China Shenghuo Pharmaceutical Reports Unaudited Financial Results for the Full Year 2012
(firmenpresse) - KUNMING, CHINA -- (Marketwire) -- 03/25/13 -- China Shenghuo Pharmaceutical Holdings, Inc. (PINKSHEETS: CKUN) ("China Shenghuo" or the "Company") today announced unaudited financial results for the year ended December 31, 2012. Such unaudited financial results were prepared by management in compliance with United States Generally Accepted Accounting Practices, except for the absence of notes to the financial statements.
Total revenue was approximately $52 million, an increase of 18% from approximately $44.2 million for the year 2011.
Gross profit as a percentage of revenues was approximately 54.9%, as compared to 61.5 % in 2011.
Net loss attributable to stockholders was approximately $2.5 million, as compared to net income of approximately $0.1 million for the year ended December 31, 2011.
Net loss per share was $0.13 compared to net income per share of $0.01 in 2011.
Stockholders' equity was approximately $(0.4) million as of December 31, 2012.
Sales for the year ended December 31, 2012 were approximately $52 million, an increase of approximately $7.8 million, or 18%, from approximately $44.2 million for the year ended December 31, 2011. The increase in sales was primarily due to an increase in sales of Xuesaitong, the Company's main product, and an increase of $871,053 in revenue from Zhonghuang Hotel, which was designed as per four-star hotel standards and operated by the Company since January of 2011.
Our cost of sales for the year ended December 31, 2012 was approximately $23.5 million, an increase of approximately $6.5 million, or 38%, from approximately $17.0 million for the year ended December 31, 2011. The increase in cost of sales was due to the increase in sales volume together with increases in the costs of purchasing Sanqi, the principal raw material of our main product Xuesaitong. Although we started to grow our own captive sources of Sanqi in 2011, we will not be able to harvest our own Sanqi until 2014 because it has a three year growth cycle. In addition, the Zhonghuang Hotel has contributed $1.8 million to the cost of sales.
Our gross profit for the year ended December 31, 2012 was approximately $28.5 million compared with approximately $27.2 million for the year ended December 31, 2011. Gross profit as a percentage of revenues was approximately 54.9% for the year ended December 31, 2012, a decrease of 6.6% from 61.5% for the year ended December 31, 2011. The decrease in gross profit percentage was primarily due to the increase in cost of sales set forth above.
Selling expenses were approximately $24.7 million for the year ended December 31, 2012, an increase of approximately $4.9 million, or 24%, from approximately $19.8 million for the year ended December 31, 2011. The primary reason for the increase in selling expenses was due to an increase in sales commission to sales representatives due to higher sales volumes.
We reimburse our sales representatives for selling and marketing expenses when they submit the appropriate documentation. We reimburse our sales representatives for their accrued selling expenses when related accounts receivable are collected.
General and administrative expenses were approximately $5.1 million for the year ended December 31, 2012, an increase of approximately $0.1 million, or 2%, from approximately $5.0 million for the year ended December 31, 2011. The increase was mainly due to increased travel expense and expenses related to the commencement of operations in 2012 by Shilin Shenghuo Pharmaceutical Co., a subsidiary of the Company engaged in the business of medicinal herb planting and wellness tourism.
Research and development expense for the year ended December 31, 2012 was approximately $0.63 million as compared to approximately $0.71 million for the year ended December 31, 2011. The decrease was primarily due to an absence of clinical testing expenses for Sh1002 in America in 2012. We conducted Phase I clinical tests of Sh1002 in America in 2011 but did not proceed with Phase II testing in 2012.
Net other expense, which includes interest income, subsidy income, interest expense, other income and other expense, was approximately $1.1 million for the year ended December 31, 2012 as compared to approximately $1.5 million for the year ended December 31, 2011, a decrease of approximately $0.4 million, or 27%. The decrease was mainly due to an increase in subsidy income from the provincial government as compared to the same period in 2011 and less interest expenses in 2012.
: Income tax benefit was $494,313 for the year ended December 31, 2012 as compared to income tax benefit $11,765 for the year ended December 31, 2011. The tax benefit was mainly from the medicine business of the Company, deferred tax benefits from accrued expenses and provisions for inventory.
We incurred a net loss attributable to stockholders of approximately $2.5 million for the year ended December 31, 2012 as compared to net income attributable to stockholders of approximately $0.1 million for the year ended December 31, 2011. The net loss attributable to stockholders was primarily due to the increase of cost of sales described above.
Founded in 1995, China Shenghuo is primarily engaged in the research, development, manufacture, and marketing of Sanqi-based medicinal and pharmaceutical, nutritional supplement and cosmetic products. Through its subsidiary, Kunming Shenghuo Pharmaceutical (Group) Co., Ltd., it owns thirty SFDA (State Food and Drug Administration) approved medicines, including the flagship product Xuesaitong Soft Capsules. At present, China Shenghuo incorporates a sales network of agencies and representatives throughout China, which markets Sanqi-based traditional Chinese medicine to hospitals and drug stores as prescription and OTC drugs primarily for the treatment of cardiovascular, cerebrovascular and peptic ulcer disease. The Company also exports medicinal products to Asian countries such as Indonesia, Singapore, Japan, Malaysia, and Thailand and to European countries such as the United Kingdom, Tajikistan, Russia and Kyrgyzstan.
China Shenghuo is also expanding into the businesses of the hotel, hospitality and wellness tourism. For more information, please visit .
As previously announced, the Board of Directors of China Shenghuo received a preliminary, non-binding proposal from Lan's Int'l Medicine Investment Co., Limited ("LIMI"), in which LIMI proposed that the Board consider a "going private" transaction to cash out the public shareholders of the Company at a price of $0.15 per share, to be funded by LIMI if necessary. LIMI currently owns approximately 77.3% of the Company's outstanding common stock.
This press release may contain certain "forward-looking statements". All statements other than statements of historical fact included herein are "forward-looking statements." These forward looking statements are often identified by the use of forward-looking terminology such as "believes," "expects," or similar expressions. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks, and uncertainties. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this news release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports previously filed with the Securities and Exchange Commission. The Company is no longer a reporting company under the U.S. Securities Exchange Act of 1934 and undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
China Shenghuo Pharmaceutical Holdings, Inc.
Ms. Shujuan Wang
Secretary of Board of Directors
+86-871-67282698
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Datum: 25.03.2013 - 07:00 Uhr
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