Biostar Pharmaceuticals, Inc. Announces Full Year 2013 Financial Results

   Biostar Pharmaceuticals, Inc. Announces Full Year 2013 Financial Results

- Annual Revenue Increased to $52.3 Million

- Net Income Increased to $809,046, or EPS of $0.06 in FY 2013

PR Newswire

XIANYANG, China, March 31, 2014

XIANYANG, China, March 31, 2014 /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 for
the fiscal year ended December 31, 2013.

Highlights for the Full Year 2013

  oTotal sales increased to $52.73 million, as compared to $49.32 million for
    the year ended December 31, 2012.
  oSales directly to hospitals were up 145% in 2013 to approximately $7.1
    million as compared to $2.88 million in 2012
  oNet income improvedto $809,046 for the full year 2013, compared with a net
    loss of $20 million for the full year 2012.
  oDiluted earnings per share (EPS) for the full year 2013 was $0.06,
    compared with diluted loss per share of ($2.09) for 2012

Summary of Financial Results:

(In '000s of U.S. Dollars, except for per share data) FULL YEAR ENDED DEC 31
                                                      2013        2012
Total Sales                                           52,729      49,318
Gross Profit                                          25,683      29,851
Operating Expenses                                    (25,175)    (51,637)
Income from Operations                                508         (21,786)
Net Income                                            809         (19,997)
Basic EPS                                             0.06        (2.09)
Diluted EPS                                           0.06        (2.09)

Mr. Ronghua Wang, Chairman and CEO of BSPM, commented, "Fiscal year 2013 was a
year of turnaround for Biostar as we achieved profitability as compared to the
prior year. Thanks to our heightened controls in product safety as well as
pricing adjustments for Xin Ao Xing Oleanolic Acid Capsule, our flagship drug
for the treatment of chronic Hepatitis B virus (HBV), we believe we have
regained the trust and confidence of our customers and stabilized our market
share in the HBV segment, as evident by the increase in our sales volume.
During the year, our sales to hospital increased 145% due to several new
products which were launched and sold exclusively to hospitals in Shaanxi
province since late 2012, In 2014, we expect to continue our current
strategies by expanding our sales and distribution network, strengthening the
research and development of new drugs, and investing in low risk, high margin
and fast growing businesses. "

Full Year 2013 Financial Results

Total Revenues

Total revenues for the full year 2013 were$52.73 million, an increase of 7%
from $49.32millionfor the full year 2012. The increase was primarily due to
the increase in new products and hospital products. The hospital products
increased 145.8% to $7.08 million, compared with $2.88 million for the full
year 2012.

Gross Profit and Gross Margin

Gross profit decreased by approximately $4.2 million or 14% for the year ended
December 31, 2013, as compared to the year of 2012. The decrease in gross
profit was due primarily to the decrease in sales price and increase in
product cost, offset by the increase in sales volume.

The overall gross profit margin decreased to 48% for the year ended December
31, 2013 from 60.5% for the year ended December 31, 2012. Our overall gross
profit was significantly affected by the decrease in gross margin of Xin
Aoxing Oleanolic Capsule from 80.9% during the year ended December 31, 2012 to

Operating Expenses

Operating expenses mainly consisted of advertising, selling, administrative,
and R&D expenses totaling $25.17million for the year ended December 31, 2013
as compared to $51.64 million for the year ended December 31, 2012, a decrease
of $26.47million or 51.2%. The decrease is attributable to the decrease in
advertising and selling expenses and bad debts. During the year ended December
31, 2012, as a result of the developments relating to the capsule production
discussed above, we paid compensation of $8.0 million to our customers for
their cost of holding our products in their warehouses and portion of their
lost profits during the sales suspension, as well as an administrative penalty
of $1.6 million.

Net Income (loss) and Earnings per Share

Net income attributable to Biostar Pharmaceuticals, Inc.'s ordinary
shareholders for the full year 2013 was$809,046, compared with a net loss
of$20 million in 2012.

Basic and diluted income per share for the full year 2013 were$0.06, compared
with basic and diluted losses per share of $2.09 for the full year 2012.

Financial Position as of December 31, 2013

As of December 31, 2013, the Company had cash and cash equivalents of
approximately $0.1 million, other current assets were $35.91 million and
current liabilities were $4.79 million. Total shareholders' equity was $62.77
million, as compared to $57.77 million as of December 31, 2012.

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:

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 continuing its sales and expansion strategies, 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, 2011, and other subsequent filings. These filings are
available 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.

                                                 December 31,
                                                 2013           2012
Current Assets
Cash and cash equivalents                        $ 80,072       $ 1,759,078
Note receivable                                   1,636,072      -
Accounts receivable, net of allowance for
doubtful accounts of $2,454,108 (2012:             17,965,082     21,851,412
Inventories                                        830,311        847,135
Deposits and other receivables                     5,282,574      7,740,673
Income tax recoverable                             374,958        265,007
Loan receivables                                   9,816,433      9,510,826
Total Current Assets                               35,985,502     41,974,131
Non-current Assets
Deposits                                           3,926,573      8,718,258
Deferred tax assets                                2,789,175      3,665,951
Property and equipment, net                        7,728,700      6,980,521
Intangible assets, net                             17,134,494     9,136,439
Total Assets                                     $ 67,564,444   $ 70,475,300
Current Liabilities
Accounts and other payables                      $ 4,447,314    $ 5,732,329
Short-term bank loans                              -              4,755,413
Due to a related party                             -              1,585,138
Value-added tax payable                            344,191        629,672
Total Current Liabilities                          4,791,505      12,702,552
Commitment and contingencies
Stockholders' Equity
Common stock, $0.001 par value, 100,000,000
shares authorized, 12,676,113 and 9,993,549        12,676         9,993
shares issued and outstanding as at December 31,
2013 and 2012
Additional paid-in capital                         25,748,669     23,266,776
Deferred stock-based compensation                  (365,017)      -
Statutory reserve                                  7,126,432      6,737,368
Retained earnings                                  23,649,725     23,229,743
Accumulated other comprehensive income             6,600,454      4,528,868
Total Stockholders' Equity                         62,772,939     57,772,748
Total Liabilities and Stockholders' Equity       $ 67,564,444   $ 70,475,300

                                                 Year Ended December 31,
                                                 2013           2012
Sales, net of discount of $807,905 (2012: $nil)  $ 52,729,054   $ 49,317,844
Cost of sales                                      27,046,216     19,466,821
Gross profit                                       25,682,838     29,851,023
Operating expenses:
Advertising expenses                               7,562,662      14,154,879
Selling expenses                                   9,012,456      13,734,910
General and administrative expenses                6,092,139      5,951,322
(Recovery of) Provision for doubtful account       (1,291,510)    3,674,905
Compensation paid to customers                     -              8,044,249
Administrative penalty                             -              1,601,012
Research and development expenses                  3,228,775      4,475,806
Impairment loss on other receivable                330,004        -
Impairment loss on intangible assets               240,091        -
Total operating expenses                           25,174,617     51,637,083
Income (Loss) from operations                      508,221        (21,786,060)
Other income (expense)
Interest income                                    1,344,566      296,146
Interest expense                                   (367,493)      (84,387)
Other                                              2,281          599
Gain on disposal of intangible assets              1,168,451      -
                                                   2,147,805      212,358
Income (Loss) before income taxes                  2,656,026      (21,573,702)
Provision for income tax (recovery)                1,846,980      (1,576,379)
Net income (Loss)                                $ 809,046      $ (19,997,323)
Other comprehensive income - Foreign currency      2,071,586      546,662
translation adjustment
Comprehensive income (loss)                      $ 2,880,632    $ (19,450,661)
Net income (loss) per share
Basic and diluted                          $ 0.06         $ (2.09)
Weighted average number of common shares           13,509,463     9,570,901
Basic and diluted

                                                 Year ended December 31,
                                                 2013           2012
Net income (loss)                                $ 809,046      $ (19,997,323)
Adjustments to reconcile net (loss) income to
net cash provided by operating activities:
Deferred income tax expense (benefit)              981,390        (2,036,089)
Depreciation and amortization                      2,786,702      1,827,852
(Recovery of) Provision for doubtful accounts      (1,291,510)    3,674,905
Recognition of deferred research and development   3,228,775      4,475,805
Credits to accounts receivable as compensation     -              1,347,779
to customers
Impairment loss on other receivables               330,004        -
Impairment loss on intangible assets               240,091        -
Gain on disposition of intangible assets           (1,168,451)    -
Stock-based compensation                           757,380        821,709
Changes in operating assets and liabilities:
Accounts receivable                                4,204,776      6,629,264
Inventories                                        43,461         535,583
Deposits and other receivables                     (161,358)      (1,870,286)
Accounts payable and accrued expenses              (1,449,439)    3,197,628
Value-added tax payable                            (301,662)      (271,889)
Income tax payable/recoverable                     (100,092)      (1,918,632)
Net cash provided by (used in) operating           8,909,113      (3,583,694)
Purchase of property, plant and equipment          (982,012)      (32,870)
Disposition of property, plant and equipment       -              21,788
Payment for acquisition of Shaanxi Weinan          -              (823,880)
Deposit paid for research and development          (2,744,459)    -
Deposit paid to acquire drug approval numbers      -              (8,714,114)
Deposit paid for intended acquisition of a         (3,874,530)    -
health product manufacturer
Compensation received for disposed land use        3,390,214      1,766,589
Provision of loan                                  -              (9,506,306)
Net cash (used in) investing activities            (4,210,787)    (17,288,793)
Advance from a related party                       -              1,584,384
Repayment to a related party                       (1,614,387)    -
Proceeds from short-term bank loans                -              4,753,153
Repayment of short-term loans                      (4,843,162)    (792,192)
Net cash (used in) provided by financing           (6,457,549)    5,545,345
Effect of exchange rate changes on cash and cash   80,217         114,431
Net (decrease) increase in cash and cash           (1,679,006)    (15,212,711)
Cash and cash equivalents, beginning balance       1,759,078      16,971,789
Cash and cash equivalents, ending balance        $ 80,072       $ 1,759,078

SOURCE Biostar Pharmaceuticals, Inc.

Contact: Biostar Pharmaceuticals, Inc., Ally Gong, +86-29-3368-6638,
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