Full Press Release Details
Qilian International Holding Group Limited Reports
Financial Results for the First Six Months of Fiscal Year 2021
Jiuquan, China, September 16, 2021 (GLOBE
NEWSWIRE) -- Qilian International Holding Group Limited (Nasdaq: QLI) (the "Company"), a China-based pharmaceutical and
chemical products manufacturer, today announced its unaudited financial results for the first six months of fiscal year 2021 ended
Xin, Chairman and CEO of the Company, commented, "We are pleased with our financial results for the first six months of fiscal
year 2021. Our revenue increased by 8% to $29.9 million, which we believe demonstrates our continuous growth potential."
"Looking forward, we believe our heparin
product will benefit from the current market trend. Driven by the increasing demand for clinical anticoagulants globally, the export price
of raw material medicine heparin soared, rising by nearly 269% year-on-year in June 2021, setting a record high. The production volume
of heparin raw materials in China ranks first in the world, and the supply of heparin raw materials from producers in China accounts for
about 50% of global demand. After our new pig by-product processing facility is built and put into operations, it will further boost our
production capability of heparin sodium preparations. We expect to seize market opportunities and continue expanding our capabilities
as we see some return to normalcy in our everyday lives. We remain focused on driving momentum in our business that will strive to achieve
sustainable development and create long term value for our shareholders, " Mr. Xin added.
Financial Highlights for the Six Months Ended
| For the Six Months Ended March 31, | ||||||||||||
| ($'000, except per share data) | 2021 | 2020 | % Change | |||||||||
| Revenue | $ | 29,939 | $ | 27,759 | 8 | % | ||||||
| Gross profit | $ | 4,091 | $ | 6,228 | (34 | )% | ||||||
| Gross margin | 13.7 | % | 22.4 | % | (9 | )% | ||||||
| Income from operations | $ | 2,272 | $ | 4,793 | (53 | )% | ||||||
| Net income | $ | 2,245 | $ | 4,183 | (46 | )% | ||||||
| Net Income attributable to Qilian International Holding Group Limited ("Qilian International") | $ | 2,351 | $ | 3,858 | (39 | )% | ||||||
| Basic and diluted earnings per share | $ | 0.07 | $ | 0.13 | (46 | )% |
| Revenue increased by 8% year-over-year to $29.9 million for the six months ended March 31, 2021 from $27.8 million for the same period of the prior fiscal year. The increase in revenue is primarily attributable to the increased revenue from the sales of oxytetracycline products and the appreciation Renminbi ("RMB") against U.S. dollars ("USD"). | ||
| Gross profit decreased by 34% to $4.1 million for the six months ended March 31, 2021 from $6.2 million for the same period of the prior fiscal year. Gross margins were 13.7% and 22.4% for the six months ended March 31, 2021 and 2020, respectively. The decreased gross profit was mainly due to decreased gross margin from licorice products, the selling price of which has decreased significantly compared to the six months ended March 31, 2020. | ||
| Income from operations was $2.3 million for the six months ended March 31, 2021, compared to income from operations of $4.8 million for the same period of the prior fiscal year, due to the decrease of gross profit. | ||
| Net income was $2.2 million for the six months ended March 31, 2021, compared to net income of $4.2 million for the same period of the prior fiscal year mainly due to the decreased gross margin described above. | ||
| Net income attributable to Qilian International was $2.4 million or earnings per share of $0.07 for the six months ended March 31, 2021, compared to net income attributable to Qilian International of $3.9 million, or earnings per share of $0.13, for the same period of the prior fiscal year. |
Unaudited Financial Results for the Six months
ended March 31, 2021
For the six months ended March 31, 2021, revenue
increased by $2.1 million, or 8%, to $29.9 million from $27.8 million for the same period of the prior fiscal year. The increase was mainly
due to the sales increase from oxytetracycline products, licorice products and traditional Chinese medicine derivatives ("TCMD"),
as well as the appreciation of RMB to USD, from 1 USD = 7.0126 RMB for the six months ended March 31, 2020.
For the six months ended March 31, 2021, revenue
from oxytetracycline products, licorice products and traditional Chinese medicine derivatives ("TCMD") increased by $2.8 million.
The increase was primarily due to an increase of oxytetracycline products sold. The increase in oxytetracycline products revenues was
due to the four newly added customers which contributed $1.6 million in the six months ended March 31, 2021. In addition, the sales quantity
increased due to the recovery of the market from the impact of the COVID-19 pandemic. For the six months ended March 31, 2020, due to
the outbreak of COVID-19 in China, the Company's sales were affected by the lock down of the economy.
For the six months ended March 31, 2021, revenue
from heparin products, sausage casings and fertilizer decreased by $0.6 million, which is normal fluctuation in the Company's business
Cost of revenue increased by $4.3 million, or
20%, to $25.8 million for the six months ended March 31, 2021 from $21.5 million for the same period of the prior fiscal year. The increase
in overall cost of revenue was mainly due to the following reasons: (1) increase of sales from oxytetracycline products, licorice products
and TCMD, which increased cost of revenue by $3.8 million; and (2) appreciation of RMB against USD, from an average exchange rate of 1
USD = 7.0126 RMB for the six months ended March 31, 2020 to an average exchange rate of 1 USD = 6.5541 for the six months ended March
Gross profit decreased by $2.1 million, or 34%,
to $4.1 million for the six months ended March 31, 2021 from $6.2 million for the same period of the prior fiscal year. As a result, gross
margin percentage decreased to 13.7% for the six months ended March 31, 2021 from 22.4% for the same period of the prior fiscal year.
Gross profit margin for oxytetracycline products,
licorice products and TCMD decreased by 9.2% for the six months ended March 31, 2021 as a result of the decreased selling price for licorice
products in the current year, compared to the same period of prior year, as the price went up last year due to the shortage of supply
and restraint from logistics as affected by the COVID-19 pandemic. For the six months ended March 31, 2021, the Company lowered the selling
price by almost 10%, with only 4% drop of the cost per unit sold, compared to the same period of last year. In addition, gross margin
for heparin and sausage casing products decreased by 8.8% for the six months ended March 31, 2021 compared to the same period of prior
year. As the demand for these products was not as strong as the Company expected, in order to increase the cash flow as well as decrease
inventory close to shelf life, the Company sold its heparin and sausage casing products at lower prices.
Selling, General and Administrative Expenses
Selling, general and administrative expenses were
$1.8 million for the six months ended March 31, 2021, representing an increase of approximately $0.4 million, or 27%, from $1.4 million
for six months ended March 31, 2020. The increase was mainly attributable to increased salary paid to board of directors of approximately
Income before income taxes
Income before income taxes was $2.5 million for
the six months ended March 31, 2021, compared to income before income taxes of $4.9 million for the same period of the prior fiscal year.
Net income and net income attributable to Qilian
Net income was $2.2 million for the six months
ended March 31, 2021, compared to net income of $4.2 million for the same period of the prior fiscal year. After deducting non-controlling
interests, net income attributable to Qilian International was $2.4 million for the six months ended March 31, 2021, compared to net income
attributable to Qilian International of $3.9 million for the same period of the prior fiscal year.
Earnings per share-basic and diluted
After deducting non-controlling interests, earnings
per share attributable to the Company was $0.07 per basic and diluted share, for the six months ended March 31, 2021, compared to earnings
per share of $0.13 per basic and diluted share, for the same period of the prior fiscal year.
Weighted average number of shares outstanding
was 32,428,571 for the six months ended March 31, 2021, compared to 30,000,000 for the same period of last fiscal year.
As of March 31, 2021, the Company had cash of
$20.3 million, compared to $11.9 million as of September 30, 2020. Total working capital was $45.3 million as of March 31, 2021, compared
to $19.1 million as of September 30, 2020.
Net cash provided by operating activities was
$9.7 million for the six months ended March 31, 2021, compared to net cash provided by operating activities of $5.3 million for the same
period last year. Despite the decrease of net income, the net cash provided by operating activities increased due to the $6.1 million
increase of cash from bank acceptance notes receivable.
Net cash used in investing activities was $21.1
million for the six months ended March 31, 2021, compared to net cash used in investing activities $0.1 million for the same period last
year. The increase was due to $20 million cash used in investment made for marketable securities.
Net cash provided by financing activities was
$19.4 million for the six months ended March 31, 2021, compared to net cash provided by financing activities $2.1 million for the same
period of last year. The increase was mainly due to the cash of $24.0 million received from ordinary shares issued in the Company's
initial public offering, offset by $4.6 million decrease of net cash provided from bank loans.
About Qilian International Holding Group Limited
Qilian International Holding Group Limited, headquartered
in Gansu, China, is a pharmaceutical and chemical products manufacturer in China. It focuses on the development, manufacture, marketing
and sale of licorice products, oxytetracycline products, traditional Chinese medicine derivatives product, heparin product, sausage casings,
and fertilizers. The Company's products are sold in more than 20 provinces in China. For more information, visit the company's
website at http://ir.qlsyy.net/.
Forward-Looking Statements
This announcement contains forward-looking
statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other
than statements of historical fact in this announcement are forward-looking statements. These forward-looking statements involve known
and unknown risks and uncertainties and are based on current expectations and projections about future events and financial trends that
the Company believes may affect its financial condition, results of operations, business strategy, financial needs and the successful
construction of the pig by-product processing project facility. Investors can identify these forward-looking statements by words or phrases
such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend,"
"plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions.
The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or
changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these
forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions
investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that
may affect its future results in the Company's registration statement and in its other filings with the SEC.