China Pharma Holdings, Inc. (NYSE American: CPHI) ("China Pharma," the "Company" or "We"), an NYSE American-listed corporation with a fully-integrated specialty pharmaceuticals subsidiary based in China, today announced that it is re-issuing its previous release that was made on March 31, 2020 to incorporate certain disclosures that are required under the NYSE American Company Guide Sections 401(h) and 610(b). Included below are these additional disclosures along with the previously disclosed financial results for the fiscal year ended December 31, 2019.
Full Year Highlights
- Revenue decreased 11.4% to $11.0 million in fiscal year 2019 from $12.3 million in fiscal year 2018;
- Gross margin was 13.6% in fiscal year 2019, compared to 16.0% in fiscal year 2018.
- Impairment loss was $17.0 million in fiscal year 2019 compared to $6.5 million in fiscal year 2018, which represented an increase of $10.5 million;
- Loss from operations was $20.4 million in fiscal year 2019 compared to $10.4 million in fiscal year 2018, which represented an increase of $10.0 million;
- Net loss was $20.7 million in fiscal year 2019 compared to $10.8 million in fiscal year 2018. Loss per common share was $0.48 per basic and diluted share in fiscal year 2019 compared with $0.25 per basic and diluted share in fiscal year 2018.
Ms. Zhilin Li, China Pharma's Chairman and CEO, commented, "In 2019, we were continuously influenced by the policies and market environment of the pharmaceutical industry in China. In particular, the various cost control related policies in connection with the healthcare insurance, Group Purchasing Organization ("GPO", a new drug purchasing practice in which the anticipated purchase volume will be announced in the tender announcement, and the suppliers will need to consider their manufacturing capacity in addition to the price) activities, consistency evaluation, and control of the percentage of drug expenditure among the total hospital expenditure. After evaluating the detailed rules of those major policies and considering the potential return of investment and our recent cash flow position, we have made the decision to impair all advances for our remaining four pipeline products in 2019. However, we may resume the development of these formulas in the future if sufficient funding and other favorable conditions arise." Ms. Li continued, "Nevertheless, we continue to explore in the field of comprehensive healthcare. Comprehensive healthcare focuses on people's daily life, aging and disease and pays attention to all kinds of risk factors and misunderstandings affecting health. We launched a wash-free sanitizer in early 2020 to address the market needs caused by COVID-19 in China. 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."
Full Year Results
Revenue decreased by 11.4% to $11.0 million for the year ended December 31, 2019, as compared to $12.3 million for the year ended December 31, 2018. This decrease in sales revenue was mainly due to the increased standards of drug tender procurement of GPO (drugs have to pass the consistency evaluation in order to participate in the GPO), and the decreased "drug ratio"(the ratio of drug expenditure to patients' total hospital expenditure) from 60% a few years ago to approximately 30% in 2019, which were promoted by the healthcare insurance cost control policy.
Gross profit for the year ended December 31, 2019 was $1.5 million, compared to $2.0 million in 2018. Our gross profit margin in 2019 was 13.6% compared to 16.0% in 2018. This decline in our gross profit margin was mainly due to a decrease in our sales but our fixed costs remained the same.
Our selling expenses for the year ended December 31, 2019 were $2.4 million, a decrease of $0.9 million compared to $3.2 million for the year ended December 31, 2018. Selling expenses accounted for 21.5% of the total revenue in 2019 compared to 26.1% in 2018.
Our general and administrative expenses for the year ended December 31, 2019 were $2.3 million, as compared to $1.9 million in 2018. General ...
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