Full Press Release Details
Reports Third Quarter 2008 Unaudited Financial Results
Conference Call on Tuesday, November 18, 2008 at 8:00 p.m. ET -
November 18, 2008 - Sinovac Biotech Ltd. (Amex: SVA), a leading developer and
provider of vaccines in China, today announced the Company's financial results
for the three-month and nine-month periods ended September 30,
Weidong Yin, Chairman, President and CEO, commented, "Our nine month sales
growth was in line with our previously stated objective to increase sales by 35%
to 45% over the prior year. As we continue to execute our business plan,
management is very confident that the Company is on track to achieve the
projected full year sales growth rate for 2008. At the same time, we have
increased our investment in research and development in order to focus on
long-term growth. The development of a vaccine against human enterovirus 71 (EV
71), which causes hand, foot, and mouth disease, is one of our R&D programs
that demonstrate our strategy to develop novel vaccines. We expect this vaccine
to become another top-selling flagship product similar to Healive , once it
is developed and commercialized. Even though we are currently facing challenging
financial markets, management continues to prudently execute its long-term
growth strategy designed to maximize shareholder value."
Months Ended September 30, 2008
third quarter 2008, sales were $8.8 million, compared to $10.8 million in the
third quarter 2007. The year-over-year change in sales reflected the Company's
strategy of heavily promoting Healive in the private market in the first half of
the year, as the Company expects the size of the public market for the hepatitis
A vaccine to possibly increase significantly and the size of the private market
may decrease in the second half of the year.
the third quarter of 2008, Sinovac sold 1.1 million doses of Healive ,
compared to 1.53 million doses for the same period of 2007. Following the launch
September, Sinovac sold 663,000 doses during the third quarter of 2008, compared
to 1.07 million doses for the same period of the prior year. During the third
quarter of 2008, Sinovac sold 28,000 doses of Bilive ,
compared to nil doses in the prior year period. As mentioned
previously, the year-over-year change in sales was in line with the Company's
sales and marketing strategy. For the third quarter for 2008, Healive, Anflu,
and Bilive as a percentage of sales represented 78%, 19.5% and 2.5%,
profit for third quarter 2008 was $7.1 million, with a gross margin of 81.0%,
compared to $9.2 million and 84.7% for the same period of 2007. The change in
gross margin as a percentage of sales was primarily attributable to the product
sales mix during the third quarter of 2008.
operating expenses for the third quarter 2008 were $4.8 million, compared to
$5.1 million in the same period 2007. Selling, general and administrative
expenses for the third quarter of 2008 were $3.8 million, compared to $4.8
million in the same period of 2007. SG&A expenses as a percentage of sales
represented 43.3% in the third quarter of 2008, compared to 44.0% in the same
period in the prior year.
expenditures on research and development expenses for the third quarter of 2008
were $812,000, compared to $221,000 in the same period of 2007. The increased
R&D expenses in the current quarter were mainly incurred for the advancement
of its vaccine candidates in the preclinical development pipeline inclusive of
its vaccine against human enterovirus 71 (EV 71), which causes hand, foot, and
mouth disease (HFMD).
income was $2.3 million for the third quarter of 2008, compared to $4.0 million
in the same period of 2007. The year-over-year variance in operating income
reflected lower vaccine sales in the current period and moderately higher
income for the third quarter of 2008 included $190,000 of interest and financing
expenses, $911,000 of income taxes, $58,000 interest and other income and
$530,000 of minority interest. Net income for the same period of 2007 included
$116,000 of interest and financing expenses, $758,000 of income taxes, $41,000
interest and other income and $1.0 million of minority interest. Net income for
the third quarter of 2008 was $740,000, or $0.02 per diluted share, compared to
$2.2 million, or $0.05 per diluted share, in the same period of
the third quarter of 2008, Sinovac Beijing continued the preparation of its
application to the Chinese government for the High and New Technology
Enterprises (HNTE) status. HNTEs are entitled to the preferential income tax
rate of 15% compared to the unified income tax rate of 25% effective January 1,
2008. Prior to 2008, Sinovac Beijing was subject to the preferential income tax
rate of 15% as a HNTE. Given that it is uncertain whether Sinovac will
eventually be approved for HNTE status, Sinovac Beijing account for its current
and deferred income tax utilizing the enacted statutory tax rate of 25% as the
applicable enterprises income tax rate for 2008.
event that Sinovac Beijing reconfirms its HNTE status in accordance with the
HNTE guidelines, a 15% corporate income tax rate would be retroactive to January
1, 2008, according to the newly enacted Enterprises Income Tax Law. Assuming
HNTE is received, the impact on the results of operations for the nine months
ended September 30, 2008 would include a $1,667,726 decrease in the provision of
the current income tax with a corresponding reduction in the income tax
liability and a $905,687 increase in deferred income tax expense with an offset
to deferred income tax assets. The change of rate will be recorded in the period
September 30, 2008, Sinovac's cash and cash equivalents totaled $20.5 million,
compared to $18.8 million as of June 30, 2008. The 9% increase in
cash and cash equivalents compared to the second quarter of 2008 was primarily
attributable to improved accounts receivables collection.
Months Ended September 30, 2008
nine months ended September 30, 2008, sales reached $34.1 million, compared to
$24.3 million for the same period of 2007, representing a 40% growth
the nine months ended September 30, 2008, Sinovac sold 5.3 million doses of
compared to 4.1 million doses for the same period of 2007. The
Company sold 234,000 doses of Bilive during
the 2008 period, compared to nil doses in the prior year period. As
mentioned previously, the year-over-year change in sales was in line with the
Company's sales and marketing strategy. For the first nine months of 2008,
Healive, Anflu, and Bilive as a percentage of sales represented 91%, 5% and 4%,
profit for nine months ended September 30, 2008 was $28.8 million, with a gross
margin of 84.4%, compared to $20.7 million and 85.2% for the same period of
2007. The change in gross margin as a percentage of sales was primarily
attributable to the product sales mix during the 2008 period.
operating expenses for the nine months ended September 30, 2008 were $16.4
million, compared to $10.6 million for the same period 2007. Selling, general
and administrative expenses for the nine months ended September 30, 2008 were
$13.4 million, compared to $9.5 million in the same period of 2007. SG&A
expenses as a percentage of sales represented 39% in the 2008 period, compared