-- Net income increased 19.4% year-over-year to $2.3 million or 11
cents per share basic TAI'AN, Shandong, China, May 15
/Xinhua-PRNewswire-FirstCall/ -- China Biologic Products, Inc.
(OTC:CBPO) (BULLETIN BOARD: CBPO) ("CBP" or the "Company"), one of
the leading plasma-based pharmaceutical companies in the People's
Republic of China ("PRC"), today reported financial results for the
first quarter ended on March 31, 2008. First Quarter 2008
Highlights -- Revenues increased 2.2% year-over-year to 7.8 million
-- Gross profits increased 33.6% to $5.9 million over the first
quarter of 2007, representing gross margin of 75.2% -- Operating
income totaled $3.6 million, a 28.5% increase over the first
quarter of 2007 -- Net income increased 19.4% year-over-year to
$2.3 million, or $0.11 per share "Despite the further tightened
blood inspection process from the PRC government, we continued to
see strong demand and price increases for our plasma-based products
due to the increased purchasing power and health consciousness of
Chinese consumers," said Mr. Stanley Wong, CEO of China Biologic
Products. "We will continue our efforts to secure plasma supply as
well as to upgrade our product portfolio. We are optimistic about
our growth prospects, given that our new production line is
expected to be in place by mid-2008, and is expected to expand our
production capacity to 500-800 metric tons per annum." During the
quarter, the Company achieved the following milestones: -- Common
stocks commenced trading on the Over-the-Counter Bulletin Board
(the "OTCBB"); -- "High-concentration Human Hepatitis B
Immunoglobulin" R&D Project was listed in the National Torch
Plan of China; First Quarter 2008 Results Revenues for the first
quarter of 2008 were $7.8 million, a 2.2% increase, compared to
$7.7 million for the same period of 2007. The increase in revenues
during the first quarter of 2008 is primarily attributable to a
general increase in prices of plasma-based products together with
foreign exchange translation benefits. During the first quarter of
2008, the Company's plasma- based products increased in price by
approximately 78.4%, weighted average, period to period, which was
offset by a decrease of in the volume of sales for three of the
Company's products, including human albumin. The Company's
temporary suspension of production for 70 days during fourth
quarter 2007, for maintenance and for the building of the new
production line, had a temporary effect on the supply of finished
products available for sale in the first quarter of 2008. Gross
profits increased 33.6% to $5.9 million with gross margins of 75.2%
for the first quarter of 2008, compared with approximately $4.4
million and 57.5% in the first quarter of 2007, respectively. The
increase in gross margin was mainly due to the increased sales of
higher margin products. Total operating expenses for the first
quarter of 2008 were $2.3 million, up 42.6% from the same period in
2007. Selling expenses increased 2.7% to $0.49 million. General and
administrative expenses increased 68.8%, which was mainly
attributable to the increase in personnel costs and auditing and
legal fees. There were also increased activities related to
investor relations and raising the profile of the Company in the US
capital market. Research and development expenses increased 22.6%
to $0.18 million. Income from operations grew 28.5% to $3.6 million
in the first quarter of 2008, representing operating margins of
46.3%, as compared to $2.8 million and 36.9% during the same period
of 2007. Provision for income taxes increased 64.5% year-over-year,
to over $0.7 million. The Company provisioned its income tax for
the first quarter of 2008 at the new PRC corporate unified income
tax rate of 25%, as compared to the 15% preferential tax rate
during the fiscal year 2007. The Company is in the process of
applying for status as a new or high technology company in order to
qualify for the favorable tax rate of 15%. Net income for the first
quarter of 2008 increased 19.4% year-over-year, to $2.3 million, or
$0.11 per basic share and $0.10 per diluted share. Financial
Condition As of March 31, 2008, CBP had $5.2 million in cash,
approximately $10.5 million in working capital and a current ratio
of 2.2. Shareholders' equity at the end of the first quarter of
2008 stood at $25.8 million, compared to $22.4 million at the end
of 2007. Recent Development (1) Management change On May 9, 2008,
Mr. Stanley Wong resigned as President and Chief Executive Officer
of the Company, effective as of June 1, 2008. He will continue to
serve as a consultant to the Company until the end of 2008 in order
to ensure a smooth transition for the management. At the same time,
Mr. Chao Ming Zhao resigned from his position as Chief Financial
Officer in order to take over Mr. Wong's role as President and
Chief Executive Officer, and Mr. Y. Tristan Kuo, the Company's Vice
President-Finance, has been appointed to as the Company's new Chief
Financial Officer, effective June 1, 2008. (2) The Company
announced its receipt of SFDA approval to Supply Cryoprecipitate in
the second quarter of 2008. (3) The Company received approval SFDA
for Clinical Trial of Human Prothrombin Complex. Business Outlook
In recent years, the biopharmaceutical industry and the
plasma-based product market have outperformed the pharmaceutical
industry. The market for plasma-based products in China 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. Furthermore, the 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. To achieve its objective to become a
first-class biopharmaceutical enterprise in China, the Company will
continue to seek to secure its market position by enhancing
existing products, introducing new products to meet customer
demand, delivering quality products to customers in a timely manner
and maintaining the already established industry reputation. "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 gain more market share and
improve our product 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. All statements, other than
statements of historical fact included herein are "forward-looking
statements" including statements regarding the general ability of
the Company to achieve its commercial objectives; the business
strategy, plans and objectives of the Company and its subsidiaries;
and any other statements of non-historical information. These
forward-looking statements are often identified by the use of
forward-looking terminology such as "believes," "expects" or
similar expressions, involve known and unknown risks and
uncertainties. Although the Company believes that the expectations
reflected in these forward-looking statements are reasonable, they
do 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 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 BALANCE SHEETS AS OF MARCH 31, 2008 AND
DECEMBER 31, 2007 A S S E T S March 31, December 31, 2008 2007
(Unaudited) (Audited) CURRENT ASSETS: Cash $ 5,152,629 $ 5,010,033
Accounts receivable, net of allowance for doubtful accounts of
$1,281,172 and $1,238,772 as of March 31, 2008 and 1,311,347
316,869 December 31, 2007, respectively Notes receivable 42,840
41,130 Other receivables 441,526 425,163 Other receivable- related
party 300,948 290,307 Inventories 11,520,085 9,505,074 Prepayments
and deferred expense 243,073 138,756 Total current assets
19,012,448 15,727,332 PLANT AND EQUIPMENT, net 17,072,037
15,434,124 OTHER ASSETS: Prepayments-non-current 850,130 711,459
Long term prepayment - related party 537,928 516,456 Intangible
assets, net 930,584 915,874 Total other assets 2,318,642 2,143,789
Total assets $ 38,403,127 $ 33,305,245 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 $ 2,471,482 $ 2,677,587 Short term loans - bank 685,500
Short term loan - minority shareholder 752,720 722,674 Other
payables and accrued liabilities 1,353,242 1,200,068 Other payable
- land use right 317,896 305,571 Dividend payable 915,762 506,626
Customer deposits 1,362,936 398,794 Taxes payable 1,291,653 384,788
Total current liabilities 8,465,691 6,881,608 COMMITMENT AND
CONTINGENCIES 40,030 142,120 MINORITY INTEREST 4,110,623 3,885,892
SHAREHOLDERS' EQUITY: Common stock, $0.0001 par value, 100,000,000
shares authorized, 21,434,942 shares issued and outstanding at
March 31, 2008 and December 31, 2007, respectively 2,143 2,143
Paid-in-capital 9,388,305 9,388,305 Statutory reserves 4,866,031
4,513,077 Retained earnings 7,798,152 5,883,306 Accumulated other
comprehensive income 3,732,152 2,608,794 Total shareholders' equity
25,786,783 22,395,625 Total liabilities and shareholders' equity $
38,403,127 $ 33,305,245 CHINA BIOLOGIC PRODUCTS, INC. AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND OTHER
COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND
2007 (Unaudited) 2008 2007 REVENUES $ 7,849,007 $ 7,677,852 COST OF
SALES 1,948,898 3,261,376 GROSS PROFIT 5,900,109 4,416,476
OPERATING EXPENSES Selling expenses 494,529 497,613 General and
administrative 1,584,128 938,598 expenses Research and development
expenses 183,782 149,907 TOTAL OPERATING EXPENSES 2,262,439
1,586,118 INCOME FROM OPERATIONS 3,637,670 2,830,358 OTHER EXPENSES
Finance expense 22,973 44,645 Other expense 412 7,665 TOTAL OTHER
EXPENSES 23,385 52,310 INCOME BEFORE PROVISION FOR INCOME TAXES AND
MINORITY INTEREST 3,614,285 2,778,048 PROVISION FOR INCOME TAXES
740,482 450,110 NET INCOME BEFORE MINORITY INTEREST 2,873,803
2,327,938 LESS MINORITY INTEREST 606,003 429,095 NET INCOME
2,267,800 1,898,843 FOREIGN CURRENCY TRANSLATION GAIN 1,123,359
92,773 OTHER COMPREHENSIVE INCOME $ 3,391,159 $ 1,991,616 BASIC
EARNINGS PER SHARE Weighted average number of shares 21,434,942
21,434,942 Earnings per share $ 0.11 $ 0.09 DILUTED EARNINGS PER
SHARE Weighted average number of shares 21,964,168 21,434,942
Earnings per share $ 0.10 $ 0.09 CHINA BIOLOGIC PRODUCTS, INC. AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE
MONTHS ENDED MARCH 31, 2008 AND 2007 (UNAUDITED) 2008 2007 CASH
FLOWS FROM OPERATING ACTIVITIES: Net income $ 2,267,800 $ 1,898,843
Adjustments to reconcile net income to cash provided by operating
activities: Minority Interest 606,003 429,095 Depreciation 274,361
162,022 Amortization 26,157 10,859 Loss on disposal of equipment
166 Allowance for doubtful accounts 58,437 Change in operating
assets and liabilities: Accounts receivable (960,482) (517,358)
Notes receivable (433,843) Other receivables 1,285 (494,298) Other
receivables - shareholders 1,398 (604,391) Inventories (1,585,462)
(498,242) Prepayments and deferred expenses (96,457) 44,701
Accounts payable (310,692) 145,858 Other payables and accrued
liabilities 101,089 651,234 Customer deposits 927,456 Taxes payable
871,964 382,165 Contingent liability (105,707) Net cash provided by
operating 2,018,879 1,235,082 activities CASH FLOWS FROM INVESTING
ACTIVITIES: Additions to plant and equipment (1,249,620)
(1,151,674) Additions to construction in progress (151,066)
Additions to intangible assets (3,285) Advances on building,
equipment and intangible assets purchases (106,777) (560,523) Net
cash used in investing activities (1,359,682) (1,863,263) CASH
FLOWS FINANCING ACTIVITIES: Proceeds from short term loan - bank
1,290,100 Payments on short term loan - bank (698,850) Payments on
long term debt (129,010) Dividends paid to minority (479,608)
shareholders Net cash (used in) provided by financing activities
(698,850) 681,482 EFFECTS OF EXCHANGE RATE CHANGE IN CASH 182,249
9,890 INCREASE IN CASH 142,596 63,191 CASH, beginning of period
5,010,033 4,268,220 CASH, end of period $ 5,152,629 $ 4,331,411 For
more information, please contact: Company Contact: Mr. Stanley Wong
CEO China Biologic Products, Inc. Tel: +86-538-620-2306 Email: Web:
http://www.chinabiologic.com/ Investor Relations Contact: Mr.
Crocker Coulson President CCG Elite Investor Relations Tel:
+1-646-213-1915 (NY office) Email: Web: http://www.ccgelite.com/
DATASOURCE: China Biologic Products, Inc. Web site:
http://www.chinabiologic.com/ http://www.ccgelite.com/
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