NEW YORK, March 14, 2011 /PRNewswire-Asia-FirstCall/ --
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,
today announced financial results for the fourth quarter and fiscal
year ended December 31, 2010.
Fourth Quarter 2010 Financial
Performance
In the fourth quarter of 2010, revenue decreased to $83.4 million from $100.0
million in the same period of 2009, primarily caused by
decreased sales from pharmaceutical products, partially offset by
increased sales from distribution business.
- The Company generated $79.4
million from its manufacturing business, in the fourth
quarter of 2010, compared with $96.4
million in the prior year period. Revenue from
pharmaceutical products decreased 19.7% to $68.3 million from $85.0
million in the prior year period. Nutraceutical products
generated revenue of approximately $11.1
million in the fourth quarter of 2010, down 2.8% from
$11.4 million in the prior year
period. The revenue performance reflects the Company's
strategic shift of revenue mix toward higher-margin products to
minimize the impact from the increased cost of certain raw
materials and the continuing government price cut on certain
products.
- The Company generated $3.9
million from its distribution business, Nuo Hua, in the fourth quarter of 2010, an
increase of 10.2% from $3.6 million
in the prior year period, primarily due to Nuo Hua's expanding market coverage.
Gross profit in the fourth quarter of 2010 was $42.4 million compared to $52.6 million in the fourth quarter of 2009.
Gross margin was 50.9%, compared to 52.6% in the prior year period.
The Company continued its efforts to manage the margin pressure,
which was mainly caused as a result of the combined impact of the
increased cost of certain raw materials, the government's pricing
control on EDL drugs, and increased labor costs.
Operating income in the fourth quarter of 2010 decreased to
$5.9 million compared with
$14.9 million in the prior year
period. Selling, general and administrative expenses were
$18.1 million, or 21.7% of total
revenue, compared to $21.2 million,
or 21.2% of total revenue in the prior year period. This is
primarily driven by management's continuing efforts at cost
control. Advertising expense increased to $12.0 million in the fourth quarter of 2010,
compared to $9.5 million in the prior
year period, driven by increased efforts to increase brand
awareness and market recognition. Research and development expenses
were $4.6 million, or 5.5% of total
revenue, compared with $5.4 million,
or 5.4% of total revenue, in the prior year period. The company
emphasizes the importance of science and technology and continues
investment in R&D spending related to create new products, and
improve existing product portfolio.
Net income attributable to controlling interest for the fourth
quarter of 2010 was $2.8 million, or
$0.04 per diluted share, compared to
$11.7 million, or $0.14 per diluted share, in the prior year
period.
2010 Financial Performance
Revenue for the fiscal year 2010 increased 3.3% to $305.9 million from $296.2
million in 2009, primarily resulted from continuing customer
demand and increased sales coverage. Prescription pharmaceutical
products generated revenue of $129.2
million, up 11.6% from $115.8
million in the year 2009, and OTC pharmaceutical products
generated revenue of $120.9 million,
down 5.8% from $128.4 million in
2009. Revenue from nutraceutical products increased 4.8% to
$41.0 million from $39.1 million in the year before. Revenue
from Nuo Hua's distribution business
was $14.8 million compared to
$12.9 million in 2009, primarily
resulted from expanded sales coverage and distribution network
especially in the rural areas. During the same time period, gross
profit decreased by 5.4% to $157.8
million from $166.8 million in
the year 2009.
Operating income in the year 2010 was $30.4 million compared to $58.8 million in the year 2009. Net income
attributable to controlling interest for the year 2010 was
$16.3 million, or $0.22 per diluted share, compared to $41.4 million, or $0.53 per diluted share, in the prior year
period.
Balance Sheet
As of December 31, 2010, the
Company had $94.6 million in cash and
cash equivalents, and generated approximately $8.0 million of operating cash flow during the
year of 2010. Working capital was $162.2
million in 2010, reflecting an increase of 23.9% compared to
$130.9 million in 2009.
Mr. Tony Liu, Chairman and Chief
Executive Officer of American Oriental Bioengineering, commented,
"We are pleased with our fiscal year 2010 financial results in
which we demonstrated steady growth despite the increasingly
challenging economic environment worldwide and China's rapidly changing regulatory
environment. Our growth in 2010 was consistent with our
expectations and reflects our continued efforts on profitability
focus and cost control. We dynamically adjust our product mix to
minimize the negative impact from the increased cost of certain raw
materials, as well as the government's price cut on certain drugs.
In addition, our long-term investments in science and technology
have achieved initial results, which were demonstrated by the
strong sales from the new products supported by our R&D
efforts. Overall, we remain enthusiastic about the tremendous
opportunities in China's
healthcare sector, and we are looking forward to more progress in
the fiscal year ahead."
Conference Call
The Company will hold a conference call at 8:00 am ET on Tuesday,
March 15, 2011, to discuss its results. Listeners may access
the call by dialing 1-800-901-5231 or 1-617-786-2961 for
international callers, access code: 57286885. A webcast will also
be available through AOB's website at www.bioaobo.com. A replay of
the call will be available through March 22,
2011. Listeners may access the replay by dialing
1-888-286-8010 or 1-617-801-6888 for international callers, access
code: 91403928.
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.
Safe Harbor Statement
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, 2010, 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.
Contact:
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ICR, LLC
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Christine Duan or Ashley
Ammon
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203-682-8200
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AMERICAN
ORIENTAL BIOENGINEERING, INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
INCOME
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THREE MONTHS
ENDED
DECEMBER 31
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TWELVE
MONTHS ENDED
DECEMBER 31
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2010
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2009
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2010
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2009
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Revenues
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$
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83,365,061
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$
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100,032,887
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$
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305,944,085
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$
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296,150,780
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Cost of sales
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40,966,778
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47,425,009
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148,186,531
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129,367,775
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GROSS PROFIT
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42,398,283
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52,607,878
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157,757,554
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166,783,005
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Selling, general and
administrative expenses
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18,112,902
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21,163,863
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66,439,702
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62,164,936
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Advertising costs
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11,971,242
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9,536,612
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38,920,905
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31,896,992
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Research and development
costs
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4,610,737
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5,417,834
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15,365,131
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7,922,357
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Depreciation and amortization
expenses
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1,760,232
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1,591,061
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6,662,237
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6,038,625
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Total operating
expenses
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36,455,113
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37,709,370
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127,387,975
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108,022,910
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INCOME FROM
OPERATIONS
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5,943,170
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14,898,508
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30,369,579
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58,760,095
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Equity in earnings (losses) from
unconsolidated entities
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196,134
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2,374,211
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384,991
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2,075,139
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Interest expense, net
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(1,506,962)
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(1,440,239)
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(5,900,055)
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(5,746,382)
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Other expenses, net
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(119,396)
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(405,558)
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(204,736)
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(569,661)
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INCOME BEFORE INCOME
TAXES
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4,512,946
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15,426,922
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24,649,779
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54,519,191
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Income tax
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1,758,188
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3,753,893
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8,336,366
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13,216,986
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NET INCOME
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2,754,758
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11,673,029
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16,313,413
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41,302,205
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Net loss (income) attributable
to non-controlling interest
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8,382
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79
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27,937
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118,945
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NET INCOME ATTRIBUTABLE TO
CONTROLLING INTEREST
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2,763,140
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11,673,108
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16,341,350
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41,421,150
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OTHER COMPREHENSIVE
INCOME
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Foreign currency translation
gain
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6,350,139
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706,638
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16,076,027
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1,362,038
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OTHER COMPREHENSIVE
INCOME
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6,350,139
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706,638
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16,076,027
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1,362,038
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COMPREHENSIVE
INCOME
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$
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9,113,279
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$
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12,379,746
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$
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32,417,377
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$
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42,783,188
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EARNINGS PER COMMON
SHARE
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Basic
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$
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0.04
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$
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0.16
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$
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0.22
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$
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0.56
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Diluted
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$
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0.04
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$
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0.14
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$
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0.22
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$
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0.53
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WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING
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Basic
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74,956,648
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74,673,067
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74,810,016
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74,612,602
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Diluted
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75,983,964
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89,494,201
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75,724,826
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89,286,621
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AMERICAN
ORIENTAL BIOENGINEERING, INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
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DECEMBER
31,
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DECEMBER
31,
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2010
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2009
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CURRENT ASSETS
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Cash and cash
equivalents
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$
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94,568,520
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$
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91,126,486
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Restricted Cash
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537,297
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3,298,379
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Accounts and notes receivable,
net
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80,598,919
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57,504,454
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Inventories, net
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12,665,586
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10,015,711
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Advances to suppliers and
prepaid expenses
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14,246,144
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13,901,180
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Deferred tax assets
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649,503
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824,451
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Other current assets
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2,986,005
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1,246,647
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Total Current
Assets
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206,251,974
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177,917,308
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LONG-TERM ASSETS
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Property, plant and equipment,
net
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109,547,616
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95,468,265
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Land use rights, net
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155,433,311
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153,604,196
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Other long term
assets
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8,167,880
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7,909,086
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Construction in
progress
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22,516,044
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28,975,386
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Other intangible assets,
net
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14,889,127
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18,695,554
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Goodwill
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33,164,121
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33,164,121
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Investments in and advances to
equity investments
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59,068,491
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57,325,887
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Deferred tax assets
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147,024
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134,268
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Unamortized financing
costs
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2,359,404
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3,287,694
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Total Long-Term
Assets
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405,293,018
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398,564,457
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TOTAL ASSETS
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$
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611,544,992
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$
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576,481,765
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LIABILITIES AND SHAREHOLDERS’
EQUITY
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DECEMBER
31,
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DECEMBER
31,
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2010
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2009
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CURRENT
LIABILITIES
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Accounts payable
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$
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10,716,686
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$
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7,497,143
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Notes payable
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537,297
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3,392,575
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Other payables and accrued
expenses
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18,039,557
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22,320,757
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Taxes payable
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1,237,169
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947,338
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Short-term bank loans
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6,957,258
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10,384,368
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Current portion of long-term
bank loans
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61,405
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60,108
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Other liabilities
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6,284,107
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2,199,280
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Deferred tax
liabilities
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243,304
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172,473
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Total Current
Liabilities
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44,076,783
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46,974,042
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LONG-TERM
LIABILITIES
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Long-term bank loans, net of
current portion
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679,866
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743,957
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Deferred tax
liabilities
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15,837,479
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15,961,465
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Unrecognized tax
benefits
|
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5,050,157
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2,746,561
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Convertible Notes
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115,000,000
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115,000,000
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Total Long-Term
Liabilities
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136,567,502
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134,451,983
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TOTAL LIABILITIES
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180,644,285
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181,426,025
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EQUITY
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SHAREHOLDERS’
EQUITY
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Preferred stock, $0.001 par
value; 2,000,000 shares authorized;
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1,000,000 shares issued
and outstanding at December 31, 2010 and
December 31, 2009, respectively
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1,000
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1,000
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Common stock, $0.001 par value;
150,000,000 shares authorized;
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78,598,604 and 78,321,439 shares
issued and outstanding at December 31, 2010 and December 31,
2009, respectively.
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78,598
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|
78,321
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Common stock to be
issued
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350,500
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388,000
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Prepaid forward repurchase
contract
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|
(29,998,616)
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(29,998,616)
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Additional paid-in
capital
|
|
203,322,671
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|
199,829,921
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Retained earnings (the
restricted portion of retained earnings is
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$26,471,124 and $23,757,901 at
December 31, 2010 and December 31, 2009, respectively)
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|
207,515,104
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191,173,754
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Accumulated other comprehensive
income
|
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49,126,251
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|
33,050,224
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Total Shareholders’
Equity
|
|
430,395,508
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394,522,604
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Non-controlling
Interest
|
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505,199
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|
533,136
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TOTAL EQUITY
|
|
430,900,707
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395,055,740
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TOTAL LIABILITIES AND
EQUITY
|
$
|
611,544,992
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$
|
576,481,765
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-
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-
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SOURCE American Oriental Bioengineering, Inc.