Operating expenses for the three months ended March 31, 2010 were approximately $6.4 million, an increase of 157.7% compared to the same period in 2009. Selling and distribution cost increased 197% to $5.6 million in the first quarter of 2010, compared to $1.9 million in the same period in 2009. The increase in selling cost is primarily due to $2.2 million in incremental advertising and promotional efforts which included billboards, newsprints and in-store advertising designed to drive sales in existing and new markets and to promote brand awareness of Xin Aoxing. These increased sales activities drove higher commissions and travel expenses, which increased $1.1 million and $0.3 million, respectively. In addition, the Company incurred non-cash equity compensation charge of $0.2 million in the first quarter of 2010, which was not present for the same period in 2009.
Operating income for the first quarter of 2010 totaled approximately $3.1
million, a 35.7% increase from $2.3 million reported for the first quarter of
2009. Operating margins were 25.3% and 31.0% for the first quarter of 2010 and
2009, respectively. The decrease was mainly attributed to the increase of SG&A
|SOURCE Biostar Pharmaceuticals, Inc.|
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