NEW YORK, May 9, 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 first quarter ended March 31, 2011.
First Quarter 2011 Financial PerformanceIn the first quarter of 2011, revenue decreased to $52.0 million from $53.7 million in the same period of 2010.
Gross profit in the first quarter of 2011 was $25.1 million compared to $28.2 million in the first quarter of 2010. Gross margin was 48.2% compared to 52.5% in the prior year period. The margin pressure was mainly caused by a higher proportion of generic product sales in the rural market, the increased costs of certain raw materials, as well as the new levied urban construction and maintenance tax and educational surcharge.
Operating income in the first quarter of 2011 decreased to $5.5 million compared with $6.4 million in the prior year period. Total operating expenses decreased 10.7% to $19.5 million from $21.9 million in the prior year period. Selling, general and administrative expenses were $11.2 million, or 21.6% of total revenue, compared to $10.7 million, or 20.0% of total revenue, in the prior year period. Advertising expense decreased to $3.8 million in the first quarter of 2011 compared to $6.7 million in the prior year period, reflecting reduced advertising efforts on OTC drugs to correspond to the Company's selective product sales strategy. Research and development expenses were $2.7 million compared to $2.8 million in the prior year period. Management continued to implement stringent cost control measures which offset the increased labor costs.
Net income attributable to controlling interest for the first quarter of 2011 was $0.9 million, or $0.01 per diluted share, compared to $3.1 million, or $0.04 per diluted share, in the prior year period.
Balance SheetAs of March 31, 2011, the Company had $111.4 million in cash and cash equivalents, and generated approximately $21.6 million of operating cash flow during the first quarter of 2011. Working capital was $162.9 million as of March 31, 2011, compared to $162.2 million as of December 31, 2010.
Mr. Tony Liu, Chairman and Chief Executive Officer of AOB, commented, "We are pleased with our financial performance despite the increasingly challenging economic and regulatory environment in China and worldwide. Our first quarter results reflect our continuing efforts on profitability focus and cost control. We dynamically adjusted our product mix to minimize the negative impact from the increased costs of certain raw materials and the government's price reduction on certain drugs. In addition, we believe our continued investments in CAPEX and R&D will give us a competitive advantage in for the long term, especially under the stricter regulatory environment."
Conference CallThe Company will hold a conference call at 8:00 am ET on Tuesday, May 10, 2011, to discuss its results. Listeners may access the call by dialing 1-877-299-4454 or 1-617-597-5447 for international callers, access code: 91826695. A webcast will also be available through AOB's website at www.bioaobo.com. A replay of the call will be available through May 17, 2011. Listeners may access the replay by dialing 1-888-286-8010 or 1-617-801-6888 for international callers, access code: 86841058.
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 StatementStatements 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:ICR, LLCChristine Duan or Ashley Ammon203-682-8200AMERICAN ORIENTAL BIOENGINEERING, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME(UNAUDITED)THREE MONTHS ENDEDMARCH 3120112010Revenues$52,002,110
$53,749,768Cost of sales26,926,20025,513,047GROSS PROFIT25,075,91028,236,721Selling, general & administrative expenses11,239,24710,742,712Advertising costs3,821,1486,748,470Research and development costs2,701,2122,778,809Depreciation and amortization 1,770,7111,596,958Total operating expenses 19,532,31821,866,949INCOME FROM OPERATIONS5,543,5926,369,772Equity in (losses) earnings from unconsolidated entities(409,886)117,473Interest expense, net(1,513,585)(1,565,785)Other expenses, net425,88012,247INCOME BEFORE INCOME TAXES4,046,0014,933,707Income tax3,124,8551,815,930NET INCOME921,1463,117,777Net loss attributable to non-controlling interest3,0065,400NET INCOME ATTRIBUTABLE TO CONTROLLING INTEREST924,1523,123,177OTHER COMPREHENSIVE INCOME3,132,46692,849COMPREHENSIVE INCOME$4,056,618
$3,216,026EARNINGS PER COMMON SHAREBasic$0.01
$0.04WEIGHTED AVERAGE SHARES OUTSTANDINGBasic74,987,37474,697,044Diluted76,018,56189,460,953AMERICAN ORIENTAL BIOENGINEERING, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(UNAUDITED)MARCH 31,DECEMBER 31,20112010CURRENT ASSETSCash and cash equivalents
94,568,520Restricted Cash875,318537,297Accounts and notes receivable, net46,865,37580,598,919Inventories, net25,138,00412,665,586Advances to suppliers and prepaid expenses16,715,34614,246,144Deferred tax assets440,174649,503Other current assets3,394,0632,986,005Total Current Assets204,861,056206,251,974LONG-TERM ASSETSProperty, plant and equipment, net108,907,254109,547,616Land use rights, net155,562,594155,433,311Other long term assets8,212,6458,167,880Construction in progress28,556,11722,516,044Other intangible assets, net14,144,11314,889,127Goodwill33,164,12133,164,121Investments in and advances to equity investments58,933,17259,068,491Deferred tax assets145,302147,024Unamortized financing costs2,127,3322,359,404Total Long-Term Assets409,752,650405,293,018TOTAL ASSETS$
611,544,992LIABILITIES AND SHAREHOLDERS’ EQUITYMARCH 31,DECEMBER 31,20112010CURRENT LIABILITIESAccounts payable
10,716,686Notes payable875,318537,297Other payables and accrued expenses13,922,64718,039,557Taxes payable2,590,1721,237,169Short-term bank loans7,001,4166,957,258Current portion of long-term bank loans61,70661,405Other liabilities 5,881,2136,284,107Deferred tax liabilities193,671243,304Total Current Liabilities41,962,72344,076,783LONG-TERM LIABILITIESLong-term bank loans, net of current portion663,783679,866Deferred tax liabilities15,656,08615,837,479Unrecognized tax benefits5,551,7035,050,157Convertible Notes115,000,000115,000,000Total Long-Term Liabilities136,871,572136,567,502TOTAL LIABILITIES178,834,295180,644,285EQUITYSHAREHOLDERS’ EQUITYPreferred stock, $0.001 par value; 2,000,000 shares authorized; 1,000,000 shares issued and outstanding at March 31, 2011 and December 31, 2010, respectively1,0001,000Common stock, $0.001 par value; 150,000,000 shares authorized; 78,598,604 shares issued and outstanding at both March 31, 2011 and December 31, 201078,59878,598Common stock to be issued435,000350,500Prepaid forward repurchase contract(29,998,616)(29,998,616)Additional paid-in capital204,063,263203,322,671Retained earnings (the restricted portion of retained earnings is $26,471,124 at both March 31, 2011 and December 31, 2010)208,439,256207,515,104Accumulated other comprehensive income52,258,71749,126,251Total Shareholders’ Equity435,277,218430,395,508Non-controlling Interest502,193505,199TOTAL EQUITY435,779,411430,900,707TOTAL LIABILITIES AND EQUITY$
|SOURCE American Oriental Bioengineering, Inc.|
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