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
SYS-CON Events announced today that iDevices®, the preeminent brand in the connected home industry, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. iDevices, the preeminent brand in the connected home industry, has a growing line of HomeKit-enabled products available at the largest retailers worldwide. Through the “Designed with iDevices” co-development program and its custom-built IoT Cloud Infrastruc...
Sensors and effectors of IoT are solving problems in new ways, but small businesses have been slow to join the quantified world. They’ll need information from IoT using applications as varied as the businesses themselves. In his session at @ThingsExpo, Roger Meike, Distinguished Engineer, Director of Technology Innovation at Intuit, showed how IoT manufacturers can use open standards, public APIs and custom apps to enable the Quantified Small Business. He used a Raspberry Pi to connect sensors...
Eighty percent of a data scientist’s time is spent gathering and cleaning up data, and 80% of all data is unstructured and almost never analyzed. Cognitive computing, in combination with Big Data, is changing the equation by creating data reservoirs and using natural language processing to enable analysis of unstructured data sources. This is impacting every aspect of the analytics profession from how data is mined (and by whom) to how it is delivered. This is not some futuristic vision: it's ha...
Silver Spring Networks, Inc. (NYSE: SSNI) extended its Internet of Things technology platform with performance enhancements to Gen5 – its fifth generation critical infrastructure networking platform. Already delivering nearly 23 million devices on five continents as one of the leading networking providers in the market, Silver Spring announced it is doubling the maximum speed of its Gen5 network to up to 2.4 Mbps, increasing computational performance by 10x, supporting simultaneous mesh communic...
Advances in technology and ubiquitous connectivity have made the utilization of a dispersed workforce more common. Whether that remote team is located across the street or country, management styles/ approaches will have to be adjusted to accommodate this new dynamic. In his session at 17th Cloud Expo, Sagi Brody, Chief Technology Officer at Webair Internet Development Inc., focused on the challenges of managing remote teams, providing real-world examples that demonstrate what works and what do...
CIOs and those charged with running IT Operations are challenged to deliver secure, audited, and reliable compute environments for the applications and data for the business. Behind the scenes these tasks are often accomplished by following onerous time-consuming processes and often the management of these environments and processes will be outsourced to multiple IT service providers. In addition, the division of work is often siloed into traditional "towers" that are not well integrated for cro...
The principles behind DevOps are not new - for decades people have been automating system administration and decreasing the time to deploy apps and perform other management tasks. However, only recently did we see the tools and the will necessary to share the benefits and power of automation with a wider circle of people. In his session at DevOps Summit, Bernard Sanders, Chief Technology Officer at CloudBolt Software, explored the latest tools including Puppet, Chef, Docker, and CMPs needed to...
Let’s face it, embracing new storage technologies, capabilities and upgrading to new hardware often adds complexity and increases costs. In his session at 18th Cloud Expo, Seth Oxenhorn, Vice President of Business Development & Alliances at FalconStor, will discuss how a truly heterogeneous software-defined storage approach can add value to legacy platforms and heterogeneous environments. The result reduces complexity, significantly lowers cost, and provides IT organizations with improved effi...
The cloud promises new levels of agility and cost-savings for Big Data, data warehousing and analytics. But it’s challenging to understand all the options – from IaaS and PaaS to newer services like HaaS (Hadoop as a Service) and BDaaS (Big Data as a Service). In her session at @BigDataExpo at @ThingsExpo, Hannah Smalltree, a director at Cazena, will provide an educational overview of emerging “as-a-service” options for Big Data in the cloud. This is critical background for IT and data profes...
Predictive analytics tools monitor, report, and troubleshoot in order to make proactive decisions about the health, performance, and utilization of storage. Most enterprises combine cloud and on-premise storage, resulting in blended environments of physical, virtual, cloud, and other platforms, which justifies more sophisticated storage analytics. In his session at 18th Cloud Expo, Peter McCallum, Vice President of Datacenter Solutions at FalconStor, will discuss using predictive analytics to ...
SYS-CON Events announced today that Men & Mice, the leading global provider of DNS, DHCP and IP address management overlay solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. The Men & Mice Suite overlay solution is already known for its powerful application in heterogeneous operating environments, enabling enterprises to scale without fuss. Building on a solid range of diverse platform support,...
Father business cycles and digital consumers are forcing enterprises to respond faster to customer needs and competitive demands. Successful integration of DevOps and Agile development will be key for business success in today’s digital economy. In his session at DevOps Summit, Pradeep Prabhu, Co-Founder & CEO of Cloudmunch, covered the critical practices that enterprises should consider to seamlessly integrate Agile and DevOps processes, barriers to implementing this in the enterprise, and pr...
Cognitive Computing is becoming the foundation for a new generation of solutions that have the potential to transform business. Unlike traditional approaches to building solutions, a cognitive computing approach allows the data to help determine the way applications are designed. This contrasts with conventional software development that begins with defining logic based on the current way a business operates. In her session at 18th Cloud Expo, Judith S. Hurwitz, President and CEO of Hurwitz & ...
It's easy to assume that your app will run on a fast and reliable network. The reality for your app's users, though, is often a slow, unreliable network with spotty coverage. What happens when the network doesn't work, or when the device is in airplane mode? You get unhappy, frustrated users. An offline-first app is an app that works, without error, when there is no network connection.
With an estimated 50 billion devices connected to the Internet by 2020, several industries will begin to expand their capabilities for retaining end point data at the edge to better utilize the range of data types and sheer volume of M2M data generated by the Internet of Things. In his session at @ThingsExpo, Don DeLoach, CEO and President of Infobright, will discuss the infrastructures businesses will need to implement to handle this explosion of data by providing specific use cases for filte...