UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of April 2020

 

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Commission File Number: 001-32371

 

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SINOVAC BIOTECH LTD.

 

No. 39 Shangdi Xi Rd, Haidian District

Beijing 10085, People’s Republic of China

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

 

Form 20-F x             Form 40-F ¨

 

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):________________

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):________________

  

 

 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

  SINOVAC BIOTECH LTD.
   
   
  By: /s/ Nan Wang
  Name: Nan Wang
  Title: Chief Financial Officer

 

 

Date: April 30, 2020

 

 

 

 

Exhibit Index

 

Exhibit 99.1           Press Release

 

 

 

Exhibit 99.1 

 

Sinovac Reports Unaudited Fourth Quarter 2019 Financial Results and Files 2019 Annual Report on Form 20-F

 

BEIJING, China, April 30, 2020 /Business Wire/ -- Sinovac Biotech Ltd. (NASDAQ: SVA) (“Sinovac” or the “Company”), a leading provider of biopharmaceutical products in China, has filed its 2019 annual report on Form 20-F with the U.S. Securities and Exchange Commission for the year ended December 31, 2019. The Company also reported its unaudited financial results for the fourth quarter ended December 31, 2019.

 

Fourth Quarter and Full Year 2019 Financial Summary

 

ŸSales for the fourth quarter of 2019 were $81.1 million, an increase of 52.4% from $53.2 million in the prior year period.

 

ŸSales in 2019 were $246.1 million, an increase of 7.1% from $229.7 million in the prior year.

 

ŸOperating income for the fourth quarter increased 10,451% from the prior year period due to higher revenue and lower selling, general and administrative expenses.

 

ŸOperating income in 2019 increased 51.3% from the prior year period due to higher revenue and lower selling, general and administrative expenses.

 

ŸThe Company posted $21.7 million of net income attributable to common shareholders, or $0.22 per basic and $0.20 per diluted share, in the fourth quarter, compared to net loss attributable to common shareholders of $1.2 million, or $0.02 per basic and diluted share, in the prior year period.

 

ŸThe Company posted $39.8 million of net income attributable to common shareholders, or $0.42 per basic and $0.41 per diluted share, in 2019, compared to net income attributable to common shareholders of $21.8 million, or $0.34 per basic and diluted share, in the prior year.

 

Mr. Weidong Yin, Chairman, President, and CEO of Sinovac, commented, “Sinovac delivered strong performance in 2019 with growth in sales and net earnings. We are pleased to report that during the fourth quarter of 2019, Anflu, the seasonal influenza vaccine, was relaunched to the market after a one-year absence due to the manufacturing disruption orchestrated by the minority shareholder of Sinovac Beijing in 2018. Furthermore, our varicella vaccine was granted market authorization in December 2019, and today the batch release approval was obtained for our first batch varicella vaccines.”

 

“Our research and development team has had a busy year. In addition to our varicella vaccine being approved to market in China, we made good progress on the development and regulatory advancement of our quadrivalent influenza vaccine (QIV), sabin inactivated polio vaccine (sIPV) and 23-valent pneumococcal polysaccharide vaccine (PPV-23). We expect to obtain market authorization for QIV in 2020. As previously announced, Sinovac is also at the forefront of the fight against COVID-19 through vaccine development. Our phase I human trial is ongoing, and we expect to deliver results in the summer,” Mr. Yin continued.

 

“Since the first quarter of 2020, the COVID-19 outbreak has impacted the regular business of the Company. As disclosed previously, domestic sales have ceased due to the suspension of vaccinations by the Chinese CDC since February, and exports are disrupted due to cancellations of cargo flights and inflated freight costs. Any prolonged disruption of Sinovac’s clinical trials could delay regulatory approvals or the commercialization of any current or future products. Certain provinces and cities in China are starting to lift some of the restrictive measures, and delivery of vaccines in China has slowly started to resume. The Company is closely monitoring the situation in China as well as in the other countries in which it markets its vaccines,” Mr. Yin concluded.

 

 

 

 

Pipeline Development

 

Sars-cov-2 (COVID-19) vaccine – The Company initiated the development of a vaccine against COVID-19 at the end of January 2020. Preclinical studies were conducted from then until early April, when the vaccine candidate was proved to be safe and can provide protection on animals. The application for clinical studies was submitted to the National Medical Products Administration (“NMPA”) on March 13, 2020. Since then, 18 submissions have been made to the NMPA to complete the full submission for clinical application. The NMPA implemented a concurrent review on the full submission and granted approval for human trials on April 13, 2020. The phase I study commenced on April 16. The trial is ongoing.

 

23-valent Pneumococcal polysaccharide vaccine (PPV-23) – The Company submitted its application for a production license in 2017. In 2018, the NMPA requested a supplementary submission. The technical review by the NMPA was commenced at the end of September, and the site inspection was conducted in December 2019.

 

Quadrivalent influenza vaccine (QIV) – The Company filed an application with the NMPA for a production license for the QIV vaccine in March 2019. The NDA has been filed, and the site inspection was completed in March 2020. The Company expects the commercial launch of QIV to occur in 2020.

 

Sabin Inactivated Polio vaccine (sIPV) – The production license application for the sIPV vaccine was accepted by the NMPA in January 2019. In March 2019, given the high demand for effective polio vaccines, the application was granted fast track review. Currently, the application is under review.

 

Unaudited Financial Results for the Fourth Quarter of 2019

 

Summary of sales and gross profit

 

(In $000 except percentage data)  2019
Q4
   Percentage
of Sales
   2018
Q4
   Percentage
of Sales
 
Hepatitis A vaccine – Healive®   18,862    23.3%   16,528    31.1%
Hepatitis A&B vaccine – Bilive®   -    0.0%   (285)   (0.5%)
Hepatitis vaccines subtotal   18,862    23.3%   16,243    30.6%
Influenza vaccine   6,179    7.6%   (50)   (0.1%)
EV71 vaccine - Inlive®   43,527    53.6%   35,884    67.4%
Mumps vaccine   12,543    15.5%   1,134    2.1%
Total sales   81,111    100.0%   53,211    100.0%
Cost of sales   12,251    15.1%   6,732    12.7%
Gross profit   68,860    84.9%   46,479    87.3%

 

Sales for the fourth quarter of 2019 were $81.1 million, an increase of 52.4% from $53.2 million in the prior year period. The increase was due to reintroduction of the Company’s influenza vaccine and higher sales of the mumps vaccine due to a revamped sales and marketing strategy and supply shortage on the market.

 

 

 

 

The lack of Bilive® sales remains attributed to its suspended production, which was due to a lack of supply of the hepatitis B vaccine antigens from the Company’s sole supplier.

 

Gross profit in the fourth quarter of 2019 was $68.9 million compared to gross profit of $46.5 million in the prior year period. Gross margin was 84.9% compared to 87.3% in the prior year period. The decrease of gross margin was due to a change of sales mix, primarily caused by increased sales of the lower-margin influenza vaccine.

 

Selling, general and administrative expenses in the fourth quarter of 2019 were $33.3 million compared to $40.7 million in the prior year period. The Company incurred lower legal and consulting fees associated with the Company’s ongoing litigation matters in the 2019 period.

 

R&D expenses in the fourth quarter of 2019 were $7.8 million compared to $7.1 million in the prior year period, as the Company continued to invest in the development of its pipeline product candidates, including sIPV and PPV.

 

Net income in the fourth quarter of 2019 was $32.8 million compared to $0.3 million in the prior year period. Net income increased due to higher revenue and lower selling, general and administrative expenses.

 

Net income attributable to common shareholders was $21.6 million, or $0.22 per basic and $0.20 per diluted share, compared to net loss attributable to common shareholders of $1.2 million, or $0.02 per basic and diluted share, in the prior year period.

 

As the Company announced on February 22, 2019, the Company’s Board of Directors determined that certain shareholders became “Acquiring Persons,” as defined in the Company’s Rights Agreement (“Rights Agreement”), and a “Trigger Event” occurred under the Rights Agreement. As a result, new common and preferred shares of the Company were issued. Without the effect of the implementation of the Rights Agreement and the newly issued common and preferred shares, basic and diluted earnings per share for the fourth quarter of 2019 would be $0.33.

 

Non-GAAP adjusted EBITDA was $30.7 million in the fourth quarter of 2019 compared to $2.2 million in the prior year period. Non-GAAP net income in the fourth quarter of 2019 was $34.0 million compared to $1.0 million in the prior year period. Non-GAAP diluted earnings per share in the fourth quarter of 2019 were $0.21 per share compared to $0.02 losses per share in the prior year period. Non-GAAP diluted earnings per share in the fourth quarter of 2019 excluding the implementation of the Rights Agreement and the newly issued common and preferred shares would be $0.36 per share. Reconciliations of non-GAAP measures to the nearest comparable GAAP measures are included at the end of this earnings announcement.

 

The Company’s fourth quarter 2019 financial statements are prepared and presented in accordance with U.S. GAAP. However, they have not been audited or reviewed by the Company’s independent registered accounting firm.

 

 

 

 

Financial Results for the Twelve Months Ended December 31, 2019

 

Summary of sales and gross profit

 

(In $000 except percentage data)  2019
YTD
   Percentage
of Sales
   2018
YTD
   Percentage
of Sales
 
Hepatitis A vaccine – Healive®   57,955    23.6%   52,420    22.8%
Hepatitis A&B vaccine – Bilive®   (2)   0.0%   11,005    4.8%
Hepatitis vaccines subtotal   57,953    23.6%   63,425    27.6%
Influenza vaccine   19,145    7.8%   2,028    0.9%
EV 71 vaccine - Inlive®   149,223    60.6%   162,538    70.8%
Mumps vaccine   19,732    8.0%   1,659    0.7%
Total sales   246,053    100.0%   229,650    100.0%
Cost of sales   32,469    13.2%   24,723    10.8%
Gross profit   213,584    86.8%   204,927    89.2%

 

Sales in 2019 were $246.1 million, an increase of 7.1% from $229.7 million in the prior year. The increase was due to reintroduction of the Company’s influenza vaccine and higher sales of the mumps vaccine for the same reason mentioned in quarterly results.

 

Gross profit in 2019 was $213.6 million compared to gross profit of $204.9 million in the prior year. Gross margin was 86.8% compared to 89.2% in the prior year. The decrease of gross margin was due to a change in sales mix, with a higher proportion of sales of the influenza vaccine, which has a lower profit margin.

 

Selling, general and administrative expenses in 2019 were $121.5 million compared to $137.0 million in the prior year. The Company incurred lower legal and consulting fees associated with the Company’s ongoing litigation matters in 2019.

 

R&D expenses in 2019 were $24.3 million compared to $21.9 million in the prior year.

 

Net income in 2019 was $65.2 million compared to $36.1 million in the prior year. Net income increased primarily due to higher revenue and lower selling, general and administrative expenses.

 

Net income attributable to common shareholders was $39.8 million, or $0.42 per basic and $0.41 per diluted share, compared to net income attributable to common shareholders of $21.8 million, or $0.34 per basic and diluted share, in the prior year.

 

Excluding the implementation of the Rights Agreement, as described above, and the newly issued common and preferred shares, basic and diluted earnings per share for 2019 would be $0.63.

 

Non-GAAP adjusted EBITDA was $76.4 million in 2019 compared to $54.8 million in the prior year. Non-GAAP net income in 2019 was $68.5 million compared to $39.9 million in the prior year. Non-GAAP diluted earnings per share in 2019 were $0.43 per share compared to $0.38 per share in the prior year. Non-GAAP diluted earnings per share in 2019, excluding the implementation of the Rights Agreement and the newly issued common and preferred shares, would be $0.73 per share. Reconciliations of non-GAAP measures to the nearest comparable GAAP measures are included at the end of this earnings announcement.

 

As of December 31, 2019, cash and cash equivalents totaled $152.7 million compared to $158.2 million as of December 31, 2018. In 2019, net cash provided by operating activities was $39.1 million, net cash used in investing activities was $42.5 million, and net cash provided by financing activities was $1.7 million, including loan proceeds of $2.1 million and loan repayment of $3.3 million. As of December 31, 2019, the Company had $5.9 million in bank loans due within one year. The Company expects that its current cash position will be able to support its operations for at least the next 12 months.

 

 

 

 

Legal Proceedings

 

As previously disclosed by the Company, on March 13, 2018, 1Globe Capital LLC (“1Globe”) filed a complaint against the Company in the Antigua Court. The trial of the matter took place from December 3 to 5, 2018. On December 19, 2018, the Antigua judge handed down his judgment (the “Antigua Judgment”), finding in the Company’s favor in full, dismissing 1Globe’s claim and declaring that the Rights Agreement was validly adopted as a matter of Antigua law. On January 29, 2019, 1Globe filed a Notice of Appeal against the Antigua Judgment. On March 4, 2019, 1Globe filed an application for urgent interim relief, seeking an injunction to prevent the Company from continuing to implement its Rights Agreement until the resolution of the appeal. This application was heard on April 4, 2019, at which the Court of Appeal issued an order restraining the Company from operating the Rights Agreement in any way that affects 1Globe’s rights or shareholding or otherwise distributing the exchange shares to the Company’s shareholders who did not trigger the Rights Plan until after the determination of the appeal (the “Exchange Shares”). 1Globe’s appeal against the Antigua Judgment was heard on September 18, 2019, and the appeal decision is now pending.

 

As disclosed previously, on March 5, 2018, the Company filed a lawsuit in the Court of Chancery of the State of Delaware seeking a determination whether 1Globe, the Chiang Li Family, OrbiMed Advisors, LLC and certain other shareholders of the Company had triggered the Rights Agreement. On April 12, 2018, 1Globe filed an amended answer to the Company’s complaint, counterclaims, and a third-party complaint against the Company and Mr. Weidong Yin alleging, among other allegations, that the Rights Agreement is not valid. On March 6, 2019, the Delaware Chancery Court entered a status quo order providing that the Company not distribute any of the Exchange Shares to the Company’s shareholders who did not trigger the Rights Plan until the final disposition of the pending Delaware litigation or further order of the Court. On April 8, 2019, the Delaware Chancery Court stayed the Delaware litigation pending the outcome of 1Globe’s appeal of the Antigua Judgment.

 

Separately, Heng Ren Investments LP (“Heng Ren”) filed suit against Sinovac and Weidong Yin for alleged breach of fiduciary duties and wrongful equity dilution on May 31, 2019, in Massachusetts state court. Sinovac removed the matter from state court to the United States District Court for the District of Massachusetts. Heng Ren alleged that Mr. Yin breached fiduciary duties owed to minority shareholders, that Sinovac aided and abetted breaches of fiduciary duties, and that both Sinovac and Mr. Yin engaged in wrongful equity dilution. Heng Ren requested damages, attorneys’ fees, and prejudgment interest. Presently, the case is effectively stayed until June 1, 2020, when an answer or response is due.

 

Status of Exchange Shares and Trading in the Company’s Shares

 

As a result of the pending legal proceedings described above, the Exchange Shares are expected to remain in a trust for the benefit of the Company’s shareholders who did not trigger the Rights Plan until, at least, the conclusion of the appeal against the Antigua Judgement and final disposition of the Delaware litigation or further order of the Delaware Chancery Court. The Exchange Shares remain issued and outstanding. The Nasdaq Stock Market LLC implemented a halt on trading of the Company’s common shares at the time of issuance of the Exchange Shares to the trust and the Company is currently unable to estimate when trading will resume, or whether Nasdaq will take any additional action regarding the trading of the Company’s common shares.

 

About Sinovac

 

Sinovac Biotech Ltd. is a China-based biopharmaceutical company that focuses on the research, development, manufacturing and commercialization of vaccines that protect against human infectious diseases. Sinovac's product portfolio includes vaccines against enterovirus71 (EV71), hepatitis A and B, seasonal influenza, H5N1 pandemic influenza (avian flu), H1N1 influenza (swine flu), and mumps. Healive, the hepatitis A vaccine manufactured by the Company, has passed the assessment under WHO prequalification procedures in 2017. The EV71 vaccine, an innovative vaccine developed by Sinovac against hand foot and mouth disease caused by EV71, was commercialized in China in 2016. In 2009, Sinovac was the first company worldwide to receive approval for its H1N1 influenza vaccine, which it has supplied to the Chinese Government's vaccination campaign and stockpiling program. The Company is also the only supplier of the H5N1 pandemic influenza vaccine to the government stockpiling program. The Company is developing a number of new products including a Sabin-strain inactivated polio vaccine, pneumococcal polysaccharides vaccine, pneumococcal conjugate vaccine and varicella vaccine. Sinovac primarily sells its vaccines in China, while also exploring growth opportunities in international markets. The Company has exported select vaccines to over 10 countries in Asia and South America. For more information please see the Company’s website at www.sinovac.com.

 

 

 

 

Safe Harbor Statement

 

This press release contains “forward-looking statements” within the meaning of the United States federal securities laws. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Factors that might cause such a difference include our inability to compete successfully in the competitive and rapidly changing marketplace in which we operate, failure to retain key employees, cancellation or delay of projects, failure to satisfy regulatory and other requirements, disapproval or delay in approval of new products by regulatory bodies, disruptions to our operations, the results of any pending litigation (including litigation relating to the 2018 annual general meeting, the validity of our Rights Agreement, and the issuance of the Exchange Shares), Nasdaq’s halt in trading of the Company’s securities and any future action taken by Nasdaq regarding the trading of the Company’s securities, the effects of natural disasters, pandemics and outbreaks of contagious diseases and other adverse public health developments, such as SARS-CoV-2 (commonly referred to as COVID-19), and adverse general economic conditions in China, the United States and elsewhere. These risks and other factors include those listed under “Risk Factors” and elsewhere in our Annual Report on Form 20-F as filed with the Securities and Exchange Commission. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” or the negative of these terms or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. The Company assumes no obligation to update the forward-looking information contained in this release.

 

 

 

 

Non-GAAP Financial Measures

 

To supplement its consolidated financial statements, which are prepared and presented in accordance with GAAP, Sinovac uses the following non-GAAP financial measures: non-GAAP adjusted EBITDA, non-GAAP net income and non-GAAP diluted EPS. For more information on these non-GAAP financial measures, please refer to the table captioned “Reconciliations of non-GAAP Measures to the Nearest Comparable GAAP Measures” in this results announcement.

 

Sinovac believes that non-GAAP adjusted EBITDA, non-GAAP net income and non-GAAP diluted EPS help identify underlying trends in its business that could otherwise be distorted by the effect of certain income or expenses that Sinovac includes in net income and diluted EPS. Sinovac believes that non-GAAP adjusted EBITDA, non-GAAP net income and non-GAAP diluted EPS provide useful information about its core operating results, enhance the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by our management in its financial and operational decision-making. Non-GAAP adjusted EBITDA, non-GAAP net income and non-GAAP diluted EPS should not be considered in isolation or construed as an alternative to income from operations, net income, diluted EPS, or any other measure of performance or as an indicator of Sinovac’s operating performance. These non-GAAP financial measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to our data.

 

Non-GAAP adjusted EBITDA represents net income and excludes interest and financing expenses, interest income, net other income (expenses) and income tax benefit (expenses), and certain non-cash expenses, consisting of share-based compensation expenses, amortization and depreciation that Sinovac does not believe are reflective of the core operating performance during the periods presented.

 

Non-GAAP net income represents net income before share-based compensation expenses and foreign exchange gain or loss.

 

Non-GAAP diluted EPS represents non-GAAP net income attributable to common shareholders divided by the weighted average number of shares outstanding during the periods on a diluted basis, including accounting for the effect of the assumed conversion of options.

 

 

Contact

 

Sinovac Biotech Ltd. 

Helen Yang 

Tel: +86-10-8279-9871 or 

+86-10-5693-1897 

Fax: +86-10-6296-6910 

Email: ir@sinovac.com

 

ICR Inc. 

Bill Zima 

U.S.: 1-646-308-1707 

Email: william.zima@icrinc.com

 

 

 

 

SINOVAC BIOTECH LTD.

Consolidated Balance sheets

As of December 31, 2019 and December 31, 2018

(Expressed in thousands of U.S. Dollars)

  

   December 31,
2019
   December 31,
2018
 
Current assets          
           
Cash and cash equivalents  $152,718   $158,170 
Restricted cash   3,160    - 
Short-term investment   50,274    18,908 
Accounts receivable - net   113,736    74,464 
Income tax receivable   -    2,999 
Inventories   27,846    25,091 
Prepaid expenses and deposits   1,873    4,543 
Total current assets   349,607    284,175 
           
Property, plant and equipment - net   74,310    70,920 
Prepaid land lease payments   7,965    8,304 
Right-of-use asset   6,636    - 
Long-term inventories   -    90 
Long-term prepaid expenses to a related party   23    23 
Prepayment for acquisition of equipment   2,390    470 
Deferred tax assets   11,368    5,798 
Total assets   452,299    369,780 
           
Current liabilities          
Short-term bank loans   5,934    3,321 
Loan from a non-controlling shareholder   6,607    - 
Accounts payable and accrued liabilities   58,890    49,991 
Income tax payable   1,904    - 
Deferred revenue   5,462    2,907 
Deferred government grants   2,738    1,986 
Dividend Payable   5,128    - 
Lease liability   536    - 
Total current liabilities   87,199    58,205 
           
Deferred government grants   3,986    5,961 
Long-term bank loans   -    3,890 
Deferred revenue   -    90 
Loan from a non-controlling shareholder   1,436    6,705 
Lease liability   5,758    - 
Other non-current liabilities   1,725    3,001 
Total long-term liabilities   12,905    19,647 
           
Total liabilities   100,104    77,852 
           
Commitments and contingencies          
           
Equity          
Preferred stock   15    - 
Common stock   99    71 
Additional paid-in capital   207,962    204,998 
Accumulated other comprehensive loss   (4,321)   (2,099)
Statutory surplus reserves   33,533    26,643 
Accumulated earnings   56,731    23,820 
Total shareholders' equity   294,019    253,433 
           
Non-controlling interests   58,176    38,495 
Total equity   352,195    291,928 
Total liabilities and equity  $452,299   $369,780 

 

 

 

 

SINOVAC BIOTECH LTD.

Consolidated Statements of Comprehensive Income

For the three and twelve months ended December 31, 2019 and 2018

(Expressed in thousands of U.S. Dollars, except for numbers of shares and per share data)

  

   Three months ended December 31   For the year ended December 31 
   2019   2018   2019   2018 
   (Unaudited)   (Unaudited)         
Sales  $81,111   $53,211   $246,053   $229,650 
Cost of sales   12,251    6,732    32,469    24,723 
Gross profit   68,860    46,479    213,584    204,927 
                     
Selling, general and administrative expenses   33,299    40,701    121,468    137,003 
Provision (recovery) for doubtful accounts   (445)   (1,624)   (306)   820 
Research and development expenses   7,758    7,145    24,254    21,910 
Loss on disposal of property, plant and equipment   64    6    294    75 
Government grants recognized in income   (619)   (22)   (688)   (197)
Total operating expenses   40,057    46,206    145,022    159,611 
Operating income   28,803    273    68,562    45,316 
                     
Interest and financing expenses   (159)   (166)   (650)   (1,070)
Interest income   594    392    1,996    2,016 
Other income, net   296    227    912    321 
Income before income taxes   29,534    726    70,820    46,583 
Income tax recovery (expense)   3,286    (433)   (5,605)   (10,472)
Net Income   32,820    293    65,215    36,111 
Less: Income attributable to non-controlling interests   (9,625)   (1,458)   (20,286)   (14,329)
Net income (loss) attributable to shareholders of Sinovac   23,195    (1,165)   44,929    21,782 
Preferred stock dividends   (1,512)   -    (5,128)   - 
Net income (loss) attributable to common shareholders of Sinovac   21,683    (1,165)   39,801    21,782 
                     
Net income   32,820    293    65,215    36,111 
Other comprehensive income, net of tax of nil                    
Foreign currency translation adjustments   6,467    280    (2,827)   (10,996)
Comprehensive income   39,287    573    62,388    25,115 
Less: comprehensive income attributable to non-controlling interests   (10,821)   (1,544)   (19,681)   (12,507)
Comprehensive income (loss) attributable to shareholders of Sinovac  $28,466    (971)  $42,707    12,608 
                     
Earnings (losses) per share                    
Basic net income (loss) per share   0.22    (0.02)   0.42    0.34 
Diluted net income (loss) per share   0.20    (0.02)   0.41    0.34 
                     
Weighted average number of shares of common stock outstanding                    
Basic   98,903,406    71,121,161    94,876,946    64,727,146 
Diluted   113,715,690    71,393,550    109,691,959    64,977,554 

 

 

 

 

SINOVAC BIOTECH LTD.

Consolidated Statements of Cash Flows

For the three and twelve months ended December 31, 2019 and 2018

(Expressed in thousands of U.S. Dollars)

 

   Three months ended   For the year ended 
   December 31   December 31 
   2019   2018   2019   2018 
   (Unaudited)   (Unaudited)         
Cash flows provided by operating activities                    
Net income   32,820    293    65,215    36,111 
Adjustments to reconcile net income to net cash provided by operating activities:                    
 - Deferred income taxes   (2,969)   3,852    (5,685)   3,146 
 - Share-based compensation   750    750    3,003    4,305 
 - Inventory provision   317    30    651    2,529 
 - Provision (recovery) for doubtful accounts   (445)   (1,624)   (306)   820 
 - Loss on disposal and impairment of property, plant and equipment   64    6    294    75 
 - Depreciation of property, plant and equipment and amortization of licenses   1,146    1,116    4,579    4,887 
 - Amortization of prepaid land lease payments   58    60    238    249 
 - Government grants recognized in income   (619)   (22)   (688)   (197)
                     
Changes in:                    
 - Accounts receivable   (5,513)   23,657    (40,191)   (13,082)
 - Inventories   2,239    (353)   (3,651)   (9,412)
 - Income tax payable   (3,582)   (5,188)   4,904    (11,844)
 - Prepaid expenses and deposits   1,385    (2,647)   2,645    (2,613)
 - Deferred revenue   1,769    (4,665)   2,521    (892)
 - Accounts payable and accrued liabilities   35    (7,757)   6,793    (6,167)
 - Other non-current liablitites   (1,004)   186    (1,248)   28 
                     
Net cash provided by operating activities   26,451    7,694    39,074    7,943 
                     
Cash flows provided by (used in) financing activities                    
 - Proceeds from bank loans   2,109    (282)   2,109    18,898 
 - Repayments of bank loans   22    (13,453)   (3,305)   (43,886)
 - Proceeds from issuance of common stock, net of share issuance costs   (3)   -    -    85,304 
 - Proceeds from shares subscribed   -    64    -    64 
 - Government grants received   625    1,790    1,476    3,800 
 - Loan from a non-controlling shareholder   -    -    1,457    - 
                     
Net cash provided by (used in) financing activities   2,753    (11,881)   1,737    64,180 
                     
Cash flows used in investing activities                    
 - Purchase of short-term investments   (49,208)   (936)   (50,665)   (19,670)
 - Proceeds from redemption of short-term investments   18,818    -    18,818    - 
 - Proceeds from disposal of equipment   9    4    21    22 
 - Acquisition of property, plant and equipment   (1,915)   (908)   (10,628)   (5,613)
                     
Net cash used in investing activities   (32,296)   (1,840)   (42,454)   (25,261)
                     
Effect of exchange rate changes on cash and cash equivalents and restricted cash   2,273    (331)   (649)   (4,656)
                     
Increase (decrease) in cash and cash equivalents and restricted cash   (819)   (6,358)   (2,292)   42,206 
                     
Cash and cash equivalents and restricted cash, beginning of period   156,697    164,528    158,170    115,964 
                     
Cash and cash equivalents and restricted cash, end of period   155,878    158,170    155,878    158,170 

 

 

 

 

SINOVAC BIOTECH LTD.

Reconciliations of Non-GAAP measures to the nearest comparable GAAP measures

For the three and twelve months ended December 31, 2019 and 2018

(Expressed in thousands of U.S. Dollars, except for numbers of shares and per share data)

 

   Three months ended December 31   For the year ended December 31 
   2019   2018   2019   2018 
   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited) 
Net income   32,820    293    65,215    36,111 
Adjustments:                    
Share-based compensation   750    750    3,003    4,305 
Depreciation and amortization   1,204    1,176    4,817    5,136 
Interest and financing expenses, net of interest income   (435)   (226)   (1,346)   (946)
Net other income   (296)   (227)   (912)   (321)
Income tax expense (recovery)   (3,286)   433    5,605    10,472 
Non-GAAP adjusted EBITDA   30,757    2,199    76,382    54,757 
                     
Net income   32,820    293    65,215    36,111 
Add: Foreign exchange (gain) loss   470    (86)   306    (559)
Add: Share-based compensation   750    750    3,003    4,305 
Non-GAAP net income   34,040    957    68,524    39,857 
                     
Net income attributable to common shareholders of Sinovac   21,683    (1,165)   39,801    21,782 
Add: Preferred stock dividends   1,512    -    5,128    - 
Net income attributable to common shareholders of Sinovac for computing diluted earnings per share   23,195    (1,165)   44,929    21,782 
Add: Non-GAAP adjustments to net income   666    (318)   2,109    2,764 
Non-GAAP net income attributable to common shareholders of Sinovac for computing non-GAAP diluted earnings per share   23,861    (1,483)   47,038    24,546 
                     
Weighted average number of shares on a diluted basis   113,715,690    71,393,550    109,691,959    64,977,554 
Diluted earnings per share   0.20    (0.02)   0.41    0.34 
Add: Non-GAAP adjustments to net income per share   0.01    0.00    0.02    0.04 
Non-GAAP Diluted earnings (losses) per share   0.21    (0.02)   0.43    0.38