Gross profit for first quarter 2011 was $7.8 million, an increase of 53.0%, from $5.1 million in the same period a year ago. Gross margins were 16.6%, 19.2%, 31.0%, and 34.0% for each of our pharmaceutical products distribution segment, TCM processing and distribution segment, herbal cultivation and sales segment, and flower tea bags segment, respectively. The increase was largely due to the stronger sales volume of its distribution business and the growth of its herbal cultivation and sales business in the first three months in 2011.
Operating expenses for the first quarter 2011 were $0.4 million, an increase of 150.1%, mostly due to an increase in advertising, freight and labor costs in order to support business growth and expansion.
General and administrative expenses for the first quarter 2011 were $0.7 million, an increase of 142.1%, which was consistent with the increase in net revenue and increased professional service fees of becoming a public company.
Operating income for the first quarter 2011 was $6.7 million, an increase of 43.6% from $4.6 million for the comparable period in 2010.
The effective tax rate for the Company's operating subsidiaries was 20.6% for the first quarter 2011, and 25% in the same period in 2010. The reduced effective tax rate was mainly due to the increased contribution of its herbal cultivation and sales business, which is subject to zero income tax in the People's Republic of China ("PRC").
Net income for the first quarter 2011 was $5.3 million, or $0.20 per weighted and diluted share, compared with net income of $3.5 million, or $0.18 per weighted and diluted share, for the same period a year ago. The diluted
|SOURCE Global Pharm Holdings Group, Inc.|
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