Operating expenses in the third quarter increased 100% to $16.7 million compared to $8.3 million in the prior year period. This increase was a result of additional investment related to the Jinji product promotional efforts, as well as increased marketing and advertising expenses related to the Company's efforts to increase market awareness of its brands and products and higher selling expenses to support the Company's growth. Operating income for the third quarter increased 49.5% to $14.0 million from $9.4 million in the third quarter of 2006. Operating margin was down slightly to 32.1%, from 34.5% in the prior year's third quarter, due to additional investment in the business, including a larger salesforce and higher advertising budget.
Net Income for the third quarter of 2007 increased 58.2% to $11.9 million, or $0.16 per diluted share, compared to $7.6 million, or $0.12 per diluted share, in the prior year period.
Mr. Tony Liu, Chairman and Chief Executive Officer of American Oriental Bioengineering commented, "Our overall results for the third quarter demonstrate the achievement made through the execution of our two pronged strategy, which is to expand our business performance through organic growth and acquisitions. We expect this strategy will continue to bring us further opportunities down the road. We have completed two acquisitions recently that have improved our product line and broadened our distribution reach. During the third quarter, we closed on the Changchun Xinan Pharmaceutical Group (CCXA) acquisition, and after the close of the third quarter we completed the acquisition of Guangxi Boke Pharmaceutical Company (Boke). Similar to our other acquisitions, we see the potential to expand CCXA's and Boke's sales, improve margins and enhance the operating infrastructure of each company."
For the full year 2007, the Company anticipates revenue of
|SOURCE American Oriental Bioengineering, Inc.|
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