NANTONG CITY, China, April 19 /PRNewswire-Asia-FirstCall/ -- Sinobiopharma, Inc. (“Sinobiopharma” or “the Company), a fully integrated and highly innovative specialty pharmaceutical company engaged in the research and development, and the manufacture and marketing of biopharmaceutical products in China, has announced its financial results for the third quarter ended February 28, 2010.
Dr. Lequn Lee Huang, Sinobiopharma’s Chairman and CEO commented on the third quarter results: “Despite slower sales during the Chinese New Year holiday in February, we continued to achieve excellent revenue and net income growth. The steady performance demonstrated that the market has a proven need for our products and that our marketing efforts have started to yield positive results.”
Third Quarter 2010 Results
Sales increased 145% to $1,993,412 for the three months ended February 28, 2010, from $813,326 for the three months ended February 28, 2009.
Gross margin increased 172% to $1,612,613 (81% of sales) for the three months ended February 28, 2010, from $592,311 (73% of sales) for the three months ended February 28, 2009.
The increase in sales was due to the continuing growth in sales of Cisatracurium Besylate. Sales of this product increased to $1,964,287 for the three months ended February 28, 2010, from $744,338 for the three months ended February 28, 2009, representing 98.5% of sales and 91.5% of sales for the three months that ended February 28, 2010, and February 28, 2009, respectively.
Operating expenses for the three months ended February 28, 2010 were $593,045, representing a 57% decrease as compared to $1,365,359 for the three months ended February 28, 2009. The decrease is primarily attributable to the stock option expense of $972,375 charged in the third quarter of 2009. There was no stock-based compensation expense for the three months ended February 28, 2010.
Income before income tax increased by $1,763,635 from a loss of $725,316 for the third quarter 2009 to $1,038,319 for the third quarter of 2010.
Income tax expense was $97,096 for the third quarter 2010; there was no income tax expense for the same period last year. The Company started to be subject to income tax with half tax rate beginning January 1, 2010. The applicable tax rate for this year is 11%.
Net income increased $1,666,539 from a net loss of $725,316 for the three months ended February 28, 2009 to a net income of $941,223 for the three months ended February 28, 2010. The increase in net income was due to the increase in sales and decrease of the stock-based compensation expense.
Earning Per Share was $0.01 compared to $(0.01) for the same period 2009.
Results for the nine months that ended February 28, 2010
Sales increased 100% to $5,424,647 for the nine months ended February 28, 2010, from $2,715,702 for the nine months ended February 28, 2009.
Gross margin increased 137% to $4,295,844 (79% of sales) for the nine months ended February 28, 2010, from $1,815,491 (67% of sales) for the nine months that ended February 28, 2009.
The increase in sales was due to the continuing growth in sales of Cisatracurium Besylate. Sales of this product increased to $5,261,860 for the nine months ended February 28, 2010, from $2,529,517 for the nine months ended February 28, 2009, representing 96% of sales and 93% of sales for the nine months that ended February 28, 2010, and February 28, 2009, respectively.
Operating expenses for the nine months ended February 28, 2010 were $1,859,986, a decrease of 45% as compared to $3,354,149 for the nine months ended February 28, 2009. The decrease is primarily attributable to the decrease of $1,620,625 in the stock-based compensation of $324,125 for the nine months ended February 28, 2010, compared to $1,944,750 for the nine months ended February 28, 2009. The stock options have been fully vested and expensed as of August 31, 2009.
Net income increased $3,874,632 from a net loss of $1,622,692 for the nine months ended February 28, 2009 to net income of $2,251,940 for the nine months ended February 28, 2010. The increase in net income was due to the increase in sales and decrease of the stock-based compensation expense.
Earning Per Share was $0.03 compared to $(0.02) for the same period 2009.
Financial Position
As of February 28, 2010, the Company had $790,142 in cash. Operating activities have generated $986,716 cash during the nine-month period that ended February 28, 2010. Working capital became positive in the period ended February 28, 2010 for the first time since the reverse take over in 2008. During this quarter, the Company raised $1,500,000 capital through a private placement. The Company has partially repaid the bank loan using funds from the placement, reducing an outstanding bank loan balance to $220,050. Net worth increased dramatically from $776,831 at May 31, 2009 to $8,998,121 at February 28, 2010. Total assets have increased by $5,458,792, from $5,956,443 at May 31, 2009 to $11,415,235 at February 28, 2010.
Business Outlook
Dr. Huang expressed the Company’s satisfaction with its third quarter results. “The numbers show the growing strength of our financial performance and position,” he said. “They also show the soundness of our strategy as we prepare to take the Company to the next level.”
About Sinobiopharma
Sinobiopharma Inc. is a fully integrated and highly innovative specialty pharmaceutical company engaged in the research and development, manufacture and marketing of biopharmaceutical products in China, one of the world’s fastest growing pharmaceutical markets. Known as Dong Ying (Jiangsu) Pharmaceutical Co. Ltd. in China, the Company’s current therapeutic focus is on anesthesia-assisted agents and cardiovascular drugs.
FORWARD LOOKING STATEMENTS This news release may include “forward-looking statements” regarding Sinobiopharma, Inc., and its subsidiaries, business and project plans. Such forward looking statements are within the meaning of Section 27A of the Securities Act of 1933, as amended, and section 21E of the United States Securities and Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor created by such sections. Where Sinobiopharma, Inc. expresses or implies an expectation or belief as to future events or results, such expectation or belief is believed to have a reasonable basis. However, forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by such forward-looking statements. Sinobiopharma, Inc. does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
CONTACT: Sinobiopharma, Inc., Investor Relations at +1-203-987-5632
