For the quarter ended March 31, 2012, the Company's bad debt expense was $320,098, compared to $9,248 in the same period of 2011. The increase was mainly due to the higher percentage of the older accounts receivables.
Operating income was $3.4 million in the first quarter of 2012, down 36% from $5.3 million in the first quarter of 2011. Operating income was lower mainly due to lower revenue and lower gross margins and higher operating expenses in the current period compared to the corresponding quarter one year ago.
For the quarter ended March 31, 2012, the Company paid income tax at a rate of approximately 15%. Income tax expense for the first quarter of 2012 was $0.53 million, compared to $0.85 million for the same period last year. The Company obtained "National High-Tech Enterprise" status from the PRC government in the fourth quarter of 2010. With this designation, the Company is entitled to a preferential tax rate of 15% for three years from 2011 to 2013, which is notably lower than the statutory income tax rate of 25%.
Net income for the first quarter of 2012 was $2.8 million, or $0.06 per basic and diluted share, compared to $5.1 million, or $0.12 per basic and diluted share, in the first quarter of 2011. The decrease of net income from the period a year ago is mainly due to the decrease in sales revenue, falling gross margins and higher operating expenses. Our net income for the first quarter of 2011 also included a positive effect of $0.68 million of derivative gains.
Financial ConditionAs of March 31, 2012, the Company had cash and cash equivalents of $3.3 million compared to $4.1 million as of December 31, 2011.
Working capital increased to $99.9 million at March 31, 2012 from $96.8 million at December 31, 2011. The current ratio decreased to 6.8 times at March 31, 2012 from 8.0 times at December 31, 2011.
Accounts receivable bal
|SOURCE China Pharma Holdings, Inc.|
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