Biostar Pharmaceuticals, Inc. Announces Second Quarter 2014 Financial Results -- Revenue increased by 31% to $19.2 million

-- Net income increased to $1.65 million as compared to a net loss of $.73 million last year

-- Diluted EPS of $0.11

XIANYANG, China, Aug 14, 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 for the second quarter ended June 30, 2014.

Highlights for the Second Quarter 2014

  • Net sales increased by 31% year over year to $19.20 million, as compared to $14.65 million for the same period in 2013.
  • Sales of Aoxing new products were up 411% in the second quarter to approximately $2.57 million as compared to about 0.50 million in second quarter of 2013.
  • Net income increased to $1.65 million for the second quarter 2014 as compared with a net loss of ($0.73) million for the same period of last year.
  • Q2 diluted earnings per share (EPS) was $0.11 as compared with a net loss per share of $0.06 for the three months ended June 30, 2013.

Summary of Financial Results:

(In '000s of U.S. Dollars, except for per share data)

Three months ended June 30


2014

2013

Total Sales

19,199

14,651

Gross Profit

9,268

6,879

Total Operating Expense

8,812

7,674

Total Operating Income (loss)

455

(795)

Net Income (loss)

1,645

(731)

Basic EPS

0.11

(0.06)

Diluted EPS

0.11

(0.06)

Mr. Ronghua Wang, Chairman and CEO of Biostar Pharmaceutical, commented: "We are excited to deliver a strong fiscal quarter, which not only results in a 31% top line revenue growth, thanks to our strong performance in new product and Weinan division, but also a turnaround of our bottom line result. During the quarter, we launched production of two new drugs, QingWeiLiChang Capsules and ChangKang Capsules.  As we continue to strengthen quality control in product safety, we believe we are winning back our customers when it comes to Xin Ao Xing Oleanolic Acid Capsule, our flagship drug for the treatment of chronic Hepatitis B virus (HBV)."

"In July, we began to assemble a new sales team to market Biostar's proprietary drug products to hospitals in Beijing, Hebei, Liaoning and Henan," concluded Chairman Wang, "With our continued focus on new drug development and innovative sales and marketing, we expect the positive momentum we have in the recent quarter shall continue into second half of 2014."

Second Quarter 2014 Financial Results

Net Sales

For the three months ended June 30, 2014, total net sales increased by approximately $4.5 million or 31.0% compared to the same period in 2013. The increase is mainly attributable to the increase in sales volume of other Aoxing products, hospital products, and Weinan products and the addition of 2 new products at Aoxing. We believe that the increase in sales volume is mainly due to the increased acceptance of our products by hospitals. Our sales prices did not materially change in the first six months of 2014.

Gross Profit and Gross Margin

Gross profit increased by approximately $2.4 million or 34.7% for the three months ended June 30, 2014, as compared to the same period in 2013. The increase in gross profit was due primarily to the increase in sales volume of Other Aoxing Pharmaceutical products and Weinan existing products. The addition of 2 new products at Aoxing also contributed to the increase in gross profit.

The overall gross profit margin was largely unchanged in the second quarter of 2014 compared to the same period of last year mainly because the increase in labor cost was offset by the decrease in the cost of sales of Xin Aoxing. 

Operating Expenses

Total operating expense increased by approximately $1.1 million or 14.8% for the three months ended June 30, 2014, as compared to the same period last year.  The increase is attributable to the increase in general and administrative expenses. During the period ended June 30, 2014 and 2013, the Company made provision for doubtful accounts of $1.5 million and Nil.

Net Income (loss) and Earnings per Share

Net income attributable to Biostar Pharmaceuticals, Inc.'s ordinary shareholders for this quarter was $1.65 million, compared with a net loss of $0.73 million in the same period in 2013.

Basic and diluted income per share of this quarter was $0.11, compared with net loss per share $0.06 in second quarter of last year.

Financial Position

As of June 30, 2014, the Company had cash and cash equivalents of approximately $9.3 million, and net working capital of approximately $36.4 million. Total current assets were $46.28 million and current liabilities were $9.28 million. Total shareholders' equity was $67.39 million, as compared to $62.77 million as of December 31, 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 Xin Aoxing Oleanolic 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 sustain its sales effort going forward, its ability to retain existing and retain new customers for its products, its ability to achieve the projected sales through the efforts of the call center, 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, 2011, 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.

 

BIOSTAR PHARMACEUTICALS, INC


CONSOLIDATED BALANCE SHEETS










June 30,


December 31,



2014


2013



(Unaudited)





ASSETS









Current Assets







Cash and cash equivalents


$

9,341,104



$

80,072


Note receivable



-




1,636,072


Accounts receivable, net of allowance for doubtful accounts of $6,273,091 (December, 2013 : $2,454,108)



24,665,180




17,965,082


Inventories



669,783




830,311


Deposits and other receivables



1,391,692




5,282,574


Income tax recoverable



464,226




374,958


Loan receivables



9,747,855




9,816,433


Total Current Assets



46,279,840




35,985,502











Non-current Assets









Deposits



3,899,142




3,926,573


Deferred tax assets



3,509,225




2,789,175


Property and equipment, net



7,877,407




7,728,700


Intangible assets, net



15,672,232




17,134,494











Total Assets


$

77,237,846



$

67,564,444











LIABILITIES AND STOCKHOLDERS' EQUITY











Current Liabilities









Accounts and other payables


$

5,489,117



$

4,447,314


Short-term bank loans



3,249,285




-


Value-added tax payable



540,899




344,191


Total Current Liabilities



9,279,301




4,791,505











Non-current Liability









Warrant liabilities



567,732




-


Total Liabilities



9,847,033




4,791,505











Commitment  


















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 June 30, 2014 and December 31, 2013



14,326




12,676


Additional paid-in capital



28,648,658




25,748,669


Deferred stock-based compensation



(165,917)




(365,017)


Statutory reserves



7,126,432




7,126,432


Retained earnings



25,601,890




23,649,725


Accumulated other comprehensive income



6,165,424




6,600,454


Total Stockholders' Equity



67,390,813




62,772,939











Total Liabilities and Stockholders' Equity


$

77,237,846



$

67,564,444


 

 

 

BIOSTAR PHARMACEUTICALS, INC


CONSOLIDATED STATEMENTS OF OPERATIONS


AND COMPREHENSIVE (LOSS) INCOME


(Unaudited)











Three months ended June 30,



Six months ended June 30,




2014



2013



2014



2013















Sales, net


$

19,198,854



$

14,650,854



$

32,380,018



$

26,742,763


Cost of sales



9,931,316




7,771,404




15,859,392




13,174,423


Gross profit



9,267,538




6,879,450




16,520,626




13,568,340



















Operating expenses:

















Advertising expenses



2,318,826




2,550,271




4,107,367




4,436,952


Selling expenses



2,537,288




2,621,288




4,472,010




4,818,634


General and administrative expenses



3,266,588




1,458,818




6,864,581




2,536,566


Research and development expenses



689,488




805,613




1,384,432




1,601,614


Impairment of intangible assets



-




238,192




-




238,192


Total operating expenses



8,812,190




7,674,182




16,828,390




13,631,958



















Income (loss) from operations



455,348




(794,732)




(307,764)




(63,618)



















Other income (expense)

















Interest income



334,467




331,404




650,898




786,635


Interest expense



-




(99,521)




-




(195,209)


Fair value adjustment on warrants



393,162




-




393,162




-


Other income (expense)



(4,132)




635




1,048,460




(1,463)





723,497




232,518




2,092,520




589,963



















Income (loss) before income taxes



1,178,845




(562,214)




1,784,756




526,345



















Provision for income tax (recovery)



(466,649)




168,766




(167,408)




696,351



















Net Income (loss)



1,645,494




(730,980)



$

1,952,164



$

(170,006)



















Foreign currency translation adjustment



98,949




942,176




(435,030)




1,380,009



















Comprehensive income


$

1,744,443



$

211,196



$

1,517,134



$

1,210,003



















Net income (loss) per share

















Basic


$

0.11



$

(0.06)



$

0.14



$

(0.02)


Diluted



0.11




(0.06)




0.14




(0.02)



















Weighted average number of common shares outstanding

















Basic



14,326,113




11,560,501




13,678,875




10,777,025


Diluted



14,326,113




11,560,501




13,681,830




10,777,025


 

BIOSTAR PHARMACEUTICALS, INC


CONSOLIDATED STATEMENTS OF CASH FLOWS


(Unaudited)











Six Months Ended June 30,




2014



2013


CASH FLOWS FROM OPERATING ACTIVITIES







Net income


$

1,952,164



$

(170,006)


Adjustments to reconcile net income to net cash provided by operating activities:









Accrued interest



-




(759,824)


Deferred tax expense (benefit)



(741,402)




230,899


Depreciation and amortization



1,591,581




1,223,460


Provision for doubtful accounts



3,845,811




-


Loss on disposal



3,277




-


Recognition of deferred research and development expenses



1,384,433




1,601,614


Stock-based compensation



199,100




6,147


Warrant liability



(393,162)




-


Impairment of intangible assets



-




238,192











Changes in operating assets and liabilities:









Accounts receivable



(9,059,901)




8,736,339


Inventories



155,118




(871,434)


Deposits and other receivables



916,527




350,570


Accounts payable and accrued expenses



1,075,535




(304,802)


Value-added tax payable



199,615




(202,051)


Income tax payable/recoverable



(92,119)




108,142


Net cash provided by operating activities



1,036,577




10,187,246











CASH FLOWS FROM INVESTING ACTIVITIES









Purchase of property, plant and equipment



(479,792)




(955,052)


Sales proceed of property, plant and equipment



2,932




-


Settlement of outstanding receivable from disposal of land use right



1,562,749




290,076


Net cash provided by (used in) investing activities



1,085,889




(664,976)











CASH FLOWS FROM FINANCING ACTIVITIES









Proceed of bank loan



3,257,488




-


Advance from (repayment to) a related party



33,944




(1,601,614)


Proceeds from stock issuance and warrants



3,862,533




-


Net cash provided by (used in) financing activities



7,153,965




(1,601,614)











Effect of exchange rate changes on cash and cash equivalents



(15,399)




271,419











Net increase in cash and cash equivalents



9,261,032




8,192,075











Cash and cash equivalents, beginning balance



80,072




1,759,078


Cash and cash equivalents, ending balance


$

9,341,104



$

9,951,153











SUPPLEMENTAL DISCLOSURES:









Interest (payments)


$

-



$

(189,359)


Income tax (payments)


$

(526,770)



$

(559,441)


 

SOURCE Biostar Pharmaceuticals, Inc.



RELATED LINKS
http://www.biostarpharmaceuticals.com

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