TAI'AN, Shandong, May 18 /PRNewswire-Asia-FirstCall/ -- China
Biologic Products, Inc. (OTC:CBPO) (BULLETIN BOARD: CBPO) ("China
Biologic," or the "Company"), one of the leading plasma-based
pharmaceutical companies in the People's Republic of China ("PRC"),
reported strong financial results for the first quarter of 2009.
First Quarter 2009 Highlights -- Revenues increased 169.4%
year-over-year to a record $21.1 million -- Gross profit increased
153.1% to $14.9 million compared to the first quarter of 2008,
representing a gross margin of 70.6% -- Operating income increased
176.6%, from the first quarter 2008 to $10.1 million, representing
an operating margin of 47.6% -- Net income was up 87.8%
year-over-year to $4.3 million, or $0.20 per diluted share "We are
pleased to report exceptional revenue and net income results for
our first quarter of 2009 as 'The New China Biologic Products',"
said Mr. Chao Ming Zhao, CEO of China Biologic Products. "During
the first quarter, we completed the government approval process for
the transfer of 35% equity interest in Xi'an Huitian Blood Products
Co., Ltd. We recently also completed the acquisition of a 90%
controlling interest in Chongqing Dalin Biologic Technologies Co.,
Ltd., which owns 54% of the equity interest in Qianfeng Biologic
Products Co., Ltd. Both of these acquisitions combined have
transformed China Biologic into the largest non-state-owned
plasma-based biopharmaceutical company in China. Our first quarter
results reflect the consolidation of these interests and
demonstrate the potential for significant earnings power ahead."
During the first quarter of 2009, the Company achieved the
following milestones: -- The Company's indirect majority-owned
subsidiary, Shandong Taibang Biological Products Co. Ltd.
("Shandong Taibang") was awarded the High- Technology Enterprise
Certification by the provincial government in Shandong Province,
which allows the Company to be taxed at the preferential income tax
rate of 15% instead of at the regular 25% rate, for a period of 3
years commencing January 1, 2008. -- One of China Biologic
Products' R&D projects, "High-Purity Human Albumin," was listed
in the National Torch Plan of China. -- China Biologic Products
completed the government approval process for the transfer of a 35%
equity interest in Xi'an Huitian Blood Products Co., Ltd. in March
2009. First Quarter of 2009 Results Revenue for the first quarter
of 2009 increased 169.4% to a record $21.1 million compared with
$7.8 million in the first quarter of 2008. The increase in revenues
for the first quarter of 2009 is primarily attributable to the
revenue consolidation of Dalin which accounted for approximately
44.6% of the total revenue, a general increase in the price of
plasma-based products, and a 12.4% increase due to the foreign
exchange translation. During the first quarter of 2009, Dalin
contributed to approximately $9.5 million in revenue, and the rest
of revenue was generated from Shandong Taibang, which experienced a
49.3% increase from the first quarter of 2008 to approximately
$11.6 million. All of the Company's approved products, except human
hepatitis B immunoglobulin, recorded price increases ranging from
3.5% to 49.2%. Sales breakdown of the Company's major plasma-based
products, the human albumin products, accounted for 58.2% of sales
in the first quarter of 2009, as compared to 58.1% in same period a
year ago. Sales of human albumin products increased by 171.1% while
the average selling price increased by 3.5%. The Company's human
immunoglobulin for intravenous injection product represented 25.4%
of revenues in the first quarter of 2009, as compared to 21.1% in
the first quarter of 2008; its sales and average selling price
increased by 224.6% and 14.7%, respectively. The Company's human
tetanus immunoglobulin products represented 4.9% of revenues in the
first quarter of 2009, as compared to 1.4% of revenues in the first
quarter of 2008, and it sales and average selling price increased
823.1% and 34.3%, respectively. Gross profit for the first quarter
of 2009 was $14.9 million, up 153.1% from $5.9 million in the first
quarter of 2008. Gross margin was 70.6% for the period ended March
31, 2009, compared to 75.2% for the first quarter of 2008. The
decrease in the gross profit margin was primarily due to the
increase in the cost of raw materials associated with the increased
compensation fee for donors. Operating expenses in the first
quarter of 2009 rose 115.3% to $4.9 million. Selling expenses
increased 17.2% to $0.6 million. As a percentage of sales, selling
expenses in the first quarter of 2009 was 2.7%, down from 6.3% a
year ago. General and administrative ("G&A") expenses increased
141.3% to $3.8 million. As a percentage of sales, the G&A
expenses decreased to 18.1% for the first quarter of 2009, from
20.2% for the same period in 2008. The dollar increase in the
G&A expenses was mainly due to the consolidation of Dalin, the
increase in personnel-related costs, extra depreciation and
amortization expenses in connection with the acquisition of Dalin
as result of fair value adjustments as well as additional
professional service charges related to the acquisition of Dalin.
Research and development expenses increased 154.5% to $0.5 million,
or 2.2% of total revenue compare to $0.2 million in the first
quarter of 2008 or 2.3% of total revenue. The dollar increase was
due primarily to the consolidation of Dalin and increased costs
from continuing clinical trial on new products. Total other
expenses in the first quarter of 2009 was $0.8 million, as the
Company recognized of a loss in the change in fair value of
derivative liability in the amount of $0.4 million, and net
interest expense in the amount of $0.4 million. Provision for
income taxes increased 174.2% to $2.0 million for the first quarter
of 2009, from $0.7 million for the same period last year. The
effective tax rate for the quarter was 21.9% as compared to 20.5%
in the same period of 2008. Net income attributable to controlling
interest for the first quarter of 2009 was $4.3 million, up 87.8%
from $2.3 million in first quarter of 2008. Fully diluted earnings
per share were $0.20 for the first quarter of 2009, compared to
$0.10 in first quarter of 2008. Financial Condition As of March 31,
2009, the Company had $34.0 million in cash, approximately $2.2
million in working capital and a current ratio of 1.0.
Shareholder's equity at the end of the first quarter of 2009 was
$39.9 million, compared to $37.2 million at the end of 2008. The
Company generated $7.1 million in net cash from operating
activities for the first quarter of 2009. Recent Developments On
April 17, China Biologic announced that it has completed the third
installment payment towards the acquisition of a 90% equity
interest in Chongqing Dalin Biologic Technologies Co., Ltd.
('Dalin') for a total consideration of RMB 194,400,000
(approximately $28.5 million), in accordance with the terms of an
equity transfer agreement with the Dalin shareholders, and is now
entitled to all the rights and privileges of a 90% shareholder in
Dalin and in Dalin's 54% majority-owned operating subsidiary,
Qianfeng Biological Products Co., Ltd. ('Qianfeng'), one of the
largest plasma-based biopharmaceutical companies in China, located
in Guiyang, Guizhou Province. On April 27, China Biologic received
an order from one of the largest authorized biopharmaceutical
distributors in India, to ship Company products valued at $5.3
million to be sold under Shandong Taibang's own brand. Business
Outlook On July 1, 2008, the SFDA implemented a new 90-day
quarantine period on plasma raw material. This new measure further
tightens the raw material that is available for production, and has
adversely impacted the already short supply of plasma-based
products. As a result, during the first quarter of 2009, the supply
of plasma-based products remained very tight industry-wide. The
continuing price increase of the Company's products since 2008 was
primarily attributable to the government's stringent control on the
quality standard of the plasma-based production industry, which
resulted in a shortage in the supply of finished products. The
Company has been able to adjust its production plan to take
advantage of the limited market supply of plasma resources to
realize higher profit margins. In addition, there is a shortage in
the market supply for human albumin products which has increased
the value of the Company's products in the market place. The
plasma-based industry has been immune from the impact of the
ongoing global financial crisis as the demand for the Company's
products has outpaced supply. As a result, the Company's selling
price, cost of revenue and operating expenses during the first
quarter of 2009 were not impacted by the global financial turmoil.
With the acquisitions of Huitian and Dalin, and its operating
subsidiary Qianfeng, the Company is better situated to serve its
existing and new customers with expanded production capacity and
market coverage. Management expects that revenue growth will remain
strong for the remainder of 2009. Assuming the full year
consolidation of Dalin, management estimates revenues for 2009 will
be in the range of $90 million to $100 million with net income
between $18 million to $22 million, including the equity investment
income from the 35% acquisition of Hutian but excluding stock based
compensation. "Despite continued tough economic conditions
worldwide, China Biologic continues to prosper due to favorable
industry fundamentals, growing brand recognition, a solid business
strategy and a highly defensible, scalable business model,"
remarked Mr. Zhao. "We see 2009 as a year in which we attain
critical mass, and realize significant economies of scale as we
integrate our acquisitions and increase our capacity utilization."
Conference Call China Biologic will host a conference call at 8:00
a.m. EDT on Tuesday, May 19, 2009, to discuss the 2009 first
quarter financial results. To participate in the conference call,
please dial the following number five to ten minutes prior to the
scheduled conference call time: 1-888-419-5570. International
callers should dial +1-617-896-9871. The pass code for the call is
634 701 69. If you are unable to participate in the call at this
time, a replay will be available for 14 days starting on Tuesday,
May 19, 2009 at 10:00 a.m. EDT. To access the replay, dial 1-
888-286-8010. International callers should dial +1-617-801-6888.
The conference pass code is 373 105 74. About China Biologic
Products, Inc. China Biologic Products, Inc. (the "Company"),
through its indirect majority-owned subsidiary, Shandong Taibang
Biological Products Co. Ltd., and equity investments in Xi'an
Huitian Blood Products Co., Ltd. and Chongqing Dalin Biologic
Technologies Co., Ltd. is currently the largest non-state-owned
plasma-based biopharmaceutical company approved by the Chinese
government. The Company is a fully integrated biologic products
company with plasma collection, production and manufacturing,
research and development, and commercial operations. The Company's
blood products are irreplaceable in the application of medical
emergencies, and prevention and treatment for various diseases. It
sells its plasma-based biopharmaceutical products to hospitals and
other healthcare facilities in China. Safe Harbor Statement This
release may contain certain "forward-looking statements" relating
to the business of China Biologic Products, Inc. and its subsidiary
companies. All statements, other than statements of historical fact
included herein are "forward-looking statements," including
statements regarding: the Company's acquisitions and acquisition
strategy and the benefits of the acquisitions, including the
expected impact on the Company's 2009 revenues and net income; the
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 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 STATEMENTS OF INCOME AND OTHER
COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2009 AND
2008 (Unaudited) 2009 2008 REVENUES $21,148,598 $7,849,007 COST OF
SALES 6,214,930 1,948,898 GROSS PROFIT 14,933,668 5,900,109
OPERATING EXPENSES: Selling expenses 579,496 494,529 General and
administrative expenses 3,822,907 1,584,128 Research and
development expenses 467,727 183,782 Total operating expenses
4,870,130 2,262,439 INCOME FROM OPERATIONS 10,063,538 3,637,670
Equity in income of unconsolidated affiliate -40,247 -- Change in
fair value of warrant liabilities 393,023 -- Interest expense
(income), net 370,853 22,973 Other expense (income), net 51,315 412
Total other expenses (income), net 774,944 23,385 INCOME BEFORE
PROVISION FOR INCOME TAXES AND NONCONTROLLING INTEREST 9,288,594
3,614,285 PROVISION FOR INCOME TAXES 2,030,194 740,482 NET INCOME
BEFORE NONCONTROLLING INTEREST 7,258,400 2,873,803 Less: Net income
attributable to noncontrolling interest 3,000,082 606,003 NET
INCOME ATTRIBUTABLE TO CONTROLLING INTEREST 4,258,318 2,267,800
OTHER COMPREHENSIVE INCOME: Foreign currency translation
adjustments 18,637 942,699 Comprehensive income attributable to
noncontrolling interest 427,302 184,467 COMPREHENSIVE INCOME
$4,704,257 $3,394,966 BASIC EARNINGS PER SHARE: Weighted average
number of shares 21,434,942 21,434,942 Earnings per share $0.20
$0.11 DILUTED EARNINGS PER SHARE: Weighted average number of shares
21,434,942 21,964,168 Earnings per share $0.20 $0.10 CHINA BIOLOGIC
PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF
MARCH 31, 2009 AND DECEMBER 31, 2008 March 31, December 31, 2009
2008 (Unaudited) ASSETS CURRENT ASSETS: Cash $34,005,948 $8,814,616
Notes receivable 468,800 -- Accounts receivable, net of allowance
for doubtful accounts of $1,275,437 and $1,268,052 as of March 31,
2009 and December 31, 2008, respectively 383,781 313,087 Accounts
receivable - related party 631,803 -- Dividend receivable 147,055
147,256 Other receivables 845,780 356,957 Other receivables -
related party 797,138 -- Inventories 26,700,002 14,949,196
Prepayments and deferred expense 1,133,535 614,704 Total current
assets 65,113,842 25,195,816 PLANT AND EQUIPMENT, net 27,583,288
19,299,364 OTHER ASSETS: Investment in unconsolidated affiliate
6,565,312 6,533,977 Refundable deposit for potential acquisition --
14,181,800 Prepayments - non-current 4,519,925 955,874 Intangible
assets, net 21,636,063 1,002,561 Goodwill 13,692,473 -- Total other
assets 46,413,773 22,674,212 Total assets $139,110,903 $67,169,392
LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts
payable $3,502,387 $2,481,889 Notes payable 29,300 29,340 Short
term loans - bank 7,720,550 -- Short term loan - holder of
noncontrolling interest 772,223 773,277 Other payables and accrued
liabilities 12,978,381 3,962,931 Other payable - land use right
29,281 1,683 Other payable - holder of noncontrolling interest
1,333,795 -- Other payable - related party 2,563,643 -- Accrued
interest - related party 305,966 -- Distribution payable to holder
of noncontrolling interest 4,166,692 3,252,354 Customer deposits
6,390,937 1,091,792 Taxes payable 5,211,498 4,060,010 Long term
bank loan-current maturities 439,500 -- Investment payable
17,510,836 3,275,501 Total current liabilities 62,954,989
18,928,777 OTHER LIABILITIES: Non-current other payable - land use
right 324,546 323,707 Long term loan-bank, net of current
maturities 8,790,000 5,868,000 Total other liabilities 9,114,546
6,191,707 Total liabilities 72,069,535 25,120,484 WARRANT
LIABILITIES 2,061,049 -- COMMITMENTS AND CONTINGENCIES -- --
SHAREHOLDERS' EQUITY: Common stock, $0.0001 par value, 100,000,000
shares authorized, 21,434,942 shares issued and outstanding at
March 31, 2009 and December 31, 2008 2,143 2,143 Paid-in-capital
9,988,956 10,700,032 Statutory reserves 9,750,637 6,989,801
Retained earnings 15,960,158 15,392,253 Accumulated other
comprehensive income 4,177,935 4,159,298 Total shareholders' equity
39,879,829 37,243,527 NONCONTROLLING INTEREST 25,100,490 4,805,381
Total equity 64,980,319 42,048,908 Total liabilities and
shareholders' equity $139,110,903 $67,169,392 CHINA BIOLOGIC
PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH
FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2009 AND 2008
(Unaudited) 2009 2008 CASH FLOWS FROM OPERATING ACTIVITIES: Net
income attributable to controlling interest $4,258,318 $2,267,800
Net income attributable to non-controlling interest 3,000,082
606,003 Consolidated net income 7,258,400 2,873,803 Adjustments to
reconcile net income to cash provided by operating activities:
Depreciation 759,072 274,361 Amortization 838,459 26,157 (Gain)
Loss on disposal of equipment -276 166 Allowance for bad debt
26,581 -- Stock based compensation 27,373 -- Change in fair value
of warrant liabilities 393,023 -- Equity in income of
unconsolidated affiliate -40,246 -- Change in operating assets and
liabilities: Notes receivable -468,832 -- Accounts receivable
-97,007 -960,482 Accounts receivable - related party -212,367 --
Other receivables -18,487 1,285 Other receivables - related party
-- 1,398 Inventories -3,513,011 -1,585,462 Prepayments and deferred
expenses -124,944 -96,457 Accounts payable -252,850 -310,692 Other
payables and accrued liabilities 307,916 101,089 Accrued interest -
related party 305,966 -- Customer deposits 2,872,712 927,456 Taxes
payable -979,190 871,964 Contingent liability -- -105,707 Net cash
provided by operating activities 7,082,292 2,018,879 CASH FLOWS
FROM INVESTING ACTIVITIES: Cash acquired through acquisition
11,938,784 -- Purchase of plant and equipment -986,640 -1,249,620
Additions to intangible assets -88,845 -3,285 Advances on
non-current assets -474,736 -- Advances on building acquired from
-- -106,777 related party Net cash provided by (used in) investing
activities 10,388,563 -1,359,682 CASH FLOWS FROM FINANCING
ACTIVITIES: Proceeds from short term bank loan 7,647,822 --
Payments on short term loan -- -698,850 Net cash provided by (used
in) financing activities 7,647,822 -698,850 EFFECTS OF EXCHANGE
RATE CHANGE IN CASH 72,655 182,249 INCREASE IN CASH 25,191,332
142,596 CASH, beginning of period 8,814,616 5,010,033 CASH, end of
period $34,005,948 $5,152,629 SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION Income taxes paid $1,783,619 $ -- Interest paid (net of
capitalized interest) $236,649 $18,416 Non-cash investing and
financing activities: Dividend paid by offsetting loan due from
holder of noncontrolling interest $3,735,243 $ -- Net assets
acquired with prepayments made in prior periods $14,240,772 $ --
Net assets acquired with unpaid investment $14,240,772 $ -- Plant
and equipment acquired with prepayments made in prior periods
$87,305 $ -- For more information, please contact: Company Contact:
Mr. Y. Tristan Kuo Chief Financial Officer China Biologic Products,
Inc. Tel: +86-538-620-2206 Email: Web:
http://www.chinabiologic.com/ Investor Relations Contact: Mr.
Crocker Coulson, President CCG Investor Relations Tel:
+1-646-213-1915 (NY office) or Mr. Gary Chin, Tel: +1-646-213-1909
Email: Web: http://www.ccgirasia.com/ DATASOURCE: China Biologic
Products, Inc. CONTACT: Company Contact: Mr. Y. Tristan Kuo, Chief
Financial Officer of China Biologic Products, Inc.,
+86-538-620-2206, or ; Or Investor Relations Contact: Mr. Crocker
Coulson, President of CCG Investor Relations, +1-646-213-1915 (NY
office) or Mr. Gary Chin, Tel: +1-646-213-1909, or Web site:
http://www.chinabiologic.com/ http://www.ccgirasia.com/
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