Full Press Release Details
SINOVAC BIOTECH LTD.
CONSOLIDATED FINANCIAL
Index
Consolidated Balance
Consolidated Statement of
Changes in Stockholders Equity
Consolidated Statements
of Income and Comprehensive Income
Consolidated Statements
Notes to Consolidated
Financial Statements
SINOVAC BIOTECH LTD.
(Expressed in U.S. Dollars)
| September 30, | December 31, | ||||||
| 2009 | 2008 | ||||||
| ASSETS | |||||||
| Current assets | |||||||
| Cash and cash equivalents | $ | 46,579,789 | $ | 32,894,102 | |||
| Accounts receivable net (notes 3 and 8) | 36,917,624 | 19,486,596 | |||||
| Inventories (note 4) | 13,541,462 | 6,486,351 | |||||
| Income tax refundable | 348,018 | ||||||
| Prepaid expenses and deposits (note 10(b)) | 877,260 | 933,297 | |||||
| Deferred tax assets | 678,620 | 1,189,831 | |||||
| Total current assets | 98,594,755 | 61,338,195 | |||||
| Property, plant and equipment (notes 6 and 8) | 21,426,879 | 19,262,099 | |||||
| Long term inventories (note 5) | 3,110,828 | 942,514 | |||||
| Deferred tax asset | 532,854 | 569,937 | |||||
| Licenses and permits (notes 7 and 8) | 794,567 | 1,090,477 | |||||
| Total assets | $ | 124,459,883 | $ | 83,203,222 | |||
| LIABILITIES AND STOCKHOLDERS EQUITY | |||||||
| Current liabilities | |||||||
| Loans payable (note 8) | $ | 21,937,522 | $ | 8,024,277 | |||
| Accounts payable and accrued liabilities (note 11) | 14,301,303 | 11,909,037 | |||||
| Income tax payable (note 12) | 2,962,831 | ||||||
| Due to related parties (note 10(a)) | 46,971 | 46,971 | |||||
| Dividends payable to non-controlling shareholder of Sinovac Beijing | 115,957 | 115,677 | |||||
| Deferred tax liability (note 12) | 768,876 | ||||||
| Deferred research grants (note 15) | 1,051,099 | 1,182,703 | |||||
| Total current liabilities | 41,184,559 | 21,278,665 | |||||
| Deferred government grants (note 15) | 2,690,382 | 2,836,994 | |||||
| Loan payable (note 8) | 2,188,439 | ||||||
| Deferred revenue (note 16) | 9,798,760 | ||||||
| Long-term debt | 12,489,142 | 5,025,433 | |||||
| Total liabilities | 53,673,701 | 26,304,098 | |||||
| Commitments and contingencies (notes 6, 10(b), 12 and 19) | |||||||
| STOCKHOLDERS EQUITY | |||||||
| Preferred stock | |||||||
| Authorized 50,000,000 shares at par value of $0.001 each Issued and outstanding: nil | |||||||
| Common stock (note 13) | 42,584 | 42,894 | |||||
| Authorized: 100,000,000 shares at par value of $0.001 each Issued and outstanding: 42,583,761(2008 42,893,928) | |||||||
| Additional paid in capital | 42,299,500 | 41,629,506 | |||||
| Accumulated other comprehensive income | 4,218,717 | 4,143,225 | |||||
| Dedicated reserves | 5,549,684 | 5,549,684 | |||||
| Retained earnings (accumulated deficit) | 9,407,160 | (1,651,534 | ) | ||||
| Total stockholders equity | 61,517,645 | 49,713,775 | |||||
| Non-controlling interest (note 9) | 9,268,537 | 7,185,349 | |||||
| Total equity | 70,786,182 | 56,899,124 | |||||
| Total liabilities and equity | $ | 124,459,883 | $ | 83,203,222 |
The accompanying notes are an integral part of these
consolidated financial statements.
Statement of Changes in Stockholders Equity
| Accumulated | Retained | ||||||||||||||||||||||||||
| Additional | other | earnings | Total | Non- | |||||||||||||||||||||||
| Common stock | paid in | comprehensive | Dedicated | (accumulated | stockholders | controlling | Total | ||||||||||||||||||||
| Shares | Amount | capital | income | reserves | deficit) | equity | interest | equity | |||||||||||||||||||
| Balance, December 31, 2008 | 42,893,928 | $ | 42,894 | $ | 41,629,506 | $ | 4,143,225 | $ | 5,549,684 | $ | (1,651,534 | ) | $ | 49,713,775 | $ | 7,185,349 | $ | 56,899,124 | |||||||||
| Stock-based compensation | 308,195 | 308,195 | 308,195 | ||||||||||||||||||||||||
| Share buyback (note 13(a)) | (542,767 | ) | (542 | ) | (335,289 | ) | (335,831 | ) | (335,831 | ) | |||||||||||||||||
| Exercise of stock options | 232,600 | 232 | 693,053 | 693,285 | 693,285 | ||||||||||||||||||||||
| Share subscription received (note 13(a)) | 4,035 | 4,035 | 4,035 | ||||||||||||||||||||||||
| Other comprehensive income | |||||||||||||||||||||||||||
| - Other comprehensive income attributable to NCI | 15,236 | 15,236 | |||||||||||||||||||||||||
| - Other comprehensive income attributable to stockholders | 75,492 | 75,492 | 75,492 | ||||||||||||||||||||||||
| Net income for the period | |||||||||||||||||||||||||||
| - Net income attributable to non-controlling interest | 5,917,215 | 5,917,215 | |||||||||||||||||||||||||
| - Net income attributable to stockholders | 11,058,694 | 11,058,694 | 11,058,694 | ||||||||||||||||||||||||
| Dividend to non-controlling interest | (3,849,263 | ) | (3,849,263 | ) | |||||||||||||||||||||||
| Balance September 30, 2009 | 42,583,761 | $ | 42,584 | $ | 42,299,500 | $ | 4,218,717 | $ | 5,549,684 | $ | 9,407,160 | $ | 61,517,645 | $ | 9,268,537 | $ | 70,786,182 |
The accompanying notes are an integral part of these
consolidated financial statements.
Consolidated Statements of Income
and Comprehensive Income
Three Months and Nine
Months Ended September 30, 2009 and 2008
| Three months ended September 30 | Nine months ended September 30 | ||||||||||||
| 2009 | 2008 | 2009 | 2008 | ||||||||||
| Sales | $ | 21,224,685 | $ | 8,753,671 | $ | 47,809,111 | $ | 34,137,101 | |||||
| Cost of sales - (exclusive of depreciation of land-use rights and amortization of licenses and permits of $104,732 (2008 - $102,742) for three months and $314,081 (2008-$202,575) for nine months | 3,675,695 | 1,658,862 | 8,886,251 | 5,320,667 | |||||||||
| Gross profit | 17,548,990 | 7,094,809 | 38,922,860 | 28,816,434 | |||||||||
| Selling, general and administrative expenses (notes 10 and 14) | 3,519,977 | 3,791,916 | 11,927,879 | 13,408,452 | |||||||||
| Research and development expenses - net of $133,176 (2008- $16,829) for three months and $261,861 (2008- $147,958) for nine months in government research grants | 1,443,834 | 811,901 | 2,753,009 | 2,408,745 | |||||||||
| Depreciation of property, plant and equipment and amortization of licenses and permits | 179,962 | 178,404 | 511,835 | 526,117 | |||||||||
| Total operating expenses | 5,143,773 | 4,782,221 | 15,192,723 | 16,343,314 | |||||||||
| Operating income | 12,405,217 | 2,312,588 | 23,730,137 | 12,473,120 | |||||||||
| Interest and financing expenses | (246,036 | ) | (189,935 | ) | (571,349 | ) | (747,496 | ) | |||||
| Interest income and other income (expenses) (note 10) | 77,300 | 58,456 | 243,451 | (36,685 | ) | ||||||||
| Income before income taxes and non-controlling interest | 12,236,481 | 2,181,109 | 23,402,239 | 11,688,939 | |||||||||
| Income taxes recovery (expense) | |||||||||||||
| - Current | (3,230,985 | ) | (1,005,174 | ) | (5,026,902 | ) | (4,229,613 | ) | |||||
| - Deferred | (551,478 | ) | 94,028 | (1,399,428 | ) | 991,461 | |||||||
| Consolidated net income for the period | 8,454,018 | 1,269,963 | 16,975,909 | 8,450,787 | |||||||||
| Less: net income attributable to non-controlling interest | (3,228,659 | ) | (530,084 | ) | (5,917,215 | ) | (2,814,703 | ) | |||||
| Net income attributable to the stockholders | $ | 5,225,359 | $ | 739,879 | $ | 11,058,694 | $ | 5,636,084 | |||||
| Net income for the period | $ | 8,454,018 | 1,269,963 | 16,975,909 | 8,450,787 | ||||||||
| Other comprehensive income | |||||||||||||
| Foreign currency translation adjustment | 64,108 | 33,637 | 90,728 | 2,358,956 | |||||||||
| Total comprehensive income | 8,518,126 | 1,303,600 | 17,066,637 | 10,809,743 | |||||||||
| Less: comprehensive income attributable to non-controlling interest | 3,229,599 | 522,960 | 5,932,451 | 2,889,658 | |||||||||
| Comprehensive income attributable to stockholders | $ | 5,288,527 | $ | 780,640 | $ | 11,134,186 | $ | 7,920,085 | |||||
| Earnings per share basic and diluted | $ | 0.12 | $ | 0.02 | $ | 0.26 | $ | 0.13 | |||||
| Weighted average number of shares of common stock outstanding | |||||||||||||
| - Basic | 42,428,755 | 42,873,511 | 42,574,921 | 42,299,187 | |||||||||
| - Diluted | 43,631,572 | 43,142,788 | 42,758,104 | 42,638,584 |
accompanying notes are an integral part of these consolidated financial
Statements of Cash Flows
Three Months and Nine
Months Ended September 30, 2009 and 2008
| Three Months ended September 30 | Nine Months ended September 30 | ||||||||||||
| 2009 | 2008 | 2009 | 2008 | ||||||||||
| Cash flows from (used in) operating activities | |||||||||||||
| Net Income for the period | $ | 8,454,018 | $ | 1,269,963 | $ | 16,975,909 | $ | 8,450,787 | |||||
| Adjustments to reconcile net income to net cash used by operating activities: | |||||||||||||
| - deferred income taxes | 551,478 | (94,028 | ) | 1,399,428 | (991,461 | ) | |||||||
| - loss (income) on disposal fixed assets | 641 | 2,249 | (6,708 | ) | 2,249 | ||||||||
| - stock-based compensation | 180,152 | 16,635 | 308,195 | 49,907 | |||||||||
| - provision for doubtful debts | (1,595,787 | ) | 408,289 | 717,137 | 1,968,207 | ||||||||
| - depreciation of property, plant and equipment, and amortization of licenses | 529,957 | 517,751 | 1,394,064 | 1,298,314 | |||||||||
| - research and development expenditures qualified for government grant | (133,176 | ) | (16,829 | ) | (261,861 | ) | (147,677 | ) | |||||
| Change in other assets and liabilities | |||||||||||||
| - accounts receivable | (3,545,198 | ) | 4,718,247 | (18,088,750 | ) | (8,650,832 | ) | ||||||
| - inventories | (4,063,146 | ) | (1,620,126 | ) | (9,198,785 | ) | (3,934,756 | ) | |||||
| - income tax refundable (payable) | 3,482,345 | 3,309,317 | |||||||||||
| - prepaid expenses and deposits | (197,728 | ) | 273,079 | 58,098 | 188,789 | ||||||||
| - advance from stockpiling program | 147,160 | 9,791,728 | |||||||||||
| - accounts payable and accrued liabilities | 3,646,229 | (2,168,844 | ) | 2,362,439 | 1,973,562 | ||||||||
| Net cash provided by operating activities | 7,456,945 | 3,306,386 | 8,760,211 | 207,089 | |||||||||
| Cash flows from (used in) financing activities | |||||||||||||
| Loan proceeds | (3,572,010 | ) | 16,074,281 | ||||||||||
| Loan repayment | (4,384,356 | ) | 2,143,206 | (4,384,356 | ) | (3,572,010 | ) | ||||||
| Proceeds from issuance of common stock | 693,285 | 693,285 | 2,143,206 | ||||||||||
| Repurchase of common shares | (335,831 | ) | 9,854,560 | ||||||||||
| Loan repayment from non-controlling shareholder of Sinovac Beijing | 1,461,298 | ||||||||||||
| Proceeds from shares subscribed | 4,035 | 20,060 | 4,035 | 20,060 | |||||||||
| Dividends paid to non-controlling shareholder of Sinovac Beijing | (3,846,501 | ) | (3,846,501 | ) | (2,947,877 | ) | |||||||
| Government grant received | 171,326 | 143,626 | 171,326 | 214,321 | |||||||||
| Net cash provided by (used in) financing activities | (5,900,913 | ) | (1,265,118 | ) | 8,376,239 | 5,712,260 | |||||||
| Cash flows from (used in) investing activities | |||||||||||||
| Restricted cash | 434,196 | (725 | ) | ||||||||||
| Acquisition of property, plant and equipment | (1,718,443 | ) | (1,046,849 | ) | (3,480,444 | ) | (3,283,424 | ) | |||||
| Net cash used in investing activities | (1,718,443 | ) | (612,653 | ) | (3,480,444 | ) | (3,284,149 | ) | |||||
| Exchange effect on cash and equivalents | 37,748 | 303,614 | 29,681 | 845,803 | |||||||||
| Increase (decrease) in cash and cash equivalents | (124,663 | ) | 1,732,229 | 13,685,687 | 3,481,003 | ||||||||
| Cash and cash equivalents, beginning of period | 46,704,452 | 18,820,271 | 32,894,102 | 17,071,497 | |||||||||
| Cash and cash equivalents, end of period | $ | 46,579,789 | $ | 20,552,500 | $ | 46,579,789 | $ | 20,552,500 | |||||
| Cash paid for interest, net of interest capitalized | $ | 285,423 | $ | 150,657 | $ | 615,691 | $ | 456,665 | |||||
| Cash paid (received) for income taxes | $ | (251,359 | ) | $ | 1,502,166 | $ | 1,717,585 | $ | 2,812,129 |
accompanying notes are an integral part of these consolidated financial
SINOVAC BIOTECH LTD.
Notes to Consolidated Financial Statements
Three Months and Nine Months Ended September 30, 2009
(Expressed in U.S. Dollars)
consolidated financial statements are those of Sinovac Biotech Ltd., formerly
Net-Force Systems Inc., ( parent company ), its 100% owned subsidiaries
Tangshan Yian Bioengineering Co., Ltd. ( Tangshan Yian ) and Sinovac Biotech
(Hong Kong) Ltd., and a subsidiary,
Sinovac Biotech Co. Ltd.( Sinovac Beijing ), which is 71.56% owned by Sinovac
Biotech (Hong Kong) Ltd. Collectively,
they are referred to as the Company
accompanying unaudited interim consolidated financial statements have been
prepared by management in accordance with U.S. generally accepted accounting principles
for interim financial information.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for annual financial
statements. They should be read in
conjunction with the financial statements and related footnotes for the Company s
most recently completed year ended December 31, 2008. Except
as otherwise noted, these unaudited interim
consolidated financial statements are prepared applying the same accounting
policies used in the annual consolidated financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included.
results are not necessarily indicative of the results for other periods or for
the year as a whole. The Company does
not earn its revenue evenly throughout the year, although expenses, with the
exception of certain sales expenses, are relatively constant from period to
period. Vaccine sales have historically
been lower in the first quarter because of Chinese New Year s
celebrations. Vaccine sales are
relatively higher in the fourth quarter, since this coincides with vaccination
programs for children returning to school and with annual purchase planning by
SINOVAC BIOTECH LTD.
Notes to Consolidated Financial Statements
Months and Nine Months Ended September 30,
(Expressed in U.S. Dollars)
2. Accounting Policy Changes and New
Accounting Pronouncement
(a) Recently adopted accounting policies
Effective July 1, 2009,
the Company adopted the Financial Accounting Standards Board ( FASB )
Accounting Standards Codification ( ASC ) 105-10, Generally Accepted
Accounting Principles. ASC 105-10 establishes the FASB Accounting Standards
Codification ( Codification ) as the source of authoritative accounting
principles recognized by the FASB to be applied by non-governmental entities in
the preparation of financial statements in conformity with GAAP for SEC
registrants. All guidance contained in the Codification carries an equal level
of authority. The Codification supersedes all existing non-SEC accounting and
reporting standards. The FASB will now issue new standards in the form of
Accounting Standards Updates ( ASUs ). The FASB will not consider ASUs as
authoritative in their own right. ASUs will serve only to update the
Codification, provide background information about the guidance and provide the
bases for conclusions on the changes in the Codification. References made to
FASB guidance have been updated for the Codification throughout this document.
Effective January 1,
2009, the Company adopted guidance issued by the FASB, which is included in the
Codification in ASC 805, Business Combinations. Under ASC 805, an acquiring
entity is required to recognize all the assets acquired and liabilities assumed
in a transaction at the acquisition-date fair value with limited exceptions. The
Company has adopted this standard but the impact on accounting for business
combinations will be dependent upon future acquisitions.
2009, the Company adopted guidance issued by the FASB that relates to
accounting for assets acquired and liabilities assumed in a business
combination that arise from contingencies, which is included in the
Codification in ASC 805-10. The guidance amended and clarified the initial
recognition and measurement, subsequent measurement and accounting, and related
disclosures arising from contingencies in a business combination. ASC 805-10
applies to all assets acquired and liabilities assumed in a business