Biostar Pharmaceuticals,Inc. Announces Its Quarterly Results for Three Months Ended March 31, 2015

May 15, 2015, 16:30 ET from Biostar Pharmaceuticals, Inc.

XIANYANG, China, May 15, 2015 /PRNewswire/ -

First Fiscal Quarter of 2015 Financial Highlights

During the first fiscal quarter of 2015, the Company:

  • Achieved net sales of $6.9 million
  • Showed gross profit of $3.6 million
  • Invested $1.0 million in research and development
  • Showed net lossof $160,104

Biostar Pharmaceuticals, Inc. (BSPM) ("Biostar", "we" or the "Company"), a producer and marketer of pharmaceutical and health supplements to treat a variety of illnesses and ailments, with operations in China, today announced its operating results for the first quarter of 2015.The Company reported top line sales of $6.9 million for the first quarter of 2015, which represented a significant decline in sales as compared to $13.1 million in thesame period in 2014. The significant decline in sales was attributed to two factors: (1) the repair and maintenance of one of the Company's major production lines, and (2) the temporary postponement of the production of certain products based on the expiration of certain certifications under the good manufacturing practices ("GMP") standard governing the manufacture of food and pharmaceutical products. The maintenance of the production line required approximately three weeks of down-time during the month of March of 2015. Following such repair and maintenance, the Company's production lines returned to their normal production capacities at the end of March and currently remain so at their normal levels. The Company is currently pursuing renewal of the GMP certificates to resume production of products related to those certifications. Costs of sales generally declined in relative proportion to the reduction in sales, but on a less than on a one-to-one basis because there are fixed overhead costs that are allocated to cost of sales regardless of sales volume. Gross profit declined as result of the reduction in sales, but the Company believes such decline to be of temporary nature. Operating expenses for the first quarter of 2015 as compared to 2014 declined significantly due to the absence of the material, one-time impairment loss related to accounts receivable that occurred in 2014. The Company's net loss for the three month period ended March 31, 2015 was approximately $160,000 and was primarily related to the temporary decline in its sales described above.

Mr. Ronghua Wang, Chairman and CEO of Biostar Pharmaceuticals, Inc. commented: "Following the repair and maintenance of the production lines, the Company returned to its normal manufacturing capacities at the end of March 2015 and currently remain so at their normal levels. We are in the process of renewing our three GMP certifications so that we can get back to producing products under those certifications. Also, during the quarter, we experienced positive results in collections of our outstanding receivables from our customers which collections produced operating cash inflows to the Company. We continue to invest in research and development to work on new supplements and medications to meet ongoing and future market needs."

*The Company's Condensed Consolidated Balance Sheets, Statement of Operations, and Cash Flows can be found at the end of this press release. Please also refer the Company's Quarterly Report on Form 10-Q filed with the U.S. Securities and Exchange Commission for further information regarding the Company's results of operations.

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 AoxingOleanolic 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 following the repair and maintenance for GMP certification renewal, to secure GMP certification renewals within the timeframe anticipated by the Company, 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, 2014, 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.

Investor Relations Contact

Please send questions or comments to:

Biostar Pharmaceuticals, Inc.
Investor Relations Coordinator
+86-29-3368-6638
office@aoxing-group.com
http://www.biostarpharmaceuticals.com

 

BIOSTAR PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS


March 31,


December 31,


2015


2014


(Unaudited)




ASSETS







Current Assets






Cash and cash equivalents


$

2,709,391



$

1,685,154

Accounts receivable, net



24,617,802




26,962,078

Inventories



395,511




673,989

Deposits and other receivables



3,699,290




4,471,992

Income tax recoverable



67,707




67,370

Loan receivables



9,821,414




9,772,464

Total Current Assets



41,311,115




43,633,047









Non-current Assets








Deposits



10,476,175




8,795,218

Deferred tax assets



7,581,878




7,065,523

Property and equipment, net



8,426,993




8,483,113

Intangible assets, net



12,994,318




13,270,330

Total Non-Current Assets



39,479,364




37,614,184









Total Assets


$

80,790,479



$

81,247,231

















LIABILITIES AND STOCKHOLDERS' EQUITY









Current Liabilities








Accounts and other payables


$

4,703,876



$

5,001,086

Short-term bank loans



2,946,424




3,094,614

Value-added tax payable



190,705




432,885

Warrants liability



393,162




383,295

Total Current Liabilities



8,234,167




8,911,880









Commitment and contingencies
















Stockholders' Equity








Common stock, $0.001 par value, 100,000,000 shares authorized,
   15,476,113 shares issued and outstanding as of
   March 31, 2015 and December 31, 2014



15,476




15,476

Additional paid-in capital



30,303,508




30,303,508

Statutory reserve



7,354,413




7,354,413

Retained earnings



28,109,852




28,269,956

Accumulated other comprehensive income



6,773,063




6,391,998

Total Stockholders' Equity



72,556,312




72,335,351









Total Liabilities and Stockholders' Equity


$

80,790,479



$

81,247,231


 

Please refer to the accompanying notes which form an integral part of these consolidated financial statements which can be found on Form 10-Q filed with U.S. Securities and Exchange Commission.

 

 

BIOSTAR PHARMACEUTICALS, INC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME(LOSS)

(Unaudited)

 



Three Months Ended March 31,



2015



2014

Sales


$

6,908,747



$

13,181,164

Cost of sales



3,327,497




5,928,076

Gross profit



3,581,250




7,253,088









Operating expenses:








Advertising expenses



1,377,164




1,788,541

Selling expenses



1,299,717




1,934,722

General and administrative expenses



775,755




1,328,305

Impairment loss on accounts receivable



-




2,269,688

Research and development expenses



1,018,612




694,944

Total operating expenses



4,471,248




8,016,200









Loss from operations



(889,998)




(763,112)









Other income (expense)








Interest income



322,345




316,431

Interest expense



(61,455)




-

Additional compensation received for the disposal of land use rights



-




1,099,292

Fair value adjustment on warrants



(9,867)




-

Other expense



-




(46,700)

Total other income, net



251,023




1,369,023









(Loss) income before income taxes



(638,975)




605,911









(Income tax benefit) provision for income tax



(478,871)




299,241









Net (loss) income


$

(160,104)



$

306,670









Other comprehensive income (loss) - foreign currency translation adjustment



381,065




(533,979)









Comprehensive income (loss)


$

220,961



$

(227,309)









Net (loss) income per share








Basic


$

(0.01)



$

0.02

Diluted


$

(0.01)



$

0.02









Weighted average number of common shares outstanding








Basic



15,476,113




13,024,446

Diluted



15,476,113




13,030,643


Please refer to the accompanying notes which form an integral part of these consolidated financial statements which can be found on Form 10-Q filed with U.S. Securities and Exchange Commission.

 

 

 

BIOSTAR PHARMACEUTICALS, INC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 



Three Months Ended March 31,



2015



2014

CASH FLOWS FROM OPERATING ACTIVITIES






Net (loss) income


$

(160,104)



$

306,670

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








Accrued interest income



(317,807)




(314,489)

Deferred tax benefit



(478,871)




(137,124)

Depreciation and amortization



487,437




736,124

Impairment loss on accounts receivable



-




2,269,688

Recognition of deferred research and development expenses



1,018,612




694,943

Stock-based compensation



-




99,550

Warrants liability



9,867




-

Changes in operating assets and liabilities:








Accounts receivable



2,468,538




(3,450,423)

Inventories



280,628




91,423

Deposits and other receivables



90,837




1,396,128

Accounts payable and accrued expenses



(320,825)




963,311

Value-added tax payable



(243,286)




104,737

Income tax payable/recoverable



-




343,723

Net cash provided by operating activities



2,835,026




3,104,261









CASH FLOWS FROM INVESTING ACTIVITIES








Deposit paid for intended acquisition



(1,629,779)




-

Purchase of property, plant and equipment



(30,646)




(1,957)

Net cash used in investing activities



(1,660,425)




(1,957)









CASH FLOWS FROM FINANCING ACTIVITIES








Advance from a related party



-




107,692

Repayment of short-term bank loans



(162,978)




-

Proceeds from stock issuance and warrants



-




3,862,533

Net cash (used in) provided by financing activities



(162,978)




3,970,225









Effect of exchange rate changes on cash and cash equivalents



12,614




(20,043)









Net increase in cash and cash equivalents



1,024,237




7,052,486









Cash and cash equivalents, beginning balance



1,685,154




80,072

Cash and cash equivalents, ending balance


$

2,709,391



$

7,132,558









SUPPLEMENTAL DISCLOSURES:








Interest received


$

4,538



$

1,943

Interest paid


$

(61,455)



$

-

Income tax paid


$

-



$

(92,641)


 

Please refer to the accompanying notes which form an integral part of these consolidated financial statements which can be found on Form 10-Q filed with U.S. Securities and Exchange Commission.

 

 

SOURCE Biostar Pharmaceuticals, Inc.