2014

Biostar Pharmaceuticals, Inc. Announces First Quarter 2014 Financial Results

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.




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