Fiscal Nine-Month Revenue Up 26% vs. Same Period in 2014
HEILONGJIANG, CHINA--(Marketwired - May 15, 2015) - China Health Industries Holdings, Inc. (OTCQB: CHHE) (the "Company" or "CHHE") today reported that, for the third fiscal quarter of 2015 ended March 31, 2015, the Company had revenue of $1,933,377, a 24 percent decrease on revenue of $2,555,394 for the third fiscal quarter of 2014. This decline was mainly the result of a significant reduction in sales volume of the Company's two leading products, Waterlilies Soft Capsule and Propolis and Black Ant Capsule.
In the third fiscal quarter of 2015, the Company had a net loss of $180,800, or $(0.003) per share, versus net income of $135,448, or $0.002 per share, for the same period a year ago. This diminished bottom line performance was primarily attributable to the aforementioned drop in quarterly revenue, and to a lesser extent an increase in operating expense of $105,245 resulting from an increase in depreciation and amortization caused by increased capital expenditure.
For the first nine months of fiscal 2015, CHHE had revenues of $8,211,156, a 26 percent gain on revenues of $6,501,198 in the first nine months of fiscal 2014. This improvement was the result of significant increases in both sales price and sales volume of the Waterlilies Soft Capsule and Propolis and Black Ant Capsule products.
Net income for the first nine months of fiscal 2015 was $149,455, or $0.002 per share, versus a net loss of $870,555, or $(0.014) per share, for the same period a year earlier. This improvement was primarily attributable to the abovementioned increase in nine-month revenue, and to a lesser extent a decrease in operating expense of $252,200.
"Despite the reduction in revenue and earnings in 2015 fiscal Q3 '15 versus Q3'14," said Chairman and CEO Mr. Xin Sun, "the nine-month period results were much improved and the Company's balance sheet and financial position remain quite strong." He noted that as of March 31, 2015, CHHE had cash and cash equivalents of $29 million, a working capital ratio of 6:1 and no long-term debt.
In addition, said Mr. Sun, the Company is implementing a strategic plan to improve its financial performance going forward. First, he said, CHHE is accelerating the CFDA registration process for several of the Company's recently purchased healthcare products and plans to release four to six of these "in the near future."
Secondly, said Mr. Sun, CHHE is considering adding distributors capable of selling the Company's products in geographic areas of China not adequately covered by its current distributors.
Third, and perhaps most exciting, said Mr. Sun, the Company is taking "concrete steps" in a drive to participate in one of China's fastest-growing industries, mobile health products and services. To lay the initial groundwork for this plan, he said, CHHE is now acquiring specialized data indicating which Chinese consumers are most likely to require a specific drug or health supplement. Next, the Company plans to establish a nationwide sales center providing free information to consumers on each of CHHE's 35 products. Finally, said Mr. Sun, the Company hopes to build or acquire an online platform, covering all of China, enabling all consumers with a mobile phone to receive instant messages telling them where to purchase the CHHE product that fulfills the consumer's medical or health requirement.
"Once we have completed these steps," concluded Mr. Sun, "we hope to become a growing player in China's mobile health industry -- and experience accelerating growth and profitability in the years to come."
For additional information on China Health Industries Holdings, Inc. please go to www.mhealthstyle.com or refer to the company's 10-Q report filed with the Securities and Exchange Commission.
About Us
China Health Industries Holdings, Inc. (www.mhealthstyle.com) produces, markets and distributes high-quality medicines, health products, health devices and cosmetics from all over the world.
CHHE owns GMP-certified plant and facilities and manufactures 21 CFDA-approved medicines and 14 CFDA-approved health supplement products in soft capsule, hard capsule, tablet, granule and oral liquid forms. These products address key major markets, including women's products, geriatric products, children's products and other vital market sectors.
Safe Harbor Statement
This press release contains certain statements that may include "forward-looking statements." All statements other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involving known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press 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 the risk factors discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on the SEC's 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 risk factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.
| CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2015 | Jun. 30, 2014 | ||||
| Current assets | ||||||
| Cash and cash equivalents | $ | 29,034,685 | $ | 27,232,074 | ||
| Notes receivable | 0 | 28,095 | ||||
| Accounts receivable, net | 1,350,831 | 2,230,746 | ||||
| Inventory | 838,156 | 1,037,939 | ||||
| Other receivables, net | 48,561 | 83,570 | ||||
| Advance to suppliers | 34,325 | 40,504 | ||||
| Prepaid expenses | 0 | 101,965 | ||||
| Total current assets | 31,306,558 | 30,754,893 | ||||
| Property, plant and equipment, net | 4,416,931 | 4,661,072 | ||||
| Intangible assets, net | 5,053,860 | 5,452,161 | ||||
| Construction in progress | 534,983 | 1,934 | ||||
| Total assets | 41,312,332 | 40,870,060 | ||||
| Current liabilities | ||||||
| Short-term loans | 1,613,163 | 1,611,967 | ||||
| Accounts payable and accrued expenses | 534,257 | 627,109 | ||||
| Other payables | 62,298 | 83,798 | ||||
| Advance from customers | 742,428 | 245,308 | ||||
| Related party debts | 1,823,709 | 1,776,851 | ||||
| Wages payable | 153,613 | 69,544 | ||||
| Taxes payable | 155,206 | 403,970 | ||||
| Total current liabilities | 5,084,674 | 4,818,547 | ||||
| Equity | ||||||
| Common stock, ($0.0001 par value, 300,000,000 shares authorized, 62,239,737 issued and outstanding as of March 31, 2015 and June 30, 2014, respectively) | 6,224 | 6,224 | ||||
| Additional paid-in capital | 27,317 | 27,317 | ||||
| Accumulated other comprehensive income | 3,269,649 | 3,242,959 | ||||
| Statutory reserve | 38,679 | 38,679 | ||||
| Retained earnings | 32,885,554 | 32,736,081 | ||||
| Total stockholders' equity | 36,227,423 | 36,051,260 | ||||
| Non-controlling interests | 235 | 253 | ||||
| Total equity | 36,227,658 | 36,051,513 | ||||
| Total liabilities and equity | $ | 41,312,332 | $ | 40,870,060 | ||
| CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (USD $) | 3 Months Ended | 9 Months Ended | ||||||||||||||
| Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | |||||||||||||
| REVENUE | $ | 1,933,377 | $ | 2,555,394 | $ | 8,211,156 | $ | 6,501,198 | ||||||||
| COST OF GOODS SOLD | 1,403,081 | 1,781,580 | 5,796,457 | 5,030,815 | ||||||||||||
| GROSS PROFIT | 530,296 | 773,814 | 2,414,699 | 1,470,383 | ||||||||||||
| OPERATING EXPENSES | ||||||||||||||||
| Selling, general and administrative expenses | 515,085 | 540,192 | 1,570,843 | 1,594,887 | ||||||||||||
| Depreciation and amortization expenses | 173,083 | 42,684 | 516,679 | 587,283 | ||||||||||||
| Research and development expenses | 0 | 47 | 0 | 157,552 | ||||||||||||
| Total operating expenses | 688,168 | 582,923 | 2,087,522 | 2,339,722 | ||||||||||||
| INCOME (LOSS) FROM OPERATIONS | (157,872 | ) | 190,891 | 327,177 | (869,339 | ) | ||||||||||
| OTHER INCOME/(EXPENSES) | ||||||||||||||||
| Interest income | 24,479 | 23,644 | 72,865 | 87,746 | ||||||||||||
| Interest expense | (31,276 | ) | (40,277 | ) | (93,474 | ) | (84,280 | ) | ||||||||
| Other income/(expenses), net | 9,623 | (38,810 | ) | 29,179 | (4,682 | ) | ||||||||||
| Total other income (expense), net | 2,826 | (55,443 | ) | 8,570 | (1,216 | ) | ||||||||||
| INCOME (LOSS) BEFORE INCOME TAXES | (155,046 | ) | 135,448 | 335,747 | (870,555 | ) | ||||||||||
| Provision for income taxes | 25,754 | 0 | 186,292 | 0 | ||||||||||||
| NET INCOME (LOSS) | (180,800 | ) | 135,448 | 149,455 | (870,555 | ) | ||||||||||
| Less: net loss attributable to non-controlling interests | (18 | ) | 1 | (18 | ) | (70 | ) | |||||||||
| Net income (loss) attributable to China Health Industries Holdings | (180,782 | ) | 135,447 | 149,473 | (870,485 | ) | ||||||||||
| Foreign currency translation gain | 35,113 | (970,760 | ) | 26,672 | (460,681 | ) | ||||||||||
| Comprehensive income/(loss) | (145,687 | ) | (835,312 | ) | 176,127 | (1,331,236 | ) | |||||||||
| Less: comprehensive loss attributable to non- controlling interests | (36 | ) | (7 | ) | (36 | ) | (73 | ) | ||||||||
| COMPREHENSIVE INCOME/(LOSS) ATTRIBUTABLE TO CHINA HEALTH INDUSTRIES HOLDINGS | $ | (145,651 | ) | $ | (835,305 | ) | $ | 176,163 | $ | (1,331,163 | ) | |||||
| Net income (loss) attributable to China Health Industries Holdings' shareholders per share are: | ||||||||||||||||
| Basic & diluted income (loss) per share | $ | (0.003 | ) | $ | 0.002 | $ | 0.002 | $ | (0.014 | ) | ||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic & diluted weighted average shares outstanding | 62,239,737 | 62,239,737 | 62,239,737 | 62,239,737 | ||||||||||||
Contacts
Company:
Mr. Xin Sun
Chairman & CEO
China Health Industries Holdings, Inc.
86-451-88100688
chhe_ir@163.com
Investor:
Jimmy Caplan
Asia IR-PR
512-329-9505
Jimmy@Asia-IRPR.com
Media:
Rick Eisenberg
Asia IR-PR
212-496-6828
Rick@Asia-IRPR.com
