TAI’AN, China, Nov. 7, 2011 /PRNewswire-Asia-FirstCall/ -- China Biologic Products, Inc. (NASDAQ: CBPO) (“China Biologic” or the “Company”), one of the leading plasma-based biopharmaceutical companies in the People’s Republic of China (“PRC”), today reported its financial results for the three and nine months ended September 30, 2011.
Financial highlights for the third quarter 2011
- Total sales increased $5.3 million or 14.7% to $41.3 million in the third quarter 2011 from $36.0 million in the third quarter 2010, including the benefit of a 6.1% gain from foreign exchange translation. Total sales in RMB increased 8.6% in the third quarter 2011 from the third quarter of last year.
- Gross profit increased $0.2 million or 0.8% to $27.5 million in the third quarter 2011 from $27.3 million in the third quarter 2010. The gross profit margin was 66.7% in the third quarter 2011 compared with 75.9% in the third quarter 2010.
- (Loss) income from operations decreased $28.2 million or 149.9% to a loss of $9.4 million in the third quarter 2011 from $18.8 million in the third quarter 2010. The third quarter 2011 included a non-cash charge for impairment loss of goodwill of $18.1 million and a non-cash loss on abandonment of long-lived assets of $6.5 million.
- GAAP net (loss)/income attributable to China Biologic decreased $23.1 million or 168.2% to a net loss of $9.4 million in the third quarter 2011 from a net income of $13.7 million in the third quarter 2010.
- Diluted net loss per share was $0.37 in the third quarter 2011, down from diluted net income per share of $0.39 in the third quarter 2010.
- Excluding non-cash employee stock compensation, non-cash gain related to change in fair value of derivative liability, impairment loss of goodwill and loss on abandonment of long-lived assets and write-off of raw plasma materials due to the closure of the plasma collection stations of Guizhou Taibang, the non-GAAP adjusted net income attributable to China Biologic was $11.0 million or diluted net income per share of $0.42 in the third quarter 2011, from $10.5 million or $0.40 per diluted share in the third quarter 2010.
CEO Comments
Mr. Chao Ming Zhao, Chief Executive Officer of China Biologic, said, “With the closure of our plasma collection stations in August 2011 due to the unexpected policy changes by the Guizhou provincial government, we have taken several measures to mitigate the loss of about 34% of our total raw plasma collection (based on our collection volume in 2010). Those measures are both short-term and longer-term.
“First, to ensure a minimal write-off on the collected plasma from these closed stations, we will maintain adequate employees from the closed stations to actively track donors who made donations before the stations closed on August 1 but have not yet returned for a second test for compliance with 90-day quarantine rules.
“Second, we are in the process of reallocating resources from the closed stations to other facilities within the Company in order to maximize their utilization.
“Third, we are working on strategies to explore new suitable regions for new plasma stations, especially in other provinces. That process, from gaining multiple levels of government approval to selecting appropriate locations for building plasma stations can be a relatively long process with some uncertainties, given the need for station construction, equipment installation, inspections and licensing, and donor promotion and education programs.
“Fourth, we are adjusting our production plan and sales strategy both in the short-term and mid-term to leverage the available resources to maximize profit as we respond to changing market dynamics.
“Last, we further increased our direct sales efforts on the hospitals and inoculation centers that are likely to be our best and highest volume customers for the long-term. That effort has also been accelerating the increase in the portion of our sales that are sold directly to institutions instead of through independent distributors and others. As you recall, we believe the shift to direct sales is very important to our long-term success.”
