China Health Industries Holdings, Inc. Reports Financial Results for the First Quarter Ended September 30, 2019
November 14, 2019 11:51 AM EST | Source: China Health Industries Holdings, Inc.
Harbin, China--(Newsfile Corp. - November 14, 2019) - China Health Industries Holdings, Inc. (OTCQB: CHHE) ("China Health Industries", the "Company" or "Us") (www.chinahealthindustries.com) is a holding company vertically integrated with the operations in its subsidiaries in China, specializing in R&D, production, marketing and distribution of hemp derivative products, medicines and health supplement products, today announced the financial results for its first quarter ended September 30, 2019.
Mr. Xin Sun, Chief Executive Officer and Chairman of China Health Industries, commented, "We are pleased to report our financial results for the first quarter of our 2020 fiscal year. Our revenue decreased by 4.10% for the three months ended September 30, 2019, as compared to the same period in 2018. However, our net income increased by 19.67% for the three months ended September 30, 2019, as compared to the same period in 2018. We continue to focus on developing, manufacturing and distributing new hemp derivative products".
First Quarter of Fiscal 2020 Selected Financial Results
For the Three Months Ended September 30, 2019:
September 30, | September 30, | |||||||||||||||
2019 | 2018 | Variance | % | |||||||||||||
Revenues | $ | 2,053,924 | $ | 2,141,825 | $ | (87,901 | ) | (4.10 | )% | |||||||
Humankind | 2,026,989 | 2,125,508 | (98,519 | ) | (4.64 | )% | ||||||||||
HLJ Huimeijia | 26,935 | 16,317 | 10,618 | 65.07 | % | |||||||||||
Cost of Goods Sold | $ | 508,896 | $ | 473,741 | $ | 35,155 | 7.42 | % | ||||||||
Humankind | 473,888 | 453,276 | 20,612 | 4.55 | % | |||||||||||
HLJ Huimeijia | 35,008 | 20,465 | 14,543 | 71.06 | % | |||||||||||
Gross Profit | $ | 1,545,028 | $ | 1,668,084 | $ | (123,056 | ) | (7.38 | )% | |||||||
Humankind | 1,553,101 | 1,672,232 | (119,131 | ) | (7.12 | )% | ||||||||||
HLJ Huimeijia | (8,073 | ) | (4,148 | ) | (3,925 | ) | 94.63 | % | ||||||||
Net Income | $ | 756,574 | 632,214 | 124,360 | 19.67 | % | ||||||||||
Earnings Per Share | $ | 0.0115 | 0.0096 |
Revenue
Total revenues decreased by $87,901 or 4.10% for the three months ended September 30, 2019, as compared to the same period in 2018. The decrease in revenues was primarily due to a decrease of $98,519 or 4.64% in Humankind's revenues, offset by an increase of $10,618 in HLJ Huimeijia's revenues for the three months ended September 30, 2019 as compared to the same period in 2018. The decrease in Humankind's sales revenues was mainly due to two reasons. Firstly, the sale percentage of products with lower price increased for the three months ended September 30, 2019 compared with the same period in 2018. Secondly, the increasing exchange rate from Renminbi to the U.S. dollar led to the decrease of revenues.
Cost of Goods Sold
Our total cost of sales increased by $35,155 or 7.42% for the three months ended September 30, 2019 as compared to the same period in 2018. The increased cost of the main business was mainly due to that the sale percentage of products with higher cost increased for the three months ended September 30, 2019 compared with the same period in 2018. The increase in HLJ Huimeijia's cost of sales was primarily due to the increase of the sales volume.
Gross Margin
Our gross margin decreased by $123,056 or 7.38% for the three months ended September 30, 2019 as compared to the same period in 2018. This change was consistent with the change of sales and costs in Humankind. As HLJ Huimeijia resumed production for a short period of time, the output of the product is small, but the fixed cost of the apportionment has not decreased, resulting in high cost of the product. After the Company operates normally, the cost will return to a reasonable level.
Net Income and Earnings Per Share
Net Income was $756,574 for the three months ended September 30, 2019, as compared to $632,214 for the three months ended September 30, 2018. This increase of $124,360 in net profit was primarily attributable to a decrease of operating expenses $249,362 in Humankind.
Earnings per share was $0.0115 for the three months ended September 30, 2019 and $0.0096 for the three months ended September 30, 2018, respectively. This increase was primarily a result of the aforementioned increase in net profit.
About Us
China Health Industries Holdings, Inc. (www.chinahealthindustries.com) is a holding company vertically integrated with the operations in its subsidiaries in China, specializing in R&D, production, marketing and distribution of hemp derivative products, medicines and health supplement products.
China Health owns GMP certified plants and facilities, manufactures 21 CFDA approved medicines 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 medicines, externally used medicines and health foods.
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
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
September 30, | June 30, | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 34,981,352 | $ | 35,507,535 | ||||
Accounts receivable, net | 1,829,792 | 1,987,505 | ||||||
Inventory | 818,597 | 857,239 | ||||||
Other receivables, net | 29,668 | 28,435 | ||||||
Advances to suppliers | 198,288 | 8,619 | ||||||
Prepayments | - | 15,868 | ||||||
Total current assets | 37,857,697 | 38,405,201 | ||||||
Property, plants and equipment, net | 3,500,965 | 3,719,424 | ||||||
Intangible assets, net | 2,561,024 | 2,782,869 | ||||||
Construction in progress | 881,319 | 835,452 | ||||||
Prepayments - Non-Current | 4,664 | 9,709 | ||||||
Deferred tax assets | 2,148 | 2,235 | ||||||
Total assets | $ | 44,807,817 | $ | 45,754,890 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable and accrued expenses | $ | 438,736 | $ | 497,084 | ||||
Other payables | 33,825 | 74,121 | ||||||
Advances from customers | 181,711 | 153,613 | ||||||
Related party debts | 6,907,949 | 6,962,520 | ||||||
Wages payable | 229,444 | 265,686 | ||||||
Taxes payable | 570,420 | 619,403 | ||||||
Total current liabilities | 8,362,085 | 8,572,427 | ||||||
Equity | ||||||||
Common stock, ($0.0001 par value per share, 300,000,000 shares authorized, 65,539,737 and 65,539,737 shares issued and outstanding as of September 30, 2019 and June 30, 2019, respectively) | 6,554 | 6,554 | ||||||
Additional paid-in capital | 521,987 | 521,987 | ||||||
Accumulated other comprehensive income | (2,086,956 | ) | (593654 | ) | ||||
Statutory reserves | 38,679 | 38,679 | ||||||
Retained earnings | 37,965,468 | 37,208,897 | ||||||
Total stockholders' equity | 36,445,732 | 37,182,463 | ||||||
Total liabilities and equity | $ | 44,807,817 | $ | 45,754,890 |
CHINA HEALTH INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(UNAUDITED)
For the Three Months Ended | ||||||||
September 30, | September 30, | |||||||
REVENUE | $ | 2,053,924 | $ | 2,141,825 | ||||
COST OF GOODS SOLD | (508,896 | ) | (473,741 | ) | ||||
GROSS PROFIT | 1,545,028 | 1,668,084 | ||||||
OPERATING EXPENSES | ||||||||
Selling, general and administrative expenses | 366,988 | 613,992 | ||||||
Depreciation and amortization expenses | 139,164 | 141,522 | ||||||
Total operating income (expenses) | (506,152 | ) | 755,514 | |||||
INCOME FROM OPERATIONS | 1,038,876 | 912,570 | ||||||
OTHER INCOME/(EXPENSES) | ||||||||
Interest income | 30,748 | 28,126 | ||||||
Interest expenses | (1 | ) | (2 | ) | ||||
Other income/(expenses), net | (417 | ) | (376 | ) | ||||
Bank charges | (125 | ) | (435 | ) | ||||
Total other income, net | 30,205 | 27,313 | ||||||
INCOME BEFORE INCOME TAXES | 1,069,081 | 939,883 | ||||||
Provision for income taxes | (312,507 | ) | (307,669 | ) | ||||
NET INCOME | 756,574 | 632,214 | ||||||
Foreign currency translation loss | (1,493,305 | ) | (1,298,123 | ) | ||||
COMPREHENSIVE LOSS | $ | (736,731 | ) | $ | (665,909 | ) | ||
Basic & diluted loss per share | $ | 0.0115 | $ | 0.0096 | ||||
Weighted average shares outstanding: | ||||||||
Basic & diluted weighted average shares outstanding | 65,539,737 | 65,539,737 |
CHINA HEALTH INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
Common Shares | Additional Paid-in | Retained | Statutory | Accumulated Other Comprehensive | Total Stockholders' | Non-controlling | Total | |||||||||||||||||||||||||||||
Shares | Amount | Capital | Earnings | Reserve | Income (loss) | Equity | Interest | Equity | ||||||||||||||||||||||||||||
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 | - | - | - | 632,214 | - | - | 632,214 | - | 632,214 | |||||||||||||||||||||||||||
Other comprehensive loss - Translation adjustment | (1,298,127 | ) | (1,298,127 | ) | - | (1,298,127 | ) | |||||||||||||||||||||||||||||
Balance, September30, 2019 | 65,539,737 | 6,554 | 521,987 | 34,534,072 | 38,679 | (522,825 | ) | 34,578,467 | 34,578,467 | |||||||||||||||||||||||||||
Balance, June 30, 2019 | 65,539,737 | $ | 6,554 | $ | 521,987 | 37,208,897 | 38,679 | (593,654 | ) | 37,182,463 | - | 37,182,463 | ||||||||||||||||||||||||
Net income | - | - | - | 756,574 | - | - | 756,574 | - | 756,574 | |||||||||||||||||||||||||||
Other comprehensive loss - Translation adjustment | - | - | - | - | - | (1,493,305 | ) | (1,493,305 | ) | - | (1,493,305 | ) | ||||||||||||||||||||||||
Balance, September30, 2019 | 65,539,737 | $ | 6,554 | $ | 521,987 | $ | 37,965,471 | $ | 38,679 | $ | (2,086,959 | ) | $ | 36,445,732 | $ | - | $ | 36,445,732 |
CHINA HEALTH INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Three Months Ended | ||||||||
September 30, | September 30, | |||||||
2019 | 2018 | |||||||
Cash Flows from Operating Activities | ||||||||
Net income (loss) from operations | $ | 756,574 | $ | 632,214 | ||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
Depreciation and amortization expenses | 199,936 | 193,804 | ||||||
Provisions for doubtful accounts | (38,076 | ) | 77 | |||||
Deferred taxes loss/(gain) | (1 | ) | (340 | ) | ||||
Changes in operating assets and liabilities, | ||||||||
Accounts receivable | 114,918 | (657,334 | ) | |||||
Other receivables | (2,397 | ) | (95 | ) | ||||
Inventory | 5,047 | (233,098 | ) | |||||
Advances to suppliers and prepaid expenses | (173,318 | ) | 91,004 | |||||
Accounts payables and accrued expenses | (39,622 | ) | 72,328 | |||||
Advances from customers and other payables | (3,340 | ) | 17,333 | |||||
Amounts due to related parties | 204,918 | 274,512 | ||||||
Wages payable | (26,289 | ) | 32,126 | |||||
Taxes payable | (46,883 | ) | 250,981 | |||||
Net cash provided by operating activities | 951,467 | 673,512 | ||||||
Cash Flows from Investing Activities | ||||||||
Purchases of property, plants and equipment | (573 | ) | (101,072 | ) | ||||
Expenditures in construction in progress | (108,529 | ) | (66,088 | ) | ||||
Disposal of property, plant and equipment | 5,844 | - | ||||||
Net cash provided by (used in) investing activities | (103,258 | ) | (167,160 | ) | ||||
Cash Flows from Financing Activities | ||||||||
Proceeds from related party debts | - | - | ||||||
Net cash provided by financing activities | - | - | ||||||
Effect of exchange rate changes on cash and cash equivalents | (1,374,392 | ) | (1,181,074 | ) | ||||
Net decrease in cash and cash equivalents | (526,183 | ) | (674,722 | ) | ||||
Cash and cash equivalents, beginning balance | 35,507,535 | 32,614,910 | ||||||
Cash and cash equivalents, beginning balance | 34,981,352 | 31,940,188 | ||||||
Supplemental cash flow information | ||||||||
Cash paid for income taxes | $ | 342,634 | $ | 91,286 | ||||
Cash paid for interest expenses | $ | - | $ | - | ||||
Non-cash activities: | ||||||||
Loan from related party for the construction of a facility | $ | 680,382 | $ | 516,923 |
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