China Pharma Holdings, Inc., an NYSE American-listed corporation with a fully-integrated specialty pharmaceuticals subsidiary based in China, today announced financial results for the quarter ended September 30, 2020.
Third Quarter Highlights
Revenue was $2.4 million in the third quarter of 2020, which stayed the same as the condition in the same period of 2019;
Gross margin was 2.0% in the third quarter of 2020, compared to 15.7% in the same period of 2019;
Loss from operations was $1.0 million in the third quarter of 2020 compared to $0.6 million in the same period of 2019;
Net loss was $1.0 million in the third quarter of 2020 compared to $0.7 million in the same period of 2019. Loss per common stock was both $0.02 per basic and diluted share in the third quarter 2020 and 2019, respectively.
Ms. Zhilin Li, China Pharma's Chairwoman and CEO, commented, "Since the outbreak of COVID-19 early this year, it has continued to create a substantial negative impact on sales of pharmaceutical companies, including ours. Nevertheless, we achieved comparable drug sales revenue in the third quarter of 2020 compared to the same period last year, which showed certain improvements from the sales performance in the previous quarter (the second quarter of 2020), thanks to the efforts of the management and sales teams." Ms. Li continued, "We will continue to work on improving human health and we aim to leverage our expertise in the PRC for the development, manufacture and commercialization of pharmaceutical and comprehensive healthcare products for the benefit of human health."
Third Quarter Results
Revenue was both $2.4 million in the three months ended September 30, 2020 and 2019, respectively.
For the three months ended September 30, 2020, our cost of revenue was $2.4 million, or 98% of total revenue, comparing to $2.0 million, or 84% of total revenue, for the same period in 2019. The increase in cost of revenue was mainly due to declining production in the third quarter in addition to constant fixed costs leading to higher costs per unit of products and therefore higher sales costs of revenue in the third quarter of 2020.
Gross profit for the three months ended September 30, 2020 was $0.05 million, as compared to $0.37 million during the same period in 2019. Our gross profit margin in the three months ended September 30, 2020 was 2.0% as compared to 15.7% during the same period in 2019. The decrease in our gross profit margin was mainly due to the increased cost of revenue in the third quarter of 2020.
Our selling expenses for the three months ended September 30, 2020 and 2019 were $0.7 million and $0.6 million, respectively. Selling expenses accounted for 27.2% of the total revenue in the three months ended September 30, 2020, as compared to 25.8% during the same period in 2019. Because of the adjustments in our sales practices and the reformation of healthcare policies, we reduced the number of personnel and expenses to efficiently support our sales and the collection of accounts receivable.
Our general and administrative expenses were both $0.3 million for the three months ended September 30, 2020 and 2019, respectively. General and administrative expenses accounted for 12.1% and 14.0% of our total revenues in the three months ended September 30, 2020 and 2019, respectively.
Our operating loss for the three months ended September 30, 2020 was $1.0 million, compared to $0.6 million during the same period in 2019.
Net loss for the three months ended September 30, 2020 was $1.0 million, or $0.02 per basic and diluted common share, as compared to net loss of $0.7 million for the same period a year ago, or $0.02 per basic and diluted common share. The increase in net loss was mainly due to the increased cost of revenue in this period.
Nine Months Results
Revenue was both $7.9 million for the nine months ended September 30, 2020 and 2019, respectively.
For the nine months ended September 30, 2020, our cost of revenue was $6.5 million, or 82.5% of total revenue, comparing to $6.7 mill...
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