NEW YORK, Aug. 7 /PRNewswire-Asia/ --
--2Q09 Revenue Increased 20.7% YoY to $71.2 Million--
--2Q09 Net Income Attributable to Controlling Interest was $13.2 million or $0.17 per Diluted Share--
-- Company Generates Approximately $22.9 Million of Operating Cashflow--
American Oriental Bioengineering, Inc. (NYSE: AOB), ("the Company" or "AOBO"), 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 second quarter ended June 30, 2009.
Revenue in the second quarter of 2009 increased 20.7% to $71.2 million from $59.0 million in the second quarter of 2008, reflecting continued demand for the Company’s core pharmaceutical and nutraceutical products. Revenue from pharmaceutical products increased 17.4% to $58.4 million from $49.8 million in the prior year’s second quarter. Revenue from prescription pharmaceutical products increased 23.2% to $25.2 million during the second quarter of 2009, reflecting an increase in sales from prescription formulation Jinji and CCXA products, which offset declines in sales of Shuanghuanglian Injection Powder ("SHL"). OTC pharmaceutical products generated $33.3 million in revenue during the second quarter of 2009, up from $29.4 million in the prior year’s period, reflecting continued demand for Boke and GLP products, as a result of marketing efforts and improved recognition of the products. Nutraceutical products generated revenue of approximately $9.5 million in the second quarter of 2009, up 3.3% from $9.2 million in the prior year’s period, reflecting increased sales of new beverage products launched in the beginning of 2009. The Company generated $3.3 million from its distribution business.
Gross profit in the second quarter of 2009 increased 3.9% to $41.6 million from $40.1 million in the second quarter of 2008. Gross margin was 58.4%, compared to 67.9% in the prior year’s period, reflecting continued revenue mix shift to CCXA’s generic product sales, increasing raw material prices and low margin distribution business.
Operating income in the second quarter of 2009 was $18.3 million compared to $18.7 million in the second quarter of 2008. Selling and marketing expenses increased 22.2% to $9.4 million from $7.7 million in the prior year period. The increase primarily reflects marketing and promotional initiatives to support the continuous growth of revenues. Advertising expense was $7.8 million in the second quarter of 2009, compared to $7.5 million in the prior year’s period.
Net income attributable to controlling interest for the second quarter of 2009 was $13.2 million, compared to $13.9 million in the prior year’s period. Excluding $1.4 million of interest expense and $0.2 million of amortized financing costs related to the Company’s outstanding convertible notes, the Company’s net income attributable to controlling interest increased 6.5% to $14.8 million, or $0.17 per diluted share. In the prior year’s second quarter, net income per diluted share was approximately $0.18.
As of June 30, 2009, the Company had $100.7 million in cash and generated approximately $22.9 million of operating cashflow during the second quarter of 2009.
Mr. Tony Liu, Chairman and Chief Executive Officer of American Oriental Bioengineering, commented, "We are pleased with our second quarter performance as we continued to enhance our diversified product portfolio and pursue further vertical integration. Our marketing capabilities, extensive distribution platform, diversified product offering and ongoing rural expansion offset anticipated challenges in SHL sales during the second quarter of 2009. We also made significant progress this quarter optimizing our distribution business, so that we solidify our presence in Tier I and II hospital channels and remain on-track for net income contributions for the full year. We continue to drive revenue growth and consistently generate cash despite the uncertain regulatory environment in China’s healthcare sector, and we are confident in our ability to be a top-five pharmaceutical company in China."
Conference Call
The Company will hold a conference call at 8:00 am ET on August 7, 2009 to discuss second quarter 2009 results. Listeners may access the call by dialing 1-866-761-0749 or 1-617-614-2707 for international callers, access code: 54060064. A webcast will also be available through AOB’s website at http://www.bioaobo.com . A replay of the call will be available through August 14, 2009. Listeners may access the replay by dialing 1-888-286-8010 or
1-617-801-6888 for international callers, access code: 18519426.
About American Oriental Bioengineering, Inc.
American Oriental Bioengineering, Inc. is a pharmaceutical company dedicated to improving health through the development, manufacture and commercialization of a broad range of prescription and over the counter products in China.
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 BALANCE SHEETS
ASSETS
JUNE 30, DECEMBER 31,
2009 2008
(UNAUDITED)
CURRENT ASSETS
Cash and cash equivalents $100,730,402 $70,636,510
Accounts receivable, net of reserve of
$505,433 and $226,330 at June 30, 2009
and December 31, 2008, respectively 31,396,881 36,982,167
Inventories, net 16,829,834 13,042,123
Advances to suppliers 3,135,694 3,593,979
Notes receivable 81,075 708,076
Refundable deposit -- 6,396,996
Deferred tax assets 421,660 347,216
Other current assets 937,087 744,903
Total Current Assets 153,532,633 132,451,970
LONG-TERM ASSETS
Property, plant and equipment, net 96,151,689 98,154,443
Land use rights, net 148,301,203 148,988,870
Deposit for long-term assets 6,717,514 6,347,174
Construction in progress 25,871,656 25,385,835
Deferred tax assets 1,327,627 1,313,832
Other intangible assets, net 21,146,928 23,690,440
Goodwill 28,543,226 28,543,226
Long-term investment and advance 55,452,267 54,963,064
Unamortized financing cost 3,751,838 4,215,983
Total Long-Term Assets 387,263,948 391,602,867
TOTAL ASSETS $540,796,581 $524,054,837
LIABILITIES AND EQUITY
JUNE 30, DECEMBER 31,
2009 2008
(UNAUDITED)
CURRENT LIABILITIES
Accounts payable $12,548,451 $12,287,887
Notes payables 3,011,486 3,262,877
Other payables and accrued expenses 14,251,673 19,766,652
Taxes payable 625,261 420,671
Short-term bank loans 6,720,430 7,140,148
Current portion of long-term bank loans 59,396 58,659
Other liabilities 2,511,295 2,253,440
Deferred tax liability 1,121,738 846,026
Total Current Liabilities 40,849,730 46,036,360
LONG-TERM LIABILITIES
Long-term bank loans, net of current
portion 774,641 804,521
Long-term notes payable -- 269,908
Deferred tax liabilities 15,963,766 16,083,768
Convertible notes 115,000,000 115,000,000
Total Long-Term Liabilities 131,738,407 132,158,197
TOTAL LIABILITIES 172,588,137 178,194,557
COMMITMENTS
EQUITY
SHAREHOLDERS’ EQUITY
Preferred stock, $0.001 par value;
2,000,000 shares authorized;
1,000,000 shares issued and
outstanding at June 30, 2009 and
December 31, 2008, respectively 1,000 1,000
Common stock, $0.001 par value;
150,000,000 shares authorized;
78,301,439 and 78,249,264 shares
issued and outstanding at June 30,
2009 and December 31, 2008, respectively 78,301 78,249
Common stock to be issued 311,999 376,335
Prepaid forward repurchase contract (29,998,616) (29,998,616)
Additional paid-in capital 196,752,860 195,741,544
Retained earnings (the restricted
portion of retained earnings is
$29,532,699 at June 30, 2009 and
December 31, 2008, respectively) 171,019,548 149,923,681
Accumulated other comprehensive income 29,510,788 29,086,006
Total Shareholders’ Equity 367,675,880 345,208,199
NON-CONTROLLING INTEREST 532,564 652,081
TOTAL EQUITY 368,208,444 345,860,280
TOTAL LIABILITIES AND EQUITY $540,796,581 $524,054,837
AMERICAN ORIENTAL BIOENGINEERING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2009 2008 2009 2008
REVENUES $71,222,037 $59,010,005 $117,299,227 $97,778,603
COST OF GOODS SOLD 29,594,923 18,928,447 47,255,261 31,406,083
GROSS PROFIT 41,627,114 40,081,558 70,043,966 66,372,520
Selling and
marketing 9,396,129 7,687,892 14,607,631 12,717,600
Advertising 7,779,936 7,452,231 13,347,293 11,846,572
General and
administrative 4,315,714 5,253,274 8,881,357 9,165,957
Depreciation and
amortization 1,850,274 1,010,461 3,709,189 1,987,671
Total operating
expenses 23,342,053 21,403,858 40,545,470 35,717,800
INCOME FROM
OPERATIONS 18,285,061 18,677,700 29,498,496 30,654,720
EQUITY IN EARNINGS
(LOSS) FROM
UNCONSOLIDATED
ENTITIES (173,258) (640,008) 264,536 (641,067)
INTEREST INCOME
(EXPENSE), NET (1,620,069) (30,616) (3,199,338) (13,769)
OTHER INCOME
(EXPENSE), NET (16,329) (255,770) (114,938) (356,502)
INCOME BEFORE INCOME
TAXES 16,475,405 17,751,306 26,448,756 29,643,382
INCOME TAXES 3,369,107 3,891,614 5,472,406 6,361,562
NET INCOME 13,106,298 13,859,692 20,976,350 23,281,820
NET INCOME
ATTRIBUTABLE TO NON-
CONTROLLING INTEREST 123,068 -- 119,517 --
NET INCOME
ATTRIBUTABLE TO
CONTROLLING INTEREST 13,229,366 13,859,692 21,095,867 23,281,820
OTHER COMPREHENSIVE
INCOME
Foreign currency
translation gain,
net of tax 46,316 5,154,761 424,782 12,089,196
TOTAL OTHER
COMPREHENSIVE
INCOME, NET OF TAX 46,316 5,154,761 424,782 12,089,196
COMPREHENSIVE INCOME $13,275,682 $19,014,453 $21,520,649 $35,371,016
NET INCOME PER SHARE
BASIC $0.18 $0.18 $0.28 $0.30
DILUTED $0.17 $0.18 $0.28 $0.30
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING
BASIC 74,582,920 78,223,659 74,560,809 78,207,405
DILUTED 88,815,593 78,223,659 86,939,711 78,208,181