PLYMOUTH MEETING, Pa., May 10 /PRNewswire-Asia-FirstCall/ -- BMP Sunstone Corporation (Nasdaq: BJGP) ("BMP Sunstone" or the "Company") today announced financial results for the first quarter ended March 31, 2010.
David Gao, Chief Executive Officer of BMP Sunstone, stated, "This was a quarter of successful management transition at Sunstone. We replaced senior managers including the general manager and improved our sales organization which we expect will drive future top line growth, improve sales force effectiveness and save costs. These changes to our management team resulted in an incremental $1.2 million of salary, legal and other expenses during this quarter, which we expect to be non-recurring. We believe our first quarter 2010 performance was respectable considering the dramatic changes at Sunstone and the exceptional strength of our results in the first quarter of 2009 when revenues grew over 46% on a pro forma basis over 2008."
First Quarter 2010 Financial Results
Revenue in the first quarter of 2010 was $39.0 million, compared to $39.3 million in the first quarter of 2009. Revenue from manufacturing was $25.4 million, up 3.6% from the prior year period, reflecting continued demand for Sunstone Pharmaceutical Co., Ltd. (Sunstone) leading products offset by near-term disruption related to the Company's sales force reorganization completed in the first quarter of 2010. Revenue from licensed products increased by 29.4% year over year to $1.7 million, due to successful sales and marketing efforts for Propess, Anpo and Ferriprox. Revenue from distribution was $11.9 million, down 11.4% on a year over year basis, reflecting management's decision to proactively cease distribution of certain low margin wholesale products during the quarter. In addition, hospital bidding in Beijing has been delayed until the second quarter of 2010. Our effort of reducing low margin products impacted revenue performance but ultimately should improve gross margin in the division. Additionally, as of the first quarter of 2010, financial contributions from Sunstone Shengda Zhangjiakou Pharmaceutical Co., Ltd., were consolidated in the Company's manufacturing division.
Gross profit in the first quarter of 2010 was relatively flat at $21.0 million, compared to $20.7 million in the first quarter of 2009. Gross margin was 53.8%, compared to 52.6% in the prior year period. Gross margin performance was driven by sales of manufactured and licensed products, which carried gross margins of 74.7% and 63.1% respectively. This gross margin performance is in line with management's plan to enhance profitability through revenue mix shift over time, as higher margin revenue from manufacturing and licensed products contributed to a greater portion of total revenue in the first quarter of 2010 versus the year ago period.
The Company's operating income was $3.0 million in the first quarter of 2010, compared to $3.2 million in the first quarter of 2009. Operating expenses include approximately $1.2 million of additional general and administrative expenses compared to the prior year period, which reflect non-recurring charges related to compensation expenses, stock compensation charges and legal expenses at Sunstone. Non-GAAP operating income improved 4.1% to $4.9 million from $4.7 million in the prior year period.
Adjusted EBITDA was $4.7 million in the first quarter of 2010, compared to $4.6 million in the first quarter of 2009.
Non-GAAP net income was $2.6 million, or $0.05 per diluted share, compared to $3.0 million, or $0.07 per diluted share, in the first quarter of 2009. On a GAAP basis, the Company reported net income of $625,000, or $0.01 per diluted share, compared to net loss of $2.0 million, or ($0.05) per diluted share, in the first quarter of 2009. The earnings per share calculation is based on 51.0 million diluted shares outstanding, compared to 43.1 million diluted shares outstanding in the prior year period.
Non-GAAP net income and earnings per share exclude stock based compensation expense, amortization related to acquisitions, amortization of debt discount and issuance cost, loss on early extinguishment of debt and gain on the embedded derivative value on convertible notes. Adjusted EBITDA is a non-GAAP measure which provides earnings before interest, taxes, depreciation and amortization and excludes loss on early extinguishment of debt and gain on the embedded derivative value on convertible notes. Please refer to the financial tables provided in this news release for a reconciliation of GAAP results to non-GAAP results for the three month periods ended March 31, 2010 and 2009.
As of March 31, 2010, the Company had cash and cash equivalents of $23.0 million and notes receivable of $15.7 million, totalling $38.7 million. Notes receivables from customers for the settlement of trade receivable balances are guaranteed by established banks in China and have maturities of six months or less.
Full Year 2010 Financial Guidance
The Company continues to expect revenue to reach between $160 million and $170 million in fiscal 2010. Additionally, during fiscal 2010, the Company continues to expect adjusted EBITDA to reach between $16 million and $17 million and non-GAAP net income to reach between $9 million and $10 million.
The Company will hold a conference call at 5:00 pm ET on May 10, 2010 to discuss its results. Listeners may access the call by dialing 1-888-713-4211 or 1-617-213-4864 for international callers, access code: 66684143. Preregistration and a webcast will be available through the Company's website at http://www.bmpsunstone.com . A replay of the call will be accessible through May 24, 2010 by dialing 1-888-286-8010 or 1-617-801-6888 for international callers, access code: 82597028.
About BMP Sunstone Corporation
BMP Sunstone Corporation is a specialty pharmaceutical company that is building a proprietary portfolio of branded pharmaceutical and healthcare products in China. Through Sunstone the Company manufactures leading pediatric and women's health products, including two of China's most recognized brands, "Hao Wawa" and "Confort," sold in pharmacies throughout the country. The Company also markets a portfolio of products under exclusive multi-year licenses into China, primarily focused on women's health and pediatrics, as well as provides pharmaceutical distribution services through subsidiaries in Beijing and Shanghai. BMP Sunstone's main office is in Beijing, with a U.S. office in Plymouth Meeting, PA. For more information, please visit http://www.bmpsunstone.com .
Safe Harbor Statement
This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts, including but not limited to statements regarding the impact of changes in the Company's management and revenue mix, the Company's expected financial performance in fiscal 2010 and the Company's expectations for its business units in fiscal year 2010. These statements are subject to uncertainties and risks including, but not limited to, operating performance, general financial, economic, and political conditions affecting the biotechnology and pharmaceutical industries and the Chinese pharmaceutical market, the ability to timely manufacture and distribute the Company's products and other risks contained in reports filed by the Company with the Securities and Exchange Commission. In addition, the Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.
For further information, please contact: Integrated Corporate Relations, Inc. (Investor Relations) Ashley M. Ammon Tel: +1-646-277-1227 Christine Duan Tel: +1-203-682-8200 BMP Sunstone Corporation and Subsidiaries Condensed Consolidated Statements of Operation ($ amounts, except per share amounts in thousands) For the three months ended March 31, 2010 2009 Revenues: Third parties $39,016 $35,521 Related parties -- 3,742 Total Revenues 39,016 39,263 Cost of Goods Sold 18,024 18,605 Gross Profit 20,992 20,658 Sales and Marketing Expenses 12,170 13,511 General and Administration Expenses 5,811 3,929 Total Operating Expenses 17,981 17,440 Profit From Operations 3,011 3,218 Other Income (Expense): Interest Income 47 24 Interest Expense (1,352) (1,417) Debt Issuance Cost Amortization (126) (128) Equity Method Investment Income 0 17 Loss on Early Extinguishment of Debt 0 (4,573) Gain on Derivatives 0 1,651 Total Other Income (Expense) (1,431) (4,426) Profit (Loss) Before Provision For Income Taxes 1,580 (1,208) Provision For Income Taxes 916 782 Net Profit (Loss) Attributable to BMP Sunstone Corporation $664 $(1,990) Less: Net Profit Attributable to the Noncontrolling Interest 39 -- Net Profit (Loss) Attributable to BMP Sunstone Corporation $625 $(1,990) Basic Profit (Loss) Per Share Attributable to BMP Sunstone $0.01 $(0.05) Fully-Diluted Profit (Loss) Per Share Attributable to BMP Sunstone $0.01 $(0.05) Basic Weighted-average Shares Outstanding 41,963 40,765 Fully Diluted Weighted-average Shares Outstanding 51,023 43,066 BMP Sunstone Corporation and Subsidiaries Condensed Consolidated Statements of Operation ($ amounts, except per share amounts in thousands) Non GAAP For the three months ended March 31, 2010 2009 Revenues: Third parties $39,016 $35,521 Related parties -- 3,742 Total Revenues 39,016 39,263 Cost of Goods Sold 17,860 18,490 Gross Profit 21,156 20,773 Sales and Marketing Expenses 11,360 12,785 General and Administration Expenses 4,942 3,325 Total Operating Expenses 16,302 16,110 Profit From Operations 4,854 4,663 Other Income (Expense): Interest Income 16 24 Interest Expense (1,352) (967) Equity Method Investment Income -- 17 Total Other Income (Expense) (1,336) (926) Profit Before Provision For Income Taxes 3,518 3,737 Provision For Income Taxes 916 782 Net Profit $2,602 $2,955 Less: Net Profit Attributable to the Noncontrolling Interest 39 -- Net Profit Attributable to BMP Sunstone Corporation 2,563 2,955 Basic Profit Per Share $0.06 $0.07 Fully Diluted Profit Per Share $0.05 $0.07 Basic Weighted-average Shares Outstanding 41,963 40,765 Fully Diluted Weighted-average Shares Outstanding 51,023 43,066 BMP Sunstone Corporation and Subsidiaries Condensed Consolidated Balance Sheets ($ amounts in thousands) March 31, December 31, 2010 2009 Assets Current Assets: Cash and Cash Equivalents $22,956 $21,544 Restricted Cash 1,125 1,125 Notes Receivable 15,738 17,541 Accounts Receivable, net of allowance for doubtful accounts of $944 and $481 45,234 37,752 Inventory, net of allowance for obsolescence of $122 and $98 11,846 9,811 Receivable from Alliance Unichem -- 7,550 Other Receivables 3,892 3,648 VAT Receivable 903 1,093 Prepaid Expenses and Other Current Assets 6,660 6,322 Total Current Assets $108,354 106,386 Property and Equipment, net 31,694 30,967 Investment in Shengda -- 2,950 Investments, at Cost 146 146 Goodwill 70,044 70,033 Other Assets 294 405 Land Use Rights, net of accumulated amortization 3,047 2,860 Intangible Assets, net of accumulated amortization 40,798 38,508 Total Assets $254,377 $252,255 Liabilities and Equity Current Liabilities: Notes Payable and Bank Borrowings, net of debt discounts $2,813 $6,406 Accounts Payable 22,724 24,465 Due to Related Parties 1,309 1,437 Deferred Revenues 128 208 Accrued Expenses 21,582 18,478 Total Current Liabilities 48,556 50,994 Long-Term Debt, including debt premium 36,320 36,749 Deferred Taxes 8,956 9,097 Total Liabilities 93,832 96,840 Commitment and Contingencies -- -- Equity: Common Stock, $.001 Par Value; 75,000,000 and 50,000,000 Shares; 42,125,320 and 41,931,987 Shares Issued and Outstanding as of March 31, 2010 and December 31, 2009, respectively 42 42 Additional Paid in Capital 170,208 168,772 Common Stock Warrants 8,621 8,621 Accumulated Deficit (32,321) (32,946) Accumulated Other Comprehensive Income 9,520 9,486 Total BMP Sunstone Corporation Stockholders' Equity 156,070 153,975 Noncontrolling Interest 4,475 1,440 Total Liabilities and Equity 254,377 $252,255 BMP Sunstone Corporation and Subsidiaries Non GAAP Reconciliations ($ amounts, except per share in thousands) Three months Ended March 31, 2010 2009 GAAP Gross Profit $20,992 $20,658 Amortization Related to Acquisition 164 115 Non GAAP Gross Profit $21,156 $20,773 Three months Ended March 31, 2010 2009 GAAP Operating Income $3,011 $3,218 Stock Based Compensation 850 585 Amortization Related to Acquisitions 993 860 Non GAAP Operating Income $4,854 $4,663 Three months Ended March 31, (all amounts in $000) 2010 2009 GAAP Net Income (Loss) $625 $(1,990) GAAP Basic and Fully Diluted EPS $0.01 $(0.05) Stock Based Compensation 850 585 Debt Discount and Premium Amortization and Issuance Cost 95 578 Amortization Related to Acquisitions 993 860 Loss on Early Extinguishment of Debt -- 4,573 Gain (Loss) on Derivatives -- (1,651) Non GAAP Net Income $2,563 $2,955 Non GAAP EPS $0.06 $0.07 BMP Sunstone Corporation and Subsidiaries Adjusted EBITDA Reconciliation ($ amounts in thousands) For the three months Ended March 31, (all amounts in $000) 2010 2009 Net Income (Loss) $625 $(1,990) Net Income Reconciliation to Adjusted EBITDA: Interest expense, net 1,336 943 Income taxes 916 782 Depreciation 720 522 Amortization of intangibles and fair value of inventory increase 993 860 Loss on Early Extinguishment of Debt 0 4,573 Gain on derivatives 0 (1,651) Amortization of debt discount and debt issuance costs 95 577 ADJUSTED EBITDA $4,685 $4,616
|SOURCE BMP Sunstone Corporation|
Copyright©2010 PR Newswire.
All rights reserved