Biostar Pharmaceuticals, Inc. Announces First Quarter 2013 Financial Results

 Biostar Pharmaceuticals, Inc. Announces First Quarter 2013 Financial Results

PR Newswire

XIANYANG, China, May 16, 2013

XIANYANG, China, May16, 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 of the
first quarter ended March 31, 2013.

Summary Financials

First Quarter 2013 and 2012 Results (unaudited)
              Q1 2013       Q1 2012       CHANGE
Net Sales     $12.1 million $15.9 million -23.9%
Gross Profit  $6.7 million  $10.8 million -38.3%
Net Income    $0.6 million  $2.2 million  -74.1%
EPS (Diluted) $0.06         $0.23         -73.9%

First Quarter 2013 Financial Results

Revenue for the first quarter of 2013 decreased 23.9% to approximately $12.1
million compared to $15.9 million for the first quarter of 2012.The decrease
was primarily due to decrease in sales of Biostar's capsule products as a
result of the Capsule Incident, partially offset by the introduction of
several new products. Sales of products under the Aoxing Pharmaceutical brand
decreased by approximately $6.3 million, or 43.8%, for the three months ended
March 31, 2013, compared to the same period in 2012. Sales of Shannxi Weinan's
product increased by approximately $0.5 million or 33.2% for the three months
ended March 31, 2013 compared to the same period in 2012. The Company
introduced three new products to a local hospital in the 3rd quarter of 2012
and sales of these products contributed approximately $2.0 million to total
net sales for the three months ended March 31, 2013.

Cost of goods sold for the three months ended March 31, 2013 was approximately
$5.4 million or 44.7% of revenues, as compared to $5.1 million or 31.8% of
revenues for the three months ended March 31, 2012. The increase in cost of
goods sold was due to the introduction of new products and increase in the
costs of raw material and labor, partially offset by the decrease in net sales
and the temporarily discontinuation of several products. Gross profit for the
first quarter of 2013 was approximately $6.7 million with gross margin of
55.3%, compared to gross profit of $10.8 million and gross margin of 68.2% for
the first quarter of 2012. The decrease in gross margin was due to the
increase in cost of goods sold and significant change in the sales of product
mix.

Operating expenses for the three months ended March 31, 2013 were
approximately $6.0 million, a decrease of 21.7% compared to the same period in
2012. The decrease was mainly attributable to approximately $1.0 million
decrease in advertising expenses and approximately $0.7 million decrease in
selling expenses.

Operating income for the first quarter of 2013 totaled approximately $0.7
million, a 77.1% decrease from $3.2 million reported for the first quarter of
2012. Operating margin were 6.0% and 20.0% for the first quarter of 2013 and
2012, respectively. The decrease was mainly attributed to the decrease of net
sales in the first quarter of 2013.

Net income was approximately $0.6 million for the first quarter of 2013, a
74.1% decrease compared to $2.2 million for the first quarter of 2012. Diluted
earnings per share were $0.06 for the first quarter of 2013 compared to $0.23
for the first quarter of 2012, based upon approximately 10.0 million and 9.4
million diluted common shares outstanding, respectively.

"We finished the first quarter of 2013 with positive momentum," commented
Ronghua Wang, Chairman and Chief Executive Officer of Biostar. "Our net income
was positive in the quarter and this reflects a gradual improvement in our
sales. We expect the negative impact from the Capsule Incident is now behind
us and we are optimistic that with our continued expansion of our product
portfolio, supported by comprehensive marketing and distribution strategies,
we are in position to leverage our product portfolio for optimal growth," Wang
concluded.

Balance Sheet and Cash Flow

Cash and cash equivalents totaled approximately $6.5 million on March 31,
2013, compared to $1.8 million on December 31, 2012. Accounts receivable
balance was approximately $16.5 million on March 31, 2013, versus
approximately $21.9 million on December 31, 2012. Days sales outstanding (DSO)
were at 123 days. The Company had a current ratio of 3.7 to 1 and
stockholders' equity of approximately $58.8 million, with total assets of
approximately $70.3 million versus total liabilities of approximately $11.5
million on March 31, 2013.

For the first three months of 2013, the Company generated approximately $6.2
million in cash from operations versus $5.7 million in cash generated from
operations reported for the same period in 2012.

Conference Call

The Company will host a conference call to discuss the 2013 first quarter
financial results on Thursday, May 16, 2013 at 9:00 a.m. ET. Interested
participants should call +1-480-629-9713. The conference ID is 4620094. It is
advisable to dial in approximately 5-10 minutes prior to 9:00 a.m. ET. This
call is being web cast by ViaVid Broadcasting and can be accessed at the
following link: http://public.viavid.com/index.php?id=104804.

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, 2012, 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.
CONDENSED CONSOLIDATED BALANCE SHEETS
                                            March 31, 2013  December 31, 2012
                                            (Unaudited)     (Audited)
ASSETS
Current Assets
Cash and cash equivalents                     $ 6,457,126      $  1,759,078
Accounts receivable, net of allowance for
doubtful accounts of $3,665,864                 16,507,815        21,851,412
(2012/12/31: $3,645,817)
Inventories - note 2)                           1,414,462         847,135
Deposits and other receivables - note 3)        7,751,359         7,740,673
Income tax recoverable                          288,036           265,007
Loan receivables - note 4)                      10,012,722        9,510,826
Total Current Assets                            42,431,520        41,974,131
Non-current Assets
Deposits - note 3)                              8,766,198         8,718,258
Deferred tax assets                             3,325,303         3,665,951
Property and equipment, net - note 2)           6,912,234         6,980,521
Intangible assets, net - note 2)                8,857,670         9,136,439
Total Assets                                  $ 70,292,925     $  70,475,300
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts and other payables                   $ 6,271,522      $  5,732,329
Short-term bank loans - note 5)                 4,781,562         4,755,413
Due to a related party                          -                 1,585,138
Value-added tax payable                         462,139           629,672
Total Current Liabilities                       11,515,223        12,702,552
Commitment and contingencies- note 9)
Stockholders' Equity
Common stock, $0.001 par value, 100,000,000
shares authorized, 9,993,549 shares issued      9,993             9,993
and outstanding as at March 31, 2013 and
December 31 - note 6)
Additional paid-in capital                      23,272,923        23,266,776
Statutory reserve - note 8)                     6,737,368         6,737,368
Retained earnings                               23,790,717        23,229,743
Accumulated other comprehensive income          4,966,701         4,528,868
Total Stockholders' Equity                      58,777,702        57,772,748
Total Liabilities and Stockholders' Equity    $ 70,292,925     $  70,475,300



BIOSTAR PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
(Unaudited)
                                                 Three months ended March 31,
                                                 2013            2012
Sales, net                                       $  12,091,909   $ 15,899,541
Cost of sales                                       5,403,019      5,063,150
Gross profit                                        6,688,890      10,836,391
Operating expenses:
Advertising expenses                                1,886,681      2,848,933
Selling expenses                                    2,197,346      2,907,801
General and administrative expenses                 1,077,748      1,100,706
Research and development expenses                   796,001        791,127
Total operating expenses                            5,957,776      7,648,567
Income from operations                              731,114        3,187,824
Other income (expense)
Interest income                                     455,231        95,694
Interest expense                                    (95,688)       (15,035)
Other                                               (2,098)        248
                                                    357,445        80,907
Income before income taxes                          1,088,559      3,268,731
Provision for income tax                            527,585        1,101,316
Net Income                                       $  560,974      $ 2,167,415
Foreign currency translation adjustment             437,833        255,460
Comprehensive Income                             $  998,807      $ 2,422,875
Net income per share
Basic and diluted                           $  0.06         $ 0.23
Weighted average number of common shares
outstanding
Basic and diluted                              9,993,549      9,398,892



BIOSTAR PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
                                                                                                                             Three months ended March 31,
                                                                                                                             2013            2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                                                                                                   $ 560,974       $ 2,167,415
Adjustments to reconcile net income to net cash provided by operating activities:
Accrued interest                                                                                                               (449,075)       -
Deferred tax assets                                                                                                            360,387         516,128
Depreciation and amortization                                                                                                  458,931         456,376
Recognition of deferred research and development expenses                                                                      796,001         791,127
Stock-based compensation                                                                                                       6,147           43,282
Changes in operating assets and liabilities:
Accounts receivable                                                                                                            5,457,403       716,639
Inventories    (562,015)       428,007
Deposits and other receivables                                                                                                 (764,161)       43
Accounts payable and accrued expenses                                                                                          507,140         1,761,799
Value-added tax payable                                                                                                        (170,796)       (67,397)
Income tax payable/recoverable                                                                                                 (21,547)        (1,065,938)
Exchange difference                                                                                                            -               (901)
Net cash provided by operating activities                                                                                      6,179,389       5,746,580
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment                                                                                             (4,352)         -
Payment for acquisition of Shaanxi Weinan                                                                                      -               (822,173)
Net cash (used in) investing activities                                                                                        (4,352)         (822,173)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment to a related party                                                                                                   (1,592,002)     -
Net cash (used in) financing activities                                                                                        (1,592,002)     -
Effective of exchange rate changes on cash and cash equivalents                                                                115,013         74,062
Net increase in cash and cash equivalents                                                                                      4,698,048       4,998,469
Cash and cash equivalents, beginning balance                                                                                   1,759,078       16,971,789
Cash and cash equivalents, ending balance                                                                                    $ 6,457,126     $ 21,970,258
SUPPLEMENTAL DISCLOSURES:
Interest received                                                                                                            $ 6,945         $ -
Interest payments                                                                                                            $ 93,132        $ -
Income tax payments                                                                                                          $ 188,745       $ 1,660,292

SOURCE Biostar Pharmaceuticals, Inc.

Website: http://public.viavid.com/index.php?id=104804
Website: http://www.biostarpharmaceuticals.com
 
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