HUBEI PROVINCE, China, May 21 /Xinhua-PRNewswire-FirstCall/ -- Benda Pharmaceutical, Inc. (OTC Bulletin Board: BPMA), a China-based pharmaceutical company producing both Gendicine(R), a commercialized gene therapy medicine for the treatment of cancer, and traditional Chinese and conventional medicines, today announced financial results for the quarter ended March 31, 2008. The Company filed its Form 10Q with the SEC on May 20, 2008.
Three Months Ended March 31, 2008
Revenue in the first quarter of 2008 increased 96.3% to $5.9 million from $3.0 million in the first quarter of 2007, primarily reflecting increased sales at Benda Ebei.
Gross profit in the first quarter of 2008 increased 89.5% to $2.0 million from $1.1 million in the first quarter of 2007. Gross margin was 33.8%, compared with 35.0% in the same period of 2007.
Charles Wan, Chief Executive Officer of Benda Pharmaceutical, stated, "We are very pleased with the net revenue from Benda Ebei, which increased 136% year over year to $5.9 million. We believe the market opportunity for our products is extremely compelling and we look forward to further increasing our long-term revenue growth and profitability."
Operating expenses in the first quarter were approximately $3.1 million, compared with $0.6 million in the first quarter of 2007. The increase in operating expense is primarily due to increased administrative expenses including a penalty payment paid to investors, a bad debt provision and increased consulting and professional fees.
Wan continued, "We remain very focused on enhancing our revenue performance at SiBiono as well as our gross margin performance across the organization."
Operating loss in the first quarter 2008 was $1.1 million, compared with an operating income of $0.5 million in the first quarter of 2007. This loss was primarily due to a significant increase in general and administrative expenses.
In the first quarter of 2008, Benda realized interest expense of $1.2 million related to the Company’s convertible note issued in March 2007.
Net loss in the first quarter of 2008 was $2.2 million, or $0.02 per diluted share, compared to net income of $0.4 million, or approximately breakeven on a diluted share basis, in the first quarter of 2007.
Business Update
-- Board of Directors update: The Company appointed Jun Tang to its board
of directors, effective May 1, 2008. Mr. Tang has over a decade of
experience in corporate management and strategic planning and is
currently the President and Chief Executive Officer at Xin Hua Du
Industrial Group Co., a China-based conglomerate with several
publicly-listed subsidiaries. He also serves on the Board of Directors
of Shanda Interactive Entertainment Ltd. (NASDAQ: SNDA), where he
served as President from February 2004 through April 2008.
-- Jiangling Benda plant update: On April 9, 2008, Jiangling Benda
received the GMP Certificate of Approval from the Chinese State Food
and Drug Administration ("SFDA"), authorizing the production of
Ribavrin. The Company believes the certification is a major step
toward commercializing Ribavrin in the domestic market.
-- Yidu Benda plant update: Yidu Benda completed its upgrading of the
waste water system and passed the government’s verification and testing
of equipment in October 2007. Yidu Benda is now permitted to test the
production process at the plant, which will be followed by a test of
the production results, held by the government bodies. Benda management
cannot at this time estimate the exact timing for obtaining production
approval by the government bodies.
About Benda Pharmaceutical, Inc.
Benda Pharmaceutical, Inc. ( http://www.bendapharma.com ), a China-based pharmaceutical company, produces traditional Chinese and conventional medicines, as well as Gendicine(R), a commercialized gene therapy medicine for the treatment of cancer.
Safe Harbor Statement
The information contained herein includes forward-looking statements. These statements relate to future events or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. The safe harbor for forward-looking statements contained in the Securities Litigation Reform Act of 1995 protects companies from liability for their forward-looking statements if they comply with the requirements of the Act.
Benda Pharmaceutical Inc., Balance Sheet
March 31 December 31
2008 2007
(Unaudited)
Assets
Current Assets
Cash and cash equivalents $1,401,178 $1,266,240
Trade receivables, net 11,215,913 10,472,233
Other receivables 716,743 453,595
Refundable purchase price paid -- 1,200,000
Inventories 2,712,963 1,952,348
Prepaid expenses and deposits 1,176,692 933,299
Total current assets 17,223,489 16,277,715
Due from related parties 2,785,347 2,630,019
Property and equipments, net 27,343,976 26,275,871
Intangible assets, net 6,464,173 6,359,000
Goodwill 7,704,058 7,395,752
Restricted cash 5,454,150 3,957,624
Refundable purchase price paid 1,200,000 --
Other assets 1,782,297 1,710,972
Debt issue costs 262,066 327,945
Total Assets $70,219,556 $64,934,898
Liabilities & Shareholders’ Equity
Current Liabilities
Bank indebtedness $1,160,976 $874,490
Bank loans payable (current
portion) 2,934,657 2,867,004
Long term debt payable (current
portion) 1,732,498 1,787,239
Accounts payable and accrued
liabilities 5,519,316 4,665,984
Commercial notes payable 8,187,194 5,118,758
Taxes payable 797,940 1,279,385
Acquisition price payable 1,388,825 1,333,246
Wages payable 848,922 664,786
Total current liabilities 22,570,328 18,590,892
Long term debt payable (long term
portion) 442,718 425,001
Long-term convertible promissory
notes 3,816,197 2,875,075
Due to related parties (Long-term) 3,284,540 3,193,618
Total liabilities 30,113,783 25,084,586
Minority interest 5,697,658 5,453,622
Redeemable common stock, 2,049,560
shares at $3.6 per share 7,376,366 7,376,366
Shareholders’ Equity
Preferred stock, $0.001 par value;
5,000,000 shares authorized;
None issued and outstanding -- --
Common stock, $0.001 par value;
150,000,000 shares authorized;
100,803,509 shares issued and
outstanding as of 3/31/2008;
100,170,071 shares issued and
outstanding as of 12/31/2007 100,803 100,170
Additional paid in capital 21,853,508 21,547,929
Retained earnings (unrestricted) (2,987,195) (833,089)
Statutory surplus reserve fund 2,310,681 2,310,681
Accumulative other comprehensive
income 5,250,092 3,390,774
Shares issuable for acquisition and
services 503,860 503,860
Total Shareholders’ Equity 27,031,749 27,020,325
Total Liabilities & Shareholders’
Equity $70,219,556 $64,934,898
Benda Pharmaceutical Inc., Income Statement
THREE MONTHS ENDED MARCH 31
2008 2007
(Unaudited) (Unaudited)
Revenue $5,947,370 $3,029,035
Cost of goods sold (3,940,080) (1,970,047)
Gross profit 2,007,290 1,058,988
Selling expenses (436,371) (88,183)
General and administrative
expenses
Amortization of
intangible assets (51,575) (26,284)
Amortization of debt
issue costs (65,879) (8,743)
Depreciation (123,220) (76,576)
Bad debts (471,297) 70,986
Director remuneration (110,873) --
Penalty to investors (722,205) (120,000)
Other general and
administrative
expenses (1,097,869) (324,713)
Total general and
administrative
expenses (2,642,918) (485,330)
Gains / (losses) on disposals
of fixed assets -- (12,025)
Research and development
expenses (22,064) --
Total operating expenses (3,101,353) (585,538)
Operating income / (loss) (1,094,063) 473,450
Interest income / (expenses) (1,212,282) (17,585)
Other income (expenses) 301,693 937
Government subsidies /
grants -- --
Income / (loss) before
minority interest and
income taxes (2,004,652) 456,802
Income taxes (133,197) --
Minority interest (16,257) (40,765)
Net income / (loss) $(2,154,106) $416,037
Earnings / (loss) per
share - basic $(0.02) $0.00
Weighted average shares
outstanding - basic 100,312,873 96,281,951
Earnings / (loss) per
share - diluted $(0.02) $0.00
Weighted average shares
outstanding - diluted 100,312,873 124,099,914