Dragon Achieved Solid Increase in Sales and Profits from Continuing Operations for Q3
November 14 2007 - 7:00PM
PR Newswire (US)
VANCOUVER, Nov. 14 /PRNewswire-FirstCall/ -- Dragon Pharmaceutical
Inc. (TSX: DDD; OTC BB: DRUG; BBSE: DRP) today announced its
financial results for the three and nine months ended September 30,
2007, showing strong growth in sales and profits for its core
antibiotic business. Meanwhile, the Company also announced the sale
of its EPO operation to an unaffiliated party through a separate
press release. Highlights for the three and nine months ended
September 30, 2007
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Sales for the third quarter increased 102% to $23.10 million from
$11.41 million for the same period of 2006. Sales for the first
nine months reached $59.98 million, with an increase of 60% as
compared to the same period of 2006; - Gross profit and gross
margin for the third quarter were $4.31 million and 18.66% compared
to $0.73 million and 6.38% for the same period of 2006; - Operating
income increased 347% to $1.31 million for this quarter from a net
loss of $0.53 million for same period of 2006; - Net cash inflow
generated from operating activities for the quarter was $2.08
million, as compared to a net cash outflow of $1.23 million for
same period of 2006; - Net income from continuing operations for
the third quarter amounted to $0.97 million, up 200% from a net
loss of $0.97 million for the same period of 2006; - A net loss of
$2.57 million was shown from discontinuing operations, which was
due to the impact of a $2.64 million non-cash impairment charge of
intangible assets and goodwill related to EPO disposal. As the
result of the EPO disposal, the Company will be focusing on core
antibiotic business with vertical product lines covering
intermediates, active pharmaceutical ingredients and formulation
drugs, which all grew strongly over the last quarters. The sale
momentum from Chemical Division that contains intermediates and API
products actually started from the fourth quarter of last year, and
continued through all three quarters of this year. As one of
dominating producers of 7ACA, the Company further strengthened its
market position and delivered 183% year-over-year revenue growth in
Chinese market during the third quarter of 2007. Mainly driven by
strong market demand, the Company realized 138 tons of sales in the
third quarter, which was 99% of 140 tons of total production
output. Meanwhile, the Company successfully increased its sales by
84% in China and by 66% in the international market for Clavulanic
Acid, reflecting the strong market acceptance of our high
production quality. Under the favorable market conditions, the
Company realized a utilization rate of 93% for 7ACA and 80% for
Clavulanic Acid. The higher facility utilization, combined with our
continuous efforts in technology improvement, led to lowering of
our per unit production costs. As a result, the Chemical Division's
gross margin increased to 27.57% in this quarter from 10.68% for
the same period of 2006. Moreover, as previously disclosed, the
Company has successfully established a new production line
producing 7ACA using the biotech method, adding an additional
annual production capacity of 120 tons 7ACA. Management believes
that the increased capacity will enable the Company to promptly
respond to the strong customer demand and gain further market
share. The Company also achieved substantial sales increase and
improved gross margin for the Pharma Division that contains
formulation business as the Company further expanded its market
share in the Chinese market. During the third quarter, the sales
increased by 266% to $5.59 million as compared to the same period
of 2006, accounting for 24% of the total revenues of the Company.
The total sales quantity reached 33 million units as compared to 20
million units in the second quarter and 15 million units in the
first quarter of 2007. Mainly due to the significant revenue
growth, improved productivity and increased gross margins for all
our products, net income from continuing operations for the third
quarter increased 200% to $0.97 million from a net loss of $0.97
million for the same period of 2006. Net income from continuing
operations for the nine months amounted to $2.12 million as
compared to a net loss of $0.86 million for the same quarter of
2006. The net cash inflow generated from operating activities
amounted to $2.08 million, which provided the Company greater
flexibility to expand the operations in its core business.
Meanwhile, due to the impact of a $2.64 million non-cash impairment
charge of intangible assets and goodwill related to EPO disposal as
disclosed in the separate press release dated November 14, 2007,
the Company had a net loss of $1.61 million for the third quarter,
which was the net of $0.97 million net income from continuing
operations and $2.57 million net loss from discontinuing
operations. "The solid performance of our core antibiotic operation
once again demonstrates the strength of our business model and our
ability to achieve growth in revenues, profitability and cashflow,"
said Mr. Yanlin Han, Chairman and CEO of the Company. "We are
focusing our efforts in the antibiotic market which we intend to
lead while showing a sustainable and growing profit. In addition,
the Company is also actively exploring additional business
opportunities in broadening its core antibiotic product offerings
and increasing production capacities. We are confident that the
benefits of all these initiatives will be reflected in the
Company's performance in the future." This press release contains
forward looking statements, including but not limited to, that the
Company will continue to experience growth in sales of its main
products, that it will continue to be able to improve its product
quality and efficiency, that it will continue to achieve continuous
growth in business and profitability in the near future. These
statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from those
anticipated in the forward looking statements. Readers should not
place undue reliance on forward looking statements, which only
reflect the views of management as of the date hereof. The Company
does not undertake the obligation to publicly revise these forward
looking statements to reflect subsequent events or circumstances.
Readers should carefully review the risk factors and other factors
described in its periodic reports filed with the Securities and
Exchange Commission. CONTACT: Dragon Pharmaceutical Inc., Maggie
Deng, Telephone: (604) 669-8817; or North America Toll Free:
1-877-388-3784, Email: , Website: http://www.dragonpharma.com/
DATASOURCE: Dragon Pharmaceutical Inc. CONTACT: Dragon
Pharmaceutical Inc., Maggie Deng, Telephone: (604) 669-8817; or
North America Toll Free: 1-877-388-3784, Email: , Website:
http://www.dragonpharma.com/
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