China Pharma Holdings, Inc. ("China Pharma") (NYSE/Amex: CPHI), which develops, manufactures, and markets specialty pharmaceutical products in China, today announced financial results for the fiscal year ended December 31, 2009.
Full Year 2009 Financial Highlights -- Revenue increased 21% to $61.7 million from $51.0 million for 2008; -- Net income increased 13% to $20.2 million from $17.8 million in 2008; -- 2009 cash flow from operations increased by 63% to $10.7 million compared to $6.5 million for 2008; and -- EPS was $0.48, compared to $0.44 in 2008.
In 2009, revenue increased 21% to $61.7 million from $51.0 million in 2008, due to contribution from new products as well as increased contribution from existing products. Sales of Antiviral & Respiratory drugs increased 31% to $24.7 million from the prior year. Digestive product sales increased 114% to $4.8 million, driven by Tiopronin and Omeprazole Sodium, two new drugs released in Q2 and Q4 of 2009, respectively. Sales of CNS, Cardio & Cerebro-vascular products decreased 3% to $21.5 million. Sales of other products (including tumor drug Granisetron, and various other products) increased 41% to $10.7 million from the prior year.
Gross profit in 2009 increased to $25.7 million from $25.3 million in 2008. Gross profit margin in 2009 was 42%, compared to 50% in 2008. The decrease in gross margin was largely a result of a higher proportion of lower-margin products, including EDL-listed drugs, in the sales mix.
Operating expenses decreased 45% to $3.0 million from $5.6 million, due to the change in the Company's estimate for bad debt reserve in the third quarter of 2009. Selling expenses for the year increased 33% to $2.7 million from $2.0 million in 2008 as the company expanded its distribution network. General and administrative expenses increased 28% to $2.1 million in 2009 from $1.7 million in 2008. In 2009, the Company realized a bad debt benefit of $1.8 million, compared to a bad debt expense of $1.8 million in 2008.
Operating income for the year increased 15% to $22.6 million, compared to $19.7 million in 2008.
Net income for 2009 increased 13% to $20.2 million from $17.8 million in the previous year. Earnings Per Share was $0.48 in 2009, compared to $0.44 in 2008. The share count used to calculate EPS was 42.3 million fully diluted shares, compared to 40.2 million shares in the prior year.
In the year ended December 31, 2009, cashflow from operating activity rose to $10.67 million, an increase of 63% over the $6.54 million for the same period in 2008. The main reasons for the improvement in operating cashflow were faster collection of accounts receivables and an increase of Net Income in 2009.
As of December 31, 2009, the Company had cash and cash equivalents of $3.6 million, which represented 3.6% of total assets, compared to $3.8 million, or 4.0% of total assets, as of September 30, 2009 and $6.9 million, or 9.2% of total assets, as of December 31, 2008.
Business Update -- On January 21, 2010, the Company announced that the clinical trials for Candesartan, an anti-hypertension drug, has been completed and the generic drug production application has been submitted to the SFDA. In China, nearly 60% of all urban adults aged 65 years and over suffer from hypertension, and prevalence in urban areas is expected to reach 100 million by 2011. Candesartan is listed in the China's National (Medical) Insurance Catalog ("NIC"), allowing patients to be reimbursed by the government.
The Company expects revenue growth of 20% to 25% for 2010, on a year over year basis.
China Pharma's President and CEO, Ms. Zhilin Li, stated, "We are very pleased with our 2009 results, which have continued to yield a net income margin above 30%. After adding two new drugs in 2009, our core portfolio now has 20 products, and we have a number of new products in various stages of registration, including Rosuvastatin (generic for Crestor) and an antibiotic, that are in clinical trials. Going forward, we will continue to invest to strengthen our product portfolio. The Healthcare Reform in China is now moving ahead steadily but forcefully, with important implications for the pharmaceutical industry. We believe the changes will be favorable for highly profitable companies like ours with innovative drugs. We also believe the changes may cause attractive acquisition opportunities to appear. To that end, we are monitoring the market for strategic opportunities to take advantage of the current fragmented nature of the pharmaceutical industry landscape in China."
China Pharma Holdings, Inc.