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Sinovac Reports Unaudited Fourth Quarter and Full Year 2012 Financial Results

April 18, 2013

- Conference call scheduled for Thursday, April 18, 2013 at 8:00 AM EDT -

BEIJING, April 18, 2013 /PRNewswire/ — Sinovac Biotech Ltd. (NASDAQ: SVA), a leading provider of vaccines in China, announced today its unaudited fourth quarter and full year financial results for the period ended December 31, 2012.

Financial Highlights

  • Total sales were $19.0 million for the fourth quarter of 2012, a decrease of 10.4% from $21.1 million in the same period of 2011. Excluding sales of Panflu and Panflu.1 under the government stockpiling program in the fourth quarter of 2011, total sales in the fourth quarter of 2012 increased by 166.9% from $7.1 million in the same period of 2011. 2012 full year sales were $48.6 million, a decrease of 14.5% from $56.8 million in 2011. Excluding sales of Panflu and Panflu.1 under the government stockpiling program in 2011, the regular sales, including Healive, Bilive and Anflu, mumps vaccine and RabEnd, increased by 38.6% to $48.6 million in 2012.
  • Net loss attributable to common stockholders in the fourth quarter of 2012 was $5.4 million, or $0.10 per basic and diluted share. Full year 2012 net loss attributable to common stockholders was $15.7 million, or $0.29 per basic and diluted share. The operating expense for the fourth quarter and full year included a $1.5 million impairment charge on long-lived assets related to the production of animal vaccine.
  • Cash and cash equivalents totaled $90.9 million as of December 31, 2012, compared to $104.3 million as of December 31, 2011.

Recent Business Highlights

  • In March 2013, Sinovac announced preliminary top-line data from its phase III clinical trial assessing the efficacy, immunogenicity and safety of the Company’s proprietary enterovirus 71 (“EV71″) vaccine against hand, foot and mouth disease (“HFMD”). The primary objective of the study was to evaluate the efficacy of the EV71 vaccine in the prevention of HFMD caused by EV71 in infants of between 6 to 35 months of age. The preliminary phase III data showed that Sinovac’s EV71 vaccine was 95% efficacious against HFMD caused by EV71.
  • In April 2013, Fengcai Zhu, Deputy Director of the Jiangsu Provincial Center for Disease Prevention and Control, and co-principal investigator of Sinovac’s phase III trial on EV71 vaccine, presented data regarding the efficacy and safety of the Company’s proprietary EV71 vaccine against HFMD at the 13th Annual World Vaccine Congress & Expo.
  • Also in April, 2013, we were granted a license from COFEPRIS, the regulatory authority of Mexico’s Ministry of Health, to sell Anflu in Mexico.

Dr. Weidong Yin, Chairman, President and CEO, commented, “2012 was a transformative year for Sinovac as we focused on continuing to advance our vaccine development pipeline. We invested significantly in research and development this year for our lead candidate, our proprietary EV71 vaccine against HFMD. We are well positioned for medium- to long-term growth as this vaccine progresses through the regulatory process and approaches launch.”

Dr. Yin continued, “EV71 represents a significant unmet medical need in China with over 2.16 million cases reported in 2012, from which 560 fatalities were reported, Most of serve cases of EV71 infection were seen in children under 5 years old, which totaled approximately 80 million in China. Unfortunately, no EV71-specific treatment and prevention method currently exists. With knowledge of this unmet need, we commenced development of an EV71 vaccine in 2008, and recently concluded the phase III efficacy trial for this candidate. In March 2013, the unblinded top-line results from the phase III clinical trial for the vaccine demonstrated a 95% efficacy rate against HFMD caused by EV71. We expect our EV71 vaccine, once commercialized, will provide a solution to this unmet medical need in China.”

Dr. Yin concluded, “I am also very pleased with the 38.6% increase in regular vaccine sales for 2012. Growth was achieved across all three of our market segments: private pay market, public market and international market. Sinovac’s core products, inclusive of Healive, Bilive, and Anflu, contributed to our sales growth, with Bilive and Healive sales in the private market in China being the primary contributors to both the rate and magnitude of the sales increase. Our financial results benefited from a successful price increase for both of these products, as well as higher volume. Our well-trained, experienced sales team continues to drive growth in our commercialized vaccine products, but also has taken significant strides to increase efficacy in our sales and marketing infrastructure, positioning us well for future vaccine product launches, such as the EV71 vaccine.”

Financial Review for Unaudited Fourth Quarter Ended December 31, 2012

An analysis of sales and gross profit is as follows:

                In
               USD 2012Q4            % of Sales      2011Q4            % of Sales      Fluctuation %
               --- ------            ----------      ------            ----------       ------------

     Healive-
     hepatitis
     A                    10,037,198           53.0%         2,970,802           14.1%         237.9%

     Bilive-
     hepatitis
     A&B                   3,784,668           20.0%           605,624            2.9%         524.9%

     Anflu-

     influenza             5,091,076           26.8%         3,523,452           16.7%          44.5%

     Core
     sales                18,912,942           99.8%         7,099,878           33.7%         166.4%

    Mumps                     23,925            0.1%

     Rabend
     (Animal)                 14,634            0.1%

     Regular
     Sales                18,951,501                         7,099,878                         166.9%

     Panflu.1
     -H1N1                                                  14,004,653           66.2%

     Panflu-
     H5N1                                                       38,873            0.1%

     Total
     sales                18,951,501                        21,143,404                         -10.4%
     -----                ----------                        ----------                         -----

     Cost
     of
     Sales                 8,698,009                         8,031,758
     -----                 ---------                         ---------

     Gross
     profit               10,253,492           54.1%        13,111,646           62.0%         -21.8%
     ======               ==========           ====         ==========           ====          =====

Total revenue for the fourth quarter of 2012 was $19.0 million, a decrease of 10.4% from $21.1 million in the same period of 2011. Fourth quarter 2012 sales of our regular products, Healive, Bilive, Anflu, mumps vaccine and RabEnd, increased by 166.9% to $19.0 million from $7.1 million in the same period of 2011. The significant increase in sales of core products in the fourth quarter was driven by: 1) expansion of Healive to a new territory of Jiangsu Province in the fourth quarter; 2) the successful implementation of a new sales strategy to achieve both volume growth and average selling price increase for hepatitis vaccines; and 3) higher Anflu sales in the fourth quarter compared to other regular years due to a later start of the Anflu sales season in 2012. 2011 sales included recognition of approximately $14 million revenue from Panflu and Panflu.1 vaccines stockpiled by the Chinese government in 2010. These two products are not for regular sales, since they were produced upon government order and subject to the government decision of using the vaccines within its shelf life if there was any flu pandemic caused by H1N1 and/or H5N1. The Company’s revenue recognition requirements were not met until the fourth quarter of 2011. And in 2012, there was no revenue recognized for either Panflu or Panflu.1.

Compared with the fourth quarter of 2011, the gross profit margin for the fourth quarter of 2012 decreased from 62.0% to 54.1%. The higher gross margin in the fourth quarter of 2011 was due to the recognition of $14 million revenue from H1N1 vaccine stockpiling, which has a higher gross profit margin than other vaccines.

Selling, general and administrative expenses for the fourth quarter of 2012 were $12.8 million, compared to $5.9 million in the same period of 2011. The increase in SG&A was largely due to an increase in G&A, although both selling expense and general and administration expense increased. The increase of G&A expense was resulted from the increased expenses incurred for validation, commissioning, and trial production for the dedicated production facility for our EV71 vaccine at the Changping site, Beijing, and the preparation for GMP inspection by the government authorities of our existing manufacturing facilities in both the Changping and Shangdi sites in Beijing for compliance with China’s 2010 GMP guidelines.

The R&D expense for the fourth quarter of 2012 was $1.3 million, a $1 million decrease from $2.3 million for the same period in 2011, due to lower EV71 clinical trial expense as the trial approaching its end.

Depreciation of property, plant and equipment and amortization of licenses and permits for the fourth quarter of 2012 was $0.5 million, compared to $0.4 million for the same period in 2011.

For the fourth quarter of 2012, an impairment charge of $1.5 million on the long-lived assets including plant and building, machinery and equipments related to the animal vaccine production was made.

Net loss attributable to stockholders for the fourth quarter of 2012 was $5.4 million, or $0.10 per basic and diluted share, compared to a net income of $2.8 million, or $0.05 per basic and diluted share, for the same period in 2011.

Financial Review for Unaudited Full Year Results Ended December 31, 2012

An analysis of sales and gross profit of full year 2012 is as follows:

               In
               USD       2012 % of Sales             2011 %of Sales        Fluctuation %
               ---       ---- ----------             ---- ---------         ------------

     Healive-
     hepatitis
     A             20,141,416            41.5% 14,217,393            25.0%          41.7%

     Bilive-
     hepatitis
     A&B           19,417,940            40.0% 12,721,993            22.4%          52.6%

     Anflu-
     influenza      8,943,937            18.4%  8,112,279            14.3%          10.3%

     Core
     sales         48,503,293            99.9% 35,051,665            61.7%          38.4%

    Mumps              23,925             0.0%

     Rabend
     (Animal)          49,482             0.1%

     Regular
     Sales         48,576,700           100.0% 35,051,665            61.7%          38.6%

     Panflu.1
     -H1N1                                     14,008,225            24.6%

     Panflu-
     H5N1                                       7,782,002            13.7%

     Total
     Sales         48,576,700                  56,841,892           100.0%         -14.5%
     -----         ----------                  ----------           -----          -----

     Cost
     of
     goods
     sold          19,099,927                  21,127,410
     -----         ----------                  ----------

     Gross
     profit        29,476,773            60.7% 35,714,482            62.8%         -17.5%
     ======        ==========            ====  ==========            ====          =====

Total revenue for the fiscal year ended December 31, 2012 was $48.6 million, a decrease of 14.5% from $56.8 million reported in 2011. Excluding the revenue recognized on the government stockpiling of Panflu and Panflu.1 in 2010, sales of our regular products, Healive, Bilive and Anflu, mumps vaccine and RabEnd, increased by 38.6% to $48.6 million in 2012 from $35.1 million in 2011.

Gross profit margin was 60.7% in 2012, a decline from 62.8% in 2011. Excluding the impact to sales and cost of sales in both years by of Panflu and Panflu.1, the gross margin of regular vaccine products increased to 63.7% in 2012 from 57.7% in 2011.

Selling, general and administrative expenses in 2012 were $31.7 million, compared to $22.4 million in 2011. The increase in SG&A was largely due to an increase in G&A, although both selling expense and general and administration expense increased. The increase of G&A expense was due to the increased cost incurred on the validation of the new facilities in Changping site and preparation for new GMP compliance inspection of our existing manufacturing facilities in both Changping and Shangdi sites.

Research and development expenses in 2012 increased to $17.0 million from $9.0 million in 2011. The increase was mainly due to expense incurred in 2012 in connection with the EV71 phase III clinical trial.

Depreciation of property, plant and equipment and amortization of licenses and permits in 2012 was $1.6 million, compared to $1.4 million in 2011. The higher depreciation in 2012 was mainly due to the additional depreciation on property, plant and equipment of the Changping site.

The Company recorded loss on disposal and impairment of property, plant and equipment of $2.2 million as operating expense, in which $1.5 million was for animal vaccine production related assets and $0.5 million was for human vaccine production related assets.

Net loss attributable to stockholders in 2012 was $15.7 million, or $0.29 per basic and diluted share, compared to a net loss of $0.8 million, or $0.02 per basic and diluted share in 2011.

As of December 31, 2012, cash and cash equivalents totaled $90.9 million, compared to $104.3 million as of December 31, 2011. Net cash used in operating activities was $16.6 million in 2012, which primarily resulted from payment made for EV71 clinical trial and validation of the new facilities in Changping, Beijing and new GMP inspection preparation expenses. Net cash used in investing activities was $16.2 million, which primarily resulted from payment for the purchase of property, plant and equipment for the Changping site. Net cash provided by financing activities was $17.3 million in 2012. The Company maintained a strong cash balance despite significant expenditure on the phase III clinical trial of EV71 vaccine candidate and investment in its production facilities. In order to commercialize other pipeline products, the Company may continue to explore new sources of financing when appropriate.

Correction of Unaudited Financials in Prior Quarterly Release

In the second quarter of 2012, the Company assessed there was reasonable assurance that the conditions attached to several government grants were fulfilled and recognized $1.4 million and $1.5 million of government grants as income for the three and six months periods ended June, 30, 2012, respectively. In the fourth quarter of 2012, the Company determined that government grants of $0.98 million (RMB 6.2 million) related to the purchase of equipment that should have been recorded as deferred government grants with the balance applied to reduce depreciation expense of the related equipment over their remaining useful lives. As a result, the amount of government grants recognized as income should be reduced by $0.98 million for the three and six months periods ended June 30, 2012, and $0.98 million for the nine months periods ended September 30, 2012, respectively. The depreciation expense should also be reduced by $11,679 and $11,679 for the three and six months periods ended June 30, 2012, and $36,646 and $46,636 for the three and nine months periods ended September 30, 2012, respectively. Net cash used from operating activities remained unchanged, because the adjustments on net loss, depreciation of property, plant and equipment and amortization of licenses and permits, and the recognized government grant income in operating activities did not affect cash. Corresponding corrections were made for both the unaudited fourth quarter and full year 2012 financial statements. The corrections to earning releases that were issued in the affected quarters in 2012 are presented in the tables below. Investors should no longer rely upon the previously released unaudited financial statements for the periods and any earnings releases or other communications relating to these periods.

Consolidated Statements of Income (Loss) and Comprehensive Income (Loss):

Unaudited Three-month and six-month period ended June 30, 2012


                                                                                  Three months ended 'June 30 2012                           Six months ended 'June 30 2012
                                                                                 --------------------------------                           ------------------------------

                                                                                        Previously Reported          Adjustment              Corrected Report               Previously Reported         Adjustment              Corrected Report
                                                                                        -------------------         ----------               ----------------               -------------------        ----------              ----------------

     Sales                                                                                               9,364,632                       -                 9,364,632                       15,338,099                       -                15,338,099

     Cost of sales                                                                                       1,375,917                       -                 1,375,917                        3,631,206                       -                 3,631,206
     -------------                                                                                       ---------                     ---                 ---------                        ---------                     ---                 ---------

     Gross profit                                                                                        7,988,715                       -                 7,988,715                       11,706,893                       -                11,706,893
     ------------                                                                                        ---------                     ---                 ---------                       ----------                     ---                ----------

     Selling, general and administrative expenses                                                        6,700,526                       -                 6,700,526                       11,020,815                       -                11,020,815

     Research and development expenses - net of                                                          4,676,703                       -                 4,676,703                       12,018,875                       -                12,018,875

     Depreciation of property, plant and equipment                                                         324,944                 (11,679)                  313,265                          632,387                 (11,679)                  620,708
    and amortization of  licenses and permits

     Loss of disposal and impairment of property, plant and equipment                                            0                       -                         0                                0                       -                         0

     Provision for doubtful debts                                                                                -                       -                         -                                -                       -                         -

     Government grants recognized in income                                                             (1,386,126)                981,044                  (405,082)                      (1,457,330)                981,044                  (476,286)
     --------------------------------------                                                             ----------                 -------                  --------                       ----------                 -------                  --------

     Total operating expenses                                                                           10,316,047                 969,365                11,285,412                       22,214,747                 969,365                23,184,112
     ------------------------                                                                           ----------                 -------                ----------                       ----------                 -------                ----------

     Operating income (loss)                                                                            (2,327,332)               (969,365)               (3,296,697)                     (10,507,854)               (969,365)              (11,477,219)

     Interest income                                                                                       498,856                       -                   498,856                        1,096,527                       -                 1,096,527

     Interest and financing expenses                                                                      (232,078)                      -                  (232,078)                        (446,398)                      -                  (446,398)

     Other income (Expenses)                                                                                14,635                       -                    14,635                          132,713                       -                   132,713
     ----------------------                                                                                 ------                     ---                    ------                          -------                     ---                   -------

     Income (loss)  before income taxes and non-                                                        (2,045,919)               (969,365)               (3,015,284)                      (9,725,012)               (969,365)              (10,694,377)
    controlling interests

     Income tax recovery (expenses)                                                                        797,462                       -                   797,462                          800,364                       -                   800,364
     -----------------------------                                                                         -------                     ---                   -------                          -------                     ---                   -------

     Consolidated net income (loss)                                                                     (1,248,457)               (969,365)               (2,217,822)                      (8,924,648)               (969,365)               (9,894,013)

     Less: income (loss) attributable to non-controlling interests                                        (326,828)               (260,856)                 (587,684)                      (2,389,964)               (260,856)               (2,650,820)
     -------------------------------------------------------------                                        --------                --------                  --------                       ----------                --------                ----------

     Net income (loss) attributable to stockholders                                                       (921,629)               (708,509)               (1,630,138)                      (6,534,684)               (708,509)               (7,243,193)
     ----------------------------------------------                                                       --------                --------                ----------                       ----------                --------                ----------

     Net income (loss)                                                                                  (1,248,457)               (969,365)               (2,217,822)                      (8,924,648)               (969,365)               (9,894,013)

     Other comprehensive income (loss)

     Foreign currency translation adjustment                                                              (474,801)                  5,067                  (469,734)                         171,982                   5,067                   177,049
     ---------------------------------------                                                              --------                   -----                  --------                          -------                   -----                   -------

     Total comprehensive income (loss)                                                                  (1,723,258)               (964,298)               (2,687,556)                      (8,752,666)               (964,298)               (9,716,964)

     Less: comprehensive income (loss) attributable to non-controlling interests                          (373,994)               (259,492)                 (633,486)                      (2,353,583)               (259,492)               (2,613,075)
     ---------------------------------------------------------------------------                          --------                --------                  --------                       ----------                --------                ----------

     Comprehensive income(loss) attributable to stockholders                                            (1,349,264)               (704,806)               (2,054,070)                      (6,399,083)               (704,806)               (7,103,889)
     =======================================================                                            ==========                ========                ==========                       ==========                ========                ==========

     Basic and diluted earnings (loss) per share                                                             (0.02)                  (0.01)                    (0.03)                           (0.12)                  (0.01)                    (0.13)
     -------------------------------------------                                                             -----                   -----                     -----                            -----                   -----                     -----

     Weighted average number of shares

     of common stock outstanding

     - Basic                                                                                            54,804,498              54,804,498                54,804,498                       54,784,801              54,784,801                54,784,801

     - Diluted                                                                                          54,804,498              54,804,498                54,804,498                       54,784,801              54,784,801                54,784,801
     =========                                                                                          ==========              ==========                ==========                       ==========              ==========                ==========

Unaudited Three-month and six-month period ended September 30, 2012


                                                                     Three months ended 'September 30 2012                          Nine months ended 'September 30 2012
                                                                     -------------------------------------                          ------------------------------------

                                                                               Previously Reported           Adjustment                 Corrected Report                 Previously Reported         Adjustment              Corrected Report
                                                                               -------------------          ----------                  ----------------                 -------------------        ----------              ----------------

    Sales                                                                                       14,287,100                       -                   14,287,100                         29,625,199                       -                29,625,199

    Cost of sales                                                                                6,770,712                       -                    6,770,712                         10,401,918                       -                10,401,918
    -------------                                                                                ---------                     ---                    ---------                         ----------                     ---                ----------

    Gross profit                                                                                 7,516,388                       -                    7,516,388                         19,223,281                       -                19,223,281
    ------------                                                                                 ---------                     ---                    ---------                         ----------                     ---                ----------

    Selling, general and administrative expenses                                                 7,844,861                       -                    7,844,861                         18,865,676                       -                18,865,676

    Research and development expenses - net of                                                   3,773,625                       -                    3,773,625                         15,792,500                       -                15,792,500

    Depreciation of property, plant and equipment                                                  471,242                 (36,646)                     434,596                          1,103,629                 (46,636)                1,056,993
    and amortization of  licenses and permits

    Loss of disposal and impairment of property, plant and equipment                                     -                       -                            -                                  -                       -                         -

    Provision for doubtful debts                                                                    97,067                       -                       97,067                             97,067                       -                    97,067

    Government grants recognized in income                                                         (78,053)                      -                      (78,053)                        (1,535,383)                979,355                  (556,028)
    --------------------------------------                                                         -------                     ---                      -------                         ----------                 -------                  --------

    Total operating expenses                                                                    12,108,742                 (36,646)                  12,072,096                         34,323,489                 932,719                35,256,208
    ------------------------                                                                    ----------                 -------                   ----------                         ----------                 -------                ----------

    Operating income (loss)                                                                     (4,592,354)                 36,646                   (4,555,708)                       (15,100,208)               (932,719)              (16,032,927)

    Interest income                                                                                464,512                       -                      464,512                          1,561,039                                         1,561,039

    Interest and financing expenses                                                                302,846                       -                      302,846                           (143,552)                      -                  (143,552)

    Other income (Expenses)                                                                        (47,283)                      -                      (47,283)                            85,430                                            85,430
    ----------------------                                                                         -------                     ---                      -------                             ------                                            ------

    Income (loss)  before income taxes and non-                                                 (3,872,279)                 36,646                   (3,835,633)                       (13,597,291)               (932,719)              (14,530,010)
    controlling interests

    Income tax recovery (expenses)                                                                  (5,958)                      -                       (5,958)                           794,406                       -                   794,406
    -----------------------------                                                                   ------                     ---                       ------                            -------                     ---                   -------

    Consolidated net income (loss)                                                              (3,878,237)                 36,646                   (3,841,591)                       (12,802,885)               (932,719)              (13,735,604)

    Less: income (loss) attributable to non-controlling interests                                 (849,619)                  9,861                     (839,758)                        (3,239,583)               (250,995)               (3,490,578)
    -------------------------------------------------------------                                 --------                   -----                     --------                         ----------                --------                ----------

    Net income (loss) attributable to stockholders                                              (3,028,618)                 26,785                   (3,001,833)                        (9,563,302)               (681,724)              (10,245,026)
    ----------------------------------------------                                              ----------                  ------                   ----------                         ----------                --------               -----------

    Net income (loss)                                                                           (3,878,237)                 36,646                   (3,841,591)                       (12,802,885)               (932,719)              (13,735,604)

    Other comprehensive income (loss)

    Foreign currency translation adjustment                                                        890,063                 (11,880)                     878,183                          1,062,045                  (6,813)                1,055,232
    ---------------------------------------                                                        -------                 -------                      -------                          ---------                  ------                 ---------

    Total comprehensive income (loss)                                                           (2,988,174)                 24,766                   (2,963,408)                       (11,740,840)               (939,532)              (12,680,372)

    Less: comprehensive income (loss) attributable                                                (744,732)                  6,664                     (738,068)                        (3,098,315)               (252,828)               (3,351,143)
    to non-controlling interests
    ----------------------------

    Comprehensive income(loss) attributable to stockholders                                     (2,243,442)                 18,102                   (2,225,340)                        (8,642,525)               (686,704)               (9,329,229)
    =======================================================                                     ==========                  ======                   ==========                         ==========                ========                ==========

     Basic and diluted earnings (loss) per share                                                     (0.06)                   0.01                        (0.05)                             (0.17)                  (0.02)                    (0.19)
     -------------------------------------------                                                     -----                    ----                        -----                              -----                   -----                     -----

    Weighted average number of shares

    of common stock outstanding

    - Basic                                                                                     55,023,070              55,023,070                   55,023,070                         54,881,874              54,881,874                54,881,874

    - Diluted                                                                                   55,023,070              55,023,070                   55,023,070                         54,881,874              54,881,874                54,881,874
    =========                                                                                   ----------              ----------                   ----------                         ----------              ----------                ----------

Unaudited Consolidated Balance Sheet:


                                                                                                June 30 2012                                 September 30 2012
                                                                                               ------------                                  -----------------

                                                                                            Previously Reported         Adjustment            Corrected Report         Previously Reported        Adjustment            Corrected Report
                                                                                            -------------------        ----------            ----------------          -------------------        ----------           ----------------

     ASSETS

     Current assets

       Cash and cash equivalents                                                                           89,440,373                     -                89,440,373                 81,962,420                    -                81,962,420

       Accounts receivable - net                                                                           18,533,886                     -                18,533,886                 25,316,304                    -                25,316,304

       Inventories                                                                                         14,226,557                     -                14,226,557                 14,099,902                    -                14,099,902

       Prepaid expenses and deposits                                                                        1,408,762                     -                 1,408,762                    905,437                    -                   905,437
     -----------------------------                                                                          ---------                   ---                 ---------                    -------                  ---                   -------

     Total current assets                                                                                 123,609,578                     -               123,609,578                122,284,063                    -               122,284,063
     --------------------                                                                                 -----------                   ---               -----------                -----------                  ---               -----------

     Property, plant and equipment                                                                         80,961,440                     -                80,961,440                 82,994,261                    -                82,994,261

     Long-term inventories                                                                                  3,974,552                     -                 3,974,552                  2,227,196                    -                 2,227,196

     Long-term prepaid expenses                                                                               343,374                     -                   343,374                    311,079                    -                   311,079

     Prepayments for acquisition of equipment                                                                 452,144                     -                   452,144                    525,972                    -                   525,972

     Deferred tax assets                                                                                      353,903                     -                   353,903                    351,627                    -                   351,627

     Licenses and permits                                                                                   1,278,421                     -                 1,278,421                  1,261,820                    -                 1,261,820

     Total assets                                                                                         210,973,412                     -               210,973,412                209,956,018                    -               209,956,018
     ============                                                                                         ===========                   ===               ===========                ===========                  ===               ===========

     LIABILITIES AND EQUITY

     Current liabilities

       Loans payable                                                                                        4,722,178                     -                 4,722,178                  4,773,422                    -                 4,773,422

       Accounts payable and accrued liabilities                                                            28,698,963                     -                28,698,963                 27,529,207                    -                27,529,207

       Income tax payable                                                                                     234,156                     -                   234,156                    236,697                    -                   236,697

       Deferred revenue                                                                                     3,794,136                     -                 3,794,136                  8,108,669                    -                 8,108,669

       Dividends payable                                                                                            0                     -                         0                          -                    -                         -

       Deferred government grants                                                                             100,897               345,471                   446,368                    101,992              349,222                   451,214

     Total current liabilities                                                                             37,550,330               345,471                37,895,801                 40,749,987              349,222                41,099,209
     -------------------------                                                                             ----------               -------                ----------                 ----------              -------                ----------

     Deferred government grants                                                                             2,805,528               618,827                 3,424,355                  2,761,758              590,310                 3,352,068

     Loans payable                                                                                         23,330,072                     -                23,330,072                 24,670,318                    -                24,670,318

     Due to related party                                                                                   3,167,008                     -                 3,167,008                  3,201,375                    -                 3,201,375

     Deferred revenue                                                                                       6,925,862                     -                 6,925,862                  4,194,246                    -                 4,194,246
     ----------------                                                                                       ---------                                       ---------                  ---------                                      ---------

     Total long term liabilities                                                                           36,228,470               618,827                36,847,297                 34,827,697              590,310                35,418,007
     ---------------------------                                                                           ----------               -------                ----------                 ----------              -------                ----------

     Total liabilities                                                                                     73,778,800               964,298                74,743,098                 75,577,684              939,532                76,517,216
     -----------------                                                                                     ----------               -------                ----------                 ----------              -------                ----------

     Commitments and contingencies

     EQUITY

     Preferred stock                                                                                                -                     -                         -                          -                    -                         -

       Authorized 50,000,000 shares at par value of                                                                                       -                                                                         -

                                                    $0.001 each Issued and outstanding: nil                                               -                                                                         -

     Common stock                                                                                              55,020                                          55,020                     55,024                    -                    55,024

     Additional paid-in capital                                                                           106,032,906                                     106,032,906                106,204,800                    -               106,204,800

     Accumulated other comprehensive income                                                                10,113,926                 5,067                10,118,993                 10,899,102               (6,813)               10,892,289

     Statutory surplus reserves                                                                            11,808,271                                      11,808,271                 11,808,271                    -                11,808,271

     Retained earnings(accumulated deficit)                                                                (3,838,457)             (708,509)               (4,546,966)                (6,867,075)            (681,724)               (7,548,799)

     Total stockholders' equity                                                                           124,171,666              (703,442)              123,468,224                122,100,122             (688,537)              121,411,585

     Non-controlling interests                                                                             13,022,946              (260,856)               12,762,090                 12,278,212             (250,995)               12,027,217
     -------------------------                                                                             ----------              --------                ----------                 ----------             --------                ----------

     Total equity                                                                                         137,194,612              (964,298)              136,230,314                134,378,334             (939,532)              133,438,802
     ------------                                                                                         -----------              --------               -----------                -----------             --------               -----------

     Total liabilities and equity                                                                         210,973,412                     -               210,973,412                209,956,018                    -               209,956,018
     ============================                                                                         ===========                   ===               ===========                ===========                  ===               ===========

Conference Call Details

The Company will host a conference call on Thursday, April 18, 2013, at 8:00 a.m. EDT (April 18, 2013, at 8:00 p.m. China Standard Time) to review the Company’s financial results and provide an update on recent corporate developments.

To access the conference call, please dial 1-877-407-4018 (USA) or 1-201-689-8471 (International). A replay of the call will be available from 11 a.m. EDT on April 18, 2013 to May 2, 2013 at midnight. To access the replay, please dial 1-877-870-5176 (USA) or 1-858-384-5517 (International) and reference the replay pin number 411774.

A live audio webcast of the call will also be available from the investors section on the corporate web site at www.sinovac.com. A webcast replay can be accessed on the corporate website beginning April 18, 2013, and the replay will remain available for 30 days.

Statement Regarding Unaudited Financial Information

The unaudited financial information set forth above is subject to adjustments that may be identified when audit work is performed on the Company’s year-end financial statements, which could result in significant differences from this unaudited financial information. The Company expects to file final audited results with the SEC shortly.

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 including hepatitis A and B, seasonal influenza, H5N1 pandemic influenza (avian flu), H1N1 influenza (swine flu) and mumps, as well as animal rabies vaccine for canines. The Company recently concluded the phase III clinical trial for enterovirus 71 (against hand, foot and mouth disease). In 2009, Sinovac was the first company worldwide to receive approval for its H1N1 influenza vaccine, Panflu.1, and has manufactured it for the Chinese Central Government, pursuant to the government-stockpiling program. The Company is also the only supplier of the H5N1 pandemic influenza vaccine to the government-stockpiling program. Sinovac is developing a number of new pipeline vaccines including vaccines for pneumococcal polysaccharides, pneumococcal conjugate, varicella and rubella. Sinovac sells its vaccines mainly in China and exports selected vaccines to Mongolia, Nepal, and the Philippines. Sinovac was also granted a license to commercialize seasonal flu vaccine in Mexico.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by words or phrases such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Among other things, the business outlook and quotations from management in this press release contain forward-looking statements. Statements that are not historical facts, including statements about Sinovac’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Sinovac does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

Helen Yang
Sinovac Biotech Ltd.
Tel: +86-10-8279-9871
Fax: +86-10-6296-6910
Email: ir@sinovac.com

Investors:
Stephanie Carrington
The Ruth Group
Tel: +1-646-536-7017
Email: scarrington@theruthgroup.com

Media:
Aaron Estrada
The Ruth Group
Tel: +1-646-536-7028
Email: vaguiar@theruthgroup.com


    SINOVAC BIOTECH LTD.

    Incorporated in Antigua and Barbuda

    Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)

    Years ended December 31, 2012 and 2011

    (Unaudited)                                                                                        Three months ended          Twelve months ended

    (Expressed in U.S. Dollars)                                                                              31-Dec                       31-Dec
                                                                                                             ------                       ------

                                                                                                                          2012                         2011         2012            2011
                                                                                                                                                                    ----            ----

    Sales                                                                                                          $18,951,501                  $21,143,404  $48,576,700     $56,841,892

    Cost of sales-(exclusive of depreciation of land                                                                 8,698,009                    8,031,758   19,099,927      21,127,410
    use right and amortization of licenses and
    permits of $126,998 (2011- $33,507) for three
    months and $234,768  (2011 -$290,526) for
    twelve months.
    --------------

    Gross profit                                                                                                    10,253,492                   13,111,646   29,476,773      35,714,482
    ------------                                                                                                    ----------                   ----------   ----------      ----------

    Selling, general and administrative expenses                                                                    12,819,508                    5,909,584   31,685,185      22,372,095

    Provision for (recovery of) doubtful accounts                                                                     -971,287                   -1,661,581     -874,220        -166,865

    Research and development expenses -net of $Nil (2011-$470,827) in government research grants for
     three months and $125,222 (2010-$686,258) for twelve months.                                                    1,251,065                    2,261,688   17,043,565       9,006,550

    Depreciation of property, plant and equipment  and amortization of  licenses and permits                           539,672                      365,391    1,594,976       1,436,944

    Loss of disposal and impairment of property, plant and equipment                                                 2,190,504                      259,464    2,190,504         454,973

    Government grant recognised as income                                                                              181,486                     -556,169     -372,853        -763,677
    -------------------------------------                                                                              -------                     --------     --------        --------

    Total operating expenses                                                                                        16,010,948   -                6,578,377   51,267,157   -  32,340,020
    ------------------------                                                                                        ---------- ---                ---------   ---------- ---  ----------

    Operating income (loss)                                                                                         -5,757,456   -                6,533,269  -21,790,384   -   3,374,462

    Interest and financing expenses -net of $485,317 (2010-$nil) in government grants for three months
     and $595,883 (2010-$147,520) for twelve months.                                                                  -630,824                       61,756     -774,376        -384,560

    Interest income                                                                                                    449,745                      555,375    2,010,784       1,397,141

    Other income (expenses)                                                                                           -162,627                      122,452      -77,197         279,866

    Loss on disposal and write down of equipment

    Income (loss)  before income taxes and non-controlling interests                                                -6,101,162   -                7,272,852  -20,631,173   -   4,666,909

    Income tax recovery (expenses)                                                                                      89,491                   -3,009,880      883,897      -5,066,603
    -----------------------------                                                                                       ------                   ----------      -------      ----------

    Consolidated net income (loss)                                                                                  -6,011,671   -                4,262,972  -19,747,276   -    -399,694

    Less: income (loss) attributable to non-controlling interests                                                     -577,578                    1,494,118   -4,068,156         445,002
    -------------------------------------------------------------                                                     --------                    ---------   ----------         -------

    Net income (loss) attributable to stockholders                                                                 $-5,434,093                   $2,768,854 $-15,679,120       $-844,696
    ----------------------------------------------                                                                 -----------                   ---------- ------------       ---------

    Net income (loss)                                                                                              $-6,011,671                   $4,262,972 $-19,747,276       $-399,694

    Other comprehensive income

    Foreign currency translation adjustment                                                                            960,352                      789,653    2,015,584       3,639,992
    ---------------------------------------                                                                            -------                      -------    ---------       ---------

    Total comprehensive income (loss)                                                                               -5,051,319                    5,052,625  -17,731,692       3,240,298

    Less: comprehensive income (loss) attributable to non-controlling interests                                       -488,125                    1,595,969   -3,839,268         973,562
    ---------------------------------------------------------------------------                                       --------                    ---------   ----------         -------

    Comprehensive income (loss) attributable to stockholders                                                       $-4,563,194                   $3,456,656 $-13,892,424      $2,266,736

    Earnings (loss) per share              - basic                                                                      $-0.10                        $0.05       $-0.29          $-0.02

                                                                 - diluted                                              $-0.10                        $0.05       $-0.29          $-0.02

    Weighted average number of shares of common stock outstanding

          - Basic                                                                                                   55,037,264                   54,766,428   54,926,440      54,608,919

    - Diluted                                                                                                       55,037,264                   54,946,194   54,926,440      54,608,919
    =========                                                                                                       ==========                   ==========   ==========      ==========


    SINOVAC BIOTECH LTD.

    Incorporated in Antigua and Barbuda

    Consolidated Balance Sheets

    December 31, 2012 and 2011

    (Unaudited)

    (Expressed in U.S. Dollars)
    --------------------------

                                                           December 31,                                          December 31,

                           2012                          2011
                           ----                          ----

    ASSETS

    Current assets

      Cash and cash equivalents                                 $90,881,970                                   $104,286,695

      Accounts receivable - net                                  23,440,135                                     17,834,407

      Inventories                                                10,529,476                                      8,113,428

      Prepaid expenses and deposits                               1,072,076                                      1,804,555

    Total current assets                                        125,923,657                                    132,039,085
    --------------------                                        -----------                                    -----------

    Property, plant and equipment                                80,083,383                                     75,627,881

    Long-term inventories                                            28,692                                      5,248,237

    Long-term prepaid expenses                                      289,766                                        408,656

    Prepayments for acquisition of equipment                        483,278                                        828,902

    Deferred tax assets                                             445,589                                        419,114

    Licenses and permits                                          1,149,914                                      1,336,254

    Total assets                                               $208,404,279                                   $215,908,129
    ============                                               ============                                   ============

    LIABILITIES AND EQUITY

    Current liabilities

      Loans payable                                              $3,328,590                                     $4,713,498

      Accounts payable and accrued liabilities                   25,425,498                                     29,522,495

    Income tax payable                                              238,775                                      3,351,127

    Deferred revenue                                             11,972,155                                        429,416

      Dividends payable                                                   -                                        795,106

      Deferred government grants                                    431,097                                        719,081
      --------------------------                                    -------                                        -------

    Total current liabilities                                    41,396,115                                     39,530,723
    -------------------------                                    ----------                                     ----------

    Deferred government grants                                    4,068,602                                      3,388,913

    Loans payable                                                31,181,235                                     17,321,327

    Due to related party                                          3,230,125                                                     -

    Deferred revenue                                                 99,517                                     10,369,695
    ----------------                                                 ------                                     ----------

    Total long term liabilities                                  38,579,479                                     31,079,935
    ---------------------------                                  ----------                                     ----------

    Total liabilities                                            79,975,594                                     70,610,658
    -----------------                                            ----------                                     ----------

    Commitments and contingencies

    EQUITY

    Preferred stock                                                       -                                                     -

      Authorized 50,000,000 shares at par value
       of $0.001 each

      Issued and outstanding: nil

    Common stock                                                     55,092                                         54,774

      Authorized: 100,000,000 shares at par
       value of $0.001 each

      Issued and outstanding:  55,091,561 (2011
       - 54,773,961)

    Additional paid-in capital                                  106,245,934                                    105,383,346

    Accumulated other comprehensive income                       11,765,021                                      9,978,325

    Statutory surplus reserves                                   11,808,271                                     11,808,271

    Retained earnings (accumulated deficit)                     -12,982,893                                      2,696,227

    Total stockholders' equity                                  116,891,425                                    129,920,943

    Non-controlling interests                                    11,537,260                                     15,376,528
    -------------------------                                    ----------                                     ----------

    Total equity                                                128,428,685                                    145,297,471
    ------------                                                -----------                                    -----------

    Total liabilities and equity                               $208,404,279                                   $215,908,129
    ============================                               ============                                   ============


    SINOVAC BIOTECH LTD.

    Incorporated in Antigua and Barbuda

    Consolidated Statements of Cash Flows

    Years ended December 31, 2012 and 2011

    (Unaudited)

    (Expressed in U.S. Dollars)
    --------------------------

                                                                                Three months ended        Twelve months ended

                                                                                      31-Dec                     31-Dec
                                                                                      ------                     ------

                                                                                                     2012                      2011         2012         2011
                                                                                                     ----                      ----         ----         ----

    Cash flows from (used in)
    operating activities

      Net income (loss)                                                                       $-6,011,671                 4,262,972 $-19,747,276    $-399,694

      Adjustments to reconcile net income to net cash

      provided by operating activities:

     - deferred income taxes                                                                      -89,491                   788,472      -17,204    2,845,195

     - stock-based compensation                                                                   -40,878                    41,909      347,226      206,301

     - inventory provision                                                                      2,113,825                 2,735,822    3,479,453    4,034,169

     - Provision for (recovery of)  doubtful accounts                                            -971,287                -1,661,581     -874,220     -166,865

     Loss of disposal and impairment of property,  plant  and equipment                         2,184,576                   259,464    2,190,504      454,973

      - research and development expenditures qualified for government grant                      -46,242                  -470,827     -125,222     -686,258

     - depreciation of property, plant and equipment

       and amortization of licenses and permits                                                   814,252                 1,213,428    4,487,411    4,825,613

     - deferred government grant recognized in income                                             109,340                  -225,035     -358,230     -432,543

     accretion expenses                                                                            49,608                    86,780      234,957      377,410

    Changes in:

     - accounts receivable                                                                      3,016,814                 6,014,109   -4,285,669    5,474,602

     - inventories                                                                              3,715,070                  -108,988     -425,853   -1,915,078

     - income tax payable                                                                          -4,841                 1,863,729   -3,129,693    1,339,812

     - prepaid expenses and deposits                                                             -135,558                  -107,276      913,084     -530,715

     - deferred revenue                                                                       -330,322.00                -1,190,534    1,026,283   -2,695,943

     - accounts payable and accrued liabilities                                                 3,451,254                 3,075,574     -328,062    1,204,647
     ------------------------------------------                                                 ---------                 ---------     --------    ---------

    Net cash (used in)                                                                          7,824,449                16,578,018  -16,612,511   13,935,626
    provided by operating
    activities
    ----------

    Cash flows from financing activities

    - Loan proceeds                                                                             9,489,001                 7,399,314   16,787,057   11,391,836

    - Loan repayment                                                                           -4,755,262                -9,275,502   -4,755,262  -10,658,840

       net of share issuance costs                                                                108,960                     6,400      508,160      748,800

    - Proceeds from shares subscribed                                                          -26,880.00                         -        7,520        3,360

    - Dividends paid to non-controlling shareholder

    of Sinovac Beijing                                                                              -2775                         -     -802,151   -5,862,676

    - Government grants received                                                             2,154,186.00                 1,585,289    2,394,766    1,592,925

    - Repayment from (loan to) non-controlling shareholder of  Sinovac  Beijing                     11666                         -                 3,397,522

    Repayment from (loan to) non-controlling shareholder of  Sinovac  Dalian                            -                         -    3,189,830
    ------------------------------------------------------------------------

    Net cash provided by                                                                        6,978,896                  -284,499   17,329,920      612,927
    financing activities
    --------------------

    Cash flows used in
    investing activities

     - Restricted cash                                                                                  -                         -            -            -

     - Proceeds from disposal of equipment                                                          5,375                     4,797        5,375      122,089

    - Proceeds from redemption of short-term investments                                                -                         -            0    1,544,759

    - Purchase of short-term investments                                                                -                         -            -            -

      - Prepayments for acquisition of equipment                                                  254,966                  -467,183      254,966     -467,183

     - Acquisition of property, plant and equipment                                            -5,469,802                -6,346,012  -16,411,576  -14,989,876
     ----------------------------------------------                                            ----------                ----------  -----------  -----------

    Net cash provided                                                                          -5,209,461                -6,808,398  -16,151,235  -13,790,211
    (used) in investing
    activities
    ----------

    Exchange gain on cash                                                                         674,334                   602,319    2,029,101    1,942,863
    and cash equivalents
    --------------------

    Increase in cash and                                                                        8,919,550                10,087,440  -13,404,725    2,701,205
    cash equivalents

    Cash and cash                                                                              81,962,420                94,199,255  104,286,695  101,585,490
    equivalents, beginning
    of period
    ---------

    Cash and cash equivalents, end of                                                         $90,881,970              $104,286,695  $90,881,970 $104,286,695
    period
    ======                                                                                                                                                ===

    Supplemental
    disclosure of cash flow
    information:

    Cash paid for interest,net of amounts capitalized                                            $256,256                  $242,504     $749,500     $455,851

    Cash paid for income taxes                                                                         $0                  $167,883   $2,264,593     $881,596
    ==========================                                                                        ===                  ========   ==========     ========

    Supplemental schedule of non-cash activities:

     Acquisition of property,                                                                  $3,788,804                $9,124,751   $3,788,004   $9,124,751
    plant and equipment
    included in accounts
    payable and accrued
    liabilities
    ===========                                                                                                                                           ===

SOURCE Sinovac Biotech Ltd.


Source: PR Newswire