Biostar Pharmaceuticals, Inc. Announces First Quarter 2014 Financial Results

May 15, 2014, 16:01 ET from Biostar Pharmaceuticals, Inc.

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

  • Net sales increased 9% year over year to approximately $13.2 million in the first quarter
  • 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 last year
  • The 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 at www.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: office@aoxing-group.com  

 

 

 

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 shares issued and outstanding as at March 31, 2014 and December 31, 2013

14,326

12,676

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 translation adjustment

(533,979)

437,833

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 development expenses

694,943

796,001

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 issuance and warrants

3,862,533

-

Net cash provided by (used in) financing activities

3,970,225

(1,592,002)

Effect of exchange rate changes on cash and cash equivalents

(20,044)

115,013

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.