TAI'AN, China, Aug. 17 /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"),
operating through its indirect majority-owned subsidiaries,
Shandong Taibang Biological Products Co. Ltd. ("Taibang") and
Chongqing Dalin Biologic Technologies Co., Ltd. ("Dalin") and its
equity investment in Xi'an Huitian Blood Products Co., Ltd.
("Huitian"), reported record financial results for the second
quarter of 2009. Second Quarter 2009 Highlights -- Revenues
increased 178.2% year-over-year to a record $33.2 million --
Revenues excluding the acquisition of Dalin increased 57.5%
year-over-year to $18.8 million -- Gross profit increased 189.8% to
$24.0 million, compared to the second quarter of 2008, representing
a gross margin of 72.4% -- Operating income increased 232.8%,
year-over-year to $16.5 million, representing an operating margin
of 49.8% -- Net income attributable to controlling interest was up
242.7% year-over-year to $7.0 million, or $0.32 per diluted share
-- Non-GAAP net income* was $8.3 million or $0.38 per diluted
share, a 151.5% increase over $3.3 million in the second quarter of
2008, or $0.15 per diluted share * Excluding non-cash employee
compensation expenses and changes in the fair value of warrants.
See "About Non-GAAP Financial Measures" as well as the
reconciliation table of non-GAAP net income to GAAP net income at
the end of the press release. "We are pleased to report another
quarter of solid results for our second quarter of 2009. We
achieved strong organic growth and benefitted from the
consolidation of our Dalin acquisition," said Mr. Chao Ming Zhao,
CEO of China Biologic Products. "We believe that as a result of
these acquisitions we are now strategically positioned as the
leading non-state-owned plasma-based biopharmaceutical company in
China. We continue to work to integrate these acquisitions to
obtain additional synergies and economies of scale." During the
second quarter of 2009, the Company achieved the following
milestones: -- China Biologic completed the acquisition of a 90%
equity interest 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, for a
total consideration of RMB 194,400,000 (approximately $28.5
million) -- China Biologic successfully raised an aggregate
principal amount of $9.6 million through the issuance of 3.8%
senior secured convertible notes due 2011 to certain accredited
investors led by Essence International Investment Limited Second
Quarter of 2009 Results Revenues for the second quarter of 2009
increased 178.2% to a record $33.2 million, compared to $11.9
million in the second quarter of 2008. The increase in revenues for
the second quarter of 2009 is primarily attributable to the revenue
consolidation of Dalin, a general increase in the price of
plasma-based products, and a 5.2% increase due to foreign exchange
translation. During the second quarter of 2009, Dalin contributed
to $14.4 million in revenue, or 43.4% of total revenues, an
increase of 52.7% from the first quarter of 2009. Taibang accounted
for $18.8 million in revenue, or 56.6% of total revenues, an
increase of 60.3% from the first quarter of 2009. Revenues,
excluding the acquisition of Dalin, increased 57.5% year-over-year,
as prior to January 1, 2009, Taibang contributed to 100% of the
Company's revenues. All of the Company's approved products, except
human hepatitis B immunoglobulin, recorded price increases ranging
from 2.1% to 46.1%. The Company's major plasma-based product, human
albumin, contributed to 47.4% of sales in the second quarter of
2009, as compared to 57.8% in same period a year ago. Revenues from
human albumin products increased by 128.5%, while the average sales
price increased by 2.1%. The Company's human immunoglobulin for
intravenous injection product represented 42.6% of revenues in the
second quarter of 2009, as compared to 17.4% in the second quarter
of 2008; its revenues and average sales price increased by 583.7%
and 13.3%, respectively. The Company's human tetanus immunoglobulin
products represented 1.0% of revenues in the second quarter of
2009, as compared to 8.6% of the revenues in the second quarter of
2008, its revenue contribution decreased 66.5% and its average
sales price increased 46.1%. The approved human rabies
immunoglobulin products represented 2.8% of revenue in the second
quarter of 2009 compared to 3.6% a year ago, and its revenues and
average sales price increased by 116.2% and 37.5%, respectively.
Gross profit for the second quarter of 2009 was $24.0 million, up
189.8% from $8.3 million in the second quarter of 2008. Gross
margin was 72.4% for the second quarter of 2009, compared to 69.5%
for the second quarter of 2008. The increase in the gross profit
margin was primarily associated with general price increase and
increase in sales of higher margin products. Total operating
expenses in the second quarter of 2009 rose 125.5% to $7.5 million.
Selling expenses increased 118.3% to $1.1 million, compared to $0.5
million in the second quarter of 2008. The increase in selling
expenses is primarily due to the consolidation of Dalin's selling
activities as well as increased marketing efforts to increase
direct sales to new hospitals. As a percentage of sales, selling
expenses in the second quarter of 2009 were 3.4%, down from 4.3% a
year ago due to the expanded sales following the Dalin acquisition.
General and administrative ("G&A") expenses increased 137.4% to
$6.0 million. As a percentage of sales, G&A expenses decreased
to 18.1% for the second quarter of 2009, from 21.2% for the same
period in 2008, primarily due to the expanded sales following the
Dalin acquisition. The dollar increase was mainly due to an
increase in personnel-related costs and increase in depreciation
and amortization expenses in connection with the Company's
acquisition of Dalin as result of fair value adjustments, as well
as additional professional service charges related to the
acquisition of Dalin. The Company also incurred $27,594 in non-cash
employee compensation expenses as a result of grants to employees,
consultants and directors made under the 2008 Equity Incentive
Plan, compared to $1.3 million for the same period in 2008.
Research and development expenses increased 31.5% to $0.4 million,
or 1.1% of total revenue compared to $0.3 million in the second
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 second quarter of 2009 were $2.3 million. The
Company recognized of a loss $1.3 million from the adoption of a
new accounting rule effective January 1, 2009, which requires the
changes in the fair value of warrants to be recognized in earnings
each quarter. No such charge occurred in the second quarter of
2008. The Company recorded a loss of $90,390 in equity income in
connection with its 35% equity interest investment in Huitian, the
Company's unconsolidated affiliate, compared to a gain of $40,247
in the first quarter of 2009 due to the additional depreciation and
amortization expenses arising from assets write-up as a result of
the equity investment. Net interest expense was $0.9 million for
the second quarter of 2009 compared to an interest income of $846
for the same period in 2008. The increase in interest expense is
primarily due to financing related to the acquisition of Dalin.
Provision for income taxes increased 40.4% to $3.0 million for the
second quarter of 2009, compared to $2.1 million for the same
period last year. The increase in provision for income taxes is
mainly due to the consolidation of Dalin, which was offset by the
decrease of Taibang's provision for income taxes as Taibang accrued
its 2008 taxes at 25% before it was granted a 15% preferential tax
rate for the 2008 tax year in early 2009. The effective tax rate
for the quarter was 20.9%, as compared to 43.2% in the same period
of 2008. Net income attributable to controlling interest for the
second quarter of 2009 was $7.0 million, up 242.7% from $2.0
million in second quarter of 2008. Fully diluted earnings per share
were $0.32 for the second quarter of 2009, compared to $0.09 in
second quarter of 2008. Compared to the first quarter of 2009, net
income attributable to controlling interest which includes the
consolidation of Dalin, increased 63.7% from $4.3 million. Non-GAAP
net income in the second quarter of 2009 was $8.3 million or $0.38
per fully diluted share, an increase of 151.5% from non-GAAP net
income of $3.3 million, or $0.15 per fully diluted share in the
second quarter of 2008.* * Excluding non-cash employee compensation
expenses and changes in the fair value of warrants. See "About
Non-GAAP Financial Measures" as well as the reconciliation table of
non-GAAP net income to GAAP net income at the end of the press
release. Six Months Results For the first six months of 2009, total
revenue was $54.3 million, up 174.7% from the first six months of
2008. Revenues excluding the acquisition of Dalin increased 54.4%
year-over-year. Gross profit for the first six months of 2009 was
$39.0 million, up 174.6% from $14.2 million in the comparable
period a year ago. Gross margin of 71.7% remained unchanged from
the first quarter of 2008. Income from operations for the period
was $26.6 million, up 209.4% from $8.6 million in the first six
months of 2008. Net income for the first six months of 2009 was
$11.2 million, up 161.0% from $4.3 million in the first six months
of 2008. Fully diluted earnings per share were $0.52 for the first
six months of 2009 compared to $0.20 in the first six months of
2008. Adjusting for non-cash charges associated with non-cash
employee compensation expenses and changes in the fair value of
warrants, the non-GAAP net income for the first six months of 2009
was $13.0 million or $0.60 per fully diluted share, an increase of
133.1% from non-GAAP net income of $5.6 million or $0.26 per fully
diluted share. Financial Condition As of June 30, 2009, the Company
had $49.5 million in cash, approximately $17.1 million in working
capital and a current ratio of 1.3. Shareholder's equity at the end
of the second quarter of 2009 was $76.5 million, compared to $42.0
million at the end of 2008. The Company generated $28.4 million in
net cash from operating activities for the second quarter of 2009.
Recent Developments In July 2009, China Biologic hosted a forum of
industry experts to discuss and provide advice to the Company
regarding how to create synergies among its subsidiaries including,
the initiation of research and development of new drugs, efficient
use of resources among the subsidiaries, quality control procedures
during collection, production and distribution processes, and other
expert opinions to create long-term, sustainable growth for the
Company. Business Outlook The recent outbreak of the H1N1 flu,
known as the swine flu, and the HFMD or known as the hand foot and
mouth disease, has further increased the demand for plasma-based
products. The Company expects that a pandemic outbreak of the flu
could prompt an increase in demand for the Company's human
immunoglobulin for intravenous injection ("IVIG") product, which is
mainly used for acute infection, autoimmune diseases and other
immune deficiencies caused by decreased or abolished antibody
production capabilities. During the second quarter of 2009, the
Company experienced an unusual increase in the demand for its IVIG
product. IVIG, which has a higher gross margin, contributed to over
42% of revenues during the second quarter of 2009, therefore,
contributing to a higher percentage increase in revenue compared to
the same period last year and from the first quarter of 2009.
Continued strong sales of IVIG in 2009 will be dependent on the
continued availability of the plasma supply for production and
sales. During the second quarter of 2009, the Company continued to
experience a lower percentage of sales for human album representing
approximately 47.4%, compared to 57.8% a year ago. Human albumin is
relatively easier to produce than other plasma-based products,
therefore, yielding a lower gross margin and more competition in
the market. Although the percentage of revenue from human album is
gradually decreasing with new product sales increasing, the Company
expects Human Albumin sales will still remain as the main
contributor to the Company's 2009 revenue. As one of the first
plasma based manufacturers to receive GMP certification in 1999 and
with increased regulation on the plasma industry, China Biologic
has implemented strict quality control procedures over the plasma
collection process, manufacturing, and distribution channels in
order to ensure that each of the Company's products are safe. Such
careful quality control process has been applied to Taibang over
the years and has enabled it to produce high quality plasma-based
products. The same quality control process is now gradually being
implemented at Dalin's majority owned subsidiary, Qianfeng. During
the second quarter of 2009, the Company implemented a comprehensive
marketing program to expand Qianfeng's distribution channels via
direct sales to hospitals, as compared to Qianfeng's previous
strategy to sell largely through distributors. The Company expects
that direct sales to hospitals will lead to lower selling expenses.
Moreover, China Biologic believes it can ensure proper storage and
handling of the product, further enhancing Qianfeng's quality
control procedures. Despite the State Food and Drug
Administration's implementation of a 90-day quarantine period for
plasma raw materials, effective July 1, 2008, the Company was ahead
of the industry and took measures to minimize the effects of this
new regulation. Currently, the Company's inventory level of raw
materials is in line with current availability of plasma collection
from its own plasma collection stations. Combined, China Biologic's
indirect majority-owned subsidiaries have a total plasma collection
capacity of greater than 500 metric tons per year. The Company
expects to achieve such collection levels under current conditions,
assuming no major changes in the Chinese government's regulation on
the plasma industry. With the acquisition of Dalin and the equity
investment in Huitian, China Biologic is now the largest non-state
owned plasma-based biopharmaceutical company in China. It is
expected to have a total market share of approximately 15% based on
management's estimate from the products approved for sales by the
PRC government. "We expect the tight supply/demand situation for
plasma-based products to persist for some time, which bodes well
for our fundamental outlook," remarked Mr. Zhao. "We will, however,
continue to focus on a strong research and development efforts
aimed at bringing new, higher margin products to market. We will
also continue to integrate our acquisitions and work to increase
our capacity utilization." Conference Call China Biologic will host
a conference call at 9:00 a.m. EDT on Monday, August 17, 2009 to
discuss the 2009 second 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:
+1-866-800-8648. International callers should dial +1-617-614-2702.
The pass code for the call is 87475342. If you are unable to
participate in the call at this time, a replay will be available
for 14 days starting on Monday, August 17, 2009 at 11:00 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 40692580
CHINA BIOLOGIC PRODUCTS, INC. AND SUBSIDIARIES RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES FOR THE THREE MONTHS AND SIX MONTHS
ENDED JUNE 30, 2009 AND 2008 Three Months Ended Three Months Ended
Adjusted Net Income June 30, 2009 June 30, 2008 Net Income (Loss)
Diluted EPS Net Income Diluted EPS Net Income Diluted EPS Adjusted
Amount - Non GAAP $8,294,071 $0.38 $3,297,342 $0.15 Non-cash
employee compensation (1) $27,594 $0.00 1,263,188 0.06 Loss in fair
value of warrant liabilities (2) $1,295,732 $0.06 -- $0.00 Amount
per consolidated statement of $6,970,745 $0.32 $2,034,154 $0.09
operations Weighted average number of shares - diluted 21,811,473
21,664,429 Six Months Ended Six Months Ended Adjusted Net Income
June 30, 2009 June 30, 2008 Net Income (Loss) Diluted EPS Net
Income Diluted EPS Net Income Diluted EPS Adjusted Amount - Non
GAAP $12,972,785 $0.60 $5,565,142 $0.26 Non-cash employee
compensation (1) $54,967 $0.00 $1,263,188 $0.06 Loss in fair value
of warrant liabilities (2) $1,688,755 $0.08 -- $0.00 Amount per
consolidated statement of operations $11,229,063 $0.52 $4,301,954
$0.20 Weighted average number of Shares 21,527,509 21,808,852 (1)
Non-cash compensation expenses related to options granted to
employees and directors under the Company's 2008 Equity Incentive
Plan (2) Adoption of a new accounting rule effective January 1,
2009 requires changes in the fair value of warrants to be
recognized in earnings each quarter. Use of Non-GAAP Financial
Measures GAAP results for the three months and six months ended
June 30, 2009 and June 30, 2008 include non-cash compensation
expenses related to options granted to employees and directors
under the Company's 2008 Equity Incentive Plan and the adoption of
a new accounting rule effective January 1, 2009 that requires
changes in the fair value of warrants to be recognized in earnings
each quarter. To supplement the Company's condensed consolidated
financial statements presented on a GAAP basis, the Company has
provided non-GAAP financial information excluding the impact of
this item in this release. The Company's management believes that
this non-GAAP measure provides investors with a better
understanding of how the results relate to the Company's historical
performance. A reconciliation of the adjustments to GAAP results
appears in the table accompanying this press 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. About
China Biologic Products, Inc. China Biologic Products, Inc. (the
"Company"), through its indirect majority-owned subsidiaries,
Shandong Taibang Biological Products Co. Ltd. and Chongqing Dalin
Biologic Technologies Co., Ltd, and its equity investment in Xi'an
Huitian Blood Products Co., Ltd., is currently the largest
non-state- owned plasma-based biopharmaceutical company in China.
The Company is a fully integrated biologic products company with
plasma collection, production and manufacturing, research and
development, and commercial operations. The Company's plasma-based
biopharmaceutical products are irreplaceable during medical
emergencies, and are used for the prevention and treatment of
various diseases. It sells its 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 AND SIX MONTHS ENDED JUNE
30, 2009 AND 2008 (Unaudited) Three months ended Six months ended
June 30, June 30, 2009 2008 2009 2008 REVENUES $33,181,545
$11,925,842 $54,330,143 $19,774,849 COST OF SALES 9,161,765
3,638,128 15,376,695 5,587,026 GROSS PROFIT 24,019,780 8,287,714
38,953,448 14,187,823 OPERATING EXPENSES Selling expenses 1,114,614
510,565 1,694,110 1,005,094 General and admini- strative expenses
6,004,802 2,529,780 9,827,709 4,121,854 Research and develop- ment
expenses 367,856 279,833 835,583 463,615 Total operating expenses
7,487,272 3,320,178 12,357,402 5,590,563 INCOME FROM OPERATIONS
16,532,508 4,967,536 26,596,046 8,597,260 OTHER EXPENSES Equity in
income of unconsolidated affiliate 90,390 -- 50,143 -- Change in
fair value of warrant liabilities 1,295,732 -- 1,688,755 --
Interest expense (income), net 883,914 (846) 1,254,767 14,182 Other
expense (income), net (16,005) 52,041 35,310 52,452 Total other
expenses, net 2,254,031 51,195 3,028,975 66,634 INCOME BEFORE
PROVISION FOR INCOME TAXES AND NONCONTROLLING INTEREST 14,278,477
4,916,341 23,567,071 8,530,626 PROVISION FOR INCOME TAXES 2,982,101
2,123,843 5,012,295 2,864,325 NET INCOME BEFORE NONCONTROLLING
INTEREST 11,296,376 2,792,498 18,554,776 5,666,301 Less: Net income
attributable to noncontrolling interest 4,325,631 758,344 7,325,713
1,364,347 NET INCOME ATTRIBUTABLE TO CONTROLLING INTEREST 6,970,745
2,034,154 11,229,063 4,301,954 OTHER COMPREHENSIVE INCOME Foreign
currency translation adjustments (1,250) 632,130 17,387 1,574,829
Comprehensive income attributable to noncontrolling interest
(9,213) 116,824 (26,977) 301,291 COMPREHENSIVE INCOME $6,960,282
$2,783,108 $11,219,473 $6,178,074 BASIC EARNINGS PER SHARE Weighted
average number of shares 21,442,909 21,434,942 21,438,948
21,434,942 Earnings per share $0.33 $0.09 $0.52 $0.20 DILUTED
EARNINGS PER SHARE Weighted average number of shares 21,811,473
21,664,429 21,527,509 21,808,852 Earnings per share $0.32 $0.09
$0.52 $0.20 CHINA BIOLOGIC PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2009 AND DECEMBER 31,
2008 ASSETS June 30, 2009 December 31, 2008 CURRENT ASSETS:
(Unaudited) Cash $49,479,021 $8,814,616 Accounts receivable, net of
allowance for doubtful accounts of $1,274,001 And $1,268,052 as of
June 30, 2009 and December 31, 2008 respectively 980,696 313,087
Account Receivable - related party 795,080 -- Dividend receivable
147,055 147,256 Other receivables 473,975 356,957 Other receivables
- related party 797,138 -- Inventories 27,316,217 14,949,196
Prepayments and deferred expense 1,928,553 614,704 Total current
assets 81,917,735 25,195,816 PLANT AND EQUIPMENT, net 27,631,919
19,299,364 OTHER ASSETS: Investment in unconsolidated affiliate
6,474,950 6,533,977 Refundable deposit for potential acquisition --
14,181,800 Prepayments-non-current 4,362,343 955,874 Intangible
assets, net 21,977,205 1,002,561 Goodwill 12,425,589 -- Total other
assets 45,240,087 22,674,212 Total assets $154,789,741 $67,169,392
LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts
payable $3,704,482 $2,481,889 Notes payable -- 29,340 Short term
loan - bank 13,580,550 -- Short term loans - holder of
noncontrolling shareholder 4,424,723 773,277 Other payables and
accrued liabilities 15,722,686 3,962,931 Other payables - land use
right 29,265 1,683 Other payable - related party 3,082,731 --
Accrued interest - holder of noncontrolling shareholder 911,084 --
Distribution payable to holder of noncontrolling shareholder
447,821 3,252,354 Customer deposits 7,838,187 1,091,792 Taxes
payable 5,567,794 4,060,010 Long term bank loan - current
maturities 3,369,500 -- Investment payable 6,139,984 3,275,501
Total current liabilities 64,818,807 18,928,777 OTHER LIABILITIES:
Non-current other payable - land use right 324,141 323,707 Notes
payable, net of discount of $9,533,784 as of June 30, 2009 41,534
-- Long term loan - bank, net of current maturities -- 5,868,000
Derivative liability - conversion option 5,796,562 -- Fair value of
derivative instrument 7,276,964 -- Total other liabilities
13,439,201 6,191,707 Total Liabilities 78,258,008 25,120,484
COMMITMENTS AND CONTINGENCIES -- -- EQUITY: Common stock, $0.0001
par value, 100,000,000 shares authorized, 21,474,942 and 21,434,942
shares issued and outstanding at June 30, 2009 and December 31,
2008, respectively 2,147 2,143 Paid-in-capital 10,255,255
10,700,032 Statutory reserves 11,738,002 6,989,801 Retained
earnings 20,943,538 15,392,253 Accumulated other comprehensive
income 4,176,685 4,159,298 Total shareholders' equity 47,115,627
37,243,527 NONCONTROLLING INTEREST 29,416,106 4,805,381 Total
equity 76,531,733 42,048,908 Total Liabilities $154,789,741
$67,169,392 CHINA BIOLOGIC PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE
30, 2009 AND 2008 (Unaudited) 2009 2008 CASH FLOWS FROM OPERATING
ACTIVITIES: Net income attributable to controlling interest
$11,229,063 $4,301,954 Net income attributable to non-controlling
interest 7,325,713 1,364,347 Consolidated net income 18,554,776
5,666,301 Adjustments to reconcile net income to cash provided by
operating activities: Depreciation 1,589,625 579,754 Amortization
1,704,248 53,192 (Gain) Loss on disposal of equipment (506) 1,900
Recovery of bad debt previously reserved (22,311) (107,583)
Allowance for bad debt - accounts receivables 9,635 -- Allowance
for bad debt - other receivables 397,101 -- Stock based
compensation 54.967 1,263,188 Change in fair value of warrant
liabilities 1,688,755 -- Amortization of deferred note issuance
cost 25,323 -- Amortization of discount on convertible notes 20,356
-- Equity in loss of unconsolidated affiliate 50,143 -- Change in
operating assets and liabilities: Notes receivable -- (23,694)
Accounts receivable (676,036) (477,858) Accounts receivable -
related party (375,810) -- Other receivables (23,082) (210,576)
Other receivables - shareholders -- 1,419 Inventories (4,130,960)
(2,571,137) Prepayments and deferred expenses (750,937) (241,377)
Accounts payable (50,767) (294,290) Other payables and accrued
liabilities 4,573,201 683,527 Accrued interest 21,178 -- Accrued
interest - holder of noncontrolling interest 911,084 -- Customer
deposits 4,251,476 264,990 Taxes payable 608,063 2,134,302
Contingent liability -- (107,273) Net cash provided by operating
activities 28,429,522 6,623,785 CASH FLOWS FROM INVESTING
ACTIVITIES: Cash acquired through acquisition 11,943,673 --
Payments made for acquisition (10,373,854) -- Purchase of plant and
equipment (1,865,746) (2,245,627) Additions to intangible assets
(1,014,766) (10,269) Proceeds from sale of equipment -- 3,546
Advances on non-current assets (590,428) (32,945) Net cash used in
investing activities (1,901,121) (2,285,295) CASH FLOWS FINANCING
ACTIVITIES: Proceeds from warrants conversion 113,700 -- Proceeds
from issuance of convertible notes 8,971,337 -- Repayments of
former shareholders loan in acquiring company (2,652,737) --
Proceeds from short term bank loan 13,513,754 -- Payments on short
term loans - bank -- (709,200) Payments on long term loan - bank
(5,862,800) -- Dividends paid to noncontrolling interest
shareholders -- (283,680) Net cash provided by (used in) investing
activities 14,083,254 (992,880) EFFECTS OF EXCHANGE RATE CHANGE IN
CASH 52,750 419,599 INCREASE IN CASH 40,664,405 3,765,209 CASH and
CASH EQUIVALENTS, beginning of year 8,814,616 5,010,033 CASH and
CASH EQUIVALENTS, end of year $49,479,021 $8,775,242 SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION Income taxes paid $4,351,056
$850,605 Interest paid (net of capitalized interest) $715,158
$29,901 Non-cash investing and financing activities
Reclassification of warrant liability to paid-in capital upon
warrants conversion $125,009 $-- Dividend paid in exchange of
holder of noncontrolling interest loan $3,736,773 $-- Dividend paid
by offsetting loan due from holder of noncontrolling interest
$3,720,649 $-- Net assets acquired with prepayments made in prior
periods $14,159,124 $-- Net assets acquired with unpaid investment
$2,849,321 $-- Plant and equipment acquired with prepayments made
in prior periods $131,103 $-- For more information, please contact:
Company Contact: Mr. Y. Tristan Kuo Chief Financial Officer China
Biologic Products, Inc. Tel: +86-538-6202206 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.,
+86-538-6202206, or ; Investor Relations Contact: Mr. Crocker
Coulson, President of CCG Investor Relations, +1-646-213-1915 (NY
office) or Mr. Gary Chin, +1-646-213-1909, or Web Site:
http://www.chinabiologic.com/ http://www.ccgirasia.com/
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