JERSEY CITY, N.J., Nov. 14, 2011 /PRNewswire-Asia-FirstCall/ --
American Oriental Bioengineering, Inc. (NYSE: AOB), (the
"Company" or "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, today announced financial
results for the third quarter ended September 30, 2011.
2011 Third Quarter Financial Results
Total Revenue for the third quarter of 2011 was
$53.9 million, compared to
$91.5 million in the same period of
2010. We strategically shift the products mix, decreasing the
manufacturing of certain generic drugs from lower margin products
toward higher-margin products in order to minimize the impact from
the increased cost of certain raw materials and the continuing
government price cut on certain products.
- Revenue from manufacturing business was $49.1 million for the third quarter of 2011,
compared to $ 87.5 million in the
same period of 2010.
- Revenue from pharmaceutical products was $40.3 million in the third quarter of 2011,
compared to $77.2 million in the same
period of 2010.
- Revenue from nutraceutical products was $8.8 million in the third quarter of 2011,
compared to $10.3 million in the same
period of 2010.
- Revenue from distribution business was $4.9 million for the third quarter of 2011,
compared to $4.1 million in the same
period of 2010.
Gross profit for the third quarter of 2011 was
$25.2 million, compared to
$47.3 million in the same period of
2010. Gross margin for the third quarter of 2011 was 46.7%,
compared to 51.7% in the same period of 2010. The margin pressure
was mainly caused by the increased costs of certain raw materials
and newly levied urban construction and maintenance tax and
educational surcharge to foreign invested companies in China since December, 2010.
Selling, general and administrative expenses for the
third quarter of 2011 were $12.1
million, which represented a decrease of 42.3% from
$20.9 million for the same period of
2010. As a percentage of total revenue, selling, general and
administrative expenses decreased to 22.4% for the third quarter of
2011 from 22.9% in the same period of 2010. The decrease reflects
management's continuing focus on the efficiency of the business
through existing and newly identified process improvements and cost
reduction initiatives.
Advertising expense for the third quarter of 2011
were $3.0 million, which represented
a decrease of 73.0% from $ 11.0
million for the same period of 2010. As a percentage of
total revenue, advertising expenses decreased to 5.5% for the third
quarter of 2011 from 12.0% in the same period of 2010. The decrease
reflects reduced advertising efforts on some of OTC drugs to
correspond to the Company's selective product sales strategy and
optimal product portfolio.
Research and development expenses for the third
quarter of 2011 were $2.8 million,
compared to $4.7 million for the same
period of 2010. Expressed as a percentage of revenue, research and
development costs were 5.2% for both the third quarter of 2011 and
2010. Our research and development activities consist of near term,
middle term and long term stages which contribute to both our
current and future business strategies.
Income from operations for the third quarter of 2011 was
$8.2 million, compared to
$ 9.0 million in the same period of
2010.
Net Income attributable to controlling interest for the
third quarter of 2011 was $ 7.7
million, or $ 0.10 per diluted
share, compared to $4.2 million, or
$ 0.06 per diluted share, in the same
period of 2010.
First Nine Months of 2011 Financial
Performance
Total revenue for the nine months of 2011 was $ 160.0 million, compared to $ 222.6 million in the same period of 2010. Gross
profit for the first nine months of 2011, was $76.1 million, compared to $ 115.4 million in the same period of 2010.
Operating income for the nine months of 2011was $ 20.0 million, compared to $ 24.4 million in the same period of 2010.
Net income attributable to controlling interest for the first
nine months of 2011 was $ 11.2
million, or $ 0.15 per diluted
share, compared to $ 12.5 million, or
$ 0.17 per diluted share, in the same
period of 2010.
Balance Sheet
Our cash position as of September 30,
2011 was $ 83.0 million,
compared to $ 94.6 million as of
December 31, 2010. The decrease was
mainly attributable to the decrease of investing activities of
$39.6 million and partially offset by
the operating and financing activities of $
20.8 million and $2.0
million.
The Company generated approximately $
20.8 million of operating cash flow in the nine months of
2011, representing an increase of $ 13.5
million, compared to $ 7.3
million for the same period of 2010. The increase was
primarily due to the collection of accounts and notes receivable of
$16.6 million.
Our net cash used in investing activities amounted to
$ 39.6 million in the nine months of
2011, including cash outflows for a deposit of $ 30.4 million, which allow us to have the right
to establish a TCM raw material trading center in Northeast China approved by the China's SFDA amounted to $26,503,473. The investment is intended to be
integrated with our competitive infrastructure and whole supply
chain management, providing a platform for the Company to start a
TCM raw material trading business, offering a long term steadier
supply of quality raw materials with manageable costs.
We have paid $8.9 million
construction in progress during the nine months of 2011, for the
expansion and upgrade of our manufacturing facilities to complement
capacity improvement and efficiency enhancement.
Our working capital decreased to $ 184.6
million as of September 30,
2011, compared to $200.7
million as of December 31,
2010. The decrease was primarily due to the decrease in cash
and cash equivalents by $11.6 million
and decrease in net accounts and notes receivable by $ 16.5 million, partially offset by the increase
of net inventories at $ 11.5
million.
Mr. Tony Liu, Chairman and Chief
Executive Officer of AOB, commented: "China remains as a major commercial
opportunity with significant growth potential. Leaving aside
near-term healthcare reform policy headwinds, we keep long-term
positive view on the pharmaceutical business. The financial results
demonstrate our ability to execute and deliver on a consistent
basis. We are fully committed to executing our growth strategy,
driving innovation and delivering value to our customers and our
shareholders."
Conference Call
To be announced as soon as the conference call number is
arranged, expected in the hour.
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.
Safe Harbor Statement
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 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.
Contact:
|
|
|
|
American Oriental
Bioengineering, Inc.
|
|
Hong Zhu
|
|
(646) 367-1765
|
|
|
AMERICAN
ORIENTAL BIOENGINEERING, INC. AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
(UNAUDITED)
|
|
|
|
|
|
|
SEPTEMBER 30,
|
|
DECEMBER 31,
|
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
(RESTATED)
|
|
CURRENT
ASSETS
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
83,018,431
|
$
|
94,568,520
|
|
Restricted Cash
|
|
654,977
|
|
537,297
|
|
Accounts and notes receivable,
net
|
|
64,117,238
|
|
80,598,919
|
|
Inventories, net
|
|
24,201,066
|
|
12,665,586
|
|
Advances to suppliers and
prepaid expenses
|
|
19,547,924
|
|
14,246,144
|
|
Deferred tax
assets
|
|
221,222
|
|
649,503
|
|
Receivable for disposal of
investment
|
|
39,832,547
|
|
38,567,410
|
|
Other current
assets
|
|
1,839,855
|
|
2,986,005
|
|
Total
Current Assets
|
|
233,433,260
|
|
244,819,384
|
|
|
|
|
|
|
|
LONG-TERM
ASSETS
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
136,405,433
|
|
109,547,616
|
|
Land use rights,
net
|
|
157,892,698
|
|
155,433,311
|
|
Other long term
assets
|
|
12,281,370
|
|
8,167,880
|
|
Construction in
progress
|
|
32,378,396
|
|
22,516,044
|
|
Other intangible assets,
net
|
|
12,858,509
|
|
14,889,127
|
|
Investments in and
advances to equity investments
|
|
18,922,088
|
|
19,179,235
|
|
Goodwill
|
|
33,164,121
|
|
33,164,121
|
|
Deferred tax
assets
|
|
84,176
|
|
147,024
|
|
Unamortized financing
costs
|
|
1,580,721
|
|
2,359,404
|
|
Total
Long-Term Assets
|
|
405,567,512
|
|
365,403,762
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
$
|
639,000,772
|
$
|
610,223,146
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEPTEMBER
30,
|
|
DECEMBER
31,
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
(RESTATED)
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
Accounts
payable
|
$
|
14,304,039
|
$
|
10,716,686
|
|
Notes payable
|
|
654,977
|
|
537,297
|
|
Other payables and accrued
expenses
|
|
14,987,564
|
|
18,039,557
|
|
Taxes payable
|
|
845,753
|
|
1,237,169
|
|
Short-term bank
loans
|
|
12,766,861
|
|
6,957,258
|
|
Current portion of
long-term bank loans
|
|
62,472
|
|
61,405
|
|
Other
liabilities
|
|
5,160,521
|
|
6,284,107
|
|
Deferred tax
liabilities
|
|
87,382
|
|
243,304
|
|
Total
Current Liabilities
|
|
48,869,569
|
|
44,076,783
|
|
|
|
|
|
|
|
LONG-TERM
LIABILITIES
|
|
|
|
|
|
Long-term bank loans, net
of current portion
|
|
631,990
|
|
679,866
|
|
Deferred tax
liabilities
|
|
14,263,066
|
|
15,837,479
|
|
Unrecognized tax
benefits
|
|
7,874,802
|
|
6,055,656
|
|
Convertible
Notes
|
|
109,500,000
|
|
115,000,000
|
|
Total
Long-Term Liabilities
|
|
132,269,858
|
|
137,573,001
|
|
TOTAL
LIABILITIES
|
|
181,139,427
|
|
181,649,784
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
SHAREHOLDERS’
EQUITY
|
|
|
|
|
|
Preferred stock, $0.001 par
value; 2,000,000 shares authorized;
|
|
|
|
|
|
|
1,000,000 shares issued and
outstanding at September 30, 2011 and December 31, 2010,
respectively
|
|
1,000
|
|
1,000
|
|
Common stock, $0.001 par value;
150,000,000 shares authorized;
|
|
|
|
|
|
|
78,952,544 shares and 78,598,604
shares issued as of September 30, 2011 and December 31, 2010,
respectively; 78,503,381 shares and 78,598,604 shares outstanding
as of September 30, 2011 and December 31, 2010,
respectively
|
|
78,952
|
|
78,598
|
|
Common stock to be
issued
|
|
224,333
|
|
350,500
|
|
Additional paid-in
capital
|
|
205,971,757
|
|
203,322,671
|
|
Retained earnings (the
restricted portion of retained earnings is
|
|
|
|
|
|
|
$26,293,785 at both September
30, 2011
and December 31,
2010)
|
|
216,442,093
|
|
205,260,681
|
|
Less: Treasury stock, at cost
(449,163 shares and nil as of September 30, 2011 and December 31,
2010, respectively)
|
|
(799,999)
|
|
-
|
|
Less: Prepaid forward repurchase
contract
|
|
(29,998,616)
|
|
(29,998,616)
|
|
Accumulated other comprehensive
income
|
|
65,421,859
|
|
49,053,329
|
|
Total
Shareholders’ Equity
|
|
457,341,379
|
|
428,068,163
|
|
Non-controlling
Interest
|
|
519,966
|
|
505,199
|
|
TOTAL
EQUITY
|
|
457,861,345
|
|
428,573,362
|
|
TOTAL
LIABILITIES AND EQUITY
|
$
|
639,000,772
|
$
|
610,223,146
|
|
|
|
|
|
|
|
|
|
AMERICAN
ORIENTAL BIOENGINEERING, INC. AND
SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
INCOME
|
|
(UNAUDITED)
|
|
|
|
|
|
THREE MONTHS ENDED
|
|
NINE MONTHS ENDED
|
|
|
|
SEPTEMBER 30
|
|
SEPTEMBER 30
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(RESTATED)
|
|
|
|
(RESTATED)
|
|
Revenues
|
$
|
53,934,602
|
$
|
91,533,044
|
$
|
159,988,508
|
$
|
222,579,024
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
28,730,424
|
|
44,250,846
|
|
83,863,569
|
|
107,219,753
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT
|
|
25,204,178
|
|
47,282,198
|
|
76,124,939
|
|
115,359,271
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general &
administrative expenses
|
|
12,080,424
|
|
20,920,522
|
|
34,577,769
|
|
48,326,800
|
|
Advertising costs
|
|
2,964,877
|
|
10,983,946
|
|
10,185,380
|
|
26,949,663
|
|
Research and development
costs
|
|
2,825,967
|
|
4,724,703
|
|
8,652,455
|
|
10,754,394
|
|
Depreciation and
amortization
|
|
1,804,888
|
|
1,682,058
|
|
5,359,979
|
|
4,902,005
|
|
Debt extinguishment
(gain)
|
|
(2,666,829)
|
|
-
|
|
(2,666,829)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
17,009,327
|
|
38,311,229
|
|
56,108,754
|
|
90,932,862
|
|
|
|
|
|
|
|
|
|
|
|
INCOME FROM
OPERATIONS
|
|
8,194,851
|
|
8,970,969
|
|
20,016,185
|
|
24,426,409
|
|
|
|
|
|
|
|
|
|
|
|
Equity in (losses) earnings from
unconsolidated entities
|
|
(796,727)
|
|
242,183
|
|
(857,811)
|
|
201,097
|
|
Impairment Loss on eqiuty
investment
|
|
-
|
|
(1,083,637)
|
|
-
|
|
(1,083,637)
|
|
Gain (loss) on changes in
ownership of unconsolidated entities
|
|
-
|
|
-
|
|
658,540
|
|
(12,240)
|
|
Interest expense, net
|
|
(1,802,954)
|
|
(1,456,062)
|
|
(4,850,651)
|
|
(4,393,093)
|
|
Other (expenses) income,
net
|
|
(116,196)
|
|
(67,548)
|
|
321,571
|
|
(85,340)
|
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME
TAXES
|
|
5,478,974
|
|
6,605,905
|
|
15,287,834
|
|
19,053,196
|
|
Provision for income
taxes
|
|
(2,203,013)
|
|
2,366,398
|
|
4,091,655
|
|
6,578,178
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
|
|
7,681,987
|
|
4,239,507
|
|
11,196,179
|
|
12,475,018
|
|
|
|
|
|
|
|
|
|
|
|
Net (income) loss attributable
to non-controlling interest
|
|
(28,446)
|
|
7,679
|
|
(14,767)
|
|
19,555
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME ATTRIBUTABLE TO
CONTROLLING INTEREST
|
|
7,653,541
|
|
4,247,186
|
|
11,181,412
|
|
12,494,573
|
|
|
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE
INCOME
|
|
5,020,779
|
|
7,780,438
|
|
16,368,530
|
|
9,716,941
|
|
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE
INCOME
|
$
|
12,674,320
|
$
|
12,027,624
|
$
|
27,549,942
|
$
|
22,211,514
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER COMMON
SHARE
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.10
|
$
|
0.06
|
$
|
0.15
|
$
|
0.17
|
|
Diluted
|
$
|
0.10
|
$
|
0.06
|
$
|
0.15
|
$
|
0.17
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE SHARES
OUTSTANDING
|
|
|
|
|
|
|
|
|
|
Basic
|
|
74,845,855
|
|
74,934,428
|
|
74,801,120
|
|
74,765,028
|
|
Diluted
|
|
76,524,003
|
|
75,965,266
|
|
76,307,044
|
|
75,647,024
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE American Oriental Bioengineering, Inc.