ACROFAN

China Pharma Holdings, Inc. Reports Second Quarter 2020 Financial Results

Published : Friday, August 14, 2020, 6:30 pm
ACROFAN=PRNewswire | mediainquiries@prnewswire.com | SNS

HAIKOU CITY, China, Aug. 14, 2020 /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 quarter ended June 30, 2020.

Second Quarter Highlights

  • Revenue increased 46.8% to $3.8 million in the second quarter 2020 from $2.6 million in the same period of 2019;
  • Gross margin was 30.5% in the second quarter 2020, compared to 6.4% in the same period of 2019;
  • Income from operations was $0.1 million in the second quarter 2020 compared to loss from operations of $0.8 million in the same period of 2019, an improvement of approximately $0.8 million;
  • Net income was $0.01 million in the second quarter 2020 compared to net loss of $0.84 million in the same period of 2019.  Earnings per common stock was $0.00 per basic and diluted share in the second quarter 2020, as compared to loss per common stock of $0.02 per basic and diluted share in the second quarter of 2019.
  • We completed a foreign trade of COVID-19 testers in the second quarter of 2020. This one-time business contributed approximately $1.7 million to our revenue for the three months ended June 30, 2020.

Ms. Zhilin Li, China Pharma's Chairman and CEO, commented, "The COVID-19 outbreak continued to have a substantial negative impact on our sales of pharmaceutical products. Many people try to avoid going to the hospital for fear of cross-contamination or potential infection. However, the majority of our existing products are prescription drugs. The macro-environment has negatively impacted our drug sales in this period. Fortunately, we completed a one-time foreign trade business this quarter. Due to the continued spread of COVID-19 in the international community, COVID-19 testers have become an urgently needed product in many markets. We have actively leveraged market information as well as our expertise to complete the order in an efficient manner." Ms. Li continued, "along with the lasting efforts to place emphasis on the marketing and sales of our current exiting pharmaceutical products, we continue to explore in the field of comprehensive healthcare. Comprehensive healthcare focuses on people's daily life, aging and disease and pays attention to all kinds of risk factors and misunderstandings affecting health. We aim to leverage our expertise in the PRC for the development, manufacture and commercialization of pharmaceutical and comprehensive healthcare products for the benefit of human health."

Second Quarter Results

Revenue increased by 46.8% to $3.8 million for the three months ended June 30, 2020, as compared to $2.6 million for the three months ended June 30, 2019. This increase was mainly due to a foreign trade of COVID-19 testers we completed in the second quarter of 2020. Because of the market demand for COVID-19 related products, we received an export order for diagnostic test, which we purchased from a third party. This one-time business contributed approximately $1.7 million to our revenue for the three months ended June 30, 2020. This is a milestone of our continuous efforts to explore various niche markets, products and regions based on our experiences and abilities.

For the three months ended June 30, 2020, our cost of revenue was $2.6 million, or 70% of total revenue, comparing to $2.4 million, or 94% of total revenue, for the same period in 2019. The decrease in cost of revenue was mainly due to a foreign trade of COVID-19 testers we completed in the second quarter of 2020.

Gross profit for the three months ended June 30, 2020 was $1.1 million, as compared to $0.2 million during the same period in 2019. Our gross profit margin in the three months ended June 30, 2020 was 30.5% as compared to 6.4% during the same period in 2019. The increase in our gross profit margin was mainly due to a foreign trade of COVID-19 testers we completed in the second quarter of 2020.

Our selling expenses for the three months ended June 30, 2020 and 2019 were $0.7 million and $0.5 million, respectively. Selling expenses accounted for 19.3% of the total revenue in the three months ended June 30, 2020, as compared to 19.7% during the same period in 2019. Because of adjustments in our sales practices, and reform of healthcare policies, we reduced number of personnel and expenses to efficiently support our sales and the collection of accounts receivable.

Our general and administrative expenses were both $0.3 million for the three months ended June 30, 2020 and 2019, respectively. General and administrative expenses accounted for 8.6% and 13.0% of our total revenues in the three months ended June 30, 2020 and 2019, respectively.

Our operating income for the three months ended June 30, 2020 was $0.1 million, compared to an operating loss of $0.8 million during the same period in 2019.

Net income for the three months ended June 30, 2020 was $0.01 million, or $0.00 per basic and diluted common share, as compared to net loss of $0.84 million, or $0.02 per basic and diluted common share for the same period a year ago. The decrease in net loss was mainly the result of a foreign trade of COVID-19 testers we completed in the second quarter of 2020.

Six Months Results

Revenue was both $5.5 million for the six months ended June 30, 2020 and 2019, respectively. The first three months in this year was impacted by COVID-19 outbreak in China, however there was one-time revenue from the selling of COVID-19 testers around $1.7 million, leading the revenue back to prior year performance.

Gross profit for the six months ended June 30, 2020 was $1.3 million, compared to $0.8 million in the same period in 2019. Our gross profit margin in the six months ended June 30, 2020 was 24.3% compared to 14.9% in the same period in 2019. The increase in our gross profit margin was mainly due to a foreign trade of COVID-19 testers we completed in the second quarter of 2020.

Net loss for the six months ended June 30, 2020 was $0.6 million, as compared to net loss of $1.3 million for the six months ended June 30, 2019. The decrease of net loss was mainly due to a foreign trade of COVID-19 testers we completed in the second quarter of 2020. 

Financial Condition

As of June 30, 2020, the Company had cash and cash equivalents of $1.8 million compared to $1.1 million as of December 31, 2019.

Our net accounts receivable was both $0.6 million as of June 30, 2020 and December 31, 2019, respectively.

For the six months ended June 30, 2020, cash flow used in operating activities was $0.2 million, as compared to cash flow provided by operating activities of $0.2 million for the same period in 2019.

Conference Call

The Company will hold a conference call at 8:30 am E.T. on August 14, 2020 to discuss the results of the second quarter of 2020. Listeners may access the call by registering via the link below:

https://apac.directeventreg.com/registration/event/7427437  

A replay of the call will be accessible through August 22, 2020 by dialing 1-855-452-5696 or 61-281-990-299 for international callers, Conference ID # 7427437.

About China Pharma Holdings, Inc.

China Pharma Holdings, Inc. is a specialty pharmaceutical company that develops, manufactures and markets a diversified portfolio of products, focusing on conditions with high incidence and high mortality rates in China, including cardiovascular, CNS, infectious, and digestive diseases. The Company's cost-effective 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 & Biotechnique 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.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)








June 30,


December 31,



2020


2019






ASSETS





Current Assets:





Cash and cash equivalents


$      1,813,544


$      1,074,979

Restricted cash


222,996


109,908

Banker's acceptances


11,251


45,756

Trade accounts receivable, less allowance for doubtful





accounts of $17,342,097 and $17,575,100, respectively


595,733


635,371

Other receivables, less allowance for doubtful





accounts of $23,715 and $22,729, respectively


86,065


46,643

Advances to suppliers


277,900


404

Inventory


3,852,972


3,588,824

Prepaid expenses


397,374


77,120

Total Current Assets


7,257,835


5,579,005






Property, plant and equipment, net


15,631,653


16,313,827

Operating lease right of use asset


90,289


136,779

Intangible assets, net


185,244


205,611

TOTAL ASSETS


$    23,165,021


$    22,235,222






LIABILITIES AND STOCKHOLDERS' EQUITY





Current Liabilities:





Trade accounts payable


$      1,025,098


$      1,366,330

Accrued expenses


180,719


189,880

Other payables


3,753,356


3,560,332

Advances from customers


592,961


505,398

Other payables - related parties


2,152,161


2,071,986

Operating lease liability, current portion


93,510


91,306

Current portion of construction loan facility


2,118,794


2,150,168

Current portion of lines of credit


1,200,650


-

Bankers' acceptance notes payable


222,996


109,908

Total Current Liabilities


11,340,245


10,045,308

Non-current Liabilities:





Construction loan facility


1,977,541


2,150,168

Lines of credit, net of current portion


706,264


-

Operating lease liability, net of current portion


-


48,701

Deferred tax liability


742,450


753,444

Total Liabilities


14,766,500


12,997,621

Commitments and Contingencies (Note 14)





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

Accumulated deficit


(26,620,246)


(25,972,402)

Accumulated other comprehensive income


11,384,983


11,576,219

Total Stockholders' Equity


8,398,521


9,237,601

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY


$    23,165,021


$    22,235,222






 

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,



2020


2019


2020


2019










Revenue


$         3,770,723


$         2,569,408


$         5,534,678


$         5,498,681

Cost of revenue


2,620,925


2,405,860


4,190,441


4,678,603










Gross profit


1,149,798


163,548


1,344,237


820,078










Operating expenses:









Selling expenses


727,642


505,866


1,053,737


984,557

General and administrative expenses


322,445


334,550


711,004


763,367

Research and development expenses


30,044


66,008


78,863


135,926

Bad debt (benefit) expense


(5,318)


10,092


24,928


23,404

Total operating expenses


1,074,813


916,516


1,868,532


1,907,254










Income (loss) from operations


74,985


(752,968)


(524,295)


(1,087,176)










Other income (expense):









Interest income


1,212


12,119


1,598


15,376

Interest expense


(63,144)


(97,254)


(125,147)


(184,034)

Net other expense


(61,932)


(85,135)


(123,549)


(168,658)










Income (loss) before income taxes


13,053


(838,103)


(647,844)


(1,255,834)

Income tax  expense


-


-


-


-

Net income (loss)


13,053


(838,103)


(647,844)


(1,255,834)

Other comprehensive income - foreign currency









translation adjustment


5,796


(811,164)


(191,236)


24,701

Comprehensive income (loss)


$              18,849


$        (1,649,267)


$           (839,080)


$        (1,231,133)

Earnings (loss) per share:









Basic and diluted


$                  0.00


$                 (0.02)


$                 (0.01)


$                 (0.03)

Weighted average shares outstanding


43,579,557


43,579,557


43,579,557


43,579,557

 

 

 

CHINA PHARMA HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



For the Six Months



Ended June 30,



2020


2019






Cash Flows from Operating Activities:





Net loss


$        (647,844)


$     (1,255,834)

Depreciation and amortization


1,305,070


1,575,870

Bad debt expense


24,928


23,404

Inventory write off


-


111,533

Changes in assets and liabilities:





Trade accounts and other receivables


(305,183)



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