Exhibit 99.2
China Biologic Second Quarter 2020 Financial Results
Second Quarter 2020 Financial Performance
Total sales in the second quarter of 2020 decreased by 18.1% in USD terms, or 14.9% in RMB terms, to $111.1 million from $135.7 million in the same quarter of 2019.
Total sales for biopharmaceutical products decreased by 20.3% in USD terms, or 17.1% in RMB terms, to $97.5 million in the second quarter of 2020 from $122.3 million in the same quarter of 2019, mainly because of decreases in sales of IVIG, albumin, coagulation factor and placenta polypeptide products. For plasma products, total sales in the second quarter of 2020 decreased by 16.2% in USD terms, or 12.8% in RMB terms, to $93.0 million from $111.0 million in the same quarter of 2019.
Revenue from IVIG products decreased by 37.2% in USD terms, or 34.5% in RMB terms, from $27.4 million in the second quarter of 2019 to $17.2 million in the second quarter of 2020, mainly because hospitals and distributors reduced their purchase volume as they stocked higher-than-normal IVIG inventory during the COVID-19 outbreak in the first quarter. The sales volume of IVIG products decreased by 33.1% during this quarter over the same period of last year. The average price decreased by 5.8% in USD terms and 2.1% in RMB terms in the second quarter of 2020 compared to the same quarter of 2019, mainly because the Company charged lower prices to certain distributors to enhance its sales volume.
Revenue from human albumin decreased by 13.3% in USD terms, or 9.8% in RMB terms, to $42.4 million in the second quarter of 2020, from $48.9 million in the second quarter of 2019, primarily due to decreased sales in the distributor and pharmacy channels. The sales volume of human albumin products decreased by 9.5% in the second quarter of 2020 over same quarter last year. The average price decreased by 4.2% in USD terms and 0.4% in RMB terms in the second quarter of 2020 compared to the same quarter of 2019.
In the second quarter of 2020, IVIG and human albumin products remained the Company’s two largest sales contributors. As a percentage of total sales, sales of IVIG and human albumin products were 15.5% and 38.2%, respectively, in the second quarter of 2020.
Revenue from other immunoglobulin products increased by 8.9% in USD terms, or 13.3% in RMB terms in the second quarter of 2020 compared to the same quarter of 2019, representing 18.6% of total sales as compared to 14.0% of total sales in the same quarter of 2019.
Revenue from other plasma products decreased by 19.1% in USD terms, or 15.8% in RMB terms, in the second quarter of 2020 compared to the same quarter of 2019, mainly because of a decline in sales of human fibrinogen products, representing 11.4% of total sales in the second quarter of 2020 compared to 11.5% of total sales in the same quarter of 2019.
Revenue from placenta polypeptide products decreased by 60.2% in USD terms, or 59.0% in RMB terms in the second quarter of 2020 as compared to the same quarter of 2019, accounting for 4.1% of total sales compared to 8.3% of total sales in the same quarter of 2019. The main reason for this decrease was that this product was included in the drug lists for monitoring and prescription control in many regions, which put a downward pressure on its sales volume.
Total sales for biomaterial products in the second quarter of 2020 increased by 1.5% in USD terms, or 5.1% in RMB terms, to $13.6 million from $13.4 million in the same quarter of 2019, accounting for 12.2% of total sales compared to 9.9% of total sales in the same quarter of 2019. The increase was mainly due to an increase in sales of artificial dura mater products.
Cost of sales decreased by 22.5% to $34.7 million in the second quarter of 2020 from $44.8 million in the same quarter of 2019. As a percentage of total sales, cost of sales decreased to 31.2% in the second quarter of 2020 from 33.0% in the same quarter of 2019, as a combined result of lower overhead costs in Shandong Taibang’s new facility after a nearly two-year run-in period, lower proportion of products made from the higher-cost outsourced plasma, and higher percentages of higher-margin dura mater products in total sales.
Gross profit decreased by 16.0% to $76.4 million in the second quarter of 2020 from $90.9 million in the same quarter of 2019. Gross margin was 68.8% and 67.0% in the second quarter of 2020 and 2019, respectively.
Total operating expenses in the second quarter of 2020 decreased by $9.0 million, or 21.1%, to $33.7 million from $42.7 million in the same quarter of 2019. This decrease mainly consisted of an $11.2 million decrease in selling expenses, which was partly offset by a $1.8 million increase in general and administrative expenses and a $0.4 million increase in research and development expenses. As a percentage of total sales, total operating expenses decreased to 30.3% in the second quarter of 2020 from 31.5% in the same quarter of 2019.
Selling expenses in the second quarter of 2020 decreased by $11.2 million, or 43.8%, to $14.4 million from $25.6 million for the same quarter of 2019. As a percentage of total sales, selling expenses decreased to 13.0% in the second quarter of 2020 from 18.9% in the same quarter of 2019. The decrease was primarily due to a decrease in marketing and promotion expenses related to placenta polypeptide products, whose sales decreased significantly in the second quarter of 2020.
General and administrative expenses increased by $1.8 million, or 12.2%, to $16.5 million in the second quarter of 2020, from $14.7 million in the same quarter of 2019. As a percentage of total sales, general and administrative expenses increased to 14.9% in the second quarter of 2020 compared to 10.8% in the same quarter of 2019. The increase was mainly because of a one-time reversal of an allowance for doubtful accounts receivable of $1.8 million during the second quarter of 2019.
Research and development expenses in the second quarter of 2020 increased by $0.4 million, or 16.7%, to $2.8 million from $2.4 million in the same quarter of 2019. As a percentage of total sales, research and development expenses increased to 2.5% in the second quarter of 2020 from 1.8% in the same quarter of 2019.
Income from operations in the second quarter of 2020 decreased by 11.4% in USD terms, or 7.9% in RMB terms, to $42.7 million from $48.2 million in the same quarter of 2019. Operating margin increased to 38.4% in the second quarter of 2020 from 35.5% in the same quarter of 2019.
Income tax expense in the second quarter of 2020 was $6.6 million, compared to $8.2 million in the same quarter of 2019. The effective income tax rate was 14.0% and 14.4% for the second quarter of 2020 and 2019, respectively.
Net income attributable to the Company decreased by 14.2% in USD terms, or 10.9% in RMB terms, to $35.7 million in the second quarter of 2020 from $41.6 million in the same quarter of 2019. Net margin increased to 32.1% in the second quarter of 2020 from 30.7% in the same quarter of 2019. Diluted earnings per share decreased to $0.91 in the second quarter of 2020 as compared to $1.06 in the same quarter of 2019.
Non-GAAP adjusted income from operations decreased by 9.3% in USD terms or 5.8% in RMB terms to $51.4 million in the second quarter of 2020 from $56.7 million in the same quarter of 2019.
Non-GAAP adjusted net income attributable to the Company decreased by 10.9% in USD terms, or 7.2% in RMB terms, to $43.4 million in the second quarter of 2020 from $48.7 million in the same quarter of 2019. Non-GAAP net margin increased to 39.1% in the second quarter of 2020 compared to 35.9% in the same quarter of 2019. Non-GAAP adjusted earnings per diluted share decreased to $1.11 in the second quarter of 2020 as compared to $1.24 in the same quarter of 2019.
Non-GAAP adjusted income from operations for the second quarter of 2020 excludes $6.7 million in non-cash employee share-based compensation expenses, and $2.0 million in amortization expenses of intangible assets and land use rights related to the acquisition of TianXinFu.
Non-GAAP adjusted net income and earnings per diluted share for the second quarter of 2020 exclude $6.1 million in non-cash employee share-based compensation expenses, and $1.6 million in amortization expenses of intangible assets and land use rights related to the acquisition of TianXinFu.
First Half 2020 Financial Performance
Total sales in the first half of 2020 increased by 3.1% in USD terms, or 6.7% in RMB terms, to $273.7 million from $265.5 million in the same period of 2019.
Total sales for plasma products increased by 10.5% in USD terms, or 14.3% in RMB terms, to $242.8 million from $219.8 million in the same period of 2019, mainly because of an increase in sales of IVIG products, which was partly offset by a decrease in sales of albumin products. During the first half of 2020, human albumin and IVIG products remained the Company’s two largest sales contributors, accounting for 30.7% and 34.9%, respectively, of total sales.
Total sales for placenta polypeptide decreased by 59.3% in USD terms, or 57.7% in RMB terms, to $7.7 million from $18.9 million in the same period of 2019. Combining plasma products and placenta polypeptide products, total sales for biopharmaceutical products increased by 4.9% in USD terms, or 8.6% in RMB terms, to $250.5 million from $238.7 million in the same period of 2019.
Total sales for biomaterial products in the first half of 2020 decreased by 13.1% in USD terms, or 10.1% in RMB terms, to $23.2 million from $26.7 million in the same period of 2019, mainly as a result of decreased sales of artificial dura mater products.
Cost of sales increased by 8.2% to $96.3 million in the first half of 2020 from $89.0 million in the same period of 2019. As a percentage of total sales, cost of sales increased to 35.2% from 33.5% in the same period of 2019, mainly because of lower percentages of higher-margin placenta polypeptide and dura mater products in total sales.
Gross profit increased by 0.5% to $177.4 million in the first half of 2020 from $176.5 million in the same period of 2019. Gross margin was 64.8% and 66.5% in the first half of 2020 and 2019, respectively.
Total operating expenses in the first half of 2020 decreased by $17.7 million, or 21.0%, to $66.7 million from $84.4 million in the same period of 2019. This decrease mainly consisted of a decrease of $15.5 million in selling expenses, a decrease of $2.0 million in general and administrative expenses and a decrease of $0.2 million in research and development expenses. As a percentage of total sales, total operating expenses decreased to 24.4% in the first half of 2020 from 31.8% in the same period of 2019.
Income from operations in the first half of 2020 increased by 20.2% in USD terms, or 24.4% in RMB terms, to $110.7 million from $92.1 million in the same period of 2019. Operating margin increased to 40.4% in the first half of 2020 from 34.7% in the same period of 2019.
Income tax expense in the first half of 2020 was $18.2 million compared to $16.1 million in the same period of 2019. The effective income tax rate was 15.0% and 14.7% for the first half of 2020 and 2019, respectively.
Net income attributable to the Company increased by 12.4% in USD terms, or 16.1% in RMB terms, to $89.1 million in the first half of 2020 from $79.3 million in the same period of 2019. Net margin increased to 32.6% in the first half of 2020 from 29.9% in the same period of 2019. Diluted earnings per share increased to $2.27 in the first half of 2020 compared to $2.01 in the same period of 2019.
Non-GAAP adjusted income from operations increased by 17.8% in USD terms, or 21.9% in RMB terms, to $128.3 million in the first half of 2020 from $108.9 million in the same period of 2019.
Non-GAAP adjusted net income attributable to the Company increased by 12.4% in USD terms and 16.3% in RMB terms, to $104.8 million in the first half of 2020 from $93.2 million in the same period of 2019. Non-GAAP net margin increased to 38.3% in the first half of 2020 from 35.1% in the same period of 2019. Non-GAAP adjusted earnings per diluted share increased to $2.67 in the first half of 2020 from $2.36 in the same period of 2019.
Non-GAAP adjusted income from operations for the first half of 2020 excludes $13.6 million in non-cash employee share-based compensation expenses, and $4.0 million in amortization expense of intangible assets and land use rights related to the acquisition of TianXinFu.
Non-GAAP adjusted net income and earnings per diluted share for the first half of 2020 exclude $12.4 million in non-cash employee share-based compensation expenses, and $3.3 million in amortization expense of intangible assets and land use rights related to the acquisition of TianXinFu.
As of June 30, 2020, the Company had $545.1 million in cash on hand and demand deposits, $21.0 million in time deposits, and $474.9 million in short term investments.
Net cash provided by operating activities for the first half of 2020 was $135.5 million as compared to $94.2 million for the same period of 2019. The increase of $41.3 million in net cash provided by operating activities was mainly because of a decrease in inventories and an increase in net income compared to the same period of 2019, which was partly offset by an increase in accounts receivable.
Inventories decreased by $22.0 million in the first half of 2020, compared with an increase of $3.9 million in the same period of 2019. The decrease of inventory in the first half of 2020 was primarily because of a significant decline in raw material plasma as all plasma collection stations of the Company were closed for over one month during the COVID-19 outbreak. The decrease of inventory in the first half of 2020 was also because of the high sales volume of IVIG products during this period, which cleaned up the high IVIG inventory as of the end of year 2019.
Accounts receivable increased by $16.9 million during the first half of 2020 as compared to an increase of $15.2 million during the same period of 2019, largely in line with the increase in sales revenue. Accounts receivable turnover days for plasma products were shortened to 76 days during the first half of 2020 from 102 days during the same period of 2019, reflecting the Company’s ongoing efforts to shorten credit terms of some of its distributors and increased collection efforts to control credit exposure.
Net cash provided by investing activities for the first half of 2020 was $256.1 million as compared to net cash used in investing activities of $117.5 million for the same period of 2019. During the first half of 2020, the Company paid $7.1 million for the acquisition of property, plant and equipment, intangible assets and land use rights, and the Company also purchased time deposits and short term investments in an amount of $1,538.9 million. This was partly offset by the maturity value of time deposits and short term investments of $1,802.0 million. Net cash used in investing activities in the first half of 2019 mainly consisted of payment of $1,265.0 million for the purchase of time deposits and short term investments, and payment of $15.1 million for the acquisition of property, plant and equipment, intangible assets and land use rights, which was partly offset by the maturity value of $1,162.7 million of time deposits and short term investments.
Net cash used in financing activities for the first half of 2020 was $7.0 million as compared to $114.9 million for the same period of 2019. During the first half of 2020, subsidiaries of the Company paid dividend of $7.3 million to the non-controlling interest shareholders, which was partly offset by a proceed of $0.3 million from stock options exercised. Net cash used in financing activities for the first half of 2019 mainly included a remittance of $110.0 million to an investment bank by the Company to execute the previously approved share repurchase program on behalf of the Company.
Non-GAAP Disclosure
This management’s discussion and analysis of the financial results (this “MD&A”) contains non-GAAP financial measures that exclude non-cash compensation expenses related to restricted shares and restricted share units granted to employees and directors under the Company’s Equity Incentive Plans and amortization of acquired intangible assets and land use rights. To supplement the Company’s unaudited consolidated financial statements presented on a GAAP basis, the Company has provided non-GAAP financial information excluding the impact of these items in this MD&A. 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 MD&A. 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.
In addition, as the Company evaluates certain key items of its financial results on a local currency basis (i.e., in RMB) in addition to the reporting currency (i.e., in USD), this MD&A contains local currency information that eliminates the impact of fluctuations in foreign currency exchange rates. The Company believes that, given its operations primarily based in China, providing local currency information on such key items enhances the understanding of its financial results and evaluation of performance in comparison to prior periods. Changes in local currency percentages are calculated by comparing financial results denominated in RMB from period to period.
(Financial statements on the following pages)
CHINA BIOLOGIC PRODUCTS HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
| | | For the Three Months Ended | | | For the Six Months Ended | |
| | | June 30, 2020 | | | June 30, 2019 | | | June 30, 2020 | | | June 30, 2019 | |
| | | USD | | | USD | | | USD | | | USD | |
| Sales: | | | 111,112,381 | | | | 135,696,199 | | | | 273,703,774 | | | | 265,480,266 | |
| Plasma products: | | | | | | | | | | | | | | | | |
| Human Albumin | | | 42,425,977 | | | | 48,909,671 | | | | 83,922,761 | | | | 105,722,460 | |
| Immunoglobulin products: | | | | | | | | | | | | | | | | |
| Human Immunoglobulin for Intravenous Injection | | | 17,245,114 | | | | 27,378,416 | | | | 95,455,143 | | | | 56,422,596 | |
| Other Immunoglobulin products | | | 20,732,209 | | | | 19,025,521 | | | | 34,287,223 | | | | 32,114,741 | |
| Others | | | 12,668,424 | | | | 15,639,597 | | | | 29,145,538 | | | | 25,509,605 | |
| Placenta Polypeptide | | | 4,459,116 | | | | 11,314,880 | | | | 7,738,081 | | | | 18,973,870 | |
| Biopharmaceutical products | | | 97,530,840 | | | | 122,268,085 | | | | 250,548,746 | | | | 238,743,272 | |
| Artificial Dura Mater | | | 12,954,955 | | | | 12,567,201 | | | | 21,999,370 | | | | 24,881,234 | |
| Others | | | 626,586 | | | | 860,913 | | | | 1,155,658 | | | | 1,855,760 | |
| Biomaterial products | �� | | 13,581,541 | | | | 13,428,114 | | | | 23,155,028 | | | | 26,736,994 | |
| | | | | | | | | | | | | | | | | |
| Cost of sales | | | 34,738,039 | | | | 44,793,259 | | | | 96,340,432 | | | | 89,033,704 | |
| Gross profit | | | 76,374,342 | | | | 90,902,940 | | | | 177,363,342 | | | | 176,446,562 | |
| | | | | | | | | | | | | | | | | |
| Operating expenses | | | | | | | | | | | | | | | | |
| Selling expenses | | | 14,413,905 | | | | 25,642,174 | | | | 28,874,015 | | | | 44,370,433 | |
| General and administrative expenses | | | 16,440,301 | | | | 14,658,433 | | | | 33,201,414 | | | | 35,255,993 | |
| Research and development expenses | | | 2,828,602 | | | | 2,431,379 | | | | 4,571,144 | | | | 4,762,204 | |
| Income from operations | | | 42,691,534 | | | | 48,170,954 | | | | 110,716,769 | | | | 92,057,932 | |
| | | | | | | | | | | | | | | | | |
| Other income (expenses) | | | | | | | | | | | | | | | | |
| Equity in (loss)/income of an equity method investee | | | (555,499 | ) | | | 851,981 | | | | (1,341,679 | ) | | | 1,445,011 | |
| Interest expense | | | (73,866 | ) | | | (125,032 | ) | | | (178,768 | ) | | | (188,809 | ) |
| Interest income | | | 2,687,216 | | | | 5,920,033 | | | | 7,216,217 | | | | 12,445,872 | |
| Other income, net | | | 2,406,844 | | | | 1,981,106 | | | | 4,601,284 | | | | 3,581,482 | |
| Total other income, net | | | 4,464,695 | | | | 8,628,088 | | | | 10,297,054 | | | | 17,283,556 | |
| | | | | | | | | | | | | | | | | |
| Income before income tax expense | | | 47,156,229 | | | | 56,799,042 | | | | 121,013,823 | | | | 109,341,488 | |
| | | | | | | | | | | | | | | | | |
| Income tax expense | | | 6,596,604 | | | | 8,161,639 | | | | 18,219,525 | | | | 16,080,081 | |
| | | | | | | | | | | | | | | | | |
| Net income | | | 40,559,625 | | | | 48,637,403 | | | | 102,794,298 | | | | 93,261,407 | |
| | | | | | | | | | | | | | | | | |
| Less: Net income attributable to noncontrolling interest | | | 4,877,900 | | | | 6,990,249 | | | | 13,728,164 | | | | 13,922,146 | |
| | | | | | | | | | | | | | | | | |
| Net income attributable to China Biologic Products Holdings, Inc. | | | 35,681,725 | | | | 41,647,154 | | | | 89,066,134 | | | | 79,339,261 | |
| | | | | | | | | | | | | | | | | |
| Earnings per share of ordinary share: | | | | | | | | | | | | | | | | |
| Basic | | | 0.92 | | | | 1.07 | | | | 2.29 | | | | 2.01 | |
| Diluted | | | 0.91 | | | | 1.06 | | | | 2.27 | | | | 2.01 | |
| Weighted average shares used in computation: | | | | | | | | | | | | | | | | |
| Basic | | | 38,519,992 | | | | 38,496,323 | | | | 38,513,676 | | | | 38,911,830 | |
| Diluted | | | 38,962,048 | | | | 38,586,250 | | | | 38,964,735 | | | | 39,003,195 | |
| | | | | | | | | | | | | | | | | |
| Net income | | | 40,559,625 | | | | 48,637,403 | | | | 102,794,298 | | | | 93,261,407 | |
| | | | | | | | | | | | | | | | | |
| Other comprehensive income/(losses): | | | | | | | | | | | | | | | | |
| Foreign currency translation adjustment, net of nil income taxes | | | 1,059,428 | | | | (27,689,871 | ) | | | (20,122,049 | ) | | | (3,373,450 | ) |
| | | | | | | | | | | | | | | | | |
| Comprehensive income | | | 41,619,053 | | | | 20,947,532 | | | | 82,672,249 | | | | 89,887,957 | |
| | | | | | | | | | | | | | | | | |
| Less: Comprehensive income attributable to noncontrolling interest | | | 4,936,485 | | | | 3,369,049 | | | | 12,652,531 | | | | 12,121,308 | |
| | | | | | | | | | | | | | | | | |
| Comprehensive income attributable to China Biologic Products Holdings, Inc. | | | 36,682,568 | | | | 17,578,483 | | | | 70,019,718 | | | | 77,766,649 | |
CHINA BIOLOGIC PRODUCTS HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
| | | June 30, 2020 | | | December 31, 2019 | |
| | | USD | | | USD | |
| ASSETS | | | | | | | | |
| Current Assets | | | | | | | | |
| Cash and cash equivalents | | | 545,137,430 | | | | 161,750,425 | |
| Time deposits | | | 20,967,792 | | | | 497,676,069 | |
| Short term investments | | | 474,864,844 | | | | 267,830,790 | |
| Accounts receivable, net of allowance for doubtful accounts | | | 114,636,338 | | | | 100,270,436 | |
| Inventories | | | 225,577,753 | | | | 250,728,260 | |
| Prepayments and other current assets | | | 21,335,033 | | | | 21,469,418 | |
| Total Current Assets | | | 1,402,519,190 | | | | 1,299,725,398 | |
| | | | | | | | | |
| Property, plant and equipment, net | | | 172,368,672 | | | | 177,596,563 | |
| Intangible assets, net | | | 39,516,491 | | | | 44,068,061 | |
| Land use rights, net | | | 28,260,837 | | | | 28,458,944 | |
| Equity method investment | | | 15,151,878 | | | | 16,725,513 | |
| Long term equity investments | | | 10,812,893 | | | | 10,812,893 | |
| Loan receivable | | | 35,122,650 | | | | 35,642,340 | |
| Goodwill | | | 304,011,108 | | | | 308,509,397 | |
| Other non-current assets | | | 16,660,772 | | | | 16,319,388 | |
| Total Assets | | | 2,024,424,491 | | | | 1,937,858,497 | |
| | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | |
| Current Liabilities | | | | | | | | |
| Accounts payable | | | 9,354,604 | | | | 6,262,256 | |
| Income tax payable | | | 14,176,278 | | | | 13,303,085 | |
| Other payables and accrued expenses | | | 100,370,255 | | | | 99,743,350 | |
| Total Current Liabilities | | | 123,901,137 | | | | 119,308,691 | |
| | | | | | | | | |
| Deferred income | | | 2,031,352 | | | | 2,300,428 | |
| Non-current income tax payable | | | 22,284,072 | | | | 24,905,728 | |
| Other liabilities | | | 17,121,948 | | | | 16,491,793 | |
| Total Liabilities | | | 165,338,509 | | | | 163,006,640 | |
| | | | | | | | | |
| Shareholders’ Equity | | | | | | | | |
| Ordinary share: | | | | | | | | |
par value $0.0001;
100,000,000 shares authorized;
42,034,809 and 41,910,701 shares issued at June 30, 2020 and December 31, 2019, respectively;
38,583,877 and 38,459,769 shares outstanding at June 30, 2020 and December 31, 2019, respectively | | | 4,203 | | | | 4,191 | |
| Additional paid-in capital | | | 1,172,202,322 | | | | 1,158,274,206 | |
| Treasury share: 3,450,932 shares at June 30, 2020 and 3,450,932 at December 31, 2019, respectively, at cost | | | (167,432,883 | ) | | | (167,432,883 | ) |
| Retained earnings | | | 862,356,620 | | | | 773,290,486 | |
| Accumulated other comprehensive losses | | | (87,467,824 | ) | | | (68,421,408 | ) |
| Total equity attributable to China Biologic Products Holdings, Inc. | | | 1,779,662,438 | | | | 1,695,714,592 | |
| | | | | | | | | |
| Noncontrolling interest | | | 79,423,544 | | | | 79,137,265 | |
| | | | | | | | | |
| Total Shareholders’ Equity | | | 1,859,085,982 | | | | 1,774,851,857 | |
| | | | | | | | | |
| Commitments and contingencies | | | - | | | | - | |
| | | | | | | | | |
| Total Liabilities and Shareholders’ Equity | | | 2,024,424,491 | | | | 1,937,858,497 | |
CHINA BIOLOGIC PRODUCTS HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| | | For the Six Months Ended | |
| | | June 30, 2020 | | | June 30, 2019 | |
| | | | USD | | | | USD | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | |
| Net income | | | 102,794,298 | | | | 93,261,407 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | |
| Depreciation | | | 8,264,084 | | | | 7,983,092 | |
| Amortization | | | 4,939,901 | | | | 4,527,682 | |
| Loss on disposal of property, plant and equipment | | | 10,096 | | | | 82,137 | |
| Fair value changes of short term investments | | | (1,529,697 | ) | | | (2,288,576 | ) |
| Allowance for doubtful accounts - accounts receivable | | | 495,274 | | | | 430,927 | |
| Reversal of doubtful accounts - prepayments and other receivables | | | (2,897 | ) | | | (19,560 | ) |
| Deferred income tax benefit | | | (811,372 | ) | | | (2,054,341 | ) |
| Share-based compensation | | | 13,627,693 | | | | 12,791,884 | |
| Equity in loss/(income) of an equity method investee | | | 1,341,679 | | | | (1,445,011 | ) |
| Change in operating assets and liabilities: | | | | | | | | |
| Accounts receivable | | | (16,872,471 | ) | | | (15,232,984 | ) |
| Inventories | | | 21,983,643 | | | | (3,923,388 | ) |
| Prepayments and other current assets | | | 1,370,615 | | | | 2,687 | |
| Accounts payable | | | 3,207,773 | | | | (4,500,433 | ) |
| Income tax payable | | | 1,075,245 | | | | 3,558,375 | |
| Other payables and accrued expenses | | | (1,565,206 | ) | | | 3,297,026 | |
| Deferred income | | | (237,335 | ) | | | (245,956 | ) |
| Non-current income tax payable | | | (2,621,656 | ) | | | (1,993,310 | ) |
| Net cash provided by operating activities | | | 135,469,667 | | | | 94,231,658 | |
| | | | | | | | | |
| CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | |
| Purchase of time deposits | | | (651,415,200 | ) | | | (908,002,883 | ) |
| Proceeds from maturity of time deposits | | | 1,127,127,492 | | | | 920,485,867 | |
| Purchase of short term investments | | | (887,512,817 | ) | | | (357,025,912 | ) |
| Proceeds from maturity of short term investments | | | 674,903,547 | | | | 242,169,502 | |
| Payment for property, plant and equipment | | | (6,370,158 | ) | | | (12,731,955 | ) |
| Payment for intangible assets and land use rights | | | (682,739 | ) | | | (2,385,371 | ) |
| Proceeds from disposal of property, plant and equipment | | | 3,381 | | | | 1,907 | |
| Net cash provided by/(used in) investing activities | | | 256,053,506 | | | | (117,488,845 | ) |
| | | | | | | | | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | |
| Proceeds from stock options exercised | | | 300,435 | | | | 237,231 | |
| Payment to an investment bank for share repurchase | | | - | | | | (110,042,776 | ) |
| Dividend paid by subsidiaries to noncontrolling interest shareholders | | | (7,302,864 | ) | | | (5,062,353 | ) |
| Net cash used in financing activities | | | (7,002,429 | ) | | | (114,867,898 | ) |
| | | | | | | | | |
| EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | | (1,133,739 | ) | | | 1,695,609 | |
| | | | | | | | | |
| NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS | | | 383,387,005 | | | | (136,429,476 | ) |
| | | | | | | | | |
| Cash and cash equivalents at beginning of period | | | 161,750,425 | | | | 338,880,559 | |
| | | | | | | | | |
| Cash and cash equivalents at end of period | | | 545,137,430 | | | | 202,451,083 | |
| | | | | | | | | |
| Supplemental cash flow information | | | | | | | | |
| Cash paid for income taxes | | | 20,413,869 | | | | 16,812,861 | |
| Noncash investing and financing activities: | | | | | | | | |
| Acquisition of property, plant and equipment included in payables | | | 410,228 | | | | 2,226,126 | |
| Set-off loan receivable against accounts payable | | | - | | | | 2,160,070 | |
| Share repurchase using the prepayment to an investment bank | | | - | | | | 110,965,013 | |
| Land use right acquired with prepayments made in prior periods | | | - | | | | 2,689,467 | |
CHINA BIOLOGIC PRODUCTS HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
| | | For the Three Months Ended | |
| | | June 30, | | | June 30, | |
| | | 2020 | | | 2019 | |
| | | USD | | | USD | |
| Income from Operations | | | 42,691,534 | | | | 48,170,954 | |
| Non-cash employee share-based compensation | | | 6,696,075 | | | | 6,485,917 | |
| Amortization of acquired intangible assets and land use rights | | | 1,982,058 | | | | 2,036,171 | |
| Adjusted Income from Operations - Non GAAP | | | 51,369,667 | | | | 56,693,042 | |
| | | | | | | | | |
| Net Income Attributable to the Company | | | 35,681,725 | | | | 41,647,154 | |
| Non-cash employee share-based compensation | | | 6,073,233 | | | | 5,630,041 | |
| Amortization of acquired intangible assets and land use rights | | | 1,684,749 | | | | 1,384,596 | |
| Adjusted Net Income Attributable to the Company - Non GAAP | | | 43,439,707 | | | | 48,661,791 | |
| Diluted EPS - Non GAAP | | | 1.11 | | | | 1.24 | |
| | | | | | | | | |
| Weighted average number of shares used in computation of Non GAAP diluted EPS | | | 38,962,048 | | | | 38,586,250 | |
| | | For the Six Months Ended | |
| | | June 30, | | | June 30, | |
| | | 2020 | | | 2019 | |
| | | USD | | | USD | |
| Income from Operations | | | 110,716,769 | | | | 92,057,932 | |
| Non-cash employee share-based compensation | | | 13,627,693 | | | | 12,791,884 | |
| Amortization of acquired intangible assets and land use rights | | | 3,971,631 | | | | 4,091,203 | |
| Adjusted Income from Operations - Non GAAP | | | 128,316,093 | | | | 108,941,019 | |
| | | | | | | | | |
| Net Income Attributable to the Company | | | 89,066,134 | | | | 79,339,261 | |
| Non-cash employee share-based compensation | | | 12,356,026 | | | | 11,080,132 | |
| Amortization of acquired intangible assets and land use rights | | | 3,375,886 | | | | 2,782,018 | |
| Adjusted Net Income Attributable to the Company - Non GAAP | | | 104,798,046 | | | | 93,201,411 | |
| Diluted EPS - Non GAAP | | | 2.67 | | | | 2.36 | |
| | | | | | | | | |
| Weighted average number of shares used in computation of Non GAAP diluted EPS | | | 38,964,735 | | | | 39,003,195 | |
