Net Income increased 225.7% year-over-year to $2.3 million or 11 cents per
share
TAI'AN CITY, Shandong, China, Nov. 15 /Xinhua-PRNewswire-FirstCall/ --
China Biologic Products, Inc. (Pink Sheets: CBPO) ("CBP", "the Company"),
one of the leading plasma-based pharmaceutical companies in the People's
Republic of China ("PRC"), today reported record financial results for the
third quarter ended on September 30, 2007.
Third Quarter 2007 Highlights
-- Revenues increased 48.8% year-over-year to a record $8.9 million
-- Gross profits increased 79.7% to $6.7 million over the third quarter of
2006
-- Operating income totaled $3.6 million, up 106.9% over the third quarter
of 2006
-- Net income was up 225.7% year-over-year to $2.3 million or $0.11 per
share
"During the quarter we continued to see strong demand for our plasma
based products due to increased purchasing power and health consciousness
of Chinese consumers although unit prices have increased greatly," said Mr.
Stanley Wong, CEO of China Biologic Products, "In addition, we have taken
advantage of the favorable industry environment to improve our production
facilities and to accelerate the pace of developing new drugs."
Third Quarter 2007 Results
Revenues for the three months ended September 30, 2007 were $8.9
million, up 48.8% as compared to $6.0 million for the same period of 2006.
The increase was primarily due to the rise in unit prices of plasma based
products, although the Company's unit sales volumes declined. During the
third quarter of 2007, unit prices of the Company's main products
experienced growth ranging from 8.1% to 424.5% year over year. The
situation of unit prices rising combined with the drop in volumes was a
result of the PRC government's stringent controls on quality in the plasma
based production industry. The Company is expected to adjust its production
plans and to utilize all plasma resources that are available to provide
products with higher profit margins.
Human albumin, Human Immunoglobulin for Intravenous Injection and Human
Rabies Immunoglobulin contributed 61.9%, 11.1% and 15.2% to the revenues,
respectively.
Cost of revenues for the three months ended September 30, 2007 remained
unchanged and stood at $2.3 million, accounting for 25.5% of the revenues,
compared to 38.3% for the comparable period of 2006.
Gross profit was up 79.7% to $6.7 million with gross margins of 74.5%
for the third quarter of 2007 compared with approximately $3.7 million and
61.7% in the third quarter of 2006, respectively. The increase of gross
margin was mainly due to the rapid growth in unit sale prices.
Total operating expenses for the three months ended September 30, 2007
were $3.1 million, up 55.9% from the same period in 2006, which was
primarily attributable to increased selling expenses. During this quarter,
the Company incurred more marketing and sales expenses, including bonuses
to salespersons, holding sales conferences, and travel related expenses.
Research and development expenses were $0.2 million for the third quarter
of 2007, representing 2.4% of the revenues.
Income from operations grew 106.9% to $3.6 million in the third quarter
of 2007, representing operating margins of 40.0%, as compared to $1.7
million and 28.7% in the same period of 2006.
In the third quarter of 2007, the Company recorded $0.56 million and
$0.61 million for provision for income taxes and minority interest,
respectively.
Net income for the third quarter of 2007 was $2.3 million or $0.11 per
basic and diluted share, an increase of 225.7% and 219.1% from $0.7 million
and $0.03 per share, respectively for the comparable period of 2006.
Nine Months Results
Revenue for the first nine months of 2007 increased 68.8% over the
comparable period in 2006 to $25.4 million. Gross profits rose 99.7% in the
same period to $17.1 million, representing gross margins of 67.4%.
Operating expenses in the first nine months of 2007 increased 85.0% to $5.7
million as a result of the increased selling expenses. Operating profits in
the first nine months of 2007 rose 107.9% over the comparable period in
2006 to $11.4 million, representing operating margins of 44.9%. Net income
for the nine months ended September 30, 2007 was $7.6 million or $0.35 per
basic and diluted share, up 124.7% and 107.9% respectively.
Cash flow from operations for the nine months ended September 30, 2007
totaled $10.8 million, a huge increase compared to $0.02 million in the
comparable period in 2006. Net cash used in investing activities in the
first nine months of 2007 totaled $7.2 million, most of which was incurred
to build the new production line.
Financial Condition
As of September 30, 2007, CBP had $6.1 million in cash, approximately
$9.6 million in working capital. Shareholder's equity at the end of the
third quarter stood at $21.1 million compared to $12.7 million at the end
of 2006.
Business Outlook
In recent years, the biopharmaceutical industry and the plasma-based
product market have outperformed the pharmaceutical industry. According to
http://www.pharmnet.com.cn, sales of blood and plasma-based drugs in China
had an average growth rate of 15% in the last 5 years, reaching $372
million in 2005, and accounting for 11.7% of prescription drug sales.
China's plasma- based products market remains underserved with limited
availability of products, offering substantial opportunities for China
Biologic to grow its business.
The PRC government is limiting the number of companies in this industry
and is not expected to issue new licenses in the foreseeable future.
Besides, import of foreign plasma-based products is severely restricted,
creating a relatively closed market for domestic suppliers. The overall
effect of recent government regulatory reform has been to reduce
competition and increase the barriers to entry, creating a favorable
industry structure for China Biologic Products.
"We are very pleased to be operating in a more regulated market for
plasma based products after recent reforms launched by the government,"
said Mr. Stanley Wong, CEO of China Biologic Products. "We are going to
continue our efforts to achieve more market share and improve our products
mix."
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 Shandong Province,
the second largest province with a population of 93 million. The company is
engaged primarily in research, manufacturing, and sale of plasma-based
biopharmaceutical products to hospitals and other health care facilities in
China. Plasma-based Human Albumin is used mainly to increase blood volume
while Immunoglobulin is used for disease prevention and treatment.
Safe Harbor Statement
This release contains certain "forward-looking statements" relating to
the business of the Company and its subsidiary companies. These
forward-looking statements are often identified by the use of
forward-looking terminology such as "believes, expects" or similar
expressions. Such forward looking statements involve known and unknown
risks and uncertainties that may cause actual results to be materially
different from those described herein as anticipated, believed, estimated
or expected. 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 to 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 CONDENSED STATEMENTS OF INCOME
(US$ - Unaudited)
Three months ended Nine months ended
30-Sep 30-Sep
2007 2006 2007 2006
REVENUES $8,938,186 $6,006,917 $25,442,097 $15,074,618
COST OF SALES 2,281,280 2,301,768 8,293,628 6,487,373
GROSS PROFIT 6,656,906 3,705,149 17,148,469 8,587,245
OPERATING EXPENSES
Selling expenses 1,741,829 397,226 2,444,297 689,895
General and
administrative
expenses 1,129,785 1,322,509 2,838,126 1,960,169
Research and
development expenses 213,865 259,506 435,500 440,140
TOTAL OPERATING EXPENSES 3,085,479 1,979,241 5,717,923 3,090,204
INCOME FROM OPERATIONS 3,571,427 1,725,908 11,430,546 5,497,041
OTHER EXPENSES
Finance expense 66,413 34,652 112,637 130,154
Other expense 72,556 30,118 95,598 60,323
TOTAL OTHER EXPENSES 138,969 64,770 208,235 190,477
INCOME BEFORE PROVISION
FOR INCOME TAXES AND
MINORITY INTEREST 3,432,458 1,661,138 11,222,311 5,306,564
PROVISION FOR INCOME
TAXES 560,030 470,907 1,858,992 954,538
NET INCOME BEFORE
MINORITY INTEREST 2,872,428 1,190,231 9,363,319 4,352,026
LESS MINORITY INTEREST 613,914 496,691 1,762,462 969,167
NET INCOME 2,258,514 693,540 7,600,857 3,382,859
FOREIGN CURRENCY
TRANSLATION GAIN 336,137 116,354 799,229 323,132
OTHER COMPREHENSIVE
INCOME $2,594,651 $809,894 $8,400,086 $3,705,991
WEIGHTED AVERAGE NUMBER
OF SHARES, BASIC AND
DILUTED 21,434,942 21,004,507 21,434,942 19,831,279
EARNING PER SHARE, BASIC
AND DILUTED $0.11 $0.03 $0.35 $0.17
China Biologic Products, Inc. and Subsidiaries
CONSOLIDATED CONDENSED BALANCE SHEET
(US$)
A S S E T S
30-Sep 31-Dec
2007 2006
(Unaudited) (Audited)
CURRENT ASSETS:
Cash $6,123,713 $4,268,220
Accounts receivable, net of
allowance for doubtful accounts of
$1,177,093 and $1,131,209 as of
September 30, 2007 and December
31, 2006, respectively 2,405,173 3,775,387
Notes receivable 6,670 81,407
Other receivables 1,225,748 584,931
Other receivables - shareholders 136,928 -
Inventories 8,068,122 6,117,361
Advances on inventory purchases 511,217 713,194
Deferred expense 3,945 -
Total current assets 18,481,516 15,540,500
PLANT AND EQUIPMENT, net 13,610,736 7,437,768
OTHER ASSETS:
Advances on equipment purchases 1,444,668 778,364
Intangible assets 920,083 718,011
Long term deferred assets 727 -
Total other assets 2,365,478 1,496,375
Total assets $34,457,730 $24,474,643
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 $2,793,333 $2,412,440
Other payables and accrued
liabilities 2,062,683 1,874,973
Short term loans - bank 1,334,000 2,564,000
Short term loan - minority
shareholder 703,171 675,761
Other payable - land use right 297,672 287,045
Distributions to minority
shareholder 212,719 476,597
Customer deposits 590,392 370,297
Taxes payable 884,783 138,203
Total current liabilities 8,878,753 8,799,316
Long term liabilities 400,200 641,000
Total liabilities 9,278,953 9,440,316
COMMITMENTS AND CONTINGENCIES 75,593 --
MINORITY INTEREST 3,977,258 2,308,487
SHAREHOLDERS' EQUITY:
Common stock, $0.0001 par value,
100,000,000 shares authorized,
21,434,942 shares issued and
outstanding at September 30, 2007
and December 31, 2006,
respectively 2,143 2,143
Paid-in-capital 9,388,305 9,388,305
Statutory reserves 4,301,940 2,199,580
Retained earnings 5,515,924 17,427
Accumulated other comprehensive
income 1,917,614 1,118,385
Total shareholders' equity 21,125,926 12,725,840
Total liabilities and
shareholders' equity $34,457,730 $24,474,643
China Biologic Products, Inc. and Subsidiaries
CASH FLOW STATEMENT
(US$ - Unaudited)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
2007 2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $7,600,857 $3,382,859
Adjustments to reconcile net income
to cash provided by operating
activities:
Minority interest 1,762,462 969,167
Depreciation 611,020 313,436
Amortization 64,168 34,890
Loss on disposal of equipment 6,077 --
Change in operating assets and
liabilities:
Accounts receivable 1,491,832 (1,285,459)
Notes receivable 76,424 (136,899)
Other receivables (604,324) (1,482,103)
Other receivables -
shareholders (134,095) --
Inventories (1,667,404) (1,701,492)
Advance on inventory purchase 226,128 341,315
Deferred expenses (3,863) --
Long term deferred expenses (712) --
Accounts payable 277,185 51,932
Other payables and accruals 183,946 (317,413)
Customer deposits 200,832 (304,606)
Taxes payable 725,644 158,892
Net cash provided
by operating
activities 10,816,177 24,519
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to plant and equipment (6,377,620) (594,927)
Additions to intangible assets (233,537) (30,674)
Proceeds from sale of equipment 26,199 -
Advances on equipment and
intangible assets purchases (621,600) (573,234)
Net cash used in investing
activities (7,206,558) (1,198,835)
CASH FLOWS FROM FINANCING ACTIVITIES:
Restricted cash -- 1,874,700
Proceeds from stock issuance -- 3,752,100
Payments on notes payable - banks -- (1,874,700)
Proceeds from short term loans -
bank 1,292,000 624,900
Payments on short term loans -
banks (2,593,000) (2,499,600)
Proceeds from short term loans -
shareholders -- 2,728,612
Payments on short term loans -
shareholders -- (735,523)
Payments on long term debt (261,280) (499,921)
Dividend paid to minority
shareholder (476,597) --
Net cash (used in) provided by
financing activities (2,038,877) 3,370,568
EFFECTS OF EXCHANGE RATE CHANGE IN
CASH 284,751 208,678
INCREASE IN CASH 1,855,493 2,404,930
CASH, beginning of period 4,268,220 607,376
CASH, end of period $6,123,713 $3,012,306
For more information, please contact:
Company Contact:
Mr. Stanley Wong
CEO
China Biologic Products, Inc.
Tel: +86-538-6202608
Email: IR@ctbb.com.cn
Investor Relations Contact:
Mr. Crocker Coulson
President
CCG Elite Investor Relations
Tel: +1-646-213-1915 (NY office)
Email: crocker.coulson@ccgir.com
SOURCE China Biologic Products, Inc.
 back to top
Related links:
http://www.ctbb.com.cn
CONTACT:
Crocker Coulson, President of CCG Elite,
+1-646-213-1915, or crocker.coulson@ccgir.com; Stanley Wong,
Chief Executive Officer of China Biologic Products Inc., all for
China Biologic Products Inc.
|
