omniture

Benda Pharmaceutical Reports Second Quarter 2008 Financial Results

2008-08-15 04:21 1878

HUBEI PROVINCE, China, Aug. 15 /Xinhua-PRNewswire/ -- 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 June 30, 2008. The Company intends to file its Form 10Q with the SEC today.

Six Months Ended June 30, 2008

Revenue in the first half of 2008 increased 60.6% to $13.2 million from $8.2 million in the first half of 2007, primarily reflecting increased sales at Benda Ebei. SiBiono generated revenue of $1.2 million in the first six months of 2008, down slightly from $1.5 million in the prior year period. The slight decline in revenue reflects the Company’s reorganization of personnel in the department. On a six months basis, the Company sold 3,526 vials of Gendicine, which was a sequential increase from 1,087 vials sold in the first quarter of 2008.

Gross profit in the first half of 2008 was $4.8 million, a 23.8% increase from $3.9 million in the first half of 2007. Gross margin was 36.5%, compared to 47.4% in the same period of 2007. The drop in gross margin reflects the re-engineering of production department personnel at SiBiono, which affected sales of Gendicine.

Operating loss in the first half of 2008 was $1.3 million, an improvement compared to an operating loss of $7.1 million in the first half of 2007. Operating expense in the first half of 2008 was approximately $6.1 million, compared to $11.0 million in the first half of 2007. Operating expense reflects promotional fees for Gendicine and the introduction of new products in Benda Ebei, as well as a $1.1 million penalty paid to investors for registration delays. The Company incurred significantly higher operating costs in the prior year period related to the acquisition of SiBiono.

Net loss in the first half of 2008 improved to $3.8 million, or $0.04 per basic and diluted share, from a net loss of $8.2 million, or $0.09 per basic and diluted share, in the first half of 2007. Net loss in the first half of 2008 includes the impact of approximately $1.9 million of interest expense related to the Company’s outstanding convertible notes. Results in 2008 also include the impact of a $1.1 million payment to investors related to the timing of the effectiveness of its registration statement on Form S-1. Please note the Company was granted effectiveness on the S1 filing and does not anticipate further penalty payments related to this S1 filing going forward.

Three Months Ended June 30, 2008

Revenue in the second quarter of 2008 increased 39.8% to $7.3 million from $5.2 million in the second quarter of 2007, primarily reflecting increased sales at Benda Ebei. SiBiono generated revenue of $0.8 million in second quarter of 2008, down slightly from $1.5 million in the prior year period. The slight decline in revenue reflects the Company’s reorganization of personnel in the department. Benda management concluded the reorganization during the second quarter of 2008, and believes that SiBiono production and sales have resumed. In the second quarter of 2008, the Company sold 2,439 vials of Gendicine, a sequential increase from sales of 1,087 vials sold in the first quarter of 2008.

Gross profit in the second quarter of 2008 was $2.7 million, unchanged from the second quarter of 2007. Gross margin was 37.1%, compared to 52.2% in the same period of 2007. The decline in gross margin was primarily due to a re-engineering of SiBiono’s production department which affected the sales of Gendicine. However, management believes that the re-engineering will lead to revenue growth in the coming quarters.

Operating loss in the second quarter of 2008 improved to $0.3 million from an operating loss of $7.7 million in the second quarter of 2007. Operating expense in the second quarter was approximately $3.0 million, compared with $10.4 million in the second quarter of 2007, and reflects the penalty payment referenced above as well as advertising expenditure for SiBiono and Benda Ebei new product launches.

Net loss in the second quarter of 2008 improved to $1.8 million, or $0.02 per basic and diluted share, from a net loss of $8.8 million, or $0.09 per basic and diluted share, in the second quarter of 2007.

Wan commented, "We remain very focused on enhancing our revenue performance at SiBiono, as well as our gross margin performance across the organization."

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. Additionally, the

Company continues to conduct an active search for additional

independent board members.

-- 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

Ribavirin. The Company believes the certification is a major step

toward commercializing Ribavirin 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 has received "Environmental

Influence Report" and "Safety Assessment Report" from the Yichang

Environmental Environmental Protection Bureau and Yichang Safety

Supervision Bureau in November and December of 2007, respectively.

With this approval, Yidu Benda is allowed to perform trial production

and 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.

-- Patent transfer update: On January 29, 2007, SiBiono entrusted

Grandall Legal Group Shenzhen Law Firm to issue a legal letter to

Zhaohui Peng, one of the shareholders of SiBiono and the inventor of

Gendicine, requesting him to transfer all the title of patents to

SiBiono. As of today, SiBiono intends to file an application to

Shenzhen Peoples’ Court to enforce the patents transfer.

-- SiBiono Arbitration: On November 27, 2007, Benda Ebei received an

arbitration award from Shenzhen Arbitration Commission which determined

that it should purchase 6.24% stake in SiBiono from Xiaozhi Zhang, one

of the shareholders of SiBiono, with the total consideration at

Rmb12.48 million, plus the penalty and related legal and arbitration

expenses, totaling approximately Rmb12.8 million. However, following

this arbitration award, Benda Ebei found out that Xiaozhi Zhang does

not own all 6.24% of SiBiono’s common stock and actually only owns

3.28%. Therefore, based on this ground, Benda Ebei filed an

application to Shenzhen Peoples’ Court on May 22, 2008 to terminate the

above mentioned arbitration award. The application has been accepted by

the Shenzhen Peoples’ Court and is waiting for its further

investigation.

-- Benda Pharmaceutical website: Benda’s website is again active, and

has been modified and updated. It now includes an updated company

overview, up to date news flow, and contact information.

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., Income Statement

(In thousands, except share and per share data)

SIX MONTHS ENDED JUNE 30 THREE MONTHS ENDED JUNE 30,

2008 2007 2008 2007

(Unaudited) (Unaudited) (Unaudited) (Unaudited)

Revenue $13,225,623 $8,236,852 $ 7,278,253 $5,207,817

Cost of goods

sold (8,396,854) (4,336,114) (4,579,608) (2,488,902)

Gross profit 4,828,769 3,900,738 2,698,645 2,718,915

Selling expenses (1,431,212) (344,886) (994,841) (256,703)

General and

administrative

expenses

Amortization of

intangible

assets (97,948) (55,219) (46,373) (28,935)

Amortization of

debt issue

costs (131,757) (67,269) (65,878) (58,526)

Depreciation (243,495) (214,256) (120,275) (137,680)

Bad debts (773,893) (776,859) (302,596) (847,845)

Director

remuneration (140,468) (33,945) (29,595) (33,945)

Penalty to

investors (1,113,405) (120,000) (391,200) 0

Brokerage fee -- (239,963) -- (239,963)

Cash bonus -- (173,400) -- (173,400)

Consulting and

professional

fees -- (7,882,416) -- (7,882,416)

Other general

and

administrative

expenses (2,020,274) (974,139) (922,405) (649,426)

Total general and

administrative

expenses (4,521,240) (10,537,466) (1,878,322) (10,052,136)

Gains / (losses)

on disposals of

fixed assets -- 0 -- 12,025

Research and

development

expenses (169,781) (97,119) (147,717) (97,119)

Total operating

expenses (6,122,233) (10,979,471) (3,020,880) (10,393,933)

Operating income

/ (loss) (1,293,464) (7,078,733) (322,235) (7,675,018)

Interest income /

(expenses) (2,340,580) (1,066,406) (1,128,298) (1,048,821)

Other income

(expenses) 248,058 90,158 (53,635) 89,221

Government

subsidies /

grants -- 273,115 -- 273,115

Income / (loss)

before minority

interest and

income taxes (3,385,986) (7,781,866) (1,504,168) (8,361,503)

Income taxes (524,808) -- (391,611) --

Minority interest 88,216 (466,616) 110,614 (419,710)

Net income /

(loss) $(3,822,578) $(8,248,482) $(1,785,165) $(8,781,213)

Earnings / (loss)

per share -

basic $(0.04) $(0.09)$ (0.02) $(0.09)

Weighted average

shares

outstanding -

basic 100,558,191 96,625,164 100,803,509 96,964,606

Earnings / (loss)

per share -

diluted $(0.04) $(0.09) $(0.02) $(0.09)

Weighted average

shares

outstanding -

diluted 100,558,191 96,625,164 100,803,509 96,964,606

Benda Pharmaceutical Inc., Balance Sheet

(In thousands, except share and per share data)

June 30 December 31

2008 2007

(Unaudited)

Assets

Current Assets

Cash and cash equivalents $1,035,931 $1,266,240

Trade receivables, net 11,487,967 10,472,233

Other receivables 346,170 453,595

Refundable purchase price

paid -- 1,200,000

Short-term loan

receivables 145,947 --

Due from related parties 33,807 --

Inventories 3,250,625 1,952,348

Prepaid expenses and

deposits 1,200,021 933,299

Total current assets 17,500,468 16,277,715

Due from related parties 2,722,081 2,630,019

Property and equipments,

net 28,544,953 27,123,035

Intangible assets, net 6,589,805 6,494,510

Goodwill 7,873,166 7,395,752

Restricted cash 5,676,297 3,957,624

Other assets 1,821,419 1,710,972

Refundable purchase price

paid 1,200,000 --

Debt issue costs 196,188 327,945

Total Assets $72,124,377 $65,917,572

Liabilities & Shareholders’

Equity

Current Liabilities

Bank indebtedness $1,272,103 $874,490

Bank loans payable

(current portion) 2,969,537 2,867,004

Long term debt payable

(current portion) 2,222,963 1,787,239

Accounts payable and

accrued liabilities 5,671,108 4,665,984

Commercial notes payable 8,729,370 5,118,758

Taxes payable 1,167,738 1,279,385

Acquisition price payable 1,419,310 1,333,246

Wages payable 885,787 664,785

Due to related parties 566,618 --

Total current liabilities 24,904,534 18,590,891

Long term debt payable

(long term portion) -- 425,001

Long-term convertible

promissory notes 4,757,319 2,875,075

Due to related parties

(Long-term) 2,018,664 3,193,618

Total liabilities 31,680,517 25,084,585

Minority interest 5,763,836 5,502,755

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

6/30/2008;

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) (3,722,125) 100,452

Statutory surplus reserve

fund 2,310,681 2,310,681

Accumulative other

comprehensive income 6,256,931 3,390,774

Shares issuable for

acquisition and services 503,860 503,860

Total Shareholders’ Equity 27,303,658 27,953,866

Total Liabilities &

Shareholders’ Equity $72,124,377 $65,917,572

Source: Benda Pharmaceutical, Inc.
Related Stocks:
OTC:BPMA
collection