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 65.5% 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: 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 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 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. BIOSTAR PHARMACEUTICALS, INC. CONSOLIDATED BALANCE SHEETS December 31, 2013 2012 ASSETS 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 $3,645,817) 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 LIABILITIES AND STOCKHOLDERS' EQUITY 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 BIOSTAR PHARMACEUTICALS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) 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 outstanding Basic and diluted BIOSTAR PHARMACEUTICALS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Year ended December 31, 2013 2012 CASH FLOWS FROM OPERATING ACTIVITIES 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 expenses 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) activities CASH FLOWS FROM INVESTING ACTIVITIES 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 right Provision of loan - (9,506,306) Net cash (used in) investing activities (4,210,787) (17,288,793) CASH FLOWS FROM FINANCING ACTIVITIES 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 activities Effect of exchange rate changes on cash and cash 80,217 114,431 equivalents Net (decrease) increase in cash and cash (1,679,006) (15,212,711) equivalents 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, email@example.com
Biostar Pharmaceuticals, Inc. Announces Full Year 2013 Financial Results
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