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Sinovac Reports Unaudited Third Quarter 2012 Financial Results

Date : 11/15/2012 @ 3:53PM
Source : PR Newswire (US)
Stock : Sinovac Biotech, Ltd. - Ordinary Shares (Antigua/Barbudo) (MM) (SVA)
Quote : 4.79  -0.12 (-2.44%) @ 1:30PM
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Sinovac Reports Unaudited Third Quarter 2012 Financial Results

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Sinovac Reports Unaudited Third Quarter 2012 Financial Results

BEIJING, Nov. 15, 2012 /PRNewswire/ -- Sinovac Biotech Ltd. (NASDAQ: SVA), a leading provider of vaccines in China, announced today its unaudited financial results for the third quarter ended September 30, 2012.

Third Quarter 2012 Financial Highlights (year-over-year comparisons to third quarter 2011)

  • Hepatitis vaccines sales in private pay market rose 31.2%; total sales decreased 7.0% to $14.3 million.
  • Gross margin was 52.6%, compared to 56.8%.
  • Net loss attributable to common stockholders was $3.0 million, or $0.06 per basic and diluted share.
  • Cash and cash equivalents totaled $82.0 million as of September 30, 2012, compared to $104.3 million as of December 31, 2011.

Recent Business Highlights

-- Sales and Marketing

Both Bilive sales and Healive sales in the private pay market continued to exhibit solid year-over-year growth in the third quarter compared to the same period of 2011. In addition to the private pay market sales growth, Sinovac continues to execute its sales plan in the public market. In the past few months, the Company was awarded multiple provincial tender awards for both Healive and Anflu. Besides the tender awards in Gansu Province, Beijing, and Shanghai previously announced, in October, Sinovac was selected by Jiangsu Centers for Disease Control and Prevention (Jiangsu CDC) as one of the two vaccine manufacturers to supply inactivated hepatitis A vaccine for the EPI in Jiangsu province in 2013. In the third quarter, total sales were mainly impacted by the decrease of Healive revenue in the public market, and sales are expected to increase in the coming quarters after vaccine delivery.

-- Phase III Clinical Trial for EV71 Vaccine Candidate

The EV71 vaccine Phase III clinical trial is progressing on schedule. The hand, foot and mouth disease (HFMD) case surveillance is ongoing, and documentation collection, data input, data review, and quality control on the database are well underway and progressing on schedule.

-- Mumps Vaccine Progress

In the third quarter, Sinovac Biotech received Good Manufacturing Practices (GMP) certification from the China SFDA for the Company's dedicated mumps vaccine production plant at its Sinovac Dalian facility. 

-- 2012 Annual General Meeting

On August 22, 2012, Sinovac held its 2012 Annual General Meeting of shareholders. During the meeting, four proposals, including the 2012 Share Incentive Plan were approved, while a fifth, a proposal to amend the Company's by-laws, was not approved.

Dr. Weidong Yin, Chairman, President and CEO of Sinovac, commented, "During the third quarter 2012, our hepatitis vaccine business grew in the private pay market, while the Healive sales in the public market decreased compared to the same period of last year, impacting our total sales. In the coming quarters we expect sales of Healive in the public market will pick up, as we continue to improve our capabilities and expand our presence in that market."

Dr. Yin continued, "We expect the commercialization of our EV71 vaccine to become our key future growth catalyst. Currently, the Phase III clinical trial of our EV71 vaccine is being executed smoothly and moving forward well on schedule. We remain in close communication with the relevant authorities and experts on the expected schedule for trial conclusion and data unblinding, and we will share that information when appropriate."

Dr. Yin concluded, "Our cash position and credit line facilities with local commercial banks provide us with the resources to commercialize our EV71 vaccine being developed for HFMD.  We are in the position to drive the future growth of our business with a combination of commercialized vaccines and vaccine candidates."

Financial Review for Third Quarter Ended September 30, 2012

An analysis of sales and gross profit is as follows:     

In USD


2012Q3

% of Sales

2011Q3

%of Sales

Increase /
- Decrease %








Hepatitis A – Healive


4,931,790

34.5%

5,595,358

36.4%

-11.9%








Hepatitis A&B – Bilive


5,548,237

38.9%

5,205,478

33.9%

6.6%








Hepatitis vaccines


10,480,027

73.4%

10,800,836

70.3%

-3.0%








Influenza vaccines


3,806,454

26.6%

4,560,961

29.7%

-16.5%








Animal vaccine


619

0.0%











Total sales


14,287,100

100%

15,361,797

100%

-7.0%








Cost of goods sold


6,770,712

47.4%

6,631,672

43.2%

2.1%








Gross profit


7,516,388

52.6%

8,730,125

56.8%

-13.9%

Total sales in the third quarter of 2012 decreased 7.0%, compared to $15.4 million in the same period of 2011.

The decrease in total third quarter 2012 sales were primarily due to decreased Healive sales to the public market and reduced Anflu sales that started later this year. This was partially offset by the increase of both Healive and Bilive sales in the private pay market. The Company ended the quarter with a net total sales decrease of $1.1 million, or 7.0%, compared to the same quarter of last year.

Core vaccines sales for the nine months period ended September 30, 2012, increased 6.0% to $29.6 million, compared to $28.0 million in the same period of 2011. Despite a 29.0% increase in Bilive sales, total sales decreased 17.0% to $29.6 million, compared to $35.7 million in the same period of last year. The decrease was mainly affected by non-core government stockpiling of the pandemic flu H5N1 vaccine sales of $7.7 million in the 2011 period, as there were no government stockpiling sales in the current fiscal year to date. Please refer to note 1 below for the sales analysis for the nine months period ended September 30, 2012.

Gross margin in third quarter of 2012 was 52.6%, compared to 56.8% in the same period of last year. The lower quarterly gross margin was mainly due to the increased provision for expired H1N1 inventory costs and overhead allocated to cost of goods sold arising from seasonal excess capacity. After deducting depreciation of land use rights, amortization of licenses and permits, the gross margin was 52.4% and 56.5% for the third quarter of 2012 and 2011, respectively.

Selling, general and administrative expenses as a percentage of third quarter 2012 sales were 54.9%, compared to 49.8% for the same quarter of the prior year. The increase in the year-over-year quarterly SG&A expenses was mainly due to the ongoing preparation costs for the GMP upgrade and the Changping site validation.

Research and development expenses for the third quarter were $3.8 million, a $1.4 million increase over the same period in 2011, mainly due to the ongoing EV71 clinical trial development.

The increase in depreciation of property, plant and equipment and amortization of licenses and permits for the third quarter of 2012 was mainly due to the assets at Changping site that were in use in the quarter.

As of September 30, 2012, cash and cash equivalents totaled $82.0 million, compared to $104.3 million as of December 31, 2012. The Company utilized $1.1 million and $6.5 million of its cash resources in the third quarter and nine months period, respectively, to contribute to its ongoing clinical trial for its proprietary EV71 vaccine. The Company intends to provide the trial with approximately an additional $3.4 million during the remaining quarter of the year and $1.5 million in 2013. During the quarter and the first nine months period, $3.7 million and $8.7 million, respectively, were spent for the ongoing capital needs of the Changping site development, which were in part covered by the credit line arrangements already in place. Capital expenditure payments to complete the Changping site, which are in part covered by the credit line arrangements, are estimated up to $7.0 million in the remaining quarter of 2012 and $8.7 million in 2013. The cash position and credit line facilities with local commercial banks provide the Company with the resources to commercialize the EV71 vaccine being developed for HFMD.  The Company is in the position to drive the future growth of the business with a combination of commercialized vaccines and vaccine candidates.

Note 1

Sales Analysis for the Nine-month Period ended September 30, 2012

In USD


2012 1-9

% of sales

2011 1-9

%of sales

Increase /
- Decrease %








Hepatitis A – Healive


10,104,218

34.1%

11,246,591

31.5%

-10.2%








Hepatitis A&B – Bilive


15,633,272

52.8%

12,116,369

33.9%

29.0%








Hepatitis vaccines


25,737,490

86.9%

23,362,960

65.4%

10.2%








Influenza vaccines


3,852,860

13.0%

4,588,828

12.9%

-16.0%








Animal vaccine

 

Core vaccines


34,849   

 

29,625,199   

           0.1%

 

          100%

                 -

 

27,951,788

              -

 

        78.3%

 

 

6.0%

H5N1


-

-

7,746,700

21.7%









Total sales


29,625,199

100%

35,698,488

100%

-17.0%








Cost of goods sold


10,401,918

35.1%

13,095,652

36.7%

-20.6%








Gross profit


19,223,281

64.9%

22,602,836

63.3%

-15.0%

Conference Call Details

The Company will host a conference call on Thursday, November 15, 2012 at 8:00 a.m. EST (November 15, 2012 at 9:00 p.m. China Standard Time) to review the Company's financial results and provide an update on recent corporate developments. To access the conference call, please dial 1-877-407-4018 (USA) or 1-201-689-8471 (International). A replay of the call will be available from 11 a.m. EST on November 15, 2012 to November 29, 2012 at midnight. To access the replay, please dial 1-877-870-5176 (USA) or 1-858-384-5517 (International) and reference the replay pin number 403079.

A live audio webcast of the call will also be available from the investors section on the corporate web site at www.sinovac.com. A webcast replay can be accessed on the corporate website beginning November 15, 2012, and the replay will remain available for 30 days.

About Sinovac

Sinovac Biotech Ltd. is a China-based biopharmaceutical company that focuses on research, development, manufacturing and commercialization of vaccines that protect against human infectious diseases including hepatitis A and B, seasonal influenza, H5N1 pandemic influenza and mumps, as well as animal rabies vaccine.  In 2009, Sinovac was the first company worldwide to receive approval for its H1N1 influenza vaccine, Panflu.1, and has manufactured it for the Chinese Central Government, pursuant to the government-stockpiling program.  The company is also the only supplier of the H5N1 pandemic influenza vaccine to the government-stockpiling program.  Sinovac is developing a number of new pipeline vaccines including vaccines for enterovirus 71 (against hand, foot, and mouth disease), of which the EV71 vaccine is currently in Phase III clinical trials, pneumococcal conjugate, pneumococcal polysaccharides, varicella and rubella.  Sinovac sells its vaccines mainly in China and exports selected vaccines to Mongolia, Nepal, and the Philippines.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by words or phrases such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the business outlook and quotations from management in this press release contain forward-looking statements. Statements that are not historical facts, including statements about Sinovac's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Sinovac does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

Helen Yang/Chris Lee
Sinovac Biotech Ltd.
Tel:  +86-10-8279-9871/9659
Fax:  +86-10-6296-6910
Email: ir@sinovac.com

Investors:
Stephanie Carrington
The Ruth Group
Tel:  +1-646-536-7017
Email: scarrington@theruthgroup.com

Media:
Tracy Lessor
The Ruth Group
Tel:  +1-646-536-7006
Email: tlessor@theruthgroup.com

 

SINOVAC BIOTECH LTD.





Incorporated in Antigua and  Barbuda





Consolidated Balance Sheets





(Unaudited)





(Expressed in U.S. Dollars)







September 30 2012


December 31 2011

ASSETS










Current assets





Cash and cash equivalents

$

81,962,420

$

104,286,695

  Accounts receivable – net 


25,316,304


17,834,407

  Inventories


14,099,902


8,113,428

  Prepaid expenses and deposits


905,437


1,804,555






Total current assets


122,284,063


132,039,085






Property, plant and equipment 


82,994,261


75,627,881

Long-term inventories


2,227,196


5,248,237

Long-term prepaid expenses 


311,079


408,656

Prepayments for acquisition of equipment


525,972


828,902

Deferred tax assets 


351,627


419,114

Licenses and permits


1,261,820


1,336,254

Total assets


209,956,018


215,908,129






LIABILITIES AND EQUITY










Current liabilities





  Loans payable 


4,773,422


4,713,498

  Accounts payable and accrued liabilities 


27,529,207


29,522,495

Income tax payable


236,697


3,351,127

Deferred revenue


8,108,669


429,416

  Dividends payable


-


795,106

  Deferred government grants 


101,992


1,830,566

Total current liabilities


40,749,987


40,642,208






Deferred government grants


2,761,758


2,277,428

Loans payable 


24,670,318


17,321,327

Due to related party 


3,201,375


-

Deferred revenue


4,194,246


10,369,695

Total long term liabilities


34,827,697


29,968,450






Total liabilities


75,577,684


70,610,658






Commitments and contingencies 










EQUITY                                                                                                   





Preferred stock


-


-

  Authorized 50,000,000 shares at par value of $0.001 each





  Issued and outstanding: nil





Common stock 


55,024


54,774

  Authorized: 100,000,000 shares at par value of $0.001 each





  Issued and outstanding:  55,023,461 (2011 –54,773,961)





Additional paid-in capital


106,204,800


105,383,346

Accumulated other comprehensive income


10,899,102


9,978,325

Statutory surplus reserves


11,808,271


11,808,271

Retained earnings(accumulated deficit) 


(6,867,075)


2,696,227

Total stockholders' equity


122,100,122


129,920,943






Non-controlling interests 


12,278,212


15,376,528






Total equity


134,378,334


145,297,471






Total liabilities and equity


209,956,018


215,908,129

 

 

SINOVAC BIOTECH LTD.



Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)



Three and Nine Months Ended September 30, 2012 and 2011



(Unaudited)









(Expressed in U.S. Dollars)











Three months ended


Nine months ended



September 30


September 30



2012


2011


2012


2011










Sales

$

14,287,100

$

15,361,797

$

29,625,199

$

35,698,488










Cost of sales-(exclusive of depreciation of land-use rights and amortization of licenses and permits of $35,800 (2011 - $47,394) for three months and  $107,770  (2011 -$257,019) for nine months


6,770,712


6,631,672


10,401,918


13,095,652










Gross profit                                                                            


7,516,388


8,730,125


19,223,281


22,602,836










Selling, general and administrative expenses 


7,844,861


7,644,466


18,865,676


16,730,771










Research and development expenses - net of 


3,773,625


2,366,842


15,792,500


6,744,862

$nil (2011- $nil) for three months and $78,980(2011- $(215,431)) for nine months in government research grants 









Depreciation of property, plant and equipment  and amortization of  licenses and permits


471,242


225,398


1,103,629


1,071,553

Provision for doubtful debts


97,067


1,226,456


97,067


1,226,456

Government grants recognized in income


(78,053)


(70,061)


(1,535,383)


(207,508)










Total operating expenses


12,108,742


11,393,101


34,323,489


25,566,134










Operating income (loss)


(4,592,354)


(2,662,976)


(15,100,208)


(2,963,298)










Interest income


464,512


333,797


1,561,039


841,766

Interest and financing expenses


302,846


(181,298)


(143,552)


(446,316)

Loss on disposal of equipment


(24,574)


(229,015)


(23,712)


(195,509)

Other income (Expenses)


(22,709)


135,033


109,142


157,414










Income (loss)  before income taxes and non-controlling interests


(3,872,279)


(2,604,459)


(13,597,291)


(2,605,943)










Income tax recovery (expenses)


(5,958)


(271,230)


794,406


(2,056,723)










Consolidated net income (loss)


(3,878,237)


(2,875,689)


(12,802,885)


(4,662,666)










Less: income (loss) attributable to non-controlling interests

(849,619)


(733,453)


(3,239,583)


(1,049,116)










Net income (loss) attributable to stockholders


(3,028,618)


(2,142,236)


(9,563,302)


(3,613,550)

Net income (loss)


(3,878,237)


(2,875,689)


(12,802,885)


(4,662,666)










Other comprehensive income (loss)









Foreign currency translation adjustment


890,063


838,029


1,062,045


2,850,339

Total comprehensive income (loss)


(2,988,174)


(2,037,660)


(11,740,840)


(1,812,327)

Less: comprehensive income (loss) attributable to non-controlling interests


(744,732)


(619,032)


(3,098,315)


(622,407)

Comprehensive income(loss) attributable to stockholders

(2,243,442)


(1,418,628)


(8,642,525)


(1,189,920)

 Basic and diluted earnings (loss) per share  


-0.06


-0.04


-0.17


-0.07

Weighted average number of shares









of common stock outstanding 









- Basic


55,023,070


54,674,182


54,881,874


54,504,318

- Diluted


55,023,070


54,674,182


54,881,874


54,504,318

SINOVAC BIOTECH LTD.


Consolidated Statements of Cash Flows

Three and Nine Months Ended September 30, 2012 and 2011

(Unaudited)









(Expressed in U.S. Dollars)                                                   











Three Months ended September 30


Nine Months ended September 30



2012


2011


2012


2011

Cash flows from (used in) operating activities









  Net income(loss) for period

$

(3,878,237)

$

(2,875,689)

$

(12,802,885)

$

(4,662,666)

  Adjustments to reconcile net income (loss) to net cash from


-


-


-


-

    (used by) operating activities:


-


-


-


-

  - deferred income taxes


5,958


285,838


72,287


2,056,723

  -write-off of equipment and loss (gain) on disposal


24,574


229,015


23,712


195,509

FA Impairment provision


(21,106)




(17,784)



  - unrealized foreign exchange gain


-


-


(43,880)


-

  - stock-based compensation


134,138


63,759


388,104


164,392

- inventory provision


776,838


1,298,347


1,365,628


1,298,347

-provision for doubtful debt


97,067


1,226,456


97,067


1,226,456

  - depreciation of property, plant and equipment, and   amortization of licenses and permits


1,161,592


1,020,131


3,719,795


3,612,185

  - research and development expenditures qualifying for government grant






(78,980)


(215,431)

- deferred government grant recognized in income


(68,712)


(70,061)


(1,446,925)


(207,508)

- accretion expenses


48,560


86,221


185,349


290,630

  - accounts receivable


(6,631,251)


(4,648,768)


(7,302,483)


(271,247)

  - inventories


1,287,997


820,897


(4,140,923)


(1,806,090)

- income tax payable


(375)


(17,984)


(3,124,852)


(523,917)

  - prepaid expenses and deposits


560,264


88,351


1,048,642


(423,439)

- deferred revenue and advances from customers


1,456,127


1,812,241


1,356,605


(1,505,409)

  - accounts payable and accrued liabilities


(1,213,161)


2,315,631


(3,735,436)


(1,870,927)

Net cash provided by (used in) operating activities


(6,259,727)


1,634,385


(24,436,959)


(2,642,392)










Cash flows from (used in) financing activities









  - Loan proceeds


1,288,549


2,111,150


7,298,056


3,992,522

  - Loan repayment


-


-


-


(1,383,338)

  - Proceeds from issuance of common stock


5,760


197,852


399,200


734,400

 - Repayment from non-controlling shareholder of  Sinovac Beijing

-


-


-


3,397,522

- Subscriptions received


32,000


2,880


34,400


11,360

  - Dividends paid to non-controlling shareholder of Sinovac Beijing

-


-


(799,376)


(5,862,676)

- Loan from non-controlling shareholder of  Sinovac Dalian




-


3,178,164


-

  - Government grant received


-


-


240,580


7,636

Net cash provided by (used in) financing activities


1,326,309


2,311,882


10,351,024


897,426










Cash flows used in investing activities









- Proceeds from disposal of equipment


-


117,292


-


117,292

- Proceeds from redemption of short-term investments


-


-


-


1,547,030

- Purchase of short-term investments


-


(9,845,966)


-


(32,277,897)

- Acquisition of property, plant and equipment


(4,322,153)


(2,945,723)


(10,941,774)


(8,643,864)

Net cash used in investing activities


(4,322,153)


(12,674,397)


(10,941,774)


(39,257,439)










Exchange effect on cash and cash equivalents


1,777,618


(163,169)


2,703,434


812,896

Increase (decrease) in cash and cash equivalents


(7,477,953)


(8,891,299)


(22,324,275)


(40,189,509)










Cash and cash equivalents, beginning of period


89,440,373


70,287,280


104,286,695


101,585,490










Cash and cash equivalents, end of period


81,962,420


61,395,981


81,962,420


61,395,981










Cash paid for interest


493,244


167,883


1,375,203


809,303

Cash paid for income taxes


-




866,693


520,514










Supplemental schedule of non-cash activities:









  Acquisition of property, plant and equipment included in


8,183,093


8,021,881


8,183,093


8,021,881

  accounts payable and accrued liabilities


















SOURCE Sinovac Biotech Ltd.

Copyright 2012 PR Newswire



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