Net Income increased 225.7% year-over-year to $2.3 million or 11
cents per share TAI'AN CITY, Shandong, China, Nov. 15
/Xinhua-PRNewswire-FirstCall/ -- China Biologic Products, Inc.
(Pink Sheets: CBPO) ("CBP", "the Company"), one of the leading
plasma-based pharmaceutical companies in the People's Republic of
China ("PRC"), today reported record financial results for the
third quarter ended on September 30, 2007. Third Quarter 2007
Highlights -- Revenues increased 48.8% year-over-year to a record
$8.9 million -- Gross profits increased 79.7% to $6.7 million over
the third quarter of 2006 -- Operating income totaled $3.6 million,
up 106.9% over the third quarter of 2006 -- Net income was up
225.7% year-over-year to $2.3 million or $0.11 per share "During
the quarter we continued to see strong demand for our plasma based
products due to increased purchasing power and health consciousness
of Chinese consumers although unit prices have increased greatly,"
said Mr. Stanley Wong, CEO of China Biologic Products, "In
addition, we have taken advantage of the favorable industry
environment to improve our production facilities and to accelerate
the pace of developing new drugs." Third Quarter 2007 Results
Revenues for the three months ended September 30, 2007 were $8.9
million, up 48.8% as compared to $6.0 million for the same period
of 2006. The increase was primarily due to the rise in unit prices
of plasma based products, although the Company's unit sales volumes
declined. During the third quarter of 2007, unit prices of the
Company's main products experienced growth ranging from 8.1% to
424.5% year over year. The situation of unit prices rising combined
with the drop in volumes was a result of the PRC government's
stringent controls on quality in the plasma based production
industry. The Company is expected to adjust its production plans
and to utilize all plasma resources that are available to provide
products with higher profit margins. Human albumin, Human
Immunoglobulin for Intravenous Injection and Human Rabies
Immunoglobulin contributed 61.9%, 11.1% and 15.2% to the revenues,
respectively. Cost of revenues for the three months ended September
30, 2007 remained unchanged and stood at $2.3 million, accounting
for 25.5% of the revenues, compared to 38.3% for the comparable
period of 2006. Gross profit was up 79.7% to $6.7 million with
gross margins of 74.5% for the third quarter of 2007 compared with
approximately $3.7 million and 61.7% in the third quarter of 2006,
respectively. The increase of gross margin was mainly due to the
rapid growth in unit sale prices. Total operating expenses for the
three months ended September 30, 2007 were $3.1 million, up 55.9%
from the same period in 2006, which was primarily attributable to
increased selling expenses. During this quarter, the Company
incurred more marketing and sales expenses, including bonuses to
salespersons, holding sales conferences, and travel related
expenses. Research and development expenses were $0.2 million for
the third quarter of 2007, representing 2.4% of the revenues.
Income from operations grew 106.9% to $3.6 million in the third
quarter of 2007, representing operating margins of 40.0%, as
compared to $1.7 million and 28.7% in the same period of 2006. In
the third quarter of 2007, the Company recorded $0.56 million and
$0.61 million for provision for income taxes and minority interest,
respectively. Net income for the third quarter of 2007 was $2.3
million or $0.11 per basic and diluted share, an increase of 225.7%
and 219.1% from $0.7 million and $0.03 per share, respectively for
the comparable period of 2006. Nine Months Results Revenue for the
first nine months of 2007 increased 68.8% over the comparable
period in 2006 to $25.4 million. Gross profits rose 99.7% in the
same period to $17.1 million, representing gross margins of 67.4%.
Operating expenses in the first nine months of 2007 increased 85.0%
to $5.7 million as a result of the increased selling expenses.
Operating profits in the first nine months of 2007 rose 107.9% over
the comparable period in 2006 to $11.4 million, representing
operating margins of 44.9%. Net income for the nine months ended
September 30, 2007 was $7.6 million or $0.35 per basic and diluted
share, up 124.7% and 107.9% respectively. Cash flow from operations
for the nine months ended September 30, 2007 totaled $10.8 million,
a huge increase compared to $0.02 million in the comparable period
in 2006. Net cash used in investing activities in the first nine
months of 2007 totaled $7.2 million, most of which was incurred to
build the new production line. Financial Condition As of September
30, 2007, CBP had $6.1 million in cash, approximately $9.6 million
in working capital. Shareholder's equity at the end of the third
quarter stood at $21.1 million compared to $12.7 million at the end
of 2006. Business Outlook In recent years, the biopharmaceutical
industry and the plasma-based product market have outperformed the
pharmaceutical industry. According to http://www.pharmnet.com.cn/,
sales of blood and plasma-based drugs in China had an average
growth rate of 15% in the last 5 years, reaching $372 million in
2005, and accounting for 11.7% of prescription drug sales. China's
plasma- based products market remains underserved with limited
availability of products, offering substantial opportunities for
China Biologic to grow its business. The PRC government is limiting
the number of companies in this industry and is not expected to
issue new licenses in the foreseeable future. Besides, import of
foreign plasma-based products is severely restricted, creating a
relatively closed market for domestic suppliers. The overall effect
of recent government regulatory reform has been to reduce
competition and increase the barriers to entry, creating a
favorable industry structure for China Biologic Products. "We are
very pleased to be operating in a more regulated market for plasma
based products after recent reforms launched by the government,"
said Mr. Stanley Wong, CEO of China Biologic Products. "We are
going to continue our efforts to achieve more market share and
improve our products mix." About China Biologic Products, Inc.
China Biologic Products, Inc., through its indirect majority-owned
subsidiary Shandong Taibang, is currently the only plasma-based
biopharmaceutical company approved by the government of Shandong
Province, the second largest province with a population of 93
million. The company is engaged primarily in research,
manufacturing, and sale of plasma-based biopharmaceutical products
to hospitals and other health care facilities in China.
Plasma-based Human Albumin is used mainly to increase blood volume
while Immunoglobulin is used for disease prevention and treatment.
Safe Harbor Statement This release contains certain
"forward-looking statements" relating to the business of the
Company and its subsidiary companies. These forward-looking
statements are often identified by the use of forward-looking
terminology such as "believes, expects" or similar expressions.
Such forward looking statements involve known and unknown risks and
uncertainties that may cause actual results to be materially
different from those described herein as anticipated, believed,
estimated or expected. Investors should not place undue reliance on
these forward-looking statements, which speak only as of the date
of this press 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 those
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 to 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 TABLES FOLLOW-
China Biologic Products, Inc. and Subsidiaries CONSOLIDATED
CONDENSED STATEMENTS OF INCOME (US$ - Unaudited) Three months ended
Nine months ended 30-Sep 30-Sep 2007 2006 2007 2006 REVENUES
$8,938,186 $6,006,917 $25,442,097 $15,074,618 COST OF SALES
2,281,280 2,301,768 8,293,628 6,487,373 GROSS PROFIT 6,656,906
3,705,149 17,148,469 8,587,245 OPERATING EXPENSES Selling expenses
1,741,829 397,226 2,444,297 689,895 General and administrative
expenses 1,129,785 1,322,509 2,838,126 1,960,169 Research and
development expenses 213,865 259,506 435,500 440,140 TOTAL
OPERATING EXPENSES 3,085,479 1,979,241 5,717,923 3,090,204 INCOME
FROM OPERATIONS 3,571,427 1,725,908 11,430,546 5,497,041 OTHER
EXPENSES Finance expense 66,413 34,652 112,637 130,154 Other
expense 72,556 30,118 95,598 60,323 TOTAL OTHER EXPENSES 138,969
64,770 208,235 190,477 INCOME BEFORE PROVISION FOR INCOME TAXES AND
MINORITY INTEREST 3,432,458 1,661,138 11,222,311 5,306,564
PROVISION FOR INCOME TAXES 560,030 470,907 1,858,992 954,538 NET
INCOME BEFORE MINORITY INTEREST 2,872,428 1,190,231 9,363,319
4,352,026 LESS MINORITY INTEREST 613,914 496,691 1,762,462 969,167
NET INCOME 2,258,514 693,540 7,600,857 3,382,859 FOREIGN CURRENCY
TRANSLATION GAIN 336,137 116,354 799,229 323,132 OTHER
COMPREHENSIVE INCOME $2,594,651 $809,894 $8,400,086 $3,705,991
WEIGHTED AVERAGE NUMBER OF SHARES, BASIC AND DILUTED 21,434,942
21,004,507 21,434,942 19,831,279 EARNING PER SHARE, BASIC AND
DILUTED $0.11 $0.03 $0.35 $0.17 China Biologic Products, Inc. and
Subsidiaries CONSOLIDATED CONDENSED BALANCE SHEET (US$) A S S E T S
30-Sep 31-Dec 2007 2006 (Unaudited) (Audited) CURRENT ASSETS: Cash
$6,123,713 $4,268,220 Accounts receivable, net of allowance for
doubtful accounts of $1,177,093 and $1,131,209 as of September 30,
2007 and December 31, 2006, respectively 2,405,173 3,775,387 Notes
receivable 6,670 81,407 Other receivables 1,225,748 584,931 Other
receivables - shareholders 136,928 - Inventories 8,068,122
6,117,361 Advances on inventory purchases 511,217 713,194 Deferred
expense 3,945 - Total current assets 18,481,516 15,540,500 PLANT
AND EQUIPMENT, net 13,610,736 7,437,768 OTHER ASSETS: Advances on
equipment purchases 1,444,668 778,364 Intangible assets 920,083
718,011 Long term deferred assets 727 - Total other assets
2,365,478 1,496,375 Total assets $34,457,730 $24,474,643 L I A B I
L I T I E S A N D S H A R E H O L D E R S' E Q U I T Y CURRENT
LIABILITIES: Accounts payable $2,793,333 $2,412,440 Other payables
and accrued liabilities 2,062,683 1,874,973 Short term loans - bank
1,334,000 2,564,000 Short term loan - minority shareholder 703,171
675,761 Other payable - land use right 297,672 287,045
Distributions to minority shareholder 212,719 476,597 Customer
deposits 590,392 370,297 Taxes payable 884,783 138,203 Total
current liabilities 8,878,753 8,799,316 Long term liabilities
400,200 641,000 Total liabilities 9,278,953 9,440,316 COMMITMENTS
AND CONTINGENCIES 75,593 -- MINORITY INTEREST 3,977,258 2,308,487
SHAREHOLDERS' EQUITY: Common stock, $0.0001 par value, 100,000,000
shares authorized, 21,434,942 shares issued and outstanding at
September 30, 2007 and December 31, 2006, respectively 2,143 2,143
Paid-in-capital 9,388,305 9,388,305 Statutory reserves 4,301,940
2,199,580 Retained earnings 5,515,924 17,427 Accumulated other
comprehensive income 1,917,614 1,118,385 Total shareholders' equity
21,125,926 12,725,840 Total liabilities and shareholders' equity
$34,457,730 $24,474,643 China Biologic Products, Inc. and
Subsidiaries CASH FLOW STATEMENT (US$ - Unaudited) FOR THE NINE
MONTHS ENDED SEPTEMBER 30, 2007 AND 2006 2007 2006 CASH FLOWS FROM
OPERATING ACTIVITIES: Net income $7,600,857 $3,382,859 Adjustments
to reconcile net income to cash provided by operating activities:
Minority interest 1,762,462 969,167 Depreciation 611,020 313,436
Amortization 64,168 34,890 Loss on disposal of equipment 6,077 --
Change in operating assets and liabilities: Accounts receivable
1,491,832 (1,285,459) Notes receivable 76,424 (136,899) Other
receivables (604,324) (1,482,103) Other receivables - shareholders
(134,095) -- Inventories (1,667,404) (1,701,492) Advance on
inventory purchase 226,128 341,315 Deferred expenses (3,863) --
Long term deferred expenses (712) -- Accounts payable 277,185
51,932 Other payables and accruals 183,946 (317,413) Customer
deposits 200,832 (304,606) Taxes payable 725,644 158,892 Net cash
provided by operating activities 10,816,177 24,519 CASH FLOWS FROM
INVESTING ACTIVITIES: Additions to plant and equipment (6,377,620)
(594,927) Additions to intangible assets (233,537) (30,674)
Proceeds from sale of equipment 26,199 - Advances on equipment and
intangible assets purchases (621,600) (573,234) Net cash used in
investing activities (7,206,558) (1,198,835) CASH FLOWS FROM
FINANCING ACTIVITIES: Restricted cash -- 1,874,700 Proceeds from
stock issuance -- 3,752,100 Payments on notes payable - banks --
(1,874,700) Proceeds from short term loans - bank 1,292,000 624,900
Payments on short term loans - banks (2,593,000) (2,499,600)
Proceeds from short term loans - shareholders -- 2,728,612 Payments
on short term loans - shareholders -- (735,523) Payments on long
term debt (261,280) (499,921) Dividend paid to minority shareholder
(476,597) -- Net cash (used in) provided by financing activities
(2,038,877) 3,370,568 EFFECTS OF EXCHANGE RATE CHANGE IN CASH
284,751 208,678 INCREASE IN CASH 1,855,493 2,404,930 CASH,
beginning of period 4,268,220 607,376 CASH, end of period
$6,123,713 $3,012,306 For more information, please contact: Company
Contact: Mr. Stanley Wong CEO China Biologic Products, Inc. Tel:
+86-538-6202608 Email: Investor Relations Contact: Mr. Crocker
Coulson President CCG Elite Investor Relations Tel: +1-646-213-1915
(NY office) Email: DATASOURCE: China Biologic Products, Inc.
CONTACT: Crocker Coulson, President of CCG Elite, +1-646-213-1915,
or ; Stanley Wong, Chief Executive Officer of China Biologic
Products Inc., all for China Biologic Products Inc. Web Site:
http://www.ctbb.com.cn/
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