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.
|SOURCE American Oriental Bioengineering, Inc.|
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