Biostar Pharmaceuticals, Inc. Announces Full Year 2013 Financial Results

XIANYANG, China, March 31, 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 fiscal year ended December 31, 2013.

Highlights for the Full Year 2013

• Total sales increased to $52.73 million, as compared to $49.32 million for the year ended December 31, 2012.
• Sales directly to hospitals were up 145% in 2013 to approximately $7.1 million as compared to $2.88 million in 2012
• Net income improvedto $809,046 for the full year 2013, compared with a net loss of $20 million for the full year 2012.
• Diluted earnings per share (EPS) for the full year 2013 was $0.06, compared with diluted loss per share of ($2.09) for 2012

Summary of Financial Results:

Mr. Ronghua Wang, Chairman and CEO of BSPM, commented, "Fiscal year 2013 was a year of turnaround for Biostar as we achieved profitability as compared to the prior year. Thanks to our heightened controls in product safety as well as pricing adjustments for Xin Ao Xing Oleanolic Acid Capsule, our flagship drug for the treatment of chronic Hepatitis B virus (HBV), we believe we have regained the trust and confidence of our customers and stabilized our market share in the HBV segment, as evident by the increase in our sales volume.  During the year, our sales to hospital increased 145% due to several new products which were launched and sold exclusively to hospitals in Shaanxi province since late 2012, In 2014, we expect to continue our current strategies by expanding our sales and distribution network, strengthening the research and development of new drugs, and investing in low risk, high margin and fast growing businesses. "

Full Year 2013 Financial Results

Total Revenues

Total revenues for the full year 2013 were $52.73 million, an increase of 7% from $49.32million for the full year 2012. The increase was primarily due to the increase in new products and hospital products. The hospital products increased 145.8% to $7.08 million, compared with $2.88 million for the full year 2012.

Gross Profit and Gross Margin

Gross profit decreased by approximately $4.2 million or 14% for the year ended December 31, 2013, as compared to the year of 2012. The decrease in gross profit was due primarily to the decrease in sales price and increase in product cost, offset by the increase in sales volume.

The overall gross profit margin decreased to 48% for the year ended December 31, 2013 from 60.5% for the year ended December 31, 2012. Our overall gross profit was significantly affected by the decrease in gross margin of Xin Aoxing Oleanolic Capsule from 80.9% during the year ended December 31, 2012 to 65.5%

Operating Expenses

Operating expenses mainly consisted of advertising, selling, administrative, and R&D expenses totaling $25.17million for the year ended December 31, 2013 as compared to $51.64 million for the year ended December 31, 2012, a decrease of $26.47million or 51.2%. The decrease is attributable to the decrease in advertising and selling expenses and bad debts. During the year ended December 31, 2012, as a result of the developments relating to the capsule production discussed above, we paid compensation of $8.0 million to our customers for their cost of holding our products in their warehouses and portion of their lost profits during the sales suspension, as well as an administrative penalty of $1.6 million.

Net Income (loss) and Earnings per Share

Net income attributable to Biostar Pharmaceuticals, Inc.'s ordinary shareholders for the full year 2013 was $809,046, compared with a net loss of $20 million in 2012.

Basic and diluted income per share for the full year 2013 were $0.06, compared with basic and diluted losses per share of $2.09 for the full year 2012.

Financial Position as of December 31, 2013

As of December 31, 2013, the Company had cash and cash equivalents of approximately $0.1 million, other current assets were $35.91 million and current liabilities were $4.79 million. Total shareholders' equity was $62.77 million, as compared to $57.77 million as of December 31, 2012.

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 achieve the projected sales through continuing its sales and expansion strategies, 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.

SOURCE Biostar Pharmaceuticals, Inc.