PLYMOUTH MEETING, Pa., March 17 /PRNewswire-Asia-FirstCall/ -- BMP Sunstone Corporation (“BMP Sunstone” or the “Company”), today announced financial results for the fourth quarter and fiscal year ended December 31, 2008.
Non-GAAP operating income, net income, and earnings per share exclude stock based compensation expense, amortization related to acquisitions, and amortization of debt discount and issuance cost. EBITDA is a non-GAAP measure which provides earnings before interest, taxes, depreciation and amortization. Please refer to the financial reconciliations provided in this news release for a reconciliation of GAAP results to non-GAAP results for the three and twelve month periods ended December 31, 2008 and 2007.
David Gao, Chief Executive Officer of BMP Sunstone, stated, “We are very proud of the progress we have made over the course of the last year, especially in light of the economic environment. We generated $3.3 million of operating cash flow through the year and the Sunstone acquisition greatly improved our top line and gross margin performance, while revenue from other segments improved significantly across the board. Our diverse product portfolio, established distribution in many of China’s most important healthcare markets, and leading brands in pediatrics and women’s health we believe are key competitive advantages which drive our growth despite the greater economic environment and potential for regulatory change. While we anticipate industry-wide changes in China’s healthcare industry in the future, we feel strongly that our double-digit growth can continue.”
Fourth Quarter 2008 Financial Results
Revenue in the fourth quarter of 2008 increased to $36.6 million from $9.2 million in the fourth quarter of 2007, reflecting increased demand for the Company’s manufactured and licensed products, as well as the $21.2 million of revenue from Sunstone, which was acquired in February of 2008. Revenue from distribution increased 72% to $13.9 million in the fourth quarter of 2008 from $8.1 million in the prior year period, reflecting revenue from Rongheng, which was acquired in July 2008, and sales growth of Wanwei’s major products. Revenue from licensed products increased to $1.5 million from $1.1 million in the prior year period, reflecting sales and marketing efforts of Propess, Anpo, Ferriprox and Galake compared to the prior year.
Gross profit in the fourth quarter of 2008 increased to $19.2 million from $1.5 million in the fourth quarter of 2007. Gross margin was 52.4% compared with 16.2% in the prior year period. Gross margin performance reflects increased sales of higher margin products and services from Sunstone and Beijing Medpharm.
Non-GAAP operating income was $3.5 million in the fourth quarter of 2008 compared to a loss of $4.7 million in the prior year period, primarily reflecting the significant increase in revenues contributed from acquired businesses in the year over year period. On a GAAP basis, the Company’s operating income improved significantly year over year to $1.8 million in the fourth quarter compared with an operating loss of $5.4 million in the fourth quarter of 2007.
Non-GAAP net income was $3.8 million, or $0.09 per diluted share, compared to a net loss of $5.3 million, or ($0.17) per diluted share, in the fourth quarter of 2007. On a GAAP basis, the Company reported net income of $1.1 million compared to a net loss of $6.6 million in the fourth quarter of 2007.
Full Year 2008 Financial Results
Revenue in the fiscal year 2008 increased to $114.9 million from $31.0 million in 2007, reflecting approximately $65.7 million in revenue from Sunstone, which was acquired in February of 2008. Revenue from distribution increased 57% to $43.7 million from $27.9 million in the year 2007, reflecting the acquisition of Rongheng in July 2008 and the sales growth of Wanwei’s major products. Revenue from licensed products increased to $5.4 million from $3.1 million in 2007, reflecting sales and marketing efforts of Propess, Anpo, Ferriprox and Galake compared to the prior year.
Gross profit increased to $57.3 million from $4.3 million in 2007, and gross margin for the year was 49.9%, compared with 13.8% in 2007. The higher margin was largely due to revenue from the sales of the Company’s branded OTC products, which yielded a gross margin of 77.2% in 2008.
Non-GAAP operating income reached $10.5 million in 2008 compared to a loss of $8.9 million in the prior year, primarily reflecting the significant increase in revenues contributed from acquired businesses in the year over year period. Operating expenses of $17.4 million reflect increased advertising and marketing, employee benefits, selling expenses and the amortization of intangibles resulting from the acquisition of Sunstone. On a GAAP basis, the Company’s operating income improved significantly year over year to $3.7 million compared with an operating loss of $10.9 million in 2007.
Non-GAAP net income was $7.2 million, or $0.19 per diluted share, in 2008 compared to a net loss of $9.0 million, or $0.32 per share, in 2007. On a GAAP basis, the Company reported a net loss of $3.4 million in 2008, compared to $11.6 million in 2007.
Balance Sheet
As of December 31, 2008, the Company had cash and cash equivalents of $15.7 million and notes receivable of $15.8, totaling $31.5 million. Notes receivables are notes accepted from customers for the settlement of trade receivable balances. All notes receivables are guaranteed by established banks in China and have maturities of six months or less.
Financial Guidance
As previously announced, for the fiscal year 2009, revenue is anticipated to increase at least 35% year over year to reach $150 to $160 million.
The Company announced today that it expects EBITDA for the full year 2009 to reach $16 million to $18 million.
The Company is also adjusting its 2009 net income guidance to reflect interest costs and debt discount amortization related to newly issued convertible debt due in July 2011. The Company expects GAAP net income to be between $2 million and $4 million and expects non-GAAP net income to be between $9 million and $11 million.
David Gao, Chief Executive Officer of BMP Sunstone, stated, “We expect 2009 to be another record year for our Company, with revenue growth of over 35% at the low end of our guidance range. We are actively transforming BMP Sunstone from a low margin distribution business into a high margin OTC and prescription specialty pharmaceutical company, and our guidance for 2009 reflects a more mature, diversified company with significant ability to drive shareholder value.”
Gao continued, “Our 2009 financial guidance reflects sales and marketing expansion in China resulting from continued performance at all of our business units, especially at Sunstone, and reflects operational synergies resulting from acquisitions the Company completed in 2008. In 2009, we expect all of our business units to be profitable and to outperform the market growth. Importantly, we expect our in-license business at Beijing Medpharm will start contributing to the Company’s bottom line in 2009, which will mark a significant milestone in the Company’s development.”
Conference Call
The Company will hold a conference call at 5:00 pm ET on March 17, 2009 to discuss fiscal fourth quarter and full year 2008 results. Listeners may access the call by dialing 1-888-680-0892 or 1-617-213-4858 for international callers, access code: 38492655. Pre-registration and a webcast will also be available through the Company’s website at http://www.bmpsunstone.com . A replay of the call will be available through March 26, 2009. Listeners may access the replay by dialing 1-888-286-8010 or 1-617-801-6888 for international callers, access code: 34716825.
About BMP Sunstone Corporation
BMP Sunstone Corporation is a specialty pharmaceutical company that is building a proprietary portfolio of branded pharmaceutical and healthcare products in China. Currently this portfolio includes eight products under exclusive multi-year licenses for China, primarily focused on women’s health and pediatrics. The Company also owns Sunstone Pharmaceutical Co. Ltd., which manufactures leading pediatric and women’s health products, including two of China’s most recognized brands, “Hao Wawa” and “Confort,” sold through approximately 120,000 pharmacies in China. The Company also provides pharmaceutical distribution services through its subsidiaries in Beijing and Shanghai, and through its affiliate, Guangzhou Pharmaceuticals Corp. The Company has its main office in Beijing, with a US office in Plymouth Meeting, PA. For more information, please visit http://www.bmpsunstone.com .
Safe Harbor Statement
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, including but not limited to statements regarding the Company’s competitive advantages, the impact of changes in China’s healthcare industry on the Company’s growth, the Company’s expected financial performance in 2009 and the Company’s expectations for each of its business units in 2009. These statements are subject to uncertainties and risks including, but not limited to, operating performance, general financial, economic, and political conditions affecting the biotechnology and pharmaceutical industries and the Chinese pharmaceutical market, the ability to timely manufacture and distribute the Company’s products and other risks contained in reports filed by the Company with the Securities and Exchange Commission. In addition, the Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.
CONTACT: At Integrated Corporate Relations, Inc., Ashley M. Ammon and
Christine Duan, +1-203-682-8200 (Investor Relations), for BMP
Web site: http://www.bmpsunstone.com/
