BEIJING, March 4, 2015 /PRNewswire/ -- China Biologic Products, Inc. (NASDAQ: CBPO, “China Biologic” or the “Company”), a leading fully integrated plasma-based biopharmaceutical company in China, today announced its financial results for the fourth quarter and fiscal year 2014.
Fourth Quarter 2014 Financial Highlights
- Total sales in the fourth quarter of 2014 increased by 36.2%, or 36.8% excluding the impact of foreign currency exchange rate changes, to $58.0 million from $42.6 million in the same quarter of 2013.
- Gross profit increased by 37.0% to $37.0 million from $27.0 million in the last quarter of 2013. Gross margin increased to 63.8% from 63.4% in the fourth quarter of 2013.
- Income from operations increased by 57.6% to $19.7 million from $12.5 million in the last quarter of 2013. Operating margin increased to 34.0%, or 42.8% excluding the impact of a one-time provision in connection with certain advance payments made under an employee housing development project, in the fourth quarter of 2014 from 29.3% in the same quarter of 2013.
- Net income attributable to the Company increased by 46.6% to $12.9 million from $8.8 million in the last quarter of 2013. Fully diluted net income per share was $0.48 in the fourth quarter of 2014 as compared to $0.32 in the fourth quarter of 2013.
- Non-GAAP adjusted net income attributable to the Company was $14.7 million, representing a 53.1% increase from $9.6 million in the same quarter of 2013. Non-GAAP adjusted net income per share was $0.56, compared to $0.35 in the last quarter of 2013.
Fiscal Year 2014 Financial Highlights
- Total sales in 2014 increased by 19.6% to $243.3 million from $203.4 million in 2013.
- Gross profit in 2014 increased by 18.3% to $163.2 million from $137.9 million in 2013. Gross margin decreased slightly to 67.1% in 2014 from 67.8% in 2013.
- Income from operations in 2014 increased by 28.0% to $111.2 million from $86.9 million in 2013. Operating margin increased to 45.7% in 2014 from 42.7% in 2013.
- Net income attributable to the Company in 2014 increased by 29.9% to $70.9 million from $54.6 million in 2013. Fully diluted net income per share was $2.71 in 2014 as compared to $1.96 in 2013.
- Non-GAAP adjusted net income attributable to the Company in 2014 was $75.6 million, exceeding the Company’s prior estimate, which represents a 28.1% increase from $59.0 million in 2013. Non-GAAP adjusted net income per share was $2.89, compared to $2.12 in 2013.
Note: The net income and non-GAAP adjusted net income figures in this news release reflected the one-time impact of the previously disclosed $3.6 million bad-debt provision attributable to the Company for the employee housing project in Shandong. See the Company’s press release dated November 5, 2014.
Mr. David (Xiaoying) Gao, Chairman and Chief Executive Officer of China Biologic, commented, “We are very pleased to finish 2014 with strong top line and bottom line growth, significant operational developments, as well as an improved shareholder structure. Our healthy financial growth was supported by strong market demand, stable product pricing, increased production capacity after the renewal of GMP certification at our Guizhou facility, stringent cost control measures, the optimization of our product portfolio mix and the successful implementation of our sales strategy in tier-one cities.”
“In 2014, we experienced a double-digit increase in our plasma collection volume for the third consecutive year, primarily through organic growth at our existing collection centers. We are pleased with our many accomplishments throughout the year. Highlights include receiving the approval to build two new plasma collection centers in Hebei Province, receiving production approval for human PCC products, increasing IVIG sales in tier-one cities, and expanding our production capacity of, and implementing an in-house sales strategy for, placenta polypeptide products. These combined efforts contributed to our considerable top line growth and improved operational efficiency in the fourth quarter and will contribute to our overall growth in the years to come.”
Mr. Gao continued, “At the non-operational level, we continued to improve our shareholding structure and create shareholder value. In early 2014, we repurchased an aggregate of 2.5 million shares of common stock, for a total consideration of $70 million. Additionally, we completed a following-on offering with net proceeds of $33.2 million in the middle of year and acquired an additional 19.84% equity stake in Guizhou Taibang in September 2014, which resulted in earnings accretion as well as the super majority ownership with significantly enhanced control of Guizhou Taibang’s long-term strategy and development. Looking ahead, we will continue our efforts in 2015 to grow China Biologic into a national leader in the plasma biopharmaceutical industry.”
Fourth Quarter 2014 Financial Performance
Total sales in the fourth quarter of 2014 were $58.0 million, representing an increase of 36.2%, or 36.8% excluding the foreign exchange effect, from $42.6 million in the same quarter of 2013. The increase was primarily attributable to the sales increases in major plasma-based products and placenta polypeptide.
Cost of sales increased by 34.6% to $21.0 million in the fourth quarter of 2014 from $15.6 million in the same quarter of 2013, mainly in line with the total sales growth.
Gross profit increased by 37.0% to $37.0 million from $27.0 million in the same quarter of 2013. Gross margin increased to 63.8% in the fourth quarter of 2014, from 63.4% in the fourth quarter of 2013 primarily due to the combined effects of higher raw material costs, more profitable production mix and certain one-time non-recurring production charges in connection with new production lines and new products.
Total operating expenses in the fourth quarter of 2014 increased by 19.3% to $17.3 million from $14.5 million in the same quarter of 2013, mainly due to effective cost control, partially offset by a $5.1 million one-time provision in connection with an employee housing development project in Shandong. As a percentage of total sales, total operating expenses decreased to 29.8%, or 21.0% excluding the impact of the one-time housing project provision, from 34.0% in the same quarter of 2013.
Income from operations increased by 57.6% to $19.7 million from $12.5 million in the same period of 2013. Operating margin increased to 34.0%, or 42.8% excluding the impact of the one-time bad-debt provision for the employee housing project in Shandong, in the reporting quarter from 29.3% in the same quarter of 2013.
Net incomeattributable to the Company increased by 46.6% to $12.9 million in the fourth quarter of 2014, from $8.8 million in the same quarter of 2013. Fully diluted net income per share was $0.48 in the fourth quarter of 2014, as compared to $0.32 in the same quarter of 2013.
Non-GAAP adjusted net income attributable to the Company was $14.7 million, or $0.56 per diluted share in the fourth quarter of 2014, representing an increase of 53.1% from $9.6 million, or 60.0% increase, from $0.35 per diluted share in the same quarter of 2013.
Fiscal Year 2014 Financial Performance
Total sales in 2014 were $243.3 million, an increase of 19.6% from $203.4 million in 2013. The increase in sales was primarily attributable to volume increases in major plasma-based products and placenta polypeptide products.
During 2014, human albumin and IVIG products remained the Company’s largest two sales contributors. The average price for both products remained relatively stable as a result of the combined effects of the higher government-imposed retail price ceiling, reduced value added tax rate and our sales effort to increase market share in tier-one cities and new markets in 2014.
- As a percentage of total sales, revenue from human albumin products was 39.3% in 2014 as compared to 44.1% in 2013. Sales volume of human albumin products increased by 5.1% in 2014, mainly due to the increased sales volume at Shandong Taibang, partially offset by the decreased sales volume at Guizhou Taibang as a result of the planned production suspension from June 2013 to March 2014.
- As a percentage of total sales, revenue from IVIG products was 40.4% in 2014 as compared to 38.0% in 2013. Sales volume of IVIG products increased by 27.4% in 2014, primarily due to increased market demand from the outburst of Hand-Foot-and-Mouth Disease and from increased sales through distributors in tier-one cities and new markets during 2014.
As a percentage of total sales, revenue from placenta polypeptide was 9.9% in 2014 as compared to 6.0% in 2013.
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