American Oriental Bioengineering, Inc. Announces Revenue and Earnings for the First Quarter 2006; First Quarter Revenues Increase 98% versus Last Year: Net Income Increases 125%, EPS Increases 60%.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 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. (AMEX AMEX See: American Stock Exchange :AOB AOB (on the agenda for a meeting) any other business ): First Quarter 2006 Highlights: --Receipt of the Second Tranche Tranche One of several related securities offered at the same time. Tranches from the same offering usually have different risk, reward, and/or maturity characteristics. tranche A class of bonds. of Proceeds in Connection with the December 2005 private placement --Operating margins expand to 33.4%, an improvement of over 2.0% versus 1Q 2005 --Subsequent to the close of the First Quarter, Company announces the acquisition of GLP See gateway location protocol. American Oriental Bioengineering, Inc. (AMEX:AOB), an emerging Chinese manufacturer and distributor of plant-based pharmaceutical and nutraceutical nu·tra·ceu·ti·cal n. A food or naturally occurring food supplement thought to have a beneficial effect on human health. nutraceutical products, today announced financial results for the first quarter ending March 31, 2006.
Key Financial Indicators
(All numbers in thousands, except per-share amounts in USD)
Q1 2006 Q1 2005 Percentage Change
Revenues $ 19,087 $ 9,653 97.7%
Cost of goods sold $ 6,509 $ 3,628 79.4%
Gross Profit $ 12,577 $ 6,025 108.8%
Total Operating Expenses $ 6,194 $ 3,000 106.5%
Income from operations $ 6,383 $ 3,025 111.0%
Net Income $ 4,917 $ 2,183 125.2%
EPS -- Fully Diluted $ 0.08 $ 0.05 60.0%
Diluted Shares 61.3M 42.7M 43.6%
The US dollar amounts are calculated based on the average conversion rate of US $1 to RMB RMB Right Mouse Button RMB Regional Management Board (USACE) RMB Rolf Maier Bode (musician, band) RMB Ren Min Bi (currency of People's Republic of China) 8.0436 for the first quarter of 2006 and US $1 to RMB 8.3 for the first quarter of 2005. First Quarter 2006 Financial Results: For the first quarter, the Company reported revenues of $19.1 million, an increase of 97.7 percent compared to the $9.7 million reported in the first quarter last year and down 3.5 percent compared to the $19.8 million reported in the fourth quarter of 2005. The increase in revenue as compared to the first quarter of last year is attributable to growth in both the Company's Plant-based Pharmaceutical (PBP PBP picture by picture (TVs and monitors) PBP Penicillin Binding Protein PBP Play-By-Play PBP Paris-Brest-Paris (bicycle race) PBP Progressive Bulbar Palsy PBP Pay Back Period PBP Pay By Phone ) and Plant-based Nutraceutical (PBN PBN Paint By Number PBN Procurement Business Number PBN Pyrolytic Boron Nitride PBN Policy-Based Networking PBN Performance-Based Navigation PBN Progressive Bengali Network PBN Paintball Nation PBN Permanent Background Notices ) products. During the first quarter of 2006, sales of PBP products increased approximately $6.2 million, or 102.8 percent compared to the same period in 2005. PBP revenues were driven by a 137.9 percent increase in Cease Enuresis enuresis Repeated urination into bedding or clothing, usually at night, in a normal child old enough to have completed toilet training. Enuresis may be voluntary or involuntary. It may run in families. Soft Gel and Patch sales and a 101.6 percent increase in Shuanghuanlian Injection Powder sales. PBP revenue growth was also driven by continued strength in Double Ginseng ginseng (jĭn`sĕng), common name for the Araliaceae, a family of tropical herbs, shrubs, and trees that are often prickly and sometimes grow as climbing forms. Grain product sales, which increased 57.6 percent from the same period of last year. During the first quarter of 2006, PBN sales increased by $3.3 million or 89.4 percent compared to the same period last year as the Company continued to improve its marketing efforts geared towards educating consumers about the benefits of soy-based 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. products. PBN revenues were driven by a 122.9 percent increase in Soy Peptide Tablets and a 116.2 percent increase in Vitamate Oral Liquid sales. On a sequential basis PBP revenue increased by 0.4 percent while PBN revenue decreased by 9.6 percent. The overall revenue decline on a sequential basis was due to seasonality, which the Company has experienced in the past, as the fourth quarter is traditionally strongest of the year. The Company's 3.5 percent sequential revenue decline in the first quarter of 2006 compares favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. to the 23.6 percent sequential decline in the first quarter of 2005. Cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold were $6.5 million, an increase of 79.4 percent compared to the $3.6 million reported during the first quarter of 2005, resulting in a gross margin of 65.9 percent for the first quarter compared to 62.4 percent for the comparable period last year and 65.2 percent during the fourth quarter of 2005. Gross margins improved in the first quarter as the Company yielded higher efficiencies in its manufacturing processes, particularly versus the year-ago period as further improvements were made on the integration of HSPL HSPL High-Speed Perceptual Learning . Selling and marketing expenses increased 159.6 percent to $1.7 million. Advertising expenses increased 173.0 percent to $2.2 million, both compared to the first quarter of last year. Total operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. were $6.2 million, an increase of 106.5 percent compared to $3.0 million reported for the same period last year as the Company increased expenses to support operational growth. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. increased to $6.4 million, up 111.0 percent from $3.0 million in the year-ago quarter. Operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: were 33.4 percent, which improved 2.1 percent from 31.3 in the first quarter of 2005 and up 2.0 percent from 31.4 percent in the fourth quarter 2005. The Company continues to seek opportunities to rationalize ra·tion·al·ize v. 1. To make rational. 2. To devise self-satisfying but false or inconsistent reasons for one's behavior, especially as an unconscious defense mechanism through which irrational acts or feelings are made to appear costs and reduce inefficiencies to drive greater profitability. The Company had an effective income tax rate during the quarter of 23.9 percent compared to 25.6 percent last year. This tax is in addition to the Value Added Tax value added tax n (BRIT) → impuesto sobre el valor añadido or agregado (LAM) value added tax n (Brit (VAT) of 17.0 percent deducted de·duct v. de·duct·ed, de·duct·ing, de·ducts v.tr. 1. To take away (a quantity) from another; subtract. 2. To derive by deduction; deduce. v.intr. from the Company's gross revenues each quarter. Net income increased 125.2 percent to $4.9 million or $0.08 per fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share versus net income of $2.2 million or $0.05 per fully diluted share in the same period last year. Fully diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of increased 60.0 percent as compared to last year and were flat sequentially despite a 43.6 percent and 18.8 percent increase in shares utilized in this calculation relative to the first quarter of 2005 and the fourth quarter of 2005, respectively. Commenting on the first quarter of 2006, Mr. Tony Liu, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of AOB, said, "We are very pleased to report a solid first quarter which resulted in strong revenue and earnings despite what is historically a weaker seasonal quarter. The Company experienced strength across all product lines which reflects the success of our efforts to continue to increase brand awareness and further penetrate underserved and rapidly growing markets throughout China." Balance Sheet The Company completed the quarter with $80.9 million in cash and cash equivalents. Cash and cash equivalents increased from $57.5 million during the fourth quarter of 2005 primarily as a result of $3.9 million in positive cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses and the receipt on January 23, 2006, of the second tranche of net cash proceeds of $25.0 million in connection with the $60.0 million private placement effected in December 2005. Short-term debt Short-term debt Debt obligations, recorded as current liabilities, requiring payment within the year. totaled $3.7 million and was down $1.4 million versus the year-ago period and unchanged from the fourth quarter of last year. Inventory increased 4.5 percent and 64.5 percent from the first quarter of 2005 and fourth quarter of 2005 respectively to $8.1 million. The increase in inventory was below that of overall sales growth for the first quarter with the increase necessary to support the Company's future growth. The Company continues to have excellent quality receivables with overall Days Sales Outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). (DSO See CSO. ) unchanged from last year at 45 days. As of March 31, 2006, the Company had a current ratio of 11.24 to 1 as compared to a current ratio of 2.68 to 1 on March 31, 2005. Mr. Liu continued, "In addition to remarkable organic growth dynamics in our existing products and markets, there continues to be a tremendous opportunity to make strategic and accretive acquisitions Accretive Acquisition An acquisition that will increase the acquiring company's EPS. Notes: As they are expected to increase the acquiring company's future earnings, these acquisitions tend to be favorable for the company's market price. in China. While there are other companies that may also have an interest in pursuing these acquisitions, AOB has a unique ability to identify, access and complete the due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. on these deals and more importantly, possesses the necessary expertise to leverage these opportunities and to successfully integrate the operations of these businesses into AOB. We remain focused on identifying acquisitions that will either enhance our presence in the PBP or PBN marketplace or broaden our distribution network for existing products. The recently completed acquisition of GLP has positioned AOB to accomplish both objectives. The product portfolio we acquired from GLP is complementary to our existing offering in the area of women's health Women's Health Definition Women's health is the effect of gender on disease and health that encompasses a broad range of biological and psychosocial issues. and we believe we can significantly grow GLP revenues by improving the execution of sales and marketing programs and introducing AOB methodologies, which were so successful in the HSPL acquisition. The acquisition of GLP is also important for AOB as it further expands our geographic reach to southern part of China." Mr. Liu concluded, "We continue to believe that we can meaningfully grow our revenues organically and through acquisitions. We are very well-positioned to execute on this strategy with a talented and experienced management team, a broad and deep existing product portfolio and a healthy balance sheet. We look forward with great anticipation to continued success in 2006." Conference Call Information: The Company will hold a conference call at 10 a.m. ET to discuss first quarter 2006 results. Interested participants should call 888-968-4564 when calling within the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. or 973-582-2841 when calling internationally. There will be a playback available until May 19, 2006. To listen to the playback, please call 877-519-4471 when calling within the United States or 973-341-3080 when calling internationally. Please use pass code 7360542 for the replay. This call is being webcast by ViaVid Broadcasting and can be accessed at American Oriental Bioengineering's Web site at http://www.bioaobo.com. The webcast may also be accessed at ViaVid's Web site at www.viavid.net. The webcast can be accessed until June 12, 2006, on either site. About American Oriental Bioengineering, Inc. American Oriental Bioengineering, Inc. (AOB) is engaged in the development and production of plant-based pharmaceutical products and plant-based nutraceutical products widely distributed Adj. 1. widely distributed - growing or occurring in many parts of the world; "a cosmopolitan herb"; "cosmopolitan in distribution" cosmopolitan bionomics, environmental science, ecology - the branch of biology concerned with the relations between organisms throughout China. For more information, visit http://www.bioaobo.com. This news release contains 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. as defined by the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 contained in statements filed from time to time with the Securities and Exchange Commission. All such forward-looking statements, whether written or oral, and whether made by or on behalf of the company, are expressly qualified by the cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" .
AMERICAN ORIENTAL BIOENGINEERING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
------
MARCH 31, DECEMBER 31,
2006 2005
------------ --------------
UNAUDITED
CURRENT ASSETS
Cash and cash equivalents $ 80,915,067 $ 57,532,049
Accounts receivable, net 9,494,257 8,168,420
Inventories, net 8,086,037 4,916,500
Advances to suppliers 1,264,680 3,494,320
Other receivables 5,285,138 102,611
Due from employees 661,947 409,159
Deferred consulting expenses 649,562 752,620
------------ --------------
Total Current Assets 106,356,688 75,375,679
PLANT AND EQUIPMENT, NET 13,860,189 13,386,439
LAND USE RIGHTS, NET 7,935,607 7,925,763
CONSTRUCTION IN PROGRESS 1,331,196 1,655,349
DEFERRED TAX ASSETS 611,716 614,336
LICENSE, NET 444,368 464,673
------------ --------------
TOTAL ASSETS $130,539,764 $ 99,422,239
------------ ============ ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Accounts payable $ 1,345,357 $ 1,230,767
Other payables and accrued expenses 1,980,818 1,604,096
Taxes payable 1,520,216 1,485,872
Short-term bank loans 3,742,048 3,717,380
Customer deposits 354,141 355,975
Other liabilities 517,303 168,080
------------ --------------
Total current liabilities 9,459,883 8,562,170
DEFERRED TAX LIABILITIES 259,518 232,505
OTHER LIABILITIES 20,285 23,018
------------ --------------
TOTAL LIABILITIES 9,739,686 8,817,693
------------ --------------
SHAREHOLDERS' EQUITY
Preferred stock, $0.001 par value;
2,000,000 shares authorized; 1,000,000
shares issued and outstanding at March
31, 2006 and December 31, 2005,
respectively 1,000 1,000
Common stock, $0.001 par value;
150,000,000 shares authorized;
62,635,788 and 57,109,188 shares issued
and outstanding, respectively 62,636 57,109
Additional paid-in capital 84,505,239 59,491,393
Retained earnings (the restricted
portion of retained earnings is
$4,104,115 and $4,104,115 at March 31,
2006 and December 31, 2005,
respectively) 34,542,299 29,625,765
Accumulated other comprehensive income 1,688,904 1,429,279
------------ --------------
Total Shareholders' Equity 120,800,078 90,604,546
------------ --------------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $130,539,764 $ 99,422,239
----------------------------------- ============ ==============
AMERICAN ORIENTAL BIOENGINEERING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED
MARCH 31,
2006 2005
----------- -----------
UNAUDITED
REVENUES $19,086,901 $ 9,652,782
COST OF GOODS SOLD (6,509,411) (3,627,564)
----------- -----------
GROSS PROFIT 12,577,490 6,025,218
Selling and marketing expenses (1,701,280) (655,375)
Advertising (2,225,187) (814,733)
General and administrative expenses (1,880,964) (1,225,393)
Depreciation and amortization (386,947) (304,982)
----------- -----------
INCOME FROM OPERATIONS 6,383,112 3,024,735
INTEREST INCOME (EXPENSE), NET 81,661 (91,675)
OTHER EXPENSE, NET (988) -
----------- -----------
INCOME BEFORE INCOME TAXES 6,463,785 2,933,060
INCOME TAXES (1,547,251) (749,871)
----------- -----------
NET INCOME $ 4,916,534 $ 2,183,189
=========== ===========
OTHER COMPREHENSIVE INCOME
Foreign currency translation gain 259,625 -
----------- -----------
Other comprehensive income before tax 259,625 -
Income tax expense related to other
comprehensive income (85,676) -
----------- -----------
TOTAL OTHER COMPREHENSIVE INCOME, NET OF TAX 1,131,566 -
----------- -----------
COMPREHENSIVE INCOME 5,090,483 2,183,189
----------- -----------
NET INCOME PER SHARE
BASIC $ 0.08 $ 0.05
DILUTED $ 0.08 $ 0.05
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING
BASIC 61,223,435 39,746,827
DILUTED 61,318,674 42,701,898
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion