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: firstname.lastname@example.org 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
Biostar Pharmaceuticals, Inc. Announces Second Quarter 2013 Financial Results
Press spacebar to pause and continue. Press esc to stop.