HAIKOU, China, March 29, 2019 /PRNewswire/ -- China Pharma
Holdings, Inc. (NYSE American: CPHI) ("China Pharma," the "Company"
or "We"), an NYSE American-listed corporation with a
fully-integrated specialty pharmaceuticals subsidiary based in
China, today announced financial
results for the fiscal year ended December
31, 2018.
Full Year Highlights
- Revenue decreased 6.7% to $12.3
million in fiscal year 2018 from $13.2 million in fiscal year 2017;
- Gross margin was 16.0% in fiscal year 2018, compared to 18.7%
in fiscal year 2017.
- Impairment loss was $6.5 million
in fiscal year 2018 compared to $14.2
million in fiscal year 2017, which represented a decrease of
$7.7 million;
- Loss from operations was $10.4
million in fiscal year 2018 compared to $18.7 million in fiscal year 2017, which
represented a decrease of $8.3
million;
- Net loss was $10.8 million in
fiscal year 2018 compared to $19.3
million in fiscal year 2017. Loss per common share was
$(0.25) per basic and diluted share
in fiscal year 2018 compared with $(0.44) per basic and diluted share in fiscal
year 2017.
In a statement from Ms. Zhilin
Li, China Pharma's Chairman and CEO, "We experienced certain
market fluctuations in 2018, but through the continued
implementation of sales promotions, our sales revenue of 2018 was
comparable to the same period a year ago. Management will continue
to vigorously promote sales through active participation in recent
provincial market openings to solicit new drug tender offers and
allow China Pharma to expand its presence in these markets." Ms. Li
continued, "In addition, we continued experiencing sustained
pressure from the more stringent requirements of drug registration
standards, consistency evaluations, and the rising costs of
clinical trials in 2018. In this challenging environment, the
company actively evaluated the technical difficulty, investment
demand, time requirements, and investment return rate of all
applicable marketed and pipeline products, and actively advanced
the compliance process for several key products in 2018."
Full Year Results
Revenue decreased by 6.7% to $12.3
million for the year ended December
31, 2018, as compared to $13.2
million for the year ended December
31, 2017. This decrease was mainly due to the negative
impact associated with health insurance cost controls as well as
government policies targeted at reducing drug costs as a proportion
of total health-care spending, in conjunction with the Company's
efforts in controlling bad debts by more rigorous screening
customers and more stringent policies on payment terms.
Gross profit for the year ended December
31, 2018 was $2.0 million, compared to $2.5 million in 2017. Our gross profit margin in
2018 was 16.0% compared to 18.7% in 2017. This decline in our gross
profit margin was mainly due to a decrease in our sales, and
our fixed manufacturing overhead.
Our selling expenses for the year ended December 31, 2018 were $3.2 million, a decrease of $0.2 million compared to $3.5 million for the year ended December 31, 2017. Selling expenses
accounted for 26.1% of the total revenue in 2018 compared to 26.2%
in 2017.
Our general and administrative expenses for the year ended
December 31, 2018 were $1.9 million, which was close to
$2.0 million in 2017. General
and administrative expenses accounted for 15.8% and 15.3% of our
total revenues in 2018 and 2017, respectively.
Our bad debt expenses for the year ended December 31, 2018 was $0.6
million, which represented a decrease of $0.8 million compared to $1.4 million in 2017. The decrease in our
bad debt expenses was mainly due to the change in the composition
of aging of accounts receivables for the years ended
December 31, 2018 compared to
December 31, 2017, which came in line
with the Company's more stringent scrutiny upon customers'
payment history.
Impairment of intangible assets for the year ended
December 31, 2018 was $6.5 million, compared to $14.2 million in 2017. As a pharmaceutical
company, we have been focusing on the development and maintenance
of our intangible assets, mainly in the form of medical
formulas. Because of recently implemented government
policies such as consistency evaluations, our management
made certain assessments regarding the impairment of
our intangible assets as of December 31, 2018 and
December 31,
2017 respectively, and identified two formulas and
six formulas in 2018 and 2017, respectively, that would likely
be unable to generate positive cash flow in the foreseeable
future and therefore recognized impairment loss on them
accordingly.
Net loss for year ended December 31,
2018 was $10.8 million, or
($0.25) each basic and diluted
share, compared to net loss of $19.3
million, or ($0.44) each basic
and diluted share, for the year ended December 31, 2017. The decrease in net loss was
mainly a result of the decrease in impairment of long term
assets.
Financial Condition
As of December 31, 2018, the
Company had cash and cash equivalents of $1.2 million compared to $2.0 million as of December 31, 2017. Working capital decreased to
($1.3) million as of December 31, 2018 from $3.1 million as of December 31, 2017.
As of December 31, 2018, our net
accounts receivable was $0.9 million,
compared to $2.3 million as of
December 31, 2017.
For the year ended December 31,
2018, cash flow from operating activities was $1.3 million, as compared to $0.8 million in 2017.
Conference Call
The Company will hold a conference call at 8:30 am E.T. on March 29,
2019 to discuss the results of full year 2018. Listeners may
access the call by dialing 1-866-519-4004 or 65-671-350-90 for
international callers, Conference ID # 3784037. A replay of
the call will be accessible through April 6,
2019 by dialing 1-855-452-5696 or 61-281-990-299 for
international callers, Conference ID # 3784037.
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 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 new 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
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. Such risks and uncertainties may
include, but are not limited to: 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.
- FINANCIAL TABLES FOLLOW -
CHINA PHARMA
HOLDINGS, INC.
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
2018
|
|
2017
|
ASSETS
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
1,186,587
|
|
$
2,030,214
|
Restricted
cash
|
|
1,273,940
|
|
709,796
|
Banker's
acceptances
|
|
20,579
|
|
39,867
|
Trade accounts
receivable, less allowance for doubtful
|
|
|
|
|
accounts of
$17,815,075 and $18,209,734, respectively
|
|
916,931
|
|
2,293,120
|
Other receivables,
less allowance for doubtful
|
|
|
|
|
accounts of $34,884
and $40,010, respectively
|
|
170,098
|
|
162,981
|
Advances to
suppliers
|
|
47
|
|
461,307
|
Inventory
|
|
5,054,975
|
|
6,407,155
|
Prepaid
expenses
|
|
123,759
|
|
185,647
|
Total Current
Assets
|
|
8,746,916
|
|
12,290,087
|
|
|
|
|
|
Advances for
purchases of intangible assets
|
|
17,069,587
|
|
23,722,954
|
Property, plant
and equipment, net
|
|
19,294,379
|
|
23,541,003
|
Intangible assets,
net
|
|
266,443
|
|
398,856
|
TOTAL
ASSETS
|
|
$
45,377,325
|
|
$
59,952,900
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Trade accounts
payable
|
|
$
1,060,934
|
|
$
1,141,138
|
Accrued
expenses
|
|
310,804
|
|
276,368
|
Other
payables
|
|
3,065,508
|
|
2,858,701
|
Advances from
customers
|
|
525,647
|
|
581,132
|
Other payables -
related parties
|
|
1,633,263
|
|
1,354,567
|
Current portion of
construction loan facility
|
|
2,181,360
|
|
2,305,430
|
Bankers' acceptance
notes payable
|
|
1,273,940
|
|
709,796
|
Total Current
Liabilities
|
|
10,051,456
|
|
9,227,132
|
Non-current
Liabilities:
|
|
|
|
|
Construction loan
facility
|
|
4,362,720
|
|
6,916,291
|
Deferred tax
liability
|
|
764,374
|
|
738,175
|
Total
Liabilities
|
|
15,178,550
|
|
16,881,598
|
Commitments and
Contingencies (Note 12)
|
|
|
|
|
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 (deficit)
earnings
|
|
(5,270,358)
|
|
5,479,809
|
Accumulated other
comprehensive income
|
|
11,835,349
|
|
13,957,709
|
Total
Stockholders' Equity
|
|
30,198,775
|
|
43,071,302
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
$
45,377,325
|
|
$
59,952,900
|
CHINA PHARMA
HOLDINGS, INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
AND COMPREHENSIVE
INCOME (LOSS)
|
|
|
|
|
|
|
|
|
|
|
For the
Years
|
|
|
|
Ended December
31,
|
|
|
|
2018
|
|
2017
|
Revenue
|
|
|
$
12,330,687
|
|
$
13,212,314
|
Cost of
revenue
|
|
|
10,355,839
|
|
10,743,764
|
|
|
|
|
|
|
Gross
profit
|
|
|
1,974,848
|
|
2,468,550
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
Selling
expenses
|
|
|
3,216,512
|
|
3,460,596
|
General and
administrative expenses
|
|
|
1,949,921
|
|
2,019,949
|
Research and
development expenses
|
|
|
172,384
|
|
90,474
|
Bad debt
expense
|
|
|
604,388
|
|
1,393,576
|
Impairment of long
term assets
|
|
|
6,479,057
|
|
14,183,969
|
Total operating
expenses
|
|
|
12,422,262
|
|
21,148,564
|
|
|
|
|
|
|
Loss from
operations
|
|
|
(10,447,414)
|
|
(18,680,014)
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
Interest
income
|
|
|
38,516
|
|
64,414
|
Interest
expense
|
|
|
(451,258)
|
|
(539,334)
|
Net other
expense
|
|
|
(412,742)
|
|
(474,920)
|
|
|
|
|
|
|
Loss before income
taxes
|
|
|
(10,860,156)
|
|
(19,154,934)
|
Income tax benefit
(expense)
|
|
|
109,989
|
|
(122,631)
|
Net
loss
|
|
|
(10,750,167)
|
|
(19,277,565)
|
Other comprehensive
income - foreign currency
|
|
|
|
|
translation
adjustment
|
|
|
(2,122,360)
|
|
3,439,733
|
Comprehensive
income (loss)
|
|
|
$
(12,872,527)
|
|
$
(15,837,832)
|
Loss per
share:
|
|
|
|
|
|
Basic and
diluted
|
|
|
$
(0.25)
|
|
$
(0.44)
|
Weighted average
shares outstanding
|
|
|
43,579,557
|
|
43,579,557
|
CHINA PHARMA
HOLDINGS, INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
For the
Years
|
|
|
Ended December
31,
|
|
|
2018
|
|
2017
|
Cash Flows from
Operating Activities:
|
|
|
|
|
Net loss
|
|
$
(10,750,167)
|
|
$
(19,277,565)
|
Depreciation and
amortization
|
|
3,258,739
|
|
3,291,330
|
Inventory write
off
|
|
954,311
|
|
118,003
|
Bad debt
expense
|
|
604,388
|
|
1,393,576
|
Deferred income
taxes
|
|
68,419
|
|
122,631
|
Impairment of long
term assets
|
|
6,479,057
|
|
14,183,969
|
Changes in assets and
liabilities:
|
|
|
|
|
Trade accounts and
other receivables
|
|
99,400
|
|
51,024
|
Advances to
suppliers
|
|
(449,101)
|
|
1,614,958
|
Inventory
|
|
688,852
|
|
1,718,336
|
Trade accounts
payable
|
|
(16,441)
|
|
(2,045,948)
|
Accrued taxes
payable
|
|
(147,099)
|
|
18,753
|
Other payables and
accrued expenses
|
|
437,901
|
|
420,523
|
Advances from
customers
|
|
(25,127)
|
|
(274,068)
|
Prepaid
expenses
|
|
53,860
|
|
(494,306)
|
Net Cash Provided
by Operating Activities
|
|
1,256,992
|
|
841,216
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
Purchases of property
and equipment
|
|
(51,145)
|
|
(136,479)
|
Net Cash Used in
Investing Activities
|
|
(51,145)
|
|
(136,479)
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
Payments of
construction term loan
|
|
(2,263,877)
|
|
(1,479,944)
|
Advances from related
party
|
|
287,423
|
|
-
|
Net Cash Used in
Financing Activities
|
|
(1,976,454)
|
|
(1,479,944)
|
|
|
|
|
|
Effect of Exchange
Rate Changes on Cash
|
|
(73,020)
|
|
139,619
|
Net Decrease in
Cash and Cash Equivalents
|
|
(843,627)
|
|
(635,588)
|
Cash and Cash
Equivalents at Beginning of Period
|
|
2,030,214
|
|
2,665,802
|
Cash and Cash
Equivalents at End of Period
|
|
$
1,186,587
|
|
$
2,030,214
|
|
|
|
|
|
Supplemental Cash
Flow Information:
|
|
|
|
|
Cash paid for income
taxes
|
|
$
-
|
|
$
-
|
Cash paid for
interest
|
|
$
588,191
|
|
$
525,788
|
|
|
|
|
|
Supplemental
Noncash Investing and Financing Activities:
|
|
|
|
Issuance of banker's
acceptances
|
|
$
625,128
|
|
$
709,796
|
Accounts receivable
collected with banker's acceptances
|
|
579,896
|
|
531,294
|
Inventory purchased
with banker's acceptances
|
|
597,686
|
|
492,906
|
View original
content:http://www.prnewswire.com/news-releases/china-pharma-holdings-inc-reports-fiscal-year-2018-financial-results-300820880.html
SOURCE China Pharma Holdings, Inc.