NEW YORK, May 7 /PRNewswire-FirstCall/ -- American Oriental Bioengineering, Inc. , a leading manufacturer and distributor of plant-based pharmaceutical and nutraceutical products, today announced financial results for the first quarter of 2007.
Revenues for the first quarter of 2007 increased 34.8% to $25.7 million from $19.1 million in the first quarter of 2006. This increase reflects $6.4 million in revenue from the Company's Jinji product portfolio, as well as year over year growth in the Company's core PBP and PBN products. Revenue from PBP products increased 52.4% to $18.6 million from $12.2 million in the prior year's first quarter, driven primarily by the Jinji products series, including the Company's newly launched Yi Mu Cao product for the relief of pre-menstrual symptoms, and by the Cease Enuresis Patch. Revenue from PBN products increased 3.7% to $7.2 million from $6.9 million from the first quarter of 2006, due to increased demand for the Company's soy peptide products.
Gross profit in the first quarter of 2007 increased 44.1% to $17.7 million from $12.3 million in the first quarter of 2006. Gross profit margin increased 440 basis points to a record 68.8% from 64.4% in the prior year's period. The increase in gross profit was a result of increased sales of PBP products, which carry higher margins and improved operating efficiencies across both business segments.
Operating expenses in the first quarter increased 65.8% to $9.8 million compared to $5.9 million in the prior year period. This increase was a result of additional expenses related to GLP that was not associated with the company in the prior year period, as well as increased marketing and advertising expenses related to the Company's efforts to increase market awareness of its brands and products. Operating income for the first quarter increased 24.0% to $7.9 million from $6.4 million in the first quarter of 2006. Operating profit as a percent of sales in the first quarter decreased 260 basis points to 30.8% compared to 33.4% in the prior year period.
Net Income for the first quarter of 2007 increased 31.1% to $6.4 million, or $0.10 per diluted share, compared to $4.9 million, or $0.08 per diluted share, in the prior year period.
Mr. Tony Liu, Chairman and Chief Executive Officer of American Oriental Bioengineering commented, "We are pleased to report another quarter of continued growth in our business. Our major plant-based pharmaceutical and nutraceutical categories contributed to our revenue growth in the first quarter with the biggest contribution coming from our over the counter (OTC) products. Our newly launched Jinji Yi Mu Cau product contributed to our results in the quarter and we are satisfied with the momentum of this product as we move into the second quarter. We continued to effectively manage our operating costs and sourcing efficiencies and were pleased to see stable pricing for our leading products, all of which resulted in record gross margin."
Fiscal 2007 Financial Update
For the second quarter of fiscal 2007, the Company anticipates revenue of approximately $33.0 million, a 45% increase compared to second quarter 2006 revenues of $22.8 million, with the majority of this revenue growth coming from products that serve the OTC market, primarily the Jinji product portfolio. The Company anticipates diluted earnings per share of approximately $0.14, based on a diluted share count of approximately 66.6 million shares outstanding.
For the 2007 fiscal year, the Company anticipates revenues to increase at least 32% from the prior year to at least $146.0 million. This guidance does not account for any potential acquisitions in 2007.
Mr. Liu concluded, "We continue to focus on opportunities that will further enhance the presence of our leading product brands and strengthen the total number of plant-based healthcare products in our portfolio. Consumer awareness of our brands continues to grow through our marketing efforts and the ongoing expansion of our diverse channels of distribution.
We also remain highly focused on the introduction of new products through the pursuit of complimentary acquisitions and additional product line extensions. We believe that these initiatives will better position our company for future growth and will further establish AOBO as a leading integrator and cultivator of plant-based traditional Chinese medicine products."
The Company will conduct a conference call to discuss the first quarter of 2007 results today, Monday, May 7, 2007 after the market close at 4:30pm ET. Listeners may access the call by dialing 1-888-802-2269 or 1-913-312-1272 for international callers. A webcast will also be available on AOB's website at www.bioaobo.com. A replay of the call will be available through May 14, 2007. Listeners may access the replay by dialing 1-888-203-1112 or 1-719-457-0820 for international callers, password 8515435.
About American Oriental Bioengineering Inc.
American Oriental Bioengineering Inc. (AOB) is engaged in the development and production of plant-based pharmaceutical products and plant-based nutraceutical products widely distributed throughout China. For more information, visit http://www.bioaobo.com.
This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulation, and other risks contained in reports filed by the Company with the Securities and Exchange Commission. All such forward-looking statements, whether written or oral, and whether made by or on behalf of the company, are expressly qualified by the cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.
AMERICAN ORIENTAL BIOENGINEERING, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED) THREE MONTHS ENDED MARCH 31, 2007 2006 REVENUES $25,722,577 $19,086,901 COST OF GOODS SOLD 8,018,260 6,797,715 GROSS PROFIT 17,704,317 12,289,186 Selling and marketing 2,702,351 1,701,280 Advertising 3,822,911 2,225,187 General and administrative 2,933,066 1,880,964 Depreciation and amortization 333,462 98,643 Total operating expenses 9,791,790 5,906,074 INCOME FROM OPERATIONS 7,912,527 6,383,112 INTEREST INCOME, NET 17,759 81,661 OTHER INCOME (EXPENSE), NET 39,084 (988) INCOME BEFORE INCOME TAXES 7,969,370 6,463,785 INCOME TAXES 1,523,103 1,547,251 NET INCOME 6,446,267 4,916,534 OTHER COMPREHENSIVE INCOME Foreign currency translation gain 1,210,147 259,625 Income tax expense related to other comprehensive income (399,349) (85,676) TOTAL OTHER COMPREHENSIVE INCOME, NET OF TAX 810,798 173,949 COMPREHENSIVE INCOME $7,257,065 $5,090,483 NET INCOME PER SHARE BASIC $0.10 $0.08 DILUTED $0.10 $0.08 WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING BASIC 64,608,561 61,223,435 DILUTED 66,545,541 61,318,674 AMERICAN ORIENTAL BIOENGINEERING, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS ASSETS MARCH 31, DECEMBER 31, 2007 2006 UNAUDITED CURRENT ASSETS Cash and cash equivalents $93,442,093 $87,784,419 Accounts receivable, net of reserve of $54,878 and $39,776 at March 31, 2007 and December 31, 2006, respectively 10,469,500 11,141,057 Inventories, net of $596,360 and $615,552 provision for slow moving inventories at March 31, 2007 and December 31, 2006, respectively 13,224,691 10,684,316 Advances to suppliers 2,533,640 1,950,101 Notes receivable 1,812,275 3,238,161 Other receivables 32,323 37,545 Due from employees 351,984 585,050 Deferred consulting expenses 310,800 166,600 Total Current Assets 122,177,306 115,587,249 LONG-TERM ASSETS Plant and equipment, net 32,706,985 32,194,957 Land use rights, net 33,078,441 32,937,743 Construction in progress 314,545 326,121 Deferred tax assets 1,657,731 1,797,153 License, net 363,328 383,755 Goodwill 1,933,100 1,933,100 Long-term investment and advance 138,208 113,868 Total Long-Term Assets 70,192,338 69,686,697 TOTAL ASSETS $192,369,644 $185,273,946 AMERICAN ORIENTAL BIOENGINEERING, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS LIABILITIES AND SHAREHOLDERS' EQUITY MARCH 31, DECEMBER 31, 2007 2006 UNAUDITED CURRENT LIABILITIES Accounts payable $2,945,328 $2,871,981 Other payables and accrued expenses 2,633,659 4,549,867 Taxes payable 1,177,561 2,211,542 Short-term bank loans 7,750,987 8,314,679 Current portion of long-term bank loans 1,453,565 1,450,905 Customer deposits 3,194,000 2,263,654 Notes payable 66,455 66,216 Other liabilities 864,075 1,606,334 Total Current Liabilities 20,085,630 23,335,178 LONG-TERM LIABILITIES Long-term bank loans, net of current portion 911,847 915,909 Long-term notes payable 262,435 255,836 Deferred tax liabilities 4,614,058 4,580,698 Other liabilities 5,399 9,083 Total Long-Term Liabilities 5,793,739 5,761,526 TOTAL LIABILITIES 25,879,369 29,096,704 SHAREHOLDERS' EQUITY Preferred stock, $0.001 par value; 2,000,000 shares authorized; 1,000,000 shares issued and outstanding at March 31, 2007 and December 31, 2006, respectively 1,000 1,000 Common stock, $0.001 par value; 150,000,000 shares authorized; 64,784,359 and 64,230,369 shares issued and outstanding, respectively 64,784 64,230 Stock to be issued 297,500 599,069 Additional paid-in capital 95,265,594 92,307,960 Retained earnings (the restricted portion of retained earnings is $8,498,766 at March 31, 2007 and December 31, 2006, respectively) 65,273,178 58,826,911 Accumulated other comprehensive income 5,588,219 4,378,072 Total Shareholders' Equity 166,490,275 156,177,242 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $192,369,644 $185,273,946
American Oriental Bioengineering, Inc.CONTACT: Wilfred Chow, SVP Finance, +1-212-786-7568, or Bill Zima & AshleyAmmon MacFarlane of Integrated Corporate Relations, Inc. for AmericanOriental Bioengineering, Inc., +1-203-682-8200
Web site: http://www.bioaobo.com/
