NEW YORK, May 11 /PRNewswire-Asia/ -- American Oriental Bioengineering, Inc. (NYSE: AOB), a pharmaceutical company dedicated to improving health through the development, manufacture and commercialization of a broad range of prescription and over the counter ("OTC") products in China, today announced financial results for the first quarter ended March 31, 2009.
Financial Results
Revenue in the first quarter of 2009 increased 18.9% year over year to $46.1 million from $38.8 million, reflecting continued demand for the Company's core pharmaceutical and nutraceutical products. Revenue from pharmaceutical products increased 8.9% to $34.7 million from $31.9 million in the prior year's first quarter. Prescription pharmaceutical products revenue increased 14.5% to $16.2 million during the first quarter of 2009, reflecting prescription formulation Jinji and CCXA products, which offset declines in Shuanghuanglian Injection Powder ("SHL"). OTC pharmaceutical products generated $18.5 million in revenue during the first quarter of 2009, roughly flat to the prior year period, reflecting continued demand for Boke nasal spray and Jinji Yimucao products and a shift of Jinji Capsule products from OTC to prescription sales. Nutraceutical products generated revenue of approximately $8.9 million in the first quarter of 2009, up 29.0% from the prior year period, reflecting continued demand for peptide products and an expanded distribution network versus the prior year's first quarter. The Company generated $2.5 million in distribution revenue in the first quarter of 2009 from Nuo Hua's majority owned subsidiary.
Gross profit in the first quarter of 2009 increased 8.1% to $28.4 million from $26.3 million in the first quarter of 2008. Gross margin was 61.7%, compared with 67.8% in the prior year period, reflecting lower margin distribution revenue and CCXA's generic product sales.
Operating income in the first quarter was $11.2 million compared with $12.0 million in the prior year period, reflecting a 20.2% increase in operating expenses to $17.2 million in the first quarter of 2009 from $14.3 million in the prior year period. General and administration expenses as well as selling and marketing expenses increased 9.3% to $9.8 million from $8.9 million in the prior year period. The increase primarily reflects marketing and promotional initiatives related to Jinji and Boke products. Advertising expense increased 26.7% to $5.6 million in the first quarter of 2009, compared to $4.4 million in the prior year period.
Net income for the first quarter of 2009 was $7.9 million, compared to $9.4 million in the prior year period. Excluding the $1.7 million of interest expense related to the Company's outstanding convertible notes in the first quarter of 2009, which did not occur in the first quarter of 2008, net income performance was roughly flat on a year over year basis. Net income per diluted share was $0.11 in the first quarter of 2009 compared to $0.12 per diluted share in the first quarter of 2008.
As of March 31, 2009, the Company had $73.9 million in cash and generated approximately $3.6 million of operating cashflow during the quarter.
Mr. Tony Liu, Chairman and Chief Executive Officer of American Oriental Bioengineering, commented, "We are pleased with our first quarter performance and have met our key near-term objective to foster a dynamic business model that is diversified across prescription, OTC and nutraceutical products. Notably, our distribution business began to strengthen overall performance this quarter, contributing to net income as anticipated, and enlarging our distribution reach, particularly for our prescription pharmaceutical products. We are more flexible today than we were one year ago and, because of this, we can quickly adapt to change and capitalize on new opportunities despite the uncertain regulatory environment. Our marketing capabilities, extensive distribution platform, compelling product portfolio and ongoing rural expansion offset anticipated challenges in SHL sales during the first quarter of 2009 and we remain focused on becoming a top five pharmaceutical company in China."
Conference Call
The Company will hold a conference call at 8:00 am ET on May 11, 2009 to discuss first quarter 2009 results. Listeners may access the call by dialing 1-866-798-2884 or 1-617-614-6207 for international callers, access code: 34266051. A webcast will also be available through AOBO's website at http://www.bioaobo.com . A replay of the call will be available through May 18, 2009. Listeners may access the replay by dialing 1-888-286-8010 or 1-617-801-6888 for international callers, access code: 57318398.
About American Oriental Bioengineering, Inc.
American Oriental Bioengineering, Inc. is a China-based pharmaceutical company dedicated to improving health through the development, manufacture and commercialization of a broad range of prescription and over the counter products.
Statements made in this press release are forward-looking and are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. The economic, competitive, governmental, technological and other factors identified in the Company's filings with the Securities and Exchange Commission, including the Form 10-K for the year ended December 31, 2008, may cause actual results or events to differ materially from those described in the forward looking statements in this press release. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise.
AMERICAN ORIENTAL BIOENGINEERING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
THREE MONTHS ENDED
March 31
2009 2008
REVENUES $46,077,190 $38,768,598
COST OF GOODS SOLD 17,660,338 12,477,636
GROSS PROFIT 28,416,852 26,290,962
Selling and marketing 5,211,502 5,029,708
Advertising 5,567,357 4,394,341
General and administrative 4,565,643 3,912,683
Depreciation and amortization 1,858,915 977,210
Total operating expenses 17,203,417 14,313,942
INCOME FROM OPERATIONS 11,213,435 11,977,020
EQUITY IN EARNINGS (LOSS) FROM
UNCONSOLIDATED ENTITIES 437,794 --
INTEREST INCOME (EXPENSE), NET (1,579,269) 16,847
OTHER (EXPENSE), NET (98,609) (101,790)
INCOME BEFORE INCOME TAXES 9,973,351 11,892,077
INCOME TAXES 2,103,299 2,469,948
NET INCOME 7,870,052 9,422,129
NET INCOME ATTRIBUTABLE TO NON-
CONTROLLING INTEREST (3,551) --
NET INCOME ATTRIBUTABLE TO
CONTROLLING INTEREST 7,866,501 9,422,129
OTHER COMPREHENSIVE INCOME
Foreign currency translation gain,
net of tax 378,466 6,934,434
OTHER COMPREHENSIVE INCOME, NET OF
TAX 378,466 6,934,434
COMPREHENSIVE INCOME $8,244,967 $16,356,563
NET INCOME PER COMMON SHARE
BASIC $0.11 $0.12
DILUTED $0.11 $0.12
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING
BASIC 74,538,593 78,191,242.00
DILUTED 86,917,603 78,192,795.00
AMERICAN ORIENTAL BIOENGINEERING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, DECEMBER 31,
2009 2008
UNAUDITED
CURRENT ASSETS
Cash and cash equivalents $73,899,602 $70,636,510
Accounts receivable, net of reserve
of $130,631 and $226,330 at March 31,
2009 and December 31, 2008,
respectively 31,812,778 36,982,167
Inventories, net of provision for
slow moving inventories 17,954,075 13,042,123
Advances to suppliers 2,241,176 3,593,979
Notes receivable 1,039,914 708,076
Refundable deposit 6,397,106 6,396,996
Tax refund claims 823,737 --
Deferred tax assets 456,444 347,216
Other current assets 863,554 744,903
Total Current Assets 135,488,386 132,451,970
LONG-TERM ASSETS
Plant and equipment, net 97,192,300 98,154,443
Land use rights, net 148,319,092 148,988,870
Deposit for long-term assets 6,355,148 6,347,174
Construction in progress 25,675,899 25,385,835
Deferred tax assets 1,322,194 1,313,832
Other intangible assets, net 22,426,393 23,690,440
Goodwill 28,543,226 28,543,226
Investments in and advances to
equity investments 55,554,438 54,963,064
Unamortized financing costs 3,983,911 4,215,983
Total Long-Term Assets 389,372,601 391,602,867
TOTAL ASSETS $524,860,987 $524,054,837
LIABILITIES AND SHAREHOLDERS' EQUITY
March 31, December 31,
2009 2008
UNAUDITED
CURRENT LIABILITIES
Accounts payable $10,355,431 $12,287,887
Notes payables 3,277,285 3,262,877
Other payables and accrued expenses 13,578,351 19,766,652
Taxes payable -- 420,671
Short-term bank loans 7,441,276 7,140,148
Current portion of long-term bank
loans 59,022 58,659
Other liabilities 2,738,113 2,253,440
Deferred tax liability 999,454 846,026
Total Current Liabilities 38,448,932 46,036,360
LONG-TERM LIABILITIES
Long-term bank loans 789,579 804,521
Long-term notes payable -- 269,908
Deferred tax liabilities 16,102,048 16,083,768
Convertible Note 115,000,000 115,000,000
Total Long-Term Liabilities 131,891,627 132,158,197
TOTAL LIABILITIES 170,340,559 178,194,557
EQUITY
SHAREHOLDERS' EQUITY
Preferred stock, $0.001 par value;
2,000,000 shares authorized;
1,000,000 shares issued and
outstanding at March 31, 2009 and
December 31, 2008, respectively 1,000 1,000
Common stock, $0.001 par value;
150,000,000 shares authorized;
78,291,735 and 78,249,264 shares
issued and outstanding at March
31, 2009 and December 31, 2008,
respectively 78,292 78,249
Common stock to be issued 177,000 376,335
Prepaid forward repurchase contract (29,998,616) (29,998,616)
Additional paid-in capital 196,352,466 195,741,544
Retained earnings (the restricted
portion of retained earnings is
$29,532,699 at March 31, 2009 and
December 31, 2008) 157,790,182 149,923,681
Accumulated other comprehensive
income 29,464,472 29,086,006
Total Shareholders' Equity 353,864,796 345,208,199
NONCONTROLLING INTEREST 655,632 652,081
TOTAL EQUITY 354,520,428 345,860,280
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $524,860,987 $524,054,837
