Company Exceeds Guidance with 2008 Revenue of RMB243.2 million (US$35.7 million); Full year 2008 Adjusted Non-GAAP Operating Income Grew 20.6% over 2007 to RMB59.7 million (US$8.8 million)
Provides 2009 Net Revenue Guidance Range of US$43-US$45 million
SHENYANG, China, March 12 /PRNewswire-Asia/ -- 3SBio Inc. (Nasdaq: SSRX) ("3SBio" or "the Company"), a leading China-based biotechnology company focused on researching, developing, manufacturing and marketing biopharmaceutical products, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2008.
Fiscal Year 2008 Financial Highlights:
-- Total net revenues increased 35.0% over 2007 to RM243.2 million
(US$35.7 million).
-- Adjusted non-GAAP operating income was RMB59.7 million (US$8.8 million)
for 2008, when excluding share-based compensation expense and a RMB6.9
million (US$1.0 million) recognition of the one-time upfront payment
related to the licensing deal with AMAG Pharmaceuticals. Adjusted
non-GAAP operating income was RMB49.5 million (US$6.8 million) for 2007.
GAAP operating income for 2008 was RMB47.8 million (US$7.0 million).
-- Adjusted non-GAAP net income was RMB75.0 million (US$11.0 million),
further excluding non-operating investment losses on available-for-sale
securities, comparing to adjusted non-GAAP net income of RMB79.8
million (US$10.9 million) in 2007. GAAP net income for 2008 was RMB39.5
million (US$5.8 million).
-- Adjusted non-GAAP earnings per American depositary share ("ADS") were
RMB3.46 (US$0.51), compared to RMB3.81 (US$0.52) in 2007. GAAP earnings
per ADS for 2008 were RMB1.82 (US$0.27).
Fourth Quarter 2008 Financial Highlights:
-- Total net revenues increased 31.5% over the fourth quarter of 2007 to
RMB60.1 million (US$8.8 million).
-- Adjusted non-GAAP operating income for the fourth quarter was RMB6.1
million (US$0.9 million) when excluding share-based compensation
expense and the AMAG recognition. Adjusted non-GAAP operating income
was RMB6.3 million (US$0.9 million) for 2007. GAAP operating loss was
RMB2.3 million (US$0.3 million) for the quarter.
-- Adjusted non-GAAP net income was RMB11.3 million (US$1.7 million),
compared to adjusted non-GAAP net income of RMB15.3 million for 2007.
GAAP net loss for the quarter was RMB1.5 million (US$0.2 million).
-- Adjusted non-GAAP earnings per ADS were RMB0.52 (US$0.08), compared to
RMB0.70 (US$0.10) in fourth quarter of 2007. GAAP loss per ADS was
RMB0.07 (US$0.01) for the fourth quarter of 2008.
* Please refer to "Reconciliation Tables of GAAP to adjusted Non-GAAP
Figures" at the end of this press release. Adjusted (Non-GAAP) items
for the three- and twelve-month periods ended December 31, 2007 have
been revised to conform to the current year's presentation basis.
Fiscal Year 2008 Business Highlights:
-- EPIAO, the Company's flagship injectable recombinant human
erythropoietin ("EPO") products, continued to outpace EPO market growth
in China. Net revenue from EPIAO increased 32.0% year-over-year in the
fourth quarter of 2008 to RMB39.3 million (US$5.8 million), and
increased 27.5% to RMB154.6 million (US$22.7 million) for the full year
2008, as 3SBio further enhanced its market leadership position, with
41.1% of EPO market share according to fourth quarter 2008 IMS data.
-- The high quality of EPIAO, a key factor contributing to EPIAO's success
and leading market position in China, was further validated by a study
sponsored by Amgen. The study shows that among 12 EPO products
manufactured in Asia, 3SBio's EPIAO has the biophysical and biochemical
properties that most resemble Epogen. The article was published in the
Journal of Pharmaceutical Sciences in July, 2008.
-- TPIAO, the Company's protein-based therapeutic recombinant human
thrombopoietin ("TPO") products, continued their rapid uptake trend and
are increasingly adopted as the standard of care for Chemo Induced
Thrombocytopenia. TPIAO net revenue increased 39.7% year-over-year in
the fourth quarter of 2008 to RMB16.4 million (US$2.4 million), and
increased 56.9% in 2008 to RMB67.6 million (US$9.9 million).
-- 3SBio completed all three Phase III programs on schedule, and submitted
them for SFDA approval:
-- In September 2008, the Company filed for approval of a 36,000 IU
dosage formulation of EPIAO for the treatment of anemia associated
with chemotherapy in cancer patients. If approved, 36,000 IU dosage
formulation of EPIAO will further enhance the Company's effort to
penetrate Oncology market given the convenience of a weekly
injection.
-- In November 2008, the Company filed for approval of NuLeusin for the
treatment of late stage metastatic renal cell carcinoma, and if
approved this is expected to be the only treatment of this kind
available in China. NuLeusin, 3SBio's second-generation IL-2, is a
genetically modified form of IL-2, possessing improved biochemical
properties over naturally occurring IL-2.
-- In December 2008, the Company filed for approval of a TPIAO label
extension for the treatment of idiopathic thrombocytopenic purpura
(ITP) in China, representing the first of a series of indications
that the Company plans to pursue to build and grow TPIAO brand.
-- 3SBio demonstrated its business development capabilities through a
strategic partnership with AMAG Pharmaceutical, to develop and
commercialize Ferumoxytol, a new generation of IV Iron therapy, in
China. 3SBio plans to initiate China SFDA registration trials in 2009,
further enhancing the Company's long term growth potential through a
diversified product portfolio.
-- The Company streamlined internal organization structures and vendor
relationships, to further strengthen capabilities and increase
operational efficiency, and recruited key management staff.
-- 3SBio expanded the Oncology and Nephrology focused sales and marketing
organization to over 221 personnel, covering over 2000 leading
hospitals in China.
-- 3SBio was jointly certified by the Liaoning Provincial Office of
Science and Technology, Liaoning Provincial Department of Finance,
National Revenue Office of Liaoning Province and Local Revenue
Administration of Liaoning Province as a "High-Tech Enterprise." A
"High-Tech Enterprise" is an official designation accorded to a company
that, among other criteria, is engaged in a business field which
receives special endorsement from the national government and has more
than 60% of its income from high-tech products or services.
Dr. Jing Lou, Chief Executive Officer of 3SBio, commented, "3SBio delivered solid operating and financial performance in our second consecutive year since going public in early 2007. We once again demonstrated our ability to execute on our business strategy and achieve above market rate top-line growth and solid bottom-line operating profitability, despite significant investment in building brands in the marketplace, developing new products and growing the organization. 3SBio enters 2009 as a company with strengthened capabilities to generate a solid operating cash flow, a robust balance sheet, and a stream of near-term new product offerings to sustain mid- and long-term growth. Based on our 2008 performance and our view on the macro economic environment, as well as market and operating conditions in 2009, we are confident in setting a total net revenue target of between US$43 million to US$45 million for the full year of 2009."
Fourth Quarter and Fiscal Year 2008 Unaudited Financial Results
Net revenues. Net revenues increased by 31.5% to RMB60.1 million (US$8.8 million) in the fourth quarter of 2008 from the same period in 2007. This increase was primarily due to the growth in TPIAO and EPIAO products, which increased by 32.0% and 39.7%, respectively, from the same period in 2007.
Net revenues increased by 35.0% to RMB243.2 million (US$35.7 million) in 2008 from RMB180.2 million (US$24.7 million) in 2007. This increase was primarily attributed to the continued growth in EPIAO products, sales of which increased by 27.5% from RMB121.2 million (US$16.6 million) in 2007 to RMB154.6 million (US$22.7 million) in 2008. The growth in sales from EPIAO was driven in part by an expanded oncology sales force, which continued to perform well. The Company also witnessed rapid market adoption of TPIAO products, which generated revenues of RMB67.6 million (US$9.9 million) in 2008, compared to RMB43.1 million (US$5.9 million) in 2007. TPIAO was 3SBio's second largest revenue contributor in 2008, accounting for 27.8% of our total net revenues in the period. Sales from in-licensed Iron Sucrose supplement increased 117.8% to RMB7.0 million (US$1.0 million) in 2008. Export sales registered a steady growth of 22.2% to RMB8.3 million (US$1.2 million) in 2008, accounting for 3.4% of total net revenue.
Gross profit. As a result of strong sales across our product lines, gross profit increased by 36.3% to RMB54.4 million (US$8.0 million) in the fourth quarter of 2008 from RMB39.9 million (US$5.5 million) for the same period in 2007. Gross margin increased to 90.6% in the fourth quarter 2008 from 87.4% for the same period in 2007.
In 2008, gross profit grew 36.1% to RMB221.5 million (US$32.5 million) from RMB162.7 million (US$22.3 million) in 2007. Gross margin of 91.1% in 2008 remained in line with the gross margin of 90.3% in 2007.
Operating income/loss. Adjusted non-GAAP operating income for the fourth quarter was RMB6.1 million (US$0.9 million), excluding share-based compensation expense of RMB1.4 million (US$0.2 million) and a RMB6.9 million (US$1.0 million) recognition of the upfront payment related to the licensing deal with AMAG Pharmaceuticals. Adjusted non-GAAP operating income for the full year was RMB59.7 million (US$8.8 million), an increase of 20.6% over year 2007. Adjusted non-GAAP operating income was RMB49.5 million (US$6.8 million) for 2007.
GAAP operating loss was RMB2.3 million (US$0.3 million) in the fourth quarter 2008, down from operating income of RMB6.1 million (US$0.8 million) for the same period in 2007. Operating income decreased by 1.6% to RMB47.8 million (US$7.0 million) in 2008 from RMB48.5 million (US$6.7 million) in 2007.
Operating expenses. Adjusted non-GAAP operating expenses were RMB48.5 million (US$7.1 million) in the fourth quarter and RMB162.1 million (US$23.8 million) in the full year of 2008. This was an increase of 44.3% and 43.2% from adjusted non-GAAP operating expenses of RMB33.6 million (US$4.6 million) and RMB113.2 million (US$15.5 million) in the fourth quarter and full year of 2007 respectively.
-- Research and development cost (non-GAAP). Adjusted R&D cost for the
fourth quarter was RMB5.3 million (US$0.8 million) and RMB15.0 million
(US$2.2 million) for the full year, excluding the one-time upfront
payment for the license fee of RMB6.9 million (US$1.0 million) and
share-based compensation expense. This was an increase of 43.4% and
29.0% from adjusted R&D cost of RMB3.7 million (US$0.5 million) and
RMB11.6 million (US$1.6 million) in the fourth quarter and full year of
2007 respectively. The overall increase in R&D cost for the fourth
quarter and fiscal year 2008 was mainly attributable to research and
development expenses associated with the number of clinical tests
conducted and the continued development of other pipeline products.
-- Sales, marketing and distribution expenses (non-GAAP). Adjusted Sales,
marketing and distribution expenses for the fourth quarter were RMB38.0
million (US$5.6 million) and RMB118.8 million (US$17.4 million) for the
full year, excluding share-based compensation expense. This was an
increase of 67.4% and 41.1% from adjusted expenses of RMB22.7 million
(US$3.1 million) and RMB84.2 million (US$11.5 million) in the fourth
quarter and full year of 2007 respectively. The increase was primarily
attributable to higher sales activities in general, continued
investment in building the TPIAO brand and EPIAO penetration of the
Oncology market.
-- General and administrative expenses (non-GAAP). Adjusted general and
administrative expenses for the fourth quarter were RMB5.1 million
(US$0.8 million) and RMB28.4 million (US$4.2 million) for the full year,
excluding share-based compensation expense. This was a decrease of
28.6% and an increase of 63.1% from adjusted general and administrative
expenses of RMB7.2 million (US$1.0 million) and RMB17.4 million (US$2.4
million) in the fourth quarter and full year of 2007 respectively. The
increase in general and administrative expense in fiscal year 2008 was
primarily attributable to compliance cost associated with being a
public company and increase of management personnel.
In the fourth quarter of 2008, total GAAP operating expenses increased by 67.8% to RMB56.7 million (US$8.3 million) as compared to the same period in 2007. In 2008, total GAAP operating expenses increased by 52.1% to RMB173.7 million (US$25.5 million) from RMB114.2 million (US$15.7 million) in 2007.
-- Research and development costs (GAAP). Research and development cost
increased by 234.8% to RMB12.4 million (US$1.8 million) in the fourth
quarter 2008 from RMB3.7 million (US$0.5 million) for the same period
in 2007. Research and development cost increased by 93.2% to RMB22.5
million (US$3.3 million) in 2008 from RMB11.6 million (US$1.6 million)
in 2007, with R&D cost as a percentage of total net revenues increasing
to 9.2% in 2008 from 6.5% in 2007.
-- Sales, marketing and distribution expenses (GAAP). Sales, marketing and
distribution expenses increased by 68.8% to RMB38.3 million (US$5.6
million) in the fourth quarter 2008 from RMB22.7 million (US$3.1
million) for the same period in 2007. Sales, marketing and distribution
expenses increased 37.4% to RMB119.8 million (US$17.6 million) for 2008
from RMB84.2 million (US$11.5 million) for 2007. Sales, marketing and
distribution expenses as a percentage of total net revenues increased
to 49.2% in 2008 from 46.7% in 2007.
-- General and administrative expenses (GAAP). General and administrative
expenses decreased by 19.2% to RMB6.0 million (US$0.9 million) in the
fourth quarter 2008 from RMB7.4 million (US$1.0 million) for the same
period in 2007. General and administrative expenses increased 71.2% to
RMB31.5 million (US$4.6 million) in 2008 from RMB18.4 million (US$2.4
million) in 2007. General and administrative expenses as a percentage
of net revenues increased to 12.9% in 2008 from 10.2% in 2007.
Interest income. The Company recorded net interest income of RMB5.9 million (US$0.9 million) in fourth quarter 2008 as compared RMB9.0 million (US$1.2 million) for the same period in 2007. 3SBio recorded net interest income of RMB24.0 million (US$3.5 million) in 2008 as compared to net interest income of RMB35.2 million (US$4.8 million) for 2007. The decrease in interest income was due in part to an environment with decreasing interest rates.
Net income/loss. Adjusted non-GAAP net income for the fourth quarter was RMB11.3 million (US$1.7 million), excluding several one-off items, including recognition of the AMAG licensing deal of RMB6.9 million (US$1.0 million) and recognition of an RMB4.4 million (US$0.7 million) impairment loss on available-for-sale securities. For 2008, adjusted non-GAAP net income was RMB75.0 million (US$11.0 million), comparing to adjusted net income of RMB79.8 million (US$10.9 million) in 2007.
GAAP net loss was RMB1.5 million (US$0.2 million) in the fourth quarter 2008, compared to net income of RMB17.9 million (US$2.4 million) for the same period in 2007. GAAP net income for 2008 was RMB39.5 million (US$5.8 million), compared to RMB81.5 million (US$11.2 million) in 2007.
Cash and cash equivalents/Time deposits. As of December 31, 2008, 3SBio had cash, cash equivalents and time deposits of RMB733.0 million (US$107.4 million), compared to RMB811.0 million (US$111.2 million) as of December 31, 2007.
2009 Full Year Guidance & Selected Company Objectives
-- Maintain and enhance the Company's EPIAO market share leadership
position, through continued penetration of the Oncology market and
gaining market share within the Dialysis market.
-- Maximize the commercial potential of TPIAO, through continuing
penetration of the Oncology market and the initiation of clinical
trials for other potential high value indications.
-- Focus on working with the SFDA to secure regulatory approval of the
three new product programs; 36,000 IU dosage formulation of EPIAO,
NuLeusin, and TPIAO label extension for the treatment of ITP.
-- Initiate Ferumoxytol registration trial in China, following US FDA
approval.
-- Submit application for clinical trials of NuPIAO, the Company's second
generation EPO product.
-- Leverage Nephrology and Oncology focused franchise and strong balance
sheet to continue efforts in the business development front.
-- Complete construction on our new EPIAO plant to support future growth
of EPIAO in China, and as the first step towards exploring global
biosimilar opportunities.
Based on these goals and current market and operating conditions, the Company's total net revenue target for the full year 2009 is estimated to be between US$43 million to US$45 million, resulting in year-over-year increase of approximately 21% to 26%.
Conference Call
3SBio's senior management will host a conference call at 5:00 am (Pacific) / 8:00 am (Eastern) / 8:00 pm (Beijing/Hong Kong) on Thursday, March 12, 2009. The conference call may be accessed using the dial-in numbers below:
International Toll Dial-In Number: +6567357955
China (Landline) 800 819 0121
China (Mobile) 400 620 8038
U.K. 08082346646
U.S. 18665194004
H.K. 800933053
Conference ID: 87494181
A telephone replay will be available shortly after the call until March 19, 2009, at:
International Dial-In Number: +61 2 8235 5000
U.S. Dial-in Number: 18662145335
Conference ID: 87494181
A live webcast of the conference call and the replay will be available on the investor relations page of 3SBio's website at http://www.3sbio.com/en/News/ShowInfo_nnn11.aspx?ID=71 .
Reconciliation of GAAP to Adjusted Non-GAAP
The Company has utilized some adjusted Non-GAAP financial measures to provide investors and management with supplemental measures that facilitate comparisons of operating performance and trends with prior and future operating performance, and that may not otherwise be apparent on a GAAP basis. Please see the attached Reconciliation Tables of GAAP to Adjusted Non-GAAP Figures for an explanation of the amounts excluded to arrive at adjusted non-GAAP figures for the three-month and full year periods ended December 31, 2008 and 2007.
Statement Regarding Unaudited Financial Information
The unaudited financial information set forth above is preliminary and subject to adjustments and modifications. The audit of the financial statements and related notes to be included in our annual report on Form 20-F for the year ended December 31, 2008 is still in progress. Adjustments and modifications to the financial statements may be identified during the course of this audit work, which could result in significant differences from this preliminary unaudited financial information.
Currency Convenience Translation
For the convenience of readers, certain RMB amounts have been translated into US dollars at the rate of RMB6.8225 to US$1.00, the noon buying rate for US dollars in effect on December 31, 2008 for cable transfers of RMB per US dollar as certified for customs purposes by the Federal Reserve Bank of New York. 2007 RMB figures were translated into US dollars at the rate of RMB7.2946 to US$1.00, the noon buying rate for US dollars in effect on December 31, 2007.
About 3SBio Inc.
3SBio Inc. is a leading, fully integrated biotechnology company focused on researching, developing, manufacturing and marketing biopharmaceutical products, primarily in China. For more information, please visit 3SBio on the web at http://www.3sbio.com
Safe Harbor Statement
Certain statements in this release that are not purely historical in nature, including the 2009 full year guidance information, statements contained in "2009 Full Year Guidance & Selected Company Objectives" section, and management comments, constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995. These statements are based upon 3SBio management's current expectations, and actual results could differ materially. Among the factors that could cause 3SBio's actual results to differ from what the company currently anticipates may include: competition from other domestic and foreign pharmaceutical companies; the market conditions or pharmaceutical products in China; market acceptance of 3SBio products; hospital or patient demand for our products; 3SBio's ability to expand its production, sales and distribution network and other aspects of its operations; its ability to develop and commercialize additional products or additional indications for existing products; its ability to analyze additional in-licensing opportunities; its ability to effectively protect its intellectual property; changes in the healthcare industry in China, including changes in the healthcare policies and regulations of the PRC government and changes in the healthcare insurance sector in the PRC; and fluctuations in general economic and business conditions in China. For additional information on these and other factors as well as risks, uncertainties and assumptions that may adversely and materially affect the 3SBio's business, financial conditions and results of operations, please refer to the company's filings with the Securities and Exchange Commission at http://www.sec.gov , particularly information set forth in Item 3.D "Risk Factors" in 3SBio's annual report on Form 20-F for the year ended Dec. 31, 2007, as continually amended and updated. 3SBio undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this press release.
3SBio Inc. and Subsidiaries
Unaudited Consolidated Balance Sheets
(expressed in thousands) December 31 December 31 December 31
2007 2008 2008
RMB RMB US$
Assets
Current assets
Cash and cash equivalents 811,026 439,237 64,380
Time deposits with financial
institutions -- 293,809 43,065
Accounts receivable, less
allowance for doubtful
accounts:
December 31, 2007 - RMB5,257;
December 31, 2008 RMB4,503 (US$660) 55,186 73,767 10,812
Inventories 6,882 7,748 1,136
Prepaid expenses and other
receivables 12,074 8,249 1,209
Structured deposits 3,527 -- --
Deferred tax assets 2,335 1,802 264
Total current assets 891,030 824,612 120,866
Available-for-sale securities 15,196 26,700 3,914
Property, plant and equipment, net 49,465 78,185 11,459
Lease prepayments 9,247 8,894 1,304
Non-current deposits 6,124 8,521 1,249
Intangible assets, net -- 5,225 766
Income tax receivable 556 -- --
Deferred tax assets 1,857 781 114
Total assets 973,475 952,918 139,672
Liabilities
Current liabilities
Accounts payable 1,693 1,939 284
Deferred grant income 374 374 55
Accrued expenses and other
payables 22,626 25,273 3,705
Income tax payable -- 1,256 184
Other current liabilities 67 57 8
Total current liabilities 24,760 28,899 4,236
Deferred grant income 3,526 3,152 462
Other liabilities 848 472 69
Total liabilities 29,134 32,523 4,767
Commitments and contingencies
Minority interests 549 -- --
Shareholders' equity
Share capital - ordinary shares
US$0.0001 par value, 500,000,000
shares authorized, 152,099,155 and
150,575,955 shares issued and
outstanding as of December 31, 2007
and 2008, respectively 122 121 18
Additional paid-in capital 917,527 908,377 133,144
Accumulated other comprehensive
loss (48,338) (102,126) (14,970)
Retained earnings 74,481 114,023 16,713
Total shareholders' equity 943,792 920,395 134,905
Total liabilities, minority
interests and shareholders' equity 973,475 952,918 139,672
Reconciliation Tables of GAAP to Adjusted Non-GAAP Figures
Three Months Ended December 31, 2008
(unaudited) Actual Actual Adjustment Adjusted Adjusted
GAAP GAAP Non-GAAP Non-GAAP
RMB US$ RMB RMB US$
Net Revenues:
EPIAO 39,326 5,764 39,326 5,764
TPIAO 16,373 2,400 16,373 2,400
Intefen 1,199 176 1,199 176
Inleusin 209 31 209 31
Iron 1,796 263 1,796 263
Export 1,148 168 1,148 168
Others 13 2 13 2
Total net revenues 60,064 8,804 60,064 8,804
Cost of revenues (5,622) (824) 110 (1) (5,512) (808)
Gross profit 54,442 7,980 54,552 7,996
Operating expenses
Research and
development
costs (12,439) (1,823) 7,110 (2) (5,329) (781)
Sales, marketing
and distribution
expenses (38,337) (5,619) 309 (1) (38,028) (5,574)
General and
administrative
expenses (5,960) (874) 825 (1) (5,135) (753)
Total operating
expenses (56,736) (8,316) (48,492) (7,108)
Operating (loss)
/income (2,294) (336) 6,060 888
Other income
/(expenses), net
Interest income 5,916 867 5,916 867
Grant income 107 16 107 16
Impairment loss on
available-for-sale
securities (4,391) (644) 4,391 (3) -- --
Others (716) (105) (716) (105)
Total other
income, net 916 134 5,307 778
(Loss)/income
before
income tax
expense and
minority interests (1,378) (202) 11,367 1,666
Income tax expense (457) (67) -- (4) (457) (67)
(Loss)/income
before minority
interests (1,835) (269) 10,910 1,599
Minority interests,
net of tax 377 55 377 55
Net (loss)/income (1,458) (214) 11,287 1,654
Three Months Ended December 31, 2008
(unaudited), continued
Actual Actual Adjustment Adjusted Adjusted
GAAP GAAP Non-GAAP Non-GAAP
RMB US$ RMB RMB US$
Net (loss)/in
come per share:
Basic and diluted (0.01) (0.00) 0.08 0.01
Basic weighted
average number
of shares
outstanding 150,575,955 150,575,955 150,575,955 150,575,955
Effect of
dilutive
potential
shares -- -- 10,500 10,500
Diluted
weighted
average
number of
shares
outstanding 150,575,955 150,575,955 150,586,455 150,586,455
Net (loss)/in
come per ADS:
Basic and
diluted (0.07) (0.01) 0.52 0.08
Basic
weighted
average
number of
ADSs
outstanding 21,510,851 21,510,851 21,510,851 21,510,851
Effect of
dilutive
potential
ADSs -- -- 1,500 1,500
Diluted
weighted
average
number of
ADSs
outstanding 21,510,851 21,510,851 21,512,351 21,512,351
Notes to reconciliation of our GAAP statements of income to our adjusted non-GAAP statements of income:
(1) To exclude share-based compensation expense.
(2) To exclude one-time upfront payment for licenses fee of RMB 6,948,000
and share-based compensation expense of RMB 162,000 for R&D staff.
(3) To exclude investment losses on available-for-sale securities
(4) No income tax effect on adjustments is required as they are incurred
by overseas companies that are not subject to income tax.
Three Months Ended December 31, 2007
(unaudited) Actual Actual Adjustment Adjusted Adjusted
GAAP GAAP Non-GAAP Non-GAAP
RMB US$ RMB RMB US$
Net Revenues:
EPIAO 29,798 4,085 29,798 4,085
TPIAO 11,718 1,606 11,718 1,606
Intefen 1,128 155 1,128 155
Inleusin 251 34 251 34
Iron 970 133 970 133
Export 1,625 223 1,625 223
Others 193 26 193 26
Total revenues 45,683 6,262 45,683 6,262
Cost of revenues (5,737) (786) (5,737) (786)
Gross profit 39,946 5,476 39,946 5,476
Operating expenses
Research and
Development costs (3,715) (509) (3,715) (509)
Sales, marketing
and distribution
expenses (22,712) (3,114) (22,712) (3,114)
General and
administrative
expenses (7,379) (1,012) 192 (1) (7,187) (985)
Total operating
expenses (33,806) (4,635) (33,614) (4,608)
Operating income 6,140 841 6,332 868
Other income/
(expenses), net
Interest income 9,048 1,240 9,048 1,240
Interest expense (70) (10) (70) (10)
Grant income 199 27 199 27
Others 299 41 299 41
Total other
income, net 9,476 1,298 9,476 1,298
Income before
Income tax
expense and
minority
interests 15,616 2,139 15,808 2,166
Income tax
credit/
(expense) 2,163 297 (2,739) (2) (576) (79)
Income before
minority
interests 17,779 2,436 15,232 2,087
Minority
interests,
net of tax 116 15 116 16
Net income 17,895 2,451 15,348 2,103
Three Months Ended December 31, 2007
(unaudited), continued
Actual Actual Adjustment Adjusted Adjusted
GAAP GAAP Non-GAAP Non-GAAP
RMB US$ RMB RMB US$
Net income
Per share:
Basic and
diluted 0.12 0.02 0.10 0.01
Basic
weighted
average
number
of shares
outstanding 152,099,155 152,099,155 152,099,155 152,099,155
Effect of
dilutive
potential
shares 323,897 323,897 323,897 323,897
Diluted
weighted
average
number
of shares
outstanding 152,423,052 152,423,052 152,423,052 152,423,052
Net income
per ADS:
Basic and
diluted 0.82 0.11 0.7 0.10
Basic
weighted
average
number
of ADSs
outstanding 21,728,451 21,728,451 21,728,451 21,728,451
Effect of
dilutive
potential
ADSs 46,271 46,271 46,271 46,271
Diluted
weighted
average
number
of ADSs
outstanding 21,774,722 21,774,722 21,774,722 21,774,722
Notes to reconciliation of our GAAP statements of income to our adjusted statements of income:
(1) To exclude share-based compensation expense
(2) To exclude reinvestment
Year Ended December 31, 2008
(unaudited) Actual Actual Adjustment Adjusted Adjusted
GAAP GAAP Non-GAAP Non-GAAP
RMB US$ RMB RMB US$
Net Revenues:
EPIAO 154,570 22,656 154,570 22,656
TPIAO 67,585 9,906 67,585 9,906
Intefen 4,989 731 4,989 731
Inleusin 773 113 773 113
Iron 6,984 1,024 6,984 1,024
Export 8,289 1,215 8,289 1,215
Others 55 8 55 8
Total revenues 243,245 35,653 243,245 35,653
Cost of
revenues (21,741) (3,187) 370 (1) (21,371) (3,132)
Gross profit 221,504 32,466 221,874 32,521
Operating
expenses
Research and
development
costs (22,477) (3,295) 7,469 (2) (15,008) (2,200)
Sales,
marketing
and
distribution
expenses (119,778) (17,556) 1,000 (1) (118,778) (17,410)
General and
administrative
expenses (31,458) (4,611) 3,097 (1) (28,361) (4,157)
Total operating
expenses (173,713) (25,462) (162,147) (23,767)
Operating income 47,791 7,004 59,727 8,754
Other income/
(expenses), net
Interest income 23,953 3,511 23,953 3,511
Grant income 388 57 388 57
Net realized
(loss)/gain
on available-
for-sale
securities (18,995) (2,784) 19,144 (3) 149 22
Impairment loss
on available-
for-sale
securities (4,391) (644) 4,391 (4) -- --
Others 1,896 278 1,896 278
Total other
Income ,net 2,851 418 26,386 3,868
Income before
income tax
expense and
minority
interests 50,642 7,422 86,113 12,622
Income tax
expense (11,649) (1,707) -- (5) (11,649) (1,707)
Income before
minority
interests 38,993 5,715 74,464 10,915
Minority
interests,
net of tax 549 80 549 80
Net income 39,542 5,795 75,013 10,995
Year Ended December 31, 2008
(unaudited), continued
Actual Actual Adjustment Adjusted Adjusted
GAAP GAAP Non-GAAP Non-GAAP
RMB US$ RMB RMB US$
Net income per
share:
Basic and diluted 0.26 0.04 0.49 0.07
Basic weighted
average number
of shares
outstanding 151,655,631 151,655,631 151,655,631 151,655,631
Effect of dilutive
potential shares 57,118 57,118 57,118 57,118
Diluted weighted
average number
of shares
outstanding 151,712,749 151,712,749 151,712,749 151,712,749
Net income per ADS:
Basic and diluted 1.82 0.27 3.46 0.51
Basic weighted
average number of
ADSs outstanding 21,665,090 21,665,090 21,665,090 21,665,090
Effect of dilutive
potential ADSs 8,160 8,160 8,160 8,160
Diluted weighted
average number of
ADSs outstanding 21,673,250 21,673,250 21,673,250 21,673,250
Notes to reconciliation of our GAAP statements of to our adjusted non-GAAP statements of income:
(1) To exclude share-based compensation expense.
(2) To exclude one-time upfront payment for license fee of RMB6,948,000
and share-based compensation expense of RMB 521,000 for R&D staff.
(3) To exclude realized loss on available-for-sale securities.
(4) To exclude impairment loss on available-for-sale securities.
(5) No income tax effect on adjustments is required as they are
incurred by overseas companies that are not subject to income tax.
Year Ended December 31, 2007
(unaudited) Actual Actual Adjustment Adjusted Adjusted
GAAP GAAP Non-GAAP Non-GAAP
RMB US$ RMB RMB US$
Net Revenues:
EPIAO 121,220 16,618 -- 121,220 16,618
TPIAO 43,074 5,905 -- 43,074 5,905
Intefen 4,123 565 -- 4,123 565
Inleusin 1,027 141 -- 1,027 141
Iron 3,206 440 -- 3,206 440
Export 6,784 930 -- 6,784 930
Others 739 101 -- 739 101
Total revenues 180,173 24,700 180,173 24,700
Cost of
revenues (17,427) (2,389) -- (17,427) (2,389)
Gross profit 162,746 22,311 162,746 22,311
Operating
expenses
Research and
development
costs (11,635) (1,595) -- (11,635) (1,595)
Sales,
marketing
and
distribution
expenses (84,187) (11,541) -- (84,187) (11,541)
General and
administrative
expenses (18,379) (2,520) 995 (1) (17,384) (2,383)
Total
operating
expenses (114,201) (15,656) (113,206) (15,519)
Operating
income 48,545 6,655 49,540 6,792
Other income/
(expenses),
net
Interest
income 36,015 4,937 36,015 4,937
Interest
expense (825) (113) -- (825) (113)
Grant income 1,067 146 -- 1,067 146
Others 205 28 -- 205 28
Total other
income, net 36,462 4,998 36,462 4,998
Income before
income tax
expense
and minority
interests 85,007 11,653 86,002 11,790
Income tax
expense (3,419) (469) (2,739) (2) (6,158) (844)
Income
before
minority
interests 81,588 11,184 79,844 10,946
Minority
interests,
net of tax (75) (10) (75) (10)
Net income 81,513 11,174 79,769 10,936
Year Ended December 31, 2007
(unaudited), continued
Actual Actual Adjustment Adjusted Adjusted
GAAP GAAP Non-GAAP Non-GAAP
RMB US$ RMB RMB US$
Net income per share:
Basic and diluted 0.56 0.08 0.54 0.07
Basic weighted
average number
of shares 146,646,049 146,646,049 146,646,049 146,646,049
outstanding
Effect of dilutive
potential shares 68,993 68,993 68,993 68,993
Diluted weighted
average number of
shares outstanding 146,715,042 146,715,042 146,715,042 146,715,042
Net income per ADS:
Basic and diluted 3.89 0.53 3.81 0.52
Basic weighted
average number
of ADSs 20,949,436 20,949,436 20,949,436 20,949,436
outstanding
Effect of dilutive
potential ADSs 9,856 9,856 9,856 9,856
Diluted weighted
average number ADSs
of outstanding 20,959,292 20,959,292 20,959,292 20,959,292
Notes to reconciliation of our GAAP statements of income to our adjusted statements of income:
(1) To exclude share-based compensation expense.
(2) To exclude reinvestment tax refund.