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China Biologic Reports Financial Results for the Second Quarter of 2016

--2Q16 Total Sales Up 23.4% with Non-GAAP Net Income Up 31.3% YoY in RMB terms, or Up 15.5% YoY to $91.4 Million and 23.1% YoY to $35.2 Million in USD terms, respectively

--1H16 Total Sales Up 26.2% with Non-GAAP Net Income Up 30.6% YoY in RMB terms, or Up 18.5% YoY to $177.0 Million and 22.6% YoY to $65.6 Million in USD terms, respectively

Aug 4, 2016

BEIJING, Aug. 4, 2016 /PRNewswire/-- China Biologic Products, Inc. (NASDAQ: CBPO, "China Biologic" or the "Company"), a leading fully integrated plasma-based biopharmaceutical company in China, today announced its unaudited financial results for the second quarter of 2016.

Second Quarter 2016 Financial Highlights

  • Total sales in the second quarter of 2016 increased by 23.4% in RMB terms, or 15.5% in USD terms, to $91.4 million from $79.1 million in the same quarter of 2015.
  • Gross profit increased by 15.2% to $59.9 million from $52.0 million in the same quarter of 2015. Gross margin decreased slightly to 65.6% from 65.8% in the same quarter of 2015.
  • Income from operations increased by 6.7% to $43.0 million from $40.3 million in the same quarter of 2015. Operating margin decreased to 47.1% from 50.9% in the same quarter of 2015.
  • Net income attributable to the Company increased by 15.4% to $30.8 million from $26.7 million in the same quarter of 2015. Fully diluted net income per share increased to $1.10 from $0.99 in the same quarter of 2015.
  • Non-GAAP adjusted net income attributable to the Company increased by 31.3% in RMB terms, or 23.1% in USD terms, to $35.2 million from $28.6 million in the same quarter of 2015. Non-GAAP adjusted net income per share increased to $1.26 from $1.06 in the same quarter of 2015.

Mr. David (Xiaoying) Gao, Chairman and Chief Executive Officer of China Biologic, commented, "We are pleased to achieve healthy financial results for the second quarter of 2016, even after accounting for the negative foreign currency impact of approximately eight percentage points. Our gross margin improvement compared to last quarter was mainly attributable to slightly higher product pricing, better product mix, and a comparatively small volume of finished goods made from the 140 tonnes of purchased plasma last year that was sold in the reporting quarter, as anticipated. We continue to make progress increasing our market share in the geographic areas and hospitals we serve directly, while also further penetrating into tier-1 cities. We significantly ramped up the production capability of certain hyper-immune products such as tetanus immunoglobulin at the expense of IVIG production. This resulted in tetanus immunoglobulin capturing the number one market position in China in the second quarter. In addition, we achieved stronger than expected growth for our non-plasma placenta polypeptide products as a result of our efforts to improve market penetration into more hospitals."

Mr. Gao continued, "Our Xinglong plasma collection station in Hebei Province received its operating permit and commenced operations in June 2016. Plasma collection growth from our existing stations as well as from our outsourcing partner, Xinjiang Deyuan's stations, remains on track as planned. The new Huitian facility also began delivery of products to the market in June 2016, ahead of schedule, while the construction of our new facility in Shandong Province remains on track with its construction plan. On the R&D front, we recently received approval from the CFDA to commence clinical trials of a new Human Coagulation Factor VIII at our Guizhou facility. We estimate the time line for commercial launch of this product to be within three years. Once commercially launched, we believe that the Factor VIII produced by our Guizhou facility can improve the production efficiency and economics of plasma collected by Guizhou Taibang and better serve hemophilia patients."

"Finally, we successfully completed a follow-on offering of 2.78 million shares of common stock in June 2016, which added new institutional investors to our shareholder base, improved our ownership structure and increased our stock liquidity. Looking ahead to the second half of 2016, we will continue to focus our operational efforts on several key areas including exploring new regions to expand plasma donor coverage while also driving plasma collection growth volume at our existing stations, managing public tenders in various local markets to ensure stable or improved product pricing, further investing in our R&D platform to accelerate the release of new products to the market and improve production yields and plasma utilization efficiency, and further enhancing our equity ownership in Guizhou Taibang," Mr. Gao concluded.

Second Quarter 2016 Financial Performance

Total sales in the second quarter of 2016 increased by 23.4% in RMB terms, or 15.5% in USD terms, to $91.4 million from $79.1 million in the same quarter of 2015. The increase was primarily attributable to the increase in sales volume of human albumin products, human tetanus immunoglobulin products and placenta polypeptide products, as well as an increase in the sales price of human tetanus immunoglobulin products.

During the second quarter of 2016, human albumin and IVIG products remained the Company's two largest sales contributors. As a percentage of total sales, sales from human albumin products increased to 41.2% in the second quarter of 2016, compared to 35.7% in the same quarter of 2015. Revenue from IVIG products decreased to 33.6% of total sales in the second quarter of 2016 from 43.1% in the same quarter of 2015 as the Company strategically ramped up its production capability of certain hyper-immune products with higher profit margin at the expense of IVIG production. The sales volume of human albumin products and IVIG products increased by 39.3% and decreased by 8.0%, respectively, in the second quarter of 2016.

The average price for human albumin products, excluding foreign exchange impact, would have increased by approximately 2.4% in RMB terms, or decreased by approximately 4.0% in USD terms, in the second quarter of 2016 compared to the same quarter of 2015. The average price for IVIG products, excluding foreign exchange impact, would have increased by approximately 4.4% in RMB terms, or decreased by approximately 2.1% in USD terms, in the second quarter of 2016 compared to the same quarter of 2015.

Revenue from hyper-immune products increased by 22.4% in the second quarter of 2016 compared to the same quarter of 2015, reaching 9.0% of total sales. Revenue from placenta polypeptide products increased by 41.6% in the second quarter of 2016 compared to the same quarter of 2015, reaching 11.9% of total sales. And revenue from other plasma products including human coagulation factor VIII and human prothrombin complex concentrate also increased by 62.5% in the second quarter of 2016 compared to the same quarter of 2015, reaching 4.3% of total sales.

Cost of sales was $31.5 million in the second quarter of 2016, compared to $27.1 million in the same quarter of 2015. As a percentage of total sales, cost of sales remained stable at 34.4%, as compared to 34.2% in the same quarter of 2015.

Gross profit increased by 15.2% to $59.9 million in the second quarter of 2016 from $52.0 million in the same quarter of 2015. Gross margin was 65.6% and 65.8% in the second quarter of 2016 and 2015, respectively.

Total operating expenses in the second quarter of 2016 increased by 44.4% to $16.9 million from $11.7 million in the same quarter of 2015, mainly due to the increases of general and administrative expenses. As a percentage of total sales, total operating expenses increased to 18.5% in the second quarter of 2016 from 14.9% in the same quarter of 2015.

Selling expenses in the second quarter of 2016 increased by 15.4% to $3.0 million from $2.6 million in the same quarter of 2015. As a percentage of total sales, selling expenses remained stable at 3.3% compared to the same quarter of 2015.

General and administrative expenses in the second quarter of 2016 were $12.6 million compared to $8.1 million in the same quarter of 2015. As a percentage of total sales, general and administrative expenses increased to 13.8% in the second quarter of 2016 from 10.3% in the same quarter of 2015. The increase in general and administrative expenses was mainly due to a $2.7 million increase in share-based compensation expenses, as well as a $1.2 million prepayment provision in the reporting quarter. Excluding the impact of share-based compensation expenses, general and administrative expenses would have been 8.6% and 7.6% as a percentage of total sales in the second quarter of 2016 and 2015, respectively.

Research and development expenses in the second quarter of 2016 increased to $1.3 million from $1.0 million in the same quarter of 2015, primarily because the Company received a government grant of $0.9 million in May 2015 and recognized it as a reduction of research and development expenses in the second quarter of 2015. Excluding the impact of the government grant, research and development expenses as a percentage of total sales would have decreased to 1.4% in the second quarter of 2016 from 2.4% in the same quarter of 2015.

Income from operations for the second quarter of 2016 increased by 6.7% to $43.0 million from $40.3 million in the same period of 2015. Operating margin decreased to 47.1% in the second quarter of 2016 from 50.9% in the same quarter of 2015.

Income tax expense in the second quarter of 2016 was $7.0 million, compared to $6.1 million in the same quarter of 2015, representing an increase of 14.8%. The effective income tax rate was 15.7% and 15.2% in the second quarter of 2016 and 2015, respectively.

Net income attributable to the Company increased by 15.4% to $30.8 million in the second quarter of 2016 from $26.7 million in the same quarter of 2015. Net margin decreased slightly to 33.6% compared to 33.8% in the same quarter of 2015. Fully diluted net income per share increased to $1.10 in the second quarter of 2016 from $0.99 in the same quarter of 2015.

Non-GAAP adjusted net income attributable to the Company increased by 23.1% to $35.2 million in the second quarter of 2016 from $28.6 million in the same quarter of 2015. Non-GAAP net margin increased to 38.5% from 36.2% in the same quarter of 2015. Non-GAAP adjusted net income per diluted share increased to $1.26 in the second quarter of 2016 from $1.06 in the same quarter of 2015.

Non-GAAP adjusted net income and diluted earnings per share for the three months ended June 30, 2016 exclude $4.4 million of non-cash employee share-based compensation expenses.

First Half 2016 Financial Performance

Total sales in the first half of 2016 increased by 26.2% in RMB terms, or 18.5% in USD terms, to $177.0 million from $149.4 million in the same period of 2015. The increase in sales was primarily driven by the increase in sales volume of human albumin products, human tetanus immunoglobulin products and placenta polypeptide products, as well as an increase in the sales price of human tetanus immunoglobulin products. As a percentage of total sales, sales from human albumin products and IVIG products accounted for 39.7% and 36.6%, respectively, for the first half of 2016.

Cost of sales was $65.5 million in the first half of 2016, compared to $51.5 million in the same period of 2015. Cost of sales as a percentage of total sales was 37.0%, as compared to 34.5% in the same period of 2015. The increase in cost of sales as a percentage of total sales was mainly due to the higher cost of plasma purchased from Xinjiang Deyuan, which was partially offset by the increase in the average sales price of certain plasma products and the adjustment of product mix to achieve higher profit margin.

Gross profit increased by 13.9% to $111.5 million in the first half of 2016 from $97.9 million in the same period of 2015. Gross margin was 63.0% in the first half of 2016, compared to 65.5% in the same period of 2015. 

Total operating expenses in the first half of 2016 increased 33.0% to $30.6 million from $23.0 million in the same period of 2015. As a percentage of total sales, total operating expenses increased to 17.3% for the first half of 2016 from 15.3% in the same period of 2015, mainly due to the increase of the general and administrative expenses.

Income from operations in the first half of 2016 increased by 7.9% to $80.9 million from $75.0 million in the same period of 2015.

Income tax expense in the first half of 2016 was $13.6 million, as compared to $11.7 million in the same period of 2015. The effective income tax rate was 16.2% and 15.5% for the first half of 2016 and 2015, respectively.

Net income attributable to the Company increased by 14.2% to $57.0 million for the first half of 2016 from $49.9 million in the same period of 2015. Net margin was 32.2% and 33.4% for the first half of 2016 and 2015, respectively.

Non-GAAP adjusted net income attributable to the Company was $65.6 million, or $2.36 per diluted share, for the first half of 2016, compared to $53.5 million, or $1.99 per diluted share, in the same period of 2015.

Non-GAAP adjusted net income and diluted earnings per share for the first half of 2016 exclude $8.6 million of non-cash employee share-based compensation expenses.

As of June 30, 2016, the Company had $204.0 million in cash and cash equivalents, primarily consisting of cash on hand and demand deposits.

Net cash provided by operating activities for the first half of 2016 was $57.0 million, as compared to $34.6 million for the same period in 2015. The increase in net cash provided by operating activities was largely consistent with the improvements in the results of operations, the speed-up of accounts receivable collection, the shortened inventory cycle and the increase of net non-cash operating expenses for the first half of 2016 as compared to the same period in 2015. Accounts receivable increased by $13.9 million during the first half of 2016, as compared to $18.8 million during the same period in 2015. The accounts receivable turnover days for plasma products decreased to 42 days during the first half of 2016 from 49 days during the same period in 2015, mainly because the Company no longer offered the long credit term policy to human rabies immunoglobulin product distributors in the first half of 2016 as it did in the same period of 2015 to penetrate the market.

Inventories increased by $12.5 million in the first half of 2016, as compared to $25.3 million during the same period in 2015, primarily because of the decrease of plasma purchased from the collection stations of Xinjiang Deyuan as of June 30, 2016 compared to the amount as of June 30, 2015.

Net cash used in investing activities for the first half of 2016 was $26.3 million, as compared to $20.1 million for the same period in 2015. During the first half of 2016, the Company paid $26.6 million for the acquisition of property, plant and equipment, intangible assets and land use rights for Shandong Taibang and Guizhou Taibang and granted a loan of $6.3 million to Xinjiang Deyuan pursuant to a cooperation agreement in August 2015, which was partially offset by the receipt of a refund of $6.5 million from the local government of Guiyang with respect to deposits of land use rights. During the first half of 2015, the Company paid $20.7 million for the acquisition of property, plant and equipment, intangible assets, and land use rights for Shandong Taibang and Guizhou Taibang.

Net cash provided by financing activities for the first half of 2016 was $32.2 million, as compared to $12.0 million for the same period in 2015. The net cash provided by financing activities in the first half of 2016 mainly consisted of the proceeds of $2.4 million from stock option exercised and the maturity of a $37.8 million time deposit as a security for a 24-month loan which was fully repaid in June 2015, partially offset by a dividend of $7.9 million paid to the minority shareholder by Shandong Taibang. The net cash provided by financing activities for the first half of 2015 mainly consisted of net proceeds of $80.6 million from a follow-on offering of the Company's stock in June 2015 and proceeds of $32.0 million from the maturity of a deposit used as security for short-term bank loan, partially offset by repayments of bank loans totaling $97.9 million and a dividend of $3.7 million held in escrow by a trial court in connection with disputes with a minority shareholder of Guizhou Taibang.

Financial Outlook

For the full year of 2016, the Company reiterates its full year forecast of total sales growth of 21% to 23% in RMB terms and non-GAAP adjusted net income growth of 24% to 26% in RMB terms over 2015 financial results. This guidance does not factor in any potential foreign currency translation impact. Having previously adopted an exchange rate of approximately RMB6.21 = $1.00 based on weighted average quarterly exchange rates in 2015 in translating 2015 financial results, the Company expects that the total sales and non-GAAP adjusted net income in USD terms in 2016 will be adversely affected by the foreign currency translation impact.

This guidance assumes only organic growth, excluding potential acquisitions, and necessarily assumes no significant adverse product price changes during 2016. This forecast reflects the Company's current and preliminary views, which are subject to change.

Conference Call

The Company will host a conference call at 7:30 am Eastern Time on Friday, August 5, 2016, which is 7:30 pm Beijing Time on August 5, 2016, to discuss second quarter 2016 results and answer questions from investors. Listeners may access the call by dialing:

US:                            

1 888 346 8982

International:             

1 412 902 4272

Hong Kong:            

800 905 945

China:                 

400 120 1203

A telephone replay will be available one hour after the conclusion of the conference all through August 12, 2016. The dial-in details are:

US:                            

1 877 344 7529

International:             

1 412 317 0088

Passcode:                  

10090306

A live and archived webcast of the conference call will be available through the Company's investor relations website at http://chinabiologic.investorroom.com.

About China Biologic Products, Inc.

China Biologic Products, Inc. (NASDAQ: CBPO) is a leading fully integrated plasma-based biopharmaceutical company in China. The Company's products are used as critical therapies during medical emergencies and for the prevention and treatment of life-threatening diseases and immune-deficiency related diseases. China Biologic is headquartered in Beijing and manufactures over 20 different dosage forms of plasma products through its indirect majority-owned subsidiaries, Shandong Taibang Biological Products Co., Ltd. and Guizhou Taibang Biological Products Co., Ltd. The Company also has an equity investment in Xi'an Huitian Blood Products Co., Ltd. The Company sells its products to hospitals, distributors and other healthcare facilities in China. For additional information, please see the Company's website www.chinabiologic.com.

Non-GAAP Disclosure

This news release contains non-GAAP financial measures that exclude non-cash compensation expenses related to options and restricted shares granted to employees and directors under the Company's 2008 Equity Incentive Plan. To supplement the Company's unaudited condensed consolidated financial statements presented on a GAAP basis, the Company has provided non-GAAP financial information excluding the impact of these items in this release. The Company's management believes that its presentation of non-GAAP financial measures provides useful supplementary information to and facilitates additional analysis by investors. A reconciliation of the adjustments to GAAP results appears in the table accompanying this news release. This additional non-GAAP information is not meant to be considered in isolation or as a substitute for GAAP financials. The non-GAAP financial information that the Company provides also may differ from the non-GAAP information provided by other companies.

Safe Harbor Statement

This news release may contain certain "forward-looking statements" relating to the business of China Biologic Products, Inc. and its subsidiaries. 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 "intend," "believe," "expect," "are expected to," "will," or similar expressions, and involve known and unknown risks and uncertainties. Among other things, the Company's plans regarding the production and sale of plasma products made from the purchased raw materials and the management's quotations and forecast of the Company's financial performance in this news release contain forward-looking statements. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they involve assumptions, risks, and uncertainties, and these expectations may prove to be incorrect.

Investors 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, without limitation, quality inspection of purchased source plasma, potential delay or failure to complete construction of new collection facilities, potential inability to pass government inspection and certification process for existing and new facilities, potential inability to achieve the designed collection capacities at the new collection facilities, potential inability to achieve the expected operating and financial performance, potential inability to find alternative sources of plasma, potential inability to increase production at permitted sites, potential inability to mitigate the financial consequences of a temporarily reduced raw plasma supply through cost cutting or other efficiencies, and potential additional regulatory restrictions on its operations and those additional risks and uncertainties discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

Contact:    

China Biologic Products, Inc.
Mr. Ming Yin
Senior Vice President
Phone: +86-10-6598-3099
Email: ir@chinabiologic.com

ICR Inc.
Mr. Bill Zima
Phone: +86-10-6583-7511 or +1-646-405-5191
E-mail: bill.zima@icrinc.com

Financial statements follow.

 

  











CHINA BIOLOGIC PRODUCTS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME












For the Three Months Ended


For the SIx Months Ended 



June 30,


June 30,


June 30,


June 30,



2016


2015


2016


2015



USD


USD


USD


USD

Sales


91,421,155


79,068,452


177,008,866


149,422,783

Cost of sales


31,482,146


27,054,626


65,525,581


51,516,201

Gross profit


59,939,009


52,013,826


111,483,285


97,906,582










Operating expenses









        Selling expenses


3,026,457


2,604,660


4,254,127


4,555,348

        General and administrative expenses


12,573,683


8,121,390


23,901,696


15,974,585

        Research and development expenses


1,303,815


1,046,985


2,398,538


2,389,307

 Income from operations


43,035,054


40,240,791


80,928,924


74,987,342










 Other income (expenses)









        Equity in income (loss) of an equity method investee


259,850


(666,233)


43,535


(761,300)

        Interest expense


(88,528)


(675,860)


(177,078)


(1,432,681)

        Interest income


1,292,069


1,467,135


3,043,209


2,843,982

Total other income, net


1,463,391


125,042


2,909,666


650,001










Earnings before income tax expense


44,498,445


40,365,833


83,838,590


75,637,343










Income tax expense


7,006,764


6,123,661


13,613,867


11,739,811










Net income


37,491,681


34,242,172


70,224,723


63,897,532










Less: Net income attributable to noncontrolling interest


6,738,646


7,518,213


13,274,433


14,011,101










Net income attributable to China Biologic Products, Inc.


30,753,035


26,723,959


56,950,290


49,886,431










Net income per share of common stock:









        Basic


1.12


1.05


2.08


1.96

        Diluted


1.10


0.99


2.05


1.86

Weighted average shares used in computation:









        Basic


26,698,996


25,019,039


26,642,461


24,918,517

        Diluted


27,152,560


26,320,773


27,145,470


26,265,857










Net income


37,491,681


34,242,172


70,224,723


63,897,532










Other comprehensive income:









Foreign currency translation adjustment, net of nil income taxes


(13,267,360)


1,463,605


(10,697,608)


609,243










Comprehensive income


24,224,321


35,705,777


59,527,115


64,506,775










Less: Comprehensive income attributable to noncontrolling interest


4,468,767


7,831,571


11,447,450


14,286,683










Comprehensive income attributable to China Biologic Products, Inc.


19,755,554


27,874,206


48,079,665


50,220,092










 

 

  







CHINA BIOLOGIC PRODUCTS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS








June 30,


December 31,



2016


2015



USD


USD

ASSETS 





Current Assets 





    Cash and cash equivalents


204,033,989


144,937,893

    Time deposits


-


38,032,593

    Accounts receivable, net of allowance for doubtful accounts 


38,258,676


25,144,969

    Inventories 


136,038,217


126,395,312

    Prepayments and other current assets, net of allowance for doubtful accounts


21,587,018


24,545,597

    Deposits related to land use rights, current portion


4,901,341


10,056,200

         Total Current Assets 


404,819,241


369,112,564






Property, plant and equipment, net 


126,417,723


105,364,251

Land use rights, net 


24,227,992


23,576,300

Equity method investment 


8,579,872


8,718,133

Loan receivable


45,240,000


39,834,173

Other non-current assets 


2,445,957


4,861,075

         Total Assets 


611,730,785


551,466,496






LIABILITIES AND STOCKHOLDERS' EQUITY 





Current Liabilities 





    Accounts payable 


6,525,540


9,681,835

    Other payables and accrued expenses 


49,276,574


57,462,563

    Income tax payable 


8,689,920


4,510,986

         Total Current Liabilities 


64,492,034


71,655,384






Deferred income


4,180,364


4,525,867

Other liabilities 


7,538,073


8,323,446

         Total Liabilities 


76,210,471


84,504,697






Stockholders' Equity 





    Common stock:





         par value $0.0001;





         1,000,000,000 shares and 100,000,000 shares authorized at June 30, 2016 and December 31, 2015, respectively;





         29,061,130 and 28,835,053 shares issued at June 30, 2016 and December 31, 2015, respectively;





         26,806,426 and 26,580,349 shares outstanding at June 30, 2016 and December 31, 2015, respectively


2,906


2,884

    Additional paid-in capital 


117,265,271


105,079,845

    Treasury stock: 2,254,704 shares at June 30, 2016 and December31, 2015, at cost


(56,425,094)


(56,425,094)






    Retained earnings


390,654,384


333,704,094

    Accumulated other comprehensive income 


(8,889,230)


(18,605)

    Total equity attributable to China Biologic Products, Inc. 


442,608,237


382,343,124






    Noncontrolling interest 


92,912,077


84,618,675






         Total Stockholders' Equity 


535,520,314


466,961,799






    Commitments and contingencies 


-


-






         Total Liabilities and Stockholders' Equity 


611,730,785


551,466,496











 

 

  






CHINA BIOLOGIC PRODUCTS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 






For the Six Months Ended


June 30,


June 30,


2016


2015


USD


USD

CASH FLOWS FROM OPERATING ACTIVITIES: 




Net income 

70,224,723


63,897,532

Adjustments to reconcile net income to net cash provided by operating activities: 




    Depreciation 

4,590,028


4,123,599

    Amortization

438,916


415,231

    Loss on sale of property, plant and equipment and land use rights

115,075


313,529

    Allowance for doubtful accounts - accounts receivable, net

6,604


35,372

    Allowance for doubtful accounts - other receivables and prepayments

-


796

    Allowance for doubtful accounts - other non-current assets

1,225,200


-

    Write-down of obsolete inventories 

61,497


16,750

    Deferred tax (benefit) expense 

(1,584,958)


167,921

    Share-based compensation 

9,307,099


4,033,482

    Equity in (income) loss of an equity method investee 

(43,535)


761,300

    Excess tax benefits from share-based compensation arrangements

-


(288,681)

Change in operating assets and liabilities: 




    Accounts receivable 

(13,856,209)


(18,835,493)

    Prepayment and other current assets 

2,433,998


(1,165,997)

    Inventories 

(12,522,807)


(25,272,719)

    Accounts payable 

(3,001,361)


10,123,561

    Other payables and accrued expenses 

(4,465,594)


(2,391,597)

    Deferred income

(255,394)


(149,708)

    Income tax payable 

4,339,536


(1,223,601)

Net cash provided by operating activities 

57,012,818


34,561,277





CASH FLOWS FROM INVESTING ACTIVITIES:




    Payment for property, plant and equipment

(25,222,545)


(16,486,212)

    Payment for intangible assets and land use rights

(1,351,789)


(4,205,678)

    Refund of deposits related to land use right

6,461,924


-

    Proceeds from sale of property, plant and equipment and land use rights

100,424


559,029

    Long-term loan lent to a third party

(6,331,518)


-

Net cash used in investing activities 

(26,343,504)


(20,132,861)





CASH FLOWS FROM FINANCING ACTIVITIES: 




    Proceeds from stock option exercised 

2,364,952


771,164

    Repayment of short-term bank loans 

-


(97,910,360)

    Maturity of deposit as security for bank loans

37,756,405


31,985,122

    Excess tax benefits from share-based compensation arrangements

-


288,681

    Dividend paid by subsidiaries to noncontrolling interest shareholders

(7,921,952)


-

    Net proceeds from reissuance of treasury stock

-


80,583,959

    Dividend to the trial court to be held in escrow as to dispute with Jie'an

-


(3,690,814)

Net cash provided by financing activities 

32,199,405


12,027,752





EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH

(3,772,623)


(661,684)





NET INCREASE  IN CASH AND CASH EQUIVALENTS

59,096,096


25,794,484





Cash and cash equivalents at beginning of period 

144,937,893


80,820,224





Cash and cash equivalents at end of period

204,033,989


106,614,708





Supplemental cash flow information 




    Cash paid for income taxes 

10,841,209


12,829,660

    Cash paid for interest expense 

-


1,428,614

    Noncash investing and financing activities: 




    Acquisition of property, plant and equipment included in payables 

9,312,476


231,397













 

  






CHINA BIOLOGIC PRODUCTS, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES 






For the Three Months Ended 


June 30,


June 30,


2016


2015


USD


USD

Adjusted Net Income Attributable to the Company - Non GAAP

35,167,523


28,582,627

Diluted EPS - Non GAAP

1.26


1.06

Non-cash employee stock compensation

(4,414,488)


(1,858,668)

Net Income Attributable to the Company

30,753,035


26,723,959

Weighted average number of shares used in computation of Non GAAP diluted EPS

27,152,560


26,320,773






For the Six Months Ended 


June 30,


June 30,


2016


2015


USD


USD

Adjusted Net Income Attributable to the Company - Non GAAP

65,609,897


53,533,033

Diluted EPS - Non GAAP

2.36


1.99

Non-cash employee stock compensation

(8,659,607)


(3,646,602)

Net Income Attributable to the Company

56,950,290


49,886,431

Weighted average number of shares used in computation of Non GAAP diluted EPS

27,145,470


26,265,857





SOURCE China Biologic Products, Inc.


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