JI'AN, China,
Aug. 16,
2022 /PRNewswire/ -- Universe Pharmaceuticals
INC (the "Company") (Nasdaq: UPC), a pharmaceutical producer and
distributor in China, today
announced its unaudited financial results for the first six months
of fiscal year 2022 ended March 31,
2022.
Mr. Gang Lai, Chairman and CEO of Universe Pharmaceuticals INC,
commented, "During the first six months of fiscal year 2022, we
have navigated business uncertainties and adjusted our business
strategy to offset the impact of reduced product sales volume due
to the resurgence of COVID-19 cases and related lockdowns. As a
result, we generated $24.2 million in
revenue for the six months ended March 31,
2022, slightly lower than the same period of last year,
demonstrating the considerable efforts we made during this
challenging period. To complement our offline sales channels, we
established a strategic priority in developing online business
channels, which helps us to seize the opportunity and is expected
to drive our business growth in the fast-evolving market. Through
executing our growth strategy of emphasizing digital marketing and
expanding our sales on e-commerce platforms, we expect to improve
our brand recognition, deliver products to more customers, and
expand our business scale. Looking forward, we intend to continue
implementing our expansion strategy, which we believe will allow us
to achieve greater market penetration and expand our customer base,
with the goal creating long-term value for our shareholders."
Financial Highlights for the Six Months Ended March 31, 2022
|
|
For the Six Months
Ended March 31,
|
($ millions, except
per share data)
|
|
2022
|
|
2021
|
|
%
Change
|
Revenues
|
|
24.2
|
|
24.3
|
|
-0.4 %
|
Income from
operations
|
|
2.7
|
|
9.6
|
|
-71.8 %
|
Net income
|
|
1.7
|
|
7.1
|
|
-75.8 %
|
Earnings per
share
|
|
0.08
|
|
0.44
|
|
-81.8 %
|
- Revenues slightly decreased by 0.4% to $24.2 million for the six months ended
March 31, 2022 from $24.3 million for the six months ended
March 31, 2021, primarily
attributable to decreased sales volume of the Company's traditional
Chinese medicine derivatives ("TCMD") products and third-party
products by 2,454,463 units, or 17.3%, and the decreased average
selling price of third-party products by $0.32 per unit, or 14.7%, partially offset by the
increased average selling price of the Company's TCMD products by
$0.74 per unit, or 50.7%.
- Income from operations was $2.7
million for the six months ended March 31, 2022, representing a decrease of 71.8%
from an income from operations of $9.6
million for the six months ended March 31, 2021.
- Net income was $1.7 million for
the six months ended March 31, 2022,
representing a decrease of 75.8% from a net income of $7.1 million for the six months ended
March 31, 2021.
- Earnings per share was $0.08 for
the six months ended March 31, 2022,
representing a decrease of 81.8% from earnings per share of
$0.44 for the six months ended
March 31, 2021.
Financial Results for the Six Months Ended March 31, 2022 Compared to the Six Months Ended
March 31, 2021
Revenues
Total revenues decreased by $0.1
million, or 0.4%, to $24.2
million for the six months ended March 31, 2022, from $24.3
million for the six months ended March 31, 2021.
|
|
For the Six Months
Ended March 31,
|
|
|
2022
|
|
2021
|
($
millions)
|
|
Revenue
|
|
Cost of
revenue
|
|
Gross
margin
|
|
Revenue
|
|
Cost of
revenue
|
|
Gross
margin
|
TCMD products
sales
|
|
15.4
|
|
4.9
|
|
67.7 %
|
|
13.3
|
|
5.4
|
|
59.3 %
|
Third-party
products
sales
|
|
8.8
|
|
5.5
|
|
37.9 %
|
|
11.0
|
|
6.9
|
|
37.2 %
|
Total
|
|
24.2
|
|
10.4
|
|
56.8 %
|
|
24.3
|
|
12.3
|
|
49.3 %
|
Sales of TCMD products increased by $2.1
million, or 15.3%, to $15.4
million for the six months ended March 31, 2022, from $13.3
million for the six months ended March 31, 2021. The increase in the sales of the
TCMD products was due to an increase in the average selling price
of the Company's TCMD products by $0.74 per unit, or 50.7%, to $2.20 per unit in the six months ended
March 31, 2022, from $1.46 per unit in the six months ended
March 31, 2021.
Sales of third-party products decreased by $2.2 million, or 19.4%, to $8.8 million for the six months ended
March 31, 2022, from $11.0 million for the six months ended
March 31, 2021. Sales volume of
third-party products slightly decreased by 5.6%, to 4,763,265 units
sold in the six months ended March 31,
2022, from 5,043,984 units sold in the six months ended
March 31, 2021. In the six months
ended March 31, 2022, due to a change
in product mix, the Company's average selling price of third-party
products decreased by $0.32 per unit,
or 14.7%, to $1.86 per unit in the
six months ended March 31, 2022, from
$2.18 per unit in the six months
ended March 31, 2021.
Cost of revenues and Gross profit
Cost of revenues decreased by $1.9
million, or 15.1%, to $10.4
million for the six months ended March 31, 2022, from $12.3
million for the six months ended March 31, 2021.
Gross profit increased by $1.8
million to $13.8 million for
the six months ended March 31, 2022,
from $12.0 million for the six months
ended March 31, 2021. Gross margin
increased by 7.5% to 56.8% for the six months ended March 31, 2022, from 49.3% for the six months
ended March 31, 2021.
Operating expenses
Selling expenses increased by $7,970,484, or 718.5%, to $9,079,771 for the six months ended March 31, 2022, from $1,109,287 for the six months ended March 31, 2022, primarily attributable to (i) an
increase in advertising expenses by $7,952,604, or 2,979.8%, from $266,884 in the six months ended March 31, 2021, to $
8,219,488 in the six months ended March 31, 2022. In September 2021, the Company entered into an
advertising service agreement with a third party, Guangdong
Fengyang Legend Consulting Co., Ltd. ("Fengyang Legend"), pursuant
to which, Fengyang Legend agreed to assist the Company in
developing and producing a television advertisement for promoting
the sales of the Company's major TCMD products, Bai Nian Dan and
Guben Yanling Pill, and coordinating with a TV channel to broadcast
the advertisement to targeted geographic market areas. Pursuant to
the terms of this agreement, the Company made an advance payment in
the amount of 30% of the total advertising service fee to Fengyang
Legend, and the Company paid Fengyang Legend another 58% of the
total advertising service fee when the TV channel on which the
advertisement is broadcasted was determined. Since the Company's TV
advertisement was first broadcasted in October 2021, the Company's prepayment to
Fengyang Legend has been charged to advertising expenses during the
six months ended March 31, 2022,
which led to higher advertising expenses in the six months ended
March 31, 2022; (ii) an increase in
the Company's salary and benefit expenses paid to its sales
employees by $35,852, or 8.7%, from
$411,310 in the six months ended
March 31, 2021 to $447,162 in the six months ended March 31, 2022, and an increase in business
travel and meal expenses by $30,343,
or 111.8%, from $27,145 in the six
months ended March 31, 2021 to
$57,488 in the six months ended
March 31, 2022, primarily due to the
Company's increased sales activities during the six months ended
March 31, 2022; and (iii) a decrease
in shipping and delivery expenses by $45,538, or 11.6%, from $393,446 in the six months ended March 31, 2021 to $347,908 in the six months ended March 31, 2022, due to the Company's decreased
sales volume during the six months ended March 31, 2022.
General and administrative expenses increased by $845,425, or 85.8%, to $1,830,923 for the six months ended March 31, 2022 from $985,498 for the six months ended March 31, 2021, primarily attributable to (i) an
increase in the Company's office supply and utility expenses by
$104,770, or 69.4%, to support its
administration activities; (ii) an increase in the Company's
salaries, welfare expenses and insurance expenses paid to
administration employees by $37,911,
or 12.3%, because of a higher amount of annual bonus distributed to
administrative staffs in the six months ended March 31, 2022 as compared to the six months
ended March 31, 2021, and (iii) an
increase in bad debt expense by $688,064, or 338.5%, because the Company accrued
more bad debt expenses based on its assessment of the
collectability of the accounts receivable and advance to suppliers,
offset by a decrease in consulting fees by $46,700 because the Company incurred higher
amount of consulting services fees in the six months ended
March 31, 2021 before the Company
completed its initial public offering (the "IPO").
Research and development expenses decreased by $166,207, or 53.5%, to $144,461 for the six months ended March 31, 2022, from $310,668 for the six months ended March 31, 2021, primarily attributable to a
decrease in the materials used in the research and development
activities.
Other income (expenses), net
Total other expenses, net, increased by $632,947, or 2,607.7%, to $608,675 for the six months ended March 31, 2022 from $24,272 for the six months ended March 31, 2021.
Provision for income taxes
Provision for income taxes was $1.6
million for the six months ended March 31, 2022, representing a decrease of
$0.8 million, or 34.5%, from
$2.4 million for the six months ended
March 31, 2021 due to the Company's
decreased taxable income.
Net income
Net income was $1.7 million for
the six months ended March 31, 2022,
representing a $5.4 million decrease
from a net income of $7.1 million for
the six months ended March 31,
2021.
Basic and diluted earnings per share were $0.08 for the six months ended March 31, 2022, representing a decrease of 81.8%
from basic and diluted earnings per share of $0.44 for the six months ended March 31, 2021.
Balance Sheet
As of March 31, 2022, the Company
had cash of $14.2 million, as
compared to $8.1 million as of
September 30, 2021.
Cash Flow
Net cash provided by operating activities was $6.1 million
for the six months ended March 31,
2022, compared with $1.1 million for the six
months ended March 31, 2021.
Net cash used in investing activities was $55,091 for the six months ended March 31, 2022, compared with $50,875 for
the six months ended March 31,
2021.
Net cash used in financing activities was $19,991 for the six months ended March 31, 2022, compared with net cash
provided by financing activities of $24,136,556 for the six months ended
March 31, 2021.
About Universe Pharmaceuticals INC
Universe Pharmaceuticals INC, headquartered in Ji'an,
Jiangxi, China, is a
pharmaceutical producer and distributor in China. The Company specializes in the
manufacturing, marketing, sales and distribution of traditional
Chinese medicine derivatives products targeting the elderly with
the goal of addressing their physical conditions in the aging
process and to promote their general well-being. The Company also
distributes and sells biomedical drugs, medical instruments,
Traditional Chinese Medicine Pieces, and dietary supplements
manufactured by third-party pharmaceutical companies. Currently,
the Company's products are sold in 30 provinces of China. For more information, visit the
company's website at http://www.universe-pharmacy.com/.
Forward-Looking Statements
All statements other than statements of historical fact in
this announcement are forward-looking statements. These
forward-looking statements involve known and unknown risks and
uncertainties and are based on current expectations and projections
about future events and financial trends that the Company believes
may affect its financial condition, results of operations, business
strategy and financial needs. Investors can identify these
forward-looking statements by words or phrases such as "may,"
"will," "expect," "anticipate," "aim," "estimate," "intend,"
"plan," "believe," "potential," "continue," "is/are likely to" or
other similar expressions. The Company undertakes no obligation to
update forward-looking statements to reflect subsequent occurring
events or circumstances, or changes in its expectations, except as
may be required by law. Although the Company believes that the
expectations expressed in these forward-looking statements are
reasonable, it cannot assure you that such expectations will turn
out to be correct, and the Company cautions investors that actual
results may differ materially from the anticipated results and
encourages investors to review other factors that may affect its
future results in the Company's registration statement and in its
other filings with the U.S. Securities and Exchange
Commission.
For more information, please contact:
Ascent Investors Relations LLC
Tina Xiao
President
Phone: 917-609-0333
Email: tina.xiao@ascent-ir.com
UNIVERSE
PHARMACEUTICALS INC. AND SUBSIDIARIES
|
CONSOLIDATED BALANCE
SHEETS
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
As of
|
|
|
March
31,
|
|
|
September
30
|
ASSETS
|
|
2022
|
|
|
2021
|
CURRENT
ASSETS:
|
|
|
|
|
|
Cash
|
$
|
14,236,300
|
|
$
|
8,077,908
|
Short-term investments
|
|
14,344,092
|
|
|
13,725,204
|
Accounts receivable, net
|
|
18,816,406
|
|
|
15,573,742
|
Inventories, net
|
|
3,385,872
|
|
|
2,462,542
|
Due
from related parties
|
|
356,290
|
|
|
236,982
|
Advance to suppliers
|
|
103,653
|
|
|
2,738,313
|
Prepayment for advertising
|
|
-
|
|
|
7,492,320
|
Prepaid expenses and other current assets
|
|
418,170
|
|
|
174,053
|
TOTAL CURRENT
ASSETS
|
|
51,660,783
|
|
|
50,481,064
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
4,985,035
|
|
|
4,681,353
|
Prepayments made to a related party for purchase of
property
|
|
2,520,000
|
|
|
2,476,800
|
Prepayments for construction in progress
|
|
10,448,944
|
|
|
10,712,160
|
Intangible assets, net
|
|
178,764
|
|
|
178,483
|
Investment in equity securities
|
|
586,674
|
|
|
744,924
|
Deferred tax assets
|
|
985,961
|
|
|
869,997
|
TOTAL NONCURRENT
ASSETS
|
|
19,705,378
|
|
|
19,663,717
|
|
|
|
|
|
|
TOTAL ASSETS
|
$
|
71,366,161
|
|
$
|
70,144,781
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
Short-term bank loans
|
$
|
4,410,000
|
|
$
|
4,334,400
|
Accounts payable
|
|
3,645,443
|
|
|
5,310,526
|
Taxes payable
|
|
962,790
|
|
|
1,101,460
|
Due
to related parties
|
|
7,293
|
|
|
19,723
|
Accrued expenses and other current liabilities
|
|
1,182,353
|
|
|
444,319
|
TOTAL CURRENT
LIABILITIES
|
|
10,207,879
|
|
|
11,210,428
|
|
|
|
|
|
|
COMMITMENTS AND
CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
Ordinary shares,
$0.003125 par value, 100,000,000 shares
authorized, 21,750,000 shares and 21,750,000 shares issued
and outstanding as of March 31, 2022 and September 30,
2021, respectively
|
|
67,969
|
|
|
67,969
|
Additional paid-in capital
|
|
29,279,159
|
|
|
29,279,159
|
Statutory reserves
|
|
2,439,535
|
|
|
2,439,535
|
Retained earnings
|
|
26,790,666
|
|
|
25,058,931
|
Accumulated other comprehensive income
|
|
2,580,953
|
|
|
2,088,759
|
TOTAL SHAREHOLDERS'
EQUITY
|
|
61,158,282
|
|
|
58,934,353
|
|
|
|
|
|
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
$
|
71,366,161
|
|
$
|
70,144,781
|
UNIVERSE
PHARMACEUTICALS INC. AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
INCOME
|
(UNAUDITED)
|
|
|
|
|
|
|
|
For the Six
Months Ended
March 31,
|
|
|
2022
|
|
|
2021
|
|
|
|
|
|
|
REVENUE
|
$
|
24,202,340
|
|
$
|
24,292,948
|
COST OF
REVENUE AND RELATED TAX
|
|
10,445,906
|
|
|
12,304,678
|
GROSS
PROFIT
|
|
13,756,434
|
|
|
11,988,270
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
Selling
expenses
|
|
9,079,771
|
|
|
1,109,287
|
General and
administrative expenses
|
|
1,830,923
|
|
|
985,498
|
Research and
development expenses
|
|
144,461
|
|
|
310,668
|
Total operating
expenses
|
|
11,055,155
|
|
|
2,405,453
|
|
|
|
|
|
|
INCOME FROM
OPERATIONS
|
|
2,701,279
|
|
|
9,582,817
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSES)
|
|
|
|
|
|
Interest expense,
net
|
|
(88,389)
|
|
|
(46,671)
|
Other income
(expense), net
|
|
634
|
|
|
(8,227)
|
Short-term
investment income
|
|
696,430
|
|
|
-
|
Equity investment
income
|
|
-
|
|
|
30,626
|
Total other
income (expense), net
|
|
608,675
|
|
|
(24,272)
|
|
|
|
|
|
|
INCOME BEFORE
INCOME TAX PROVISION
|
|
3,309,954
|
|
|
9,558,545
|
|
|
|
|
|
|
PROVISION FOR
INCOME TAXES
|
|
1,578,219
|
|
|
2,410,747
|
|
|
|
|
|
|
NET
INCOME
|
|
1,731,735
|
|
|
7,147,798
|
|
|
|
|
|
|
OTHER
COMPREHENSIVE INCOME
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
492,194
|
|
|
797,643
|
COMPREHENSIVE
INCOME
|
$
|
2,223,929
|
|
$
|
7,945,441
|
|
|
|
|
|
|
Earnings per
common share - basic and diluted
|
$
|
0.08
|
|
$
|
0.44
|
Weighted
average shares - basic and diluted
|
$
|
21,750,000
|
|
$
|
16,168,956
|
|
|
|
|
|
|
|
UNIVERSE
PHARMACEUTICALS INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
For the Six Months
Ended
March 31,
|
|
|
|
2022
|
|
2021
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
Net
income
|
$
|
1,731,735
|
|
$
|
7,147,798
|
|
Adjustments to reconcile net income to net cash
|
|
|
|
|
|
|
|
provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
292,111
|
|
|
243,466
|
|
|
Loss from disposal of
fixed assets
|
|
1,011
|
|
|
-
|
|
|
Changes in allowance
for doubtful accounts
|
|
100,406
|
|
|
(203,253)
|
|
|
Changes in inventory
reserve
|
|
(16,508)
|
|
|
(76,734)
|
|
|
Deferred income tax
provision (benefit)
|
|
(100,406)
|
|
|
71,221
|
|
|
Short-term investment
income
|
|
(696,430)
|
|
|
-
|
|
Changes in
operating assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
(3,060,116)
|
|
|
(6,322,074)
|
|
|
Inventories
|
|
(860,517)
|
|
|
(2,864,911)
|
|
|
Advance to suppliers,
net
|
|
2,664,149
|
|
|
-
|
|
|
Prepayment for
advertising
|
|
7,593,960
|
|
|
-
|
|
|
Advances to related
parties
|
|
(110,241)
|
|
|
-
|
|
|
Prepaid expenses and
other current assets
|
|
(240,164)
|
|
|
(3,098,993)
|
|
|
Accounts
payable
|
|
(1,751,013)
|
|
|
5,801,410
|
|
|
Taxes
payable
|
|
(157,280)
|
|
|
55,105
|
|
|
Accrued expenses and
other current liabilities
|
|
727,506
|
|
|
305,094
|
|
Net cash provided by
operating activities
|
|
6,118,203
|
|
|
1,058,129
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
(55,629)
|
|
|
(50,875)
|
|
|
Proceeds from disposal
of equipment
|
|
538
|
|
|
-
|
|
Net cash used in
investing activities
|
|
(55,091)
|
|
|
(50,875)
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from
short-term bank loans
|
|
1,255,200
|
|
|
1,220,800
|
|
|
Repayment of bank
loans
|
|
(1,255,200)
|
|
|
(1,220,800)
|
|
|
Net proceeds from
initial public offerings
|
|
-
|
|
|
21,941,916
|
|
|
Proceeds from
(repayment of) related party borrowings
|
|
(19,991)
|
|
|
2,194,640
|
|
Net cash provided by
(used in) financing activities
|
|
(19,991)
|
|
|
24,136,556
|
|
|
|
|
|
|
|
|
|
Effect of changes of
foreign exchange rates on cash
|
|
115,271
|
|
|
797,117
|
|
Net increase in
cash
|
|
6,158,392
|
|
|
25,940,927
|
|
Cash, beginning of
period
|
|
8,077,908
|
|
|
10,058,202
|
|
Cash, end of
period
|
$
|
14,236,300
|
|
$
|
35,999,129
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosure of cash flow information
|
|
|
|
|
|
|
|
Cash paid for
interest
|
$
|
103,765
|
|
$
|
65,775
|
|
|
Cash paid for income
tax
|
$
|
1,880,314
|
|
$
|
3,364,769
|
|
|
|
|
|
|
|
|
|
Supplemental
non-cash financing activity:
|
|
|
|
|
|
|
|
Subscription receivable
from issuance of ordinary shares under
initial public offerings
|
$
|
-
|
|
$
|
3,571,241
|
|
|
Cost of construction in
progress paid in prior years
|
$
|
448,342
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
View original
content:https://www.prnewswire.com/news-releases/universe-pharmaceuticals-inc-reports-financial-results-for-the-first-six-months-of-fiscal-year-2022-301606189.html
SOURCE Universe Pharmaceuticals INC