China Health Industries Holdings, Inc. Reports Financial Results for the First Quarter Ended September 30, 2019

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,
2019

June 30,
2019

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,
2019

September 30,
2018

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

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/49749

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