China Health Industries Holdings, Inc. Reports Financial Results for the Third Quarter Ended March 31, 2019
- 20
Harbin, China--(Newsfile Corp. - May 15, 2019) - China Health Industries Holdings, Inc. (OCTQB: CHHE) ("China Health Industries", the "Company" or "Us") is a holding company vertically integrated with the operations in its subsidiaries in China, specializing in R&D, production, marketing and distribution of hemp derivative products, medical drugs and health supplements, today announced the financial results for its third quarter ended March 31, 2019.
Mr. Xin Sun, Chief Executive Officer and Chairman of China Health Industries, commented, "We are pleased to report our financial results for the third quarter of our 2019 fiscal year. Our revenue increased by 43.18% for the three months ended March 31, 2019 compared to the same period of the previous year as we continue to develop, manufacture and distribute new hemp derivative products. We have applied new Cannabidiol patents in 2019, and we will launch many more hemp derivative products into the market."
Third Quarter of Fiscal 2019 Selected Financial Results
For the Three Months Ended March 31, 2019:
March 31, | March 31, | |||||||||||||||
2019 | 2018 | Variance | % | |||||||||||||
Revenues | $ | 2,202,739 | $ | 1,538,470 | $ | 664,269 | 43.18 | % | ||||||||
| Humankind | 2,192,680 | $ | 1,538,470 | $ | 654,210 | 42.52 | % | |||||||||
| HLJ Huimeijia | 10,059 | - | 10,059 | - | ||||||||||||
Cost of Goods Sold | $ | 506,623 | $ | 979,456 | $ | (472,833 | ) | (48.28 | )% | |||||||
| Humankind | 492,569 | $ | 979,456 | $ | (486,887 | ) | (49.71 | )% | ||||||||
| HLJ Huimeijia | 14,054 | - | (14,054 | ) | - | |||||||||||
Gross Profit | $ | 1,696,116 | $ | 559,014 | $ | 1,137,102 | 203.41 | % | ||||||||
| Humankind | 1,700,111 | 559,014 | 1,141,097 | 204.13 | % | |||||||||||
| HLJ Huimeijia | (3,995 | ) | - | (3,995 | ) | - | ||||||||||
Revenue
Total revenues increased by $664,269 or 43.18% for the three months ended March 31, 2019, as compared to the same period in 2018. The increase in revenues was primarily due to an increase of $654,210 or 42.52% in Humankind's revenues for the three months ended March 31, 2019, as compared to the same period in 2018. The increase in Humankind's sales revenues was primarily due to the increased demand for the new products.
The increase in HLJ Huimeijia's sales revenue was primarily due to small-scale production after obtaining a new GMP certificate.
Cost of Goods Sold
Our total cost of sales decreased by $472,833 or 48.28% for the three months ended March 31, 2019 as compared to the same period in 2018. The decrease in the overall cost of sales was attributed to the decrease of $486,887 or 49.71% Humankind's cost of sales for the three months ended March 31, 2019 as compared to the same period in 2018. This decrease aligned with the decrease in sales volume of products sold by Humankind. The significant decline in the cost of the main business was mainly due to the lower unit cost of new products and the fact that the old products were no longer sold for the three months ended March 31, 2019 as compared to the same period in 2018. The increase in HLJ Huimeijia cost of sales was primarily due to the small-scale production.
Gross Profit
Our gross margin increased by $1,137,102 or 203.41% for the three months ended March 31, 2019 as compared to the same period in 2018. This change was consistent with the change in the main products in Humankind. As HLJ Huimeijia resumed production for a short period of time, the output of the products is small, but the fixed cost of the apportionment has not decreased, resulting in high cost of the product. After the Company operates normally, the cost will return to a reasonable level.
Net Income and Net Income Per Share
Net income was $767,929 for the three months ended March 31, 2019, as compared to net income of $10,711 for the three months ended March 31, 2018. This increase of $757,218 in net income was primarily attributable to an increase of $564,862 from Humankind.
Net income per share was $0.0117 for the three months ended March 31, 2019, and net income per share was $0.0002 for the three months ended March 31, 2018, respectively. This increase was primarily a result of the aforementioned increase in net profit.
For the Nine Months Ended March 31, 2019:
March 31, | March 31, | |||||||||||||||
2019 | 2018 | Variance | % | |||||||||||||
Revenues | $ | 7,058,721 | $ | 4,863,477 | $ | 2,195,244 | 45.14 | % | ||||||||
| Humankind | 7,003,073 | $ | 4,863,477 | $ | 2,139,596 | 43.99 | % | |||||||||
| HLJ Huimeijia | 55,648 | - | 55,648 | |||||||||||||
Cost of Goods Sold | $ | 1,668,440 | $ | 3,112,166 | $ | (1,443,726 | ) | (46.39 | )% | |||||||
| Humankind | 1,599,002 | $ | 3,112,166 | $ | (1,513,164 | ) | (48.62 | )% | ||||||||
| HLJ Huimeijia | 69,438 | - | 69,438 | |||||||||||||
Gross Profit | $ | 5,390,281 | $ | 1,751,311 | $ | 3,638,970 | 207.79 | % | ||||||||
| Humankind | 5,404,071 | 1,751,311 | 3,652,760 | 208.57 | % | |||||||||||
| HLJ Huimeijia | (13,790 | ) | - | (13,790 | ) | |||||||||||
Revenue
Total revenues increased by $2,195,244 or 45.14% for the nine months ended March 31, 2019, as compared to the same period in 2018. The increase in revenues was primarily due to an increase of $2,139,596 or 43.99% in Humankind's revenues. The increase in Humankind's sales revenues was primarily due to the increased demand for the new products. The new products are hemp-based products, which include hemp oils, hemp protein powders, hemp polypeptides and collagen peptides. The market demand for medical appliances that combine with traditional Chinese medicine is increasing and these new products are important offerings to expand sales for Humankind.
The increase in HLJ Huimeijia's sales revenue was primarily due to small-scale production after obtaining a new GMP certificate.
Cost of Goods Sold
Our total cost of sales decreased by $1,443,726 or 46.39% for the nine months ended March 31, 2019, as compared to the same period in 2018. The decrease in the overall cost of sales was attributed to the decrease of $1,513,164 or 48.62% in Humankind's cost of sales for the nine months ended March 31, 2019 as compared to the same period in 2018. The significant decline in the cost of the main business was mainly due to the lower unit cost of new products and the fact that the old products were no longer sold for the nine months ended March 31, 2019 as compared to the same period in 2018.
Gross Profit
Our gross margin increased by $3,638,970 from $1,751,311 for the nine months ended March 31, 2018 to $5,390,281 for the nine months ended March 31, 2019. This change was consistent with the change in the main products in Humankind. As HLJ Huimeijia resumed production for a short period of time, the output of its products is small, but the fixed cost of the apportionment has not decreased, resulting in high cost of the products. After the Company operates normally, the cost will return to a reasonable level.
Net Income (Loss) and Net Income (Loss) Per Share
Net Income was $2,517,410 for the nine months ended March 31, 2019, as compared to net loss of $279,032 for the nine months ended March 31, 2018. This increase of $2,796,442 in net profit was primarily attributable to an increase of $2,576,385 in Humankind.
Net Income per share was $0.0384 for the nine months ended March 31, 2019 and net loss per share was $0.0043 for the nine months ended March 31, 2018. This increase was primarily a result of the aforementioned increase in net profit.
About Us
China Health Industries Holdings, Inc. (www.chinahealthindustries.com) is a holding company vertically integrated with the operations in its subsidiaries in China, specializing in R&D, production, marketing and distribution of hemp derivative products, medical drugs and health supplements.
China Health owns GMP certified plants and facilities, manufactures 21 CFDA approved medical drugs and 14 health supplement products covering five kinds of dosage forms, including soft capsule, hard capsule, tablet, granule and oral liquid. Our product series cover hemp derivative foods, hemp derivative medical drugs, externally used medical drugs and health supplements.
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; thus, 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 ("SEC") 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.
Contact:
Company:
Melody Zhang
IR Contact
China Health Industries Holdings, Inc.
Tel: 86-451-88100688
Email: [email protected]
CHINA HEALTH INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
March 31, | June 30, | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 35,219,487 | $ | 32,614,910 | ||||
Accounts receivable, net | 2,007,516 | 1,455,433 | ||||||
Inventory | 954,019 | 452,397 | ||||||
Other receivables, net | 28,189 | 30,611 | ||||||
Advances to suppliers | 32,884 | 94,749 | ||||||
Prepayments | 32,469 | 20,462 | ||||||
Total current assets | 38,274,564 | 34,668,562 | ||||||
Property, plants and equipment, net | 3,594,895 | 3,724,490 | ||||||
Intangible assets, net | 2,966,893 | 3,372,501 | ||||||
Construction in progress | 1,139,068 | 1,134,834 | ||||||
Prepayments - Non-Current | 14,899 | 30,212 | ||||||
Deferred tax assets | 2,287 | 1,970 | ||||||
Total assets | $ | 45,992,606 | $ | 42,932,569 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable and accrued expenses | 492,752 | 400,109 | ||||||
Other payables | 77,163 | 67,800 | ||||||
Advances from customers | 386,985 | 163,459 | ||||||
Related party debts | 6,764,975 | 6,393,730 | ||||||
Wages payable | 272,260 | 234,668 | ||||||
Taxes payable | 684,488 | 428,423 | ||||||
Total current liabilities | 8,678,623 | 7,688,189 | ||||||
Equity | ||||||||
Common stock, ($0.0001 par value per share, 300,000,000 shares authorized, 65,539,737 and 65,539,737 shares issued and outstanding as of March 31, 2019 and June 30, 2018, respectively) | 6,554 | 6,554 | ||||||
Additional paid-in capital | 521,987 | 521,987 | ||||||
Accumulated other comprehensive income | 327,495 | 775,302 | ||||||
Statutory reserves | 38,679 | 38,679 | ||||||
Retained earnings | 36,419,268 | 33,901,858 | ||||||
Total stockholders' equity | 37,313,983 | 35,244,380 | ||||||
Total equity | 37,313,983 | 35,244,380 | ||||||
Total liabilities and equity | $ | 45,992,606 | $ | 42,932,569 | ||||
CHINA HEALTH INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
March 31, | March 31, | March 31, | March 31, | |||||||||||||
REVENUE | $ | 2,202,739 | $ | 1,538,470 | $ | 7,058,721 | $ | 4,863,477 | ||||||||
COST OF GOODS SOLD | 506,623 | 979,456 | 1,668,440 | 3,112,166 | ||||||||||||
GROSS PROFIT | 1,696,116 | 559,014 | 5,390,281 | 1,751,311 | ||||||||||||
OPERATING EXPENSES | ||||||||||||||||
Selling, general and administrative expenses | 449,177 | 718,290 | 1,469,472 | 1,901,748 | ||||||||||||
Depreciation and amortization expenses | 180,166 | 127,079 | 464,446 | 335,683 | ||||||||||||
Total operating expenses | 629,243 | 845,369 | 1,933,918 | 2,237,431 | ||||||||||||
INCOME (LOSS) FROM OPERATIONS | 1,066,773 | (286,355 | ) | 3,456,343 | (486,120 | ) | ||||||||||
OTHER INCOME/(EXPENSES) | ||||||||||||||||
Interest income | 28,815 | 28,824 | 83,531 | 81,027 | ||||||||||||
Interest expense | (2 | ) | (710 | ) | (5 | ) | (49,112 | ) | ||||||||
Other income/(expenses), net | 84 | 318,524 | 15,681 | 354,662 | ||||||||||||
Bank charges | (205 | ) | (322 | ) | (914 | ) | (1,199 | ) | ||||||||
Total other income (expenses), net | 28,692 | 346,316 | 98,293 | 385,378 | ||||||||||||
INCOME/(LOSS) BEFORE INCOME TAXES | 1,095,465 | 59,961 | 3,554,656 | (100,742 | ) | |||||||||||
Provision for income taxes | (327,536 | ) | (49,250 | ) | (1,037,246 | ) | (178,290 | ) | ||||||||
NET INCOME (LOSS) | 767,929 | 10,711 | 2,517,410 | (279,032 | ) | |||||||||||
OTHER COMPREHENSIVE LOSS | ||||||||||||||||
Foreign currency translation loss | 895,253 | 1,359,724 | (447,807 | ) | 2,829,645 | |||||||||||
COMPREHENSIVE INCOME (LOSS) | 1,663,182 | 1,370,435 | 2,069,603 | 2,550,613 | ||||||||||||
Basic & diluted income (loss) per share | $ | 0.0117 | $ | 0.0002 | $ | 0.0384 | $ | (0.0043 | ) | |||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic & diluted weighted average shares outstanding | 65,539,737 | 65,539,737 | 65,539,737 | 65,539,737 | ||||||||||||
CHINA HEALTH INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED)
Accumulated | ||||||||||||||||||||||||||||||||||||
Additional | Other | Total | Non- | |||||||||||||||||||||||||||||||||
Common Shares | Paid-in | Retained | Statutory | Comprehensive | Stockholders' | controlling | Total | |||||||||||||||||||||||||||||
Shares | Amount | Capital | Earnings | Reserve | Income (loss) | Equity | Interest | Equity | ||||||||||||||||||||||||||||
Balance, June 30, 2018 | 65,539,737 | $ | 6,554 | $ | 521,987 | 33,901,858 | 38,679 | 775,302 | 35,244,380 | - | 35,244,380 | |||||||||||||||||||||||||
Net income | - | - | - | 2,517,410 | - | - | 2,517,410 | - | $ | 2,517,410 | ||||||||||||||||||||||||||
Other comprehensive loss - Translation adjustment | - | - | - | - | - | (447,807 | ) | (447,807 | ) | - | (447,807 | ) | ||||||||||||||||||||||||
Balance, March 31, 2019 | 65,539,737 | $ | 6,554 | $ | 521,987 | 36,419,268 | 38,679 | 327,495 | 37,313,983 | - | 37,313,983 | |||||||||||||||||||||||||
CHINA HEALTH INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Nine Months Ended | ||||||||
March 31, | March 31, | |||||||
2019 | 2018 | |||||||
Cash Flows from Operating Activities | ||||||||
Net income (loss) from operations | $ | 2,517,410 | $ | (279,032 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
Depreciation and amortization expenses | 619,788 | 466,755 | ||||||
Provision for doubtful accounts | 82 | 2,118 | ||||||
Provision for inventories | (155,601 | ) | (61,608 | ) | ||||
Deferred taxes loss/(gain) | (339 | ) | (353 | ) | ||||
Changes in operating assets and liabilities, | ||||||||
Accounts receivable | (562,752 | ) | 490,025 | |||||
Other receivables | 1,969 | (221 | ) | |||||
Inventory | (343,902 | ) | 15,495 | |||||
Advance to suppliers and prepaid expenses | 62,142 | 2,226 | ||||||
Accounts payables and accrued expenses | 96,497 | 267 | ||||||
Advance from customers and other payables | 232,195 | 80,007 | ||||||
Amounts due to related parties | 445,204 | 2,253,404 | ||||||
Wages payable | 40,142 | (56,741 | ) | |||||
Taxes payable | 253,604 | (412,668 | ) | |||||
Net cash provided by operating activities | 3,206,439 | 2,499,674 | ||||||
Cash Flows from Investing Activities | ||||||||
Withdraw of short term investment | - | 9,166,881 | ||||||
Purchases of property, plant and equipment | (189,106 | ) | (74,033 | ) | ||||
Expenditure in construction in progress | (19,475 | ) | (77,196 | ) | ||||
Disposal of property, plant and equipment | - | 13,450 | ||||||
Proceeds from disposal of subsidiaries | - | 916,688 | ||||||
Net cash used in investing activities | (208,581 | ) | 9,945,790 | |||||
Cash Flows from Financing Activities | ||||||||
Proceeds from related party debts | - | 85,085 | ||||||
Payment of short term loans | - | (1,527,813 | ) | |||||
Net cash provided by financing activities | - | (1,442,728 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents | (393,281 | ) | 2,208,204 | |||||
Net increase/(decrease) in cash and cash equivalents from continuing operations | 2,604,577 | 13,210,940 | ||||||
Cash and cash equivalents, beginning balance | 32,614,910 | 21,197,448 | ||||||
Cash and cash equivalents, ending balance | $ | 35,219,487 | $ | 34,408,388 | ||||
Supplemental cash flow information | ||||||||
Cash paid for income taxes | $ | 829,119 | $ | 461,176 | ||||
Cash paid for interest expense | $ | - | $ | 49,109 | ||||
Non-cash activities: | ||||||||
Loan from related party for the construction of a facility | $ | 587,296 | $ | 487,016 | ||||
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/44809
Newsfile Corp. is a press release service for companies of all sizes. With a distribution of over 6,000 media and financial databases, Newsfile delivers press releases to a global audience.
