Gross margins for the second quarter of 2009 increased to 57.9% as compared to 50.0% in the second quarter of 2008. Dr. Zhongyi Liu, Chairman and CEO of Lotus commented, "We are very pleased with our growth in sales quantities and gross margins of this quarter. Our pricing policy for 2009 has been adjusted accordingly due to the expected inflation contraction on the wholesale level nationally. We have been able to reduce the cost of sales mainly because Active Pharmaceutical Ingredient ("API") and essential medicine prices have dropped since the onset of economic slowdown."
Total operating expenses for the second quarter 2009 were $2.6 million, a 63% decrease from the second quarter of 2008. The decrease resulted from the decrease of selling expenses in relation to our drugs that have established certain market shares, which was due to the profit margins we have given away to our agents who in turn are incentivized to sell our established drugs at competitive prices.
Dr. Liu commented, "We are very pleased to obtain the approval from the Beijing Land Planning Bureau for permitting us to build a new office building on our current production base which was previously industrial-use-only land in Beijing. This means that we can finally bring all of our operational units such as administration, sales, R&D and production into a single office building. This is another important step we made towards improving our operational efficiency."
Net income for the second quarter of 2009 was $4.8 million, or $0.10 per diluted share, compared to $2.2 million, or $0.05 per diluted share, in the second quarter of 2008.
The Company's cash position at the end of the second quarter was $1.8
million, compared to $1.3 million at the
|SOURCE Lotus Pharmaceuticals, Inc.|
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