China Health Industries Holdings, Inc. Announces Sales Up 42% in 2019 Fiscal Year

Harbin, China--(Newsfile Corp. - September 11, 2019) - China Health Industries Holdings, Inc. (OCTQB: CHHE) ("China Health Industries", the "Company", "We" or "Us") , a holding company with the operations in its subsidiaries in China, specializing in research & development, production, marketing and distribution of hemp derivative products, medical drugs and health supplements, today announced the financial results for the fiscal year ended June 30, 2019.

Mr. Xin Sun, Chief Executive Officer and Chairman of China Health Industries, commented, "We are pleased to report our strong financial results for the 2019 fiscal year. Our revenue increased to $9,275,386 for the 2019 fiscal year compared to $6,554,939 for the previous year. Our net income increased to $3,307,039 for the 2019 fiscal year compared to net loss of $316,827 for the previous year. In the year of 2019, we applied for new CBD (cannabidiol) patents and strengthened our capacity of research & development and innovation. We will continue developing, manufacturing and distributing new hemp derivative products and plan to launch more hemp derivative products and deliver them into the market.

Fiscal Year 2019 Financial Highlights

  June 30, June 30,    
  2019 2018 Variance %
Revenues $ 9,275,386 $ 6,554,939 $ 2,720,447 42%
Cost of Goods Sold $ 2,238,011 $ 4,279,635 ($2,041,624) (48%)
Gross Profit $ 7,037,375 $ 2,275,304 $ 4,762,071 209%
Net Income (Loss) $ 3,307,039 ($316,827) $ 3,623,866  
Net Income (Loss) per Share $ 0.0505 ($0.0043) $ 0.0548  

 

Revenues increased by $2,720,447, or 42%, for the year ended June 30, 2019 as compared to the year ended June 30, 2018.

Cost of sales decreased by $2,041,624 or 48% for the year ended June 30, 2019 as compared to the year ended June 30, 2018.

Our gross profit increased by $4,762,071 from $2,275,304 for the year ended June 30, 2018 to $7,037,375 for the year ended June 30, 2019.

Net income after provision for income taxes increased to $3,307,039, an increase of $3,623,866 for the year ended June 30, 2019, as compared to net loss of $316,827 for the year ended June 30, 2018.

Net income per share was $0.0505 for the year ended June 30, 2019 and net loss per share was $0.0043 for the year ended 2018.

Fiscal Year 2019 Financial Results

The following table summarizes the top lines of the results of our operations for the years ended June 30, 2019 and 2018, respectively:

  June 30, June 30,    
  2019 2018 Variance %
Revenues $9,275,386 $6,554,939 $2,720,447 42%
   Humankind 9,203,087 6,476,253 2,726,834 42%
   HLJ Huimeijia 72,299 78,686 (6,387) (8%)
Cost of Goods Sold $2,238,011 $4,279,635 $(2,041,624) (48%)
   Humankind 2,118,239 4,012,551 (1,894,312) (47%)
   HLJ Huimeijia 119,772 267,084 (147,312) (55%)
Gross Profit $7,037,375 $2,275,304 $ 4,762,071 209%
   Humankind 7,084,848 2,463,702 4,621,146 188%
   HLJ Huimeijia (47,473) (188,398) 140,925 (75%)
Net Income (Loss) $3,307,039 ( $316,827) $3,623,866
Net Income (Loss) per Share $0.0505 ( $0.0043) $0.0548

 

Revenue

Total revenues of the Company increased by $2,720,447, or 42%, for the year ended June 30, 2019 as compared to the same period in 2018. The increase in revenues was primarily due to an increase of $2,726,834 or 42% in Humankind's revenues and a decrease of $6,387 or 8% in HLJ Huimeijia's revenues for the year ended June 30, 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.

Cost of Goods Sold

Our total cost of sales decreased by $2,041,624 or 48% for the year ended June 30, 2019 as compared to the same period in 2018. The decrease in the overall cost of sales was attributable to a decrease of $1,894,312 or 47% in Humankind's cost of sales in 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 hemp derivative products and the fact that the old products such as Waterlilies Soft Capsules (Sailuozhi) and Propolis and Black Ant Capsules were no longer sold in the year ended June 30, 2019 compared with 2018.

Gross Profit

Our gross profit increased by $4,762,071 from $2,275,304 for the year ended June 30, 2018 to $7,037,375 for the year ended June 30, 2019. This change was consistent with the change in the main hemp derivative products which have higher gross margin than the old products in Humankind.

Net Income (Loss) and Net Income per Share

Net income after provision for income taxes increased to $3,307,039, an increase of $3,623,866 for the year ended June 30, 2019, as compared to net loss of $316,827 for the year ended June 30, 2018. The increase was primarily due to the increase of gross margin.

Net income per share was $0.0505 for the year ended June 30, 2019 and net loss per share was $0.0043 for the year ended 2018. This increase was primarily a result of the above increase in net income from the Company's continuing operations.

About Us

China Health Industries Holdings, Inc. (www.chinahealthindustries.com) is a holding company with the operations in its subsidiaries in China, specializing in research & development, production, marketing and distribution of hemp derivative products, medical drugs and health supplements.

China Health Industries 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.

* GMP (Good Manufacturing Practice) is a term that is recognized worldwide for the control and management of manufacturing and quality control testing of foods and pharmaceutical products.

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: 86-451-87170800 ext. 8869
Email: ir@chinahealthindustries.com

CHINA HEALTH INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Audited)

   June 30, June 30,
  2019        2018
ASSETS    
     
Current assets    
   Cash and cash equivalents $35,507,535 $ 32,614,910
   Accounts receivable, net 1,987,505 1,455,433
   Inventory 857,239 452,397
   Other receivables, net 28,435 30,611
   Advances to suppliers 8,619 94,749
   Prepayments 15,868 20,462
Total current assets 38,405,201 34,668,562
     
Property, plants and equipment, net 3,719,424 3,724,490
Intangible assets, net 2,782,869 3,372,501
Construction in progress 835,452 1,134,834
Deferred tax assets 2,235 1,970
Prepayments – Non-Current 9,709 30,212
Total assets $45,754,890 $ 42,932,569
LIABILITIES AND EQUITY    
     
Current liabilities    
   Accounts payable and accrued expenses 497,084 400,109
   Other payables 74,121 67,800
   Advances from customers 153,613 163,459
   Related party debts 6,962,520 6,393,730
   Wages payable 265,686 234,668
   Taxes payable 619,403 428,423
Total current liabilities 8,572,427 7,688,189
     
Equity    
       Common stock, ($0.0001 par value per share, 300,000,000 shares authorized, 65,539,737 and    
       65,839,737 shares issued and outstanding as of June 30, 2019 and June 30, 2018, respectively) 6,554 $ 6,554
   Additional paid-in capital 521,987 $ 521,987
   Accumulated other comprehensive income (593,654) $ 775,302
   Statutory reserves 38,679 $ 38,679
   Retained earnings 37,208,897 $33,901,858
Total stockholders’ equity 37,182,463 $35,244,380
Total equity 37,182,463 $35,244,380
     
Total liabilities and equity $45,754,890 $42,932,569

 

CHINA HEALTH INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Audited)

     For the Year Ended
     June 30, June 30,
  2019 2018
REVENUE $ 9,275,386 $6,554,939
COST OF GOODS SOLD      2,238,011 4,279,635
GROSS PROFIT      7,037,375 2,275,304
OPERATING EXPENSES    
   Selling, general and administrative expenses 1,864,636 2,246,327
   Depreciation and amortization expenses 610,821 495,835
       Total operating expenses 2,475,457 2,742,162
     
INCOME (LOSS) FROM OPERATIONS 4,561,918 (466,858)
     
OTHER INCOME/(EXPENSES)    
   Interest income 114,228 110,591
   Interest expense (6) (49,408)
   Other income, net 15,681 353,461
   Bank charges (1,119) (1,548)
       Total other income, net 128,784 413,096
     
INCOME (LOSS) 4,690,702 (53,762)
     
Provision for income taxes (1,383,663) (263,065)
     
NET INCOME (LOSS) 3,307,039 (316,827)
     
Foreign currency translation adjustment (1,368,956) 853,351
COMPREHENSIVE INCOME (LOSS) $ 1,938,083 $ 536,524
     
Net income/(loss) per share:    
Net income per share Basic & diluted $ 0.0505 $ (0.0048)
     
Weighted average shares outstanding:    
   Basic & diluted 65,539,737 65,539,737

 

CHINA HEALTH INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Audited)

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, 2017 65,539,737 $6,554 $521,987 $34,218,685 $38,679 $(78,049) $34,707,856 $- $34,707,856
Net income - - - (316,827) - - (316,827 ) - $(316,827 )
Other comprehensive loss - Translation adjustment - - - - - 853,351 853,351 - 853,351
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 - - - 3,307,039 - - 3,307,039 - $3,307,039
Other comprehensive loss - Translation adjustment - - - - - (1,368,956) (1,368,956) - (1,368,956)-
Balance, June 30, 2019 65,539,737 $6,554 $521,987 37,208,897 38,679 (593,654) 37,182,463 - 37,182,463

 

CHINA HEALTH INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Audited)

  For the Year Ended
  June 30,  June 30,
  2019 2018
Cash Flows from Operating Activities    
   Net income attributable to China Health Industries Holdings $ 3,307,039 $ (316,827)
     
Adjustments to reconcile net income to net cash provided by operating    
activities:    
       Depreciation and amortization expenses 817,679 668,748
       Provision for doubtful accounts (136,860) 7,747
       Deferred taxes gain (339) -
   Changes in operating assets and liabilities:    
       Inventory (268,187) 13,248
       Accounts receivable (606,897) 205,336
       Other receivables 1,082 3,516
       Advance to suppliers and prepaid expenses 106,672 403,250
       Accounts payables and accrued expenses 111,997 (48,484)
       Advance from customers and other payables 4,817 (2,472)
       Amounts due to related parties 1,541,573 2,543,725
       Wages payable 39,711 (33,680)
       Taxes payable 197,098 (454,721)
   Net cash provided by operating activities 5,115,385 2,989,386
Net cash provided by operating activities $ 5,115,385 $ 2,989,386
     
Cash Flows from Investing Activities    
       Withdraw of short term investment - 9,221,707
       Purchase of property, plant and equipment (127,826) (74,475)
       Expenditure in construction in progress (25,750) (332,736)
       Disposal of property, plant and equipment 29,581 31,022
       Proceeds from short term investment - 922,171
       Proceeds from disposal of subsidiary - -
   Net cash (used in)/provided by investing activities (123,995) 9,767,689
     
Cash Flows from Financing Activities    
       Proceed from related party debts - 85,085
       Payment of short term loans - (1,536,951)
   Net cash (used in)/provided by financing activities - (1,451,866)
Effect of exchange rates change on cash and cash equivalents (2,098,765) 112,253
     
Net increase/(decrease) in cash and cash equivalents 2,892,625 11,417,462
     
Cash and cash equivalents, beginning of period 32,614,910 21,197,448
Cash and cash equivalents, end of period $ 35,507,535 $32,614,910
Supplemental disclosure of cash flow information    
   Interest paid $ - $ 49,403
   Taxes paid $ 829,157 $ 541,519
Non-cash activities:    
   Loan from related party for the construction of a facility $ 587,323 $ 489,928

 

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