Sinovac Reports Unaudited Third Quarter 2013 Financial Results

        Sinovac Reports Unaudited Third Quarter 2013 Financial Results

- Conference call scheduled for Wednesday, November 13, 2013 at 8:00 AM EST -

PR Newswire

BEIJING, Nov. 12, 2013

BEIJING, Nov. 12, 2013 /PRNewswire/ -- Sinovac Biotech Ltd. (NASDAQ: SVA), a
leading provider of biopharmaceutical products in China, announced today its
unaudited third quarter financial results for for the three and nine months
ended September 30, 2013.

2013 Third Quarter Financial Highlights (period-over-period comparisons to
third quarter 2012)

  oTotal quarterly sales increased by 54.5% to $22.1 million from $14.3
    million. Excluding $3.6 million of H5N1 vaccine revenue recognized in the
    third quarter of 2013, the sales from regular products increased by 29.5%
    to $18.5 million from $14.3 million.
  oGross profit increased by 111.7% to $15.9 million from $7.5 million. Gross
    margin was 72.1%, compared to 52.6%.
  oNet income attributable to common stockholders was $2.3 million, or $0.04
    per basic and diluted share, compared to net loss attributed to common
    stockholders of $3.0 million, or $0.05 per basic and diluted share.
  oCash and cash equivalents totaled $89.0 million as of September 30, 2013,
    compared to $91.2 million as of December 31, 2012.

Recent Business Highlights

In August 2013, Sinovac (the "Company") was selected by the Beijing Health
Bureau as one of the four suppliers to supply the Company's seasonal influenza
vaccine, Anflu, to the citizens of Beijing. Sinovac has been chosen as one of
the suppliers in the Beijing tender on six separate occasions since 2007. The
total volume for the 2013 tender is up to 1.8 million doses and the delivery
will depend on the actual demand in Beijing. Under the prior year's tender
that totaled up to 1.8 million doses, Sinovac delivered approximately 340,000
doses of Anflu to Beijing citizens.

In October 2013, Sinovac was selected by the Jiangsu Centers for Disease
Control and Prevention as one of the two suppliers of inactivated hepatitis A
vaccine to the pediatric population in the Jiangsu province for its 2014
Expanded Program of Immunization (or EPI program). According to the tender
award contract, the tender totals 1.8 million doses of inactivated hepatitis A
vaccine, and Sinovac will supply 900,000 doses of Healive.

Mr. Weidong Yin, Chairman, President and CEO, commented, "We are pleased to
see another strong quarter with revenue growth of 54.5% year-over-year, which
resulted in another profitable quarter on a sequential quarterly basis. With
continued execution of the tailored sales strategy, Anflu sales was increased
by 121% in this quarter compared to the same period of 2012, resulted from a
solid support from operation.Leveraging the improved efficiency and expanded
capacity of our fully operational Changping filling and packaging line, we
delivered the majority of the flu vaccine thatwe produced at the beginning of
the seasonal flu season."

Mr. Yin concluded, "Our vaccine development pipeline is continuing to advance
on schedule. The China Food and Drug Administration ("CFDA") issued new
guidance in late October 2013 enabling applicants to apply for Good
Manufacturing Practice ("GMP") certification for its production facilities
concurrently with the production site inspection during the New Drug
Application ("NDA") review process, instead of waiting until after the new
drug certificate is granted to commence the GMP certification process. Sinovac
is poised to benefit from the agency's revised guidance, which may accelerate
the entire registration process for vaccine candidates, including EV71
vaccine."

Financial Review for Third Quarter Ended September 30, 2013

An analysis of sales and gross profit is as
follows:



                                                              % of         % of
$000 (Unaudited)                                       2013Q3 total 2012Q3
                                                              sales        total
                                                                           sales
Healive, Hepatitis A vaccine                           5,252  23.8% 4,932  34.5%
Bilive, Hepatitis A&B vaccine                          5,355  24.3% 5,548  38.9%
Anflu, seasonal flu vaccine                            8,417  38.1% 3,806  26.6%
Rabend, Animal rabies vaccine                          54     0.2%  1      0.0%
Mumps vaccine                                          (571)  -2.6% -      -

Regular sales*                                         18,507 83.8% 14,287 100%
Panflu (H5N1), avian flu vaccine for human             3,568  16.2% -      -
Total sales                                            22,075 100%  14,287 100%
Cost of goods sold                                     6,164  27.9% 6,771  47.4%
Gross profit                                           15,911 72.1% 7,516  52.6%

*Regular sales represent sales revenue generated by all commercialized
products, excluding Panflu (H5N1) vaccine and Panflu.1 (H1N1) vaccine, which
are produced when government issues stockpiling orders

Total sales increased by 54.5% to $22.1 million in the third quarter 2013 from
$14.3 million in the third quarter of 2012. Excluding the $3.6 million H5N1
vaccine revenue recognized in the third quarter of 2013, regular sales
increased by 29.5% to $18.5 million from $14.3 million in the third quarter
2012.

The growth was mainly driven by robust sales of Anflu in the third quarter of
2013 given that Sinovac's seasonal influenza vaccine was commercialized in a
timely manner at the beginning of the 2013 flu season compared with the prior
year, benefiting from the improved efficiency and expanded capacity of the
fully operational Changping filling and packaging line.

Gross profit increased by 111.7% to $15.9 million in the third quarter of 2013
from $7.5 million in the same period of 2012. Gross margin was 72.1% in the
third quarter of 2013, compared to 52.6% in the same period of 2012. The
higher gross margin was primarily due to increased Anflu gross margin because
a lower sales return provision as well as inventory provision was recorded and
less excess capacity was charged to cost of goods sold in the third quarter of
2013, compared to the same period of 2012.

SG&A expenses in the third quarter of 2013 were $9.9 million, compared to $7.8
million in the same period of 2012. Selling expenses as a percentage of the
third quarter 2013 regular sales were 32.0%, compared to 28.7% in the same
period of 2012. The increase in selling expenses as a percentage of revenue
was mainly due to the increased marketing efforts to generate Anflu sales this
quarter.

G&A expenses in the third quarter of 2013 increased to $4.0 million from $3.7
million in the same period of 2012. The increase was mainly due to higher
operating costs at the Company's Changping site as it is now fully
operational. These increases were partially offset by the decrease of bonuses
due to the board of directors approving certain employee bonuses to be settled
from the Company's Staff Bonus and Welfare Fund, an accrued liability account,
rather than charged to expense.

R&D expenses in the third quarter of 2013 decreased to $2.0 million from $3.8
million in the same period of 2012. The lower R&D expenses in the current
quarter were attributable to the completion of the phase III study of EV71
vaccine candidate in the first quarter of 2013.

Depreciation of property, plant and equipment and amortization of licenses,
permits and renovation costs for the third quarter of 2013 was $0.8 million,
compared to $0.4 million in the same period of 2012. Depreciation increased
primarily due to more assets at the Changping facility starting to be
depreciated in the fourth quarter of 2012, compared to the comparative period.

Net income attributable to stockholders in the third quarter of 2013 was $2.3
million, or $ 0.04 per basic and diluted share, compared to a net loss of $3.0
million, or $0.05 per basic and diluted share, in the same period of 2012. If
the $0.3 million bonus, settled from the accrued liability account, was
charged to operation in third quarter of 2013, the net income of the third
quarter of 2013 was approximately $2.0 million, or $0.04 per basic share and
diluted share.

Financial Review for the Nine Month Period Ended September 30, 2013

An analysis of sales and gross profit is as
follows:

$000 (Unaudited)                     2013 1-9 % of       2012 1-9 % of
                                              total sales          total sales
Healive, Hepatitis A vaccine         18,451   37.2%       10,104   34.1%
Bilive, Hepatitis A&B vaccine        17,935   36.2%       15,633   52.8%
Anflu, seasonal flu vaccine          8,747    17.6%       3,853    13.0%
Rabend, Animal rabies vaccine        132      0.3%        35       0.1%
Mumps vaccine                 746      1.5%        -        -
Regular sales*                       46,011   92.8%       29,625   100%
Panflu (H5N1), avian flu vaccine     3,568    7.2%        -        -
for human
Total sales                          49,579   100%        29,625   100%
Cost of goods sold                   13,017   26.3%       10,402   35.1%
Gross profit                         36,562   73.7%       19,223   64.9%

*Regular sales represent sales revenue generated by all commercialized
products, excluding Panflu (H5N1) vaccine and Panflu.1 (H1N1) vaccine, which
are produced when government issues stockpiling orders.

Total sales of the first nine months of 2013 were $49.6 million, a 67.4%
increase from $29.6 million in the same period of 2012, and exceeded full year
2012 sales by $363,000. Excluding the $3.6 million H5N1 vaccines revenue
recognized, regular sales increased by 55.3% to $46.0 million. The increased
revenue was driven by the Anflu sales growth in the third quarter as well as
Healive growth in the first half of the year.

Gross profit for the first nine months of 2013 increased by 90.2% to $36.6
million from $19.2 million in the same period of 2012. Gross margin was 73.7%,
compared to 64.9% in the same period of 2012. The higher gross margin was
primarily due to increase of gross margin of Anflu and Healive with lower
sales return provision recorded and less excess capacity charged to cost of
goods sold in the third quarter of 2013, compared to the same period of 2012.

Selling, general and administrative expenses for the first nine months of 2013
were $24.6 million, compared to $18.9 million in the same period of 2012.
Selling expenses as a percentage of 2013 nine months regular product sales was
31.6%, compared to 33.5% of the same period of last year. The decrease in
selling expense as a percentage of regular product sales was mainly due to the
higher sales achieved without significantly increasing the sales team
headcount and salaries. G&A expenses in the first nine months of 2013
increased to $10.0 million from $8.9 million in the same period of last year.
The factors affecting general and administrative expenses in the nine months
of 2013 were the same as for the third quarter of 2013 as described above.

Research and development expenses for the first nine months of 2013 decreased
to $5.9 million from $15.8 million in the same period of last year as the
phase III study of EV71 vaccine candidate was completed in the first quarter
of 2013.

Depreciation of property, plant and equipment and amortization of licenses,
permits and renovation costs in the first nine months of 2013 was $2.1
million, compared to $1.1 million in the same period of last year.
Depreciation increased because more assets at the Changping facility started
to be depreciated in the last quarter of 2012.

Net income attributable to stockholders in the first nine months of 2013 was
$1.6 million, or $0.03 per basic and diluted share, compared to a net loss of
$10.2 million, or $0.19 per basic and diluted share, in the same period of
last year. If the $1.7 million bonus, settled from an accrued liability
account, was charged to operations for the nine-month period, the net loss of
the first nine months of 2013 was $0.1 million, or $0.002 per basic share and
diluted share.

As of September 30, 2013, cash and cash equivalents totaled $89.0 million,
compared to $91.2 million as of December 31, 2012. Net cash used in operating
activities was $14.7 million in the first nine months of 2013. Net cash used
in investing activities was $3.4 million in the first nine months of 2013,
which was mainly to acquire property, plant and equipment for the Changping
facility. Net cash provided by financing activities was $15.0 million in the
first nine months of 2013, including loan proceeds of $13.9 million.

Conference Call Details

The Company will host a conference call prior to the market opening
onWednesday, November 13, 2013, at 8:00 a.m. EST (November 13, 2013at 9:00
p.m. China Standard Time) to review the Company's financial results and
provide an update on recent corporate developments. To access the conference
call, please dial 1-877-407-0784 (USA) or 1-201-689-8560 (International). A
replay of the call will be available from 11 a.m. EST on November 13, 2013, to
November 27, 2013, at midnight. To access the replay, please dial
1-877-870-5176 (USA) or 1-858-384-5517 (International) and reference the
replay pin number 13572718.

A live audio webcast of the call will also be available from the investors
section on the corporate web site at www.sinovac.com. A webcast replay can be
accessed on the corporate website beginning November 13, 2013, and the replay
will remain available for 30 days.

About Sinovac

Sinovac Biotech Ltd. is a China-based biopharmaceutical company that focuses
on the research, development, manufacturing and commercialization of vaccines
that protect against human infectious diseases including hepatitis A and B,
seasonal influenza, H5N1 pandemic influenza (avian flu), H1N1 influenza (swine
flu) and mumps, as well as animal rabies vaccine for canines. The Company
recently concluded the phase III clinical trial for enterovirus 71 (against
hand, foot and mouth disease) and filed new drug application with China Food &
Drug Administration.In 2009, Sinovac was the first company worldwide to
receive approval for its H1N1 influenza vaccine, Panflu.1, and has
manufactured it for the Chinese Central Government, pursuant to the
government-stockpiling program.The Company is also the only supplier of the
H5N1 pandemic influenza vaccine to the government-stockpiling program. Sinovac
is developing a number of new pipeline vaccines including vaccines for
pneumococcal polysaccharides, pneumococcal conjugate, varicella and rubella.
Sinovac sells its vaccines mainly in China and exports selected vaccines to
Mongolia, Nepal, and the Philippines. Sinovac has also been granted a license
to commercialize seasonal flu vaccine in Mexico.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are
made under the "safe harbor" provisions of the U.S. Private Securities
Litigation Reform Act of 1995. These forward-looking statements can be
identified by words or phrases such as "will," "expects," "anticipates,"
"future," "intends," "plans," "believes," "estimates" and similar statements.
Among other things, the business outlook and quotations from management in
this press release contain forward-looking statements. Statements that are not
historical facts, including statements about Sinovac's beliefs and
expectations, are forward-looking statements. Forward-looking statements
involve inherent risks and uncertainties. A number of important factors could
cause actual results to differ materially from those contained in any
forward-looking statement. Sinovac does not undertake any obligation to update
any forward-looking statement, except as required under applicable law.



SINOVAC BIOTECH LTD.
Incorporated in Antigua and Barbuda
Consolidated Balance Sheets
(Unaudited)
(Expressed in U.S. Dollars)
                                                     30-Sep-13     31-Dec-12
ASSETS
Current assets
 Cash and cash equivalents                        $ 89,026,229  $ 91,240,956
 Accounts receivable – net                         38,598,691    23,440,135
 Inventories                                       15,939,472    10,529,476
 Prepaid expenses and deposits                     1,109,194     1,072,078
Due from related party                               18,489        -
Total current assets                                 144,692,075   126,282,645
Property, plant and equipment                       79,277,846    80,083,383
Long-term inventories                            -             28,692
Long-term prepaid expenses                           178,736       289,766
Prepayments for acquisition of equipment             197,938       483,278
Deferred tax assets                                 391,491       445,589
Licenses                                             865,437       1,149,914
Total assets                                       $ 225,603,523 $ 208,763,267
LIABILITIES AND EQUITY
Current liabilities
 Loans payable                                   $ 12,613,967  $ 3,328,590
Due to related party                                 3,287,582     -
 Accounts payable and accrued liabilities          26,259,560    24,777,808
Income tax payable                                  243,071       238,775
Deferred revenue                                     7,541,515     1,378,425
 Deferred government grants                        438,853       431,097
Total current liabilities                            50,384,548    30,154,695
Deferred government grants                          4,571,838     4,068,602
Loans payable                                        36,229,007    31,181,235
Due to related party                                -             3,230,125
Deferred revenue                                     -             10,693,247
Total long term liabilities                          40,800,845    49,173,209
Total liabilities                                    91,185,393    79,327,904
Commitments and contingencies
EQUITY
Preferred stock                                      -             -
 Authorized 50,000,000 shares at par value of
$0.001 each
 Issued and outstanding: nil
Common stock                                         55,403        55,092
 Authorized: 100,000,000 shares at par value of
$0.001 each
 Issued and outstanding: 55,402,061 (2012 –
55,091,561)
Additional paid-in capital                           107,201,859   106,245,934
Accumulated other comprehensive income               13,205,203    11,770,927
Statutory surplus reserves                           11,808,271    11,808,271
Accumulated deficit                                 -10,535,905   -12,156,414
Total stockholders' equity                           121,734,831   117,723,810
Non-controlling interests                           12,683,299    11,711,553
Total equity                                         134,418,130   129,435,363
Total liabilities and equity                       $ 225,603,523 $ 208,763,267





SINOVAC BIOTECH LTD.
Incorporated in Antigua and Barbuda
Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)
Three and Nine Months Ended September 30, 2013 and 2012
(Unaudited)
(Expressed in U.S.
Dollars)
                         Three months ended          Nine months ended
                         30-Sep                      30-Sep
                         2013          2012          2013          2012
Sales                  $ 22,075,472  $ 14,287,100  $ 49,579,129  $ 29,625,199
Cost of sales           -6,164,587    -6,770,712    -13,017,307   -10,401,918
Gross profit             15,910,885    7,516,388     36,561,822    19,223,281
Selling, general and
administrative           -9,942,183    -7,844,861    -24,570,852   -18,865,676
expenses
Provision for doubtful   -171,729      -97,067       -1,057,520    -97,067
accounts
Research and             -2,033,989    -3,773,625    -5,923,235    -15,792,500
development expenses
Depreciation of
property, plant and
equipment and           -758,971      -434,596      -2,072,837    -1,056,993
amortization of
licenses and
renovation costs
Gain on disposal and
impairment of            8             -             2,327         -
property, plant and
equipment
Government grants        -             78,053        -             556,028
recognized in income
Total operating          -12,906,864   -12,072,096   -33,622,117   -35,256,208
expenses
Operating                3,004,021     -4,555,708    2,939,705     -16,032,927
income/(loss)
Interest income          544,062       464,512       1,567,982     1,561,039
Interest and financing   -734,900      302,846       -2,168,306    -143,552
expenses
Other                    134,126       -47,283       141,221       85,430
income/(expenses)
Income/(loss) before
income taxes and         2,947,309     -3,835,633    2,480,602     -14,530,010
non-controlling
interests
Income tax               -76,672       -5,958        -61,889       794,406
recovery/(expense)
Consolidated net         2,870,637     -3,841,591    2,418,713     -13,735,604
income/(loss)
Less: income/(loss)
attributable to          561,189       -839,758      798,204       -3,490,578
non-controlling
interests
Net income/(loss)
attributable to        $ 2,309,448   $ -3,001,833  $ 1,620,509   $ -10,245,026
stockholders
Net income/(loss)      $ 2,870,637   $ -3,841,591  $ 2,418,713   $ -13,735,604
Other comprehensive
income/(loss)
Foreign currency         249,027       878,183       1,601,728     1,055,232
translation adjustment
Total comprehensive      3,119,664     -2,963,408    4,020,441     -12,680,372
income/(loss)
Less: comprehensive
income/(loss)
attributable to          588,052       -738,068      965,656       -3,351,143
non-controlling
interests
Comprehensive
income/(loss)          $ 2,531,612   $ -2,225,340  $ 3,054,785   $ -9,329,229
attributable to
stockholders
Basic and diluted
earnings/(loss) per    $ 0.04        $ -0.05       $ 0.03        $ -0.19
share
Weighted average
number of shares
of common stock
outstanding
 - Basic              55,382,329    55,023,070    55,235,198    54,881,874
 - Diluted            55,882,837    55,023,070    55,684,691    54,881,874





SINOVAC BIOTECH LTD.
Incorporated in Antigua and Barbuda
Consolidated Statements of Cash Flows
Three and Nine Months Ended September 30, 2013 and 2012
(Unaudited)
(Expressed in U.S.
Dollars)
                        Three Months ended      Nine Months ended September 30
                        September 30
                        2013         2012          2013            2012
Cash flows used in
operating activities
 Net income(loss)    $ 2,870,637  $ -3,841,591 $  2,418,714     $ -13,735,604
for the period
 Adjustments to
reconcile net income
(loss) to net cash
 used in operating
activities:
 - deferred income     76,672       5,958         61,889          72,287
taxes
 -Impairment of
equipment and           -8           3,468         -2,327          5,928
loss(gain) on
disposal
 - unrealized          -            -             -               -43,880
foreign exchange gain
 - stock-based         71,685       134,138       209,378         388,104
compensation
- inventory provision   2,640        776,838       770,451         1,365,628
- provision for         171,728      97,067        1,057,520       97,067
doubtful accounts
 - depreciation of
property, plant and
equipment, and        1,649,639    1,124,946     5,135,179       3,673,159
amortization of
licenses and
renovation costs
 - research and
development
expenditures            -            -                             -78,980
qualified for
government grant
- deferred government
grant recognized in     -            -68,712                       -467,570
income
- accretion expenses    19,007       48,560        71,380          185,349
Changes in:
 - accounts            -7,165,298   -6,631,251    -15,452,983     -7,302,483
receivable
 - inventories         734,545      1,287,997     -5,922,498      -4,140,923
- income tax payable    -            -375                          -3,124,852
 - prepaid expenses    -428,282     560,264       -172,739        1,048,642
and deposits
 - deferred revenue   -3,482,735   1,456,127     -4,711,378      1,356,605
 - accounts payable
and accrued             101,967      -1,213,161    1,855,651       -3,735,436
liabilities
Net cash used in        -5,377,803   -6,259,727    -14,681,763     -24,436,959
operating activities
Cash flows from
financing activities
 - Loan proceeds       3,073,545    1,288,549     13,858,047      7,298,056
 - Loan repayment      -            -             -162,162        -
 - Proceeds from
issuance of common      137,524      5,760         554,644         399,200
stock
- Subscriptions         30,638       32,000        203,094         34,400
received
 - Dividends paid to
non-controlling         -            -             -               -799,376
shareholder of
 Sinovac Beijing
- Loan from
non-controlling         -            -             -               3,178,164
shareholder of
Sinovac Dalian
 - Government grants   71,920       -             595,733         240,580
received
Net cash provided by    3,313,627    1,326,309     15,049,356      10,351,024
financing activities
Cash flows used in
investing activities
- Acquisition of
property, plant and     -768,474     -4,322,153    -3,437,346      -10,941,774
equipment
Net cash used in        -768,474     -4,322,153    -3,437,346      -10,941,774
investing activities
Exchange effect on
cash and cash           -187,549     1,777,618     855,026         2,703,434
equivalents
Increase (decrease)
in cash and cash        -3,020,199   -7,477,953    -2,214,727      -22,324,275
equivalents
Cash and cash
equivalents,            92,046,428   89,440,373    91,240,956      104,286,695
beginning of period
Cash and cash
equivalents, end of     89,026,229 $ 81,962,420 $  89,026,229    $ 81,962,420
period
Cash paid for           759,543    $ 493,244    $  2,055,339     $ 1,375,203
interest
Cash paid for income  $ -          $ -          $  -             $ 866,693
taxes
                        -            -             -
Supplemental schedule
of non-cash
activities:
 Acquisition of
property, plant and
equipment included in
 accounts payable
and accrued           $ 3,332,952  $ 9,962,278  $  3,332,952     $ 9,962,278
liabilities



Helen Yang/Chris Lee
Sinovac Biotech Ltd.
Tel: +86-10-8279-9659/9696
Fax: +86-10-6296-6910
Email: ir@sinovac.com

Investors:
Stephanie Carrington
The Ruth Group
Tel: +1-646-536-7017
Email: scarrington@theruthgroup.com

Media
Aaron Estrada
The Ruth Group
Tel: +1-646-536-7028
Email: aestrada@theruthgroup.com

SOURCE Sinovac Biotech Ltd.

Website: http://www.sinovac.com