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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: [email protected]

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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