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Benda Pharmaceutical Reports First Quarter 2008 Financial Results

HUBEI PROVINCE, China, May 21 /Xinhua-PRNewswire-FirstCall/ -- Benda Pharmaceutical, Inc. (OTC Bulletin Board: BPMA), a China-based pharmaceutical company producing both Gendicine(R), a commercialized gene therapy medicine for the treatment of cancer, and traditional Chinese and conventional medicines, today announced financial results for the quarter ended March 31, 2008. The Company filed its Form 10Q with the SEC on May 20, 2008.

Three Months Ended March 31, 2008

Revenue in the first quarter of 2008 increased 96.3% to $5.9 million from $3.0 million in the first quarter of 2007, primarily reflecting increased sales at Benda Ebei.

Gross profit in the first quarter of 2008 increased 89.5% to $2.0 million from $1.1 million in the first quarter of 2007. Gross margin was 33.8%, compared with 35.0% in the same period of 2007.

Charles Wan, Chief Executive Officer of Benda Pharmaceutical, stated, "We are very pleased with the net revenue from Benda Ebei, which increased 136% year over year to $5.9 million. We believe the market opportunity for our products is extremely compelling and we look forward to further increasing our long-term revenue growth and profitability."

Operating expenses in the first quarter were approximately $3.1 million, compared with $0.6 million in the first quarter of 2007. The increase in operating expense is primarily due to increased administrative expenses including a penalty payment paid to investors, a bad debt provision and increased consulting and professional fees.

Wan continued, "We remain very focused on enhancing our revenue performance at SiBiono as well as our gross margin performance across the organization."

Operating loss in the first quarter 2008 was $1.1 million, compared with an operating income of $0.5 million in the first quarter of 2007. This loss was primarily due to a significant increase in general and administrative expenses.

In the first quarter of 2008, Benda realized interest expense of $1.2 million related to the Company's convertible note issued in March 2007.

Net loss in the first quarter of 2008 was $2.2 million, or $0.02 per diluted share, compared to net income of $0.4 million, or approximately breakeven on a diluted share basis, in the first quarter of 2007.

Business Update

-- Board of Directors update: The Company appointed Jun Tang to its board

of directors, effective May 1, 2008. Mr. Tang has over a decade of

experience in corporate management and strategic planning and is

currently the President and Chief Executive Officer at Xin Hua Du

Industrial Group Co., a China-based conglomerate with several

publicly-listed subsidiaries. He also serves on the Board of Directors

of Shanda Interactive Entertainment Ltd. (NASDAQ: SNDA), where he

served as President from February 2004 through April 2008.

-- Jiangling Benda plant update: On April 9, 2008, Jiangling Benda

received the GMP Certificate of Approval from the Chinese State Food

and Drug Administration ("SFDA"), authorizing the production of

Ribavrin. The Company believes the certification is a major step

toward commercializing Ribavrin in the domestic market.

-- Yidu Benda plant update: Yidu Benda completed its upgrading of the

waste water system and passed the government's verification and testing

of equipment in October 2007. Yidu Benda is now permitted to test the

production process at the plant, which will be followed by a test of

the production results, held by the government bodies. Benda management

cannot at this time estimate the exact timing for obtaining production

approval by the government bodies.

About Benda Pharmaceutical, Inc.

Benda Pharmaceutical, Inc. ( ), a China-based pharmaceutical company, produces traditional Chinese and conventional medicines, as well as Gendicine(R), a commercialized gene therapy medicine for the treatment of cancer.

Safe Harbor Statement

The information contained herein includes forward-looking statements. These statements relate to future events or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward- looking statements. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. The safe harbor for forward-looking statements contained in the Securities Litigation Reform Act of 1995 protects companies from liability for their forward-looking statements if they comply with the requirements of the Act.

Benda Pharmaceutical Inc., Balance Sheet

March 31 December 31

2008 2007



Current Assets

Cash and cash equivalents $1,401,178 $1,266,240

Trade receivables, net 11,215,913 10,472,233

Other receivables 716,743 453,595

Refundable purchase price paid -- 1,200,000

Inventories 2,712,963 1,952,348

Prepaid expenses and deposits 1,176,692 933,299

Total current assets 17,223,489 16,277,715

Due from related parties 2,785,347 2,630,019

Property and equipments, net 27,343,976 26,275,871

Intangible assets, net 6,464,173 6,359,000

Goodwill 7,704,058 7,395,752

Restricted cash 5,454,150 3,957,624

Refundable purchase price paid 1,200,000 --

Other assets 1,782,297 1,710,972

Debt issue costs 262,066 327,945

Total Assets $70,219,556 $64,934,898

Liabilities & Shareholders' Equity

Current Liabilities

Bank indebtedness $1,160,976 $874,490

Bank loans payable (current

portion) 2,934,657 2,867,004

Long term debt payable (current

portion) 1,732,498 1,787,239

Accounts payable and accrued

liabilities 5,519,316 4,665,984

Commercial notes payable 8,187,194 5,118,758

Taxes payable 797,940 1,279,385

Acquisition price payable 1,388,825 1,333,246

Wages payable 848,922 664,786

Total current liabilities 22,570,328 18,590,892

Long term debt payable (long term

portion) 442,718 425,001

Long-term convertible promissory

notes 3,816,197 2,875,075

Due to related parties (Long-term) 3,284,540 3,193,618

Total liabilities 30,113,783 25,084,586

Minority interest 5,697,658 5,453,622

Redeemable common stock, 2,049,560

shares at $3.6 per share 7,376,366 7,376,366

Shareholders' Equity

Preferred stock, $0.001 par value;

5,000,000 shares authorized;

None issued and outstanding -- --

Common stock, $0.001 par value;

150,000,000 shares authorized;

100,803,509 shares issued and

outstanding as of 3/31/2008;

100,170,071 shares issued and

outstanding as of 12/31/2007 100,803 100,170

Additional paid in capital 21,853,508 21,547,929

Retained earnings (unrestricted) (2,987,195) (833,089)

Statutory surplus reserve fund 2,310,681 2,310,681

Accumulative other comprehensive

income 5,250,092 3,390,774

Shares issuable for acquisition and

services 503,860 503,860

Total Shareholders' Equity 27,031,749 27,020,325

Total Liabilities & Shareholders'

Equity $70,219,556 $64,934,898

Benda Pharmaceutical Inc., Income Statement


2008 2007

(Unaudited) (Unaudited)

Revenue $5,947,370 $3,029,035

Cost of goods sold (3,940,080) (1,970,047)

Gross profit 2,007,290 1,058,988

Selling expenses (436,371) (88,183)

General and administrative


Amortization of

intangible assets (51,575) (26,284)

Amortization of debt

issue costs (65,879) (8,743)

Depreciation (123,220) (76,576)

Bad debts (471,297) 70,986

Director remuneration (110,873) --

Penalty to investors (722,205) (120,000)

Other general and


expenses (1,097,869) (324,713)

Total general and


expenses (2,642,918) (485,330)

Gains / (losses) on disposals

of fixed assets -- (12,025)

Research and development

expenses (22,064) --

Total operating expenses (3,101,353) (585,538)

Operating income / (loss) (1,094,063) 473,450

Interest income / (expenses) (1,212,282) (17,585)

Other income (expenses) 301,693 937

Government subsidies /

grants -- --

Income / (loss) before

minority interest and

income taxes (2,004,652) 456,802

Income taxes (133,197) --

Minority interest (16,257) (40,765)

Net income / (loss) $(2,154,106) $416,037

Earnings / (loss) per

share - basic $(0.02) $0.00

Weighted average shares

outstanding - basic 100,312,873 96,281,951

Earnings / (loss) per

share - diluted $(0.02) $0.00

Weighted average shares

outstanding - diluted 100,312,873 124,099,914

SOURCE Benda Pharmaceutical, Inc.
Copyright©2008 PR Newswire.
All rights reserved

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