Sinovac Biotech (SVA) 6-K Sinovac Reports Unaudited Fourth Quarter 2020 Financial Results and Files 2020 Annual

Exhibit 99.1

Sinovac Reports Unaudited Fourth Quarter 2020 Financial Results and Files 2020 Annual

Report on Form 20-F

BEIJING, China, April 22, 2021 /Business Wire/ – Sinovac Biotech Ltd. (NASDAQ: SVA) (“Sinovac” or the “Company”), a leading provider of biopharmaceutical products in China, has filed its 2020 annual report on Form 20-F with the U.S. Securities and Exchange Commission for the year ended December 31, 2020. The Company also reported its unaudited financial results for the fourth quarter ended December 31, 2020.

Fourth Quarter and Full Year 2020 Financial Summary

• Sales for the fourth quarter of 2020 were $327.5 million, an increase from $81.1 million in the prior year period.

• Sales in 2020 were $510.6 million, an increase from $246.1 million in the prior year.

• Operating income for the fourth quarter increased by 583.7% from the prior year period due to higher sales.

• Operating income in 2020 increased by 214.5% from the prior year period due to higher sales.

• The Company posted $107.3 million of net income attributable to common shareholders, or $1.09 per basic and $0.96 per diluted share, in the fourth quarter of 2020, compared to net income attributable to common shareholders of $21.7 million, or $0.22 per basic and $0.20 per diluted share, in the prior year period.

• The Company posted $104.4 million of net income attributable to common shareholders, or $1.06 per basic and $0.97 per diluted share, in 2020, compared to net income attributable to common shareholders of $39.8 million, or $0.42 per basic and $0.41 per diluted share, in the prior year.

Mr. Weidong Yin, Chairman, President, and CEO of Sinovac, commented, “Sinovac experienced an exceptionally strong year in 2020. Despite the unprecedented COVID-19 pandemic, we are pleased with our record financial performance both for the fourth quarter and full fiscal year. We moved quickly to develop an inactivated COVID-19 vaccine, also known as CoronaVac, within a year’s time and without having to sacrifice product quality.”

“We have built production facilities with an annual production capacity of 2 billion doses. At this time, over 200 million doses of our COVID-19 vaccine have been delivered to different countries to support vaccine rollout, and millions of people around the globe have been administered our vaccine. We always strive to achieve low incident rates when developing vaccines, and we are happy to see CoronaVac’s strong performance in the largest real world study in Chile, providing solid, real-life evidence that our vaccine helps to reduce hospitalized cases, ICU admissions, and fatal cases. Our overarching goal is to deliver a safe, effective, and accessible vaccine to the world.”

Mr. Yin added, “As we worked to develop our COVID-19 vaccine, Sinovac also achieved good development progress with its other vaccine products as well. Two of our products, QIV and PPV-23, were granted market authorization in China in 2020, and our existing business segments continued to grow, despite a reduction in vaccination activities in the first half of the year due to the COVID-19 outbreak and lockdown policy.”

Pipeline Development

COVID-19 Vaccine – The Company initiated the development of an inactivated vaccine against COVID-19 (named CoronaVac) on January 28, 2020. The phase I and II human studies on healthy adults aged 18 to 59 and elderly adults aged 60 and above were conducted in China and enrolled 144 participants in the phase I trial and 600 participants in the phase II trial, with 743 participants receiving at least one dose of investigational product. Results from the randomized, double-blind, placebo-controlled phase I/II clinical trial on safety, tolerability and immunogenicity of CoronaVac were published in The Lancet Infectious Diseases on November 17, 2020.

Since September 2020, the Company made rolling submission to China’s National Medical Products Administration (NMPA), which carried out rolling reviews when the submissions were made. NMPA granted a conditional marketing authorization (CMA) to Sinovac for CoronaVac in individuals aged 18 and above on February 5, 2021. As of March 31, 2021, CoronaVac has been granted either emergency approval or conditional marketing authorization by over 30 countries or regions.

Sinovac completed its phase I/II trial on pediatric populations aged 3 to 17 years old. 28 days after second dose, both the middle-dose and low-dose were well tolerated, and the seroconversaion rates were 96.77% and 100%, respectively. The pre-print of the publication named Safety, Tolerability and Immunogenicity of an Inactivated SARS-CoV-2 Vaccine (CoronaVac) in Healthy Children and Adolescents: A Randomised, Double-Blind, and Placebo-Controlled, Phase 1/2 Clinical Trial is available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3820545.

Sabin Inactivated Polio vaccine (sIPV) – The Company submitted an application to NMPA for the product license of sIPV in January 2019. The Company expects the license to be issued in mid-2021.

Unaudited Financial Results for the Fourth Quarter of 2020

Sales for the fourth quarter of 2020 were $327.5 million, an increase from $81.1 million in the prior year period. The increase was due to higher sales of the Company’s influenza products, including the newly launched QIV, and sales of CoronaVac.

Gross profit in the fourth quarter of 2020 was $283.9 million, an increase from $68.9 million in the prior year period. Gross margin was 86.7%, compared to 84.9% in the prior year period. The increase of gross margin was due to a change in sales mix in 2020.

Selling, general and administrative expenses in the fourth quarter of 2020 were $83.1 million, compared to $33.3 million in the prior year period. The increase was mainly due to higher sales and increased marketing dedicated to revenue growth.

R&D expenses in the fourth quarter of 2020 were $2.7 million in 2020, compared to $7.8 million in the prior year period.

Net income in the fourth quarter of 2020 was $172.7 million, compared to $32.8 million in the prior year period, due to an increase in sales.

Net income attributable to common shareholders was $107.3 million, or $1.09 per basic and $0.96 per diluted share, in the fourth quarter of 2020, compared to $21.7 million, or $0.22 per basic and $0.20 per diluted share, in the prior year period.

As the Company announced on February 22, 2019, the Company’s board of directors determined that certain shareholders became “Acquiring Persons,” as defined in the Company’s Rights Agreement (“Rights Agreement”), and a “Trigger Event” occurred under the Rights Agreement. As a result, the Company issued new common and preferred shares of Sinovac. Without the effect of implementing the Rights Agreement and the newly-issued common and preferred shares, basic and diluted earnings per share for the fourth quarter of 2020 would be $1.53 and $1.27, respectively.

Non-GAAP adjusted EBITDA was $198.9 million in the fourth quarter of 2020, compared to $30.8 million in the prior year period. Non-GAAP net income was $175.3 million in the fourth quarter of 2020, compared to $34.0 million in the prior year period. Non-GAAP diluted earnings per share in the fourth quarter of 2020 was $1.02, compared to earnings of $0.21 per share in the prior year period. Non-GAAP diluted earnings per share in the fourth quarter of 2020, excluding the implementation of the Rights Agreement and the newly-issued common and preferred shares, would be $1.36. Reconciliations of non-GAAP measures to the nearest comparable GAAP measures are included at the end of this earnings announcement.

The Company’s fourth quarter 2020 financial statements are prepared and presented in accordance with U.S. GAAP. However, they have not been audited or reviewed by the Company’s independent registered accounting firm.

Financial Results for the Twelve Months Ended December 31, 2020

Sales in 2020 were $510.6 million, an increase from $246.1 million in the prior year. The increase was due to higher sales of the Company’s influenza products, including the newly launched QIV, and sales of CoronaVac.

Gross profit in 2020 was $443.4 million, compared to gross profit of $213.6 million in the prior year. Gross margin was 86.8%, which is the same compared to the prior year.

Selling, general and administrative expenses in 2020 were $176.5 million, compared to $121.5 million in the prior year. The increase was mainly due to higher sales and increased marketing dedicated to revenue growth.

R&D expenses in 2020 were $48.8 million, compared to $24.3 million in the prior year. The Company continued to invest in the advancement of pipeline vaccines, including sIPV and COVID-19 vaccines.

Net income in 2020 was $185.2 million, compared to $65.2 million in the prior year. Net income increased primarily due to increased sales.

Net income attributable to common shareholders was $104.4 million, or $1.06 per basic and $0.97 per diluted share, compared to net income attributable to common shareholders of $39.8 million, or $0.42 per basic and $0.41 per diluted share, in the prior year.

Excluding the implementation of the Rights Agreement, as described above, and the newly-issued common and preferred shares, basic and diluted earnings per share for 2020 would be $1.55 and $1.29, respectively.

Non-GAAP adjusted EBITDA was $230.0 million in 2020, compared to $76.4 million in the prior year. Non-GAAP net income in 2020 was $197.1 million in 2020, compared to $68.5 million in the prior year. Non-GAAP diluted earnings per share in 2020 was $1.03, compared to earnings of $0.43 per share in the prior year. Non-GAAP diluted earnings per share in 2020, excluding the implementation of the Rights Agreement and the newly-issued common and preferred shares, would be $1.44 per share. Reconciliations of non-GAAP measures to the nearest comparable GAAP measures are included at the end of this earnings announcement.

As of December 31, 2020, cash and cash equivalents totaled $1,041.0 million, compared to $152.7 million as of December 31, 2019. In 2020, net cash provided by operating activities was $479.3 million, net cash used in investing activities was $204.8 million, and net cash provided by financing activities was $592.6 million, including proceeds of $541.0 million from a subsidiary’s financing, loan proceeds of $33.2 million and loan repayments of $6.0 million. As of December 31, 2020, the Company had $32.9 in 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.

Legal Proceedings

As previously disclosed by the Company, on March 13, 2018, 1Globe Capital LLC (“1Globe”) filed a complaint against the Company in the Antigua Court. The trial of the matter took place from December 3 to 5, 2018. On December 19, 2018, the Antigua judge handed down his judgment (the “Antigua Judgment”), finding the Company fully in favor, dismissing 1Globe’s claim and declaring that the Rights Agreement was validly adopted as a matter of Antigua law. On January 29, 2019, 1Globe filed a Notice of Appeal against the Antigua Judgment. On March 4, 2019, 1Globe filed an application for urgent interim relief, seeking an injunction to prevent the Company from continuing to implement its Rights Agreement until the resolution of the appeal. This application was heard on April 4, 2019, at which the Court of Appeal issued an order restraining the Company from operating the Rights Agreement in any way that affects 1Globe’s rights or shareholding or otherwise distributing the exchange shares to the Company’s shareholders who did not trigger the Rights Plan until after the determination of the appeal (the “Exchange Shares”). 1Globe’s appeal against the Antigua Judgment was heard on September 18, 2019, and the appeal decision is now pending.

As previously disclosed, on March 5, 2018, the Company filed a lawsuit in the Court of Chancery of the State of Delaware seeking a determination on whether 1Globe, the Chiang Li Family, OrbiMed Advisors, LLC, and certain other shareholders of the Company had triggered the Rights Agreement. On April 12, 2018, 1Globe filed an amended answer to the Company’s complaint, counterclaims, and a third-party complaint against the Company and Mr. Weidong Yin alleging, among other allegations, that the Rights Agreement is not valid. On March 6, 2019, the Delaware Chancery Court entered a status quo order, providing that the Company not distribute any of the Exchange Shares to the Company’s shareholders who did not trigger the Rights Plan until the final disposition of the pending Delaware litigation or further order of the Court. On April 8, 2019, the Delaware Chancery Court stated that the Delaware litigation was pending the outcome of 1Globe’s appeal of the Antigua Judgment.

Separately, Heng Ren Investments LP (“Heng Ren”) filed suits against Sinovac and Weidong Yin on May 31, 2019, in Massachusetts state court, for alleged breach of fiduciary duties and wrongful equity dilution. Sinovac moved the matter from the state court to the United States District Court for the District of Massachusetts. Heng Ren alleged that Mr. Yin breached fiduciary duties owed to minority shareholders, that Sinovac aided and abetted breaches of fiduciary duties, and that both Sinovac and Mr. Yin engaged in wrongful equity dilution. Heng Ren requested damages, attorney fees, and prejudgment interest. On September 14, 2020, Sinovac Antigua filed a motion to dismiss Heng Ren’s claims. The court’s decision on this motion is still pending.

Status of Exchange Shares and Trading in the Company’s Shares

As a result of the pending legal proceedings described above, the Exchange Shares are expected to remain in a trust for the benefit of the Company’s shareholders who did not trigger the Rights Plan until, at least, the conclusion of the appeal against the Antigua Judgement and the final disposition of the Delaware litigation or further order of the Delaware Chancery Court. The Exchange Shares remain issued and outstanding. The Nasdaq Stock Market LLC implemented a halt on trading of the Company’s common shares at the time the Exchange Shares were issued to the trust. The Company is currently unable to estimate when trading will resume, or whether Nasdaq will take any additional action in regards to the trading of the Company’s common shares.

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 COVID-19, enterovirus71 (EV71), hepatitis A and B, seasonal influenza, 23-Valent pneumococcal polysaccharide (“PPV”), H5N1 pandemic influenza (avian flu), H1N1 influenza (swine flu), varicella vaccine and mumps. Sinovac’s COVID-19 vaccine, CoronaVac, has been granted emergency use approval or conditional marketing authorization by over 30 countries or region worldwide. 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 and combined vaccines. Sinovac primarily sells its vaccines in China, while also exploring growth opportunities in international markets. The Company is seeking market authorization of its products in over 30 countries outside of China. For more information please see the Company’s website at www.sinovac.com.

Safe Harbor Statement

This press release may include certain statements that are not descriptions of historical facts, but are forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Forward-looking statements involve risks, uncertainties and other factors that could cause actual results to differ materially from those contained in any such statements. In particular, the outcome of any litigation is uncertain, and the Company cannot predict the potential results of the litigation it filed or filed against it by others. Additionally, the triggering of a shareholder rights plan is nearly unprecedented, and the Company cannot predict the impact on the Company or its stock price as a result of the trigger of the rights plan.

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 adjusted EBITDA, non-GAAP net income and non-GAAP diluted EPS. 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 adjusted EBITDA, non-GAAP net income and non-GAAP diluted EPS help identify underlying trends in its business that could otherwise be distorted by the effect of certain income or expenses that Sinovac includes in net income and diluted EPS. Sinovac believes that non-GAAP adjusted EBITDA, non-GAAP net income and non-GAAP diluted EPS 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 adjusted EBITDA, non-GAAP net income and non-GAAP diluted EPS should not be considered in isolation or construed as an alternative to income from operations, net income, diluted EPS, 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 adjusted EBITDA represents net income and excludes interest and financing expenses, interest income, net other income 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 represents net income before share-based compensation expenses and foreign exchange gain or loss.

Non-GAAP diluted EPS represents non-GAAP net income attributable to common shareholders 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 or

  +86-10-5693-1897

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 December 31, 2020 and December 31, 2019

(Expressed in thousands of U.S. Dollars)

	December 31, 2020			December 31, 2019
Current assets
Cash and cash equivalents	$	1,041,008		$	152,718
Restricted cash		9,196			3,160
Short-term investment		135,248			50,274
Accounts receivable – net		253,487			113,736
Inventories		105,813			27,846
Prepaid expenses and deposits		15,541			1,873
Total current assets		1,560,293			349,607
Property, plant and equipment – net		200,371			74,310
Prepaid land lease payments		8,247			7,965
Intangible assets – net		1,474			—
Long-term prepaid expenses		25			23
Prepayments for acquisition of equipment		20,192			2,390
Deferred tax assets		26,891			11,368
Right-of-use assets		83,833			6,636
Total assets		1,901,326			452,299
Current liabilities
Short-term bank loans and current portion of long-term bank loans		32,941			5,934
Loan from a non-controlling shareholder		6,155			6,607
Accounts payable and accrued liabilities		211,428			58,890
Income tax payable		35,262			1,904
Deferred revenue		364,005			5,462
Deferred government grants		15,159			2,738
Dividend payable		11,143			5,128
Lease liability		3,517			536
Total current liabilities		679,610			87,199
Deferred government grants		4,229			3,986
Long-term bank loans		2,155			—
Deferred tax liability		2,724			—
Loan from a non-controlling shareholder		6,130			1,436
Lease liability		85,488			5,758
Other non-current liabilities		865			1,725
Total long-term liabilities		101,591			12,905
Total liabilities		781,201			100,104
Commitments and contingencies
Equity
Preferred stock		15			15
Common stock		99			99
Additional paid-in capital		538,924			207,962
Subscriptions receivable		(7,109	)		—
Accumulated other comprehensive income (loss)		19,925			(4,321	)
Statutory surplus reserves		50,377			33,533
Accumulated earnings		144,241			56,731
Total shareholders’ equity		746,472			294,019
Non-controlling interests		373,653			58,176
Total equity		1,120,125			352,195
Total liabilities and equity	$	1,901,326		$	452,299

SINOVAC BIOTECH LTD.

Consolidated Statements of Comprehensive Income

For the three and twelve months ended December 31, 2020 and 2019

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

	Three months ended December 31						For the year ended December 31
	2020			2019			2020			2019
	(Unaudited)			(Unaudited)
Sales	$	327,454		$	81,111		$	510,624		$	246,053
Cost of sales		43,525		$	12,251		$	67,180		$	32,469
Gross profit		283,929			68,860			443,444			213,584
Selling, general and administrative expenses		83,051			33,299			176,534			121,468
Provision (recovery) for doubtful accounts		1,191			(445	)		2,640			(306	)
Research and development expenses		2,661			7,758			48,760			24,254
Loss on disposal of property, plant and equipment		115			64			163			294
Government grants recognized in income		(10	)		(619	)		(297	)		(688	)
Total operating expenses		87,008			40,057			227,800			145,022
Operating income		196,921			28,803			215,644			68,562
Interest and financing expenses		(328	)		(159	)		(1,453	)		(650	)
Interest income		402			594			1,930			1,996
Other income, net		1,371			296			496			912
Income before income taxes		198,366			29,534			216,617			70,820
Income tax benefit (expense)		(25,665	)		3,286			(31,438	)		(5,605	)
Net Income		172,701			32,820			185,179			65,215
Less: Income attributable to non-controlling interests		(63,871	)		(9,625	)		(74,810	)		(20,286	)
Net income attributable to shareholders of Sinovac		108,830			23,195			110,369			44,929
Preferred stock dividends		(1,512	)		(1,512	)		(6,015	)		(5,128	)
Net income attributable to common shareholders of Sinovac		107,318			21,683			104,354			39,801
Net income		172,701			32,820			185,179			65,215
Other comprehensive income, net of tax of nil
Foreign currency translation adjustments		24,703			6,467			32,328			(2,827	)
Comprehensive income		197,404			39,287			217,507			62,388
Less: comprehensive income attributable to non-controlling interests		(70,213	)		(10,821	)		(82,892	)		(19,681	)
				��
Comprehensive income attributable to shareholders of Sinovac	$	127,191			28,466		$	134,615			42,707
Earnings per share
Basic net income per share		1.09			0.22			1.06			0.42
Diluted net income per share		0.96			0.20			0.97			0.41
Weighted average number of shares of common stock outstanding
Basic		98,897,607			98,903,406			98,897,345			94,876,946
Diluted		113,662,163			113,715,690			113,662,362			109,691,959

SINOVAC BIOTECH LTD.

Consolidated Statements of Cash Flows

For the three and twelve months ended December 31, 2020 and 2019

(Expressed in thousands of U.S. Dollars)

	Three months ended December 31						For the year ended December 31
	2020			2019			2020			2019
	(Unaudited)			(Unaudited)
Cash flows provided by operating activities
Net income		172,701			32,820			185,179			65,215
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income taxes		(6,276	)		(2,969	)		(11,227	)		(5,685	)
Share-based compensation		751			750			10,203			3,003
Inventory provision		5,170			317			5,816			651
Provision (recovery) for doubtful accounts		1,191			(445	)		2,640			(306	)
Loss on disposal of property, plant and equipment		115			64			163			294
Depreciation of property, plant and equipment and amortization of licenses		1,141			1,146			3,693			4,579
Amortization of the prepaid land lease payments		62			58			238			238
Amortization of Intanglible assets		55			—			106			—
Government grants recognized in income		(10	)		(619	)		(297	)		(688	)
Changes in:
Accounts receivable		(74,734	)		(5,513	)		(128,016	)		(40,191	)
Inventories		(49,773	)		2,239			(77,738	)		(3,651	)
Income tax payable		24,183			(3,582	)		31,804			4,904
Prepaid expenses and deposits		(4,719	)		1,385			(13,151	)		2,645
Deferred revenue		337,593			1,769			339,329			2,521
Accounts payable and accrued liabilities		74,855			35			131,777			6,793
Other non-current liablitites		(1,210	)		(1,004	)		(1,210	)		(1,248	)
Net cash provided by operating activities		481,095			26,451			479,309			39,074
Cash flows provided by financing activities
Proceeds from bank loans		5,734			2,109			33,227			2,109
Repayments of bank loans		(2,238	)		22			(6,041	)		(3,305	)
Proceeds from issuance of common stock, net of share issuance costs		1,999			(3	)		1,999			—
Proceeds from subsidiary’s financing		526,311			—			541,043			—
Government grants received		4,021			625			16,521			1,476
Loan from a non-controlling shareholder		10,162			—			10,162			1,457
Repayments of loan from a non-controlling shareholder		(4,345	)		—			(4,345	)		—
Net cash provided by financing activities		541,644			2,753			592,566			1,737
Cash flows used in investing activities
Purchase of short-term investments		(125,895	)		(49,208	)		(201,688	)		(50,665	)
Proceeds from redemption of short-term investments		31,609			18,818			124,562			18,818
Proceeds from disposal of equipment		1			9			20			21
Acquisition of property, plant and equipment		(57,701	)		(1,915	)		(127,486	)		(10,628	)
Acquisition of intangible assets		(164	)		—			(164	)		—
Net cash used in investing activities		(152,150	)		(32,296	)		(204,756	)		(42,454	)
Effect of exchange rate changes on cash and cash equivalents and restricted cash		25,902			2,273			27,207			(649	)
Increase (decrease) in cash and cash equivalents and restricted cash		896,491			(819	)		894,326			(2,292	)
Cash and cash equivalents and restricted cash, beginning of year		153,713			156,697			155,878			158,170
Cash and cash equivalents and restricted cash, end of year		1,050,204			155,878			1,050,204			155,878

SINOVAC BIOTECH LTD.

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

For the three and twelve months ended December 31, 2020 and 2019

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

	Three months ended December 31						For the year ended December 31
	2020			2019			2020			2019
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Net income		172,701			32,820			185,179			65,215
Adjustments:
Share-based compensation		751			750			10,203			3,003
Depreciation and amortization		1,258			1,204			4,037			4,817
Interest and financing expenses, net of interest income		(74	)		(435	)		(477	)		(1,346	)
Net other income		(1,371	)		(296	)		(496	)		(912	)
Income tax expense (benefit)		25,665			(3,286	)		31,438			5,605
Non-GAAP adjusted EBITDA		198,930			30,757			229,884			76,382
Net income		172,701			32,820			185,179			65,215
Add: Foreign exchange loss		1,805			470			1,698			306
Add: Share-based compensation		751			750			10,203			3,003
Non-GAAP net income		175,257			34,040			197,080			68,524
Net income attributable to common shareholders of Sinovac		107,318			21,683			104,354			39,801
Add: Preferred stock dividends		1,512			1,512			6,015			5,128
Net income attributable to common shareholders of Sinovac for computing diluted earnings per share		108,830			23,195			110,369			44,929
Add: Non-GAAP adjustments to net income		6,379			666			7,365			2,109
Non-GAAP net income attributable to common shareholders of Sinovac for computing non-GAAP diluted earnings per share		115,209			23,861			117,734			47,038
Weighted average number of shares on a diluted basis		113,662,163			113,715,690			113,662,362			109,691,959
Diluted earnings per share		0.96			0.20			0.97			0.41
Add: Non-GAAP adjustments to net income per share		0.06			0.01			0.06			0.02
Non-GAAP Diluted earnings per share		1.02			0.21			1.03			0.43