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Benda Pharmaceutical Reports Fourth Quarter and Full Year 2007 Financial Results
Date:3/31/2008

HUBEI PROVINCE, China, March 31 /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 fourth quarter and fiscal year ended December 31, 2007. The Company plans to file its Annual Report with the SEC today.

Full Year Ended December 31, 2007

Revenue in the fiscal year 2007 increased 66% to $26.4 million from $15.9 million in 2006. Revenue performance reflects increased sales from Benda's subsidiaries, Benda Ebei and Jiangling Benda, and approximately $5.8 million in revenue from Gendicine since Benda's acquisition of SiBiono in April 2007.

Gross profit during this period increased 97% to $12.5 million from $6.3 million in 2006. Gross margin increased 770 basis points to 47.3% from 39.6% in the same period of 2006, reflecting the higher margin revenue contribution from Gendicine sales.

The Company's general and administrative expenses in 2007 were $13.9 million compared to $2.5 million in 2006. The $11.4 million increase in 2007 was driven by $9.4 million in non-recurring costs, including $8.4 million in non-cash stock compensation expense for consulting services related to the acquisition of SiBiono and a $1.0 million cash penalty recorded in 2007 because of the late submission of the effective registration statement. For additional information regarding these items, please refer to the Company's Annual Report. Excluding these non-recurring expenses, operating income for the year 2007 would have been $5.8 million, up 92% from $3.0 million in 2006.

In 2007, Benda recognized $2.9 million in interest expense, related to the Company's convertible note issued in March 2007.

Mr. Charles Wan, Chief Executive Officer of Benda Pharmaceutical, commented, "We realized signiabilities 25,084,586 5,488,453

Commitments and contingencies -- --

Minority interest 5,453,622 2,154,356

Redeemable common stock, 2,049,560

shares at $3.6 per share 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;

100,170,071 shares issued and

outstanding as of 12/31/2007;

96,258,411 shares issued and

outstanding as of 12/31/2006 100,170 96,258

Additional paid in capital 21,547,929 13,099,424

Retained earnings (unrestricted) (833,090) 7,437,663

Statutory surplus reserve fund 2,310,681 1,869,523

Accumulative other comprehensive

income 3,390,774 1,090,408

Shares issuable for acquisition and

services 503,860 326,403

Total Shareholders'

Equity 27,020,324 23,919,680

Total Liabilities & Shareholders'

Equity $64,934,898 $31,562,489

ficant costs in 2007, some of which we consider to be non-recurring in nature, and we are disappointed that these costs offset the progress we made during the year. We are also working diligently to meet the filing requirements of our previous financing."

Net loss in fiscal year 2007 was $7.8 million, or $0.06 per diluted share, compared with net income of $2.3 million, or $0.03 per diluted share in 2006. During the year over year period, the diluted weighted average of shares outstanding increased 70% to 127.5 million from 74.9 million. Excluding the stock compensation expense and penalty payment, net income for the year 2007 would have been $1.5 million, or $0.01 per diluted share.

Three Months Ended December 31, 2007

Revenue in the fourth quarter of 2007 increased 197% to $10.6 million from $3.6 million in the fourth quarter of 2006, reflecting increased sales from subsidiaries Benda Ebei and Jiangling Benda, as well as $2.5 million from SiBiono's flagship product, Gendicine.

Gross profit in the fourth quarter of 2007 increased 441% to $4.8 million from $0.9 million in the fourth quarter of 2006. Gross margin was 45.3%, compared with 24.4% in the same period of 2006, reflecting the higher margin revenue contribution from Gendicine sales.

Mr. Wan continued, "We are pleased with the increase in sales from Benda Ebei in the fourth quarter, as well as with Gendicine's revenue performance, which was encouraging throughout the year. We are particularly pleased that Gendicine, which generates higher gross margins than our traditional products, can potentially help us increase profitability over the long term. We believe the market opportunity for Gendicine is extremely compelling. When we acquired SiBiono in April of 2007, only 1,869 vials of Gendicine had been sold in the first three months of the year. We ended 2007 with sales of more than 21,000 vials, generating approximately $5.8 million in revenue and significantly enhancing our gross margin performance."

Operating income in the fourth quarter 2007 was $2.1 million, compared with an operating loss of $0.3 million in the fourth quarter of 2006. Operating expenses in the fourth quarter were approximately $2.7 million, compared with $1.2 million in the fourth quarter of 2006. Approximately $0.6 million of the operating expenses in the fourth quarter of 2007 reflect the penalty and non-cash expense mentioned above. The remaining increase in operating expenses reflects additional sales and marketing expenditure to drive potential Gendicine sales.

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

Net loss in the fourth quarter of 2007 was $0.3 million, roughly breakeven on a diluted share basis, compared to net loss of $0.7 million, or a loss of $0.01 per diluted share in the fourth quarter of 2006. During the year over year period, the diluted weighted average of shares outstanding increased 70% to 127.5 million from 74.9 million. Excluding the stock compensation expense and penalty payment, net income in the fourth quarter 2007 would have been approximately $0.4 million, or breakeven on a diluted share basis.

Balance Sheet

As of December 31, 2007, the Company had cash and cash equivalents of $1.3 million, trade receivables of $10.5 million, and total inventories of $2.0 million.

Business Update

-- Gendicine sales: Benda Pharmaceutical sold approximately 21,000 vials

of Gendicine during the nine months in which it owned SiBiono in 2007,

generating approximately $5.8 million in revenue.

-- Yidu Benda plant update: Yidu Benda's plant was temporarily closed in

January 2007 in order to bring its waste water treatment system into

compliance with new local environmental regulation. The waste water

system passed the government's equipment verification tests in October

2007. However, before resuming operations, Yidu Benda must conduct

further testing with relevant government authorities and, at this time,

management cannot estimate the exact timing of the process.

-- Jiangling Benda plant update: The upgrade process of Jiangling Benda

has been completed and is now waiting for a GMP Certificate from

China's State Food and Drug Administration (SFDA). However, due to the

overhaul and restructuring of the SFDA, Benda management cannot

estimate the exact timing for obtaining a GMP certificate.

-- Intellectual property: SiBiono, a subsidiary of Benda Pharmaceutical,

recently entrusted Grandall Legal Group Shenzhen Law Firm to issue a

legal letter to Zhaohui Peng, one of the shareholders of SiBiono and

the inventor of Gendicine, to request that Peng transfer all existing

title of patents to SiBiono. SiBiono has received two of the six

outstanding patents, and is currently in negotiations with Peng

regarding the remaining patent transfers.

Financial Guidance

While the Company remains confident in its ability to pursue opportunities in China's healthcare market, the Company is withdrawing any previously stated financial projections at this time. The Company is diligently working to meet the previously announced terms of its March 2007 financing, which included receiving effective status for its registration statement.

The Company's operating priorities include the roll out of Gendicine to new hospitals and clinics in 2008. These operating priorities also include ultimately utilizing additional capacity at Jiangling Benda and Yidu Benda, although these facilities require either GMP approval or re-examination by government authorities, the time frame of which relies entirely on the relevant government authorities and not on Benda Pharmaceutical.

About Benda Pharmaceutical, Inc.

Benda Pharmaceutical, Inc. ( http://www.bendapharma.com ), 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.

CONSOLIDATED STATEMENT OF INCOME

Year Ended December 31,

2007 2006

(Audited) (Audited)

Revenues $26,384,608 $15,932,075

Other Sales -- 2,937

Cost of goods sold (13,913,034) (9,594,852)

Gross profit 12,471,574 6,340,160

Selling expenses (1,581,655) (599,571)

General and administrative expenses

Amortization of intangible assets (141,681) (96,615)

Amortization of debt issue costs (201,255) --

Depreciation (333,964) (132,747)

Bad debts (287,482) (364,064)

Director remuneration (94,247) --

Penalty to investors (1,022,275) --

Finder fee (293,751) --

Cash bonus -- --

Consulting and professional fees (8,353,615) (326,403)

Other general and administrative

expenses (3,173,307) (1,533,775)

Total general and administrative

expenses (13,901,577) (2,453,604)

Gains / (losses) on disposals of fixed

assets (30,027) (249,381)

Research and development expenses (553,962) (30,821)

Total operating expenses (16,067,221) (3,333,377)

Operating income / (loss) (3,595,647) 3,006,783

Interest income / (expense) (3,389,676) (108,811)

Other income (expenses) 55,964 (281,190)

Government subsidies / grants 2,276,574 --

Income / (loss) before minority

interest and income taxes (4,652,785) 2,616,782

Income taxes (965,183) 0

Minority interest (2,211,627) (298,024)

Net income / (loss) $(7,829,595) $2,318,758

Earnings / (loss) per share - basic $(0.08) $0.03

Weighted average shares outstanding -

basic 98,181,685 73,414,057

Earnings / (loss) per share - diluted $(0.06) $0.03

Weighted average shares outstanding -

diluted 127,534,003 74,864,283

Quarter Ended December 31,

2007 2006

(Unaudited) (Unaudited)

Revenues $10,588,313 $3,566,652

Other Sales -- 2,937

Cost of goods sold (5,807,182) (2,686,448)

Gross profit 4,781,131 883,141

Selling expenses (906,642) (177,925)

General and administrative expenses

Amortization of intangible assets 201,906 97,412

Amortization of debt issue costs (66,602) --

Depreciation 4,018 291,236

Bad debts 214,791 53,759

Director remuneration (35,288) --

Penalty to investors (482,275) --

Finder fee (2,627) --

Cash bonus 173,400 --

Consulting and professional fees (131,431) (326,403)

Other general and administrative

expenses (1,421,548) (1,142,143)

Total general and administrative

expenses (1,545,656) (1,026,139)

Gains / (losses) on disposals of fixed

assets (21,629) (1,172)

Research and development expenses (243,878) 2,317

Total operating expenses (2,717,805) (1,202,919)

Operating income / (loss) 2,063,326 (319,778)

Interest income / (expense) (1,181,798) 9,863

Other income (expenses) (57,400) (279,756)

Government subsidies / grants 585,600 --

Income / (loss) before minority

interest and income taxes 1,409,728 (589,671)

Income taxes (965,183) 0

Minority interest (702,063) (76,321)

Net income / (loss) $(257,518) $(665,992)

Earnings / (loss) per share - basic $(0.00) $(0.01)

Weighted average shares outstanding -

basic 98,181,685 73,414,057

Earnings / (loss) per share - diluted $(0.00) $(0.01)

Weighted average shares outstanding -

diluted 127,534,003 74,864,283

BENDA PHARMACEUTICAL, INC.

CONSOLIDATED BALANCE SHEET

December 31, December 31,

2007 2006

Assets

Current Assets

Cash and cash equivalents $1,266,240 $1,676,119

Trade receivables, net 10,472,233 6,193,585

Other receivables 453,595 99,733

Refundable purchase price paid 1,200,000 5,367,801

Inventories 1,952,348 701,339

Prepaid expenses and deposits 933,299 372,548

Total current assets 16,277,715 14,411,124

Due from related parties 2,630,019 1,976,815

Property and equipments, net 26,275,871 13,673,067

Intangible assets, net 6,359,000 1,501,483

Goodwill 7,395,752 --

Restricted cash 3,957,624 --

Other assets 1,710,972 --

Debt issue costs 327,945 --

Total Assets $64,934,898 $31,562,489

Liabilities & Shareholders' Equity

Current Liabilities

Bank indebtedness $874,490 $--

Bank loans payable (current portion) 2,867,004 256,492

Long-term debt payable (current

portion) 1,787,239 --

Accounts payable and accrued

liabilities 4,665,984 1,823,030

Commercial notes payable 5,118,758 --

Taxes payable 1,279,385 226,931

Acquisition price payable 1,333,246 --

Wages payable 664,786 145,903

Deferred revenues -- 1,732

Total current liabilities 18,590,892 2,454,088

Long-term debt payable (long term

portion) 425,001 --

Long-term convertible promissory

notes 2,875,075 --

Due to related parties (Long-term) 3,193,618 3,034,365

Total li
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SOURCE Benda Pharmaceutical, Inc.
Copyright©2008 PR Newswire.
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