Sinovac Reports Unaudited Third Quarter Financial Results

-- - Conference call scheduled for Monday, November 17, 2014 at 8:00 a.m. ET -

  • Author: Sinovac
  • Date: 2014-11-15
  • Source: Sinovac
  • Pageview: 12933

BEIJING, Nov. 14, 2014 /PRNewswire/ -- Sinovac Biotech Ltd. (SVA), a leading provider of biopharmaceutical products in China, today announced its unaudited financial results for the third quarter and nine months ended September 30, 2014.

Third Quarter 2014 Financial Highlights

(compared to the third quarter 2013)

  • Quarterly sales were $17.1 million, a decrease of 22.3% from $22.1 million in the prior year period, which includes recognition of a special order of pandemic influenza vaccine (H5N1) revenue of $3.6 million. Excluding the impact from this special order, third quarter sales of regular vaccine products decreased 7.4% from the prior year period.
  • Gross profit was $12.2 million, a decrease of 16.7% from $14.6 million in the prior year period. Excluding the special order of pandemic influenza vaccine (H5N1) sales impact from 3Q13, gross profit decreased 2.8% from $12.5 million in the same period of last year. Gross margin was 70.9%, compared to 66.1% in the prior year period. Excluding the impact from the special order of pandemic influenza vaccine (H5N1) in 3Q13, gross margin was 70.9%, compared to 67.6% in the same period of last year.
  • Net income attributable to common stockholders was $0.1 million, or $0.00 per basic and diluted share, compared to $2.3 million, or $0.04 per basic and diluted share, in the third quarter of 2013.

Mr. Weidong Yin, Chairman, President and CEO of Sinovac, commented, "In the third quarter, the vaccine market in China began to show signs of recovery after the lower demand in the first half of the year. Although our regular sales were still down from the third quarter last year, we are encouraged by the uptick in demand for our seasonal flu vaccine from the private-pay market as well as consistent hepatitis A vaccine tenders in the public market.

"We continue to expand our presence in international markets with high sales potential for our vaccines. The Mexican Ministry of Health recently renewed our GMP certificate for the seasonal influenza and hepatitis A vaccines. Also during the third quarter, we received our registration license for our seasonal influenza vaccine in Chile.

"We are continuing to make progress on our pipeline vaccines. The expert panel review for our EV71 vaccine is scheduled in November 2014, which is one step forward in the process of new drug appication of our EV71 vaccine. We have also finalized the clinical trial protocol for our pneumococcal polysaccharide vaccine (PPV) and expect to begin clinical trials by the end of 2014," Mr. Yin concluded.

Third Quarter 2014 Business Highlights

Sales Update

Public Tenders Sinovac received notification that it has been selected by the Jiangsu Centers for Disease Control and Prevention to supply the Company's inactivated hepatitis A vaccine, Healive, to the Expanded Program of Immunization (EPI) in 2015. As one of two selected suppliers for the tender, Sinovac has committed to supplying 55% of the total tender of Jiangsu Province, which represents growth over Sinovac's contribution of 50% of the total tender amount in last year. Sinovac anticipates revenue of approximately RMB 18 million (or approximately $2.9 million) from this tender.

Additionally, Sinovac has been selected by the Tianjin Centers for Disease Control and Prevention to be the sole supplier of inactivated hepatitis A vaccines to the EPI in Tianjin for 2015 through 2017. The total value of this tender is approximately RMB 28 million (or approximately $4.6 million).

The Company expects to begin delivery of vaccines for both tenders by the end of 2014, according to demand.

GMP Certificate for Mexico On August 29, 2014, Sinovac passed on-site inspections of its Shangdi and Changping facilities and obtained a renewal of its GMP certificate from the Mexico Ministry of Health for its seasonal influenza and hepatitis A vaccines. The renewed GMP certificate is valid until February 2016.

Seasonal Influenza Vaccine Registration License in Chile Sinovac obtained a registration license for its seasonal influenza vaccine from Chile's Institute of Public Health. The license is valid until October 2019.

R&D Update

sIPV On October 29, 2014, the Beijing Drug Administration officially accepted Sinovac's clinical trial application for its Sabin inactivated polio vaccine (sIPV).

Unaudited Financial Results for Third Quarter 2014

(In USD'000 except percentage data)


 

2014 Q3

% of Sales

2013 Q3

% of Sales

Hepatitis A – Healive


 

3,967

23.1%

5,252

23.8%

Hepatitis A&B – Bilive


 

3,176

18.5%

5,355

24.3%

Hepatitis vaccines


 

7,143

41.6%

10,607

48.1%

Influenza vaccine


 

9,647

56.3%

8,417

38.1%

Animal vaccine


 

102

0.6%

54

0.2%

Mumps vaccine


 

254

1.5%

(571)

(2.6)%

Regular sales


 

17,146

100.0%

18,507

83.8%

H5N1


 

-

-

3,568

16.2%

Total sales


 

17,146

100.0%

22,075

100.0%

Cost of goods sold


 

4,986

29.1%

7,474

33.9%

Gross profit


 

12,160

70.9%

14,601

66.1%

In the third quarter 2014, total sales were $17.1 million, a decrease of 22.3% from $22.1 million during the same period in 2013. However, during the third quarter 2013, the Company recognized revenue of $3.6 million from sales of its pandemic influenza vaccine (H5N1) to the government stockpiling program. Excluding the impact of this special order, quarterly sales decreased 7.4% YoY in the third quarter. According to a joint notice on reducing and unifying the value added tax (VAT) rate published by the Ministry of Finance of China and State Administration of Taxation of China, the VAT rate applied to the sales of vaccine products was reduced to 3% from 6% effective July 1, 2014. Excluding the impact of the VAT rate reduction, quarterly sales decreased 10.1% YoY in the third quarter.

Gross profit was $12.2 million in the third quarter 2014, compared to $14.6 million in the prior year period. Gross margin increased to 70.9% from 66.1% in the prior year period. Excluding the impact from the sales of pandemic influenza vaccine (H5N1) in the third quarter of last year, gross margin was 70.9%, compared to 67.6% in the same period of last year. The increase in gross margin was primarily due to increased efficiency in the Anflu manufacturing processes.

Selling, general and administrative expenses for the third quarter 2014 were $8.5 million, compared to $9.4 million in the same period of 2013.

R&D expenses for the third quarter of 2014 were $2.5 million, a $0.5 million increase over the same period in 2013. This increase is attributable to the continued advancement of sIPV and process optimization for PPV.

Net income attributable to common stockholders for the third quarter of 2014 was $0.1 million, or $0.00 per basic and diluted share, compared to $2.3 million, or $0.04 per basic and diluted share, in the same period last year.

Unaudited Financial Results for First Nine Months of 2014

(In USD'000 except percentage data)


 

2014 1-9

% of Sales

2013 1-9

% of Sales

Hepatitis A – Healive


 

15,519

36.3%

18,451

37.2%

Hepatitis A&B – Bilive


 

15,613

36.5%

17,935

36.2%

Hepatitis vaccines


 

31,132

72.8%

36,386

73.4%

Influenza vaccine


 

9,708

22.7%

8,747

17.6%

Animal vaccine


 

147

0.3%

132

0.3%

Mumps vaccine


 

1,693

4.0%

746

1.5%

Regular sales


 

42,680

99.8%

46,011

92.8%

H5N1


 

102

0.2%

3,568

7.2%

Total sales


 

42,782

100.0%

49,579

100.0%

Cost of goods sold


 

11,289

26.4%

14,327

28.9%

Gross profit


 

31,493

73.6%

35,252

71.1%

Total sales for the first nine months of 2014 were $42.8 million, a decrease of 13.7% from $49.6 million during the prior year period. Excluding the sales revenue of the special order of pandemic influenza vaccine (H5N1)  recognized in the third quarter of 2013, sales for the first nine months were $42.7 million, a decrease of 7.2% YoY from $46.0 million. Excluding the impact of the VAT rate reduction, sales for the first nine months decreased 8.3% YoY.

Gross profit for the first nine months of 2014 was $31.5 million, a decrease of 10.7% from $35.3 million in the same period of 2013. Gross margin was 73.6%, compared to 71.1% in the prior year period. Excluding the impact from the sales of pandemic influenza vaccine (H5N1) in the third quarter of 2013, gross margin was 73.6%, consistent with 73.9% in the same period of last year.

Selling, general and administrative expenses for the first nine months of 2014 were $24.9 million, compared to $25.3 million for the same period of 2013.

R&D expenses in the first nine months of 2014 were $7.5 million, compared to $5.9 million in the same period of 2013. These expenses are primarily related to the continued development and process optimization of the Company's pipeline vaccine candidates, sIPV and PPV.

Net loss attributable to stockholders in the first nine months of 2014 was $2.2 million or $(0.04) per basic and diluted share, compared to a net income of $1.6 million, or $0.03 per basic and diluted share, in the same period of 2013.

As of September 30, 2014, cash and cash equivalents totaled $94.4 million, compared to $107.2 million as of December 31, 2013. Net cash used in operating activities was $16.1 million during the first nine months of 2014. Net cash used in investing activities was $7.3 million, which was primarily used for payment of property, plant and equipment for the Company's PPV production facility and the Changping facility. Net cash provided by financing activities was $11.6 million during the first nine months of 2014, including loan proceeds of $17.8 million which were offset by loan repayment of $10.0 million.  As of September 30, 2014, the Company had $44.5 million of bank loans due within one year. Sinovac's cash and cash equivalents position of $94.4 million is sufficient to meet both these loan repayment obligations and the Company's operational requirements.

Conference Call Details

Sinovac will host a conference call on Monday, November 17, 2014 at 8:00 a.m. ET (November 17, 2014 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 1-877-407-9039 (USA) or 1-201-689-8470 (International). A replay of the call will be available from 11:00 a.m. ET on November 17, 2014 through December 1, 2014. To access the replay, please dial 1-877-870-5176 (USA) or 1-858-384-5517 (International) and reference the replay pin number 13595202.

A live audio webcast of the call will also be available on the Investor Relations section of the Company's website at www.sinovac.com. A webcast replay will be available on the Company's website for 30 days following the call, beginning November 17, 2014.

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. Sinovac's product portfolio includes vaccines against hepatitis A and B, seasonal influenza, H5N1 pandemic influenza (avian flu), H1N1 influenza (swine flu), mumps and canine rabies. In 2009, Sinovac was the first company worldwide to receive approval for its H1N1 influenza vaccine, which it has supplied to the Chinese Government's vaccination campaign and stockpiling program. The Company is also the only supplier of the H5N1 pandemic influenza vaccine to the government stockpiling program. Sinovac has filed a new drug application with the China Food and Drug Administration for its proprietary enterovirus 71 vaccine, having been proven effective in preventing hand, foot and mouth disease in infants and children during its phase III clinical trial. The Company is currently developing a number of new products including a Sabin-strain inactivated polio vaccine, pneumococcal polysaccharides vaccine, pneumococcal conjugate vaccine and varicella vaccine. Sinovac primarily sells its vaccines in China. The Company has exported select vaccines to Mexico, Mongolia, Nepal, and the Philippines. Sinovac has recently been granted a license to commercialize its hepatitis A vaccine and seasonal influenza vaccine in Chile. For more information, please visit the Company's website at www.Sinovac.com.

Contact

Sinovac Biotech Ltd.
Helen Yang / Chris Lee
Tel: +86-10-8279-9659 / 9696
Fax: +86-10-6296-6910
Email: ir@sinovac.com

ICR Inc.
Bill Zima
U.S: 1-646-308-1707
Email: william.zima@icrinc.com

 

SINOVAC BIOTECH LTD.


 

 

Consolidated Balance sheets


 

 

As of September 30, 2014 and December 31, 2013


 

(Expressed in thousands of U.S. Dollars, except for numbers of shares and per share data)


 

 

 

Current assets

September 30,
2014

December 31,
2013


 

(Unaudited)


 

Cash and cash equivalents

94,354

107,242

Accounts receivable

40,852

31,927

Inventories

18,892

14,329

Prepaid expenses and deposits

1,411

1,150

Deferred tax assets

1,836

2,602

Total current assets

157,345

157,250


 

 

 

Property, plant and equipment

68,157

67,963

Prepaid land lease payments

10,588

10,948

Long-term inventories

4,061

2,781

Long-term prepaid expenses

38

154

Prepayment for acquisition of equipment

1,392

708

Deferred tax assets

298

117

Licenses

457

772

Total assets

242,336

240,693


 

 

 

Current liabilities


 

 

Bank loans and current portion of long-term debt

44,505

16,217

Loan from a non-controlling shareholder

2,625

3,324

Accounts payable and accrued liabilities

23,326

28,037

Income tax payable

460

246

Deferred revenue

345

875

Deferred government grants

454

458

Total current liabilities

71,715

49,157


 

 

 

Deferred government grants

7,782

4,746

Long-term debt

11,803

32,146

Deferred revenue

10,753

11,005

Total long term liabilities

30,338

47,897


 

 

 

Total liabilities

102,053

97,054


 

 

 

Commitments and contingencies


 

 

Equity


 

 

Preferred stock

-

-

Common stock

56

56

Additional paid-in capital

107,950

107,393

Accumulated other comprehensive income

12,875

14,141

Statutory surplus reserves

11,808

11,808

Accumulated deficit

(6,869)

(4,714)

Total stockholders' equity

125,820

128,684


 

 

 

Non-controlling interests

14,463

14,955

Total equity

140,283

143,639

Total liabilities and equity

242,336

240,693

 

SINOVAC BIOTECH LTD.


 

 

 

 

 

Consolidated Statements of Comprehensive Income (loss)


 

 

 

 

For the three and nine months ended September 30, 2014 and 2013


 

 

 

(Unaudited)


 

 

 

 

 

(Expressed in thousands of U.S. Dollars, except for numbers of shares and per share data)


 

 

 

 

 

 

 

 

 Three months ended September 30


 

 Nine months ended September 30


 

2014

2013


 

2014

2013

 Sales

17,146

22,075


 

42,782

49,579

 Cost of sales

4,986

7,474


 

11,289

14,327

 Gross profit

12,160

14,601


 

31,493

35,252


 

 

 

 

 

 

 Selling, general and administrative expenses

8,515

9,392


 

24,896

25,335

 Provision for doubtful accounts

205

171


 

499

1,057

 Research and development expenses

2,545

2,034


 

7,512

5,923

 Loss (gain) on disposal and Impairment of property, plant and equipment

1

-


 

30

(2)

 Total operating expenses

11,266

11,597


 

32,937

32,313

 Operating income (loss)

894

3,004


 

(1,444)

2,939


 

 

 

 

 

 

 Interest and financing expenses 

(905)

(735)


 

(2,487)

(2,168)

 Interest income

575

544


 

2,120

1,568

 Other income (expenses) - net

(38)

134


 

179

141

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

526

2,947


 

(1,632)

2,480

 Income tax expense

(419)

(76)


 

(842)

(62)


 

 

 

 

 

 

 Net Income (loss)

107

2,871


 

(2,474)

2,418

Less: (Income) loss attributable to the non-controlling interests

(18)

(561)


 

319

(798)

 Net Income (loss) attributable to stockholders of Sinovac

89

2,310


 

(2,155)

1,620


 

 

 

 

 

 

 Other comprehensive income (loss), net of tax of nil


 

 

 

 

 

Foreign currency translation adjustments

964

249


 

(1,439)

1,602

 Total comprehensive income (loss)

1,071

3,120


 

(3,913)

4,020

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

(146)

(588)


 

492

(966)

 Comprehensive income (loss) attributable to stockholders of Sinovac

925

2,532


 

(3,421)

3,054


 

 

 

 

 

 

 Weighted average number of shares of


 

 

 

 

 

   Basic

55,722,435

55,382,329


 

55,658,173

55,235,198

   Diluted

56,118,063

55,882,837


 

55,658,173

55,684,691


 

 

 

 

 

 

 Earning per share


 

 

 

 

 

   Basic

0.00

0.04


 

(0.04)

0.03

   Diluted

0.00

0.04


 

(0.04)

0.03

 

SINOVAC BIOTECH LTD.


 

 

 

 

 

 

 

 

 

Consolidated Statements of Cash Flows


 

 

 

 

 

 

 

 

 

For the three and nine months ended September 30, 2014 and 2013


 

 

 

 

 

 

 

(Unaudited)


 

 

 

 

 

 

 

 

 

(Expressed in thousands of U.S. Dollars)


 

 

 

 

 

 

 

 

 

 

Three months ended


 

Nine months ended


 

September 30


 

September 30


 

 

2014


 

2013


 

 

2014


 

2013

Cash flows provided by (used in) operating activities


 

 

 

 

 

 

 

 

 

Net income (loss)

$

107

$

2,871


 

$

(2,474)

$

2,419

  Adjustments to reconcile net income (loss) to net cash


 

 

 

 

 

 

 

 

 

  provided by (used in) operating activities:


 

 

 

 

 

 

 

 

 

 - deferred income taxes


 

122


 

76


 

 

545


 

62

 - stock-based compensation


 

72


 

72


 

 

215


 

209

 - inventory provision


 

42


 

3


 

 

584


 

770

 - provision for doubtful accounts


 

205


 

171


 

 

499


 

1,057

 - impairment of equipment and loss on disposal


 

1


 

-


 

 

30


 

(2)

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

736


 

1,581


 

 

5,270


 

4,928

 - amortization of the prepaid land lease payments


 

66


 

69


 

 

198


 

207

 - accretion expenses


 

30


 

19


 

 

85


 

71

Changes in:


 

 

 

 

 

 

 

 

 

 - accounts receivable


 

(5,753)


 

(7,165)


 

 

(9,407)


 

(15,453)

 - inventories


 

976


 

735


 

 

(6,808)


 

(5,922)

 - income tax payable


 

297


 

-


 

 

297


 

-

 - prepaid expenses and deposits


 

(425)


 

(428)


 

 

(773)


 

(173)

 - deferred revenue


 

69


 

(3,483)


 

 

(616)


 

(4,711)

 - accounts payable and accrued liabilities


 

(1,334)


 

101


 

 

(3,793)


 

1,856


 

 

 

 

 

 

 

 

 

 

Net cash used in operating activities


 

(4,789)


 

(5,378)


 

 

(16,148)


 

(14,682)


 

 

 

 

 

 

 

 

 

 

Cash flows provided by (used in) financing activities


 

 

 

 

 

 

 

 

 

 - Loan proceeds


 

8,920


 

3,074


 

 

17,837


 

13,858

 - Loan repayments


 

(1,463)


 

-


 

 

(10,005)


 

(162)

 - Proceeds from issuance of common stock,


 

 

 

 

 

 

 

 

 

   net of share issuance costs


 

84


 

138


 

 

336


 

555

 - Proceeds from shares subscribed


 

(74)


 

31


 

 

6


 

203

 - Government grants received


 

3,244


 

71


 

 

3,429


 

595


 

 

 

 

 

 

 

 

 

 

Net cash provided by financing activities


 

10,711


 

3,314


 

 

11,603


 

15,049


 

 

 

 

 

 

 

 

 

 

Cash flows used in investing activities


 

 

 

 

 

 

 

 

 

 - Acquisition of property, plant and equipment


 

(1,624)


 

(768)


 

 

(7,307)


 

(3,437)


 

 

 

 

 

 

 

 

 

 

Net cash used in investing activities


 

(1,624)


 

(768)


 

 

(7,307)


 

(3,437)


 

 

 

 

 

 

 

 

 

 

Exchange gain (loss) on cash and cash equivalents


 

422


 

(188)


 

 

(1,036)


 

855


 

 

 

 

 

 

 

 

 

 

Increase (decrease) in cash and cash equivalents


 

4,720


 

(3,020)


 

 

(12,888)


 

(2,215)


 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents, beginning of year


 

89,634


 

92,046


 

 

107,242


 

91,241


 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents, end of year

$

94,354

$

89,026


 

$

94,354

$

89,026

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