Biostar Pharmaceuticals, Inc. Announces Second Quarter 2013 Financial Results

Biostar Pharmaceuticals, Inc. Announces Second Quarter 2013 Financial Results

PR Newswire

XIANYANG, China, Aug. 19, 2013

XIANYANG, China, Aug. 19, 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
second quarter ended June 30, 2013.

SUMMARY FINANCIALS

Second Quarter 2013 Results (unaudited)
              Q2 2013       Q2 2012       CHANGE
Net Sales     $14.7 million $8.2 million  +79.6%
Gross Profit  $6.9 million  $4.6 million  +50.4%
Net Income    -$0.7 million -$9.5 million -
EPS (Diluted) -$0.06        -$1.01        -



Six Months 2013 Results (unaudited)
              6-Month 2013  6-Month 2012  CHANGE
Net Sales     $26.7 million $24.1 million +11.2%
Gross Profit  $13.6 million $15.4 million -11.9%
Net Income    -$0.2 million -$7.3 million -
EPS (Diluted) -$0.02        -$0.78        -

Second Quarter 2013 Financial Results

Revenue for the second quarter of 2013 increased 79.6% to approximately $14.7
million compared to $8.2 million for the second quarter of 2012. The increase
was mainly attributed to the increase in sales volume and introduction of
several new products, offset by decrease in average sales price and
discontinuation of four products since the first quarter of 2013. Sales of
products under the Aoxing Pharmaceutical brand increased by approximately $4.0
million, or 62.9%, to $10.4 million for the three months ended June 30, 2013,
compared to the same period in 2012. Sales of Shaanxi Weinan's products
increased by approximately $0.5 million or 30.2% to $2.3 million for the three
months ended June, 2013 compared to the same period in 2012. The increase was
attributable to an increase in sales volume and introduction of new products.
The Company has also begun sales of three new products that were sold
exclusively at a local hospital since the third quarter in 2012. These
products accounted for approximately $1.9 million of total net sales for the
three months ended June 30, 2013.

Cost of goods sold for the three months ended June 30, 2013 was approximately
$7.8 million or 53.0% of revenue, as compared to $3.6 million or 44.0% of
revenue for the three months ended June 30, 2012. This increase is mainly due
to the increase in sales and the introduction of the new hospital products.

Gross profit for the second quarter of 2013 were $6.9 million with gross
margins of 47.0%, compared to $4.6 million in gross profit and gross margins
of 56.0% for the second quarter of 2012. The increase in gross profit was due
to increased sales.The decrease in gross profit margin was mainly due to
higher average cost of Xin Aoxing Capsule.

Operating expenses for the three months ended June 30, 2013 were approximately
$7.7 million, a decrease of 54.3% compared to the same period in 2012. The
decrease is attributable to decrease in advertising and selling expenses. The
Company incurred a one-time compensation expense of $7.9 million, paid to
customers during the sales suspension as a result of the Capsule Incident
during the three months ended June 30, 2012. Advertising expenses accounted
for 17.4% and 53.8% of total net sales for the three months ended June 30,
2013 and 2012. The overall decrease of approximately $1.8 million or 41.9% is
consistent with the temporary discontinuation of several products. Selling
expenses increased approximately $0.3 million or 11.9% to $2.6 million for the
three months ended June 30, 2013 as compared to the same period in 2012. For
the three months ended June 30, 2013 and 2012, general and administrative
expenses were approximately $1.5 and 1.4 million.

Loss from operations for the second quarter of 2013 totaled approximately $0.8
million, a 93.5% decrease from $12.2 million reported for the second quarter
of 2012. Net loss was approximately $0.7 million for the second quarter of
2013, compared to $9.5 million for the second quarter of 2012. Diluted
earnings per share were ($0.06) for the second quarter of 2013 compared to
($1.01) for the second quarter of 2012, based upon 11.6 million and 9.4
million diluted common stocks outstanding, respectively.

Six Month Results

For the six months ended June 30, 2013, revenue increased approximately 11.2%
to $26.7 million compared to the same period in 2012. Gross profit was
approximately $13.6 million for the first six months of 2013, representing a
decrease of 11.9% from the first six months of 2012. Gross margins decreased
to 50.7% for the first six months of 2013 compared to the same period one year
ago.

Loss from operations was $63,618 and $9.1 million for the first six months of
2013 and 2012, respectively. Net loss was $0.2 million for the six months
ended June 30, 2013, compared to $7.3 million from the same period in 2012.
Fully diluted earnings per share were ($0.02) compared to ($0.78) for the
first six months of 2013 and 2012 respectively, based up on 10.8 million and
9.4 million shares.

Balance Sheet and Cash Flow

Cash and cash equivalents totaled $10.0 million on June 30, 2013, compared to
$1.8 million on December 31, 2012. Accounts receivable balance was
approximately $13.5 million on June 30, 2013, versus approximately $21.9
million on December 31, 2012. Days sales outstanding for the first six months
of 2013 were at 91 days, compared to 176 days for the same period in 2012. The
Company had a current ratio of 3.8:1 and stockholders' equity of $60.4
million, with total assets of $71.2 million versus total liabilities of $10.8
million on June 30, 2013.

For the first six months of 2013, the Company generated $10.5 million in cash
from operations versus $2.7 million for the same period in 2012.

Business Developments

In April 2013, Aoxing Pharmaceutical executed a supplemental agreement to the
Weinan Share Transfer Agreement (the "Weinan Supplemental Agreement") with all
the former equity holders of Shaanxi Weinan to acquire 13 drug approval
numbers which were excluded from the Weinan Share Transfer Agreement due to
the ongoing re-registration.The Company acquired ownership of the 13 drug
approval numbers for which re-registration has been completed in April 2013.
The aggregate purchase price was approximately $10.2 million, consisting of
approximately $8.8 million in cash and 1,602,564 shares of the Company's
common stock, valued at approximately $1.4 million.

"We continued positive momentum in the second quarter of 2013 with 79.6%
year-over-year growth in sales," commented Ronghua Wang, Chairman and Chief
Executive Officer of Biostar. "Although our net profit was impacted by a
temporary decrease in sale price of Xin Aoxing Capsule as we were still in
recovery from the gel capsule production setback during the first half of
2013, we are optimistic about our long-term outlook as Chinese healthcare
industry is still in rapid growth and we continue our expansion of product
portfolio."

Conference Call

The Company will host a conference call to discuss the 2013 second quarter
financial results on Tuesday, August 20, 2013 at 9:30 a.m. ET. Interested
parties may access the call by dialing + 1-480-629-9664. The conference ID is
4636783. It is advisable to dial in approximately 5-10 minutes prior to the
start of the call. A playback will be available through August 27, 2013. To
listen, please call +1-858-384-5517 and utilize the pass code 4636783 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=105864.

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
                                              June 30, 2013  December31,2012
                                              (Unaudited)    (Audited)
ASSETS
Current Assets
Cash and cash equivalents                     $  9,951,153   $    1,759,078
Accounts receivable, net of allowance for
doubtful accounts                                13,478,205       21,851,412
 of $3,721,261 (2012/12/31: $3,645,817)
Inventories                                      1,744,982        847,135
Deposits and other receivables                   5,635,737        7,740,673
Income tax recoverable                           161,247          265,007
Loan receivables                                 10,475,207       9,510,826
Total Current Assets                             41,446,531       41,974,131
Non-current Assets
Deposits                                         -                8,718,258
Deferred tax assets                              3,508,560        3,665,951
Property and equipment, net                      7,876,513        6,980,521
Intangible assets, net                           18,354,739       9,136,439
Total Assets                                  $  71,186,343  $    70,475,300
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts and other payables                   $  5,542,855   $    5,732,329
Short-term bank loans                            4,853,820        4,755,413
Due to a related party                           -                1,585,138
Value-added tax payable                          438,591          629,672
Total Current Liabilities                        10,835,266       12,702,552
Commitment and contingencies
Stockholders' Equity
Common stock, $0.001 par value, 100,000,000
shares authorized,
 11,596,113 and 9,993,549 shares issued and     11,596           9,993
outstanding as at
 June 30, 2013 and December 31
Additional paid-in capital                       24,633,499       23,266,776
Statutory reserve                                6,737,368        6,737,368
Retained earnings                                23,059,737       23,229,743
Accumulated other comprehensive income           5,908,877        4,528,868
Total Stockholders' Equity                       60,351,077       57,772,748
Total Liabilities and Stockholders' Equity    $  71,186,343  $    70,475,300



BIOSTAR PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
(Unaudited)
                     Three months ended June 30,   Six months ended June 30,
                     2013          2012            2013          2012
Sales, net           $ 14,650,854  $ 8,159,248     $ 26,742,763  $ 24,058,789
Cost of sales          7,771,404     3,586,243       13,174,423    8,649,393
Gross profit           6,879,450     4,573,005       13,568,340    15,409,396
Operating expenses:
Advertising expenses   2,550,271     4,389,657       4,436,952     7,244,982
Selling expenses       2,621,288     2,343,053       4,818,634     5,244,462
Compensation paid to   -             7,904,513       -             7,904,513
customers
General and
administrative         1,458,818     1,383,843       2,536,566     2,484,549
expenses
Research and           805,613       789,776         1,601,614     1,580,903
development expenses
Impairment of          238,192       -               238,192       -
intangible assets
Total operating        7,674,182     16,810,842      13,631,958    24,459,409
expenses
(Loss) from            (794,732)     (12,237,837)    (63,618)      (9,050,013)
operations
Other income
(expense)
Interest income        331,404       96,006          786,635       191,700
Interest expense       (99,521)      (17,099)        (195,209)     (32,134)
Other                  635           198             (1,463)       446
                       232,518       79,105          589,963       160,012
(Loss) before income   (562,214)     (12,158,732)    526,345       (8,890,001)
taxes
Provision for income   168,766       (2,676,180)     696,351       (1,574,864)
tax (recovery)
Net (Loss) Income      (730,980)     (9,482,552)   $ (170,006)   $ (7,315,137)
Foreign currency
translation            942,176       42,821          1,380,009     298,281
adjustment
Comprehensive Income $ 211,196     $ (9,439,731)   $ 1,210,003   $ (7,016,856)
(Loss)
Net (loss) income
per share
 Basic and       $ (0.06)      $ (1.01)        $ (0.02)      $ (0.78)
diluted
Weighted average
number of common
shares outstanding
 Basic and         11,560,501    9,400,216       10,777,025    9,400,216
diluted



BIOSTAR PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
                                                  Six months ended June 30,
                                                  2013           2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                          $ (170,006)    $ (7,315,137)
Adjustments to reconcile net income to net cash
provided by operating activities:
Accrued interest                                    (759,824)      -
Deferred tax assets                                 230,899        (1,815,094)
Depreciation and amortization                       1,223,460      912,513
Recognition of deferred research and development    1,601,614      1,580,903
expenses
Stock-based compensation                            6,147          71,358
Credits to accounts receivable as compensation to   -              7,904,513
customers
Impairment of intangible assets                     238,192        -
Changes in operating assets and liabilities:
        Accounts receivable                         8,736,339      3,727,917
        Inventories                                 (871,434)      535,421
        Deposits and other receivables              640,646        43
        Accounts payable and accrued expenses       (304,802)      (129,305)
        Value-added tax payable                     (202,051)      (752,786)
        Income tax payable/recoverable              108,142        (1,997,695)
        Exchange difference                         -              898
Net cash provided by operating activities           10,477,322     2,723,549
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment                  (4,378)        (13,819)
Additions to construction in progress               (950,674)      -
Payment for acquisition of Shaanxi Weinan           -              (822,173)
Compensation received for disposed land use         -              553,876
rights
Net cash (used in) investing activities             (955,052)      (282,116)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of short term loan                        -              (791,176)
Repayment to a related party                        (1,601,614)    -
Net cash (used in) financing activities             (1,601,614)    (791,176)
Effective of exchange rate changes on cash and      271,419        87,548
cash equivalents
Net increase in cash and cash equivalents           8,192,075      1,737,805
Cash and cash equivalents, beginning balance        1,759,078      16,971,789
Cash and cash equivalents, ending balance         $ 9,951,153    $ 18,709,594
SUPPLEMENTAL DISCLOSURES:
Interest received                                 $ 26,811       $ -
Interest payments                                 $ (189,359)    $ -
Income tax payments                               $ (559,441)    $ (2,243,098)

SOURCE Biostar Pharmaceuticals, Inc.

Website: http://www.biostarpharmaceuticals.com
 
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