AOBO Reports 80 Percent Increase in Net Profit for Quarter Ending September 30, 2004; Year To Date Net Income Increases 35% to $5.0 Million.HONG KONG Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. -- American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Oriental oriental having some connection with the Orient. oriental avian eye fluke see philophthalmusgralli. oriental blood fluke schistosomajaponicum. oriental cattle plague see rinderpest. Bioengineering bioengineering Application of engineering principles and equipment to biology and medicine. It includes the development and fabrication of life-support systems for underwater and space exploration, devices for medical treatment (see Inc. (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). BB: AOBO AOBO Australian Opera and Ballet Orchestra AOBO Accept on Behalf Of AOBO All Out Blow Out (Sioux City, IA annual event) ), a leading Chinese Chinese, subfamily of the Sino-Tibetan family of languages (see Sino-Tibetan languages), which is also sometimes grouped with the Tai, or Thai, languages in a Sinitic subfamily of the Sino-Tibetan language stock. company which produces and distributes a broad range of pharmaceutical and nurtriceutical products, today reported results for the third quarter ended September 30, 2004. Revenue and net profit for three months ending September 30, 2004 reached $7.4 million and $2.2 million, respectively, representing a 36% and 80% increase over the same period in 2003. Gross margins increased to 66% for the three months ending September 30, 2004 from 65% in the same three month period in 2003. E[acute accent acute accent n. A mark (´) indicating: a. that a vowel is close or tense, as é in French été. b. that a vowel or syllable has a high or rising pitch, as in Chinese or Ancient Greek. c. ]For the first nine months of 2004, revenue was $19.3 million, a 30% increase over the same period in 2003. For the same period, income grew to $5 million, a 35% increase compared to same period in 2003. The growth in revenue and income reflects increased demand for the Company's pharmaceutical and nutriceutical products and the Company's successful market share expansion in China. E[acute accent]"We are very pleased by the third quarter results which reflect healthy growth. We expect our financial performance in 2004 will continue to outperform Outperform An analyst recommendation meaning a stock is expected to do slightly better than the market return. Notes: Exact definitions vary by brokerage, but in general this rating is better than neutral and worse than buy or strong buy. last year," said Tony (Shujun) Liu, chairman and chief executive officer of American Oriental Bioengineering , Inc. E[acute accent]"With the successful acquisition of Heilongjiang Songhuajiang Pharmaceutical (HSPL HSPL High-Speed Perceptual Learning ) on September 9, 2004, we expect there will be full synergy The enhanced result of two or more people, groups or organizations working together. In other words, one and one equals three! It comes from the Greek "synergia," which means joint work and cooperative action. in terms of operations and financial performance between HSPL and our existing operations in upcoming months." E[acute accent]About American Oriental Bioengineering, Inc. E[acute accent]American Oriental Bioengineering, Inc. (OTC BB: AOBO) is a leading Chinese biotechnology company that uses proprietary processes for producing soybean soybean, soya bean, or soy pea, leguminous plant (Glycine max, G. soja, or Soja max) of the family Leguminosae (pulse family), native to tropical and warm temperate regions of Asia, where it has been protein peptide peptide, organic compound composed of amino acids linked together chemically by peptide bonds. The peptide bond always involves a single covalent link between the α-carboxyl (oxygen-bearing carbon) of one amino acid and the amino nitrogen of a second amino acid. more efficiently than traditional extracting techniques. These techniques are used to manufacture and formulate formulate /for·mu·late/ (for´mu-lat) 1. to state in the form of a formula. 2. to prepare in accordance with a prescribed or specified method. supplemental and medicinal products medicinal product, n a substance administered to humans or animals through injection, application, oral ingestion, inhalation, and so forth, whose purpose is to ultimately restore health or eliminate disease in an individual. . Soybean peptides are used widely in general food, health food products and medicines, among other applications. AOBO also produces Cease-Enuresis Soft Gel, the only Chinese FDA-approved first grade, prescription medicine that is specially formulated for·mu·late tr.v. for·mu·lat·ed, for·mu·lat·ing, for·mu·lates 1. a. To state as or reduce to a formula. b. To express in systematic terms or concepts. c. to help alleviate Alleviate To make something easier to be endured. Mentioned in: Kinesiology, Applied bed-wetting Bed-Wetting Definition Bed-wetting is the unintentional (involuntary) discharge of urine during the night. Although most children between the ages of three and five begin to stay dry at night, the age at which children are physically and emotionally and incontinence incontinence Inability to control excretion. Starting and stopping urination relies on normal function in pelvic and abdominal muscles, diaphragm, and control nerves. Babies' nervous systems are too immature for urinary control. Later incontinence may reflect disorders (e.g. . The Company is a leading producer of products in both the nutriceuticals and pharmaceuticals areas in China. For more information, visit http://www.bioaobo.com. E[acute accent]Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement E[acute accent]Except for the historical statements made herein, the statements made in this release are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . Risk factors that could cause actual results to differ materially from those projected in forward-looking statements include, but are not limited to, general business conditions, managing growth, and political and other business risks. All forward-looking statements are expressly qualified in their entirety The whole, in contradistinction to a moiety or part only. When land is conveyed to Husband and Wife, they do not take by moieties, but both are seised of the entirety. by this Cautionary Statement and the risks and other factors detailed in the Company's reports filed with the Securities and Exchange Commission. American Oriental Bioengineering, Inc. undertakes no duty to update these forward-looking statements.
AMERICAN ORIENTAL BIOENGINEERING, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(United States Dollars)
3 months ended 9 months ended
Sept. 30, Sept. 30,
2004 2003 2004 2003
Sales $7,372,555 $5,426,568 $19,283,134 $14,802,208
Cost of Sales 2,436,157 1,956,309 6,098,743 5,509,981
---------- ---------- ----------- -----------
Gross Profit 4,936,398 3,470,259 13,184,391 9,292,227
Selling and
Administrative Expense 508,477 440,322 1,537,631 1,144,636
Advertising 728,802 420,987 2,336,006 1,593,682
General and
Administrative Expenses 892,701 882,504 2,757,745 1,655,667
Merger Costs 8,333 8,333 24,999 24,999
Depreciation &
Amortization 145,619 134,580 436,674 396,290
---------- ---------- ----------- -----------
Income from Operations 2,652,466 1,583,533 6,091,336 4,476,953
Interest, Net (23,694) (3,554) (71,485) (50,261)
Other Income/ (Expenses) 56,634 (679) 83,376 79,473
---------- ---------- ----------- -----------
Income before Income
Taxes 2,685,406 1,579,300 6,103,227 4,506,165
Income Taxes 444,361 335,645 1,094,394 803,242
---------- ---------- ----------- -----------
NET INCOME $2,241,045 $1,243,655 $ 5,008,833 $ 3,702,923
========== ========== =========== ===========
Net Income per Share
Basic $ 0.07 $ 0.04 $ 0.15 $ 0.13
Diluted $ 0.07 $ 0.04 $ 0.15 $ 0.13
Weighted Average Number
of Shares Outstanding
Basic 33,570,957 31,625,827 33,073,499 27,762,034
Diluted 33,594,477 33,237,240 33,097,224 28,777,621
AMERICAN ORIENTAL BIOENGINEERING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(United States Dollars)
ASSETS September 30 December 31
------------- -------------
2004 2003
------------- -------------
CURRENT ASSETS
Cash and cash equivalents $2214039 5366857
Trade receivables, net of
provisions 3533872 3112998
Other receivable 425511 143,809
Inventory 4495426 2546810
Prepayments for goods 321081 868458
Advances to employees 123283 55116
Deferred taxes 78439 78439
Deferred merger costs 8335 33334
Deferred consulting expenses 1937243 1569442
------------- -------------
TOTAL CURRENT ASSETS 13137229 13775263
------------- -------------
PROPERTY, PLANT AND EQUIPMENT, NET 6903876 7264822
------------- -------------
DEPOSIT FOR MACHINERY 388898 --
------------- -------------
DEPOSIT FOR LEASEHOLD IMPROVEMENT 386000 --
------------- -------------
DEPOSIT FOR ACQUISITION 7228916 --
------------- -------------
OTHER ASSETS, NET 566446 632531
------------- -------------
TOTAL ASSETS $ 28611365 211672616
============= =============
Liabilities and Shareholders' Equity
CURRENT LIABILITIES
Accounts payable and accrued
expenses $ 1497581 1253826
Prepayments for materials 231998 76593
Bank loans 1445783 1445783
Taxes payable 444365 310480
Obligation under finance leases
within one year 7069 6780
Payable to related party 92426 43243
------------- -------------
TOTAL CURRENT LIABILITIES $ 3719222 3136705
------------- -------------
LONG-TERM LIABILITIES
Obligation under finance leases 21638 25449
------------- -------------
TOTAL LIABILITIES $ 3740860 3162154
============= =============
SHAREHOLDERS' EQUITY
Preferred stock, $0.001 par value;
2,000,000 shares authorized;
1,000,000 shares issued or
outstanding at September 30, 2004 1000 1000
And December 31, 2003 respectively
Common stock, $0.001 par value;
60,000,000 shares authorized;
outstanding, respectively
33,631,827 and 32,725,827
shares issued 33632 32726
Additional paid-in capital 11399038 10048734
Retained earnings
Restricted portion 534177 534177
------------- -------------
Unrestricted portion 12902658 7893825
------------- -------------
TOTAL SHAREHOLDERS' EQUITY 24870505 18510462
------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY 28611365 21672616
============= =============
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