HUBEI PROVINCE, China, March 31 /Xinhua-PRNewswire-FirstCall/ -- Benda Pharmaceutical, Inc. , a China-based pharmaceutical company producing both Gendicine(R), a commercialized gene therapy medicine for the treatment of cancer, and traditional Chinese and conventional medicines, today announced financial results for the fourth quarter and fiscal year ended December 31, 2007. The Company plans to file its Annual Report with the SEC today.
Full Year Ended December 31, 2007
Revenue in the fiscal year 2007 increased 66% to $26.4 million from $15.9 million in 2006. Revenue performance reflects increased sales from Benda’s subsidiaries, Benda Ebei and Jiangling Benda, and approximately $5.8 million in revenue from Gendicine since Benda’s acquisition of SiBiono in April 2007.
Gross profit during this period increased 97% to $12.5 million from $6.3 million in 2006. Gross margin increased 770 basis points to 47.3% from 39.6% in the same period of 2006, reflecting the higher margin revenue contribution from Gendicine sales.
The Company’s general and administrative expenses in 2007 were $13.9 million compared to $2.5 million in 2006. The $11.4 million increase in 2007 was driven by $9.4 million in non-recurring costs, including $8.4 million in non-cash stock compensation expense for consulting services related to the acquisition of SiBiono and a $1.0 million cash penalty recorded in 2007 because of the late submission of the effective registration statement. For additional information regarding these items, please refer to the Company’s Annual Report. Excluding these non-recurring expenses, operating income for the year 2007 would have been $5.8 million, up 92% from $3.0 million in 2006.
In 2007, Benda recognized $2.9 million in interest expense, related to the Company’s convertible note issued in March 2007.
Mr. Charles Wan, Chief Executive Officer of Benda Pharmaceutical, commented, “We realized significant costs in 2007, some of which we consider to be non-recurring in nature, and we are disappointed that these costs offset the progress we made during the year. We are also working diligently to meet the filing requirements of our previous financing.”
Net loss in fiscal year 2007 was $7.8 million, or $0.06 per diluted share, compared with net income of $2.3 million, or $0.03 per diluted share in 2006. During the year over year period, the diluted weighted average of shares outstanding increased 70% to 127.5 million from 74.9 million. Excluding the stock compensation expense and penalty payment, net income for the year 2007 would have been $1.5 million, or $0.01 per diluted share.
Three Months Ended December 31, 2007
Revenue in the fourth quarter of 2007 increased 197% to $10.6 million from $3.6 million in the fourth quarter of 2006, reflecting increased sales from subsidiaries Benda Ebei and Jiangling Benda, as well as $2.5 million from SiBiono’s flagship product, Gendicine.
Gross profit in the fourth quarter of 2007 increased 441% to $4.8 million from $0.9 million in the fourth quarter of 2006. Gross margin was 45.3%, compared with 24.4% in the same period of 2006, reflecting the higher margin revenue contribution from Gendicine sales.
Mr. Wan continued, “We are pleased with the increase in sales from Benda Ebei in the fourth quarter, as well as with Gendicine’s revenue performance, which was encouraging throughout the year. We are particularly pleased that Gendicine, which generates higher gross margins than our traditional products, can potentially help us increase profitability over the long term. We believe the market opportunity for Gendicine is extremely compelling. When we acquired SiBiono in April of 2007, only 1,869 vials of Gendicine had been sold in the first three months of the year. We ended 2007 with sales of more than 21,000 vials, generating approximately $5.8 million in revenue and significantly enhancing our gross margin performance.”
Operating income in the fourth quarter 2007 was $2.1 million, compared with an operating loss of $0.3 million in the fourth quarter of 2006. Operating expenses in the fourth quarter were approximately $2.7 million, compared with $1.2 million in the fourth quarter of 2006. Approximately $0.6 million of the operating expenses in the fourth quarter of 2007 reflect the penalty and non-cash expense mentioned above. The remaining increase in operating expenses reflects additional sales and marketing expenditure to drive potential Gendicine sales.
In the fourth quarter of 2007, Benda realized interest expense of $1.2 million, related to the Company’s convertible note issued in March 2007.
Net loss in the fourth quarter of 2007 was $0.3 million, roughly breakeven on a diluted share basis, compared to net loss of $0.7 million, or a loss of $0.01 per diluted share in the fourth quarter of 2006. During the year over year period, the diluted weighted average of shares outstanding increased 70% to 127.5 million from 74.9 million. Excluding the stock compensation expense and penalty payment, net income in the fourth quarter 2007 would have been approximately $0.4 million, or breakeven on a diluted share basis.
Balance Sheet
As of December 31, 2007, the Company had cash and cash equivalents of $1.3 million, trade receivables of $10.5 million, and total inventories of $2.0 million.
Financial Guidance
While the Company remains confident in its ability to pursue opportunities in China’s healthcare market, the Company is withdrawing any previously stated financial projections at this time. The Company is diligently working to meet the previously announced terms of its March 2007 financing, which included receiving effective status for its registration statement.
The Company’s operating priorities include the roll out of Gendicine to new hospitals and clinics in 2008. These operating priorities also include ultimately utilizing additional capacity at Jiangling Benda and Yidu Benda, although these facilities require either GMP approval or re-examination by government authorities, the time frame of which relies entirely on the relevant government authorities and not on Benda Pharmaceutical.
About Benda Pharmaceutical, Inc.
Benda Pharmaceutical, Inc. ( http://www.bendapharma.com ), a China-based pharmaceutical company, produces traditional Chinese and conventional medicines, as well as Gendicine(R), a commercialized gene therapy medicine for the treatment of cancer.
Safe Harbor Statement
The information contained herein includes forward-looking statements. These statements relate to future events or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward- looking statements. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. The safe harbor for forward-looking statements contained in the Securities Litigation Reform Act of 1995 protects companies from liability for their forward-looking statements if they comply with the requirements of the Act.
CONTACT: In the U.S.: Ashley Ammon MacFarlane and Christine Duan,
+1-203-682-8200, or in Asia: Xuyang Zhang at +86-10-8523-3087, all of
Integrated Corporate Relations, Inc. Investor Relations, for Benda
Pharmaceutical, Inc.
Web site: http://www.bendapharma.com/
