TAIAN CITY,
Second Quarter 2008 Highlights -- Revenues increased 35.1% year-over-year to $11.9 million -- Gross profit increased 36.4% to $8.3 million over the second quarter 2007 -- Gross margin improved to 69.5%, from 68.8% for the same period last year -- Operating income totaled $5.0 million, down 1.5% from the previous year -- Net income totaled $2.0 million, or $0.09 per diluted share -- Non-GAAP net income was $3.3 million, a 4.2% decline over 2007, or $0.15 per diluted share* * Excludes Stock Based Compensation ("SBC"). See Table 1 for a reconciliation of Net Income and EPS to exclude SBC.
"We are pleased to report solid revenue and profitability in the second
quarter, primarily due to strong demand and price increases for our plasma
based products," said Mr.
During the quarter, the Company achieved the following milestones: -- Received approval for the production of Cryoprecipitate and clinical trials of Human Prothrombin Complex -- Began production and sales of Human Albumin 12.5g/vial (25%, 50 ml) -- Received approval to purchase excess clinical plasma -- Received approval to set up a new plasma collection station in Pu Bei County, Guangxi Province to replace its Fang Cheng Plasma Collection Station
Second Quarter 2008 Results
Revenues for the second quarter of 2008 were
Gross profit was up 36.4% to
Total operating expenses for the second quarter of 2008 were
As a result of the increase in operating expenses, income from operations
decreased 1.5% to
Provision for income taxes increased 150.2% year over year to
Net income for the second quarter of 2008 decreased 40.9% year over year,
to
Non-GAAP net income in the second quarter of 2008 was
* Excludes Stock Based Compensation ("SBC"). See Table 1 for a reconciliation of Net Income and EPS to exclude SBC.
Six Months Results
For the first six months of 2008, total revenue was
Financial Condition
As of
Recent Developments
(1) The Company began operation of its newly constructed plasma collection
station in Qi He County,
(2) The Company was honored with the Advanced Technology Certification for Foreign-Funded Enterprises.
(3) On
(4) The Company began annual maintenance of its production facilities on
(5) On
Business Outlook
For the most recent quarter, the Company received SFDA approval in a variety of plasma-based products including the approval to supply Cryoprecipitate to Green Cross China for the use in the production of Human Coagulation Factor VIII, an effort that leads the Company to focus on research and development of Human Coagulation Factor VIII. The Company also received approval to commence clinical trial of its new Human Prothrombin Complex for the production and sale of human albumin 12.5g/vial 925%, 50ml). The Company is currently one of the few producers offering the widest range of Human Albumin products available in the Chinese market. Management believes that these approvals are a reflection of the Company's R&D efforts to upgrade its product portfolio.
Realizing that the supply of human plasma is one of the keys to success in
the industry, the Company sought and obtained approval to relocate its Fang
Cheng plasma collection station to Pu Bei County,
The Company began the annual maintenance of its production facilities on
Commencing
The foregoing measure as well as the continued restriction on the importation of foreign plasma based products have placed pressure on the already tightened supply of plasma available for production. In addition, the overall effect of these and other regulations has been to reduce competition and increase the barriers to entry. In order to maintain its favorable position in the industry, the Company is focusing on its research and development efforts on securing plasma supply and on the development and production of new high quality plasma-based products.
"We are pleased with our operational results given the government's restriction on both the supply of human plasma and the slow approval process of the plasma-based products for sale earlier in the year," remarked Mr. Zhao. "Now that the government approval process for plasma based finished goods has returned to more normal levels, we are optimistic about our outlook for the remainder of the year. We have made great efforts to secure raw material inventories and finished products in order to better serve our customers."
*TABLE 1 CHINA BIOLOGIC PRODUCTS, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2008 AND 2007 Three Months Ended Three Months Ended Adjusted Net Income June 30, 2008 June 30, 2007 Diluted Diluted Net Income (Loss) Diluted EPS Net Income EPS Net Income EPS Adjusted Amount - Non GAAP $3,297,342 $0.15 $3,443,500 $0.16 Non-cash employee compensation (1) $1,263,188 $0.06 -- -- Amount per consolidated statement $2,034,154 $0.09 $3,443,500 $0.16 of operations Adjusted Net Income Six Months Ended Six Months Ended June 30, 2008 June 30, 2007 Net Income (Loss) Diluted EPS Net Income Diluted Diluted EPS Net Income EPS Adjusted Amount - Non GAAP $5,565,142 $0.26 $5,342,343 $0.25 Non-cash employee compensation (1) $1,263,188 $0.06 -- -- Amount per consolidated statement $4,301,954 $0.20 $5,342,343 $0.25 of operations (1) Non-cash compensation expense of $1,263,188 in connection with adoption of the equity incentive plan granting share options on the Company's common stock to employees and directors
Use of Non-GAAP Financial Measures
GAAP results for the three months ended
About China Biologic Products, Inc.
China Biologic Products, Inc., through its indirect majority-owned
subsidiary Shandong Taibang, is currently the only plasma-based
biopharmaceutical company approved by the government of
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 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.
For more information, please contact: Company Contact: Mr. Y. Tristan Kuo, CFO China Biologic Products, Inc. Tel: +86-538-620-2206 Email: IR@chinabiologic.com Web site: http://www.chinabiologic.com Investor Relations Contact: Mr. Crocker Coulson, President CCG Investor Relations Tel: +1-646-213-1915 (NY office) Email: crocker.coulson@ccgir.com Web site: http://www.ccgir.com CHINA BIOLOGIC PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2008 AND 2007 (Unaudited) Three months ended June 30, Six months ended June 30, 2008 2007 2008 2007 REVENUES $11,925,842 $8,826,059 $19,774,849 $16,503,911 COST OF SALES 3,638,128 2,750,972 5,587,026 6,012,348 GROSS PROFIT 8,287,714 6,075,087 14,187,823 10,491,563 OPERATING EXPENSES Selling expenses 510,565 204,855 1,005,094 702,468 General and administrative expenses 1,266,592 757,016 2,858,666 1,708,341 Research and development expenses 279,833 71,728 463,615 221,635 Compensation expense 1,263,188 1,263,188 TOTAL OPERATING EXPENSES 3,320,178 1,033,599 5,590,563 2,632,444 INCOME FROM OPERATIONS 4,967,536 5,041,488 8,597,260 7,859,119 OTHER EXPENSES Interest income (19,601) (4,386) (30,490) (17,113) Interest expense 18,755 18,692 44,672 63,337 Other income (364) (23) (567) (4,093) Other expense 52,405 15,400 53,019 27,135 TOTAL OTHER EXPENSES 51,195 29,683 66,634 69,266 INCOME BEFORE PROVISION FOR INCOME TAXES AND MINORITY INTEREST 4,916,341 5,011,805 8,530,626 7,789,853 PROVISION FOR INCOME TAXES 2,123,843 848,852 2,864,325 1,298,962 NET INCOME BEFORE MINORITY INTEREST 2,792,498 4,162,953 5,666,301 6,490,891 LESS MINORITY INTEREST 758,344 719,453 1,364,347 1,148,548 NET INCOME 2,034,154 3,443,500 4,301,954 5,342,343 FOREIGN CURRENCY TRANSLATION GAIN 747,767 370,319 1,871,125 463,092 OTHER COMPREHENSIVE INCOME $2,781,921 $3,813,819 $6,173,079 $5,805,435 BASIC EARNINGS PER SHARE Weighted average number of shares 21,434,942 21,434,942 21,434,942 21,434,942 Earnings per share $0.09 $0.16 $0.20 $0.25 DILUTED EARNINGS PER SHARE Weighted average number of shares 21,664,429 21,434,942 21,808,852 21,434,942 Earnings per share $0.09 $0.16 $0.20 $0.25 CHINA BIOLOGIC PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2008 AND DECEMBER 31, 2007 A S S E T S June 30, December 31, 2008 2007 (Unaudited) CURRENT ASSETS: Cash $8,775,242 $5,010,033 Accounts receivable, net of allowance for doubtful accounts of $1,202,838 and $1,238,772 as of June 30, 2008 and December 31, 2007, respectively 939,406 316,869 Notes receivable 68,142 41,130 Other receivables 659,799 425,163 Other receivable- related party 307,481 290,307 Inventories 12,759,906 9,505,074 Prepayments and deferred expense 395,949 138,756 Total current assets 23,905,925 15,727,332 PLANT AND EQUIPMENT, net 18,132,745 15,434,124 OTHER ASSETS: Advances on equipment purchases 791,014 711,459 Long term prepayment - related party 549,605 516,456 Intangible assets, net 929,738 915,874 Total other assets 2,270,357 2,143,789 Total assets $44,309,027 $33,305,245 L I A B I L I T I E S A N D S H A R E H O L D E R S' E Q U I T Y CURRENT LIABILITIES: Accounts payable $2,546,739 $2,677,587 Short term loans - bank -- 685,500 Short term loan - minority shareholder 769,060 722,674 Other payables and accrued liabilities 1,980,188 1,200,068 Other payable - land use right 324,411 305,571 Dividend payable 643,842 506,626 Customer deposits 696,966 398,794 Taxes payable 2,604,880 384,788 Total current liabilities 9,566,086 6,881,608 COMMITMENT AND CONTINGENCIES 40,899 142,120 MINORITY INTEREST 4,870,150 3,885,892 SHAREHOLDERS' EQUITY: Common stock, $0.0001 par value, 100,000,000 shares authorized, 21,434,942 shares issued and outstanding at June 30, 2008 and December 31, 2007, respectively 2,143 2,143 Paid-in-capital 10,651,493 9,388,305 Statutory reserves 5,334,520 4,513,077 Retained earnings 9,363,817 5,883,306 Accumulated other comprehensive income 4,479,919 2,608,794 Total shareholders' equity 29,831,892 22,395,625 Total liabilities and shareholders' equity $44,309,027 $33,305,245 CHINA BIOLOGIC PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2008 AND 2007 (UNAUDITED) 2008 2007 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $4,301,954 $5,342,343 Adjustments to reconcile net income to cash provided by operating activities: Recovery of bad debt previously reserved (107,583) -- Minority Interest 1,364,347 1,148,548 Depreciation 579,754 417,406 Amortization 53,192 23,686 Loss on disposal of equipment 1,900 4,064 Stock-based compensation 1,263,188 -- Change in operating assets and liabilities: Accounts receivable (477,858) 458,758 Notes receivable (23,694) 57,721 Other receivables (201,576) (1,317,291) Other receivables - shareholders 1,419 (146,149) Inventories (2,571,137) (989,274) Prepayments and deferred expenses (241,377) 187,928 Accounts payable (294,290) 36,733 Other payables and accrued liabilities 683,527 298,787 Other payable - land use right (752) -- Customer deposits 264,990 1,239,099 Taxes payable 2,134,302 547,273 Contingent liability (107,273) -- Net cash provided by operating activities 6,623,033 7,309,632 CASH FLOWS FROM INVESTING ACTIVITIES: Additions to plant and equipment (2,245,627) (3,830,236) Additions to construction in progress -- 9,393 Additions to intangible assets (9,517) (46,213) Proceeds from sale of equipment 3,546 -- Advances on building, equipment and intangible assets purchases (32,945) (5,672) Net cash used in investing activities (2,284,543) (3,872,728) CASH FLOWS FINANCING ACTIVITIES: Restricted cash -- (65,750) Proceeds from short term loans - bank -- 1,297,100 Payments on short term loans - bank (709,200) (2,511,400) Proceeds from employee loans -- 752,750 Payments on long term debt -- (194,565) Dividends paid to minority shareholders (283,680) (476,597) Net cash (used in) provided by financing activities (992,880) (1,198,462) EFFECTS OF EXCHANGE RATE CHANGE IN CASH 419,599 41,654 INCREASE IN CASH 3,765,209 2,280,096 CASH, beginning of period 5,010,033 4,268,220 CASH, end of period $8,775,242 $6,548,316 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Income taxes paid $850,605 $743,113 Interest paid (net of capitalized interest) $29,901 $55,714
SOURCE China Biologic Products, Inc.