Watch Live

Tweet TWEET

Biostar Pharmaceuticals, Inc. Reports 2012 Results

              Biostar Pharmaceuticals, Inc. Reports 2012 Results

PR Newswire

XIANYANG, China, April 15, 2013

XIANYANG, China, April 15, 2013 /PRNewswire/ -- Biostar Pharmaceuticals, Inc.
(NASDAQ GM: BSPM) ("Biostar" or "the Company"), a PRC-based manufacturer and
marketer of pharmaceutical and health supplement products in China for a
variety of diseases and conditions, today announced financial results for the
full year ended December 31, 2012.

SUMMARY FINANCIALS

Full Year 2012 Results (audited)
                        2012           2011          CHANGE
Net Sales               $49.3 million  $92.0 million -46.4%
Gross Profit            $29.9 million  $64.4 million -53.6%
Net Income              -$20.0 million $12.2 million -263.9%
EPS (Basic and Diluted) -$2.09         $1.31         -259.5%

For the twelve months ended December 31, 2012, revenue decreased approximately
46.4% to $49.3 million compared to 2011. Sales of Aoxing Pharmaceutical's
capsule products were affected by the suspension of sale and negative
publicity associated with Chinese SFDA's investigation of several capsule
manufacturers which used industrial gelatin with high chromium content in
their products (the "Capsule Incident"). Net sales of capsule products
decreased by $51.3 million or 63.2%. The sales of other Aoxing Pharmaceutical
products were also affected by the negative publicity. Net sales of these
products decreased by $1.5 million or 15.1%. The Company acquired Shaanxi
Weinan Huaren Pharmaceuticals, Ltd. ("Shaanxi Weinan") in the fourth quarter
in 2011, and continued the sales of Shaanxi Weinan's then existing products.
These products accounted for $7.4 million or 15.1% of total net sales in 2012.
The Company discontinued one product due to low sales volume and demand.
During 2012, the Company reintroduced six of Shaanxi Weinan's previous
products, which accounted for $0.7 million or 1.4% of total net sales in 2012.

In 2012, the Company has also begun sales of three new products that were sold
exclusively at a local hospital. These products accounted for $2.9 million or
5.8% of total net sales in 2012.

"We experienced very difficult business environment in 2012. The incident
related to capsule manufacturers has significantly negative impact on our
business as most of our products are in capsule format, including our flagship
product Xin Aoxing Capusule. We expect this impact is temporary and we have
seen the gradually recovery of sales of our capsule products in the fourth
quarter of 2012," commented Mr. Ronghua Wang, Chairman and Chief Executive
Officer of Biostar. "We believe that Chinese healthcare industry is still in a
rapid growth and with our continued marketing efforts, an expanding product
portfolio and strong demand for our product portfolio, we are well positioned
to recover from the temporary loss and capitalize on the long-term secular
growth occurring in our industry."

Compared to the fiscal year of 2011, cost of sales decreased by about $8.1
million or 29.4% for the year ended December 31, 2012. This decrease is mainly
due to the decrease in net sales.

Gross profit was $29.9 million, decreased by $34.5 million or 53.6% for the
year ended December 31, 2012, as compared to the year ended December 31, 2011.
The decrease in gross profit was due primarily to the decrease in sales
volume. Gross profit loss as a result of the Capsule incident was estimated at
$34.5 million.

The overall gross profit margin decreased to 60.5% for the fiscal year of 2012
from 70.0% for 2011 mainly because of the increase in the cost of labor and
raw material for the year ended December 31, 2012. The decrease is also due to
significant change in the sales mix of products. Xin Aoxing Oleanolic Acid
Capsule, the highest gross margin product, contributed 63% to total gross
profit in 2012, as compared to 78% in 2011.

Total operating expense increased by $5.4 million or 11.7% to $51.6 million
for the fiscal year of 2012, from $46.2 million for 2011. The increase is
attributable to an administrative penalty imposed by the SFDA and compensation
paid to the Company's customers as a result of the Capsule Incident, increase
in research and development expense and increase in provision for doubtful
account. Operating income was -$21.8 million and $18.2 million in 2012 and
2011, respectively.

Net loss was $20.0 million for the fiscal year ended December 31, 2012, a
decrease of approximately $32.2 million from net income of $12.2 million for
the same period in 2011. Fully diluted loss per share were $2.09 as compared
to fully diluted earning per share of $1.31 for the fiscal years of 2012 and
2011 based on 9.6 million and 9.3 million shares, respectively.

Balance Sheet and Cash Flow

Cash and cash equivalents totaled $1.8 million on December 31, 2012, as
compared to $17.0 million on December 31, 2011. Accounts receivable balance
was approximately $21.9 million on December 31, 2012, versus approximately
$35.0 million on December 31, 2011. The Company had total assets of $70.5
million versus total liabilities of $12.7 million on December 31, 2012.
Working capital on December 31, 2012 was $29.3 million, as compared to $53.8
million on December 31, 2011.

For the fiscal year of 2012, the Company used $3.6 million in cash in
operations and spent $17.3 million in investing activities.

Conference Call

The Company will host a conference call to discuss the 2012 year-end financial
results on Monday, April 15, 2013 at 9:30 a.m. ET. Interested parties may
access the call by dialing + 1-480-629-9712. The conference ID is 4609975. It
is advisable to dial in approximately 5-10 minutes prior to the start of the
call. A playback will be available through April 22, 2013. To listen, please
call +1-858-384-5517 and utilize the pass code 4609975 for the replay. This
call is being web cast by ViaVid Broadcasting and can be accessed at the
following link: http://public.viavid.com/index.php?id=104000

About Biostar Pharmaceuticals, Inc.

Biostar Pharmaceuticals, Inc., through its wholly owned subsidiary and
controlled affiliate in China, develops, manufactures and markets
pharmaceutical and health supplement products for a variety of diseases and
conditions.The Company's most popular product is its Xin Aoxing Oleanolic
Acid Capsule, an over-the-counter ("OTC") medicine for chronic hepatitis B, a
disease affecting approximately 10% of the Chinese population. For more
information please visit: http://www.biostarpharmaceuticals.com

Safe Harbor Relating to the Forward-Looking Statements

Certain statements in this release concerning our future growth prospects are
forward-looking statements, within the meaning of Section 27A of the U.S.
Securities Act of 1933, as amended, and Section 21E of the U.S. Securities
Exchange Act of 1934, as amended, which involve a number of risks and
uncertainties that could cause actual results to differ materially from those
in such forward-looking statements. The company uses words and phrases such as
"guidance," "forecasted," "projects," "is expected," "remain confident,"
"will" and similar expressions to identify forward-looking statements in this
press release, including forward-looking statements. Undue reliance should not
be placed on forward-looking information. Forward-looking information is based
on current expectations, estimates and projections that involve a number of
risks, which could cause actual results to vary and in some instances to
differ materially from those anticipated by Biostar and described in the
forward-looking information contained in this news release. The risks and
uncertainties relating to these statements include, but are not limited to,
risks and uncertainties regarding the Company's ability to achieve the
projected sales through the efforts of the call center, to complete the
contemplated clinical trials and capitalize on such opportunities, the
Company's ability to recover its sales and revenue for the gel capsule segment
of its business, the state of consumer confidence and market demand or the
Company's products, success of our investments, risks and uncertainties
regarding fluctuations in earnings, our ability to sustain our previous levels
of profitability including on account of our ability to manage growth, intense
competition, wage increases in China, our ability to attract and retain highly
skilled professionals, time and cost overruns on fixed-price, fixed-time frame
contracts, client concentration, our ability to successfully complete and
integrate potential acquisitions, withdrawal of governmental fiscal
incentives, political instability and regional conflicts and legal
restrictions on raising capital or acquiring companies outside China.
Additional risks that could affect our future operating results are more fully
described in our United States Securities and Exchange Commission filings
including our most recent Annual Report on Form 10-K for the year ended
December 31, 2011, and other subsequent filings. These filings are available
atwww.sec.gov. We may, from time to time, make additional written and oral
forward-looking statements, including statements contained in our filings with
the Securities and Exchange Commission and our reports to shareholders. We do
not undertake to update any forward-looking statements that may be made from
time to time by or on our behalf.

For more information contact:

Biostar Pharmaceuticals, Inc.
Ally Gong
Tel: +86-29-3368-6638
Email: office@aoxing-group.com



BIOSTAR PHARMACEUTICALS, INC.
CONSOLIDATED BALANCE SHEETS
                                                    December 31,
                                                    2012          2011
ASSETS
Current Assets
Cash and cash equivalents                           $ 1,759,078   $ 16,971,789
Accounts receivable, net of allowance for doubtful    21,851,412    35,033,650
accounts of $3,645,817 (2011: $143,928)
Inventories                                           847,135       1,373,459
Deposits and other receivables                        7,740,673     7,129,911
Income tax recoverable                                265,007       -
Loan receivables                                      9,510,826     -
Total Current Assets                                  41,974,131    60,508,809
Non-current Assets
Deposits                                              8,718,258     3,148,466
Deferred tax assets                                   3,665,951     1,617,688
Property and equipment, net                           6,980,521     7,379,982
Intangible assets, net                                9,136,439     10,406,931
Total Assets                                        $ 70,475,300  $ 83,061,876
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts and other payables                         $ 5,732,329   $ 3,334,418
Short-term bank loans                                 4,755,413     787,116
Due to a related party                                1,585,138     -
Value-added tax payable                               629,672       895,487
Income tax payable                                    -             1,643,155
Total Current Liabilities                             12,702,552    6,660,176
Commitment and contingencies
Stockholders' Equity
Common stock, $0.001 par value, 100,000,000 shares
authorized, 9,993,549 and 9,400,216 shares issued     9,993         9,400
and outstanding as at December 31, 2012 and 2011
Additional paid-in capital                            23,266,776    22,445,660
Statutory reserve                                     6,737,368     6,490,600
Retained earnings                                     23,229,743    43,473,834
Accumulated other comprehensive income                4,528,868     3,982,206
Total Stockholders' Equity                            57,772,748    76,401,700
Total Liabilities and Stockholders' Equity          $ 70,475,300  $ 83,061,876



BIOSTAR PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE (LOSS) INCOME
                                                 Year Ended December 31,
                                                 2012            2011
Sales, net                                       $ 49,317,844    $ 91,965,505
Cost of sales                                      19,466,821      27,578,441
Gross profit                                       29,851,023      64,387,064
Operating expenses:
Advertising expenses                               14,154,879      21,234,426
Selling expenses                                   13,734,910      16,992,936
General and administrative expenses                5,951,322       5,676,652
Provision for doubtful account                     3,674,905       -
Compensation paid to customers                     8,044,249       -
Administrative penalty                             1,601,012       -
Research and development expenses                  4,475,806       2,323,996
Total operating expenses                           51,637,083      46,228,010
(Loss) Income from operations                      (21,786,060)    18,159,054
Other income (expense)
Interest income                                    296,146         430,021
Interest expense                                   (84,387)        (41,942)
Other                                              599             713
Gain from bargain purchase                         -               1,299,063
Impairment loss on land use right                  -               (1,784,072)
Foreign exchange gain                              -               3,313
                                                   212,358         (92,904)
(Loss) Income before income taxes                  (21,573,702)    18,066,150
Provision for income tax (recovery)                (1,576,379)     5,892,637
Net (Loss) / Income                              $ (19,997,323)  $ 12,173,513
Foreign currency translation adjustment            546,662         2,007,184
Comprehensive (Loss) / Income                    $ (19,450,661)  $ 14,180,697
Net (loss) income per share
 Basic and diluted                              $ (2.09)        $ 1.31
Weighted average number of common shares
outstanding
 Basic and diluted                                9,570,901       9,298,074



BIOSTAR PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                 Year ended December 31,
                                                 2012             2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income                                $ (19,997,323)  $ 12,173,513
Adjustments to reconcile net (loss) income to
net cash provided by operating activities:
Deferred tax assets                                (2,036,089)     (299,960)
Depreciation and amortization                      1,827,852       885,118
Provision for doubtful accounts                    3,674,905       -
Recognition of deferred research and development   4,475,805       2,332,681
expenses
Credits to accounts receivable as compensation     1,347,779       -
to customers
Impairment loss on land use rights                 -               1,784,072
Stock-based compensation                           821,709         1,721,006
Gain from bargain purchase                         -               (1,299,063)
Changes in operating assets and liabilities:
           Accounts receivable                     6,629,264       (5,332,216)
           Inventories                             535,583         (609,967)
           Deposits and other receivables          (1,870,286)     (10,000)
           Accounts payable and accrued expenses   3,197,628       (1,638,295)
           Value-added tax payable                 (271,889)       (675,338)
           Income tax payable/recoverable          (1,918,632)     (528,792)
           Exchange difference                     -               270,488
Net cash (used in) provided by operating           (3,583,694)     8,773,247
activities
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment                 (32,870)        (110,585)
Disposition of property and equipment              21,788          -
Payment for acquisition of Shaanxi Weinan          (823,880)       (4,037,700)
Deposit paid for research and development          -               (3,119,798)
Refund of deposit paid for acquisition of          -               928,361
business
Deposit paid to acquire drug approval numbers      (8,714,114)     -
Compensation received for disposed land use        1,766,589       -
right
Provision of loan                                  (9,506,306)     -
Net cash (used in) investing activities            (17,288,793)    (6,339,722)
CASH FLOWS FROM FINANCING ACTIVITIES
Advance from a related party                       1,584,384       334,957
Repayment to a related party                       -               (334,957)
Proceeds from short-term bank loans                4,753,153       787,116
Repayment of short-term loans                      (792,192)
Net cash provided by financing activities          5,545,345       787,116
Effective of exchange rate changes on cash and     114,431         539,705
cash equivalents
Net (decrease) increase in cash and cash           (15,212,711)    3,760,346
equivalents
Cash and cash equivalents, beginning balance       16,971,789      13,211,443
Cash and cash equivalents, ending balance        $ 1,759,078     $ 16,971,789
SUPPLEMENTAL DISCLOSURES:
Interest received                                $ 296,146       $ 430,021
Interest payments                                $ (62,819)      $ (41,942)
Income tax payments                              $ (2,387,030)   $ (6,699,145)

SOURCE Biostar Pharmaceuticals, Inc.

Website: http://www.biostarpharmaceuticals.com
Website: http://public.viavid.com/player/index.php?id=104000