Full Press Release Details
Qilian International Holding Group Limited Reports
Fiscal Year 2021 Financial Results
Jiuquan, China, Feburary 11, 2022
/PRNewswire/ -- Qilian International Holding Group Limited (Nasdaq: QLI) (the "Company", "Qilian
International", "we", "our" or "us"), a China-based pharmaceutical and chemical products
manufacturer, today announced its unaudited financial results for the fiscal year ended September 30, 2021.
Xin, Chairman and CEO of the Company, commented, "The fiscal year 2021 was an excellent year for the Company. Compared with
the fiscal year 2020, our revenue grew by 14%, or $7.1 million, to $57.1 million, which was made possible due to consistent execution
and solid progress of our business strategies. Despite the ongoing macro challenges in 2021 and the impact of regional resurgence of COVID-19
pandemic, our focus remained on expanding production capacity, and we also made substantial progress on the expansion of our new organic
fertilizer production facility. In 2022 and beyond, we intend to complete the construction of a pig by-product processing facility for
heparin sodium production, and fully complete the construction of our new organic fertilizer production facility. We will also continue
to increase our research and development efforts and provide high-quality products to our customers. We believe our business strategy
will further fuel growth in 2022, driving further improvements in our operational and financial performance, and creating long-term value
for all stakeholders."
Fiscal Year 2021 Financial Highlights
| For the years ended September 30, | ||||||||||||
| ($'000, except per share data) | 2021 | 2020 | % Change | |||||||||
| Revenue | $ | 57,100 | $ | 50,033 | 14 | % | ||||||
| Gross profit | $ | 5,639 | $ | 7,539 | (25 | )% | ||||||
| Gross margin | 9.9 | % | 15.1 | % | (5.2 | )% | ||||||
| Income from operations | $ | 2,388 | $ | 4,811 | (50 | )% | ||||||
| Net income | $ | 3,108 | $ | 4,940 | (37 | )% | ||||||
| Net Income attributable to Qilian International Holding Group Limited ("Qilian International") | $ | 3,153 | $ | 5,064 | (38 | )% | ||||||
| Basic and diluted earnings per share | $ | 0.09 | $ | 0.17 | (47 | )% |
| Revenue increased by 14% year-over-year to $57.1 million for the fiscal year ended September 30, 2021 from $50.0 million for the fiscal year ended September 30, 2020. The increase in revenue was primarily attributable to a $6.4 million increase in sales from heparin products and sausage casings, and a $0.8 million increase in sales from oxytetracycline products, licorice products and traditional Chinese medicine derivatives ("TCMD"). | ||
| Gross profit decreased by 25% to $5.6 million for the fiscal year ended September 30, 2021 from $7.5 million for the fiscal year ended September 30, 2020. Gross margins were 9.9% and 15.1% for the fiscal years ended September 30, 2021 and 2020, respectively. | ||
| Income from operations was $2.4 million for the fiscal year ended September 30, 2021, compared to income from operations of $4.8 million for the fiscal year ended September 30, 2020. | ||
| Net income was $3.1 million for the fiscal year ended September 30, 2021, compared to net income of $4.9 million for the fiscal year ended September 30, 2020. | ||
| Net income attributable to Qilian International was $3.2 million, compared to net income attributable to Qilian International of $5.1 million for the fiscal year ended September 30, 2020. | ||
| Basic and diluted earnings per share were $0.09 for the fiscal year ended September 30, 2021, compared with $0.17 for the fiscal year ended September 30, 2020. |
Fiscal Year 2021 Financial Results
the fiscal year ended September 30, 2021, revenue increased by $7.1 million, or 14%, to $57.1 million from $50.0 million for
the fiscal year ended September 30, 2020. The increase was primarily attributable to a $6.4 million increase in sales from heparin
products and sausage casings, and a $0.8 million increase in sales from oxytetracycline & licorice products and TCMD.
from oxytetracycline products, licorice products and TCMD increased by $0.8 million, or 3%, to to $33.5 million for the fiscal year ended
September 30, 2021 from $32.6 million for the fiscal year ended September 30, 2020. The increase was due to the appreciation
of RMB against USD in 2021, which accounted for $2.5 million. Sales denominated in RMB decreased by RMB10.6 million, equivalent to $1.6
million. The decrease in sales in this segment is due to a decrease in the average selling price of oxytetracycline products by 9% compared
to that of 2020 in order to stimulate the sales of oxytetracycline products. Sales quantity increased by 6% compared to that of 2020,
due to the lower selling price. The ongoing COVID-19 pandemic has caused significant uncertainty in global market and demand as well as
logistics and transportation. Although we do not serve customers oversea directly, COVID-19 related export restrictions has led to excessive
supply of our competitors' products in domestic markets.
Sales from heparin products and sausage casings
increased by $6.4 million, or 38%, to $23.2 million for the fiscal year ended September 30, 2021 from $16.7 million for the fiscal
year ended September 30, 2020. $1.2 million of such increase was due to the appreciation of RMB against USD in 2021. In additional,
the increase of our sales of heparin products was mainly driven by increased demand from pharmaceutical customers. Due to the COVID-19
pandemic, global demand for prescription medicines, vaccines and medical devices increased. The demand for heparin, a widely used medication,
also increased significantly during the pandemic. In 2021, we increased investment in this segment and added new sales force. The sales
quantity of heparin products increased by 41%, and their selling price increased by 10%. However, our sales of sausage casings decreased
by $0.4 million. As the gross margin of sausage casings in the past two fiscal years was negative due to the combined effect of COVID-19
pandemic and African Swine fever in China, we reduced our efforts in selling sausage casings.
from fertilizer decreased by $0.3 million, or 31%, to $0.5 million for the fiscal year ended September 30, 2021 from $0.7
million for the fiscal year ended September 30, 2020. In the fiscal year ended September 30, 2021, we expanded our manufacturing
capacity and the production of fertilizer was interrupted for almost ten months. We resumed normal production of fertilizer in October 2021.
Cost of Revenue and Gross Profit
of revenue increased by $9.0 million, or 21%, to $51.5 million for the fiscal year ended September 30, 2021 from $42.5 million
for the fiscal year ended September 30, 2020.
profit decreased by $1.9 million, or 25%, to $5.6 million for the fiscal year ended September 30, 2021 from $7.5 million for
the fiscal year ended September 30, 2020. As a result, gross margin decreased to 9.9% for the fiscal year ended September 30,
2021 from 15.1% for the fiscal year ended September 30, 2020.
Selling, General and Administrative Expenses
general and administrative expenses increased by $0.5 million, or 19%, to $3.3 million for the fiscal year ended September 30,
2021 from $2.7 million for the year ended September 30, 2020. The increase was mainly attributable to an increase of approximately
$0.4 million in salary and repair and maintenance expense as we expanded our operations and sales, as well as an increase of $0.2 million
in insurance expense in connection with us being a publicly traded company in the United States.
Interest Expenses, net
Interest expenses are primarily generated from
bank borrowings, including bank loans and banknotes payable, offset by interest income. Interest expenses for the fiscal year ended September 30,
2021 decreased by $185,000, to $58,000 for the fiscal year ended September 30, 2021 from $243,000 for the fiscal year ended September 30,
2020. The decrease is due to payoff of the bank loans in April 2021 and no bank loan has been borrowed afterwards.
Other income was $1.0 million for the fiscal year
ended September 30, 2021, as compared to $1.2 million for the fiscal year ended September 30, 2020, which primarily consisted
of government grants and investment income.
Income Taxes Provision
Provision for income taxes decreased by $0.6 million,
or 71%, to $0.3 million for the fiscal year ended September 30, 2021 from $0.9 million for the fiscal year ended September 30,
2020, as a result of the decreased income before income tax provision, as well as increased tax holiday for some of the variable interest
entity's subsidiaries enacted by the Chinese government.
Net income and Net income attributable to Qilian
income was $3.1 million for the fiscal year ended September 30, 2021, compared to net income of $4.9 million for the fiscal
year ended September 30, 2020. After deducting non-controlling interests, net income attributable to Qilian International was $3.2
million for the year ended September 30, 2021, compared to net income attributable to Qilian International of $5.1 million for the
fiscal year ended September 30, 2020.
Earnings per share-basic and diluted
deducting non-controlling interests, earnings per share attributable to the Company was $0.09 per basic and diluted share for the
fiscal year ended September 30, 2021, compared to earnings per share of $0.17 per basic and diluted share for the fiscal year ended
decreased by $2.5 million, or 35%, to $4.6 million for the fiscal year ended September 30, 2021, from $7.2 million for the
fiscal year ended September 30, 2020.
As of September 30, 2021, the Company had
cash of $10.5 million, compared to $11.9 million as of September 30, 2020.
cash provided by operating activities was $0.3 million for the fiscal year ended September 30, 2021, compared to $5.1 million
for the fiscal year ended September 30, 2020.
cash used in investing activities was $24.2 million for the fiscal year ended September 30, 2021, compared to $0.4 million
for the fiscal year ended September 30, 2020.
cash provided by financing activities was $24.0 million for the fiscal year ended September 30, 2021, compared to $2.1 million
for the fiscal year ended September 30, 2020.
Non-GAAP Financial Measures
The Company's management uses certain financial
measures to evaluate its operating performance which is calculated and presented on the basis of methodologies other than in accordance
with GAAP ("Non-GAAP"). These measures should not be considered a substitute for, or superior to, measures of financial performance
prepared in accordance with GAAP, and the Company's calculations thereof may not be comparable to similarly entitled measures reported
by other companies. The Company believes that EBITDA is a useful performance measure and can be used to facilitate a comparison of its
operating performance on a consistent basis from period to period and to provide for a more complete understanding of factors and trends
affecting its business than GAAP measures alone can provide. The Company's management believes that EBITDA is less susceptible to
variances in actual performance resulting from depreciation, amortization and other non-cash charges and more reflective of other factors
that affect its operating performance. The Company's management believes that the use of these Non-GAAP financial measures provides
an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with
the companies in the same industry, many of which present similar Non-GAAP financial measures to investors. The Company presents EBITDA
in order to provide supplemental information that Management considers relevant for the readers of its consolidated financial statements
included elsewhere in this annual report, and such information is not meant to replace or supersede U.S. GAAP measures.
The Company's management defines EBITDA
as net income (loss) before interest expense, income taxes, and depreciation and amortization. EBITDA is not defined under U.S. GAAP and