HANGZHOU, China, May 24 /PRNewswire-FirstCall/ -- Aida Pharmaceuticals, Inc. , one of mainland China’s leading pharmaceutical companies, today announced its financial results for the first quarter ended March 31, 2006. Full details of the Company’s quarterly financial results are available in the Company’s Form 10-QSB at http://www.sec.gov.
First Quarter 2006 Financial Highlights: * Revenues for the first quarter ended March 31, 2006 totaled $5,331,827, an 11.1% increase from revenues of $4,800,613 for the quarter ended March 31, 2005. * Gross profit totaled $2,348,713 in the first quarter of 2006, a decrease of approximately 30% over gross profit of $3,364,753 in the first quarter of 2005. The gross profit margin for the first quarter of 2006 declined to 44.05%, from 70.09% for the first quarter of 2005. * Net income totaled $14,536, declining 98.4% from net income of $934,135 in the first quarter of 2005. The Company reported earnings per share of $0.00 in the first quarter of 2006, versus $0.04 in the first quarter of 2005. * Cash and cash equivalents decreased to $2,277,406 at the end of the first quarter of 2006, versus $3,129,450 at year-end 2005. Shareholders’ equity increased to $6,805,876 at the end of the first quarter, versus $6,724,107 at year-end 2005. Weighted average shares outstanding were 25,000,000 as of the end of the first quarter of 2006. Financial Performance:
Revenues in the first quarter of 2006 increased by $531,214, or 11.1%, to $5,331,827, versus revenues of $4,800,613 in the first quarter of 2005. Reflecting the Company’s current strategic focus on intense promotion of new Etimicin transfusion and injection products, Etimicin transfusion revenues increased 72.66% quarter-over-quarter and Etimicin injection revenues increased 85.55% quarter-over-quarter. Etimicin powder revenues decreased 47.16% quarter-over-quarter, reflecting some restructuring in the Company’s sales force and the implementation of a new government program to monitor the resale of pharmaceutical drugs by distributors.
Gross profit in the first quarter of 2006 declined 30%, to $2,348,713, versus $3,364,753 in the first quarter of 2005, with the gross profit margin declining to 44.05% in the first quarter of 2006, versus 70.09% in the first quarter of 2005. The decrease in the gross margin was attributable to several factors: 1) a change in the revenue mix in the first quarter of 2006, with lower margin Aike products accounting for a larger portion of sales; 2) an increase in the cost of C1a, a precursor of Etimicin raw materials; and 3) a 5% reduction in the price of Etimicin, taken to remain cost competitive with alternative antibiotics. The effect of decreased gross profit on the Company’s net results was partially offset by a government subsidy grant of $459,993. Selling and distribution expenses increased approximately 9% in the first quarter of 2006 versus the year-ago quarter, following a 70% increase in selling and distribution costs for the full year 2005. The Company is consolidating its sales force structure, following the major ramp-up of selling and distribution channels in 2005.
Cash and equivalents declined to $2,277,406 at the end of the first quarter of 2006, versus $3,129,450 at year-end 2005. The decline reflects repayment of short-term debt and notes payable during the quarter and an increase in inventories. Aida’s current operations are self-funding from internally generated cash flows.
“We expect our gross margins to remain stable in the short term and recover gradually,” said Jin Biao, Aida’s chief executive officer. “Consolidation of our sales force, following a major expansion in 2005, will focus our sales efforts on higher margin products. We have also now locked in a relatively stable price for C1a with our supplier.” He continued, “Etimicin consumption in China continues to grow at rapid rates. Given prospects for Etimicin sales, along with our strong pipeline of new drugs for cancer, hepatitis and stroke and our selective acquisition program, we continue to expect our revenue and earnings growth to average 30% per year over the next five years.”
COMPARATIVE RESULTS For Quarter Ended 3/31/06 3/31/05 Revenue $5,331,827 $4,800,613 Cost of Goods Sold (2,983,114) (1,435,860) Gross Profit 2,348,713 3,364,753 Gross profit margin (%) 44.05% 70.09% Net Income 14,536 934,135 Income per share 0.00 0.04 Weighted average shares outstanding 25,000,000 23,375,000 About Aida Pharmaceuticals:
Aida Pharmaceuticals is a product-focused pharmaceuticals company engaged in the formulation, clinical testing, registration, manufacture, sales and marketing of advanced pharmaceutical and genetic products in mainland China. The Company’s mission is to discover, develop and market meaningful new therapies that improve human health. Aida, in operation since March 1999, is headquartered in Hangzhou, China with manufacturing, distribution and sales points throughout mainland China. Aida is GMP certified in China and ISO9002 certified for quality assurance and ISO14000 certified for ecologically-friendly practices. Aida is now producing and marketing a patented prescription drug in China, Etimicin Sulfate. It is the first antibiotic developed in China and is regarded as a category “A” drug by the State Food and Drug Administration of China.
Aida Pharmaceuticals, Inc. 31 Dingjiang Road Jianggan District Hangzhou, China 310016 Investor Relations: Equity Performance Group Gary Geraci (617) 723-2373 gary@equityperfgp.com Safe Harbor Statement: Under the Private Securities Litigation Reform Act of 1995:
This press release includes certain “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995. These statements are based on Aida Pharmaceuticals, Inc.'s management’s current expectations and are subject to risks and uncertainties and changes in circumstances. All forward-looking statements included in this press release are based upon information available to Aida Pharmaceuticals, Inc. as of the date of the press release, and it assumes no obligation to update or alter its forward looking statements whether as a result of new information, future events or otherwise. These forward-looking statements may relate to, among other things, plans and timing for the introduction or enhancement of our services and products, statements about future market conditions, supply and demand conditions, and other expectations, intentions and plans contained in this press release that are not historical fact. Further information on risks or other factors that could affect Aida Pharmaceuticals, Inc.'s results of operations is detailed in its filings with the United States Securities and Exchange Commission available at http://www.sec.gov.
Aida Pharmaceuticals, Inc.
CONTACT: Investor Relations: Gary Geraci of Equity Performance Group,+1-617-723-2373, gary@equityperfgp.com
