Welcome!

News Feed Item

China Pharma Holdings, Inc. Reports Second Quarter 2014 Financial Results

HAIKOU CITY, China, Aug. 15, 2014 /PRNewswire/ -- China Pharma Holdings, Inc. (NYSE MKT: CPHI) ("China Pharma" or the "Company"), an NYSE MKT listed corporation with its  fully-integrated specialty pharmaceuticals subsidiary based in China, today announced its financial results for the three months ended June 30, 2014.

Second Quarter Highlights

  • Revenue was $6.1 million in the second quarter of 2014, which represented a decrease of 24% from $8.0 million in the second quarter of 2013.
  • Loss from operations was $8.5 million in the second quarter of 2014 compared to $4.8 million in the second quarter of 2013.
  • Net loss was $8.6 million in the second quarter of 2014 compared to $4.5 million in the second quarter of 2013.  Loss per common share was $0.20 per basic and diluted share in the second quarter of 2014 compared with $0.10 in the second quarter of 2013.
  • Gross profit margin was 39% in the second quarter of 2014, compared to 27% in second quarter of 2013. The increase in gross profit margin was mainly due to the decrease in purchasing prices of certain raw materials and the increase in selling prices of certain products due to market fluctuation.

"We have submitted the application for a new GMP certificate at the end of June 2014. We believe that the GMP upgrading will be successful and expect the new GMP certificate to be issued in approximately three to six months from our submission of the application," said Ms. Zhilin Li, China Pharma's Chairman and CEO.  Ms. Li continued, "The national CFDA staff was originally scheduled for an on-site-review of our new facility and production lines in late July of 2014. The review is a mandatory and major step in order for us to receive the new GMP certification.  However, due to a once-in-forty-year 16 grade super typhoon Rammasun hitting Haikou on July 18, 2014, the on-site-review was postponed and the typhoon caused considerable damage to our manufacturing facilities and inventory. We have taken emergency measures to restore and recover post-typhoon to be ready for the rescheduled on-site-review in mid-August."

Second Quarter 2014 Results

Revenue decreased by 24% to $6.1 million for the three months ended June 30, 2014, as compared to $8.0 million for the three months ended June 30, 2013, due to the suspension of our injectable production lines this year.

Our cost of revenue was $3.7 million, or 61% of total revenue in the second quarter of 2014, which represented a decrease of $2.1 million from $5.8 million, or 73% of total revenue, in the second quarter of 2013.  The decrease in cost of revenue was mainly due to a decrease in purchasing prices of certain raw materials result from market fluctuation.

Gross profit was $2.4 million in the second quarter of 2014, an increase of $0.3 million, from $2.2 million in the same period of 2013. Our gross profit margin in the second quarter of 2014 was 39% compared to 27% in the same period 2013. The increase in gross profit margin was mainly due to the decrease in purchasing prices of certain raw materials and the increase in selling prices of certain products result from market fluctuation.  

Selling, general and administrative expenses were $1.0 million, or 16% of sales in the second quarter of 2014, compared to $1.3 million, or 16% of sales, in the same period in 2013. The Company's research and development expense was $1.9 million in the second quarter of 2014, compared to $0.9 million in the same period last year. The increase in R&D expense was mainly due to the costs related to testing of the new production lines and the payment schedule per milestone stated in the contracts.

Our bad debt expenses were $8.0 million in the second quarter of 2014, compared to $4.8 million in the same period in 2013. The increase in bad debt expenses was mainly due to the increase in the aged accounts receivable.

Our operating loss was $8.5 million in the second quarter of 2014, compared to $4.8 million in the same period in 2013. The increase in operating loss was primarily due to the decrease in sales, the increase in bad debt expense and R&D expense recognized during the three months ended June 30, 2014.

For the three months ended June 30, 2014 and 2013, our income tax rate was 15%. Income tax expense was $0.02 million for the three months ended June 30, 2014, and income tax benefit was $0.4 million for the three months ended June 30, 2013. The income taxes recognized for the three months ended June 30, 2014 and 2013 were related to changes in deferred tax assets and liabilities. We renewed our "National High-Tech Enterprise" status ("National HT Status") from the PRC government in the third quarter of 2013. With this designation, for the years ending December 31, 2014, 2015 and 2016, we will continue to enjoy a preferential tax rate of 15% which is notably lower than the statutory income tax rate of 25%.

Net loss was $8.6 million or $0.20 per basic and diluted share in the second quarter of 2014, compared to $4.5 million, or $0.10 per basic and diluted share in the same period in 2013. The increase in net loss was primarily due to the decrease in sales, the increase in bad debt expense and R&D expense recognized for the three months ended June 30, 2014.

Six Months Results

Revenue for the six months ended June 30, 2014 was $13.2 million, down 19% from revenue of $16.3 million for the six months ended June 30, 2013.

Gross profit for the six months ended June 30, 2014 was $5.1 million for the six months ended June 30, 2014, compared to $0.6 million for the corresponding period of 2013. Gross profit for the six months ended June 30, 2013 was impacted by an inventory obsolescence amount of $3.7 million during that period.

Operating loss was $10.9 million for the six months ended June 30, 2014, decreased by $3.1 million from $7.8 million for the same period of 2013.

Net loss was $11.0 million, or $0.25 per basic and diluted share for the six months ended June 30, 2014, compared to $4.2 million, or $0.17 per basic and diluted share, for the same period a year ago.

Financial Condition

As of June 30, 2014, the Company had cash and cash equivalents of $4.4 million compared to $6.0 million as of December 31, 2013. Working capital decreased to $57.1 million as of June 30, 2014 from $72.0 million as of December 31, 2013 and the current ratio was 5.8 times as of June 30, 2014 compared to 7.0 times as of December 31, 2013.

Our accounts receivable balance decreased to $35.9 million at June 30, 2014 from $45.1 million at December 31, 2013. The decrease was due to our enhanced collection efforts as well as the increased allowance for doubtful accounts at June 30, 2014 compared to December 31, 2013.

For the three months ended June 30, 2014, cash flow from operating activities was $2.4 million, as compared to $3.1 million in the same period in 2013.

Conference Call

The Company will hold a conference call at 8:30 am ET on August 15, 2014 to discuss its second quarter 2014 results. Listeners may access the call by dialing 1-866-519-4004 or 65-672-393-81 for international callers, Conference ID # 81036556. A webcast will also be available through CPHI's website at http://www.chinapharmaholdings.com.  A replay of the call will be accessible until August 23, 2014 by dialing 1-855-452-5696 or 61-281-990-299 for international callers, Conference ID # 81036556.

About China Pharma Holdings, Inc.

China Pharma Holdings, Inc. is a specialty pharmaceutical company that develops, manufactures and markets a diversified portfolio of products focused on conditions with a high incidence and high mortality rates in China, including cardiovascular, CNS, infectious, and digestive diseases. The Company's cost-effective, high-margin business model is driven by market demand and supported by eight scalable GMP-certified product lines covering the major dosage forms. In addition, the Company has a broad and expanding nationwide distribution network across all major cities and provinces in China. The Company's wholly-owned subsidiary, Hainan Helpson Medical & Biotechnology Co., Ltd., is located in Haikou City, Hainan Province. For more information about China Pharma Holdings, Inc., please visit http://www.chinapharmaholdings.com. The Company routinely posts important information on its website.

Safe Harbor Statement 

Certain statements in this press release constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Any statements set forth above that are not historical facts are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, which may include, but are not limited to, such factors as the achievability of financial guidance, success of new product development, unanticipated changes in product demand, increased competition, downturns in the Chinese economy, uncompetitive levels of research and development, and other information detailed from time to time in the Company's filings and future filings with the United States Securities and Exchange Commission. The forward-looking statements made herein speak only as of the date of this press release and the Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations except as required by applicable law or regulation.

Contact:

China Pharma Holdings, Inc.
Phone: +86-898-6681-1730 (China)
Email: [email protected]

 - FINANCIAL TABLES FOLLOW -


CHINA PHARMA HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)








June 30,


December 31,



2014


2013

ASSETS





Current Assets:





Cash and cash equivalents


$      4,425,744


$      5,993,139

Banker's acceptances


92,832


336,003

Trade accounts receivable, less allowance for doubtful





accounts of $24,499,361 and $13,301,622, respectively


35,904,934


45,147,602

Other receivables, less allowance for doubtful





accounts of $60,083 and $43,064, respectively


482,862


175,739

Advances to suppliers


7,142,290


7,626,716

Inventory, less allowance for obsolescence 





of $7,968,701 and $8,027,126, respectively


20,960,894


24,677,120

Total Current Assets


69,009,556


83,956,319






Advances for purchases of intangible assets


41,397,984


41,701,505

Property and equipment, net of accumulated depreciation of





$5,628,507 and $5,264,350, respectively


34,115,618


30,241,337

Intangible assets, net of accumulated amortization of





$3,978,083 and $3,812,992, respectively


1,506,490


1,711,793

TOTAL ASSETS


$  146,029,648


$  157,610,954






LIABILITIES AND STOCKHOLDERS' EQUITY





Current Liabilities:





Trade accounts payable


$      2,541,166


$      1,877,437

Accrued expenses


293,539


323,651

Other payables


1,179,720


1,312,361

Advances from customers


1,626,334


2,228,238

Other payables - related parties


1,354,567


1,354,567

Short-term notes payable


4,873,928


4,909,662

Total Current Liabilities


11,869,254


12,005,916

Non-current Liabilities:





Construction loan facility


12,997,141


12,484,183

Long-term deferred tax liability


213,575


176,414

Total Liabilities


25,079,970


24,666,513

Stockholders' Equity:





Preferred stock, $0.001 par value; 5,000,000 shares authorized;





no shares issued or outstanding


-


-

Common stock, $0.001 par value; 95,000,000 shares authorized;





43,579,557 shares and 43,579,557 shares outstanding, respectively


43,580


43,580

Additional paid-in capital


23,590,204


23,590,204

Retained earnings


77,862,833


88,896,276

Accumulated other comprehensive income


19,453,061


20,414,381

Total Stockholders' Equity


120,949,678


132,944,441

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY


$  146,029,648


$  157,610,954






CHINA PHARMA HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)












For the Three Months


For the Six Months



Ended June 30,


Ended June 30,



2014


2013


2014


2013

Revenue


$          6,130,544


$          8,026,325


$        13,236,059


$        16,275,712

Cost of revenue


3,713,147


5,849,002


8,158,276


11,974,402

Inventory obsolescence


-


27,178


-


3,720,073










Gross profit


2,417,397


2,150,145


5,077,783


581,237










Operating expenses:









Selling expenses


627,442


701,687


1,447,847


1,513,741

General and administrative expenses


382,832


591,251


806,759


1,164,263

Research and development expenses


1,902,027


865,249


2,346,434


1,031,664

Bad debt expense


8,032,315


4,752,733


11,340,444


4,632,803

Total operating expenses


10,944,616


6,910,920


15,941,484


8,342,471










(Loss) income from operations


(8,527,219)


(4,760,775)


(10,863,701)


(7,761,234)










Other income (expense):









Interest income


16,828


1,016


38,611


2,602

Interest expense


(113,363)


(92,049)


(169,810)


(174,494)

Net other income (expense)


(96,535)


(91,033)


(131,199)


(171,892)










(Loss) income before income taxes


(8,623,754)


(4,851,808)


(10,994,900)


(7,933,126)

Income tax benefit (expense)


(19,196)


387,983


(38,543)


656,994

Net (loss) income


(8,642,950)


(4,463,825)


(11,033,443)


(7,276,132)

Other comprehensive income - foreign currency









translation adjustment


153,664


2,218,896


(961,320)


3,038,663

Comprehensive (loss) income


$        (8,489,286)


$        (2,244,929)


$      (11,994,763)


$        (4,237,469)

(Loss) earnings per share:









Basic


$                 (0.20)


$                 (0.10)


$                 (0.25)


$                 (0.17)

Diluted


$                 (0.20)


$                 (0.10)


$                 (0.25)


$                 (0.17)

 

CHINA PHARMA HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)








For the Six Months



Ended June 30,



2014


2013

Cash Flows from Operating Activities:





Net loss


$   (11,033,443)


$     (7,276,132)

Depreciation and amortization


596,819


697,549

Bad debt expense


11,340,444


4,632,803

Deferred income taxes


38,543


(656,994)

Inventory obsolescence reserve


-


3,720,073

Changes in assets and liabilities:





Trade accounts receivable


(3,398,497)


1,672,236

Other receivables


(309,181)


(468,509)

Advances to suppliers


429,998


(648,436)

Inventory


4,781,501


1,745,256

Trade accounts payable


714,380


1,403,638

Accrued taxes payable


(35,513)


(1,767,344)

Other payables and accrued expenses


(124,072)


(15,103)

Advances from customers


(587,165)


19,003

Net Cash Provided by Operating Activities


2,413,814


3,058,040






Cash Flows from Investing Activities:





Advances for purchases of intangible assets


-


(4,572,982)

Purchases of property and equipment and





construction in process


(4,543,490)


(49,030)

Net Cash Used in Investing Activities


(4,543,490)


(4,622,012)






Cash Flows from Financing Activities:





Proceeds from construction term loan


605,347


-

Net Cash Provided by Financing Activity


605,347


-






Effect of Exchange Rate Changes on Cash


(43,066)


58,787

Net (Decrease) Increase in Cash and Cash Equivalents


(1,567,395)


(1,505,185)

Cash and Cash Equivalents at Beginning of Period


5,993,139


4,029,708

Cash and Cash Equivalents at End of Period


$       4,425,744


$       2,524,523






Supplemental Cash Flow Information:





Cash paid for interest


$          621,841


$          167,819

Cash paid for income taxes


-


1,716,064






Supplemental Noncash Investing and Financing Activities:





Accounts payable for purchases of property and equipment


$            35,275


$          153,621

Accounts receivable collected with banker's acceptances


994,624


5,756,309

Inventory purchased with banker's acceptances


1,235,956


2,099,243

Advances for purchases of equipment paid with banker's acceptances


-


2,063,840

SOURCE China Pharma Holdings, Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
"Space Monkey by Vivent Smart Home is a product that is a distributed cloud-based edge storage network. Vivent Smart Home, our parent company, is a smart home provider that places a lot of hard drives across homes in North America," explained JT Olds, Director of Engineering, and Brandon Crowfeather, Product Manager, at Vivint Smart Home, in this SYS-CON.tv interview at @ThingsExpo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that Conference Guru has been named “Media Sponsor” of the 22nd International Cloud Expo, which will take place on June 5-7, 2018, at the Javits Center in New York, NY. A valuable conference experience generates new contacts, sales leads, potential strategic partners and potential investors; helps gather competitive intelligence and even provides inspiration for new products and services. Conference Guru works with conference organizers to pass great deals to gre...
DevOps is under attack because developers don’t want to mess with infrastructure. They will happily own their code into production, but want to use platforms instead of raw automation. That’s changing the landscape that we understand as DevOps with both architecture concepts (CloudNative) and process redefinition (SRE). Rob Hirschfeld’s recent work in Kubernetes operations has led to the conclusion that containers and related platforms have changed the way we should be thinking about DevOps and...
The Internet of Things will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform. In his session at @ThingsExpo, Craig Sproule, CEO of Metavine, demonstrated how to move beyond today's coding paradigm and shared the must-have mindsets for removing complexity from the develop...
In his Opening Keynote at 21st Cloud Expo, John Considine, General Manager of IBM Cloud Infrastructure, led attendees through the exciting evolution of the cloud. He looked at this major disruption from the perspective of technology, business models, and what this means for enterprises of all sizes. John Considine is General Manager of Cloud Infrastructure Services at IBM. In that role he is responsible for leading IBM’s public cloud infrastructure including strategy, development, and offering m...
The next XaaS is CICDaaS. Why? Because CICD saves developers a huge amount of time. CD is an especially great option for projects that require multiple and frequent contributions to be integrated. But… securing CICD best practices is an emerging, essential, yet little understood practice for DevOps teams and their Cloud Service Providers. The only way to get CICD to work in a highly secure environment takes collaboration, patience and persistence. Building CICD in the cloud requires rigorous ar...
Companies are harnessing data in ways we once associated with science fiction. Analysts have access to a plethora of visualization and reporting tools, but considering the vast amount of data businesses collect and limitations of CPUs, end users are forced to design their structures and systems with limitations. Until now. As the cloud toolkit to analyze data has evolved, GPUs have stepped in to massively parallel SQL, visualization and machine learning.
"Evatronix provides design services to companies that need to integrate the IoT technology in their products but they don't necessarily have the expertise, knowledge and design team to do so," explained Adam Morawiec, VP of Business Development at Evatronix, in this SYS-CON.tv interview at @ThingsExpo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
To get the most out of their data, successful companies are not focusing on queries and data lakes, they are actively integrating analytics into their operations with a data-first application development approach. Real-time adjustments to improve revenues, reduce costs, or mitigate risk rely on applications that minimize latency on a variety of data sources. In his session at @BigDataExpo, Jack Norris, Senior Vice President, Data and Applications at MapR Technologies, reviewed best practices to ...
Widespread fragmentation is stalling the growth of the IIoT and making it difficult for partners to work together. The number of software platforms, apps, hardware and connectivity standards is creating paralysis among businesses that are afraid of being locked into a solution. EdgeX Foundry is unifying the community around a common IoT edge framework and an ecosystem of interoperable components.
"ZeroStack is a startup in Silicon Valley. We're solving a very interesting problem around bringing public cloud convenience with private cloud control for enterprises and mid-size companies," explained Kamesh Pemmaraju, VP of Product Management at ZeroStack, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Large industrial manufacturing organizations are adopting the agile principles of cloud software companies. The industrial manufacturing development process has not scaled over time. Now that design CAD teams are geographically distributed, centralizing their work is key. With large multi-gigabyte projects, outdated tools have stifled industrial team agility, time-to-market milestones, and impacted P&L stakeholders.
"Akvelon is a software development company and we also provide consultancy services to folks who are looking to scale or accelerate their engineering roadmaps," explained Jeremiah Mothersell, Marketing Manager at Akvelon, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Enterprises are adopting Kubernetes to accelerate the development and the delivery of cloud-native applications. However, sharing a Kubernetes cluster between members of the same team can be challenging. And, sharing clusters across multiple teams is even harder. Kubernetes offers several constructs to help implement segmentation and isolation. However, these primitives can be complex to understand and apply. As a result, it’s becoming common for enterprises to end up with several clusters. Thi...
"Infoblox does DNS, DHCP and IP address management for not only enterprise networks but cloud networks as well. Customers are looking for a single platform that can extend not only in their private enterprise environment but private cloud, public cloud, tracking all the IP space and everything that is going on in that environment," explained Steve Salo, Principal Systems Engineer at Infoblox, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Conventio...