Harbin, China--(Newsfile Corp. - February 14, 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 second quarter ended December 31, 2019.
Mr. Xin Sun, Chief Executive Officer and Chairman of China Health Industries, commented, "We are pleased to report our financial results for the second quarter of our 2020 fiscal year. Our revenue increased by 26.08% for the three months ended December 31, 2019 compared to the same period of the previous year as we continue to develop, manufacture and distribute new hemp derivative products. We have successfully stepped into and become a pioneer in the market of hemp derivative products. Our hemp derivative products are well welcomed by our customers and our brand has been promoted. We plan to launch more hemp derivative products into the market."
Second Quarter of Fiscal 2020 Selected Financial Results
For the Three Months Ended December 31, 2019:
Revenue
Total revenues increased by $707,831 or 26.08% for the three months ended December 31, 2019, as compared to the same period in 2018. The increase in revenues was primarily due to an increase of $728,209 or 27.12% in Humankind's revenues mainly due to the increasing demand of Hemp Polypeptide and Hemp Protein Powder for the three months ended December 31, 2019 compared with the same period in 2018.
Cost of Goods Sold
Our total cost of sales decreased by $1,566 or 0.23% for the three months ended December 31, 2019 as compared to the same period in 2018. The decrease in the cost of the main business was mainly due to two reasons. Firstly, the revenue in Humankind increased by $28,825 or 4.41% which was consistent with the change of sales for the three months ended December 31, 2019 as compared to the same period in 2018. However, the growth ratio of cost was lower than that of the revenue because the unit cost of Hemp Polypeptide and Hemp Protein Powder was lower than the other two hemp products for the three months ended December 31, 2019 compared with the same period in 2018. Secondly, the decrease in HLJ Huimeijia's cost of sales was consistent with the change of revenue.
Gross Profit
Our gross margin increased by $709,397 or 35.01% for the three months ended December 31, 2019 as compared to the same period in 2018. This change was consistent with the change of sales and costs in Humankind. The gross margin of HLJ Huimeijia increased by $10,013 or 177.32% for the three months ended December 31, 2019 as compared to the same period in 2018. 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 December 31, 2019.
Net Income and Net Income Per Share
Net income was $1,426,584 for the three months ended December 31, 2019, as compared to $1,117,267 for the three months ended December 31, 2018. This increase of $309,317 in net profit was primarily attributable to an increase of gross margin.
Net income per share was $0.0218 for the three months ended December 31, 2019 and $0.0170 for the three months ended December 31, 2018, respectively. This increase was primarily a result of the aforementioned increase in net profit.
For the Six Months Ended December 31, 2019:
Revenue
Total revenues increased by $619,930 or 12.77% for the six months ended December 31, 2019, as compared to the same period in 2018. The increase in revenues was primarily due to an increase of $629,690 or 13.09% in Humankind's revenues, mainly due to the increasing demand of Hemp Polypeptide and Hemp Protein Powder for the six months ended December 31, 2019 as compared to the same period in 2018,
Cost of Goods Sold
Our total cost of sales increased by $33,589 or 2.89% for the six months ended December 31, 2019 as compared to the same period in 2018. The increased cost of the main business was mainly due to that the revenue increased for the six months ended December 31, 2019 as compared to the same period in 2018. However, the growth ratio of cost was lower than that of the revenue because the unit cost of Hemp Polypeptide and Hemp Protein Powder was lower than the other two hemp products for the six months ended December 31, 2019 compared with the same period in 2018.
Gross Profit
Our gross margin increased by $586,341 or 15.87% for the six months ended December 31, 2019 as compared to the same period in 2018. This change was consistent with the change of sales and costs in Humankind.
Net Income and Net Income Per Share
Net income was $2,183,158 for the six months ended December 31, 2019, as compared to $1,749,481 for the six months ended December 31, 2018. This increase of $433,677 in net profit was primarily attributable to an increase of gross margin.
Net income per share was $0.0333 for the six months ended December 31, 2019 and $0.0267 for the six months ended December 31, 2018, respectively. This increase was primarily a result of the aforementioned increase in net profit.
Liquidity and Capital Resources
The following table summarizes our cash and cash equivalents positions, our working capital, and our cash flow activities as of December 31, 2019 and June 30, 2019 and for the six months ended December 31, 2019 and 2018:
Our working capital at December 31, 2019 was $31,915,518, compared to our working capital of $29,832,774 at June 30, 2019. This increase of $2,082,744 or 6.98% was primarily attributable to the increase of cash and cash equivalents and accounts receivable in the amount of $1,168,296 and $1,269,754, respectively in the six months ended December 31, 2019.
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: [email protected]
CHINA HEALTH INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
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CHINA HEALTH INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
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CHINA HEALTH INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED DECEMBER 31, 2019 AND 2018
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CHINA HEALTH INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED DECEMBER 31, 2019 AND 2018
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CHINA HEALTH INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
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