SINOVAC Reports Unaudited First Half of 2023 Financial Results
- Sales for the first half of 2023 were $140.4 million, compared to $1.2 billion in the prior year period.
- Net income attributable to common shareholders was $14.0 million, compared to $481.6 million in the prior year period.
- Sinovac's broad-spectrum neutralizing antibody products for COVID-19 have been approved for clinical trial in China.
- The decrease in sales was mainly due to decreased sales of CoronaVac®.
- The negative gross margin at 34.2% was caused by the sharply reduced sales of CoronaVac combined with the COVID-19 employee incentive plan established in 2022.
- Non-GAAP adjusted EBITDA was $346.6 million loss in the first half of 2023, compared to $691.3 million income in the prior year period.
First Half of 2023 Financial Summary
-
Sales for the six months ended June 30, 2023 were
, compared to$140.4 million in the prior year period.$1.2 billion -
The Company posted
of net income attributable to common shareholders, or$14.0 million per basic and$0.14 per diluted share, in the six-month period ended June 30, 2023, compared to net income attributable to common shareholders of$0.15 , or$481.6 million per basic and$4.84 per diluted share, in the prior year period.$4.24
Mr. Weidong Yin, Chairman, President and CEO of SINOVAC, commented “After experiencing three years of the COVID-19 pandemic, the world is still facing the threat of various infectious diseases in 2023. The ability to combat global outbreaks remains vital to world health. As a prominent biopharmaceutical products provider in
“Looking ahead, SINOVAC is determined to sustain our business momentum in both domestic and international markets, strengthen our product portfolio and partnerships, and provide many accessible pharmaceutical products to meet the increasing healthcare demand from around the world.”
Business Updates
COVID-19 Antibody Products – SINOVAC’s broad-spectrum neutralizing antibody products, SA55 Injection and Nasal Spray, which are intended for the prevention and treatment of COVID-19 infections, were approved for clinical trial in
Hepatitis A Vaccine – Healive®, the first and only WHO prequalified inactivated hepatitis A vaccine from
Influenza Vaccine – A new and state-of-the-art influenza vaccine production line started operations in
Varicella Vaccine – SINOVAC’s live attenuated varicella vaccine, the first WHO prequalified Chinese varicella vaccine, successfully delivered to the Republic of Türkiye early this year. The vaccine was also registered in
Hand Foot and Mouth Disease Vaccine – SINOVAC’s bivalent inactivated vaccine, developed to combat enterovirus (EV) and coxsackievirus (CV) infections, was approved for clinical trials in
Strategic Development outside of
Unaudited Financial Results for the First Half of 2023
Sales for the first half of 2023 were
Selling, general and administrative expenses in the first half of 2023 were
R&D expenses in the first half of 2023 were
Net loss in the first half of 2023 was
Net income attributable to common shareholders was
As the Company announced on February 22, 2019, the Company’s board of directors determined that certain shareholders became acquiring persons, as defined in the Company’s rights agreement (“Rights Agreement”), under which a trigger event occurred. As a result, the Company issued new common and preferred shares of SINOVAC. Without the effect of implementing the Rights Agreement and newly-issued common and preferred shares, basic and diluted earnings per share for the first half of 2023 would be
Non-GAAP adjusted EBITDA was
As of June 30, 2023, cash and cash equivalents and restricted cash totaled
The Company’s first half of 2023 financial statements are prepared and presented in accordance with
Legal Proceedings
As previously disclosed by the Company, on March 13, 2018, 1Globe Capital LLC (“1Globe”) filed a complaint against the Company in the
As previously disclosed, on March 5, 2018, SINOVAC filed a lawsuit in the Court of Chancery of the
Separately, Heng Ren Investments LP (“Heng Ren”) filed suit against SINOVAC and Weidong Yin for alleged breach of fiduciary duties and wrongful equity dilution on May 31, 2019, in
As previously disclosed by the Company, On December 5, 2022, a purported shareholder filed a putative class action complaint in United States District Court for the District of
Status of Exchange Shares and Trading in the Company’s Shares
As a result of the pending legal proceedings described above, the Exchange Shares are expected to remain in a trust for the benefit of the Company’s shareholders who did not trigger the Rights Plan until, at least, the conclusion of the appeal against the Antigua Judgement and the final disposition of the
About SINOVAC
Sinovac Biotech Ltd. (SINOVAC) is a
SINOVAC’s product portfolio includes vaccines against COVID-19, enterovirus 71 (EV71) infected hand-foot-mouth disease (HFMD), hepatitis A, varicella, influenza, poliomyelitis, pneumococcal disease, mumps, etc.
The COVID-19 vaccine, CoronaVac®, has been approved for use in more than 60 countries and regions worldwide. The hepatitis A vaccine, Healive®, passed WHO prequalification requirements in 2017. The EV71 vaccine, Inlive®, is an innovative vaccine under "Category 1 Preventative Biological Products" and commercialized in
SINOVAC was the first company to be granted approval for its H1N1 influenza vaccine Panflu.1®, which has supplied the Chinese government's vaccination campaign and stockpiling program. The Company is also the only supplier of the H5N1 pandemic influenza vaccine, Panflu®, to the Chinese government stockpiling program.
SINOVAC continually dedicates itself to pipeline development including but not limited to new technology, new vaccines as well as other biomedical products. We will constantly explore global opportunities of strategic expansion.
For more information, please visit the Company’s website at www.sinovac.com.
Safe Harbor Statement
This press release may include certain statements that are not descriptions of historical facts, but are forward-looking statements. These statements are made under the “safe harbor” provisions of the
Non-GAAP Financial Measures
To supplement its consolidated financial statements, which are prepared and presented in accordance with GAAP, SINOVAC uses the following non-GAAP financial measures: non-GAAP adjusted EBITDA, non-GAAP net income and non-GAAP diluted EPS. For more information on these non-GAAP financial measures, please refer to the table captioned “Reconciliations of non-GAAP Measures to the Nearest Comparable GAAP Measures” in this results announcement.
SINOVAC believes that non-GAAP adjusted EBITDA, non-GAAP net income and non-GAAP diluted EPS help identify underlying trends in its business that could otherwise be distorted by the effect of certain income or expenses that SINOVAC includes in net income and diluted EPS. SINOVAC believes that non-GAAP adjusted EBITDA, non-GAAP net income and non-GAAP diluted EPS provide useful information about its core operating results, enhance the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by our management in its financial and operational decision-making. Non-GAAP adjusted EBITDA, non-GAAP net income and non-GAAP diluted EPS should not be considered in isolation or construed as an alternative to income from operations, net income, diluted EPS, or any other measure of performance or as an indicator of SINOVAC’s operating performance. These non-GAAP financial measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to our data.
Non-GAAP adjusted EBITDA represents net income and excludes interest and financing expenses, interest income, net other income and income tax benefit (expenses), and certain non-cash expenses, consisting of share-based compensation expenses, amortization and depreciation that SINOVAC does not believe are reflective of the core operating performance during the periods presented.
Non-GAAP net income represents net income before share-based compensation expenses and foreign exchange gain or loss.
Non-GAAP diluted EPS represents non-GAAP net income attributable to common shareholders divided by the weighted average number of shares outstanding during the periods on a diluted basis, including accounting for the effect of the assumed conversion of options.
SINOVAC BIOTECH LTD. |
|||||
Consolidated Balance Sheets |
|||||
As of June 30, 2023 and December 31, 2022 |
|||||
(Expressed in thousands of |
|||||
June 30, 2023 |
|
December 31, 2022 |
|||
Current assets |
|||||
Cash and cash equivalents |
$ |
1,643,026 |
$ |
4,278,124 |
|
Restricted cash |
3,734 |
8,253 |
|||
Short-term investments |
9,425,778 |
7,034,569 |
|||
Accounts receivable - net |
425,245 |
537,118 |
|||
Inventories |
182,735 |
180,719 |
|||
Prepaid expenses and deposits |
13,312 |
15,242 |
|||
Income tax receivable |
75,195 |
72,371 |
|||
Total current assets |
11,769,025 |
12,126,396 |
|||
Property, plant and equipment – net |
1,058,962 |
993,781 |
|||
Prepaid land lease payments |
65,519 |
69,815 |
|||
Intangible assets - net |
8,753 |
9,699 |
|||
Long-term prepaid expenses |
22 |
23 |
|||
Long-term investments |
657,767 |
661,440 |
|||
Prepayments for acquisition of equipment |
16,292 |
120,912 |
|||
Deferred tax assets |
98,688 |
71,118 |
|||
Right-of-use assets |
47,676 |
58,586 |
|||
Other Non-current Assets |
2,306 |
2,798 |
|||
Total assets |
13,725,010 |
14,114,568 |
|||
Current liabilities |
|||||
Short-term bank loans and current portion of long-term bank loans |
201,118 |
293 |
|||
Loan from a non-controlling shareholder |
4,159 |
4,358 |
|||
Accounts payable and accrued liabilities |
819,530 |
905,923 |
|||
Deferred revenue |
15,153 |
17,955 |
|||
Deferred government grants |
4,132 |
15,120 |
|||
Dividend payable |
139,547 |
141,993 |
|||
Lease liability |
5,990 |
5,993 |
|||
Total current liabilities |
1,189,629 |
1,091,635 |
|||
Deferred government grants |
6,548 |
4,477 |
|||
Long-term bank loans |
10,989 |
11,513 |
|||
Deferred tax liability |
239,029 |
241,526 |
|||
Lease liability |
40,929 |
52,516 |
|||
Other non-current liabilities |
630 |
240 |
|||
Total long-term liabilities |
298,125 |
310,272 |
|||
Total liabilities |
1,487,754 |
1,401,907 |
|||
Commitments and contingencies |
|||||
Equity |
|||||
Preferred stock |
15 |
15 |
|||
Common stock |
100 |
100 |
|||
Additional paid-in capital |
541,258 |
540,582 |
|||
Accumulated other comprehensive loss |
(654,462) |
(383,276) |
|||
Statutory surplus reserves |
1,538,013 |
1,538,013 |
|||
Accumulated earnings |
7,239,947 |
7,225,987 |
|||
Total shareholders' equity |
8,664,871 |
8,921,421 |
|||
Non-controlling interests |
3,572,385 |
3,791,240 |
|||
Total equity |
12,237,256 |
12,712,661 |
|||
Total liabilities and equity |
$ |
13,725,010 |
$ |
14,114,568 |
SINOVAC BIOTECH LTD. |
||||||
Consolidated Statements of Comprehensive Income |
||||||
For the six months ended 2023 and 2022 |
||||||
(Expressed in thousands of |
||||||
Six months ended June 30 |
||||||
2023 |
2022 |
|||||
Sales |
$ |
140,404 |
$ |
1,212,290 |
||
Cost of sales |
188,409 |
254,362 |
||||
Gross profit (loss) |
(48,005) |
957,928 |
||||
Selling, general and administrative expenses |
231,048 |
155,880 |
||||
Provision for doubtful accounts |
386 |
807 |
||||
Research and development expenses |
151,132 |
184,394 |
||||
Loss on disposal of property, plant and equipment |
312 |
3,286 |
||||
Government grants recognized in income |
(92) |
(14) |
||||
Total operating expenses |
382,786 |
344,353 |
||||
Operating income (loss) |
(430,791) |
613,575 |
||||
Interest and financing expenses |
(264) |
(623) |
||||
Interest income |
29,589 |
83,998 |
||||
Other income, net |
337,856 |
229,458 |
||||
Income (Loss) before income taxes |
(63,610) |
926,408 |
||||
Income tax benefit (expense) |
33,597 |
(135,962) |
||||
Net income (loss) |
(30,013) |
790,446 |
||||
Less: (income) loss attributable to non-controlling interests |
46,931 |
(305,934) |
||||
Net income attributable to shareholders of Sinovac |
16,918 |
484,512 |
||||
Preferred stock dividends |
(2,958) |
(2,958) |
||||
Net income attributable to common shareholders of Sinovac |
13,960 |
481,554 |
||||
Net income (loss) |
(30,013) |
790,446 |
||||
Other comprehensive income, net of tax of nil |
||||||
Foreign currency translation adjustments |
(441,560) |
(579,251) |
||||
Comprehensive income (loss) |
(471,573) |
211,195 |
||||
Less: comprehensive (income) loss attributable to non- controlling interests |
217,305 |
(74,774) |
||||
Comprehensive income (loss) attributable to shareholders of Sinovac |
(254,268) |
136,421 |
||||
Earnings per share |
||||||
Basic net income per share |
0.14 |
4.84 |
||||
Diluted net income per share |
0.15 |
4.24 |
||||
Weighted average number of shares of common stock outstanding |
||||||
Basic |
99,576,600 |
99,502,243 |
||||
Diluted |
114,227,276 |
114,172,782 |
SINOVAC BIOTECH LTD. |
||||||
Consolidated Statements of Cash Flows |
||||||
For the six months ended 2023 and 2022 |
||||||
(Expressed in thousands of |
||||||
Six months ended June 30 |
||||||
2023 |
2022 |
|||||
Operating activities |
||||||
Net income (loss) |
$ |
(30,013) |
$ |
790,446 |
||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||
Deferred income taxes |
(32,124) |
(15,837) |
||||
Inventory provision |
12,624 |
56,203 |
||||
Provision for doubtful accounts |
386 |
807 |
||||
Loss on disposal of property, plant and equipment |
312 |
3,286 |
||||
Depreciation of property, plant and equipment |
82,484 |
75,159 |
||||
Amortization of prepaid land lease payments |
1,138 |
2,503 |
||||
Amortization of intangible assets |
527 |
97 |
||||
Government grants recognized in income |
(92) |
(14) |
||||
Loss from equity method investments |
374 |
- |
||||
Investment income |
(75,612) |
- |
||||
Changes in: |
||||||
Accounts receivable |
90,434 |
(140,015) |
||||
Inventories |
(23,296) |
37,251 |
||||
Other non-current assets |
2,785 |
- |
||||
Income tax payable |
(5,824) |
(1,083,624) |
||||
Prepaid expenses and deposits |
1,583 |
133,914 |
||||
Deferred revenue |
(2,074) |
(45,121) |
||||
Accounts payable and accrued liabilities |
(47,208) |
(622,923) |
||||
Deferred government grants |
(16,813) |
- |
||||
Other non-current liabilities |
418 |
(298) |
||||
Net cash used in operating activities |
(39,991) |
(808,166) |
||||
Financing activities |
||||||
Proceeds from bank loans |
209,587 |
199 |
||||
Repayments of bank loans |
(150) |
(3,038) |
||||
Proceeds from issuance of common stock, net of share issuance costs |
676 |
- |
||||
Dividend paid to non-controlling shareholders |
(1,616) |
(2,469) |
||||
Proceeds from subsidiary's financing |
12,000 |
|||||
Government grants received |
8,668 |
5,021 |
||||
Repayments of loan from a non-controlling shareholder |
(1) |
(12) |
||||
Net cash provided by financing activities |
217,164 |
11,701 |
||||
Investing activities |
||||||
Purchase of short-term investments |
(6,628,110) |
(15,123,334) |
||||
Proceeds from redemption of short-term investments |
4,013,372 |
11,890,425 |
||||
Proceeds from disposal of equipment |
37 |
603 |
||||
Prepaid land lease payments |
- |
(9,658) |
||||
Acquisition of property, plant and equipment |
(92,942) |
(279,398) |
||||
Acquisition of intangible assets |
- |
- |
||||
Purchase of long-term investments |
(24,792) |
(63,280) |
||||
Distributions of equity method investees |
1,342 |
- |
||||
Proceeds from sale or maturity of long-term investments |
146 |
|||||
|
|
|||||
Net cash used in investing activities |
(2,730,947) |
(3,584,642) |
||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash |
(85,843) |
(371,559) |
||||
Decrease in cash and cash equivalents and restricted cash |
(2,639,617) |
(4,752,666) |
||||
Cash and cash equivalents and restricted cash, beginning of period |
4,286,377 |
(3,584,642) |
||||
Cash and cash equivalents and restricted cash, end of period |
1,646,760 |
(8,337,308) |
SINOVAC BIOTECH LTD. |
||||||
Reconciliations of Non-GAAP measures to the nearest comparable GAAP measures |
||||||
For the six months ended 2023 and 2022 |
||||||
(Expressed in thousands of |
||||||
Six months ended June 30 |
||||||
2023 |
2022 |
|||||
(Unaudited) |
(Unaudited) |
|||||
Net income (loss) |
$ |
(30,013) |
$ |
790,446 |
||
Adjustments: |
||||||
Depreciation and amortization |
84,149 |
77,759 |
||||
Interest income, net of interest and financing expenses |
(29,325) |
(83,375) |
||||
Other income, net |
(337,856) |
(229,458) |
||||
Income tax benefit (expense) |
(33,597) |
135,962 |
||||
Non-GAAP adjusted EBITDA |
(346,642) |
|
691,334 |
|||
Net income (loss) |
(30,013) |
790,446 |
||||
Less: Foreign exchange gain |
(90,851) |
(161,619) |
||||
Non-GAAP net income (loss) |
(120,864) |
|
628,827 |
|||
Net income attributable to common shareholders of |
||||||
Sinovac |
13,960 |
481,554 |
||||
Add: Preferred stock dividends |
2,958 |
|
2,958 |
|||
Net income attributable to common shareholders of |
|
|||||
Sinovac for computing diluted earnings per share |
16,918 |
484,512 |
||||
Add: Non-GAAP adjustments to net income |
(53,349) |
(95,093) |
||||
Non-GAAP net income attributable to common |
|
|||||
shareholders of Sinovac for computing non-GAAP |
||||||
diluted earnings per share |
(36,431) |
389,419 |
||||
Weighted average number of shares on a diluted |
|
|
||||
basis |
114,227,276 |
114,172,782 |
||||
Diluted earnings per share |
0.15 |
4.24 |
||||
Add: Non-GAAP adjustments to net income per share |
(0.47) |
(0.83) |
||||
Non-GAAP diluted earnings per share |
(0.32) |
3.41 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230815454546/en/
Sinovac Biotech Ltd.
Helen Yang
Tel: +86-10-8279 9720
Email: ir@sinovac.com
Source: Sinovac Biotech Ltd.
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