China Pharma Holdings, Inc. Reports Second Quarter 2021 Financial Results

Rhea-AI Summary

China Pharma Holdings, Inc. (CPHI) reported a 35.9% decline in revenue to $2.4 million for Q2 2021, compared to $3.8 million in Q2 2020, primarily due to a one-time sale of COVID-19 testers in the previous year. The company incurred a net loss of $0.8 million, a drop from a net income of $0.01 million in the same period last year. However, excluding this one-time deal, sales increased 15% year-over-year. The company has repaid a significant loan, reducing future cash flow pressures. Overall, CPHI remains optimistic about opportunities in specialty pharmaceuticals and Traditional Chinese Medicine.

Positive

• Sales increased by 15% excluding one-time COVID-19 tester trade.
• Successfully repaid RMB 80 million ($12.4 million) construction loan, easing cash flow pressure.
• Positive outlook on growth opportunities in specialty pharmaceuticals and TCM.

Negative

• Revenue decreased by 35.9% year-over-year.
• Net loss of $0.8 million compared to net income of $0.01 million in Q2 2020.
• Overall net loss increased to $1.6 million for six months ended June 30, 2021.

HAIKOU, China, Aug. 13, 2021 /PRNewswire/ -- China Pharma Holdings, Inc. (NYSE American: CPHI)  ("China Pharma," the "Company" or "We"), an NYSE American-listed corporation with a fully-integrated specialty pharmaceuticals subsidiary based in China, today announced the financial results for the quarter ended June 30, 2021.

Revenue decreased by 35.9% to $2.4 million for the three months ended June 30, 2021, as compared to $3.8 million for the three months ended June 30, 2020. Net loss for the three months ended June 30, 2021 was $0.8 million, or $0.02 per basic and diluted per share, as compared to net income of $0.01 million for the same period a year ago, or $0.00 per basic and diluted per share in the same period in 2020. This decrease for revenue and net income was mainly due to a one-time foreign trade of COVID-19 testers that contributed approximately $1.7 million to our revenue in the second quarter of 2020, while we did not have similar kind of income in the quarter ended June 30, 2021. Excluding the impact of the one-time deal, our sales increased by 15% over the same period last year.

As of July 10, 2021, we have fully repaid the RMB 80 million (approximately $12.4 million) of the eight-year construction loan facility, which had been fully utilized through May 7, 2014, per the payback schedule. We believe that this will reduce the pressure on the Company's future cash flow and interest expenses.

Revenue was $4.8 million and $5.5 million for the six months ended June 30, 2021 and 2020, respectively.  Net loss for the six months ended June 30, 2021 was $1.6 million, as compared to net loss of $0.6 million for the six months ended June 30, 2020.  The deterioration of the financial performance in the first half of 2021 was also mainly due to the one-time trade of COVID-19 testers in the same period last year; however, it was partially off-traded by the increase in sales of our products portfolio.

Ms. Zhilin Li, China Pharma's Chairman and CEO, commented, "In this quarter, the company continued to focus on the consistency evaluation of existing listed products. Our hypertensive drug Candesartan has passed the bioequivalence experiment, which is the key experiment of the consistency evaluation. At present, we have submitted the application materials to the National Medical Products Administration. In addition, we observed an increasing amount of COVID-19 confirmed cases in several cities in China recently. Therefore, we have correspondingly strengthened the production and sales of our epidemic prevention materials, such as medical surgical masks."

Ms. Li continued, "Overall, we are very optimistic about the company's future given the strong foundation of our business and market, including the favorable policies in Hainan Free Trade Port that encourage the development, manufacture and commercialization of pharmaceutical and comprehensive healthcare products for the benefit of human health.  We see considerable opportunities ahead of us and are working to accelerate our growth in specialty pharma and Traditional Chinese Medicine (TCM)."

About China Pharma Holdings, Inc.

China Pharma Holdings, Inc. (NYSE American: CPHI) is a specialty pharmaceutical company that develops, manufactures and markets a diversified portfolio of products, focusing on conditions with high incidence and high mortality rates in China, including cardiovascular, CNS, infectious, and digestive diseases. The Company's cost-effective business model is driven by market demand and supported by new GMP-certified product lines covering the major dosage forms. In addition, the Company has a broad and expanding nationwide distribution network across all major cities and provinces in China. The Company's wholly-owned subsidiary, Hainan Helpson Medical & Biotechnology Co., Ltd., is located in Haikou City, Hainan Province. For more information about China Pharma Holdings, Inc., please visit www.chinapharmaholdings.com. The Company routinely posts important information on its website.

Safe Harbor Statement 

Certain statements in this press release constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Any statements set forth above that are not historical facts are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties may include, but are not limited to: the achievability of financial guidance; success of new product development; unanticipated changes in product demand; increased competition; downturns in the Chinese economy; uncompetitive levels of research and development; and other information detailed from time to time in the Company's filings and future filings with the United States Securities and Exchange Commission. The forward-looking statements made herein speak only as of the date of this press release and the Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations, except as required by applicable law or regulation.

- FINANCIAL TABLES FOLLOW -

CHINA PHARMA HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
		June 30,		December 31,
		2021		2020
ASSETS
Current Assets:
Cash and cash equivalents		$      1,754,868		$         957,653
Banker's acceptances		-		53,736
Trade accounts receivable, less allowance for doubtful
accounts of $18,316,990 and $18,150,493, respectively		409,675		501,892
Other receivables, less allowance for doubtful
accounts of $30,142 and $22,320, respectively		63,770		27,652
Advances to suppliers		2,963		2,238
Inventory		2,978,060		3,705,119
Prepaid expenses		54,034		73,668
Total Current Assets		5,263,370		5,321,958
Property, plant and equipment, net		14,346,122		15,564,200
Operating lease right of use asset		169,807		49,687
Intangible assets, net		164,942		182,146
TOTAL ASSETS		$    19,944,241		$    21,117,991
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Trade accounts payable		$         687,052		$      1,234,594
Accrued expenses		332,393		177,359
Other payables		3,051,694		2,748,208
Advances from customers		525,579		719,786
Borrowings from related parties		2,824,019		2,134,428
Operating lease liability		83,707		52,070
Construction loan facility		2,167,149		2,298,886
Current portion of lines of credit		2,523,181		2,038,345
Total Current Liabilities		12,194,774		11,403,676
Non-current Liabilities:
Lines of credit, net of current portion		325,072		904,228
Operating lease liability, net of current portion		86,186
Deferred tax liability		813,636		805,556
Total Liabilities		13,419,668		13,113,460
Commitments and Contingencies (Note 9)
Stockholders' Equity:
Preferred stock, $0.001 par value; 5,000,000 shares authorized;
no shares issued or outstanding		-		-
Common stock, $0.001 par value; 95,000,000 shares authorized;
45,579,557 shares and 45,579,557 shares issued and outstanding, respectively		45,580		45,580
Additional paid-in capital		24,452,684		24,452,684
Retained deficit		(30,431,267)		(28,839,179)
Accumulated other comprehensive income		12,457,576		12,345,446
Total Stockholders' Equity		6,524,573		8,004,531
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$    19,944,241		$    21,117,991

 

 

CHINA PHARMA HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)
		For the Three Months				For the Six Months
		Ended June 30,				Ended June 30,
		2021		2020		2021		2020
Revenue		$         2,415,559		$         3,770,723		$         4,773,930		$         5,534,678
Cost of revenue		2,344,559		2,620,925		4,430,200		4,190,441
Gross profit		71,000		1,149,798		343,730		1,344,237
Operating expenses:
Selling expenses		445,478		727,642		823,813		1,053,737
General and administrative expenses		329,758		322,445		738,756		711,004
Research and development expenses		53,456		30,044		243,542		78,863
Bad debt (benefit) expense		(4,744)		(5,318)		(12,965)		24,928
Total operating expenses		823,948		1,074,813		1,793,146		1,868,532
(Loss) income from operations		(752,948)		74,985		(1,449,416)		(524,295)
Other income (expense):
Interest income		579		1,212		985		1,598
Interest expense		(72,392)		(63,144)		(143,657)		(125,147)
Net other expense		(71,813)		(61,932)		(142,672)		(123,549)
(Loss) income before income taxes		(824,761)		13,053		(1,592,088)		(647,844)
Income tax  expense		-		-		-		-
Net (loss) income		(824,761)		13,053		(1,592,088)		(647,844)
Other comprehensive income (loss) - foreign currency
translation adjustment		183,455		5,796		112,130		(191,236)
Comprehensive (loss) income		$           (641,306)		$              18,849		$        (1,479,958)		$           (839,080)
(Loss) Earnings per share:
Basic and diluted		$                 (0.02)		$                  0.00		$                 (0.03)		$                 (0.01)
Weighted average shares outstanding		45,579,557		43,579,557		45,579,557		43,579,557

 

 

CHINA PHARMA HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
		For the Six Months
		Ended June 30,
		2021		2020
Cash Flows from Operating Activities:
Net loss		$     (1,592,088)		$        (647,844)
Depreciation and amortization		1,400,647		1,305,070
Bad debt (benefit) expense		(12,965)		24,928
Inventory write off		121,604
Changes in assets and liabilities:
Trade accounts and other receivables		(120,757)		(305,183)
Advances to suppliers		(702)		(279,380)
Inventory		890,435		(14,136)
Trade accounts payable		(558,912)		(323,470)
Other payables and accrued expenses		447,500		199,781
Change in bankers' acceptance notes payable		-		115,468
Advances from customers		(201,063)		95,579
Prepaid expenses		25,421		(323,553)
Net Cash Provided by (Used in) Operating Activities		399,120		(152,740)
Cash Flows from Investing Activities:
Purchases of property and equipment		(15,022)		(840,449)
Net Cash Used in Investing Activities		(15,022)		(840,449)
Cash Flows from Financing Activities:
Payments of construction term loan		(154,516)		(142,209)
Payments of line of credit		(896,194)		-
Borrowings and interest from related party		932,876		90,551
Repayments to related party		(251,861)		-
Proceeds from lines of credit		772,581		1,919,818
Net Cash provided by Financing Activities		402,886		1,868,160
Effect of Exchange Rate Changes on Cash		10,231		(23,318)
Net Increase in Cash, Cash Equivalents and Restricted Cash		797,215		851,653
Cash and Cash Equivalents at Beginning of Period		957,653		1,184,887
Cash, Cash Equivalents and Restricted Cash at End of Period		$       1,754,868		$       2,036,540
Cash and Cash Equivalents		1,754,868		1,813,544
Restricted cash		-		222,996
Cash, Cash Equivalents and Restricted Cash at End of Period		1,754,868		2,036,540
Supplemental Cash Flow Information:
Cash paid for income taxes		$                      -		$                      -
Cash paid for interest		$          121,090		$          118,374
Supplemental Noncash Investing and Financing Activities:
Accounts receivable collected with banker's acceptances		$          195,021		$          270,453
Inventory purchased with banker's acceptances		249,198		304,520
Right-of-use assets obtained in exchange for operating lease obligations		168,077

 

 

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SOURCE China Pharma Holdings, Inc.

FAQ

What were the financial results of CPHI for the second quarter of 2021?

In Q2 2021, CPHI reported a revenue of $2.4 million, down 35.9% from $3.8 million in Q2 2020.

How did CPHI perform compared to the previous year?

CPHI experienced a net loss of $0.8 million in Q2 2021, contrasting with a net income of $0.01 million for the same period in the previous year.

What impact did COVID-19 tester sales have on CPHI's revenue?

The significant drop in revenue was mainly due to a one-time $1.7 million revenue from COVID-19 testers in Q2 2020 that was not repeated in Q2 2021.

What are CPHI's future prospects according to the recent announcement?

China Pharma is optimistic about future growth opportunities in specialty pharmaceuticals and Traditional Chinese Medicine, supported by favorable policies in Hainan Free Trade Port.