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China Health Industries Holdings, Inc. Reports Financial Results for the Third Quarter Ended March 31, 2020
May 15, 2020 8:00 AM EDT | Source: China Health Industries Holdings, Inc.
Harbin, China--(Newsfile Corp. - May 15, 2020) - China Health Industries Holdings, Inc. (OTCQB: CHHE) ("China Health Industries", the "Company" 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, medicines and health supplement products, today announced the financial results for its third quarter ended March 31, 2020.
Mr. Xin Sun, Chief Executive Officer and Chairman of China Health Industries, commented, "We are pleased to report our financial results for the third quarter of our 2020 fiscal year. Our revenue increased by 10.03% for the three months ended March 31, 2020 compared to the same period of the previous year as the increased demand of hemp polypeptide and hemp protein powder by the market. Affected by COVID-19, the company ceased production in February 2020, and the company has obtained government approval for reinstatement in early March. In the short term, our business could be adversely affected by the effects of COVID-19, and the company's sales revenue growth would be affected, but in the medium to long term it has no impact on sales revenue. Because the company sells products such as hemp protein powder and hemp polypeptide, as the understanding of COVID-19 continues to deepen, consumers will realize that strengthening their own immunity and resistance is the effective way to fight COVID-19, and the consumers will pay attention to strengthen of physical fitness, the consumption of protein powder, protein peptides and other health foods, and our products will be more popular with customers."
Third Quarter of Fiscal 2020 Selected Financial Results
For the Three Months Ended March 31, 2020:
| March 31, | March 31, | |||||||||||||||||
| 2020 | 2019 | Variance | % | |||||||||||||||
| Revenues | $ | 2,423,720 | $ | 2,202,739 | $ | 220,981 | 10.03 | % | ||||||||||
| Humankind | 2,421,935 | $ | 2,192,680 | $ | 229,255 | 10.46 | % | |||||||||||
| HLJ Huimeijia | 1,785 | 10,059 | (8,274 | ) | (82.25 | )% | ||||||||||||
| Cost of Goods Sold | $ | 566,692 | $ | 506,623 | $ | 60,069 | 11.86 | % | ||||||||||
| Humankind | 565,409 | $ | 492,569 | $ | 72,840 | 14.79 | % | |||||||||||
| HLJ Huimeijia | 1,283 | 14,054 | (12,771 | ) | (90.87 | )% | ||||||||||||
| Gross Profit | $ | 1,857,028 | $ | 1,696,116 | $ | 160,912 | 9.49 | % | ||||||||||
| Humankind | 1,856,526 | 1,700,111 | 156,415 | 9.20 | % | |||||||||||||
| HLJ Huimeijia | 502 | (3,995 | ) | 4,497 | 112.57 | % | ||||||||||||
| Net Income | $ | 992,722 | $ | 767,929 | 224,793 | 29.27 | % | |||||||||||
| Net Income Per Share | 0.0151 | 0.0117 | 0.0034 | 29.06 | % | |||||||||||||
Revenue
Total revenues increased by $220,981 or 10.03% for the three months ended March 31, 2020, as compared to the same period in 2019. The increase in revenues was primarily due to an increase of $229,255 or 10.55% in Humankind's revenues for the three months ended March 31, 2020, as compared to the same period in 2019. The increase in Humankind's sales revenues was primarily due to the increased demand of Hemp Polypeptide and Hemp Protein Powder.
Cost of Goods Sold
Our total cost of sales increased by $60,069 or 11.86% for the three months ended March 31, 2020 as compared to the same period in 2019. The increase in the overall cost of sales was attributed to the decrease of $72,840 or 14.79% Humankind's cost of sales for the three months ended March 31, 2020 as compared to the same period in 2019. This increase aligned with the increase in sales volume of products sold by Humankind. The growth ratio of cost of goods sold was consistent with the figure of sales for the three months ended March 31, 2020 as compared to the same period in 2019.
Gross Profit
Our gross margin increased by $160,912 or 9.49% for the three months ended March 31, 2020 as compared to the same period in 2019. This change was consistent with the change of sales and costs in Humankind. The gross margin of HLJ Huimeijia increased by $4,497 or 112.57% for the three months ended March 31, 2020 as compared to the same period in 2019. The increase was primarily due to that HLJ Huimeijia completed a processing transaction for drying raw materials of traditional Chinese medicine of which the gross margin was higher during the three months ended March 31, 2020.
Net Income and Net Income Per Share
Net income was $992,722 for the three months ended March 31, 2020, as compared to $767,929 for the three months ended March 31, 2019. This increase of $224,793 in net income was primarily attributable to an increase of gross margin.
Net income per share was $0.0151 for the three months ended March 31, 2020, and net income per share was $0.0117 for the three months ended March 31, 2019, respectively. This increase was primarily a result of the aforementioned increase in net profit.
For the Nine Months Ended March 31, 2020:
| March 31, | March 31, | |||||||||||||||||
| 2020 | 2019 | Variance | % | |||||||||||||||
| Revenues | $ | 7,899,632 | $ | 7,058,721 | $ | 840,911 | 11.91 | % | ||||||||||
| Humankind | 7,862,018 | $ | 7,003,073 | $ | 858,945 | 12.27 | % | |||||||||||
| HLJ Huimeijia | 37,614 | 55,648 | (18,034 | ) | (32.41 | )% | ||||||||||||
| Cost of Goods Sold | $ | 1,762,098 | $ | 1,668,440 | $ | 93,658 | 5.61 | % | ||||||||||
| Humankind | 1,721,279 | $ | 1,599,002 | $ | 122,277 | 7.65 | % | |||||||||||
| HLJ Huimeijia | 40,819 | 69,438 | (28,619 | ) | (41.22 | )% | ||||||||||||
| Gross Profit | $ | 6,137,534 | $ | 5,390,281 | $ | 747,253 | 13.86 | % | ||||||||||
| Humankind | 6,140,739 | 5,404,071 | 736,668 | 13.63 | % | |||||||||||||
| HLJ Huimeijia | (3,205 | ) | (13,790 | ) | 10,585 | 76.76 | % | |||||||||||
| Net Income | $ | 3,175,880 | 2,517,410 | 685,470 | 27.23% | |||||||||||||
| Net Income Per Share | 0.0485 | 0.0384 | 0.0101 | 26.30% | ||||||||||||||
Revenue
Total revenues increased by $849,811 or 11.91% for the nine months ended March 31, 2020, as compared to the same period in 2019. The increase in revenues was primarily due to an increase of $858,945 or 12.27% in Humankind's revenues, which was primarily due to the increased demand of Hemp Polypeptide and Hemp Protein Powder.
Cost of Goods Sold
Our total cost of sales increased by $93,658 or 5.61% for the nine months ended March 31, 2020, as compared to the same period in 2019. The increase in the overall cost of sales was mainly due to the cost of sales of Humankind increased by$122,277 or 7.65%, which was consistent with the growth of sales for the nine months ended March 31, 2020 as compared to the same period in 2019.
Gross Profit
Our gross margin increased by $747,253, from $5,390,281 for the nine months ended March 31, 2019 to $6,137,534 for the nine months ended March 31, 2020. This growth was consistent with the increase of sales and costs in Humankind. The gross margin of HLJ Huimeijia increased by $10,585 or 76.76% for the nine months ended March 31, 2020 as compared to the same period in 2019. The increase was primarily due to that HLJ Huimeijia completed a processing transaction for drying raw materials of traditional Chinese medicine of which the gross margin was higher during the nine months ended March 31, 2020.
Net Income (Loss) and Net Income (Loss) Per Share
Net income was $3,175,880 for the nine months ended March 31, 2020, as compared to $2,517,410 for the nine months ended March 31, 2019. This increase of $685,470 was primarily attributable to an increase of gross margin.
Net income per share was $0.0485 for the nine months ended March 31, 2020 and $0.0384 for the nine months ended March 31, 2019. This increase was primarily a result of the above-mentioned increase in net income.
Liquidity and Capital Resources
The following table summarizes our cash and cash equivalents positions, our working capital, and our cash flow activities as of March 31, 2020 and June 30, 2019 and for the nine months ended March 31, 2020 and 2019:
| March 31, 2020 | June 30, 2019 | |||||||
| Cash and cash equivalents | $ | 36,593,609 | $ | 35,219,487 | ||||
| Working capital | $ | 32,539,427 | $ | 29,595,941 | ||||
| Inventories | $ | 840,597 | $ | 954,019 | ||||
| 2020 | 2019 | |||||||
| For the nine months ended March 31: | ||||||||
| Cash provided by (used in): | ||||||||
| Operating activities | $ | 2,044,984 | $ | 3,206,439 | ||||
| Investing activities | $ | (152,362 | ) | $ | (208,581 | ) | ||
| Financing activities | $ | - | $ | - | ||||
Our working capital as of March 31, 2020 was $32,539,427, compared to working capital of $29,595,941 as of June 30, 2019. This increase of $2,943,486 or 9.95% was primarily attributable to the increase of cash and cash equivalents and accounts receivable in the amount of $1,374,122 and $1,614,178, respectively in the nine months ended March 31, 2020.
About Us
China Health Industries Holdings, Inc. is a holding company with the operations in its subsidiaries in China, specializing in research & development, production, marketing and distribution of hemp derivative products, medicines and health supplement products.
China Health Industries 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. For more information about the Company, please visit www.chinahealthindustries.com. The Company routinely posts important information on its website.
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)
March 31, | June 30, | |||||
ASSETS | ||||||
Current assets | ||||||
Cash and cash equivalents | $ | 36,593,609 | $ | 35,507,535 | ||
Accounts receivable, net | 3,601,683 | 1,987,505 | ||||
Inventory | 840,597 | 857,239 | ||||
Other receivables, net | 31,183 | 28,435 | ||||
Advances to suppliers | 205,386 | 8,619 | ||||
Prepayments | - | 15,868 | ||||
Total current assets | 41,272,458 | 38,405,201 | ||||
Property, plants and equipment, net | 3,774,844 | 3,719,424 | ||||
Intangible assets, net | 2,361,198 | 2,782,869 | ||||
Construction in progress | 510,522 | 835,452 | ||||
Prepayments - Non-Current | - | 9,709 | ||||
Deferred tax assets | 2,169 | 2,235 | ||||
Total assets | $ | 47,921,191 | $ | 45,754,890 | ||
LIABILITIES AND EQUITY | ||||||
Current liabilities | ||||||
Accounts payable and accrued expenses | 394,530 | 497,084 | ||||
Other payables | 26,690 | 74,121 | ||||
Advances from customers | 178,272 | 153,613 | ||||
Related party debts | 7,241,166 | 6,962,520 | ||||
Wages payable | 276,488 | 265,686 | ||||
Taxes payable | 615,885 | 619,403 | ||||
Total current liabilities | 8,733,031 | 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 March 31, 2020 and June 30, 2019, respectively) | 6,554 | 6,554 | ||||
Additional paid-in capital | 521,987 | 521,987 | ||||
Accumulated other comprehensive income | (1,763,837 | ) | (593,654 | ) | ||
Statutory reserves | 38,679 | 38,679 | ||||
Retained earnings | 40,384,777 | 37,208,897 | ||||
Total stockholders' equity | 39,188,160 | 37,182,463 | ||||
Total equity | 39,188,160 | 37,182,463 | ||||
Total liabilities and equity | $ | 47,921,191 | $ | 45,754,890 | ||
CHINA HEALTH INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME
(UNAUDITED)
For the Three Months | For the Nine Months | |||||||||||||||
March 31, | March 31, | March 31, | March 31, | |||||||||||||
REVENUE | $ | 2,423,720 | $ | 2,202,739 | $ | 7,899,632 | $ | 7,058,721 | ||||||||
COST OF GOODS SOLD | 566,692 | 506,623 | 1,762,098 | 1,668,440 | ||||||||||||
GROSS PROFIT | 1,857,028 | 1,696,116 | 6,137,534 | 5,390,281 | ||||||||||||
OPERATING EXPENSES | ||||||||||||||||
Selling, general and administrative expenses | 389,009 | 449,177 | 1,389,300 | 1,469,472 | ||||||||||||
Depreciation and amortization expenses | 145,817 | 180,166 | 435,733 | 464,446 | ||||||||||||
Total operating expenses | 534,826 | 629,243 | 1,825,033 | 1,933,918 | ||||||||||||
INCOME FROM OPERATIONS | 1,322,202 | 1,066,773 | 4,312,501 | 3,456,343 | ||||||||||||
OTHER INCOME/(EXPENSES) | ||||||||||||||||
Interest income | 31,801 | 28,815 | 93,842 | 83,531 | ||||||||||||
Interest expense | - | (2 | ) | (1 | ) | (5 | ) | |||||||||
Other income/(expenses), net | (1 | ) | 84 | (417 | ) | 15,681 | ||||||||||
Bank charges | (186 | ) | (205 | ) | (548 | ) | (914 | ) | ||||||||
Total other income, net | 31,614 | 28,692 | 92,876 | 98,293 | ||||||||||||
INCOME BEFORE INCOME TAXES | 1,353,816 | 1,095,465 | 4,405,377 | 3,554,656 | ) | |||||||||||
Provision for income taxes | (361,094 | ) | (327,536 | ) | (1,229,497 | ) | (1,037,246 | ) | ||||||||
NET INCOME | 992,722 | 767,929 | 3,175,880 | 2,517,410 | ||||||||||||
OTHER COMPREHENSIVE INCOME (LOSS) | ||||||||||||||||
Foreign currency translation loss | (677,194 | ) | 895,253 | (1,170,183 | ) | (447,807 | ) | |||||||||
COMPREHENSIVE INCOME | 315,528 | 1,663,182 | 2,005,697 | 2,069,603 | ||||||||||||
Basic & diluted income per share | $ | 0.0151 | $ | 0.0117 | $ | 0.0485 | $ | 0.0384 | ||||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic & diluted weighted average shares outstanding | 65,539,737 | 65,539,737 | 65,539,737 | 65,539,737 | ||||||||||||
CHINA HEALTH INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED MARCH 31, 2020 AND 2019
(UNAUDITED)
Common Shares |
|
|
|
|
| |||||||||||||||||||||||||
Shares | Amount | Additional | Retained | Statutory | Accumulated | Total | Non-controlling | Total | ||||||||||||||||||||||
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 | - | - | - | 2,517,410 | - | - | 2,517,410 | - | $ | 2,517,410 | ) | |||||||||||||||||||
Other comprehensive loss - Translation adjustment | - | - | - | - | - | (447,807 | ) | (447,807 | ) | - | (447,807 | |||||||||||||||||||
Balance, March 31, 2019 | 65,539,737 | $ | 6,554 | $ | 521,987 | 36,419,268 | 38,679 | 327,495 | 37,313,983 | - | 37,313,983 | |||||||||||||||||||
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 | - | - | - | 3,175,880 | - | - | 3,175,880 | - | $ | 3,175,880 | ||||||||||||||||||||
Other comprehensive loss - Translation adjustment | - | - | - | - | - | (1,170,183 | ) | (1,170,183 | ) | - | (1,170,183 | ) | ||||||||||||||||||
Balance, March 31, 2020 | 65,539,737 | $ | 6,554 | $ | 521,987 | 40,384,777 | 38,679 | (1,763,837 | ) | 39,188,160 | - | 39,188,160 | ||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
CHINA HEALTH INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2020 AND 2019
(UNAUDITED)
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, December 31, 2018 | 65,539,737 | $ | 6,554 | $ | 521,987 | 35,651,339 | 38,679 | (567,758 | ) | 35,650,801 | - | 35,650,801 | ||||||||||||||||||||||||
Net income | - | - | - | 767,929 | - | - | 767,929 | - | $ | 767,929 | ||||||||||||||||||||||||||
Other comprehensive loss - Translation adjustment | - | - | - | - | - | 895,253 | 895,253 | - | 895,253 | |||||||||||||||||||||||||||
Balance, March 31, 2019 | 65,539,737 | $ | 6,554 | $ | 521,987 | 36,419,268 | 38,679 | 327,495 | 37,313,983 | - | 37,313,983 | |||||||||||||||||||||||||
Balance, December 31, 2019 | 65,539,737 | $ | 6,554 | $ | 521,987 | $ | 39,392,055 | $ | 38,679 | $ | (1,086,643 | ) | $ | 38,872,632 | - | 38,872,632 | ||||||||||||||||||||
Net income | - | - | - | 992,722 | 992,722 | 992,722 | ||||||||||||||||||||||||||||||
Other comprehensive loss - Translation adjustment | - | - | - | - | - | (677,194 | ) | (677,194 | ) | - | (677,194 | ) | ||||||||||||||||||||||||
Balance, March 31, 2020 | 65,539,737 | $ | 6,554 | $ | 521,987 | 40,384,777 | 38,679 | (1,763,837 | ) | 39,188,160 | - | 39,188,160 | ||||||||||||||||||||||||
CHINA HEALTH INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Nine Months Ended | ||||||||
March 31, | March 31, | |||||||
2020 | 2019 | |||||||
Cash Flows from Operating Activities | ||||||||
Net income from operations | $ | 3,175,880 | $ | 2,517,410 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization expenses | 568,074 | 619,788 | ||||||
Provision for doubtful accounts | (35,936 | ) | 82 | |||||
Provision for inventories | - | (155,601 | ) | |||||
Deferred taxes loss | (1 | ) | (339 | ) | ||||
Changes in operating assets and liabilities, | ||||||||
Accounts receivable | (1,656,659 | ) | (562,752 | ) | ||||
Other receivables | (3,642 | ) | 1,969 | |||||
Inventory | (9,356 | ) | (343,902 | ) | ||||
Advance to suppliers and prepaid expenses | (173,894 | ) | 62,142 | |||||
Accounts payables and accrued expenses | (88,458 | ) | 96,497 | |||||
Advance from customers and other payables | (16,074 | ) | 232,195 | |||||
Amounts due to related parties | 478,665 | 445,204 | ||||||
Wages payable | 19,014 | 40,142 | ||||||
Taxes payable | (3,845 | ) | 253,604 | |||||
Net cash provided by operating activities | 2,253,768 | 3,206,439 | ||||||
Cash Flows from Investing Activities | ||||||||
Withdraw of short term investment | - | - | ||||||
Purchases of property, plant and equipment | (24,773 | ) | (189,106 | ) | ||||
Expenditure in construction in progress | (133,436 | ) | (19,475 | ) | ||||
Disposal of property, plant and equipment | 5,846 | - | ||||||
Proceeds from disposal of subsidiaries | - | |||||||
Net cash used in investing activities | (152,363 | ) | (208,581 | ) | ||||
Cash Flows from Financing Activities | ||||||||
Proceeds from related party debts | - | - | ||||||
Payment of short term loans | - | - | ||||||
Net cash provided by financing activities | - | - | ||||||
Effect of exchange rate changes on cash and cash equivalents | (1,015,331 | ) | (393,281 | ) | ||||
Net increase/(decrease) in cash and cash equivalents from continuing operations | 1,086,074 | 2,604,577 | ||||||
Cash and cash equivalents, beginning balance | 35,507,535 | 32,614,910 | ||||||
Cash and cash equivalents, ending balance | $ | 36,593,609 | $ | 35,219,487 | ||||
Supplemental cash flow information | ||||||||
Cash paid for income taxes | $ | 1,226,331 | $ | 829,119 | ||||
Cash paid for interest expense | $ | - | $ | - | ||||
Non-cash activities: | ||||||||
Loan from related party for the construction of a facility | $ | 729,669 | $ | 587,296 | ||||
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/55931