Sinovac Reports Unaudited Third Quarter Financial Results

-- Conference call scheduled for Thursday, November 12, 2015 at 8:00 AM ET --

Nov 11, 2015, 18:00 ET from Sinovac Biotech Co., Ltd.

BEIJING, Nov. 11, 2015 /PRNewswire/ -- Sinovac Biotech Ltd. (NASDAQ: SVA), a leading provider of biopharmaceutical products in China, announced today its unaudited third quarter and nine month financial results for the period ended September 30, 2015.

Third Quarter 2015 Financial Highlights
(compared to the third quarter of 2014)

  • Quarterly sales were $16.8 million, a decrease of 2.0% from $17.1 million in the comparative period. This decline was largely due to changes in exchange rate.
  • Gross profit was $11.2 million, a decrease of 8.3% from $12.2 million in the prior year period. Gross margin was 66.4%, compared to 70.9% in the prior year period.
  • Net loss attributable to common shareholders was $1.6 million, or $(0.03) per basic and diluted share, compared to net income attributable to common shareholders of $89,000, or $0.00 per basic and diluted share, in the third quarter of 2014.

Mr. Weidong Yin, Chairman, President and CEO of Sinovac, commented, "Our results this quarter reflect consistent recurring sales of our core products. We are pleased to announce that the site inspection and GMP inspection for production of our EV71 vaccine have been completed, which is a critical step in the final phase of the approval process. We expect to receive final approval for production from the CFDA by early next year. Also, we were pleased to receive clinical trial approval for our varicella vaccine candidate. This live-attenuated vaccine will be an important addition to our product portfolio and will serve as a component in our pipeline measles-mumps-rubella-varicella (MMRV) combination vaccine. We continue to focus on maximizing the distribution of our core vaccine products, as we advance our product pipeline to drive growth for years to come."

Third Quarter 2015 Business Highlights

Sales and Marketing

In October, Sinovac received a tender from the Jiangsu provincial government to be the supplier of hepatitis A vaccines for the third consecutive year. Under this agreement, Sinovac became the sole supplier of the 2015 hepatitis A vaccine tender in Jiangsu for the first time and will provide 1.1 million doses of its inactivated hepatitis A vaccines over the next 12 months to the Jiangsu provincial government.

As previously announced, Sinovac was also awarded a tender from the Beijing government to supply seasonal influenza vaccines for its 2015 vaccination campaign. The Beijing government plans to order a minimum of 1.2 million doses of the seasonal flu vaccine this year from four domestic vaccine manufacturers for its campaign.

Research and Development

EV71 The site inspection and GMP inspection of the Company's EV71 vaccine production facility have been completed. The vaccine samples have passed the required testing by the CFDA. Sinovac expects to receive final approval for its EV71 vaccine by early 2016.

Varicella Vaccine Sinovac obtained approval from the CFDA to begin human clinical trials on its varicella vaccine candidate. The Company is currently confirming the site, training staff and preparing for volunteer screening. Sinovac expects the clinical trials to be completed by 2017. Sinovac is currently renovating an existing building on its Dalian campus, which will serve as the commercial production plant for the varicella vaccine. The plant will have a designed annual capacity of 5,000,000 doses.

Unaudited Financial Results for Third Quarter 2015



2015 Q3

% of Sales

2014 Q3

% of Sales

(In USD'000 except percentage data)

Hepatitis A - Healive


4,800

28.6%

3,967

23.1%

Hepatitis A&B - Bilive


3,701

22.0%

3,176

18.5%

Hepatitis vaccines subtotal


8,501

50.6%

7,143

41.6%

Influenza vaccine


8,032

47.8%

9,647

56.3%

Animal vaccine


33

0.2%

102

0.6%

Mumps vaccine


231

1.4%

254

1.5%

Regular sales


16,797

100.0%

17,146

100.0%

H5N1


-

-

-

-

Total sales


16,797

100.0%

17,146

100.0%

Cost of sales


5,643

33.6%

4,986

29.1%

Gross profit


11,154

66.4%

12,160

70.9%

Total sales in the third quarter of 2015 were $16.8 million, a decrease of 2.0% compared to $17.1 million in the same period of 2014. The slight decrease is attributable to the depreciation of the Chinese RMB against the US dollar.

Gross profit was $11.2 million in the third quarter of 2015, compared to $12.2 million in the prior year period. Gross margin decreased to 66.4% from 70.9% in the prior year period. The decrease is primarily due to a lower utilization rate of the Company's production facilities in 2015. Additionally, in the third quarter of 2015, the Company delivered more Healive to the public market, which resulted in a lower average selling price of products sold compared to the prior year period.

Selling, general and administrative expenses in the third quarter of 2015 were $10.1 million, compared to $8.5 million in the same period of 2014. The increase was mainly due to increased G&A expenses associated with the trial production of the EV71 vaccine for the site inspection.

R&D expenses in the third quarter of 2015 were $2.2 million, compared to $2.5 million in the same period of 2014.

Net loss attributable to common shareholders for the third quarter of 2015 was $1.6 million, or $ (0.03) per basic and diluted share, compared to a net income attributable to common shareholders of $89,000, or $0.00 per basic and diluted share, in the same period last year.

Unaudited Financial Results for nine months ended September 30, 2015



2015 YTD

% of Sales

2014 YTD

% of Sales

(In USD'000 except percentage data)

Hepatitis A - Healive


16,185

36.3%

15,519

36.3%

Hepatitis A&B - Bilive


17,972

40.3%

15,613

36.5%

Hepatitis vaccines subtotal


34,157

76.6%

31,132

72.8%

Influenza vaccine


9,144

20.5%

9,708

22.7%

Animal vaccine


113

0.3%

147

0.3%

Mumps vaccine


1,161

2.6%

1,693

4.0%

Regular sales


44,575

100.0%

42,680

99.8%







H5N1


-

-

102

0.2%

Total sales


44,575

100.0%

42,782

100.0%

Cost of sales


11,484

25.8%

11,289

26.4%







Gross profit


33,091

74.2%

31,493

73.6%

Total sales in the first nine months of 2015 were $44.6 million, an increase of 4.2% from $42.8 million in the same period of 2014. The increase is primarily due to increased sales of Healive into the public market and increased sales of Bilive into the private-pay market.

Gross profit in the first nine months of 2015 was $33.1 million, an increase of 5.1% from $31.5 million in the same period of 2014. Gross margin was 74.2%, compared to 73.6% in the same period of 2014.

Selling, general and administrative expenses in the first nine months of 2015 were $26.2 million, compared with $24.9 million in the same period of 2014.The increase was mainly due to increased G&A expenses associated with the trial production of the EV71 vaccine for the site inspection.

R&D expenses in the first nine months of 2015 were $6.6 million, compared to $7.5 million in the same period of 2014.

Net loss attributable to common shareholders in the first nine months of 2015 was $1.6 million, or $(0.03) per basic and diluted share, compared to net loss of $2.2 million, or $(0.04) per basic and diluted share, in the same period of 2014.

As of September 30, 2015, cash and cash equivalents totaled $54.4 million, compared to $91.5 million as of December 31, 2014. In the first nine months of 2015, net cash used in operating activities was $11.0 million. Net cash used in investing activities was $3.4 million, which was for the payment of property, plant and equipment. Net cash used in financing activities was $21.9 million, including loan proceeds of $14.4 million and loan repayment of $37.2 million. As of September 30, 2015, the Company had $24.9 million of bank loans due within one year. The Company expects that its current cash position will be able to support its operations for the next 12 months. The Company will seek new commercial bank loans to finance the commercialization of its pipeline products and for other operational purposes when appropriate.

Conference Call Details

Sinovac will host a conference call on Thursday, November 12, 2015 at 8:00 a.m. ET (November 12, 2015 at 9:00 p.m. China Standard Time) to review the Company's financial results and provide an update on recent corporate developments. To access the conference call, please dial 1-877-407-9039 (USA) or 1-201-689-8470 (International). A replay of the call will be available from 11:00 a.m. ET on November 13, 2015 through November 27, 2015. To access the replay, please dial 1-877-870-5176 (USA) or 1-858-384-5517 (International) and reference the replay pin number 13616892.

A live audio webcast of the call will also be available on the Investor Relations section of the Company's website at www.sinovac.com. A webcast replay will be available on the Company's website for 30 days following the call.

About Sinovac

Sinovac Biotech Ltd. is a China-based biopharmaceutical company that focuses on the research, development, manufacturing, and commercialization of vaccines that protect against human infectious diseases. Sinovac's product portfolio includes vaccines against hepatitis A and B, seasonal influenza, H5N1 pandemic influenza (avian flu), H1N1 influenza (swine flu), mumps and canine rabies. In 2009, Sinovac was the first company worldwide to receive approval for its H1N1 influenza vaccine, which it has supplied to the Chinese Government's vaccination campaign and stockpiling program. The Company is also the only supplier of the H5N1 pandemic influenza vaccine to the government stockpiling program. Sinovac has filed a new drug application with the China Food & Drug Administration for its proprietary enterovirus 71 vaccine, having been proven effective in preventing hand, foot and mouth disease in infants and children during its Phase III clinical trial. The Company is currently developing a number of new products including a Sabin-strain inactivated polio vaccine, pneumococcal polysaccharides vaccine, pneumococcal conjugate vaccine and varicella vaccine. Sinovac primarily sells its vaccines in China, while also exploring growth opportunities in international markets. The Company has exported select vaccines to Mexico, Mongolia, Nepal, and the Philippines, and was recently granted a license to commercialize its hepatitis A vaccine in Chile. For more information, please visit the Company's website at www.Sinovac.com.

Contact

Sinovac Biotech Ltd.
Helen Yang
Tel: +86-10-8279-9871
Fax: +86-10-6296-6910
Email: ir@sinovac.com

ICR Inc.
Bill Zima
U.S: 1-646-308-1707
Email: william.zima@icrinc.com

Katherine Knight
Phone: +1 (646) 277-1276
Email: katherine.knight@icrinc.com

 

- tables to follow -

 

SINOVAC BIOTECH LTD.

Consolidated Balance sheets

As of September 30, 2015 and December 31, 2014

(Expressed in thousands of U.S. Dollars, except for numbers of shares and per share data)






Current assets 


September 30,
2015
(Unaudited)


December
31, 2014






Cash and cash equivalents

$

54,360

$

91,518

Accounts receivable - net


46,277


40,757

Inventories


20,826


18,832

Prepaid expenses and deposits 


1,129


1,430

Deferred tax assets


1,786


2,266

Total current assets


124,378


154,803






Property, plant and equipment


64,917


68,417

Prepaid land lease payments


9,956


10,405

Long-term inventories


2,585


2,648

Long-term prepaid expenses


-


3

Prepayments for acquisition of equipment


1,677


1,387

Deferred tax assets


731


515

Licenses


86


352

Total assets


204,330


238,530






Current liabilities





Short-term bank loans and current portion of
long-term debt


24,900


47,375

Loan from a non-controlling shareholder


2,576


2,595

Accounts payable and accrued liabilities 


18,443


23,237

Income tax payable


322


1,101

Deferred revenue


3,781


4,996

Deferred government grants


882


530

Total current liabilities


50,904


79,834






Deferred government grants


6,382


7,494

Long-term debt


771


1,803

Deferred revenue


7,021


7,191

Other non-current liabilities


473


482

Total long-term liabilities


14,647


16,970






Total liabilities


65,551


96,804






Commitments and contingencies 





Equity





Preferred stock


-


-

Common stock


57


56

Additional paid-in capital


109,430


108,243

Accumulated other comprehensive income


9,562


12,022

Statutory surplus reserves


12,627


12,627

Accumulated deficit


(7,962)


(6,384)

Total shareholders' equity


123,714


126,564






Non-controlling interests


15,065


15,162

Total equity


138,779


141,726

Total liabilities and equity

$

204,330

$

238,530

 

 

SINOVAC BIOTECH LTD. 

Consolidated Statements of Comprehensive Income (loss) 

For the three and nine months ended September 30, 2015 and 2014

(Unaudited) 

(Expressed in thousands of U.S. Dollars, except for numbers of shares and per share data)












 Three months ended
September 30 


 Nine months ended
September 30 



2015


2014


2015


2014

 Sales 

$

16,797

$

17,146

$

44,575

$

42,782

 Cost of sales 


5,643


4,986


11,484


11,289

 Gross profit 


11,154


12,160


33,091


31,493










 Selling, general and administrative expenses 


10,080


8,515


26,173


24,896

 Provision for doubtful accounts 


414


205


498


499

 Research and development expenses 


2,214


2,545


6,647


7,512

 Loss (gain) on disposal and impairment of property,
plant and equipment 


(11)


1


(35)


30

 Government grants recognized in income


(58)


-


(501)


-

 Total operating expenses 


12,639


11,266


32,782


32,937

 Operating income (loss) 


(1,485)


894


309


(1,444)










 Interest and financing expenses  


(493)


(905)


(1,502)


(2,487)

 Interest income


234


575


949


2,120

 Other income (expenses)


31


(38)


134


179

 Income (loss) before income taxes and non-
controlling interests  


(1,713)


526


(110)


(1,632)

 Income tax expense 


(267)


(419)


(1,258)


(842)

 Net Income (loss) 


(1,980)


107


(1,368)


(2,474)

 Less: (Income) loss attributable to the non-controlling interests

382


(18)


(210)


319

 Net Income (loss) attributable to
shareholders of Sinovac 


(1,598)


89


(1,578)


(2,155)










 Other comprehensive income (loss), net of
tax of nil 









Foreign currency translation adjustments


(2,821)


964


(2,766)


(1,439)

 Total comprehensive income (loss) 


(4,801)


1,071


(4,134)


(3,913)

  Less: comprehensive (income) loss attributable to
non-controlling interests  


700


(146)


96


492

 Comprehensive income (loss) attributable to
shareholders of Sinovac 

$

(4,101)

$

925

$

(4,038)

$

(3,421)










 Weighted average number of shares of
common stock outstanding 









   Basic 


56,424,587


55,722,435


56,126,013


55,658,173

   Diluted 


56,424,587


56,118,063


56,126,013


55,658,173










 Earning (loss) per share 









   Basic 


(0.03)


0.00


(0.03)


(0.04)

   Diluted 


(0.03)


0.00


(0.03)


(0.04)

 

SINOVAC BIOTECH LTD.

Consolidated Statements of Cash Flows

For the three and nine months ended September 30, 2015 and 2014

(Unaudited)

(Expressed in thousands of U.S. Dollars)



Three months ended

Nine months ended



September 30

September 30



2015


2014


2015


2014

Cash flows used in operating activities









Net income (loss)

$

(1,980)

$

107

$

(1,368)

$

(2,474)

  Adjustments to reconcile net income (loss) to net cash









Used in operating activities:









 - deferred income taxes


(465)


122


234


545

 - stock-based compensation


316


72


637


215

 - inventory provision


(68)


42


500


584

 - provision for doubtful accounts


416


205


498


499

 - loss (gain) on disposal and impairment of property, plant and equipment

(11)


1


(35)


30

 - government grants recognized in income


(58)


-


(501)


-

 - depreciation of property, plant and equipment and amortization of licenses

1,747


736


5,198


5,270

 - amortization of the prepaid land lease payments


68


66


205


198

 - accretion expenses


31


30


90


85

Changes in:









 - accounts receivable


(3,828)


(5,753)


(7,441)


(9,407)

 - inventories


1,881


976


(3,205)


(6,808)

 - income tax payable 


(415)


297


(797)


297

 - prepaid expenses and deposits


100


(425)


621


(773)

 - deferred revenue 


(12)


69


(1,116)


(616)

 - accounts payable and accrued liabilities


(966)


(1,334)


(4,544)


(3,793)

 - other non-current liabilities


6


-


6


-










Net cash used in operating activities


(3,238)


(4,789)


(11,018)


(16,148)










Cash flows provided by (used in) financing activities









 - Proceeds from bank loans


2,433


8,920


14,389


17,837

 - Repayments of bank loans


(8,673)


(1,463)


(37,214)


(10,005)

 - Proceeds from issuance of common stock,









   net of share issuance costs


50


84


551


336

 - Proceeds from shares subscribed 


(9)


(74)


-


6

 - Government grants received 


389


3,244


398


3,429










Net cash provided by (used in) financing activities


(5,810)


10,711


(21,876)


11,603










Cash flows used in investing activities









 - Acquisition of property, plant and equipment


(528)


(1,624)


(3,373)


(7,307)










Net cash used in investing activities


(528)


(1,624)


(3,373)


(7,307)










Exchange gain (loss) on cash and cash equivalents


(820)


422


(891)


(1,036)










Increase (decrease) in cash and cash equivalents


(10,396)


4,720


(37,158)


(12,888)










Cash and cash equivalents, beginning of period


64,756


89,634


91,518


107,242










Cash and cash equivalents, end of period

$

54,360

$

94,354

$

54,360

$

94,354










 

SOURCE Sinovac Biotech Co., Ltd.



RELATED LINKS

http://www.sinovac.com