BMP Sunstone Reports Third Quarter 2008 Financi...(perating performance. Revenues for t...)

Revenues for the third quarter of 2008 were $30.5 million, compared with $9.0 million in the third quarter of 2007. The majority of revenues at BMP Sunstone are derived from two sources: branded OTC revenues from Sunstone products, and revenue from the distribution of pharmaceutical products, including BMP China's licensed products, through subsidiaries Wanwei and Rongheng, which was acquired on July 4, 2008. Sunstone contributed $15.5 million in revenues during the third quarter of 2008, and was not yet acquired in the prior year period. Revenues from distribution were $13.7 million in the third quarter of 2008 compared to $8.0 million in the comparable period of 2007. Revenues from licensed products were $1.3 million in the third quarter of 2008 as compared to $960,000 in the prior year period.

Non-GAAP gross profit increased to $13.9 million from $1.2 million in the third quarter of 2007. Gross margin of 46%, up substantially from 13.1% in the prior year period, reflects the higher margin revenue contribution from Sunstone and licensed products sales versus distribution revenue.

Non-GAAP operating income reached $3.5 million in the third quarter of 2008 compared to a loss of $1.5 million in the prior year period, primarily reflecting the significant increase in revenues contributed from acquired businesses in the year over year period. Operating income performance also reflects a $525,000 reversal of an over-accrual for social taxes incurred in prior years.

Non-GAAP net income was $1.9 million, or $0.05 per diluted share, compared to a net loss of $1.3 million, or ($0.05) per diluted share, in the third quarter of 2007.

Mr. Gao continued, "With the incorporation of Rongheng, we have built a national strategic distribution platform covering China's three top pharmaceutical markets in Beijing, Shanghai and Guangdong Province. Through Wanwei, Rongheng, and our affiliate, Guangzhou Pharmaceuticals Corp., our d
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