BEIJING, Nov. 11, 2011 /PRNewswire-Asia-FirstCall/ --
Lotus Pharmaceuticals, Inc. (OTCBB: LTUS) ("Lotus" or the
"Company"), a profitable developer, manufacturer and seller of
medicine and drugs in the People's
Republic of China ("PRC"), today announced its financial
results for the third fiscal quarter ended September 30, 2011. Summary financial data is
provided below:
Third Quarter 2011 Financial
Highlights
- Revenues for the third quarter of fiscal year 2011 increased by
4.0% year-over-year to $19.0 million,
up from $18.3 million in the third
quarter of 2010
- Wholesale revenue was $15.3
million, or 80.2% of total revenues
- Retail revenues were $3.8
million, or 19.8% of total revenues
- Gross margin for the third quarter was 17.4% based on gross
profit of $3.3 million, compared with
a 56.7% margin in the same period last year
- Net income for the third quarter decreased 81.3% to
$1.3 million, compared with
$6.7 million for the third quarter of
2010
- Earnings per diluted share were $0.04 for the quarter, compared with diluted EPS
of $0.25 achieved in the same period
a year ago
Chairman and Chief Executive Officer Mr. Zhongyi Liu stated, "As we focused our efforts
on the construction of our headquarter facility in 2011, there were
some major changes on the competitive landscape for our business,
which put significant pressure on our gross margins. Retail sales
continue to deliver solid results with 27.4% growth in revenue
versus the same period in 2010, driven primarily by our
Over-the-Counter division's continued growth. Construction of our
Beijing facility continues to
progress and the facility is near completion. We anticipate
additional capacity for growth and significant efficiency
improvements once we move into the new building by the end of the
year."
Mr. Liu continued, "Lotus has a well-established nationwide
sales and distribution network, and strong product development
capabilities. With the completion of our new headquarters, we
believe we are well positioned with respect to the ongoing
consolidation of the Chinese pharmaceutical industry."
Third Quarter 2011 Results
of Operations
Revenues
Revenues for the three months ended September 30, 2011 were $19.0 million as compared to $18.3 million for the three months ended
September 30, 2010. The increase of
$0.7 million, or 4.0%, was primarily
due to the continued expansion of our OTC sales division. Wholesale
revenue stayed roughly flat year-over-year at $15.3 million, or 80.2% of total revenues. Retail
revenues increased 27.4% year-over-year to $3.8 million, or 19.8% of total revenues.
Gross Profit
Gross profit for the three months ended September 30, 2011 were $3.3 million as compared to $10.4 million for the three months ended
September 30, 2010. Costs of sales
for the three-month period were $15.7
million as compared to $7.9
million for the same period a year ago. The Company's gross
margin was 17.4% and 56.7%, for the three months ended September 30, 2011 and 2010, respectively.
Income from Operations
Operating income for the three months ended September 30, 2011 amounted to $1.3 million as compared to $6.8 million for the three months ended
September 30, 2010. Operating
expenses for the three-month period totaled $2.0 million as compared to $3.6 million for the same period in 2010. The
decrease in operating expenses was primarily due to the decrease in
selling expenses and G&A expenses, partially offsetting by the
increase in R&D expenses.
Net Income
Net income for the three months ended September 30, 2011 was $1.3 million as compared to $6.7 million for the three months ended
September 30, 2010, due to the
reasons set forth above. Earnings per diluted share were
$0.04 for the quarter, compared with
diluted EPS of $0.25 for the same
period a year ago.
Liquidity and Capital Resources
As of September 30, 2011, the
Company's current assets were $7.6
million and current liabilities were $14.2 million. Cash and cash equivalents totaled
$0.2 million as of September 30, 2011. The Company's shareholders'
equity at September 30, 2011 was
$99.5 million. The Company generated
$10.6 million in cash from operating
activities for the nine months ended September 30, 2011, compared to $19.0 million for the same period in 2010. The
Company used $11.8 million in net
cash for investing activities for the nine months ended
September 30, 2011, compared to
$22.1 million for the same period in
2010.
Recent Business Highlights
- The Company continues to make progress in the construction of
its headquarters building in Chaoyang District, Beijing, and the project is now near
completion. The company expects to finish the construction and move
into the facility by the end of the year. This state-of-the-art
building will host the Company's GMP manufacturing facility, a
storage warehouse, an R&D center, a sales and marketing center,
and administrative offices, as well as employee apartments.
Business Outlook for 2011
2011 is a transitional year for Lotus Pharmaceuticals, as the
Company focuses its efforts on completing its new headquarters and
shifting its focus to the wholesale business in Beijing and the surrounding areas. After the
completion of the headquarters, the Company expects the growth of
revenue and profitability will resume, driven primarily by the
wholesale business in Beijing.
Conference Call and Webcast
Management will host a conference call to discuss these
financial results on Monday, November 14,
2011 at 10:00 a.m. EST
(7:00 a.m. PST).
To participate in the call, please dial (877) 941-4774, or (480)
629-9760 for international calls, approximately 10 minutes prior to
the scheduled start time.
A replay of the call will be available for two weeks from
1:00 p.m. EST on November 14, 2011, until 11:59 p.m. EST on November
28, 2011. The number for the replay is (877) 870-5176, or
(858) 384-5517 for international calls; the passcode for the replay
is 4487388.
About Lotus Pharmaceuticals, Inc.
Lotus Pharmaceuticals, Inc. is a profitable developer and
producer of drugs and a licensed national seller of pharmaceutical
items in the People's Republic of
China (PRC). Lotus operates its business through its two
controlled entities: Liang Fang Pharmaceutical, Ltd. and En Ze Jia
Shi Pharmaceutical, Ltd. Lotus' current drug development is focused
on the treatment of cerebro-cardiovascular diseases, asthma and
diabetes. Liang Fang sells drugs
directly and indirectly through its national sales channels to
hospitals, clinics and drugs stores in 30 provinces of the PRC.
Information Regarding Forward-Looking Statements
Except for historical information contained herein, the
statements in this press release are forward-looking statements
that are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements involve known and unknown risks and uncertainties, which
may cause our actual results in future periods to differ materially
from forecasted results. These risks and uncertainties include,
among other things, product demand, market competition, and risks
inherent in our operations. These and other risks are described in
our filings with the U.S. Securities and Exchange
Commission.
Contacts:
Xing Shen, Ph.D.
VP of Corporate Development
Lotus Pharmaceuticals, Inc.
Ph: 415-690-7688
Email: shen@lotuspharma.com
Web: http://www.lotuspharma.com
|
|
LOTUS
PHARMACEUTICALS, INC. AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
INCOME
|
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
Three Months Ended
|
|
For the Nine
Months Ended
|
|
|
|
September
30,
|
|
September
30,
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
NET REVENUES:
|
|
|
|
|
|
|
|
|
|
Wholesale
|
|
$
15,276,053
|
|
$
15,347,372
|
|
$ 38,585,730
|
|
$ 42,309,596
|
|
Retail
|
|
3,768,485
|
|
2,957,488
|
|
12,070,485
|
|
9,652,235
|
|
|
|
|
|
|
|
|
|
|
|
Total Net
Revenues
|
|
19,044,538
|
|
18,304,860
|
|
50,656,215
|
|
51,961,831
|
|
|
|
|
|
|
|
|
|
|
|
COST OF REVENUES:
|
|
|
|
|
|
|
|
|
|
Wholesale
|
|
12,855,958
|
|
5,791,825
|
|
27,287,898
|
|
16,318,673
|
|
Retail
|
|
2,874,778
|
|
2,133,906
|
|
9,014,537
|
|
6,956,438
|
|
|
|
|
|
|
|
|
|
|
|
Total Cost of
Revenues
|
|
15,730,736
|
|
7,925,731
|
|
36,302,435
|
|
23,275,111
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT
|
|
3,313,802
|
|
10,379,129
|
|
14,353,780
|
|
28,686,720
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
|
Selling
expenses
|
|
846,919
|
|
2,452,629
|
|
2,987,630
|
|
6,996,741
|
|
Research and
development expenses
|
|
470,311
|
|
21,517
|
|
1,889,535
|
|
21,517
|
|
General and
administrative expenses
|
|
728,164
|
|
1,145,412
|
|
4,170,350
|
|
3,242,617
|
|
|
|
|
|
|
|
|
|
|
|
Total
Operating Expenses
|
|
2,045,394
|
|
3,619,558
|
|
9,047,515
|
|
10,260,875
|
|
|
|
|
|
|
|
|
|
|
|
INCOME FROM
OPERATIONS
|
|
1,268,408
|
|
6,759,571
|
|
5,306,265
|
|
18,425,845
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSE):
|
|
|
|
|
|
|
|
|
|
Debt issuance
costs
|
|
-
|
|
-
|
|
-
|
|
(52,226)
|
|
Other
income
|
|
47,717
|
|
200,074
|
|
141,331
|
|
597,016
|
|
Interest
income
|
|
439
|
|
525
|
|
2,005
|
|
2,711
|
|
Interest
expense
|
|
(63,223)
|
|
(59,896)
|
|
(187,256)
|
|
(551,726)
|
|
|
|
|
|
|
|
|
|
|
|
Total
Other Income (Expense)
|
|
(15,067)
|
|
140,703
|
|
(43,920)
|
|
(4,225)
|
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME
TAXES
|
|
1,253,341
|
|
6,900,274
|
|
5,262,345
|
|
18,421,620
|
|
|
|
|
|
|
|
|
|
|
|
INCOME TAXES
|
|
-
|
|
200,348
|
|
149
|
|
470,514
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
|
|
1,253,341
|
|
6,699,926
|
|
5,262,196
|
|
17,951,106
|
|
|
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE
INCOME:
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation gain
|
|
930,264
|
|
1,426,434
|
|
3,054,039
|
|
1,760,632
|
|
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE INCOME
|
|
2,183,605
|
|
8,126,360
|
|
$
8,316,235
|
|
$ 19,711,738
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME PER COMMON
SHARE:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.05
|
|
$
0.25
|
|
$
0.19
|
|
$
0.69
|
|
Diluted
|
|
$
0.04
|
|
$
0.25
|
|
$
0.19
|
|
$
0.67
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
27,784,732
|
|
26,697,892
|
|
27,675,063
|
|
26,000,584
|
|
Diluted
|
|
28,094,644
|
|
27,047,556
|
|
27,985,245
|
|
26,872,434
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOTUS
PHARMACEUTICALS, INC. AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
September
30, 2011
|
|
December 31,
2010
|
|
ASSETS
|
|
|
|
|
CURRENT ASSETS:
|
|
|
|
|
|
Cash
|
$
158,908
|
|
$
1,339,972
|
|
|
Accounts receivable
|
6,000,546
|
|
1,973,150
|
|
|
Inventories
|
1,268,875
|
|
634,583
|
|
|
Prepaid expenses and other
current assets
|
128,805
|
|
593,759
|
|
|
|
|
|
|
|
|
|
Total Current Assets
|
7,557,134
|
|
4,541,464
|
|
|
|
|
|
|
|
|
PROPERTY AND EQUIPMENT,
net
|
52,280,950
|
|
39,337,935
|
|
|
|
|
|
|
OTHER ASSETS
|
|
|
|
|
|
Land use right held for
development or sale
|
30,195,957
|
|
29,236,891
|
|
|
Deposits and Installments on
intangible assets
|
9,840,982
|
|
9,528,419
|
|
|
Land use rights, net
|
13,111,904
|
|
12,932,421
|
|
|
Other intangible assets,
net
|
7,169,988
|
|
7,607,485
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
$
120,156,915
|
|
$
103,184,615
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
Accounts payable
|
$
2,499
|
|
$
37,829
|
|
|
Other payables and accrued
liabilities
|
723,557
|
|
3,441,466
|
|
|
Taxes payable
|
10,595,533
|
|
2,024,565
|
|
|
Unearned revenue
|
530,987
|
|
504,442
|
|
|
Dividend payable
|
5,743
|
|
-
|
|
|
Due to related
parties
|
2,342,828
|
|
2,042,376
|
|
|
|
|
|
|
|
|
|
|
Total Current
Liabilities
|
14,201,147
|
|
8,050,678
|
|
|
|
|
|
|
|
|
LONG-TERM
LIABILITIES:
|
|
|
|
|
|
Due to related
parties
|
1,087,879
|
|
869,067
|
|
|
Notes payable - related
parties
|
5,413,778
|
|
5,241,829
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
20,702,804
|
|
14,161,574
|
|
|
|
|
|
|
|
|
COMMITMENTS AND
CONTIGENCIES
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY:
|
|
|
|
|
|
Preferred stock ($.001 par
value; 10,000,000 shares authorized;
|
|
|
|
|
|
619,824 and 607,107 shares
issued and outstanding
|
|
|
|
|
|
at September 30, 2011 and
December 31, 2010, respectively)
|
620
|
|
607
|
|
|
Common stock ($.001 par value;
100,000,000 shares authorized;
|
|
|
|
|
|
27,800,927 and 26,763,485
shares issued and outstanding
|
|
|
|
|
|
at September 30, 2011 and
December 31, 2010, respectively)
|
27,801
|
|
26,763
|
|
|
Additional paid-in
capital
|
23,809,738
|
|
21,679,147
|
|
|
Retained earnings
|
59,170,490
|
|
53,925,101
|
|
|
Statutory reserves
|
6,240,202
|
|
6,240,202
|
|
|
Accumulated other comprehensive
income
|
10,205,260
|
|
7,151,221
|
|
|
|
|
|
|
|
|
|
|
Total
stockholders' Equity
|
99,454,111
|
|
89,023,041
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and
Stockholders' Equity
|
$
120,156,915
|
|
$
103,184,615
|
|
|
|
|
|
|
|
|
|
SOURCE Lotus Pharmaceuticals, Inc.