XI’AN, China, Nov. 16 /PRNewswire-FirstCall/ -- Huifeng Bio-Pharmaceutical Technology, Inc. , a growing Chinese company which produces raw materials for pharmaceutical, nutraceutical supplement and food production, today reported results for the third quarter ended September 30, 2006. All results are reported in U.S. dollars. Revenue for the third quarter of 2006 increased 28 percent to $816,093 compared to $638,442 in the third quarter of 2005. Gross profit margin for the third quarter was 18 percent, compared to 25 percent in the period ended September 30, 2005, due primarily to higher costs of chemicals used in production. However, the Company achieved an operating profit of 8 percent versus 2 percent in the prior year quarter as a result of lower administrative costs related to public company listing. Net income for the third quarter of 2006 was $76,994, compared to net income of $9,461 for the quarter ended September 30, 2005. Huifeng’s working capital increased to $2,895,748 from $2,667,073.
Jing’an Wang, Chief Executive Officer of Huifeng Bio-Pharmaceutical Technology commented, “Our revenue growth for the quarter was attributable to growing demand for our high-quality products primarily as pharmaceutical materials both in China and internationally. We continue to expand the marketing and sales efforts directed towards pharmaceutical manufacturers and nutraceutical producers of both supplements and foods. Since receiving the Good Manufacturing Practices (GMP) qualification in the first quarter of 2006, we have increased sales significantly, including a 77 percent revenue increase over the second quarter of 2006.”
Wang concluded, “In addition, we expect that the recently announced acquisition of assets for the production of diosmin and L-rhamnose, which took place subsequent to the end of the third quarter, will broaden our production capacity of these pharmaceutical and nutraceutical raw materials and will add to revenue in 2007.”
About Huifeng Bio-Pharmaceutical Technology, Inc.
Huifeng Bio-Pharmaceutical Technology, Inc. located in Xi’an, People’s Republic of China, develops and produces plant extracts and pharmaceutical raw materials for use in pharmaceutical, nutraceutical supplement and food production. It is the leading Chinese producer of rutin and related plant- derived chemicals in a class called flavonoids, with medicinal and other beneficial properties. Founded in 2000, Huifeng uses proprietary patented processes to extract rutin more efficiently than traditional extraction techniques. The Company is diversifying its product line through internal development, acquisition and cooperation with scientific research organizations.
Forward Looking statements
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 defined in this document and in statements filed from time to time with the Securities and Exchange Commission. All readers are encouraged to review the 10QSB to be filed in connection with the acquisition discussed above, which outlines risk factors and other relevant items. All such forward-looking statements, whether written or oral, and whether made by or on behalf of the companies, are expressly qualified by the cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the companies disclaim any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.
Investor Contact: Maura Gedid Adam Friedman Associates (212) 981-2529 X 11 mgedid@adam-friedman.com HUIFENG BIO-PHARMACEUTICAL TECHNOLOGY INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 2006 (UNAUDITED) ASSETS CURRENT ASSETS Cash and cash equivalents $ 132,039 Accounts receivable, net of allowances 925,505 Inventories, net 1,505,559 Notes receivable 437,500 Due from stockholders 89,982 Other assets 394,401 Total Current Assets 3,484,986 PROPERTY AND EQUIPMENT, NET 2,564,275 LAND USE RIGHTS, NET 133,686 TOTAL ASSETS $ 6,182,947 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES Accounts payable $ 86,731 Other payables and accrued expenses 189,670 Notes payable 300,000 Value added tax payables 88,625 Income tax and other tax payables 56,251 Total Current Liabilities 721,277 COMMITMENTS AND CONTINGENCIES - MINORITY INTEREST 453,368 STOCKHOLDERS’ EQUITY Preferred stock, ($0.001 par value, 5,000,000 shares authorized, non issued and outstanding) - Common stock, ($0.018 par value, 100,000,000 shares authorized, 16,466,169 shares issued and outstanding as of September 30, 2006) 296,391 Additional paid-in capital 7,256,063 Retained earnings (deficit) Unappropriated (2,739,834) Appropriated 23,274 Accumulated other comprehensive income 172,408 Total Stockholders’ Equity 5,461,670 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 6,182,947 HUIFENG BIO-PHARMACEUTICAL TECHNOLOGY INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS & COMPREHENSIVE INCOME (UNAUDITED) For the For the For the For the Three Three Nine Nine Months Months Months Months Ended Ended Ended Ended September September September September 30, 2006 30, 2005 30, 2006 30, 2005 NET SALES - A subsidiary $ 10,416 $ - $ 38,942 $ - - Third parties 805,677 638,442 2,339,846 1,981,254 816,093 638,442 2,378,788 1,981,254 COST OF SALES (672,441) (478,273) (1,963,992) (1,571,976) GROSS PROFIT 143,652 160,169 414,796 409,278 OPERATING EXPENSES Selling expenses and distribution expenses 20,897 33,614 105,342 82,319 General and administrative expenses 47,001 66,849 157,120 154,599 Depreciation and amortization 11,482 44,275 34,463 79,045 Total Operating Expenses 79,380 144,738 296,925 315,963 INCOME FROM OPERATIONS 64,272 15,431 117,871 93,315 OTHER INCOME (EXPENSE) Equity in loss of affiliate - - - (112) Goodwill written off - - - (2,764) Interest income 13,194 12,325 39,095 19,962 Interest expense (4,297) - (4,354) - Other income 15,375 - 34,275 42,270 Total Other Income, net 24,272 12,325 69,016 59,356 INCOME FROM OPERATIONS BEFORE TAXES AND MINORITY INTEREST 88,544 27,756 186,887 152,671 INCOME TAX EXPENSE (18,060) (12,858) (55,786) (38,670) MINORITY INTEREST 6,510 (5,437) 19,204 (41) NET INCOME 76,994 9,461 150,305 113,960 OTHER COMPREHENSIVE (LOSS) INCOME Foreign currency translation (loss) gain (262) 63,651 96,841 63,651 COMPREHENSIVE INCOME $ 76,732 $ 73,112 $ 247,146 $ 177,611 Net income per share - basic and diluted $ 0.01 $ 0.01 $ 0.01 $ 0.02 Weighted average number of shares outstanding during the period - basic and diluted 16,466,169 5,200,444 16,466,169 5,200,444
Huifeng Bio-Pharmaceutical Inc.
CONTACT: Investor, Maura Gedid, Adam Friedman Associates, +1-212-981-2529ext. 11, mgedid@adam-friedman.com, for Huifeng Bio- Pharmaceutical Inc.
