Sinovac Files 2017 Annual Report on Form 20-F and Reports Unaudited Second Half, Audited Full Year 2017 Financial Results

  • Date: 2018-05-11
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BEIJINGMay 11, 2018 -- Sinovac Biotech Ltd. (NASDAQ: SVA) ("Sinovac" or the "Company"), a leading provider of biopharmaceutical products in China, announced today that it has filed its annual report for the year ended December 31 on Form 20-F (the "2017 Annual Report") with the U.S. Securities and Exchange Commission. The Company also reported its unaudited financial results for the six months ended December 31, 2017, as well as audited financial results for the year ended December 31, 2017.

Filing of 2017 Annual Report

The Company has filed its 2017 Annual Report with the SEC on May 11, 2018.  The 2017 Annual Report is available on the SEC's website www.sec.gov. Sinovac will also post the 2017 Annual Report on its website www.sinovacbio.com under SEC Filings in the Investor Relations section. The Company will provide a hard copy of the 2017 Annual Report to its shareholders upon request, free of charge. Requests for a hard copy of the 2017 Annual Report can be made by sending a request by email to ir@sinovac.com and submitting the complete mailing details on a request form. 

Unaudited Second Half of 2017 Financial Highlights

  • Sales from continuing operations for the second half of 2017 were $107.4 million compared to $60.1 million in the prior year period, an increase of 78.8%. Sales increased primarily due to revenue generated by the Company's EV71 vaccine.
  • Net income attributable to common shareholders was $15.0 million, or $0.26 per basic and diluted share, compared to net income attributable to common shareholders of $7.7 million, or $0.13 per basic and diluted share, in the prior year period.

Full Year 2017 Financial Highlights

  • Sales from continuing operations in 2017 were $174.3 million, an increase of 140.7% from $72.4 million in 2016. Sales increased primarily due to revenue generated by the Company's EV71 vaccine.
  • Net income attributable to common shareholders was $25.8 million, or $0.45 per basic and diluted share in 2017, compared to net loss attributable to common shareholders of $0.6 million, or ($0.01) per basic and diluted share in 2016.

Business Highlights

Marketing and Sales

In 2017, the vaccine market recovered from the impact caused by the Shandong incident in 2016. The Company's new product, EV71, made a significant contribution to the revenue. Hepatitis vaccine and flu vaccine sales rebounded compared to 2016.

Research and Development

Varicella – Sinovac obtained clinical research approval for its proprietary Varicella vaccine candidate from the China Food and Drug Administration (CFDA) in September 2015 and completed phase I clinical trials in 2016. The phase III trial was completed in 2017 with preliminary phase III data showing that Sinovac's varicella vaccine was 87.1% (95% CI: 69.7%, 94.5%) efficacious against chickenpox caused by Varicella-zoster Virus (VZV). The results of the lot consistency study indicated that the immunogenicity of the three vaccine lots was consistent. The Company filed the production license application with the CFDA before the end of 2017.

sIPV – In November 2015, the Company obtained clinical trial licensing for its Sabin IPV. Phase I/II clinical trials were completed in 2017. A phase III trial was commenced in April 2017 and recently unblended. The preliminary results of the trial after unblinding show that the seroconversion rate of poliovirus type II is superior to the control vaccine and seroconversion rates of the other two types of poliovirus are non-inferior to the control vaccine. In addition, the geometric mean titer ("GMT") of all three poliovirus types were higher than the control vaccine. 

23 Valent Pneumococcal Polysaccharide Vaccine – A phase III trial on 23-PPV was completed with results showed that the immunogenicity and safety of Sinovac's vaccine candidate were not inferior to the controlled vaccine, a 23-PPV already commercialized in China. Furthermore, the results showed that the vaccine candidate could be used by the target age group to control and prevent diseases caused by pneumonia. The New Drug Application was filed to the CFDA in August 2017. Due to the aggressive actions taken by the minority shareholder of Sinovac Biotech Co., Ltd. (Sinovac Beijing), Sinovac Beijing was forced to suspend all preparations for and ultimately postpone the CFDA inspection of the manufacturing site necessary for 23-valent PPV production approval.

Quadrivalent Influenza Vaccine (QIV) – The Company initiated the development of a QIV in May 2013. Following the completion of preclinical studies, the Company applied for the clinical license from the CFDA. The approval to conduct a human clinical trial was issued by the CFDA in November 2016, and the trial was initiated in the fourth quarter of 2017. In contrast to the trivalent influenza vaccine, such as Sinovac's Anflu product, which includes an influenza A H1N1 virus, an influenza A H3N2 virus, and a B virus, the quadrivalent flu vaccine is designed to protect against four different flu viruses: two influenza A viruses and two influenza B viruses. Adding another B virus to the vaccine is expected to provide broader protection against circulating flu viruses because there are two very different lineages of B viruses that both circulate during most seasons.

Other Legal Matters

A number of legal matters have recently arisen related to the actions of certain shareholders of the Company in connection with 2017 Annual General Meeting of Shareholders ("2017 AGM") in the United States and Antigua by the Company or 1 Globe. The progress of each litigation was disclosed in the form of 20-F filed by the Company.

On April 9, 2018, the Company received a document request from the SEC requesting all of the Company's documents concerning 1Globe, the Chiang Li Family, OrbiMed, certain other shareholders, and their affiliates. We have been cooperating with the SEC. We understand the SEC is conducting a fact-finding investigating to determine whether these shareholders and possibly other parties violated the U.S. securities laws.  We do not have any information to suggest the SEC is investigating the actions of the Company or its officers and directors.  We cannot predict the outcome of the SEC's investigation. 

Unaudited Financial Results for Second Half of 2017

   

2017 2H

% of Sales

2016 2H

% of Sales

(In $000 except percentage data)

   

Hepatitis A – Healive

 

14,542

13.5%

15,520

25.8%

Hepatitis A&B – Bilive

 

5,502

5.2%

1,695

2.8%

 

Hepatitis vaccines subtotal

 

20,044

18.7%

17,215

28.6%

Influenza vaccine

 

13,550

12.6%

9,119

15.2%

           

Enterovirus 71 vaccine

 

72,533

67.5%

33,578

55.9%

Mumps vaccine

 

1,311

1.2%

191

0.3%

Regular sales

 

107,438

100.0%

60,103

100.0%

H5N1

 

-

0.0%

(3)

0.0%

Total sales

 

107,438

100.0%

60,100

100.0%

Cost of sales

 

12,505

11.6%

14,030

23.3%

Gross profit

 

94,933

88.4%

46,070

76.7%

Sales from continuing operations in the second half of 2017 were $107.4 million compared to $60.1 million in the prior year period. Sales increased primarily due to revenue generated by the Company's EV71 vaccine.

Gross profit from continuing operations was $94.9 million compared to gross profit of $46.1 million in the prior year period. Gross margin was 88.4% compared to 76.7% in the prior year period. Growth margin in the second half of 2016 was lower due to higher idle capacity costs charged to cost of sales and a negative gross profit for the hepatitis A&B vaccine due to higher sales returns provision provided in 2016 as a result of the Shandong incident. Gross profit in the second half of 2017 also increased due to higher gross profit generated by the Company's EV71 vaccine.

Selling, general and administrative expenses in the second half of 2017 were $50.6 million compared to $27.5 million in the same period of 2016. The Company's selling, general and administrative expenses increased with higher levels of sales activity. The Company also incurred a cost of $0.6 million relating to the proposed privatization of Sinovac.

R&D expenses in the second half of 2017 were $11.7 million compared to $7.8 million in the same period of 2016. The increase was mainly due to higher R&D expenses on the varicella and sIPV vaccine pipeline products.

Income from continuing operations in the second half of 2017 was $20.9 million compared to $11.1 million in the prior year period.

Net income attributable to common shareholders was $15.0 million, or $0.26 per basic and diluted share, compared to net income attributable to common shareholders of $7.7 million, or $0.13 per basic and diluted share, in the prior year period.

Non-GAAP EBITDA was $35.4 million in the second half year of compared to $20.1 million in the prior year period. Non-GAAP net income from continuing operations in the second half of 2017 was $20.2 million compared to $13.4 million in the prior year period. Non-GAAP diluted earnings per share from continuing operations in the second half of 2017 were $0.25 per share compared to $0.17 per share in the prior year period. Reconciliations of non-GAAP measures to the nearest comparable GAAP measures are included at the end of this earnings announcement.

Financial Results for the Twelve Months Ended December 31, 2017

   

2017

% of Sales

2016

% of Sales

(In $000 except percentage data)

Hepatitis A – Healive

 

27,421

15.7%

20,044

27.7%

Hepatitis A&B – Bilive

 

10,430

6.0%

552

0.7%

 

Hepatitis vaccines subtotal

 

37,851

21.7%

20,596

28.4%

Influenza vaccine

 

13,544

7.7%

9,829

13.6%

           

Enterovirus 71 vaccine

 

121,284

69.6%

35,140

48.5%

Mumps vaccine

 

1,667

1.0%

477

0.7%

Regular sales

 

174,346

100.0%

66,042

91.2%

H5N1

 

-

0.0%

6,389

8.8%

Total sales

 

174,346

100.0%

72,431

100.0%

Cost of sales

 

20,240

11.6%

22,393

30.9%

Gross profit

 

154,106

88.4%

50,038

69.1%

Sales from continuing operations in 2017 were $174.3 million, an increase of 140.7% from $72.4 million in 2016. Sales increased primarily due to revenue generated by the Company's EV71 vaccine as well as sales recovery in the Company's other products following the 2016 Shandong vaccine incident.

Gross profit from continuing operations in 2017 was $154.1 million, an increase of 208.0% from $50.0 million in 2016. Gross margin was 88.4% compared to 69.1% in 2016. Gross margin in 2016 was lower due to higher inventory provision provided for the hepatitis A&B and mumps vaccines, higher idle capacity costs charged to cost of sales, and a negative gross profit for the hepatitis A&B vaccine due to a higher sales returns provision provided in 2016 as a result of the Shandong incident. Gross profit in 2017 also increased due to higher gross profit generated by the Company's EV71 vaccine.

Selling, general and administrative expenses in 2017 were $87.4 million compared to $42.0 million in 2016. The Company's selling, general and administrative expenses increased with the higher level of sales activity, and the Company also incurred a cost of $1.5 million related to the proposed privatization of Sinovac.

R&D expenses in 2017 were $20.5 million compared to $12.6 million in 2016. The increase was mainly due to higher R&D expenses on the varicella and sIPV vaccine pipeline products.

Net income from continuing operations was $36.7 million in 2017 compared to a net loss of $3.1 million in 2016. Net income from discontinued operations was nil in 2017 compared to $2.3 million in 2016.

Net income attributable to common shareholders was $25.8 million, or $0.45 per basic and diluted share in 2017, compared to net loss attributable to common shareholders of $0.6 million, or ($0.01) per basic and diluted share in 2016.

Non-GAAP EBITDA was $51.3 million in 2017 compared to $8.2 million in 2016. Non-GAAP net income from continuing operations in 2017 was $36.4 million compared to net income of $0.3 million in 2016. Non-GAAP diluted earnings per share from continuing operations in 2017 were $0.45 compared to diluted earnings per share of $0.01 in 2016. Reconciliations of non-GAAP measures to the nearest comparable GAAP measures are included at the end of this earnings announcement.

As of December 31, 2017, cash and cash equivalents totaled $114.4 million compared to $62.4 million as of December 31, 2016. In 2017, net cash provided in operating activities was $61.4 million. Net cash used in investing activities was $11.9 million, which was due to the purchase of equipment. Net cash used by financing activities was $1.3 million, including loan proceeds of $28.6 million and loan repayment of $38.7 million. As of December 31, 2017, the Company had $18.2 million of bank loans due within one year. The Company expects that its current cash position will be able to support its operations for at least the next 12 months.

Update on "Going Private" Proposals

On June 26, 2017, the Company entered into an amalgamation agreement (the "Amalgamation Agreement") with Sinovac (Cayman) Limited, ("Parent") and Sinovac Amalgamation Sub Limited ("Amalgamation Sub"), a wholly owned subsidiary of Parent. Pursuant to the Amalgamation Agreement, Parent will acquire the Company for cash consideration equal to $7.00 per common share. Subject to the terms and conditions of the Amalgamation Agreement, at the effective time of the amalgamation, Amalgamation Sub will be amalgamated with and into the Company, with the Company continuing as the surviving corporation and a wholly owned subsidiary of Parent (the "Amalgamation"). Immediately following the consummation of the transactions contemplated by the Amalgamation Agreement, Parent will be beneficially owned by a consortium comprising Mr. Weidong Yin, SAIF Partners IV L.P., C-Bridge Healthcare Fund II, L.P., Advantech Capital L.P., Vivo Capital Fund VIII, L.P., and Vivo Capital Surplus Fund VIII, L.P.

Our board of directors, acting upon the unanimous recommendation of the special committee formed by the board of directors, or the Special Committee, unanimously approved the Amalgamation Agreement and the transactions contemplated by the Amalgamation Agreement, including the Amalgamation, and resolved to recommend that the Company's shareholders authorize and approve the Amalgamation Agreement and the transactions contemplated by the Amalgamation Agreement, including the Amalgamation.

The Amalgamation is subject to customary closing conditions, including approval by an affirmative vote of holders of Shares representing at least two-thirds of the Company's common shares present and voting in person or by proxy as a single class at a meeting of its shareholders, which will be convened to consider the authorization and approval of the Amalgamation Agreement and the transactions contemplated by the Amalgamation Agreement, including the Amalgamation, and the other closing conditions specified in the Amalgamation Agreement. If completed, the Amalgamation will result in Sinovac Biotech Ltd. becoming a privately-held company, and the Company's common shares will no longer be listed on NASDAQ.

On June 28, 2017, the Company received a written proposal (the "Sinobioway Proposal") from a consortium comprising (i) PKU V-Ming (Shanghai) Investment Holdings Co., Ltd., (ii) Shandong Sinobioway Biomedicine Co., Ltd., (iii) CICC Qianhai Development (Shenzhen) Fund Management Co., Ltd., (iv) Beijing Sinobioway Group Co., Ltd., (v) CITIC M&A Fund Management Co., Ltd., (vi) Heng Feng Investments (International) Limited, and (vii) Fuerde Global Investment Limited (collectively, the "Sinobioway Consortium"), pursuant to which the Sinobioway Consortium proposed to acquire the Company for cash consideration equal to $8.00 per common share (the "Sinobioway Transaction").During the course of the following three months, the Special Committee and its advisors sought to clarify the terms of the Sinobioway Proposal, including the financing of the Sinobioway Transaction, and the likelihood of consummating the Sinobioway Transaction, with the Sinobioway Consortium and its advisors. In late October, the Special Committee determined, after consultation with its advisors, that negotiations with respect to the Sinobioway Proposal were not permitted under the Amalgamation Agreement based on the information provided by the Sinobioway Consortium prior to such determination.

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 enterovirus71, or EV71, hepatitis A and B, seasonal influenza, H5N1 pandemic influenza (avian flu), H1N1 influenza (swine flu), and mumps. Healive, the hepatitis A vaccine manufactured by the Company has passed the assessment under WHO Prequalification procedures in 2017. The EV71 vaccine, an innovative vaccine developed by Sinovac against hand foot and mouth disease caused by EV71, was commercialized in China in 2016. 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. The Company is 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, while also exploring growth opportunities in international markets. The Company has exported select vaccines to over 10 countries in Asiaand South America. 

Safe Harbor Statement

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Factors that might cause such a difference include our inability to compete successfully in the competitive and rapidly changing marketplace in which we operate, failure to retain key employees, cancellation or delay of projects and adverse general economic conditions in the United States and internationally. These risks and other factors include those listed under "Risk Factors" and elsewhere in our Annual Report on Form 20-F as filed with the Securities and Exchange Commission. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "continue," or the negative of these terms or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.  The Company assumes no obligation to update the forward-looking information contained in this release.

Non-GAAP Financial Measures

To supplement its consolidated financial statements, which are prepared and presented in accordance with GAAP, Sinovac uses the following non-GAAP financial measures: non-GAAP EBITDA, non-GAAP net income from continuing operations and non-GAAP diluted EPS from continuing operations.  For more information on these non-GAAP financial measures, please refer to the table captioned "Reconciliations of non-GAAP Measures to the Nearest Comparable GAAP Measures" in this results announcement.

Sinovac believes that non-GAAP EBITDA, non-GAAP net income from continuing operations and non-GAAP diluted EPS from continuing operations help identify underlying trends in its business that could otherwise be distorted by the effect of certain income or expenses that Sinovac includes in income from operations from continuing operations, net income from continuing operations and diluted EPS from continuing operations. Sinovac believes that non-GAAP EBITDA, non-GAAP net income from continuing operations and non-GAAP diluted EPS from continuing operations provide useful information about its core operating results, enhance the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by our management in its financial and operational decision-making. Non-GAAP EBITDA, non-GAAP net income from continuing operations and non-GAAP diluted EPS from continuing operations should not be considered in isolation or construed as an alternative to income from operations from continuing operations, net income from continuing operations, diluted EPS from continuing operations, or any other measure of performance or as an indicator of Sinovac's operating performance. These non-GAAP financial measures presented here may not be comparable to similarly titled measures presented by other companies.  Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to our data.

Non-GAAP EBITDA represents income (loss) from continuing operations, excludes interest and financing expenses, interest income, net other income (expenses) and income tax benefit (expenses), and certain non-cash expenses, consisting of share-based compensation expenses, amortization and depreciation that Sinovac does not believe are reflective of the core operating performance during the periods presented.

Non-GAAP net income from continuing operations represents net income from continuing operations before share-based compensation expenses, and foreign exchange gain or loss.

Non-GAAP diluted EPS from continuing operations represents non-GAAP net income attributable to ordinary shareholders from continuing operations divided by the weighted average number of shares outstanding during the periods on a diluted basis, including accounting for the effect of the assumed conversion of options.

Contact

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

Media
ICR Inc.
United States
Phil Denning
Tel : 1-646 277 1258
Email : Phil.denning@icrinc.com

China :
Edmond Lococo
Tel : +86 10 6583 7510
Email : Edmond.Lococo@icrinc.com

Investors: 
ICR Inc.
Bill Zima
Tel: 1-203--682-8233
Email: william.zima@icrinc.com

SINOVAC BIOTECH LTD.

       

Consolidated Balance sheets

       

As of December 31, 2017 and December 31, 2016

     

(Expressed in thousands of U.S. Dollars)

       
         
   

December 31, 2017

 

December 31, 2016

Current assets 

       
         

Cash and cash equivalents

$

114,415

$

62,434

Restricted cash

 

1,549

 

3,007

Accounts receivable - net

 

66,205

 

49,832

Inventories

 

19,618

 

14,102

Prepaid expenses and deposits 

 

2,101

 

1,372

Total current assets

 

203,888

 

130,747

         

Property, plant and equipment

 

76,430

 

66,882

Prepaid land lease payments

 

9,028

 

8,697

Long-term inventories

 

-

 

98

Long-term prepaid expenses

 

25

 

23

Prepayment for acquisition of equipment

 

528

 

964

Deferred tax assets

 

9,320

 

3,944

Total assets

 

299,219

 

211,355

         

Current liabilities

       

Short-term bank loans

 

18,152

 

31,279

Loan from a non-controlling shareholder

 

-

 

2,304

Accounts payable and accrued liabilities 

 

59,418

 

24,960

Income tax payable

 

8,862

 

3,178

Deferred revenue

 

4,073

 

2,766

Deferred government grants

 

2,038

 

1,777

Total current liabilities

 

92,543

 

66,264

         

Deferred government grants

 

4,474

 

2,953

Long-term bank loans

 

14,849

 

9,448

Deferred revenue

 

-

 

89

Loan from a non-controlling shareholder

 

7,070

 

-

Other non-current liabilities

 

3,143

 

2,935

Total long-term liabilities

 

29,536

 

15,425

         

Total liabilities

 

122,079

 

81,689

         

Commitments and contingencies 

       
         

Equity

       

Preferred stock

 

-

 

-

Common stock

 

57

 

57

Additional paid in capital

 

115,339

 

112,668

Accumulated other comprehensive income

 

7,075

 

168

Statutory surplus reserves

 

19,549

 

14,788

Accumulated earnings (deficit)

 

9,132

 

(11,914)

Total shareholders' equity

 

151,152

 

115,767

         

Non-controlling interests

 

25,988

 

13,899

Total equity

 

177,140

 

129,666

Total liabilities and equity

$

299,219

$

211,355

SINOVAC BIOTECH LTD.

               

Consolidated Statements of Comprehensive Income (loss)

           

For the six and twelve months ended December 31, 2017 and 2016

           

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

     
                 
   

 Six months ended December 31 

 

 Twelve months ended December 31 

   

2017

 

2016

 

2017

 

2016

   

 (Unaudited) 

 

 (Unaudited)

       

 Sales 

$

107,438

$

60,100

$

174,346

$

72,431

 Cost of sales 

 

12,505

 

14,030

 

20,240

 

22,393

 Gross profit  

 

94,933

 

46,070

 

154,106

 

50,038

                 

 Selling, general and administrative expenses 

 

50,646

 

27,516

 

87,365

 

41,980

 Provision (recovery) for doubtful accounts 

 

407

 

847

 

934

 

1,412

 Research and development expenses 

 

11,710

 

7,797

 

20,489

 

12,648

 Loss on disposal and impairment of property, plant and equipment 

 

29

 

357

 

42

 

478

 Government grants recognized in income

 

(137)

 

(6,500)

 

(141)

 

(6,984)

 Total operating expenses 

 

62,655

 

30,017

 

108,689

 

49,534

 Operating income 

 

32,278

 

16,053

 

45,417

 

504

                 

 Interest and financing expenses  

 

(747)

 

(945)

 

(1,569)

 

(1,729)

 Interest income

 

719

 

278

 

1,183

 

731

 Other income (expenses), net

 

(91)

 

(136)

 

13

 

100

 Income (loss) from continuing operationgs before 
income taxes 

 

32,159

 

15,250

 

45,044

 

(394)

 Income tax expense 

 

11,299

 

4,156

 

8,339

 

2,664

 Income (loss) from continuing operations 

 

20,860

 

11,094

 

36,705

 

(3,058)

 Income (loss) from discontinued operations, net of 
tax of nil 

 

-

 

-

 

-

 

2,338

 Net Income (loss) 

 

20,860

 

11,094

 

36,705

 

(720)

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

(5,906)

 

(3,440)

 

(10,898)

 

124

 Net income (loss) attributable to shareholders of 
Sinovac 

 

14,954

 

7,654

 

25,807

 

(596)

                 

 Income (loss) from continuing operations 

 

20,860

 

11,094

 

36,705

 

(3,058)

 Other comprehensive loss from continuing 
operations, net of tax of nil 

               

Foreign currency translation adjustments

 

4,581

 

(4,543)

 

8,098

 

(8,843)

 Comprehensive income (loss) from continuing 
operations 

 

25,441

 

6,551

 

44,803

 

(11,901)

                 

 Income (loss) from discontinued operations 

 

-

 

-

 

-

 

2,338

 Other comprehensive income (loss) from 
discontinued operations, net of tax of nil 

 

-

 

-

       

Foreign currency translation adjustments

 

-

 

-

 

-

 

-

 Comprehensive income (loss) from discontinued operations 

 

-

 

-

 

-

 

2,338

                 

 Comprehensive income (loss)  

 

25,441

 

6,551

 

44,803

 

(9,563)

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

 

(6,752)

 

(2,883)

 

(12,089)

 

953

 Comprehensive income (loss) attributable to 
shareholders of Sinovac 

$

18,689

$

3,668

$

32,714

$

(8,610)

                 

Earnings (loss) per share

               

Basic net income (loss) per share:

               

Continuing operations

 

0.26

 

0.13

 

0.45

 

(0.05)

Discontinued operations

 

0.00

 

0.00

 

0.00

 

0.04

Basic net income (loss) per share

 

0.26

 

0.13

 

0.45

 

(0.01)

                 

Diluted net income (loss) per share:

               

Continuing operations

 

0.26

 

0.13

 

0.45

 

(0.05)

Discontinued operations

 

0.00

 

0.00

 

0.00

 

0.04

Diluted net income (loss) per share

 

0.26

 

0.13

 

0.45

 

(0.01)

                 
                 

 Weighted average number of shares of common stock outstanding 

               

  Basic 

 

57,052,268

 

56,975,699

 

57,033,816

 

56,949,083

  Diluted 

 

57,250,279

 

57,154,463

 

57,101,191

 

56,949,083

SINOVAC BIOTECH LTD.

               

Consolidated Statements of Cash Flows

               

For the six and twelve months ended December 31, 2017 and 2016

           

(Expressed in thousands of U.S. Dollars)

               
 

 Six months ended

Twelve months ended

   

December 31

 

December 31

   

2017

 

2016

 

2017

 

2016

   

(Unaudited)

           

Cash flows provided by (used in) operating activities

               

Income (loss) from continuing operations

 

20,860

 

11,094

 

36,705

 

(3,058)

Adjustments to reconcile net income to net cash provided by (used 
in) operating activities:

               

 - Deferred income taxes

 

(2,743)

 

(1,075)

 

(4,921)

 

(1,007)

 - Share-based compensation

 

495

 

1,777

 

979

 

2,409

 - Inventory provision

 

957

 

3,626

 

1,231

 

6,377

 - Provision (recovery) for doubtful accounts

 

407

 

847

 

934

 

1,412

 - Loss on disposal and impairment of property, plant and equipment

29

 

357

 

42

 

478

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

2,515

 

2,189

 

4,638

 

5,063

 - Amortization of prepaid land lease payments

 

126

 

121

 

243

 

247

 - Government grants recognized in income

 

(137)

 

(6,500)

 

(141)

 

(6,984)

                 

Changes in:

               

 - Accounts receivable

 

17,223

 

(23,423)

 

(13,482)

 

(15,122)

 - Inventories

 

(1,933)

 

3,288

 

(5,531)

 

(3,025)

 - Income tax payable 

 

9,237

 

4,560

 

4,948

 

1,720

 - Prepaid expenses and deposits

 

(1,062)

 

(552)

 

(622)

 

(436)

 - Deferred revenue 

 

3,460

 

2,609

 

987

 

(4,959)

 - Accounts payable and accrued liabilities

 

7,934

 

2,436

 

33,416

 

2,739

 - Other non-current liablitites

 

330

 

339

 

330

 

339

 - Deferred government grants

 

-

 

(31)

 

-

 

-

 - Restricted cash

 

(1,439)

 

(1,557)

 

1,598

 

(1,557)

                 

Net cash provided by (used in) operating activities from 
continuing operations

 

56,259

 

105

 

61,354

 

(15,364)

Net cash used in operating activities from discontinued 
operations

 

-

 

-

 

-

 

(95)

Net cash provided by (used in) operating activities 

 

56,259

 

105

 

61,354

 

(15,459)

                 

Cash flows provided by (used in) financing activities

               

 - Proceeds from bank loans

 

17,465

 

22,808

 

28,636

 

45,462

 - Repayments of bank loans

 

(20,760)

 

(7,099)

 

(38,708)

 

(24,850)

 - Proceeds from issuance of common stock, net of share issuance costs

1,229

 

(445)

 

1,264

 

315

 - Proceeds from shares subscribed

 

428

 

(36)

 

428

 

-

 - Government grants received

 

2,506

 

6,857

 

2,598

 

6,857

 - Loan from non-controlling shareholder

 

4,440

 

-

 

4,440

 

-

                 

Net cash provided by (used in) financing activities

 

5,308

 

22,085

 

(1,342)

 

27,784

                 

Cash flows used in investing activities

               

 - Proceeds from disposal of equipment

 

19

 

26

 

19

 

26

 - Acquisition of property, plant and equipment

 

(5,147)

 

(8,043)

 

(11,915)

 

(12,654)

 - Net proceeds from disposal of subsidiary

 

-

 

(14)

 

-

 

861

Net cash used in investing activities from continuing operations

 

(5,128)

 

(8,031)

 

(11,896)

 

(11,767)

Net cash used in investing activities from discontinued operations

-

 

-

 

-

 

(9)

Net cash used in investing activities

 

(5,128)

 

(8,031)

 

(11,896)

 

(11,776)

                 

Effect of exchange rate changes on cash and cash equivalents, including cash classified within current assets held for sale

 

2,997

 

(943)

 

3,865

 

(2,092)

                 

Increase (decrease) in cash and cash equivalents

 

59,436

 

13,216

 

51,981

 

(1,543)

Less: Net decrease in cash from discontinued operation

 

-

 

-

 

-

 

(143)

Increase (decrease) in cash and cash equivalents

 

59,436

 

13,216

 

51,981

 

(1,400)

                 

Cash and cash equivalents, beginning of period

 

54,979

 

49,218

 

62,434

 

63,834

                 

Cash and cash equivalents, end of period

$

114,415

$

62,434

$

114,415

$

62,434

                 

SINOVAC BIOTECH LTD.

               

Reconciliations of Non-GAAP measures to the nearest comparable GAAP measures

       

For the six and twelve months ended December 31, 2017 and 2016

           

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

   
                 
   

 Six months ended December 31 

 

 Twelve months ended December 31 

   

2017

 

2016

 

2017

 

2016

   

 (Unaudited) 

 

 (Unaudited)

 

 (Unaudited) 

 

  (Unaudited) 

 Income (loss) from continuing operations 

 

20,860

 

11,094

 

36,705

 

(3,058)

 Adjustments: 

               

   Share-based compensation 

 

495

 

1,777

 

979

 

2,409

   Depreciation and amortization 

 

2,641

 

2,310

 

4,881

 

5,310

   Interest and financing expenses, net of interest 
income 

 

28

 

667

 

386

 

998

   Net other (income) expense 

 

91

 

136

 

(13)

 

(100)

   Income tax expense 

 

11,299

 

4,156

 

8,339

 

2,664

 Non-GAAP EBITDA 

 

35,414

 

20,140

 

51,277

 

8,223

                 

 Income (loss) from continuing operations 

 

20,860

 

11,094

 

36,705

 

(3,058)

   Add: Foreign exchange loss 

 

(1,188)

 

539

 

(1,323)

 

942

   Add: Share-based compensation 

 

495

 

1,777

 

979

 

2,409

 Non-GAAP net income (loss) from continuing operations 

 

20,167

 

13,410

 

36,361

 

293

                 

 Net Income (loss) from continuing operaitons attributable to shareholders of Sinovac 

 

14,954

 

7,654

 

25,807

 

(2,934)

 Add: Non-GAAP adjustments to net income from 
continuing operaitons 

 

(693)

 

2,316

 

(344)

 

3,351

 Non-GAAP net income attributable to 
shareholders of Sinovac from continuing 
operations for computing non-GAAP diluted 
earnings (loss) per share  

 

14,261

 

9,970

 

25,463

 

417

                 

 Weighted average number of shares on a 
diluted basis 

 

57,250,279

 

57,154,463

 

57,101,191

 

56,949,083

 Diluted earnings (loss) per share from 
continuing operations 

 

0.26

 

0.13

 

0.45

 

(0.05)

 Add: Non-GAAP adjustments to net income per 
share from continuing operatons 

 

(0.01)

 

0.04

 

(0.01)

 

0.06

 Non-GAAP Diluted earnings per share from 
continuing operations 

 

0.25

 

0.17

 

0.45

 

0.01

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