China Health Industries Holdings, Inc. Reports Financial Results for the Third Quarter Ended March 31, 2020

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,
2020



June 30,
2019

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
Ended



For the Nine Months
Ended




March 31,
2020



March 31,
2019



March 31,
2020



March 31,
2019















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
Paid-in
Capital


Retained
Earnings


Statutory
Reserve


Accumulated
Other
Comprehensive
Income (loss)


Total
Stockholders'
Equity


Non-controlling
Interest



Total
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


-



-




-



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

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