NEW YORK, Aug. 7 /PRNewswire-Asia-FirstCall/ -- --2Q09 Revenue
Increased 20.7% YoY to $71.2 Million-- --2Q09 Net Income
Attributable to Controlling Interest was $13.2 million or $0.17 per
Diluted Share-- -- Company Generates Approximately $22.9 Million of
Operating Cashflow-- American Oriental Bioengineering, Inc.
(NYSE:AOB), ("the Company" or "AOBO"), a pharmaceutical company
dedicated to improving health through the development, manufacture
and commercialization of a broad range of prescription and over the
counter ("OTC") products in China, today announced financial
results for the second quarter ended June 30, 2009. Revenue in the
second quarter of 2009 increased 20.7% to $71.2 million from $59.0
million in the second quarter of 2008, reflecting continued demand
for the Company's core pharmaceutical and nutraceutical products.
Revenue from pharmaceutical products increased 17.4% to $58.4
million from $49.8 million in the prior year's second quarter.
Revenue from prescription pharmaceutical products increased 23.2%
to $25.2 million during the second quarter of 2009, reflecting an
increase in sales from prescription formulation Jinji and CCXA
products, which offset declines in sales of Shuanghuanglian
Injection Powder ("SHL"). OTC pharmaceutical products generated
$33.3 million in revenue during the second quarter of 2009, up from
$29.4 million in the prior year's period, reflecting continued
demand for Boke and GLP products, as a result of marketing efforts
and improved recognition of the products. Nutraceutical products
generated revenue of approximately $9.5 million in the second
quarter of 2009, up 3.3% from $9.2 million in the prior year's
period, reflecting increased sales of new beverage products
launched in the beginning of 2009. The Company generated $3.3
million from its distribution business. Gross profit in the second
quarter of 2009 increased 3.9% to $41.6 million from $40.1 million
in the second quarter of 2008. Gross margin was 58.4%, compared to
67.9% in the prior year's period, reflecting continued revenue mix
shift to CCXA's generic product sales, increasing raw material
prices and low margin distribution business. Operating income in
the second quarter of 2009 was $18.3 million compared to $18.7
million in the second quarter of 2008. Selling and marketing
expenses increased 22.2% to $9.4 million from $7.7 million in the
prior year period. The increase primarily reflects marketing and
promotional initiatives to support the continuous growth of
revenues. Advertising expense was $7.8 million in the second
quarter of 2009, compared to $7.5 million in the prior year's
period. Net income attributable to controlling interest for the
second quarter of 2009 was $13.2 million, compared to $13.9 million
in the prior year's period. Excluding $1.4 million of interest
expense and $0.2 million of amortized financing costs related to
the Company's outstanding convertible notes, the Company's net
income attributable to controlling interest increased 6.5% to $14.8
million, or $0.17 per diluted share. In the prior year's second
quarter, net income per diluted share was approximately $0.18. As
of June 30, 2009, the Company had $100.7 million in cash and
generated approximately $22.9 million of operating cashflow during
the second quarter of 2009. Mr. Tony Liu, Chairman and Chief
Executive Officer of American Oriental Bioengineering, commented,
"We are pleased with our second quarter performance as we continued
to enhance our diversified product portfolio and pursue further
vertical integration. Our marketing capabilities, extensive
distribution platform, diversified product offering and ongoing
rural expansion offset anticipated challenges in SHL sales during
the second quarter of 2009. We also made significant progress this
quarter optimizing our distribution business, so that we solidify
our presence in Tier I and II hospital channels and remain on-track
for net income contributions for the full year. We continue to
drive revenue growth and consistently generate cash despite the
uncertain regulatory environment in China's healthcare sector, and
we are confident in our ability to be a top-five pharmaceutical
company in China." Conference Call The Company will hold a
conference call at 8:00 am ET on August 7, 2009 to discuss second
quarter 2009 results. Listeners may access the call by dialing
1-866-761-0749 or 1-617-614-2707 for international callers, access
code: 54060064. A webcast will also be available through AOB's
website at http://www.bioaobo.com/ . A replay of the call will be
available through August 14, 2009. Listeners may access the replay
by dialing 1-888-286-8010 or 1-617-801-6888 for international
callers, access code: 18519426. About American Oriental
Bioengineering, Inc. American Oriental Bioengineering, Inc. is a
pharmaceutical company dedicated to improving health through the
development, manufacture and commercialization of a broad range of
prescription and over the counter products in China. Statements
made in this press release are forward-looking and are made
pursuant to the safe harbor provisions of the Securities Litigation
Reform Act of 1995. Such statements involve risks and uncertainties
that may cause actual results to differ materially from those set
forth in these statements. The economic, competitive, governmental,
technological and other factors identified in the Company's filings
with the Securities and Exchange Commission, including the Form
10-K for the year ended December 31, 2008, may cause actual results
or events to differ materially from those described in the forward
looking statements in this press release. The Company undertakes no
obligation to publicly update or revise any forward-looking
statements, whether because of new information, future events, or
otherwise. AMERICAN ORIENTAL BIOENGINEERING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS ASSETS JUNE 30, DECEMBER 31,
2009 2008 (UNAUDITED) CURRENT ASSETS Cash and cash equivalents
$100,730,402 $70,636,510 Accounts receivable, net of reserve of
$505,433 and $226,330 at June 30, 2009 and December 31, 2008,
respectively 31,396,881 36,982,167 Inventories, net 16,829,834
13,042,123 Advances to suppliers 3,135,694 3,593,979 Notes
receivable 81,075 708,076 Refundable deposit -- 6,396,996 Deferred
tax assets 421,660 347,216 Other current assets 937,087 744,903
Total Current Assets 153,532,633 132,451,970 LONG-TERM ASSETS
Property, plant and equipment, net 96,151,689 98,154,443 Land use
rights, net 148,301,203 148,988,870 Deposit for long-term assets
6,717,514 6,347,174 Construction in progress 25,871,656 25,385,835
Deferred tax assets 1,327,627 1,313,832 Other intangible assets,
net 21,146,928 23,690,440 Goodwill 28,543,226 28,543,226 Long-term
investment and advance 55,452,267 54,963,064 Unamortized financing
cost 3,751,838 4,215,983 Total Long-Term Assets 387,263,948
391,602,867 TOTAL ASSETS $540,796,581 $524,054,837 LIABILITIES AND
EQUITY JUNE 30, DECEMBER 31, 2009 2008 (UNAUDITED) CURRENT
LIABILITIES Accounts payable $12,548,451 $12,287,887 Notes payables
3,011,486 3,262,877 Other payables and accrued expenses 14,251,673
19,766,652 Taxes payable 625,261 420,671 Short-term bank loans
6,720,430 7,140,148 Current portion of long-term bank loans 59,396
58,659 Other liabilities 2,511,295 2,253,440 Deferred tax liability
1,121,738 846,026 Total Current Liabilities 40,849,730 46,036,360
LONG-TERM LIABILITIES Long-term bank loans, net of current portion
774,641 804,521 Long-term notes payable -- 269,908 Deferred tax
liabilities 15,963,766 16,083,768 Convertible notes 115,000,000
115,000,000 Total Long-Term Liabilities 131,738,407 132,158,197
TOTAL LIABILITIES 172,588,137 178,194,557 COMMITMENTS EQUITY
SHAREHOLDERS' EQUITY Preferred stock, $0.001 par value; 2,000,000
shares authorized; 1,000,000 shares issued and outstanding at June
30, 2009 and December 31, 2008, respectively 1,000 1,000 Common
stock, $0.001 par value; 150,000,000 shares authorized; 78,301,439
and 78,249,264 shares issued and outstanding at June 30, 2009 and
December 31, 2008, respectively 78,301 78,249 Common stock to be
issued 311,999 376,335 Prepaid forward repurchase contract
(29,998,616) (29,998,616) Additional paid-in capital 196,752,860
195,741,544 Retained earnings (the restricted portion of retained
earnings is $29,532,699 at June 30, 2009 and December 31, 2008,
respectively) 171,019,548 149,923,681 Accumulated other
comprehensive income 29,510,788 29,086,006 Total Shareholders'
Equity 367,675,880 345,208,199 NON-CONTROLLING INTEREST 532,564
652,081 TOTAL EQUITY 368,208,444 345,860,280 TOTAL LIABILITIES AND
EQUITY $540,796,581 $524,054,837 AMERICAN ORIENTAL BIOENGINEERING,
INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME (UNAUDITED) THREE MONTHS ENDED SIX MONTHS
ENDED JUNE 30, JUNE 30, 2009 2008 2009 2008 REVENUES $71,222,037
$59,010,005 $117,299,227 $97,778,603 COST OF GOODS SOLD 29,594,923
18,928,447 47,255,261 31,406,083 GROSS PROFIT 41,627,114 40,081,558
70,043,966 66,372,520 Selling and marketing 9,396,129 7,687,892
14,607,631 12,717,600 Advertising 7,779,936 7,452,231 13,347,293
11,846,572 General and administrative 4,315,714 5,253,274 8,881,357
9,165,957 Depreciation and amortization 1,850,274 1,010,461
3,709,189 1,987,671 Total operating expenses 23,342,053 21,403,858
40,545,470 35,717,800 INCOME FROM OPERATIONS 18,285,061 18,677,700
29,498,496 30,654,720 EQUITY IN EARNINGS (LOSS) FROM UNCONSOLIDATED
ENTITIES (173,258) (640,008) 264,536 (641,067) INTEREST INCOME
(EXPENSE), NET (1,620,069) (30,616) (3,199,338) (13,769) OTHER
INCOME (EXPENSE), NET (16,329) (255,770) (114,938) (356,502) INCOME
BEFORE INCOME TAXES 16,475,405 17,751,306 26,448,756 29,643,382
INCOME TAXES 3,369,107 3,891,614 5,472,406 6,361,562 NET INCOME
13,106,298 13,859,692 20,976,350 23,281,820 NET INCOME ATTRIBUTABLE
TO NON- CONTROLLING INTEREST 123,068 -- 119,517 -- NET INCOME
ATTRIBUTABLE TO CONTROLLING INTEREST 13,229,366 13,859,692
21,095,867 23,281,820 OTHER COMPREHENSIVE INCOME Foreign currency
translation gain, net of tax 46,316 5,154,761 424,782 12,089,196
TOTAL OTHER COMPREHENSIVE INCOME, NET OF TAX 46,316 5,154,761
424,782 12,089,196 COMPREHENSIVE INCOME $13,275,682 $19,014,453
$21,520,649 $35,371,016 NET INCOME PER SHARE BASIC $0.18 $0.18
$0.28 $0.30 DILUTED $0.17 $0.18 $0.28 $0.30 WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING BASIC 74,582,920 78,223,659 74,560,809
78,207,405 DILUTED 88,815,593 78,223,659 86,939,711 78,208,181
DATASOURCE: American Oriental Bioengineering, Inc. CONTACT: Ashley
M. Ammon of Integrated Corporate Relations, Inc., +1-203-682-8208
Web site: http://www.bioaobo.com/
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