Biostar Pharmaceuticals, Inc. Announces Third Quarter 2013 Financial Results PR Newswire XIANYANG, China, Nov. 14, 2013 XIANYANG, China, Nov. 14, 2013 /PRNewswire/ -- Biostar Pharmaceuticals, Inc. (NASDAQ: 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 its financial results of the third quarter ended September 30, 2013. SUMMARY FINANCIALS Third Quarter 2013 Results (unaudited) (in 000,000 USD) Q3 2013 Q3 2012 CHANGE Net Sales $15.01 $9.97 +50.1% Gross Profit $6.94 $5.24 +32.5% Net Income $0.39 -$5.94 - EPS (Diluted) $0.03 -$0.63 - Nine Months 2013 Results (unaudited) (in 000,000 USD) 9-Month 2013 9-Month 2012 CHANGE Net Sales $41.75 $34.03 +22.7% Gross Profit $20.51 $20.65 -0.7% Net Income $0.22 -$13.25 - EPS (Diluted) $0.02 -$1.41 - Third Quarter 2013 Financial Results Revenue for the 3rd Quarter of 2013 was $15.01M, representing a substantial increase ($5.04M) over the same period of the prior year. The factors positively affected our growth were primarily attributable to 1) an increase in general sales volume, and 2) revenue generated by several new products. Cost of Sales for the 3rd Quarter of 2013 increased over the same quarter of 2012 by $3.33M or 70.6% due to an increase in net sales and the introduction of the new hospital products. Gross Profits for the 3rd Quarter of 2013 were $6.94M representing an improvement of approximately $1.7M or 32.5% as compared to the same period in 2012. Increasing sales volume was the primary driver of this encouraging trend for the company. Total Operating Expense for the 3rd Quarter of 2013 decreased substantially to $6.19M in comparison to the prior year's (2012) value of $11.04M on increasing sales. The decrease is primarily attributable to a lower cost structure in our advertising as well as general and administrative expense. Nine Months Results For the nine months ended September 30, 2013, revenue increased by approximately 22.7% to $41.75M in comparison to the same period in 2012. Gross profit was approximately $20.51M for the first nine months of 2013, representing a decrease of 0.67% from the first nine months of 2012. Income (Loss) from operations was $0.68M and（$14.85）million for the first nine months of 2013 and 2012, respectively. Net income（Loss）was $0.22M for the nine months ended September 30, 2013, compared to（$13.25M）from the same period in 2012. Fully diluted earnings (loss) per share were $0.02 compared to ($1.41) for the first nine months of 2013 and 2012 respectively, based on 11.20 million and 9.43 million shares outstanding. Balance Sheet and Cash Flow As of September 30, 2013 we had cash and cash equivalents of approximately $10.55M and working capital of approximately $32.84M and had a current ratio of 4:1. Our Accounts Receivable balance was approximately $13.08M on September 30, 2013, versus approximately $21.85M at year end of 2012. Accounts Receivable turnover significantly improved to 97 days for the three months ended September 30, 2013, as compared to 257 days during the same period in 2012 . The Company's stockholders' equity at of the end the third quarter of 2013 was $61.74M, with total assets of $72.38M versus total liabilities of $10.64M. For the first nine months of 2013, the Company generated $13.71M in cash from operations versus $5.04M cash used in operations for the same period in 2012. Business Developments Since our acquisition of Shaanxi Weinan in 2011, and the acquisition of additional 13 drug approval numbers in the previous quarter, we continue to diversify our product offerings to consumers under the Shaanxi Weinan Huaren brand. During the nine months ended September 30, 2013, we introduced 3 new products. These new products are Yanlixiao capsule (anti-inflammation capsule), Erlongtong Qiao pill (for treatment of hearing loss), and Danxiang Rhinitis tablet（or 'fragrant rhinitis tablet'). Under the Aoxing Pharmaceutical brand, during the nine months ended September 30, 2013，we introduced Yiwei particle, a health supplement product to improve stomach functions. This product was jointly developed with the Fourth Military Medical University (FMMU) of China. The effectiveness of this product, in combination with strong market acceptance has resulted in substantially increased production. Our partnership and cooperation with FMMU represents positive outlook in the development of the Company. Meanwhile, following the market disruption in the PRC public sector caused by the gel capsule events (as previously discussed), consumer and market confidence appear to be regaining their strength. The Company is experiencing noticeable improvements and is hopeful for full market recovery of these markets in the near future. Ronghua Wang, Chairman of the Company stated, "Thanks to the efforts of our entire team and the continued support shown in our market channel by both consumers and our suppliers, for the nine months ended September 30, 2013, the Company achieved sales revenue of $41.75 million, cash flow from operations of $13.71 million, and net profits of $0.22 million. We will continue to operate in accordance with the highest industry standards while working to deliver high quality products to our customers as well as increasing returns for our stockholders in terms of earnings and share value." Conference Call The Company will host a conference call to discuss its 2013 third quarter performance at 9:30 a.m. ET on Friday, November 15, 2013. Interested parties may access the call by dialing + 1-480-629-9808. The conference ID is 4650742. It is advisable to dial in approximately 5-10 minutes prior to the start of the call. A playback will be available through November 22, 2013. To listen, please call 1-858-384-5517 and utilize the pass code 4650742 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=106931 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 recover its sales in the gel capsule and related markets, 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: Chineseinvestors.com Inc Biostar Pharmaceuticals, Inc. Ally Gong Alice Tel: +86-29-3368-6638 Tel: +86-4001200987 Email: firstname.lastname@example.org Email: email@example.com BIOSTAR PHARMACEUTICALS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS September 30, 2013 December 31, 2012 (Unaudited) (Audited) ASSETS Current Assets Cash and cash equivalents $ 10,551,231 $ 1,759,078 Accounts receivable, net of allowance for doubtful accounts of $3,743,550 13,076,519 21,851,412 (2012/12/31: $3,645,817) Inventories - note 2) 1,214,285 847,135 Deposits and other receivables - note 7,622,649 7,740,673 3) Income tax recoverable 157,459 265,007 Loan receivables - note 4) 10,850,990 9,510,826 Total Current Assets 43,473,133 41,974,131 Non-current Assets Deposits - note 3) - 8,718,258 Deferred tax assets - note 7) 3,224,212 3,665,951 Property and equipment, net - note 2) 7,822,733 6,980,521 Intangible assets, net - note 2) 17,857,951 9,136,439 Total Assets $ 72,378,029 $ 70,475,300 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts and other payables $ 5,236,751 $ 5,732,329 Short-term bank loans - note 5) 4,882,893 4,755,413 Due to a related party - 1,585,138 Value-added tax payable 518,466 629,672 Total Current Liabilities 10,638,110 12,702,552 Commitment and contingencies- note 9) Stockholders' Equity Common stock, $0.001 par value, 100,000,000 shares authorized, 12,346,113 and 9,993,549 shares issued 12,346 9,993 and outstanding as at September 30, 2013 and December 31, 2012 - note 6) Additional paid-in capital 25,240,249 23,266,776 Statutory reserve - note 8) 6,737,368 6,737,368 Retained earnings 23,446,543 23,229,743 Accumulated other comprehensive income 6,303,413 4,528,868 Total Stockholders' Equity 61,739,919 57,772,748 Total Liabilities and Stockholders' $ 72,378,029 $ 70,475,300 Equity BIOSTAR PHARMACEUTICALS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited) Three months ended Nine months ended September 30, September 30, 2013 2012 2013 2012 Sales, net $ 15,009,432 $ 9,969,375 $ 41,752,195 $ 34,028,164 Cost of sales 8,068,096 4,729,894 21,242,519 13,379,287 Gross profit 6,941,336 5,239,481 20,509,676 20,648,877 Operating expenses: Advertising 931,938 4,077,019 5,368,890 11,295,419 expenses Selling 2,584,700 1,932,208 7,403,334 7,203,252 expenses Compensation paid to - - - 7,904,513 customers Administrative - 1,596,174 - 1,596,174 penalty General and administrative 1,867,707 2,640,240 4,404,273 5,124,789 expenses Research and development 811,009 789,702 2,412,623 2,370,605 expenses Impairment of intangible - - 239,203 - assets Total operating 6,195,354 11,035,343 19,828,323 35,494,752 expenses Income (Loss) 745,982 (5,795,862) 681,353 (14,845,875) from operations Other income (expense) Interest income 348,281 55,642 1,134,916 247,342 Interest (98,111) (1,059) (293,320) (33,193) expense Other 370 152 (1,093) 598 250,540 54,735 840,503 214,747 Income (Loss) before income 996,522 (5,741,127) 1,521,856 (14,631,128) taxes Provision for income tax 608,705 198,508 1,305,056 (1,376,356) (recovery) Net Income 387,817 (5,939,635) $ 216,800 $ (13,254,772) (Loss) Foreign currency 1,336,712 (117,289) 1,774,545 180,992 translation adjustment Comprehensive $ 1,724,529 $ (6,056,924) $ 1,991,345 $ (13,073,780) Income (Loss) Net income (loss) per share Basic and $ 0.03 $ (0.63) $ 0.02 $ (1.41) diluted Weighted average number of common shares outstanding 12,024,685 9,490,506 11,197,451 9,430,532 Basic and diluted BIOSTAR PHARMACEUTICALS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Nine months ended September 30, 2013 2012 CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ 216,800 $ (13,254,772) Adjustments to reconcile net income to net cash provided by operating activities: Accrued interest (1,072,394) - Deferred tax assets 533,637 (1,705,866) Depreciation and amortization 2,026,796 1,368,205 Recognition of deferred research and 2,412,623 2,370,605 development expenses Stock-based compensation 613,647 793,633 Credits to accounts receivable as - 7,904,513 compensation to customers Allowance for doubtful debts - 962,399 Impairment of intangible assets 239,203 - Changes in operating assets and liabilities: Accounts receivable 9,250,156 (2,547,289) Inventories (340,375) 392,153 Deposits and other receivables 482,525 - Prepaid tax - (451,121) Accounts payable and accrued expenses (641,335) 1,120,998 Value-added tax payable (126,573) (446,986) Income tax payable/recoverable 113,299 (1,555,225) Exchange difference - 11,583 Net cash provided by (used in) operating 13,708,009 (5,037,170) activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property and equipment (978,377) (32,784) Disposition of property and equipment - 21,704 Deposit paid for research and development (2,734,306) - Payment for acquisition of Shaanxi Weinan - (822,173) Compensation received for disposed land use 160,842 1,760,341 rights Net cash (used in) provided by investing (3,551,841) 927,088 activities CASH FLOWS FROM FINANCING ACTIVITIES Repayment of short term loan - (791,176) Repayment to a related party (1,608,415) - Net cash (used in) financing activities (1,608,415) (791,176) Effective of exchange rate changes on cash 244,400 49,034 and cash equivalents Net increase in cash and cash equivalents 8,792,153 (4,852,224) Cash and cash equivalents, beginning balance 1,759,078 16,971,789 Cash and cash equivalents, ending balance $ 10,551,231 $ 12,119,565 SUPPLEMENTAL DISCLOSURES: Interest received $ 1,134,916 $ - Interest payments $ (189,359) $ - Income tax payments $ (658,120) $ (2,348,336) SOURCE Biostar Pharmaceuticals, Inc. Website: http://www.biostarpharmaceuticals.com
Biostar Pharmaceuticals, Inc. Announces Third Quarter 2013 Financial Results
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