BEIJING, April 1 /PRNewswire-Asia-FirstCall/ -- Lotus Pharmaceuticals, Inc. ("Lotus" or the "Company"), a growing developer, manufacturer and seller of medicine and drugs in the People's Republic of China (the "PRC") reported that its 2009 net earnings were approximately $16.4 million, or $0.33 per diluted share, compared with approximately $12.8 million, or $0.27 per diluted share, in 2008. Net revenues were approximately $57.8 million in 2009 compared with $73.8 million in 2008.
For the year ended December 31, 2009, wholesale revenues accounted for 78% of net revenues a decrease of 17% compared to the year ended December 31, 2008. This decrease was a result of the reduced unit prices of wholesale drugs in 2009 as a result of deflation in raw material prices, and reduced commissions paid to our sales representatives. Eight products accounted for approximately 84% of the our total wholesale revenues for the year ended December 31, 2009, including Maixin (Valsartan), Junxin (Levofloxacin Lactate for Injection), Muxin (Brimonidine), Ni Mai Jiao Lin (Nicergoline for Injection), Yipubishan (Octreotide Acetate Injection Solution), Recombinant Human Erythropoietin Injection, Recombinant Human Granulocyte Colony Stimulating Factor Injection, Recombinant Human Interleukin-2 for Injection. Offsetting the impact of a 37% decrease in average unit selling prices for these eight wholesale products was an increase in the sales quantities of these eight drugs by approximately 18% compared to 2008. The impact of these efforts resulted in EBIT margin in 2009 being 33%, compared to 20% in 2008.
Our retail sales accounted for 20% of net revenues in 2009, a decrease of 17% as compared to 2008. Lotus believes that this decrease was due to increased competition in Beijing.
Liquidity and Capital Resources
As of December 31, 2009, the Company had approximately $4.0 million in cash, compared to approximately $1.3 million as of December 31, 2008. Net cash provided by operating activities was approximately $31.4 million in 2009 as compared to approximately $37.4 million in 2008.
The Company believes that its internal cash flows and external financings will be able to support its proposed capital expenditures in 2010.
Outlook
"I'm pleased with our strong results for 2009," said Dr. Zhong Yi Liu, chairman and chief executive officer. "China's pharmaceutical sector presents us with tremendous growth opportunities. We have maintained strong relationships with our clients, leading research and development institutes and leading drug makers. At such time as we begin to use our new Beijing building complex, we hope to increase our sales and achieve both top and bottom line growth."
Based on information available to management at this time, Lotus anticipates its EBIT of fiscal year 2010 to grow by 15-20%, because its direct sales of drugs to third-party pharmacies in Beijing are expected to generate additional earnings.
About Lotus Pharmaceuticals, Inc. ( http://www.lotuspharma.com )
Lotus Pharmaceuticals, Inc. is a growing developer and producer of drugs and a licensed national seller of pharmaceutical items in the PRC. Lotus operates its business through its two controlled entities: Liang Fang Pharmaceutical, Ltd. and En Ze Jia Shi Pharmaceutical, Ltd. Lotus' current drug development is focused on the treatment of cerebro-cardiovascular disease, asthma, and diabetes. Liang Fang sells drugs directly and indirectly through its national sales channels to hospitals, clinics and drugs stores in 30 provinces of the PRC.
Safe Harbor Statement
This press release contains "forward-looking statements" within the meaning of the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance or achievements, and may contain the words "estimate," "project," "intent," "forecast," "anticipate," "plan," "planning," "expect," "believe," "will likely," "should," "could," "would," "may," or words or expressions of similar meaning. Such statements are not guarantees of future performance and could cause the actual results of the Company to differ materially from the results expressed or implied by such statements, including, but not limited to, changes from anticipated levels of sales, future national or regional economic and competitive and regulatory conditions, changes in relationships with customers, access to capital, increased costs, difficulties in developing and marketing new products, marketing existing products, customer acceptance of existing and new products, the time to get new drugs approved by the State Food and Drug Administration and other factors. Additional information regarding risks can be found in the Company's Annual Report on Form 10K and its other filings with the SEC. Accordingly, although the Company believes that the expectations reflected in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. The Company has no obligation to update the forward-looking information contained in this press release.
CONTACT: Yan ZENG, CFO of Lotus Pharmaceuticals, Inc., +86-10-6389-9868,
zy@lotuspharma.com
Web site: http://www.lotuspharma.com/
