NEW YORK, May 10, 2010 /PRNewswire via COMTEX/ -- 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, today announced financial results for the first quarter ended March 31, 2010.
First Quarter 2010 Financial Performance Revenue in the first quarter of 2010 increased 16.7% year over year to $53.7 million from $46.1 million, reflecting continued demand for the Company's core prescription and OTC pharmaceutical products.
-- Revenue from pharmaceutical products increased 17.8% to $40.9 million from $34.7 million in the first quarter of 2009, driven by increased demand for the Shuanghuanglian ("SHL") Injection Powder, BOKE and CCXA pharmaceutical products, as well as the newly-launched products such as YuYeQingHuo Capsules. Revenue from prescription pharmaceutical products increased 29.3% to $20.9 million from $16.2 million in the prior year period, reflecting a year over year increase in sales from the prescription Jinji capsule, SHL powder, Boke and CCXA prescription products. The overall increase in sales was also supported by continuous marketing efforts, an increase in new product offerings, and expansion of coverage to previously unaddressed rural markets. OTC pharmaceutical products generated $19.9 million in revenue during the first quarter of 2010, in comparison to $18.5 million in the prior year period, reflecting increased sales of our Boke and CCXA products as a result of improved recognition of those products.
-- Nutraceutical products generated revenue of approximately $9.7 million in the first quarter of 2010, up 8.5% from $8.9 million in the prior year period, reflecting increased sales of new beverage products launched in the second quarter of 2009.
-- The Company generated $3.2 million from its distribution business, Nuo Hua, in the first quarter of 2010. An increase of 29.5% was mainly attributed to the Nuo Hua's expanding market coverage.
Gross profit in the first quarter of 2010 was $28.2 million, compared to $28.4 million in the first quarter of 2009. Gross margin was 52.5%, compared to 61.7% in the prior year period, reflecting continued revenue mix shift to CCXA's generic product sales as well as increasing raw material prices.
Operating income in the first quarter of 2010 was $6.4 million, compared to $10.9 million in the prior year period. Selling and marketing expenses increased 14.7% to $6.0 million from $5.2 million in the prior year period, and advertising expense increased 21.2% to $6.7 million in the first quarter of 2010 from $5.6 million in the prior year period. General and administrative expenses increased 8.6% to $4.8 million from $4.4 million in the prior year period.
Research and development expenses increased to $2.8 million from $0.7 million in the prior year period. This reflects the Company's continuing efforts to invest in the centralized R&D centre in Beijing.
Net income attributable to controlling interest for the first quarter of 2010 was $3.1 million, compared to $7.2 million in the prior year period. The Company's net income attributable to controlling interest was $0.04 per diluted share, compared to $0.10 per diluted share in the same period of 2009.
Balance Sheet As of March 31, 2010, the Company had $99.0 million in cash and cash equivalents, including restricted portions, and generated approximately $5.8 million of operating cash flow during the first quarter of 2010. Working capital was $136.9 million as of March 31, 2010, reflecting an increase of 4.6% from $130.9 million as of December 31, 2009.
Mr. Tony Liu, Chairman and Chief Executive Officer of American Oriental Bioengineering, commented, "We are very satisfied with our performance in the first quarter, despite the challenging global economic environment and the changing Chinese regulatory environment. During the past quarter, we continued to invest heavily in R&D, which consumed 5% of total revenue, in order to upgrade our existing products and develop new proprietary products to lay a solid foundation for AOBO's near term and long term growth. Meanwhile, we continued to fortify our market position, strengthen our presence in rural areas, and diversify our business operations through cost control, advertising campaigns, and sales network expansion. We are confident that we will achieve initial success from the above combined efforts in the latter part of this year." Conference Call The Company will hold a conference call at 8:00 am ET on Monday, May 10, to discuss its results. Listeners may access the call by dialing 1-866-804-6927 or 1-857-350-1673 for international callers, access code: 92995812. A webcast will also be available through AOB's website at http://www.bioaobo.com . A replay of the call will be available through May 17, 2010. Listeners may access the replay by dialing 1-888-286-8010 or 1-617-801-6888 for international callers, access code: 50942560.
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.
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, 2010, 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.
For more information, please contact: Integrated Corporate Relations, Inc.
Ashley M. Ammon Tel: +1-646-277-1200 AMERICAN ORIENTAL BIOENGINEERING, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) MARCH 31, DECEMBER 31, 2010 2009 CURRENT ASSETS Cash and cash equivalents $95,787,301 $91,126,486 Restricted Cash 3,209,381 3,298,379 Accounts and notes receivable, net 53,503,601 57,504,454 Inventories, net 19,838,535 10,015,711 Advances to suppliers and prepaid expenses 5,525,812 13,901,180 Deferred tax assets 590,330 824,451 Other current assets 1,494,931 1,246,647 Total Current Assets 179,949,891 177,917,308 LONG-TERM ASSETS Property, plant and equipment, net 94,614,699 95,468,265 Land use rights, net 152,805,027 153,604,196 Other long term assets 7,930,112 7,909,086 Construction in progress 30,111,567 28,975,386 Other intangible assets, net 17,480,990 18,695,554 Goodwill 33,164,121 33,164,121 Investments in and advances to equity investments 57,461,382 57,325,887 Deferred tax assets 138,746 134,268 Unamortized financing costs 3,055,621 3,287,694 Total Long-Term Assets 396,762,265 398,564,457 TOTAL ASSETS $576,712,156 $576,481,765 LIABILITIES AND SHAREHOLDERS' EQUITY MARCH 31, DECEMBER 31, 2010 2009 CURRENT LIABILITIES Accounts payable $10,660,316 $7,497,143 Notes payable 3,297,568 3,392,575 Other payables and accrued expenses 14,935,485 22,320,757 Taxes payable 352,439 947,338 Short-term bank loans 10,386,039 10,384,368 Current portion of long-term bank loans 60,404 60,108 Other liabilities 3,140,176 2,199,280 Deferred tax liabilities 172,017 172,473 Total Current Liabilities 43,004,444 46,974,042 LONG-TERM LIABILITIES Long-term bank loans 727,731 743,957 Deferred tax liabilities 15,737,755 15,961,465 Unrecognized tax benefits 3,300,625 2,746,561 Convertible Notes 115,000,000 115,000,000 Total Long-Term Liabilities 134,766,111 134,451,983 TOTAL LIABILITIES 177,770,555 181,426,025 EQUITY SHAREHOLDERS' EQUITY Preferred stock, $0.001 par value; 2,000,000 shares authorized; 1,000,000 shares issued and outstanding at March 31, 2010 and December 31, 2009, respectively 1,000 1,000 Common stock, $0.001 par value; 150,000,000 shares authorized; 78,321,439 shares issued and outstanding at March 31, 2010 and December 31, 2009 78,321 78,321 Common stock to be issued 485,000 388,000 Prepaid forward repurchase contract (29,998,616) (29,998,616) Additional paid-in capital 200,408,156 199,829,921 Retained earnings (the restricted portion of retained earnings is $23,757,901 at both March 31 and December 31, 2009) 194,296,931 191,173,754 Accumulated other comprehensive income 33,143,073 33,050,224 Total Shareholders' Equity 398,413,865 394,522,604 Non-controlling Interest 527,736 533,136 TOTAL EQUITY 398,941,601 395,055,740 TOTAL LIABILITIES AND EQUITY $576,712,156 $576,481,765 AMERICAN ORIENTAL BIOENGINEERING, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED) THREE MONTHS ENDED MARCH 31, 2010 2009 Revenues $53,749,768 $46,077,190 Cost of sales 25,513,047 17,660,338 GROSS PROFIT 28,236,721 28,416,852 Selling and marketing expenses 5,976,226 5,211,502 Advertising costs 6,748,470 5,567,357 Research and development costs 2,778,809 749,798 General and administrative expenses 4,766,486 4,390,701 Depreciation and amortization expenses 1,596,958 1,632,586 Total operating expenses 21,866,949 17,551,944 INCOME FROM OPERATIONS 6,369,772 10,864,908 Equity in earnings from unconsolidated entities 117,473 437,794 Interest expense, net (1,565,785) (1,579,269) Other income (expenses) 12,247 (98,609) INCOME BEFORE INCOME TAXES 4,933,707 9,624,824 Income tax 1,815,930 2,469,764 NET INCOME 3,117,777 7,155,060 Net loss (income) attributable to non-controlling interest 5,400 (3,551) NET INCOME ATTRIBUTABLE TO CONTROLLING INTEREST 3,123,177 7,151,509 OTHER COMPREHENSIVE INCOME 92,849 491,337 COMPREHENSIVE INCOME $3,216,026 $7,642,846 EARNINGS PER COMMON SHARE Basic $0.04 $0.10 Diluted $0.04 $0.10 WEIGHTED AVERAGE SHARES OUTSTANDING Basic 74,697,044 74,538,593 Diluted 89,460,953 86,917,603 SOURCE American Oriental Bioengineering, Inc.
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