American Oriental Bioengineering Reports Second Quarter 2009 Financi...(ningof 2009. The Company generated $3.3...)

Gross profit in the second quarter of 2009 increased 3.9% to $41.6 million from $40.1 million in the second quarter of 2008. Gross margin was 58.4%, compared to 67.9% in the prior year's period, reflecting continued revenue mix shift to CCXA's generic product sales, increasing raw material prices and low margin distribution business.

Operating income in the second quarter of 2009 was $18.3 million compared to $18.7 million in the second quarter of 2008. Selling and marketing expenses increased 22.2% to $9.4 million from $7.7 million in the prior year period. The increase primarily reflects marketing and promotional initiatives to support the continuous growth of revenues. Advertising expense was $7.8 million in the second quarter of 2009, compared to $7.5 million in the prior year's period.

Net income attributable to controlling interest for the second quarter of 2009 was $13.2 million, compared to $13.9 million in the prior year's period. Excluding $1.4 million of interest expense and $0.2 million of amortized financing costs related to the Company's outstanding convertible notes, the Company's net income attributable to controlling interest increased 6.5% to $14.8 million, or $0.17 per diluted share. In the prior year's second quarter, net income per diluted share was approximately $0.18.

As of June 30, 2009, the Company had $100.7 million in cash and generated approximately $22.9 million of operating cashflow during the second quarter of 2009.

Mr. Tony Liu, Chairman and Chief Executive Officer of American Oriental Bioengineering, commented, "We are pleased with our second quarter performance as we continued to enhance our diversified product portfolio and pursue further vertical integration. Our marketing capabilities, extensive distribution platform, diversified product offering and on
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