Biostar Pharmaceuticals reports revenue of $15.01M for third quarter 2013

Nov 14 2013

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 of the third quarter ended September 30, 2013.

SUMMARY FINANCIALS

Third Quarter 2013 Financial Results

Revenue for the 3rd Quarter of 2013 was $15.01M, representing a substantial increase ($5.04M) over the same period of the prior year.  The factors positively affected our growth were primarily attributable to 1) an increase in general sales volume, and 2) revenue generated by several new products.

Cost of Sales for the 3rd Quarter of 2013 increased over the same quarter of 2012 by $3.33M or 70.6% due to an increase in net sales and the introduction of the new hospital products.

Gross Profits for the 3rd Quarter of 2013 were $6.94M representing an improvement of approximately $1.7M or 32.5% as compared to the same period in 2012. Increasing sales volume was the primary driver of this encouraging trend for the company.

Total Operating Expense for the 3rd Quarter of 2013 decreased substantially to $6.19M in comparison to the prior year's (2012) value of $11.04M on increasing sales. The decrease is primarily attributable to a lower cost structure in our advertising as well as general and administrative expense. 

Nine Months Results

For the nine months ended September 30, 2013, revenue increased by approximately 22.7% to $41.75M in comparison to the same period in 2012. Gross profit was approximately $20.51M for the first nine months of 2013, representing a decrease of 0.67% from the first nine months of 2012.

Income (Loss) from operations was $0.68M and（$14.85）million for the first nine months of 2013 and 2012, respectively. Net income（Loss）was $0.22M for the nine months ended September 30, 2013, compared to（$13.25M）from the same period in 2012. Fully diluted earnings (loss) per share were $0.02 compared to ($1.41) for the first nine months of 2013 and 2012 respectively, based on 11.20 million and 9.43 million shares outstanding.

Balance Sheet and Cash Flow

As of September 30, 2013 we had cash and cash equivalents of approximately $10.55M and working capital of approximately $32.84M and had a current ratio of 4:1. Our Accounts Receivable balance was approximately $13.08M on September 30, 2013, versus approximately $21.85M at year end of 2012.  Accounts Receivable turnover significantly improved to 97 days for the three months ended September 30, 2013, as compared to 257 days during the same period in 2012 . The Company's stockholders' equity at of the end the third quarter of 2013 was $61.74M, with total assets of $72.38M versus total liabilities of $10.64M.

For the first nine months of 2013, the Company generated $13.71M in cash from operations versus $5.04M cash used in operations for the same period in 2012.

Business Developments

Since our acquisition of Shaanxi Weinan in 2011, and the acquisition of additional 13 drug approval numbers in the previous quarter, we continue to diversify our product offerings to consumers under the Shaanxi Weinan Huaren brand.  During the nine months ended September 30, 2013, we introduced 3 new products.  These new products are Yanlixiao capsule (anti-inflammation capsule), Erlongtong Qiao pill (for treatment of hearing loss), and Danxiang Rhinitis tablet（or 'fragrant rhinitis tablet'). 

Under the Aoxing Pharmaceutical brand, during the nine months ended September 30, 2013，we introduced Yiwei particle, a health supplement product to improve stomach functions.  This product was jointly developed with the Fourth Military Medical University (FMMU) of China.  The effectiveness of this product, in combination with strong market acceptance has resulted in substantially increased production. Our partnership and cooperation with FMMU represents positive outlook in the development of the Company. 

Meanwhile, following the market disruption in the PRC public sector caused by the gel capsule events (as previously discussed), consumer and market confidence appear to be regaining their strength. The Company is experiencing noticeable improvements and is hopeful for full market recovery of these markets in the near future. 

Ronghua Wang, Chairman of the Company stated, "Thanks to the efforts of our entire team and the continued support shown in our market channel by both consumers and our suppliers, for the nine months ended September 30, 2013, the Company achieved sales revenue of $41.75 million, cash flow from operations of $13.71 million, and net profits of $0.22 million.  We will continue to operate in accordance with the highest industry standards while working to deliver high quality products to our customers as well as increasing returns for our stockholders in terms of earnings and share value."

SOURCE Biostar Pharmaceuticals, Inc.