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:
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:
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:
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: [email protected]
CHINA HEALTH INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
CHINA HEALTH INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME
(UNAUDITED)
CHINA HEALTH INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED MARCH 31, 2020 AND 2019
(UNAUDITED)
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)
CHINA HEALTH INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
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