly consisted of a decrease of $5.9 million in general and administrative
expenses, partially offset by an increase of $1.2 million in selling expenses and $0.5 million in research and development
expenses. As a percentage of total sales, total operating expenses
decreased to 31.5% in the second quarter of 2019 from 39.0% in the
same quarter of 2018.
Selling expenses in the second quarter of 2019 increased
by $1.2 million, or 4.9%, to
$25.6 million from $24.4 million for the second quarter of 2018. The
increase is primarily due to increased selling expenses for plasma
products and biomaterial products, which is partly offset by a
decrease in marketing and promotion expenses related to placenta
polypeptide products. As a percentage of total sales, selling
expenses decreased to 18.9% for the second quarter of 2019 from
20.3% in the same quarter of 2018.
General and administrative expenses in the second quarter
of 2019 decreased by $5.9 million, or
28.6%, to $14.7 million from
$20.6 million in the same quarter of
2018. As a percentage of total sales, general and administrative
expenses decreased to 10.8% for the second quarter of 2019 from
17.1% for the same quarter of 2018. The decrease in general and
administrative expenses was mainly because of a decrease in
share-based compensation expenses and a reversal of allowance for
doubtful accounts receivable.
Research and development expenses in the second
quarter of 2019 increased by $0.5
million, or 26.3%, to $2.4
million from $1.9 million in
the same quarter of 2018. As a percentage of total sales, research
and development expenses increased to 1.8% from 1.6% in the same
quarter of 2018.
Income from operations in the second quarter of 2019
increased by 43.4% in RMB terms, or 34.3% in USD terms, to
$48.2 million from $35.9 million in the same quarter of 2018.
Operating margin increased to 35.5% in the second quarter of
2019 from 29.8% in the second quarter of 2018.
Income tax expense in the second quarter of 2019
increased by 22.4%, to $8.2 million
from $6.7 million in the same period
of 2018. The effective income tax rate was 14.4% and 16.5% for the
second quarter of 2019 and 2018, respectively.
Net income attributable to the
Company increased by 55.2% in RMB terms, or 45.5% in USD
terms, to $41.6 million in the second
quarter of 2019 from $28.6 million in
the same period of 2018. Net margin increased to 30.7% in
the second quarter of 2019 from 23.8% in the same period of 2018.
Diluted net earnings per share increased to $1.06 in the second quarter of 2019 compared to
$0.83 in the same period of 2018.
Non-GAAP adjusted income from operations increased
by 23.1% in RMB terms, or 15.2% in USD terms, to $56.7 million in the second quarter of 2019 from
$49.2 million in the same period of
2018.
Non-GAAP adjusted net income attributable to the Company
increased by 29.1% in RMB terms and 21.1% in USD terms, to
$48.7 million in the second quarter
of 2019 from $40.2 million in
the same period of 2018. Non-GAAP net margin increased to
35.9% in the second quarter of 2019 from 33.4% in the same period
of 2018. Non-GAAP adjusted net income per diluted share
increased to $1.24 in the second
quarter of 2019 from $1.17 in the
same period of 2018.
Non-GAAP adjusted income from operations for the
second quarter of 2019 excludes $6.5
million in non-cash employee share-based compensation
expenses, and $2.0 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 second quarter of 2019 exclude $5.6 million in non-cash employee share-based
compensation expenses, and $1.4
million in amortization expense of intangible assets and
land use rights related to the acquisition of TianXinFu.
First Half 2019 Financial Performance
Total sales in the first half of 2019 increased by
21.3% in RMB terms, or 14.0% in USD terms, to $265.5 million from $232.8
million in the same period of 2018.
Total sales for biopharmaceutical products increased by 21.9% in
RMB terms, or 14.5% in USD terms, to $238.7
million from $208.4 million in
the same period of 2018, as a result of increases in the sales of
human albumin products, immunoglobulin products and coagulation
factor products, which was partly offset by decreases in the sales
of placenta polypeptide products. For plasma products, total sales
in the first half of 2019 increased by 33.4% in RMB terms, or 25.4%
in USD terms, to $219.8 million from
$175.3 million in the same period of
2018. As a percentage of total sales, sales from human albumin and
IVIG products accounted for 39.8% and 21.3%, respectively, in the
first half of 2019.
Total sales for biomaterial products in the first half of 2019
increased by 16.4% in RMB terms, or 9.4% in USD terms, to
$26.7 million from $24.4 million in the same period of 2018, as a
result of higher sales concentration in higher-unit-price
artificial dura mater products.
Cost of sales increased by 24.8% to $89.0 million in the first half of 2019 from
$71.3 million in the same period of
2018. As a percentage of total sales, cost of sales increased to
33.5% from 30.6% in the same period of 2018, mainly because of
decreased sales prices for most of the Company's plasma products,
and increased plasma collection costs.
Gross profit increased by 9.3% to $176.5 million in the first half of 2019 from
$161.5 million in the same period of
2018. Gross margin was 66.5% and 69.4% in the first half of
2019 and 2018, respectively.
Total operating expenses in the first half of 2019
decreased by $2.3 million, or 2.7%,
to $84.4 million from $86.7 million in the same period of 2018. This
decrease mainly consisted of a decrease of $2.7 million in general and administrative
expenses and $0.6 million in selling
expense, partially offset by an increase of $1.1 million in research and development
expenses. As a percentage of total sales, total operating expenses
decreased to 31.8% in the first half of 2019 from 37.2% in the same
period of 2018.
Income from operations in the first half of 2019
increased by 30.9% in RMB terms, or 23.1% in USD terms, to
$92.1 million from $74.8 million in the same period of 2018.
Operating margin increased to 34.7% in the first half of
2019 from 32.1% in the first half of 2018.
Income tax expense in the first half of 2019
increased by $2.6 million, or 19.3%,
to $16.1 million from $13.5 million in the same period of 2018. The
effective income tax rate was 14.7% and 15.9% for the first half of
2019 and 2018, respectively.
Net income attributable to the Company increased by
40.2% in RMB terms, or 31.7% in USD terms, to $79.3 million in the first half of 2019 from
$60.2 million in the same period of
2018. Net margin increased to 29.9% in the first half of
2019 from 25.9% in the same period of 2018. Diluted net earnings
per share increased to $2.01 in
the first half of 2019 compared to $1.75 in the same period of 2018.
Non-GAAP adjusted income from operations increased
by 16.7% in RMB terms and 9.7% in USD terms to $108.9 million in the first half of 2019 from
$99.3 million in the same period
of 2018.
Non-GAAP adjusted net income attributable to the Company
increased by 21.6% in RMB terms, and 14.3% in USD terms, to
$93.2 million in the first half of
2019 from $81.6 million in the same
period of 2018. Non-GAAP net margin remained comparatively
stable at 35.1% in the first half of 2019 compared with 35.0% in
the same period of 2018. Non-GAAP adjusted net income per
diluted share was $2.36 and
$2.37, respectively, in the first
half of 2019 and 2018.
Non-GAAP adjusted income from operations for the
first half of 2019 excludes $12.8
million in non-cash employee share-based compensation
expenses, and $4.1 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 first half of 2019 exclude $11.1 million in non-cash employee share-based
compensation expenses, and $2.8
million in amortization of intangible assets and land use
rights related to the acquisition of TianXinFu.
As of June 30, 2019, the Company
had $202.5 million in cash on hand
and demand deposits, $523.9 million
in time deposits, and $191.1 million
in short term investments.
Net cash provided by operating activities for the
first half of 2019 was $94.2 million
as compared to $45.5 million for the
same period of 2018. The $48.7
million increase in net cash provided by operating
activities was a combined result of the increase in net income and
a slowdown of increase in accounts receivable and inventories
compared to the first half of 2018.
Accounts receivable increased by $15.2
million during the first half of 2019 as compared to
$30.3 million during the same period
of 2018. The accounts receivable turnover days for plasma products
increased to 102 days during the first half of 2019 from 88 days
during the same period of 2018, reflecting longer credit terms to
hospitals as a result of the nationwide implementation of
healthcare reform measures and intensified competition in the
distributor channel.
Inventories increased by $4.3
million in the first half of 2019, which was milder than the
increase of $21.4 million in the same
period of 2018. This reflected a lower level of albumin inventory
attributable to higher-than-expected albumin sales, which was
partially offset by higher IVIG inventory due to sluggish IVIG
sales.
Net cash used in investing activities for the first half
of 2019 was $117.5 million as
compared to $168.9 million for the
same period of 2018. During the first half of 2019, the Company
paid $15.1 million for the
acquisition of property, plant and equipment, intangible assets and
land use rights, and the Company also purchased time deposits and
short-term investments in the amount of $1,265.0 million. This was partly offset by
$1,162.7 million from the maturity of
time deposits and short term investments. Net cash used in
investing activities in the first half of 2018 mainly consisted of
$529.6 million payment for purchase
of time deposits and short term investments, and $19.1 million for the acquisition of property,
plant and equipment, intangible assets, and land use rights, which
was partly offset by $97.7 million
cash received upon acquisition of TianXinFu and the maturity of
$282.1 million time deposits and
short term investments.
Net cash used in financing activities for the first half
of 2019 was $114.9 million as
compared to net cash provided by financing activities of
$0.8 million for the same period of
2018. In the first half of 2019, $110.0
million was remitted to an investment bank by the Company to
execute the previously approved share repurchase program on behalf
of the Company. During this period, 1,196,228 shares were
repurchased at a total amount of $111.0
million. Net cash provided by financing activities in the
first half of 2018 represented proceeds of $0.8 million from stock options exercised.
Financial Outlook
The Company reiterates its forecast for the full year 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 Tuesday, August 6, 2019,
which is 7:30 pm Beijing Time on
August 6, 2019, to discuss its second
quarter 2019 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 August 13, 2019. The dial-in details are:
US:
|
1 877 344
7529
|
International:
|
1 412 317
0088
|
Passcode:
|
10133955
|
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 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 and amortization of acquired
intangible assets and land use rights. To supplement the Company's
unaudited 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
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
For the Six Months
Ended
|
|
June 30,
2019
|
|
June 30,
2018
|
|
June 30,
2019
|
|
June 30,
2018
|
|
USD
|
|
USD
|
|
USD
|
|
USD
|
Sales:
|
135,696,199
|
|
120,377,293
|
|
265,480,266
|
|
232,842,183
|
Plasma products:
|
|
|
|
|
|
|
|
Human Albumin
|
48,909,671
|
|
38,134,120
|
|
105,722,460
|
|
71,930,081
|
Immunoglobulin products:
|
|
|
|
|
|
|
|
Human Immunoglobulin for
Intravenous Injection
|
27,378,416
|
|
28,111,148
|
|
56,422,596
|
|
59,896,369
|
Other Immunoglobulin
products
|
19,025,521
|
|
15,405,847
|
|
32,114,741
|
|
28,425,404
|
Others
|
15,639,597
|
|
8,665,576
|
|
25,509,605
|
|
15,038,538
|
Placenta Polypeptide
|
11,314,880
|
|
17,013,150
|
|
18,973,870
|
|
33,107,795
|
Biopharmaceutical products
|
122,268,085
|
|
107,329,841
|
|
238,743,272
|
|
208,398,187
|
Artificial Dura Mater
|
12,567,201
|
|
12,815,856
|
|
24,881,234
|
|
22,759,839
|
Others
|
860,913
|
|
231,596
|
|
1,855,760
|
|
1,684,157
|
Biomaterial products
|
13,428,114
|
|
13,047,452
|
|
26,736,994
|
|
24,443,996
|
|
|
|
|
|
|
|
|
Cost of
sales
|
44,793,259
|
|
37,638,545
|
|
89,033,704
|
|
71,330,228
|
Gross
profit
|
90,902,940
|
|
82,738,748
|
|
176,446,562
|
|
161,511,955
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Selling expenses
|
25,642,174
|
|
24,352,111
|
|
44,370,433
|
|
45,047,326
|
General and administrative expenses
|
14,658,433
|
|
20,583,026
|
|
35,255,993
|
|
37,970,101
|
Research and development expenses
|
2,431,379
|
|
1,945,921
|
|
4,762,204
|
|
3,662,875
|
Income from
operations
|
48,170,954
|
|
35,857,690
|
|
92,057,932
|
|
74,831,653
|
|
|
|
|
|
|
|
|
Other income
(expenses)
|
|
|
|
|
|
|
|
Equity in income of an equity method
investee
|
851,981
|
|
430,509
|
|
1,445,011
|
|
1,498,554
|
Interest expense
|
(125,032)
|
|
(68,109)
|
|
(188,809)
|
|
(135,673)
|
Interest income
|
5,920,033
|
|
3,237,207
|
|
12,445,872
|
|
6,241,136
|
Other income, net
|
1,981,106
|
|
1,341,402
|
|
3,581,482
|
|
2,626,465
|
Total other income,
net
|
8,628,088
|
|
4,941,009
|
|
17,283,556
|
|
10,230,482
|
|
|
|
|
|
|
|
|
Income before income
tax expense
|
56,799,042
|
|
40,798,699
|
|
109,341,488
|
|
85,062,135
|
|
|
|
|
|
|
|
|
Income tax
expense
|
8,161,639
|
|
6,743,682
|
|
16,080,081
|
|
13,451,137
|
|
|
|
|
|
|
|
|
Net income
|
48,637,403
|
|
34,055,017
|
|
93,261,407
|
|
71,610,998
|
|
|
|
|
|
|
|
|
Less: Net income
attributable to noncontrolling interest
|
6,990,249
|
|
5,412,147
|
|
13,922,146
|
|
11,383,051
|
|
|
|
|
|
|
|
|
Net income
attributable to China Biologic Products Holdings, Inc.
|
41,647,154
|
|
28,642,870
|
|
79,339,261
|
|
60,227,947
|
|
|
|
|
|
|
|
|
Earnings per share of
ordinary share:
|
|
|
|
|
|
|
|
Basic
|
1.07
|
|
0.84
|
|
2.01
|
|
1.76
|
Diluted
|
1.06
|
|
0.83
|
|
2.01
|
|
1.75
|
Weighted average
shares used in computation:
|
|
|
|
|
|
|
|
Basic
|
38,496,323
|
|
33,213,938
|
|
38,911,830
|
|
33,187,923
|
Diluted
|
38,586,250
|
|
33,345,062
|
|
39,003,195
|
|
33,347,605
|
|
|
|
|
|
|
|
|
Net income
|
48,637,403
|
|
34,055,017
|
|
93,261,407
|
|
71,610,998
|
|
|
|
|
|
|
|
|
Other comprehensive
income:
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment, net of nil income taxes
|
(27,689,871)
|
|
(43,595,004)
|
|
(3,373,450)
|
|
(11,801,779)
|
|
|
|
|
|
|
|
|
Comprehensive
income
|
20,947,532
|
|
(9,539,987)
|
|
89,887,957
|
|
59,809,219
|
|
|
|
|
|
|
|
|
Less: Comprehensive
income attributable to noncontrolling interest
|
3,369,049
|
|
508,757
|
|
12,121,308
|
|
9,872,451
|
|
|
|
|
|
|
|
|
Comprehensive income
attributable to China Biologic Products Holdings, Inc.
|
17,578,483
|
|
(10,048,744)
|
|
77,766,649
|
|
49,936,768
|
CHINA BIOLOGIC
PRODUCTS HOLDINGS, INC. AND SUBSIDIARIES
|
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
|
|
June 30,
2019
|
|
December 31,
2018
|
|
|
USD
|
|
USD
|
ASSETS
|
|
|
|
|
Current
Assets
|
|
|
|
|
Cash and
cash equivalents
|
|
202,451,083
|
|
338,880,559
|
Time
deposits
|
|
523,885,887
|
|
537,478,040
|
Short
term investments
|
|
191,132,785
|
|
76,048,594
|
Accounts
receivable, net of allowance for doubtful accounts
|
|
139,528,398
|
|
125,115,842
|
Inventories
|
|
246,763,567
|
|
243,295,512
|
Prepayments and other current assets, net of allowance for
doubtful accounts
|
|
34,510,066
|
|
36,369,275
|
Total Current Assets
|
|
1,338,271,786
|
|
1,357,187,822
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
180,067,627
|
|
178,327,361
|
Intangible assets,
net
|
|
49,104,013
|
|
53,258,871
|
Land use rights,
net
|
|
34,824,538
|
|
32,204,342
|
Equity method
investment
|
|
16,828,849
|
|
15,428,028
|
Prepayment in equity
securities
|
|
-
|
|
10,812,893
|
Other
investments
|
|
10,812,893
|
|
-
|
Loan receivable - non
current
|
|
37,751,620
|
|
39,942,591
|
Goodwill
|
|
313,072,254
|
|
313,588,803
|
Other non-current
assets
|
|
13,602,789
|
|
9,227,970
|
Total Assets
|
|
1,994,336,369
|
|
2,009,978,681
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
Accounts
payable
|
|
4,816,135
|
|
11,404,642
|
Income
tax payable
|
|
14,502,086
|
|
11,010,347
|
Other
payables and accrued expenses
|
|
107,263,399
|
|
99,933,793
|
Total Current Liabilities
|
|
126,581,620
|
|
122,348,782
|
|
|
|
|
|
Deferred
income
|
|
2,577,006
|
|
2,824,212
|
Non-current income
tax payable
|
|
24,905,728
|
|
26,899,038
|
Other
liabilities
|
|
13,784,274
|
|
13,203,485
|
Total Liabilities
|
|
167,848,628
|
|
165,275,517
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
|
|
Ordinary
share:
|
|
|
|
|
par value $0.0001;
|
|
|
|
|
100,000,000 shares authorized;
|
|
|
|
|
41,714,719 and
41,616,320 shares issued at June 30, 2019 and December 31, 2018,
respectively;
|
|
|
|
|
38,263,787 and 39,361,616 shares outstanding at
June 30, 2019 and December 31, 2018, respectively
|
|
4,171
|
|
4,162
|
Additional paid-in capital
|
|
1,202,727,599
|
|
1,189,698,494
|
Treasury
share: 3,450,932 shares at June 30, 2019 and 2,254,704 at
December31, 2018, respectively, at cost
|
|
(167,432,883)
|
|
(56,425,094)
|
Retained
earnings
|
|
713,821,999
|
|
634,482,738
|
Accumulated other comprehensive loss
|
|
(47,283,313)
|
|
(45,710,701)
|
Total equity attributable to China
Biologic Products Holdings, Inc.
|
|
1,701,837,573
|
|
1,722,049,599
|
|
|
|
|
|
Noncontrolling interest
|
|
124,650,168
|
|
122,653,565
|
|
|
|
|
|
Total Shareholders'
Equity
|
|
1,826,487,741
|
|
1,844,703,164
|
|
|
|
|
|
Commitments and contingencies
|
|
-
|
|
-
|
|
|
|
|
|
Total Liabilities and Shareholders'
Equity
|
|
1,994,336,369
|
|
2,009,978,681
|
CHINA BIOLOGIC
PRODUCTS HOLDINGS, INC. AND SUBSIDIARIES
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
|
|
|
|
|
|
|
For the Six Months
Ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2019
|
|
2018
|
|
|
USD
|
|
USD
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
Net
income
|
|
93,261,407
|
|
71,610,998
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation
|
|
7,983,092
|
|
6,577,959
|
Amortization
|
|
4,527,682
|
|
5,149,167
|
Loss on disposal of
property, plant and equipment
|
|
82,137
|
|
98,555
|
Fair value changes of
short term investments
|
|
(2,288,576)
|
|
(2,626,465)
|
Allowance (reversal)
for doubtful accounts - accounts receivable, net
|
|
430,927
|
|
(4,703)
|
Reversal for doubtful
accounts - prepayments and other receivables
|
|
(19,560)
|
|
-
|
Write-down for
obsolete inventories
|
|
391,215
|
|
-
|
Deferred income tax
benefit
|
|
(2,054,341)
|
|
(4,314,498)
|
Share-based
compensation
|
|
12,791,884
|
|
19,846,826
|
Equity in income of
an equity method investee
|
|
(1,445,011)
|
|
(1,498,554)
|
Change in operating
assets and liabilities:
|
|
|
|
|
Accounts
receivable
|
|
(15,232,984)
|
|
(30,298,478)
|
Inventories
|
|
(4,314,603)
|
|
(21,365,581)
|
Prepayments and other
current assets
|
|
789,688
|
|
(8,339,852)
|
Other non-current
assets
|
|
(787,001)
|
|
-
|
Accounts
payable
|
|
(4,500,433)
|
|
(1,321,840)
|
Income tax
payable
|
|
3,558,375
|
|
(1,747,739)
|
Other payables and
accrued expenses
|
|
4,267,065
|
|
17,286,649
|
Deferred
income
|
|
(245,956)
|
|
(261,672)
|
Non-current income
tax payable
|
|
(1,993,310)
|
|
(3,250,000)
|
Other
liabilities
|
|
(970,039)
|
|
-
|
Net cash provided
by operating activities
|
|
94,231,658
|
|
45,540,772
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
Cash acquired from
acquisition of TianXinFu
|
|
-
|
|
97,702,278
|
Purchase of time
deposits
|
|
(908,002,883)
|
|
(206,656,231)
|
Proceeds from
maturity of time deposits
|
|
920,485,867
|
|
108,029,200
|
Purchase of short
term investments
|
|
(357,025,912)
|
|
(322,948,071)
|
Proceeds from
maturity of short term investments
|
|
242,169,502
|
|
174,086,107
|
Payment for property,
plant and equipment
|
|
(12,731,955)
|
|
(18,443,583)
|
Payment for
intangible assets and land use rights
|
|
(2,385,371)
|
|
(700,720)
|
Proceeds from
disposal of property, plant and equipment
|
|
1,907
|
|
17,562
|
Net cash used in
investing activities
|
|
(117,488,845)
|
|
(168,913,458)
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
Proceeds from stock
option exercised
|
|
237,231
|
|
766,906
|
Payment to an
investment bank for share repurchase
|
|
(110,042,776)
|
|
-
|
Dividend paid by
subsidiaries to noncontrolling interest shareholders
|
|
(5,062,353)
|
|
-
|
Net cash (used
in)/ provided by financing activities
|
|
(114,867,898)
|
|
766,906
|
|
|
|
|
|
EFFECT OF FOREIGN
EXCHANGE RATE CHANGES ON CASH AND CASH
EQUIVALENTS
|
|
1,695,609
|
|
6,568,136
|
|
|
|
|
|
NET DECREASE IN
CASH AND CASH EQUIVALENTS
|
|
(136,429,476)
|
|
(116,037,644)
|
|
|
|
|
|
Cash and cash
equivalents at beginning of period
|
|
338,880,559
|
|
219,336,848
|
|
|
|
|
|
Cash and cash
equivalents at end of period
|
|
202,451,083
|
|
103,299,204
|
|
|
|
|
|
Supplemental cash
flow information
|
|
|
|
|
Cash paid for income
taxes
|
|
16,812,861
|
|
23,356,958
|
Noncash investing and
financing activities:
|
|
|
|
|
Acquisition of
property, plant and equipment included in payables
|
|
2,226,126
|
|
5,028,782
|
Set-off loan
receivable against accounts payable
|
|
2,160,070
|
|
-
|
Fair value of noncash
assets acquired and liabilities assumed in acquisition of
TianXinFu
|
|
-
|
|
337,186,892
|
Land use right
acquired with prepayments made in prior periods
|
|
2,689,467
|
|
-
|
Share repurchase
using the prepayment to an investment bank
|
|
110,965,013
|
|
-
|
CHINA BIOLOGIC
PRODUCTS HOLDINGS, INC. AND SUBSIDIARIES
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
2019
|
|
2018
|
|
|
|
USD
|
|
USD
|
Income from
Operations
|
|
|
48,170,954
|
|
35,857,690
|
Non-cash employee
share-based compensation
|
|
6,485,917
|
|
10,837,592
|
Amortization of
acquired intangible assets and land use rights
|
|
2,036,171
|
|
2,472,350
|
Adjusted Income from
Operations - Non GAAP
|
|
56,693,042
|
|
49,167,632
|
|
|
|
|
|
|
Net Income
Attributable to the Company
|
|
|
41,647,154
|
|
28,642,870
|
Non-cash employee
share-based compensation
|
|
5,630,041
|
|
9,914,207
|
Amortization of
acquired intangible assets and land use rights
|
|
1,384,596
|
|
1,681,198
|
Adjusted Net Income
Attributable to the Company - Non GAAP
|
|
48,661,791
|
|
40,238,275
|
Diluted EPS - Non
GAAP
|
|
|
1.24
|
|
1.17
|
|
|
|
|
|
|
Weighted average
number of shares used in computation of Non GAAP diluted
EPS
|
|
38,586,250
|
|
33,345,062
|
|
|
|
|
|
|
|
|
|
For the Six Months
Ended
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
2019
|
|
2018
|
|
|
|
USD
|
|
USD
|
Income from
Operations
|
|
|
92,057,932
|
|
74,831,653
|
Non-cash employee
share-based compensation
|
|
12,791,884
|
|
19,846,826
|
Amortization of
acquired intangible assets and land use rights
|
|
4,091,203
|
|
4,629,652
|
Adjusted Income from
Operations - Non GAAP
|
|
108,941,019
|
|
99,308,131
|
|
|
|
|
|
|
Net Income
Attributable to the Company
|
|
|
79,339,261
|
|
60,227,947
|
Non-cash employee
share-based compensation
|
|
11,080,132
|
|
18,176,844
|
Amortization of
acquired intangible assets and land use rights
|
|
2,782,018
|
|
3,148,163
|
Adjusted Net Income
Attributable to the Company - Non GAAP
|
|
93,201,411
|
|
81,552,954
|
Diluted EPS - Non
GAAP
|
|
|
2.36
|
|
2.37
|
|
|
|
|
|
|
Weighted average
number of shares used in computation of Non GAAP diluted
EPS
|
|
39,003,195
|
|
33,347,605
|
View original
content:http://www.prnewswire.com/news-releases/china-biologic-reports-financial-results-for-the-second-quarter-of-2019-300896292.html
SOURCE China Biologic Products Holdings, Inc.