As a result of the increase in operating expenses, income from operations decreased 1.5% to $5.0 million during the second quarter of 2008, representing an operating margin of 41.7%, as compared to $5.0 million and 57.1% in the same period 2007.
Provision for income taxes increased 150.2% year over year to $2.1 million. The Company provisioned its income tax for the second quarter of 2008 at the new PRC corporate income tax rate of 25%, as compared with the 15% preferential tax rate during the fiscal year 2007. The Company is in the process of applying for status as a new or high technology company in order to qualify for the favorable tax rate of 15%.
Net income for the second quarter of 2008 decreased 40.9% year over year, to $2.0 million or $0.09 per fully diluted share. Net margin during the period was 17.1%, compared to 39.0% in the same quarter last year. The decrease in net income was materially impacted by a one-time non-cash employee compensation recognized pursuant to SFAS 123(R), and by the negative effect of China's newly-implemented Unified Corporate Income Tax Law on the Company's enterprise income tax.
Non-GAAP net income in the second quarter of 2008 was $3.3 million or
$0.15 per fully diluted share, a 4.2% decrease from non-GAAP net income of
$3.4 million, or $0.16 per fully diluted share in the second quarter of
* Excludes Stock Based Compensation ("SBC"). See Table 1 for a
reconciliation of Net Income and EPS to exclude SBC.
|SOURCE China Biologic Products, Inc.|
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