Sinovac Reports Unaudited Fourth Quarter and Full Year 2013 Financial Results

Sinovac Reports Unaudited Fourth Quarter and Full Year 2013 Financial Results

- Conference call scheduled for Thursday, March 20, 2014 at 8:00 AM EDT -

PR Newswire

BEIJING, March 19, 2014

BEIJING, March 19, 2014 /PRNewswire/ -- Sinovac Biotech Ltd. (NASDAQ: SVA), a
leading provider of biopharmaceutical products in China, announced today its
unaudited fourth quarter and full year financial results for the period ended
December 31, 2013.

Unaudited Fourth Quarter 2013 Financial Highlights (period-over-period
comparisons to fourth quarter 2012)

  oQuarterly sales increased by 17.1% to $22.9 million from $19.6 million.
  oGross profit increased by 34.9% to $14.7 million from $10.9 million. Gross
    margin was 64.0%, compared to 55.6%.
  oNet income attributable to common stockholders was $5.8 million, or $0.10
    per basic and diluted share, compared to net loss attributable to common
    stockholders of $4.6 million, or $0.08 per basic and diluted share.

Unaudited Full Year 2013 Financial Highlights (Year-over-year comparisons to
2012)

  oSales increased by 47.4% to $72.5 million from $49.2 million. Excluding
    revenue recognition of Panflu under government stockpiling program in
    2013, regular sales increased by 25.5% to $61.8 million from $49.2
    million.
  oGross profit increased by 70.2% to $51.3 million from $30.1 million. Gross
    margin increased to 70.7% from 61.2%. Excluding the impact of Panflu sales
    under the government stockpiling program in 2013, gross margin increased
    to 72.6% from 61.2%.
  oNet income attributable to common stockholders was $7.4 million, or $0.13
    per basic and diluted share, compared to net loss attributable to common
    stockholders of $14.9 million, or $0.27 per basic and diluted share.
  oCash and cash equivalents totaled $107.2 million as of December 31, 2013,
    compared to $91.2 million as of December 31, 2012. Net cash provided by
    operating activities was $5.7 million in 2013, compared to net cash used
    by operating activities of $16.3 million in 2012.

Recent Business Highlights

In January 2014, Sinovac submitted a Clinical Trial Application (CTA) with the
China Food and Drug Administration (CFDA) to commence human clinical trials
for its vaccine against Avian influenza A (H7N9) virus. The CTA was officially
accepted by the CFDA on January 29, 2014.

In February 2014, the Phase III clinical trial results for Sinovac's
proprietary Enterovirus 71 ("EV71") vaccine were published online in the
February 27th issue of The New England Journal of Medicine ("NEJM"). The
clinical results showed the efficacy of the vaccine against EV71-associated
hand, foot and mouth disease ("HFMD"), or herpangina, was 94.8% among infants
and young children.An anti-EV71 neutralizing antibody titer of 1:16 was
associated with protection against EV71 associated HFMD or herpangina. As
outlined in the NEJM article, Sinovac's vaccine also demonstrated a 100%
efficacy rate against EV71-associated hospitalization and against HFMD with
neurologic complications, the main cause of fatalities.

Mr. Weidong Yin, Chairman, President and CEO, commented, "2013 was a strong
year for Sinovac from a commercial vaccines sales standpoint. Total 2013 sales
increased by 47.4% and regular sales, excluding the government stockpiling
revenue recognition, rose by 25.5%. We generated a net income in excess of $7
million for the full year.Sinovac's sales team continued to execute its
tailored sales and marketing strategy in China within a favorable competitive
environment."

Mr. Yin concluded, "The publication of phase III clinical trial results in
February 2014 further validated our scientific contribution to address this
significant unmet need through the development of our proprietary EV71 vaccine
against hand foot and mouth disease. Currently, the new drug application for
our EV71 vaccine is under technological review by the CFDA. We look forward to
supplying the urgently needed vaccine for the control and prevention of HFMD
in China and neighboring countries. "

Financial Review for Unaudited Fourth Quarter Ended December 31, 2013

An analysis of sales and gross profit is as follows:

In USD'000                 % of         %of
(Unaudited)         2013Q4       2012Q4
                           Sales        Sales
Hepatitis A –
                    7,970  34.7% 10,038 51.3%
Healive
Hepatitis A&B –
                    2,846  12.4% 4,177  21.3%
Bilive
Hepatitis vaccines  10,816 47.1% 14,215 72.6%
Influenza vaccines  3,409  14.9% 5,336  27.2%
Animal vaccines     617    2.7%  15     0.1%
Mumps vaccines      934    4.1%  25     0.1%
Regular sales       15,776 68.8% 19,591 100%
H5N1                7,169  31.2% -      -
Total sales         22,945 100%  19,591 100%
Cost of goods sold  8,255  36.0% 8,698  44.4%
Gross profit        14,690 64.0% 10,893 55.6%

Fourth quarter 2013 sales increased by 17.1% to $22.9 million from $19.6
million for the same period in 2012. The increase was mainly due to the
revenue recognition of Panflu (H5N1) manufactured under the government
stockpiling program. Excluding revenue of Panflu (H5N1), sales for the fourth
quarter 2013 decreased by 19.5% to $15.8 million, compared to $19.6 million in
the same period of 2012. The decrease in regular sales was mainly due to three
reasons: 1) 2012 sales included a one-time order of Healive from Gansu
province after a natural disaster, so sales of Healive decreased by 20.6% in
the fourth quarter of 2013 compared with that of the same period in 2012. 2)
Bilive sales decreased by 31.9% due to timing differences of vaccination
campaigns. Different from Healive that is part of the regular immunization
program in China for infants and young children, Bilive is mainly administered
as a booster through vaccination campaigns organized by local CDCs, which
results in sales fluctuation from quarter to quarter. Bilive sales for full
year of 2013 were higher than 2012; and 3) sales of Anflu decreased by 36.1%
as the majority of Anflu sales shifted from the fourth quarter to the third
quarter due to early launch of the vaccine during the 2013-2014 flu season.

Compared to the fourth quarter of 2012, the gross profit margin for the fourth
quarter of 2013 increased to 64.0% from 55.6%.Higher gross margin was mainly
driven by the improved operational management, which resulted inless
inventory provision charged to the cost of sales, as well as increased selling
price of some of our products.

Selling, general and administrative expenses for the fourth quarter 2013 were
$7.9 million, compared to $12.8 million in 2012. The decrease in SG&A expenses
was mainly due to lower G&A expenses of ongoing validation of EV71 vaccine
facilities and GMP certification preparation.

R&D expenses for the fourth quarter of 2013 were $2.5 million, a $1.2 million
increase over the same period in 2012. The Company incurred more expenditures
related to the continued advancement of pipeline vaccine candidates, such as
pneumococcal polysaccharides vaccine and varicella vaccine, in the fourth
quarter of 2013.

Net income attributable to stockholders for the fourth quarter of 2013 was
$5.8 million, or $ 0.10 per basic and diluted share, compared to a net loss of
$4.6 million, or $0.08 per basic and diluted share, in the same period of last
year. Excluding the impact of the bonus revision of $0.6 million, which was
paid out or to be paid out from an accrued liability account rather than
charged to expenses, the net income for the fourth quarter 2013 was $5.2
million, or $0.09 per basic share and diluted share.

Financial Review for Unaudited Full Year Ended December 31, 2013

In USD'000                 % of         % of
                    2013         2012
(Unaudited)                Sales        Sales
Hepatitis A –
                    26,420 36.4% 20,141 40.9%
Healive
Hepatitis A&B –
                    20,782 28.7% 19,810 40.3%
Bilive
Hepatitis vaccines  47,202 65.1% 39,951 81.2%
Influenza vaccines  12,156 16.8% 9,191  18.7%
Animal vaccines     750    1.0%  50     0.1%
Mumps vaccines      1,680  2.3%  24     0.0%
Regular sales       61,788 85.2% 49,216 100%
H5N1                10,736 14.8% -      -
Total sales         72,524 100%  49,216 100%
Cost of goods sold  21,273 29.3% 19,100 38.8%
Gross profit        51,251 70.7% 30,116 61.2%

Total sales for 2013 increased by 47.4% to $72.5 million from $49.2 million in
2012. Excluding revenue recognition of Panflu under the government stockpiling
program in 2013, regular sales of Healive, Bilive, Anflu, mumps and Rabend
increased by 25.5% to $61.8 million in 2013 from $49.2 million in 2012. The
increased sales mainly derived from the growth of Healive and Anflu.

Gross profit for 2013 increased by 70.2% to $51.3 million from $30.1 million
in 2012. Gross margin increased to 70.7% in 2013 from 61.2% in 2012. Excluding
the impact of Panflu sales under the government stockpiling program in 2013,
gross margin increased to 72.6% in 2013 from 61.2% in 2012. The reasons for
the increased gross profit were the same as discussed under the section of the
fourth quarter result discussion.

Selling, general and administrative expenses for 2013 were $32.4 million,
which was maintained at a similar level of $31.7 million for 2012.

Research and development expenses in 2013, which primarily represented amounts
spent on the advancement of the pipeline vaccines, inclusive of EV71,
pneumococcal vaccines, and varicella, decreased to $8.4 million from $17.0
million in 2012. The decrease was mainly due to the completion of the phase
III clinical trial of EV71 vaccine candidate in the first quarter of 2013.

Depreciation of property, plant and equipment for 2013 was $2.1 million,
compared to $1.6 million for 2012. Depreciation rose in 2013 as more assets at
the Changping facility commenced depreciation in the last quarter of 2012.

Net income attributable to stockholders in 2013 was $7.4 million, or $0.13 per
basic and diluted share, compared to a net loss of $14.9 million, or $0.27 per
basic and diluted share in 2012. Excluding the impact of the bonus revision of
$2.4 million, which was paid out or to be paid out from an accrued liability
account rather than charged to expenses, net income of 2013 was $5.0 million,
or $0.09 per basic share and diluted share.

As of December 31, 2013, cash and cash equivalents totaled $107.2 million,
compared to $91.2 million as of December 31, 2012. Net cash provided by
operating activities was $5.7 million in 2013. Net cash used in investing
activities was $5.2 million in 2013, which was mainly for payment of property,
plant and equipment for the Changping facility. Net cash provided by financing
activities was $14.3 million in 2013, including loan proceeds of $16.8
million.

Conference Call Details

The Company will host a conference call on Thursday, March 20, 2014 at 8:00
a.m. EDT (March 20, 2014 at 8:00 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. EDT on March 20, 2014 to April 3, 2014 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 13578265.

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 March 20, 2014 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.

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



SINOVAC BIOTECH LTD.
Consolidated Statements of Balance Sheets
(Unaudited)
December 31, 2013 and 2012
(Expressed in thousands of U.S. Dollars)
Current assets                           December 31, 2013 December 31, 2012
Cash and cash equivalents                 107,242           91,241
Accounts receivable                      31,927            23,440
Inventories                               14,399            10,530
Prepaid expenses and deposits            1,131             1,072
Due from related party                    19                -
Deferred tax assets                       2,602             -
Total current assets                      157,320           126,283
Property, plant and equipment             78,911            80,083
Long-term inventories                     2,711             28
Long-term prepaid expenses                154               290
Prepayments for acquisition of equipment  708               483
Deferred tax assets                       117               446
Licenses                                  772               1,150
Total assets                              240,693           208,763
Current liabilities
Loans payable                            16,217            3,329
Due to related party                      3,324             -
Accounts payable and accrued liabilities 28,037            24,778
Income tax payable                        246               239
Deferred revenue                          875               1,378
Deferred government grants                444               431
Total current liabilities                 49,143            30,155
Deferred government grants                4,760             4,069
Loans payable                             32,146            31,181
Due to related party                      -                 3,230
Deferred revenue                          11,005            10,693
Total long term liabilities               47,911            49,173
Total liabilities                         97,054            79,328
Commitments and contingencies
Stock holder's equity
Preferred stock                           -                 -
Common stock                              56                55
Additional paid in capital                107,393           106,246
Accumulated other comprehensive income    14,141            11,771
Statutory surplus reserves                11,808            11,808
Accumulated deficit                       (4,714)           (12,156)
Total stockholders' equity                128,684           117,724
Non-controlling interests                 14,955            11,711
Total equity                              143,639           129,435
Total liabilities and equity              240,693           208,763



SINOVAC BIOTECH LTD.
Consolidated Statements of Operations and
Comprehensive Income (loss)
Three and Twelve Months Ended December 31,
2013 and 2012
(Unaudited)
(Expressed in thousands of U.S. Dollars,
expect for per share figures)
                                  Three months ended    Twelve months ended
                                  December 31            December 31
                                                        
                                  2013       2012        2013       2012
Sales                           22,945     19,591      72,524     49,216
Cost of sales                   8,255      8,698       21,273     19,100
Gross profit                    14,690     10,893      51,251     30,116
Selling, general and             7,861      12,820      32,432     31,685
administrative expenses
(Recovery) for doubtful          (1,561)    (971)       (504)      (874)
accounts
Research and development         2,461      1,251       8,384      17,044
expenses
Depreciation of property,        33         540         2,106      1,595
plant and equipment
Loss on disposal and
impairment of property, plant
and                               91         2,191       88         2,191

equipment
Government grants recognized     -          181         -          (374)
in income
Total operating expenses        8,885      16,012      42,506     51,267
Operating income (loss)         5,805      (5,119)     8,745      (21,151)
Interest and financing           (863)      (631)       (3,031)    (775)
expenses
Interest income                  600        809         2,168      2,370
Other income (expenses)          121        (163)       263        (77)
Income (loss) before income
taxes and non-                   5,663      (5,104)     8,145      (19,633)

controlling interests
Income tax recovery             2,287      89          2,225      884
Consolidated net income          7,950      (5,015)     10,370     (18,749)
(loss)
Net (income) loss attributable to (2,129)    405         (2,928)    3,896
the non-controlling interests
Net income (loss)               5,821      (4,610)     7,442      (14,853)
attributable to stockholders
 Net Income (loss)              7,950      (5,015)     10,370     (18,749)
Other comprehensive income
Foreign currency translation      1,086      968         2,687      2,024
adjustment
Total comprehensive income       9,036      (4,047)     13,057     (16,725)
(loss)
 Less: comprehensive (income)
loss attributable to non-         (2,279)    314         (3,244)    3,665

controlling interests
Comprehensive income (loss)      6,757      (3,733)     9,813      (13,060)
attributable to stockholders
Weighted average number of
shares of common

stock outstanding
 Basic                         55,497,357 55,037,264  55,301,276 54,926,440
 Diluted                        56,057,462 55,037,264  55,802,338 54,926,440
Earning (loss) per share
 Basic                         0.10       (0.08)      0.13       (0.27)
 Diluted                       0.10       (0.08)      0.13       (0.27)



SINOVAC BIOTECH LTD.
Consolidated Statement of Cash
Flows
Three and Twelve Months Ended December 31,
2013 and 2012
(Unaudited)
(Expressed in thousands of U.S.
dollars)
                                     Three months ended  Twelve months ended
                                     December 31          December 31
                                                         
                                     2013      2012       2013      2012
Cash flows provided by(used in) operating
activities:
Net income (loss)                   7,950     (5,015)    10,370    (18,749)
Adjustments to reconcile net income
(loss) to net cash

provided by (used in) operating
activities:
Deferred income tax                 (2,287)   (89)       (2,225)   (17)
Stock-based compensation            72        (41)       281       347
Inventory provision                 629       2,114      1,399     3,479
Recovery of doubtful accounts       (1,561)   (971)      (504)     (874)
Impairment of equipment and loss on  (349)     2,185      88        2,191
disposal
Unrealized foreign exchange gain    -         44         -         -
Research and development
expenditures qualified for          -         421        -         (125)
government grant
Depreciation of property, plant and  1,706     814        6,842     4,487
equipment
Deferred government grants           -         (358)      -         (358)
recognized in income
Accretion expenses                  47        50         100       235
Changes in:                         -         0          -         -
Accounts receivable                 8,197     3,017      (7,256)   (4,286)
Inventory                          (1,624)   3,715      (7,547)   (426)
Income tax payable                  -         (5)        -         (3,130)
Prepaid expenses and deposits       415       (136)      242       913
Deferred revenue                    4,037     (330)      (675)     1,026
Accounts payables and accrued        2,684     2,774      4,559     (967)
liabilities
Net cash provided by (used in)       19,916    8,189      5,674     (16,254)
operating activities
Cash flows provided by financing
activities:
Loan proceeds                       2,942     9,489      16,800    16,787
Loan repayments                     (3,927)   (4,755)    (4,089)   (4,755)
Proceeds from issuance of common     85        109        842       508
stock, net of share issuance costs
Proceeds from shares subscribed    -         (27)       -         8
Government grants received          149       2,154      745       2,395
Dividends paid to non-controlling    -         (3)        -         (802)
shareholder of Sinovac Beijing
Loan from non-controlling            -         12         -         3,189
shareholder of Sinovac Dalian
Net cash provided by financing       (751)     6,979      14,298    17,330
activities
Cash flows used in investing
activities:
Proceeds from disposal of equipment -         -          -         5
Acquisition of property, plant and   (1,739)   (5,215)    (5,176)   (16,156)
equipment
Net cash used in investing           (1,739)   (5,215)    (5,176)   (16,151)
activities
Exchange gain (loss) on cash and     790       (674)      1,205     2,029
cash equivalents
Increase in cash and cash            18,216    9,279      16,001    (13,046)
equivalents
Cash and cash equivalents, beginning 89,026    81,962     91,241    104,287
of year
Cash and cash equivalents, end of    107,242   91,241     107,242   91,241
year

SOURCE Sinovac Biotech Ltd.

Website: http://www.sinovac.com
 
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