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  • Date: 2012-08-14
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Sinovac Reports Unaudited Fourth Quarter and Full Year 2012 Financial Results
 
– Conference call scheduled for Thursday, April 18, 2013 at 8:00 AM EDT –
BEIJING, April 18, 2013 /PRNewswire/ -- Sinovac Biotech Ltd. (NASDAQ: SVA), a leading provider of vaccines in China, announced today its unaudited fourth quarter and full year financial results for the period ended December 31, 2012.
Financial Highlights
  • Total sales were $19.0 million for the fourth quarter of 2012, a decrease of 10.4% from $21.1 million in the same period of 2011. Excluding sales of Panflu and Panflu.1 under the government stockpiling program in the fourth quarter of 2011, total sales in the fourth quarter of 2012 increased by 166.9% from $7.1 million in the same period of 2011. 2012 full year sales were $48.6 million, a decrease of 14.5% from $56.8 million in 2011. Excluding sales of Panflu and Panflu.1 under the government stockpiling program in 2011, the regular sales, including Healive, Bilive and Anflu, mumps vaccine and RabEnd, increased by 38.6% to $48.6 million in 2012.
  • Net loss attributable to common stockholders in the fourth quarter of 2012 was $5.4 million, or $0.10 per basic and diluted share. Full year 2012 net loss attributable to common stockholders was $15.7 million, or $0.29 per basic and diluted share. The operating expense for the fourth quarter and full year included a $1.5 million impairment charge on long-lived assets related to the production of animal vaccine.
  • Cash and cash equivalents totaled $90.9 million as of December 31, 2012, compared to $104.3 million as of December 31, 2011.
Recent Business Highlights
  • In March 2013, Sinovac announced preliminary top-line data from its phase III clinical trial assessing the efficacy, immunogenicity and safety of the Company's proprietary enterovirus 71 ("EV71") vaccine against hand, foot and mouth disease ("HFMD"). The primary objective of the study was to evaluate the efficacy of the EV71 vaccine in the prevention of HFMD caused by EV71 in infants of between 6 to 35 months of age.  The preliminary phase III data showed that Sinovac's EV71 vaccine was 95% efficacious against HFMD caused by EV71.
  • In April 2013, Fengcai Zhu, Deputy Director of the Jiangsu Provincial Center for Disease Prevention and Control, and co-principal investigator of Sinovac's phase III trial on EV71 vaccine, presented data regarding the efficacy and safety of the Company's proprietary EV71 vaccine against HFMD at the 13th Annual World Vaccine Congress & Expo. 
  • Also in April, 2013, we were granted a license from COFEPRIS, the regulatory authority of Mexico's Ministry of Health, to sell Anflu in Mexico.
Dr. Weidong Yin, Chairman, President and CEO, commented, "2012 was a transformative year for Sinovac as we focused on continuing to advance our vaccine development pipeline. We invested significantly in research and development this year for our lead candidate, our proprietary EV71 vaccine against HFMD. We are well positioned for medium- to long-term growth as this vaccine progresses through the regulatory process and approaches launch."
Dr. Yin continued, "EV71 represents a significant unmet medical need in China with over 2.16 million cases reported in 2012, from which 560 fatalities were reported, Most of serve cases of EV71 infection were seen in children under 5 years old, which totaled approximately 80 million in China. Unfortunately, no EV71-specific treatment and prevention method currently exists. With knowledge of this unmet need, we commenced development of an EV71 vaccine in 2008, and recently concluded the phase III efficacy trial for this candidate. In March 2013, the unblinded top-line results from the phase III clinical trial for the vaccine demonstrated a 95% efficacy rate against HFMD caused by EV71. We expect our EV71 vaccine, once commercialized, will provide a solution to this unmet medical need in China."
Dr. Yin concluded, "I am also very pleased with the 38.6% increase in regular vaccine sales for 2012. Growth was achieved across all three of our market segments: private pay market, public market and international market. Sinovac's core products, inclusive of Healive, Bilive, and Anflu, contributed to our sales growth, with Bilive and Healive sales in the private market in China being the primary contributors to both the rate and magnitude of the sales increase. Our financial results benefited from a successful price increase for both of these products, as well as higher volume. Our well-trained, experienced sales team continues to drive growth in our commercialized vaccine products, but also has taken significant strides to increase efficacy in our sales and marketing infrastructure, positioning us well for future vaccine product launches, such as the EV71 vaccine."
Financial Review for Unaudited Fourth Quarter Ended December 31, 2012
An analysis of sales and gross profit is as follows: 

In USD
2012Q4
% of Sales
2011Q4
% of Sales
Fluctuation %
Healive-hepatitis A
10,037,198
53.0%
2,970,802
14.1%
237.9%
Bilive-hepatitis A&B
3,784,668
20.0%
605,624
2.9%
524.9%
Anflu- influenza
5,091,076
26.8%
3,523,452
16.7%
44.5%
Core sales
18,912,942
99.8%
7,099,878
33.7%
166.4%
Mumps 
23,925
0.1%
Rabend (Animal)
14,634
0.1%
Regular Sales
18,951,501
7,099,878
166.9%
Panflu.1 -H1N1
14,004,653
66.2%
Panflu-H5N1
38,873
0.1%
Total sales
18,951,501
21,143,404
-10.4%
Cost of Sales
8,698,009
8,031,758
Gross profit
10,253,492
54.1%
13,111,646
62.0%
-21.8%

Total revenue for the fourth quarter of 2012 was $19.0 million, a decrease of 10.4% from $21.1 million in the same period of 2011. Fourth quarter 2012 sales of our regular products, Healive, Bilive, Anflu, mumps vaccine and RabEnd, increased by 166.9% to $19.0 million from $7.1 million in the same period of 2011. The significant increase in sales of core products in the fourth quarter was driven by: 1) expansion of Healive to a new territory of Jiangsu Province in the fourth quarter; 2) the successful implementation of a new sales strategy to achieve both volume growth and average selling price increase for hepatitis vaccines; and 3) higher Anflu sales in the fourth quarter compared to other regular years due to a later start of the Anflu sales season in 2012. 2011 sales included recognition of approximately $14 million revenue from Panflu and Panflu.1 vaccines stockpiled by the Chinese government in 2010. These two products are not for regular sales, since they were produced upon government order and subject to the government decision of using the vaccines within its shelf life if there was any flu pandemic caused by H1N1 and/or H5N1. The Company's revenue recognition requirements were not met until the fourth quarter of 2011. And in 2012, there was no revenue recognized for either Panflu or Panflu.1.
Compared with the fourth quarter of 2011, the gross profit margin for the fourth quarter of 2012 decreased from 62.0% to 54.1%. The higher gross margin in the fourth quarter of 2011 was due to the recognition of $14 million revenue from H1N1 vaccine stockpiling, which has a higher gross profit margin than other vaccines.
Selling, general and administrative expenses for the fourth quarter of 2012 were $12.8 million, compared to $5.9 million in the same period of 2011. The increase in SG&A was largely due to an increase in G&A, although both selling expense and general and administration expense increased. The increase of G&A expense was resulted from the increased expenses incurred for validation, commissioning, and trial production for the dedicated production facility for our EV71 vaccine at the Changping site, Beijing, and the preparation for GMP inspection by the government authorities of our existing manufacturing facilities in both the Changping and Shangdi sites in Beijing for compliance with China's 2010 GMP guidelines.
The R&D expense for the fourth quarter of 2012 was $1.3 million, a $1 million decrease from $2.3 million for the same period in 2011, due to lower EV71 clinical trial expense as the trial approaching its end.
Depreciation of property, plant and equipment and amortization of licenses and permits for the fourth quarter of 2012 was $0.5 million, compared to $0.4 million for the same period in 2011.
For the fourth quarter of 2012, an impairment charge of $1.5 million on the long-lived assets including plant and building, machinery and equipments related to the animal vaccine production was made.
Net loss attributable to stockholders for the fourth quarter of 2012 was $5.4 million, or $0.10 per basic and diluted share, compared to a net income of $2.8 million, or $0.05 per basic and diluted share, for the same period in 2011.
Financial Review for Unaudited Full Year Results Ended December 31, 2012
An analysis of sales and gross profit of full year 2012 is as follows:      

In USD
2012
% of Sales
2011
%of Sales
Fluctuation %
Healive-hepatitis A
20,141,416
41.5%
14,217,393
25.0%
41.7%
Bilive-hepatitis A&B
19,417,940
40.0%
12,721,993
22.4%
52.6%
Anflu-influenza
8,943,937
18.4%
8,112,279
14.3%
10.3%
Core sales
48,503,293
99.9%
35,051,665
61.7%
38.4%
Mumps
23,925
0.0%
Rabend (Animal)
49,482
0.1%
Regular Sales
48,576,700
100.0%
35,051,665
61.7%
38.6%
Panflu.1 -H1N1
14,008,225
24.6%
Panflu-H5N1
7,782,002
13.7%
Total Sales
48,576,700
56,841,892
100.0%
-14.5%
Cost of goods sold
19,099,927
21,127,410
Gross profit
29,476,773
60.7%
35,714,482
62.8%
-17.5%

Total revenue for the fiscal year ended December 31, 2012 was $48.6 million, a decrease of 14.5% from $56.8 million reported in 2011. Excluding the revenue recognized on the government stockpiling of Panflu and Panflu.1 in 2010, sales of our regular products, Healive, Bilive and Anflu, mumps vaccine and RabEnd, increased by 38.6% to $48.6 million in 2012 from $35.1 million in 2011.
Gross profit margin was 60.7% in 2012, a decline from 62.8% in 2011. Excluding the impact to sales and cost of sales in both years by of Panflu and Panflu.1, the gross margin of regular vaccine products increased to 63.7% in 2012 from 57.7% in 2011.
Selling, general and administrative expenses in 2012 were $31.7 million, compared to $22.4 million in 2011. The increase in SG&A was largely due to an increase in G&A, although both selling expense and general and administration expense increased. The increase of G&A expense was due to the increased cost incurred on the validation of the new facilities in Changping site and preparation for new GMP compliance inspection of our existing manufacturing facilities in both Changping and Shangdi sites.
Research and development expenses in 2012 increased to $17.0 million from $9.0 million in 2011. The increase was mainly due to expense incurred in 2012 in connection with the EV71 phase III clinical trial.
Depreciation of property, plant and equipment and amortization of licenses and permits in 2012 was $1.6 million, compared to $1.4 million in 2011. The higher depreciation in 2012 was mainly due to the additional depreciation on property, plant and equipment of the Changping site.
The Company recorded loss on disposal and impairment of property, plant and equipment of $2.2 million as operating expense, in which $1.5 million was for animal vaccine production related assets and $0.5 million was for human vaccine production related assets.
Net loss attributable to stockholders in 2012 was $15.7 million, or $0.29 per basic and diluted share, compared to a net loss of $0.8 million, or $0.02 per basic and diluted share in 2011.
As of December 31, 2012, cash and cash equivalents totaled $90.9 million, compared to $104.3 million as of December 31, 2011. Net cash used in operating activities was $16.6 million in 2012, which primarily resulted from payment made for EV71 clinical trial and validation of the new facilities in Changping, Beijing and new GMP inspection preparation expenses. Net cash used in investing activities was $16.2 million, which primarily resulted from payment for the purchase of property, plant and equipment for the Changping site. Net cash provided by financing activities was $17.3 million in 2012. The Company maintained a strong cash balance despite significant expenditure on the phase III clinical trial of EV71 vaccine candidate and investment in its production facilities. In order to commercialize other pipeline products, the Company may continue to explore new sources of financing when appropriate.
Correction of Unaudited Financials in Prior Quarterly Release
In the second quarter of 2012, the Company assessed there was reasonable assurance that the conditions attached to several government grants were fulfilled and recognized $1.4 million and $1.5 million of government grants as income for the three and six months periods ended June, 30, 2012, respectively. In the fourth quarter of 2012, the Company determined that government grants of $0.98 million (RMB 6.2 million) related to the purchase of equipment that should have been recorded as deferred government grants with the balance applied to reduce depreciation expense of the related equipment over their remaining useful lives. As a result, the amount of government grants recognized as income should be reduced by $0.98 million for the three and six months periods ended June 30, 2012, and $0.98 million for the nine months periods ended September 30, 2012, respectively. The depreciation expense should also be reduced by $11,679 and $11,679 for the three and six months periods ended June 30, 2012, and $36,646 and $46,636 for the three and nine months periods ended September 30, 2012, respectively. Net cash used from operating activities remained unchanged, because the adjustments on net loss, depreciation of property, plant and equipment and amortization of licenses and permits, and the recognized government grant income in operating activities did not affect cash. Corresponding corrections were made for both the unaudited fourth quarter and full year 2012 financial statements. The corrections to earning releases that were issued in the affected quarters in 2012 are presented in the tables below. Investors should no longer rely upon the previously released unaudited financial statements for the periods and any earnings releases or other communications relating to these periods.
Consolidated Statements of Income (Loss) and Comprehensive Income (Loss):
Unaudited Three-month and six-month period ended June 30, 2012

 Three months ended 'June 30 2012 
 Six months ended 'June 30 2012 
 Previously Reported 
 Adjustment 
 Corrected Report 
 Previously Reported 
 Adjustment 
 Corrected Report 
 Sales 
9,364,632
-
9,364,632
15,338,099
-
15,338,099
 Cost of sales 
1,375,917
-
1,375,917
3,631,206
-
3,631,206
 Gross profit 
7,988,715
-
7,988,715
11,706,893
-
11,706,893
 Selling, general and administrative expenses  
6,700,526
-
6,700,526
11,020,815
-
11,020,815
 Research and development expenses - net of  
4,676,703
-
4,676,703
12,018,875
-
12,018,875
 Depreciation of property, plant and equipment 
and amortization of  licenses and permits 
324,944
(11,679)
313,265
632,387
(11,679)
620,708
 Loss of disposal and impairment of property, plant and equipment  
0
-
0
0
-
0
 Provision for doubtful debts 
-
-
-
-
-
-
 Government grants recognized in income 
(1,386,126)
981,044
(405,082)
(1,457,330)
981,044
(476,286)
 Total operating expenses 
10,316,047
969,365
11,285,412
22,214,747
969,365
23,184,112
 Operating income (loss) 
(2,327,332)
(969,365)
(3,296,697)
(10,507,854)
(969,365)
(11,477,219)
 Interest income 
498,856
-
498,856
1,096,527
-
1,096,527
 Interest and financing expenses 
(232,078)
-
(232,078)
(446,398)
-
(446,398)
 Other income (Expenses) 
14,635
-
14,635
132,713
-
132,713
 Income (loss)  before income taxes and non-
controlling interests 
(2,045,919)
(969,365)
(3,015,284)
(9,725,012)
(969,365)
(10,694,377)
 Income tax recovery (expenses) 
797,462
-
797,462
800,364
-
800,364
 Consolidated net income (loss) 
(1,248,457)
(969,365)
(2,217,822)
(8,924,648)
(969,365)
(9,894,013)
 Less: income (loss) attributable to non-controlling interests 
(326,828)
(260,856)
(587,684)
(2,389,964)
(260,856)
(2,650,820)
 Net income (loss) attributable to stockholders 
(921,629)
(708,509)
(1,630,138)
(6,534,684)
(708,509)
(7,243,193)
 Net income (loss) 
(1,248,457)
(969,365)
(2,217,822)
(8,924,648)
(969,365)
(9,894,013)
 Other comprehensive income (loss) 
 Foreign currency translation adjustment 
(474,801)
5,067
(469,734)
171,982
5,067
177,049
 Total comprehensive income (loss) 
(1,723,258)
(964,298)
(2,687,556)
(8,752,666)
(964,298)
(9,716,964)
 Less: comprehensive income (loss) attributable to non-controlling interests 
(373,994)
(259,492)
(633,486)
(2,353,583)
(259,492)
(2,613,075)
 Comprehensive income(loss) attributable to stockholders 
(1,349,264)
(704,806)
(2,054,070)
(6,399,083)
(704,806)
(7,103,889)
 Basic and diluted earnings (loss) per share  
(0.02)
(0.01)
(0.03)
(0.12)
(0.01)
(0.13)
 Weighted average number of shares 
 of common stock outstanding  
 - Basic 
54,804,498
54,804,498
54,804,498
54,784,801
54,784,801
54,784,801
 - Diluted 
54,804,498
54,804,498
54,804,498
54,784,801
54,784,801
54,784,801

Unaudited Three-month and six-month period ended September 30, 2012

Three months ended 'September 30 2012
Nine months ended 'September 30 2012
 Previously Reported 
 Adjustment 
 Corrected Report 
 Previously Reported 
 Adjustment 
 Corrected Report 
Sales
14,287,100
-
14,287,100
29,625,199
-
29,625,199
Cost of sales
6,770,712
-
6,770,712
10,401,918
-
10,401,918
Gross profit
7,516,388
-
7,516,388
19,223,281
-
19,223,281
Selling, general and administrative expenses 
7,844,861
-
7,844,861
18,865,676
-
18,865,676
Research and development expenses - net of 
3,773,625
-
3,773,625
15,792,500
-
15,792,500
Depreciation of property, plant and equipment 
and amortization of  licenses and permits
471,242
(36,646)
434,596
1,103,629
(46,636)
1,056,993
Loss of disposal and impairment of property, plant and equipment 
-
-
-
-
-
-
Provision for doubtful debts
97,067
-
97,067
97,067
-
97,067
Government grants recognized in income
(78,053)
-
(78,053)
(1,535,383)
979,355
(556,028)
Total operating expenses
12,108,742
(36,646)
12,072,096
34,323,489
932,719
35,256,208
Operating income (loss)
(4,592,354)
36,646
(4,555,708)
(15,100,208)
(932,719)
(16,032,927)
Interest income
464,512
-
464,512
1,561,039
1,561,039
Interest and financing expenses
302,846
-
302,846
(143,552)
-
(143,552)
Other income (Expenses)
(47,283)
-
(47,283)
85,430
85,430
Income (loss)  before income taxes and non-
controlling interests
(3,872,279)
36,646
(3,835,633)
(13,597,291)
(932,719)
(14,530,010)
Income tax recovery (expenses)
(5,958)
-
(5,958)
794,406
-
794,406
Consolidated net income (loss)
(3,878,237)
36,646
(3,841,591)
(12,802,885)
(932,719)
(13,735,604)
Less: income (loss) attributable to non-controlling interests
(849,619)
9,861
(839,758)
(3,239,583)
(250,995)
(3,490,578)
Net income (loss) attributable to stockholders
(3,028,618)
26,785
(3,001,833)
(9,563,302)
(681,724)
(10,245,026)
Net income (loss)
(3,878,237)
36,646
(3,841,591)
(12,802,885)
(932,719)
(13,735,604)
Other comprehensive income (loss)
Foreign currency translation adjustment
890,063
(11,880)
878,183
1,062,045
(6,813)
1,055,232
Total comprehensive income (loss)
(2,988,174)
24,766
(2,963,408)
(11,740,840)
(939,532)
(12,680,372)
Less: comprehensive income (loss) attributable
to non-controlling interests
(744,732)
6,664
(738,068)
(3,098,315)
(252,828)
(3,351,143)
Comprehensive income(loss) attributable to stockholders
(2,243,442)
18,102
(2,225,340)
(8,642,525)
(686,704)
(9,329,229)
 Basic and diluted earnings (loss) per share  
(0.06)
0.01
(0.05)
(0.17)
(0.02)
(0.19)
Weighted average number of shares
of common stock outstanding 
- Basic
55,023,070
55,023,070
55,023,070
54,881,874
54,881,874
54,881,874
- Diluted
55,023,070
55,023,070
55,023,070
54,881,874
54,881,874
54,881,874

 
Unaudited Consolidated Balance Sheet:

 June 30 2012 
 September 30 2012 
 Previously Reported
 Adjustment 
 Corrected Report
 Previously Reported
 Adjustment
 Corrected Report 
ASSETS
Current assets
  Cash and cash equivalents
89,440,373
-
89,440,373
81,962,420
-
81,962,420
  Accounts receivable – net 
18,533,886
-
18,533,886
25,316,304
-
25,316,304
  Inventories
14,226,557
-
14,226,557
14,099,902
-
14,099,902
  Prepaid expenses and deposits
1,408,762
-
1,408,762
905,437
-
905,437
Total current assets
123,609,578
-
123,609,578
122,284,063
-
122,284,063
Property, plant and equipment 
80,961,440
-
80,961,440
82,994,261
-
82,994,261
Long-term inventories
3,974,552
-
3,974,552
2,227,196
-
2,227,196
Long-term prepaid expenses 
343,374
-
343,374
311,079
-
311,079
Prepayments for acquisition of equipment
452,144
-
452,144
525,972
-
525,972
Deferred tax assets 
353,903
-
353,903
351,627
-
351,627
Licenses and permits
1,278,421
-
1,278,421
1,261,820
-
1,261,820
Total assets
210,973,412
-
210,973,412
209,956,018
-
209,956,018
LIABILITIES AND EQUITY
Current liabilities
  Loans payable 
4,722,178
-
4,722,178
4,773,422
-
4,773,422
  Accounts payable and accrued liabilities 
28,698,963
-
28,698,963
27,529,207
-
27,529,207
  Income tax payable
234,156
-
234,156
236,697
-
236,697
  Deferred revenue
3,794,136
-
3,794,136
8,108,669
-
8,108,669
  Dividends payable
0
-
0
-
-
-
  Deferred government grants 
100,897
345,471
446,368
101,992
349,222
451,214
Total current liabilities
37,550,330
345,471
37,895,801
40,749,987
349,222
41,099,209
Deferred government grants
2,805,528
618,827
3,424,355
2,761,758
590,310
3,352,068
Loans payable 
23,330,072
-
23,330,072
24,670,318
-
24,670,318
Due to related party 
3,167,008
-
3,167,008
3,201,375
-
3,201,375
Deferred revenue
6,925,862
-
6,925,862
4,194,246
-
4,194,246
Total long term liabilities
36,228,470
618,827
36,847,297
34,827,697
590,310
35,418,007
Total liabilities
73,778,800
964,298
74,743,098
75,577,684
939,532
76,517,216
Commitments and contingencies 
EQUITY
Preferred stock
-
-
-
-
-
-
  Authorized 50,000,000 shares at par value of
-
-
 $0.001 each  Issued and outstanding: nil
-
-
Common stock 
55,020
55,020
55,024
-
55,024
Additional paid-in capital
106,032,906
106,032,906
106,204,800
-
106,204,800
Accumulated other comprehensive income
10,113,926
5,067
10,118,993
10,899,102
(6,813)
10,892,289
Statutory surplus reserves
11,808,271
11,808,271
11,808,271
-
11,808,271
Retained earnings(accumulated deficit) 
(3,838,457)
(708,509)
(4,546,966)
(6,867,075)
(681,724)
(7,548,799)
Total stockholders' equity
124,171,666
(703,442)
123,468,224
122,100,122
(688,537)
121,411,585
Non-controlling interests 
13,022,946
(260,856)
12,762,090
12,278,212
(250,995)
12,027,217
Total equity
137,194,612
(964,298)
136,230,314
134,378,334
(939,532)
133,438,802
Total liabilities and equity
210,973,412
-
210,973,412
209,956,018
-
209,956,018

Conference Call Details
The Company will host a conference call on Thursday, April 18, 2013, at 8:00 a.m. EDT (April 18, 2013, at 8:00 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. EDT on April 18, 2013 to May 2, 2013 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 411774.
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 April 18, 2013, and the replay will remain available for 30 days.
Statement Regarding Unaudited Financial Information
The unaudited financial information set forth above is subject to adjustments that may be identified when audit work is performed on the Company's year-end financial statements, which could result in significant differences from this unaudited financial information. The Company expects to file final audited results with the SEC shortly.
About Sinovac
Sinovac Biotech Ltd. is a China-based biopharmaceutical company that focuses on the research, development, manufacturing and commercialization of vaccines that protect against human infectious diseases including hepatitis A and B, seasonal influenza, H5N1 pandemic influenza (avian flu), H1N1 influenza (swine flu) and mumps, as well as animal rabies vaccine for canines.  The Company recently concluded the phase III clinical trial for enterovirus 71 (against hand, foot and mouth disease).  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 pneumococcal polysaccharides, pneumococcal conjugate, varicella and rubella.  Sinovac sells its vaccines mainly in China and exports selected vaccines to Mongolia, Nepal, and the Philippines. Sinovac was also granted a license to commercialize seasonal flu vaccine in Mexico.
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
Sinovac Biotech Ltd.
Tel:  +86-10-8279-9871
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:
Aaron Estrada
The Ruth Group
Tel:  +1-646-536-7028
Email:
vaguiar@theruthgroup.com

SINOVAC BIOTECH LTD.
Incorporated in Antigua and Barbuda
Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)
Years ended December 31, 2012 and 2011
(Unaudited)
Three months ended
Twelve months ended
(Expressed in U.S. Dollars)
31-Dec
31-Dec
2012
2011
2012
2011
Sales
$
18,951,501
$
21,143,404
$
48,576,700
$
56,841,892
Cost of sales-(exclusive of depreciation of land
use right and amortization of licenses and
permits of $126,998 (2011- $33,507) for three
months and $234,768  (2011 -$290,526) for
twelve months. 
8,698,009
8,031,758
19,099,927
21,127,410
Gross profit
10,253,492
13,111,646
29,476,773
35,714,482
Selling, general and administrative expenses
12,819,508
5,909,584
31,685,185
22,372,095
Provision for (recovery of) doubtful accounts
-971,287
-1,661,581
-874,220
-166,865
Research and development expenses - net of $Nil (2011-$470,827) in government research grants for three months and $125,222 (2010-$686,258) for twelve months. 
1,251,065
2,261,688
17,043,565
9,006,550
Depreciation of property, plant and equipment  and amortization of  licenses and permits
539,672
365,391
1,594,976
1,436,944
Loss of disposal and impairment of property, plant and equipment 
2,190,504
259,464
2,190,504
454,973
Government grant recognised as income
181,486
-556,169
-372,853
-763,677
Total operating expenses
16,010,948
-
6,578,377
51,267,157
-
32,340,020
Operating income (loss)
-5,757,456
-
6,533,269
-21,790,384
-
3,374,462
Interest and financing expenses –net of $485,317 (2010-$nil) in government grants for three months and $595,883 (2010-$147,520) for twelve months. 
-630,824
61,756
-774,376
-384,560
Interest income
449,745
555,375
2,010,784
1,397,141
Other income (expenses)
-162,627
122,452
-77,197
279,866
Loss on disposal and write down of equipment
Income (loss)  before income taxes and non-controlling interests
-6,101,162
-
7,272,852
-20,631,173
-
4,666,909
Income tax recovery (expenses) 
89,491
-3,009,880
883,897
-5,066,603
Consolidated net income (loss)
-6,011,671
-
4,262,972
-19,747,276
-
-399,694
Less: income (loss) attributable to non-controlling interests
-577,578
1,494,118
-4,068,156
445,002
Net income (loss) attributable to stockholders
$
-5,434,093
$
2,768,854
$
-15,679,120
$
-844,696
Net income (loss)
$
-6,011,671
$
4,262,972
$
-19,747,276
$
-399,694
Other comprehensive income 
Foreign currency translation adjustment
960,352
789,653
2,015,584
3,639,992
Total comprehensive income (loss)
-5,051,319
5,052,625
-17,731,692
3,240,298
Less: comprehensive income (loss) attributable to non-controlling interests 
-488,125
1,595,969
-3,839,268
973,562
Comprehensive income (loss) attributable to stockholders
$
-4,563,194
$
3,456,656
$
-13,892,424
$
2,266,736
Earnings (loss) per share              – basic
$
-0.10
$
0.05
$
-0.29
$
-0.02
                                                             – diluted
$
-0.10
$
0.05
$
-0.29
$
-0.02
Weighted average number of shares of common stock outstanding
      – Basic 
55,037,264
54,766,428
54,926,440
54,608,919
– Diluted
55,037,264
54,946,194
54,926,440
54,608,919
SINOVAC BIOTECH LTD.
Incorporated in Antigua and Barbuda
Consolidated Balance Sheets
December 31, 2012 and 2011
(Unaudited)
(Expressed in U.S. Dollars)
December 31,
December 31, 
2012
2011
ASSETS
Current assets
  Cash and cash equivalents
$
90,881,970
$
104,286,695
  Accounts receivable – net
23,440,135
17,834,407
  Inventories
10,529,476
8,113,428
  Prepaid expenses and deposits
1,072,076
1,804,555
Total current assets
125,923,657
132,039,085
Property, plant and equipment 
80,083,383
75,627,881
Long-term inventories
28,692
5,248,237
Long-term prepaid expenses 
289,766
408,656
Prepayments for acquisition of equipment
483,278
828,902
Deferred tax assets 
445,589
419,114
Licenses and permits
1,149,914
1,336,254
Total assets
$
208,404,279
$
215,908,129
LIABILITIES AND EQUITY
Current liabilities
  Loans payable
$
3,328,590
$
4,713,498
  Accounts payable and accrued liabilities 
25,425,498
29,522,495
Income tax payable 
238,775
3,351,127
Deferred revenue
11,972,155
429,416
  Dividends payable
-
795,106
  Deferred government grants 
431,097
719,081
Total current liabilities
41,396,115
39,530,723
Deferred government grants 
4,068,602
3,388,913
Loans payable 
31,181,235
17,321,327
Due to related party 
3,230,125
-
Deferred revenue
99,517
10,369,695
Total long term liabilities
38,579,479
31,079,935
Total liabilities
79,975,594
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 
55,092
54,774
  Authorized: 100,000,000 shares at par value of $0.001 each
  Issued and outstanding:  55,091,561 (2011 – 54,773,961)
Additional paid-in capital
106,245,934
105,383,346
Accumulated other comprehensive income
11,765,021
9,978,325
Statutory surplus reserves
11,808,271
11,808,271
Retained earnings (accumulated deficit) 
-12,982,893
2,696,227
Total stockholders' equity
116,891,425
129,920,943
Non-controlling interests 
11,537,260
15,376,528
Total equity
128,428,685
145,297,471
Total liabilities and equity
$
208,404,279
$
215,908,129

 

SINOVAC BIOTECH LTD.
Incorporated in Antigua and Barbuda
Consolidated Statements of Cash Flows
Years ended December 31, 2012 and 2011
(Unaudited)
(Expressed in U.S. Dollars)
Three months ended
Twelve months ended
31-Dec
31-Dec
2012
2011
2012
2011
Cash flows from (used in)
operating activities
  Net income (loss)
$
-6,011,671
4,262,972
$
-19,747,276
$
-399,694
  Adjustments to reconcile net income to net cash
  provided by operating activities:
 - deferred income taxes
-89,491
788,472
-17,204
2,845,195
 - stock-based compensation
-40,878
41,909
347,226
206,301
 - inventory provision
2,113,825
2,735,822
3,479,453
4,034,169
 - Provision for (recovery of)  doubtful accounts
-971,287
-1,661,581
-874,220
-166,865
 Loss of disposal and impairment of property,  plant  and equipment 
2,184,576
259,464
2,190,504
454,973
  - research and development expenditures qualified for government grant
-46,242
-470,827
-125,222
-686,258
 - depreciation of property, plant and equipment
   and amortization of licenses and permits
814,252
1,213,428
4,487,411
4,825,613
 - deferred government grant recognized in income 
109,340
-225,035
-358,230
-432,543
 accretion expenses
49,608
86,780
234,957
377,410
Changes in:
 - accounts receivable
3,016,814
6,014,109
-4,285,669
5,474,602
 - inventories
3,715,070
-108,988
-425,853
-1,915,078
 - income tax payable 
-4,841
1,863,729
-3,129,693
1,339,812
 - prepaid expenses and deposits
-135,558
-107,276
913,084
-530,715
 - deferred revenue 
-330,322.00
-1,190,534
1,026,283
-2,695,943
 - accounts payable and accrued liabilities
3,451,254
3,075,574
-328,062
1,204,647
Net cash (used in)
provided by operating
activities
7,824,449
16,578,018
-16,612,511
13,935,626
Cash flows from financing activities
- Loan proceeds
9,489,001
7,399,314
16,787,057
11,391,836
- Loan repayment
-4,755,262
-9,275,502
-4,755,262
-10,658,840
   net of share issuance costs
108,960
6,400
508,160
748,800
- Proceeds from shares subscribed 
-26,880.00
-
7,520
3,360
- Dividends paid to non-controlling shareholder 
of Sinovac Beijing
-2775
-
-802,151
-5,862,676
- Government grants received 
2,154,186.00
1,585,289
2,394,766
1,592,925
- Repayment from (loan to) non-controlling shareholder of  Sinovac  Beijing 
11666
-
3,397,522
Repayment from (loan to) non-controlling shareholder of  Sinovac  Dalian
-
-
3,189,830
Net cash provided by
financing activities
6,978,896
-284,499
17,329,920
612,927
Cash flows used in
investing activities
 - Restricted cash 
-
-
-
-
 - Proceeds from disposal of equipment
5,375
4,797
5,375
122,089
- Proceeds from redemption of short-term investments
-
-
0
1,544,759
- Purchase of short-term investments
-
-
-
-
  - Prepayments for acquisition of equipment
254,966
-467,183
254,966
-467,183
 - Acquisition of property, plant and equipment
-5,469,802
-6,346,012
-16,411,576
-14,989,876
Net cash provided
(used) in investing
activities
-5,209,461
-6,808,398
-16,151,235
-13,790,211
Exchange gain on cash
and cash equivalents
674,334
602,319
2,029,101
1,942,863
Increase in cash and
cash equivalents
8,919,550
10,087,440
-13,404,725
2,701,205
Cash and cash
equivalents, beginning
of period
81,962,420
94,199,255
104,286,695
101,585,490
Cash and cash equivalents, end of
period
$
90,881,970
$
104,286,695
$
90,881,970
$
104,286,695
Supplemental
disclosure of cash flow
information:
Cash paid for interest,net of amounts capitalized
$
256,256
$
242,504
$
749,500
$
455,851
Cash paid for income taxes
$
0
$
167,883
$
2,264,593
$
881,596
Supplemental schedule of non-cash activities:
 Acquisition of property,
plant and equipment
included in accounts
payable and accrued
liabilities
$
3,788,804
$
9,124,751
$
3,788,004
$
9,124,751

 
 
 

 

 

       
     
   

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