NEW YORK, March 12 /PRNewswire-FirstCall/ -- American Oriental Bioengineering, Inc. , a leading manufacturer and distributor of plant-based pharmaceutical and nutraceutical products, today announced financial results for the fourth quarter and fiscal year ended December 31, 2006.
Revenue for the fourth quarter of 2006 increased 108.7% to $41.3 million from $19.8 million in the fourth quarter of 2005. Revenue growth reflects continued demand for the Company’s leading PBP and PBN products, as well as a $12.7 million contribution from the GLP acquisition. Revenue from PBP products increased 159.2% to $31.5 million from $12.1 million in the prior year’s fourth quarter, driven by increased demand for Shuanghuanglian Injection Powder, Cease Enuresis Soft Gel and UrinStopper Patch. Revenue from PBN products increased 28.4% to $9.8 million from $7.6 million from the fourth quarter of 2005, due to increased demand for the Company’s Protein Peptide products.
Gross profit in the fourth quarter of 2006 increased 116.0% to $27.2 million from $12.6 million in the fourth quarter of 2005. Gross margin increased 220 basis points to 65.9% from 63.7% in the prior year’s period. The increase in gross profit was a result of higher sales, improved gross margins and operating efficiencies across PBP and PBN businesses.
Operating expenses in the fourth quarter increased 112.6% to $13.6 million compared to $6.4 million in the prior year period. This increase was primarily due to increased marketing materials, payroll and shipping expenses commensurate with sales growth. Additionally, the Company continued to increase advertising expenditure as it invests in brand strength, particularly related to products acquired with the GLP business. Operating income for the fourth quarter increased 119.6% to $13.6 million from $6.2 million in the fourth quarter of 2005. Operating margin as a percent of sales in the fourth quarter increased 170 basis points to 33.1% compared to 31.4% in the prior year period.
Net Income for the fourth quarter of 2006 increased 161.1% to $10.9 million, or $0.17 per diluted share, compared to $4.2 million, or $0.10 per diluted share, in the prior year’s period.
Fiscal 2006 Financial Results
Revenue for fiscal 2006 surpassed $100 million in sales, increasing 101.3% to $110.2 million from $54.7 million in 2005. Net Income for 2006 increased 117.5% to $29.2 million, or $0.46 per diluted share, compared to $13.4 million, or $0.31 per diluted share, in the prior year.
Mr. Tony Liu, Chairman and Chief Executive Officer of American Oriental Bioengineering commented, “We are pleased to report another strong quarterly and fiscal year performance. Revenue exceeded $41 million in the fourth quarter and exceeded $110 million for the year reflecting continued strong growth in both PBP and PBN product categories. In 2006 we focused on a number of core strategic initiatives including improving the breadth and quality of our product portfolio, penetrating new markets and rationalizing our administrative, manufacturing and distribution cost structures. We achieved success in these areas through accretive acquisitions and through a program of continuous internal efficiency improvements.”
Fiscal 2007 Financial Update
For the first quarter of fiscal 2007, the company anticipates revenue to be in the range of $24 to $25 million and anticipates diluted earnings per share of approximately $0.10. This is based on a diluted share count of approximately 66.5 million shares outstanding.
For the 2007 fiscal year, the Company anticipates revenue to be in the range of $143-$147 million. This guidance does not account for any potential acquisitions in 2007.
Mr. Liu concluded, “Moving into 2007, we intend to continue to market our leading brands, develop new products and line extensions, further expand our channels of distribution, identify further cost savings throughout our business and pursue acquisitions that will be complimentary to our current business. We are committed to remaining a leader and innovator in the area of women’s health and believe our initiatives in 2007 will continue to enhance our performance and expand our presence in the marketplace. We are energized with our opportunities and will continue to work aggressively to maximize return for our shareholders.”
The Company will conduct a conference call to discuss the fourth quarter and 2006 full year results today, Monday, March 12, 2007 at 4:30 p.m. ET. Listeners may access the call by dialing #800-817-4887 or #913-981-4913 for international callers. A replay of the call will be available through March 19, 2007. Listeners may access the replay by dialing #800-203-1112 or #719- 457-0820 for international callers, passcode 1894285. A live webcast of the call will be broadcast at www.viavid.net.
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 statements filed from time to time 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 Consolidated Statements of Income for the Quarters and Years Ended December 31, 2006 and 2005 FOURTH QUARTER YEAR 2006 2005 2006 2005 UNAUDITED AUDITED REVENUES $41,258,250 19,770,068 $110,182,092 54,732,557 COST OF GOODS SOLD 14,054,600 7,178,395 38,318,223 20,524,201 GROSS PROFIT 27,203,650 12,591,673 71,863,869 34,208,356 Selling and marketing 2,988,430 1,160,557 8,876,829 3,216,545 Advertising 6,339,751 3,077,562 15,174,125 5,238,186 General and administrative 3,904,796 2,107,433 10,446,740 7,076,139 Depreciation and amortization 334,646 35,838 988,488 337,537 Total operating expenses 13,567,623 6,381,390 35,486,182 15,868,407 INCOME FROM OPERATIONS 13,636,027 6,210,283 36,377,687 18,339,949 INTEREST INCOME (EXPENSE), NET 23,756 (545,896) 574,172 (505,822) OTHER INCOME (EXPENSE), NET (349,425) (176) (333,798) (6,876) INCOME BEFORE INCOME TAXES 13,310,358 5,664,211 36,618,061 17,827,251 INCOME TAXES 2,403,691 1,486,500 7,416,915 4,400,870 NET INCOME $10,906,667 4,177,710 $29,201,146 13,426,381 NET INCOME PER COMMON SHARE BASIC $0.18 0.10 0.47 0.31 DILUTED $0.17 0.10 0.46 0.31 WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING BASIC (in millions) 64.1 43.8 62.7 43.8 DILUTED (in millions) 65.5 43.8 62.9 43.8 AMERICAN ORIENTAL BIOENGINEERING, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS DECEMBER 31, 2006 2005 CURRENT ASSETS Cash and cash equivalents $87,784,419 $57,532,049 Accounts receivable, net 11,141,057 8,168,420 Inventories, net 10,684,316 4,916,500 Advances to suppliers and prepaid expenses 1,950,101 3,494,320 Notes receivable 3,238,161 - Other receivables 37,545 102,611 Due from employees 585,050 409,159 Deferred consulting expenses 166,600 752,620 Total Current Assets 115,587,249 75,375,679 LONG-TERM ASSETS Plant and equipment, net 32,194,957 13,386,439 Land use rights, net 32,937,743 7,925,763 Construction in progress 326,121 1,655,349 Deferred tax assets 1,797,153 614,336 Licenses, net 383,755 464,673 Goodwill 1,933,100 - Long-term investment and advance 113,868 - Total Long-Term Assets 69,686,697 24,046,560 TOTAL ASSETS $185,273,946 $99,422,239 AMERICAN ORIENTAL BIOENGINEERING, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS LIABILITIES AND SHAREHOLDERS’ EQUITY DECEMBER 31, 2006 2005 CURRENT LIABILITIES Accounts payable $2,871,981 $1,230,767 Other payables and accrued expenses 4,549,867 1,604,096 Taxes payable 2,211,542 1,485,872 Short-term bank loans 8,314,679 3,717,380 Current portion of long-term bank loans 1,450,905 - Customer deposits 2,263,654 355,975 Notes payable 66,216 - Other liabilities 1,606,334 27,036 Total Current Liabilities 23,335,178 8,421,126 LONG-TERM LIABILITIES Long-term bank loans, net of current portion 915,909 - Long-term notes payable 255,836 - Deferred tax liabilities 4,580,698 232,505 Other liabilities 9,083 23,018 Total Long-Term Liabilities 5,761,526 255,523 TOTAL LIABILITIES 29,096,704 8,676,649 COMMITMENTS SHAREHOLDERS’ EQUITY Preferred stock, $0.001 par value; 2,000,000 shares authorized; 1,000,000 shares issued and outstanding at December 31, 2006 and 2005 1,000 1,000 Common stock, $0.001 par value; 150,000,000 shares authorized; 64,230,369 and 57,109,188 shares issued and outstanding, at December 31, 2006 and 2005, respectively 64,230 57,109 Stock to be issued 599,069 141,044 Additional paid-in capital 92,307,960 59,491,393 Retained earnings (the restricted portion is $8,498,766 and $4,104,115 at December 31, 2006 and 2005, respectively) 58,826,911 29,625,765 Accumulated other comprehensive income 4,378,072 1,429,279 Total Shareholders’ Equity 156,177,242 90,745,590 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $185,273,946 $99,422,239
American Oriental Bioengineering, Inc.
CONTACT: Bill Zima or Ashley Ammon MacFarlane, both of IntegratedCorporate Relations, Inc., +1-203-682-8200
