Biostar Pharmaceuticals, Inc. Announces First Quarter 2014 Financial Results PR Newswire XIANYANG, China, May 15, 2014 XIANYANG, China, May 15, 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 of the first quarter ended March 31, 2014. Financial highlights oNet sales increased 9% year over year to approximately $13.2 million in the first quarter oGross profit increased by approximately $0.6 million or 8.4% for the three months ended March 31, 2014 as compared to the same period last year oThe net sales of other Aoxing products increased 18.8% and Weinan products including 4 new products increased 42% Three Months Ended March 31, 2014 2013 Sales, net $ 13,181,164 $ 12,091,909 Gross profit $ 7,253,088 6,688,890 First Quarter 2014 Financial Results Revenue for the first quarter of 2014 increased 9.0% to approximately $13.2 million compared to $12.1 million for the first quarter of 2013.The increase is mainly attributable to the increase in sales volume of other Aoxing products and Weinan products and the addition of 4 new products at Shaanxi Weinan. The increase in sales volume is mainly due to the positive image spread by the hospital using our products. Our sales prices didn't change much in the first quarter of 2014. Cost of goods sold for the three months ended March 31, 2014 was approximately $5.9 million, increased by approximately $0.5 million or 9.7%, compared to the same period in 2013. This increase is mainly due to the increase in sales volume of other Aoxing products and Weinan existing products and the addition of 4 new products at Shaanxi Weinan. The increase in the production workers' salary also contributed to the increase in the cost of sales. Gross profit increased by approximately $0.6 million or 8.4% for the three months ended March 31, 2014, as compared to the same period in 2013. The overall gross profit margin for the first quarter of 2014 was approximately 55.0%, largely unchanged compared to the same period of 2013 mainly because the increase in labor cost was offset by the decrease in the cost of sales of XinAoxing products. Operating expenses for the three months ended March 31, 2014 were approximately $8.0 million, an increase of approximately $2.1 million or34.5% compared to the same period last year. The increase was mainly attributable to the increase in general and administrative expenses. During the period ended March 31, 2014, the Company made provision for doubtful accounts of $2.3 million. Advertising expenses and selling expenses decreased approximately $0.1 million and $0.3 million respectively. As market of our products and sales channels is becoming more established, and our brands are becoming more well-known to households, we have been reducing the amount spent on advertising campaigns and selling activities. Net income was approximately $0.3 million for the first quarter of 2014, a decrease of approximately $0.3 million compared to the $0.6 million for the first quarter of 2013. Diluted earnings per share were $0.02 for the first quarter of 2014 compared to $0.06 for the first quarter of 2013, based upon approximately 13.0 million and 10.0 million diluted common shares outstanding, respectively. Balance Sheet and Cash Flow Cash and cash equivalents totaled approximately $7.1 million on March 31, 2014, compared to $0.1 million on December 31, 2013. Accounts receivable balance was approximately $19.0 million on March 31, 2014, versus approximately $18.0 million on December 31, 2013. The Company had a current ratio of 6.0 to 1 and stockholders' equity of approximately $65.5 million, with total assets of approximately $72.4 million versus total liabilities of approximately $6.9 million on March 31, 2014. For the first three months of 2014 the Company generated approximately $3.1 million in cash from operations versus $6.2 million in cash generated from operations reported for the same period in 2013. 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 XinAoxingOleanolic 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, 2013, 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: Biostar Pharmaceuticals, Inc. Ally Gong Tel: +86-29-3368-6638 Email: firstname.lastname@example.org BIOSTAR PHARMACEUTICALS, INC CONSOLIDATED BALANCE SHEETS March 31, December 31, 2014 2013 (Unaudited) ASSETS Current Assets Cash and cash equivalents $ 7,132,558 $ 80,072 Note receivable 1,622,876 1,636,072 Accounts receivable, net 18,992,045 17,965,082 Inventories 732,878 830,311 Deposits and other receivables 3,164,607 5,282,574 Income tax recoverable 30,794 374,958 Loan receivables 10,049,382 9,816,433 Total Current Assets 41,725,140 35,985,502 Non-current Assets Deposits 3,894,903 3,926,573 Deferred tax assets 2,902,771 2,789,175 Property and equipment, net 7,527,318 7,728,700 Intangible assets, net 16,378,191 17,134,494 Total Assets $ 72,428,323 $ 67,564,444 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts and other payables $ 5,367,568 $ 4,447,314 Due to a related party 107,677 - Value-added tax payable 445,365 344,191 Warrant liabilities 960,894 - Total Current Liabilities 6,881,504 4,791,505 Commitment and contingencies Stockholders' Equity Common stock, $0.001 par value, 100,000,000 shares authorized, 14,326,113 and 12,676,113 14,326 12,676 shares issued and outstanding as at March 31, 2014 and December 31, 2013 Additional paid-in capital 28,648,658 25,748,669 Deferred stock-based compensation (265,467) (365,017) Statutory reserve 7,126,432 7,126,432 Retained earnings 23,956,395 23,649,725 Accumulated other comprehensive income 6,066,475 6,600,454 Total Stockholders' Equity 65,546,819 62,772,939 Total Liabilities and Stockholders' Equity $ 72,428,323 $ 67,564,444 BIOSTAR PHARMACEUTICALS, INC CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME (Unaudited) Three Months Ended March 31, 2014 2013 Sales, net $ 13,181,164 $ 12,091,909 Cost of sales 5,928,076 5,403,019 Gross profit 7,253,088 6,688,890 Operating expenses: Advertising expenses 1,788,541 1,886,681 Selling expenses 1,934,722 2,197,346 General and administrative expenses 3,597,993 1,077,748 Research and development expenses 694,944 796,001 Total operating expenses 8,016,200 5,957,776 Income (Loss) from operations (763,112) 731,114 Other income (expense) Interest income 316,431 455,231 Interest expense - (95,688) Other income 1,099,292 - Other expense (46,700) (2,098) 1,369,023 357,445 Income before income taxes 605,911 1,088,559 Provision for income tax 299,241 527,585 Net income $ 306,670 $ 560,974 Other comprehensive income - foreign currency (533,979) 437,833 translation adjustment Comprehensive income (loss) $ (227,309) $ 998,807 Net income per share Basic $ 0.02 $ 0.06 Diluted $ 0.02 $ 0.06 Weighted average number of common shares outstanding Basic 13,024,446 9,993,549 Diluted 13,030,643 9,993,549 BIOSTAR PHARMACEUTICALS, INC CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended March 31, 2014 2013 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 306,670 $ 560,974 Adjustments to reconcile net income to net cash provided by operating activities: Accrued interest (314,489) (449,075) Deferred tax expense (benefit) (137,124) 360,387 Depreciation and amortization 736,124 458,931 Provision for doubtful accounts 2,269,688 - Recognition of deferred research and 694,943 796,001 development expenses Stock-based compensation 99,550 6,147 Changes in operating assets and liabilities: Accounts receivable (3,450,423) 5,457,403 Inventories 91,423 (562,015) Deposits and other receivables 1,396,128 (764,161) Accounts payable and accrued expenses 963,311 507,140 Value-added tax payable 104,737 (170,796) Income tax payable/recoverable 343,723 (21,547) Net cash provided by operating activities 3,104,261 6,179,389 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment (1,957) (4,352) Net cash (used in) investing activities (1,957) (4,352) CASH FLOWS FROM FINANCING ACTIVITIES Advance from (repayment to) a related party 107,692 (1,592,002) Proceeds from stock issuanceand warrants 3,862,533 - Net cash provided by (used in) financing 3,970,225 (1,592,002) activities Effect of exchange rate changes on cash and (20,044) 115,013 cash equivalents Net increase in cash and cash equivalents 7,052,486 4,698,048 Cash and cash equivalents, beginning balance 80,072 1,759,078 Cash and cash equivalents, ending balance $ 7,132,558 $ 6,457,126 SUPPLEMENTAL DISCLOSURES: Interest received $ 1,943 $ 6,945 Interest (payments) $ - $ 93,132 Income tax (payments) $ 92,641 $ 188,745 SOURCE Biostar Pharmaceuticals, Inc.
Biostar Pharmaceuticals, Inc. Announces First Quarter 2014 Financial Results
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