HAIKOU,
China, Nov. 13, 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 September 30, 2020.
Third Quarter Highlights
- Revenue was $2.4 million in the
third quarter of 2020, which stayed the same as the condition in
the same period of 2019;
- Gross margin was 2.0% in the third quarter of 2020, compared to
15.7% in the same period of 2019;
- Loss from operations was $1.0
million in the third quarter of 2020 compared to
$0.6 million in the same period of
2019;
- Net loss was $1.0 million in the
third quarter of 2020 compared to $0.7
million in the same period of 2019. Loss per common stock
was both $0.02 per basic and diluted
share in the third quarter 2020 and 2019, respectively.
Ms. Zhilin Li, China Pharma's
Chairwoman and CEO, commented, "Since the outbreak of COVID-19
early this year, it has continued to create a substantial negative
impact on sales of pharmaceutical companies, including ours.
Nevertheless, we achieved comparable drug sales revenue in the
third quarter of 2020 compared to the same period last year, which
showed certain improvements from the sales performance in the
previous quarter (the second quarter of 2020), thanks to the
efforts of the management and sales teams." Ms. Li continued, "We
will continue to work on improving human health and 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."
Third Quarter Results
Revenue was both $2.4 million in
the three months ended September 30,
2020 and 2019, respectively.
For the three months ended September 30,
2020, our cost of revenue was $2.4
million, or 98% of total revenue, comparing to $2.0 million, or 84% of total revenue, for the
same period in 2019. The increase in cost of revenue was mainly due
to declining production in the third quarter in addition to
constant fixed costs leading to higher costs per unit of products
and therefore higher sales costs of revenue in the third quarter of
2020.
Gross profit for the three months ended September 30, 2020 was $0.05 million, as compared to $0.37 million during the same period in 2019. Our
gross profit margin in the three months ended September 30, 2020 was 2.0% as compared to 15.7%
during the same period in 2019. The decrease in our gross profit
margin was mainly due to the increased cost of revenue in the third
quarter of 2020.
Our selling expenses for the three months ended September 30, 2020 and 2019 were $0.7 million and $0.6
million, respectively. Selling expenses accounted for
27.2% of the total revenue in the three months ended September 30, 2020, as compared to 25.8% during
the same period in 2019. Because of the adjustments in our sales
practices and the reformation of healthcare policies, we reduced
the 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
September 30, 2020 and 2019,
respectively. General and administrative expenses accounted for
12.1% and 14.0% of our total revenues in the three months ended
September 30, 2020 and 2019,
respectively.
Our operating loss for the three months ended September 30, 2020 was $1.0 million, compared to $0.6 million during the same period in 2019.
Net loss for the three months ended September 30, 2020 was $1.0 million, or $0.02 per basic and diluted common share, as
compared to net loss of $0.7 million
for the same period a year ago, or $0.02 per basic and diluted common share. The
increase in net loss was mainly due to the increased cost of
revenue in this period.
Nine Months Results
Revenue was both $7.9 million for
the nine months ended September 30,
2020 and 2019, respectively.
For the nine months ended September 30,
2020, our cost of revenue was $6.5
million, or 82.5% of total revenue, comparing to
$6.7 million, or 84.9% of total
revenue, in 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 partially offset the
increase in cost of revenue.
Gross profit for the nine months ended September 30, 2020 was $1.4 million, compared to $1.2 million in the same period in 2019. Our
gross profit margin in the nine months ended September 30, 2020 was 17.5% compared to 15.1% 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 partially offset the increase in cost
of revenue.
Net loss for the nine months ended September 30, 2020 was $1.7 million, or $0.04 per basic and diluted common share, as
compared to net loss of $2.0 million,
or $0.04 per basic and diluted common
share for the nine months ended September
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 September 30, 2020, the
Company had cash and cash equivalents of $0.3 million compared to $1.1 million as of December 31, 2019.
Our net accounts receivable was $0.5
million and $0.6 million as of
September 30, 2020 and December 31, 2019.
For the nine months ended September 30,
2020, cash flow used in operating activities was
$0.4 million, as compared to cash
flow provided by operating activities of $0.6 million for the same period in 2019.
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)
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
2020
|
|
2019
|
ASSETS
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
346,611
|
|
$
1,074,979
|
Restricted
cash
|
|
-
|
|
109,908
|
Banker's
acceptances
|
|
38,465
|
|
45,756
|
Trade accounts
receivable, less allowance for doubtful
|
|
|
|
|
accounts of
$17,957,621 and $17,575,100, respectively
|
|
535,060
|
|
635,371
|
Other receivables,
less allowance for doubtful
|
|
|
|
|
accounts of $27,318
and $22,729, respectively
|
|
91,389
|
|
46,643
|
Advances to
suppliers
|
|
106,880
|
|
404
|
Inventory
|
|
3,513,570
|
|
3,588,824
|
Prepaid
expenses
|
|
401,747
|
|
77,120
|
Total Current
Assets
|
|
5,033,722
|
|
5,579,005
|
|
|
|
|
|
Property, plant
and equipment, net
|
|
15,836,890
|
|
16,313,827
|
Operating lease
right of use asset
|
|
70,733
|
|
136,779
|
Intangible assets,
net
|
|
183,545
|
|
205,611
|
TOTAL
ASSETS
|
|
$
21,124,890
|
|
$
22,235,222
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Trade accounts
payable
|
|
$
989,641
|
|
$
1,366,330
|
Accrued
expenses
|
|
160,535
|
|
189,880
|
Other
payables
|
|
3,483,821
|
|
3,560,332
|
Advances from
customers
|
|
640,103
|
|
505,398
|
Other payables -
related parties
|
|
2,176,629
|
|
2,071,986
|
Operating lease
liability, current portion
|
|
73,690
|
|
91,306
|
Current portion of
construction loan facility
|
|
2,202,611
|
|
2,150,168
|
Current portion of
lines of credit
|
|
1,827,189
|
|
-
|
Bankers' acceptance
notes payable
|
|
-
|
|
109,908
|
Total Current
Liabilities
|
|
11,554,219
|
|
10,045,308
|
Non-current
Liabilities:
|
|
|
|
|
Construction loan
facility
|
|
-
|
|
2,150,168
|
Lines of credit, net
of current portion
|
|
939,781
|
|
-
|
Operating lease
liability, net of current portion
|
|
-
|
|
48,701
|
Deferred tax
liability
|
|
771,820
|
|
753,444
|
Total
Liabilities
|
|
13,265,820
|
|
12,997,621
|
Commitments and
Contingencies (Note 13)
|
|
|
|
|
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 issued and outstanding, respectively
|
43,580
|
|
43,580
|
Additional paid-in
capital
|
|
23,590,204
|
|
23,590,204
|
Accumulated
deficit
|
|
(27,630,142)
|
|
(25,972,402)
|
Accumulated other
comprehensive income
|
|
11,855,428
|
|
11,576,219
|
Total
Stockholders' Equity
|
|
7,859,070
|
|
9,237,601
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
$
21,124,890
|
|
$
22,235,222
|
CHINA PHARMA
HOLDINGS, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
AND COMPREHENSIVE
INCOME (LOSS)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
For the Three
Months
|
|
For the Nine
Months
|
|
|
Ended September
30,
|
|
Ended September
30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenue
|
|
$
2,400,667
|
|
$
2,376,844
|
|
$
7,935,345
|
|
$
7,875,525
|
Cost of
revenue
|
|
2,353,471
|
|
2,004,085
|
|
6,543,912
|
|
6,682,688
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
47,196
|
|
372,759
|
|
1,391,433
|
|
1,192,837
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling
expenses
|
|
654,090
|
|
613,110
|
|
1,707,827
|
|
1,597,667
|
General and
administrative expenses
|
|
290,586
|
|
333,833
|
|
1,001,590
|
|
1,097,200
|
Research and
development expenses
|
|
37,628
|
|
39,716
|
|
116,491
|
|
175,642
|
Bad debt (benefit)
expense
|
|
17,386
|
|
31,304
|
|
42,314
|
|
54,708
|
Total operating
expenses
|
|
999,690
|
|
1,017,963
|
|
2,868,222
|
|
2,925,217
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(952,494)
|
|
(645,204)
|
|
(1,476,789)
|
|
(1,732,380)
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Interest
income
|
|
3,665
|
|
11,840
|
|
5,263
|
|
27,216
|
Interest
expense
|
|
(61,067)
|
|
(67,590)
|
|
(186,214)
|
|
(251,624)
|
Net other
expense
|
|
(57,402)
|
|
(55,750)
|
|
(180,951)
|
|
(224,408)
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
|
(1,009,896)
|
|
(700,954)
|
|
(1,657,740)
|
|
(1,956,788)
|
Income tax
expense
|
|
-
|
|
-
|
|
-
|
|
-
|
Net
loss
|
|
(1,009,896)
|
|
(700,954)
|
|
(1,657,740)
|
|
(1,956,788)
|
Other comprehensive
income - foreign currency
|
|
|
|
|
|
|
|
|
translation
adjustment
|
|
470,445
|
|
(909,889)
|
|
279,209
|
|
(885,188)
|
Comprehensive
loss
|
|
$
(539,451)
|
|
$
(1,610,843)
|
|
$
(1,378,531)
|
|
$
(2,841,976)
|
Loss per
share:
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
(0.02)
|
|
$
(0.02)
|
|
$
(0.04)
|
|
$
(0.04)
|
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 Nine
Months
|
|
|
Ended September
30,
|
|
|
2020
|
|
2019
|
Cash Flows from
Operating Activities:
|
|
|
|
|
Net loss
|
|
$
(1,657,740)
|
|
$
(1,956,788)
|
Depreciation and
amortization
|
|
1,978,363
|
|
2,261,800
|
Bad debt
expense
|
|
42,314
|
|
54,708
|
Inventory write
off
|
|
-
|
|
87,542
|
Changes in assets and
liabilities:
|
|
|
|
|
Trade accounts and
other receivables
|
|
(366,385)
|
|
(407,733)
|
Advances to
suppliers
|
|
(103,701)
|
|
(2,980)
|
Inventory
|
|
561,139
|
|
1,436,878
|
Trade accounts
payable
|
|
(399,363)
|
|
130,642
|
Accrued taxes
payable
|
|
123,921
|
|
23,321
|
Other payables and
accrued expenses
|
|
(250,851)
|
|
(201,831)
|
Change in bankers'
acceptance notes payable
|
|
(109,663)
|
|
(773,264)
|
Advances from
customers
|
|
119,199
|
|
(12,670)
|
Prepaid
expenses
|
|
(314,361)
|
|
(9,211)
|
Net Cash (Used in)
Provided by Operating Activities
|
|
(377,128)
|
|
630,414
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
Purchases of property
and equipment
|
|
(1,099,878)
|
|
(85,739)
|
Net Cash Used in
Investing Activities
|
|
(1,099,878)
|
|
(85,739)
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
Proceeds from lines
of credit
|
|
2,695,087
|
|
-
|
Payments of
construction term loan
|
|
(2,145,389)
|
|
(2,188,463)
|
Proceeds from related
party loan
|
|
162,090
|
|
674,405
|
Payments of related
party loan
|
|
(77,530)
|
|
(209,726)
|
Net Cash Provided
by (Used in) Financing Activities
|
|
634,258
|
|
(1,723,784)
|
|
|
|
|
|
Effect of Exchange
Rate Changes on Cash
|
|
4,472
|
|
(30,604)
|
Net Decrease in
Cash, Cash Equivalents and Restricted Cash
|
|
(838,276)
|
|
(1,209,713)
|
Cash, Cash
Equivalents and Restricted Cash at Beginning of Period
|
|
1,184,887
|
|
2,460,527
|
Cash, Cash
Equivalents and Restricted Cash at End of Period
|
|
$
346,611
|
|
$
1,250,814
|
|
|
|
|
|
Cash and Cash
Equivalents
|
|
346,611
|
|
761,606
|
Restricted
cash
|
|
-
|
|
489,208
|
Cash, Cash
Equivalents and Restricted Cash at End of Period
|
|
$
346,611
|
|
$
1,250,814
|
|
|
|
|
|
Supplemental Cash
Flow Information:
|
|
|
|
|
Cash paid for income
taxes
|
|
$
-
|
|
$
-
|
Cash paid for
interest
|
|
$
176,055
|
|
$
241,465
|
|
|
|
|
|
Supplemental
Noncash Investing and Financing Activities:
|
|
|
|
|
Issuance of banker's
acceptances
|
|
$
-
|
|
$
2,641
|
Accounts receivable
collected with banker's acceptances
|
|
394,393
|
|
532,537
|
Inventory purchased
with banker's acceptances
|
|
402,582
|
|
553,183
|
Right-of-use assets
obtained in exchange for operating lease obligations
|
|
-
|
|
231,130
|
View original
content:http://www.prnewswire.com/news-releases/china-pharma-holdings-inc-reports-third-quarter-2020-financial-results-301172549.html
SOURCE China Pharma Holdings, Inc.