Bohai Pharmaceuticals
Reports Record Financial Results for Fiscal First Quarter Ended September
30, 2010
11/12/2010 4:15 PM -
Business Wire
Net Revenues Increase
22% to $17.0 Million;Net Income Rises 57% to $3.0 Million;Basic EPS of
$0.18, or $0.15 Fully Diluted
for the Fiscal First
Quarter;Earnings Conference Call Scheduled for Monday, November 15 at 11:00
a.m. Eastern
YANTAI, China, Nov 12,
2010 (BUSINESS WIRE) --
Bohai Pharmaceuticals
Group, Inc. (OTCBB/OTCQB: BOPH), a China-based pharmaceutical company engaged
in the production, manufacturing and distribution of Traditional Chinese
Medicine (TCM) in China, today reported record financial results for its
first quarter of fiscal 2011 ended September 30, 2010.
Summary of Fiscal First
Quarter Ended September 30, 2010 Financial Results:
Net Revenues of $17.0
million, an increase of 22% from $14.0 million in 2009 Gross profit of
$13.6 million, compared to $11.7 million in 2009 Net income of $3.0 million,
an increase of 57% from $1.9 million in 2009 Fully diluted EPS of $0.15
for fiscal Q1 2011 Basic EPS of $0.18 for fiscal Q1 2011, exceeding performance
for Q1 2009
"Improving upon our past
financial achievements, Bohai is excited to announce its record results
for the first quarter of fiscal 2011," said Mr. Hongwei Qu, Chairman, President
and CEO of Bohai Pharmaceuticals Group. "During the quarter, we recognized
double digit top line growth by focusing our strong marketing efforts on
our lead products while at the same time continuing the roll out of our
five new TCM products. We were also able to cut administrative costs, allowing
us to boost net income by 57% compared to the same period last year. We
look forward to making further progress with our sales initiatives as we
continue to take advantage of the Chinese government's growing support
of the TCM industry through the implementation of its new healthcare policies."
As a key driver of Bohai's
growth, the company's three lead TCM products (Tongbi Capsules and Tablets
and Lung Nourishing Cream) are eligible for reimbursement under China's
national medical insurance program enacted in 2009. Bohai believes that
this provides a distinct advantage to the company's business strategy,
which places a particular marketing focus on these lead products going
forward. Among other features, this new government plan seeks to extend
national medical insurance coverage to China's rural areas, with a target
population in excess of 900 million potential healthcare consumers. The
plan also seeks to promote the use of TCM products. Bohai currently produces
15 TCM products in China and is authorized to produce an additional 14
products.
Sales in the first quarter
were generated mainly from Bohai's lead products, Lung Nourishing Cream,
Tongbi Capsules and Tongbi Tablets, which together represented over 70%
of Bohai's total net revenues. However, progress has been made on the five
products that Bohai introduced in April and May of 2010. Although the new
product sales only represented less than 5% of total net revenues in the
first quarter, the net revenues for the five new products in the quarter
ended September 30, 2010 increased by 160% compared to the quarter ended
June 30, 2010.
Mr. Qu added, "We anticipate
our overall net revenues will continue to increase due to the national
medical and health plan initiated by Chinese government in 2009, which
is expected to eventually cover individual health insurance over 90% of
China's population by 2011. As these policies continue to be implemented,
we believe endorsements for Traditional Chinese Medicine, along with its
coverage and reimbursement from hospitals and medical centers throughout
China, will be a major driver of growth for Bohai as we seek to increase
revenues, earnings and ultimately shareholder value."
Highlights for the Fiscal
2011 First Quarter:
Net revenue was $17.0
million along with net income of $3.0 million, resulting in basic EPS of
$0.18 in the first quarter of fiscal 2011 ended September 30, 2010. Further
implementation of a proactive marketing strategy in the quarter significantly
increased revenue on all of the TCM products Bohai currently sells. In
2009, the PRC government began the implementation of a new national medical
and health plan. Among other features, this new plan seeks to extend national
medical insurance coverage to China's rural areas, with a target population
in excess of 900 million, and to promote the use of TCM products. Sales
in the fiscal first quarter were generated mainly from Bohai's lead products,
Lung Nourishing Cream, Tongbi Capsules and Tongbi Tablets, which together
represented over 70% of total net revenues. Bohai introduced five products
in April and May of this year, increasing its total TCM offering from 10
to 15 products. Net revenues for these five new products constituted 5%
of total period sales but increased 160% from the prior quarter ended June
30, 2010. Net income margin increased to 18% compared to 14% from the same
quarter last year, while selling, general and administrative expenses decreased
8% to $8.6 million due to cost reduction in advertisement and other operating
expenses. Cash flow from operating activities for the period ended September
30, 2010 was $2.8 million. A cash payment of $4.7 million was made towards
the purchase of prepaid land use rights from the Shandong provincial government
that Bohai anticipates utilizing for future factory expansion. An additional
$2.3 million is due by March 31, 2011. Throughout the remainder of fiscal
2011, Bohai expects to increase marketing and advertising for its growing
portfolio of TCM medicines.
In China, Traditional
Chinese Medicine is not an alternative form of therapy but is used in the
state-run hospitals alongside modern medicine. For its practitioners and
advocates, TCM is a complete medical system that is used to treat disease
in all its forms. TCM is also believed to promote long term wellness and
vigor and many modern-day drugs have been developed from herbal sources.
Bohai's growth has been
made possible through the company's focused strategy, which emphasizes
quality products and aggressive sales and marketing efforts and also leverages
the "protected" manufacturing status and national insurance coverage for
certain of its pharmaceutical products. Currently, Bohai has nearly 600
employees, including approximately 300 that are engaged in sales and distribution
in 20 locations throughout China. Utilizing this distribution platform,
and combined with mass media and other marketing methods to build awareness
of its brand, Bohai will seek to grow its revenues and earnings in the
remainder of 2011 and beyond.
Earnings Conference Call
Details:
Bohai will host a conference
call on Monday, November 15, 2010, at 11:00 a.m. Eastern to discuss its
financial results for the first quarter of fiscal 2011 ended September
30, 2010. The teleconference can be accessed by dialing 877-407-8031 when
calling internationally. Please dial in 10 minutes prior to the beginning
of the call. There will be a playback available until December 16, 2010.
To listen to the playback dial 877-660-6853 when calling within the United
States, or 201-612-7415 when calling internationally and use account number:
286, in conjunction with replay ID number: 361002.
About Bohai Pharmaceuticals
Group, Inc.
Based in the city of
Yantai, Shandong Province, China, Bohai Pharmaceuticals Group, Inc. (OTCBB/OTCQB:
BOPH) is engaged in the production, manufacturing and distribution of herbal
pharmaceuticals based on Traditional Chinese Medicine in China. Bohai's
medicines address common health problems such as rheumatoid arthritis,
viral infections, gynecological diseases, cardio vascular issues and respiratory
diseases. Bohai's products are sold either by prescription through hospitals
or over-the-counter through local pharmacies and retail drug store chains.
Bohai has approximately 600 employees, including approximately 300 sales
representatives, operating from 20 offices throughout China. Bohai's three
lead products, Tongbi Capsules, Tongbi Tablets and Lung Nourishing Cream,
are eligible for reimbursement under China's National Medical Insurance
Program.
For comprehensive investor
relations material, including fact sheets, research reports, presentations
and video, please follow the appropriate link: Investor Relations Portal,
Investor Fact Sheet and Overview Video. For additional information, please
visit Bohai's corporate website: www.bohaipharma.com.
Additional Information
Relating to Bohai's Trading Data
Due to certain recent
disruptions in the marketplace relating to quotations on the OTC Bulletin
Board operated by FINRA (OTCBB), incomplete trading data may exist for
certain companies like Bohai. Real-time trading data for Bohai on the OTCQB
market is available through the below link. Readers are advised that OTCQB
market is operated by the owner of otcmarkets.com, and Bohai Pharmaceuticals
Group, Inc. makes no representation or warranty regarding the OTCQB market.
For real-time trading
data for Bohai on the OTCQB market, including Level 2 quotes, please visit:
www.otcmarkets.com/stock/boph/quote.
Cautionary Note Regarding
Forward Looking Statements
This press release, the
operational plans discussed herein and the statements of representatives
of Bohai Pharmaceuticals Group, Inc. (the "Company") related thereto and
in the conference call referenced herein contain, or may contain, among
other things, "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. All statements, other than statements
of historical fact included herein are "forward-looking statements," including
any other statements of non-historical information. These forward-looking
statements are subject to significant known and unknown risks and uncertainties
and are often identified by the use of forward-looking terminology such
as "guidance," "projects," "may," "could," "would," "should," "believes,"
"expects," "anticipates," "estimates," "intends," "plans," "ultimately"
or similar expressions. All forward-looking statements involve material
assumptions, risks and uncertainties, and the expectations contained in
such statements may prove to be incorrect. Investors should not place undue
reliance on these forward-looking statements, which speak only as of the
date of this press release. The Company's actual results could differ materially
from those anticipated in these forward-looking statements as a result
of a variety of factors, including factors and risks discussed in the periodic
reports that the Company files with the Securities and Exchange Commission
(http://www.sec.gov). All forward-looking statements attributable to the
Company or persons acting on its behalf are expressly qualified in their
entirety by these factors. The Company undertakes no duty to update these
forward-looking statements except as required by law.
Bohai Pharmaceuticals Group, Inc. and Subsidiaries
Summary Selected Consolidated Statements
of Operations
---------------------------------------------------------
(in millions, except per share amounts)
(unaudited)
Fiscal three months ended
September 30,
2010 2009
--------- ---------
Net revenues
$ 17.0 $
14.0
Cost of revenues
(3.4 ) (2.2 )
Selling, general and
admin expenses (8.6 )
(9.2 )
--------- - --------- -
Income from operations
5.0 2.6
Other income (expenses)
(0.8 ) (0.1 )
Provision for income
taxes
(1.2 ) (0.6 )
--------- - --------- -
Net income
$ 3.0 $
1.9
========= =========
Basic earnings per share
0.18 0.15
Fully diluted earnings
per share $ 0.15
$ 0.15
========= =========
Basic weighted average
shares
16.5 13.2
Diluted weighted average
shares
22.3 13.2
========= =========
NOTE: The above numbers
may not total correctly due to rounding.
Bohai Pharmaceuticals Group, Inc. and Subsidiaries
Summary Selected Consolidated Balance
Sheet Items
----------------------------------------------------------
(in millions)
(unaudited) As of
As of June 30,
Sept. 30, 2010
2010
----------- -------------
Cash and cash equivalents
$ 15.5 $
17.1
Accounts receivable,
net
12.0
10.4
Inventories
1.7
0.7
Property, plant &
equipment, net
7.9
7.9
Intangible assets, net
17.6
17.3
Total Assets
70.6
64.5
Total current liabilities
10.8
8.8
Total liabilities
16.4
14.4
Total stockholders'
equity $
54.2 $ 50.1
=========== =============
NOTE: The above numbers
may not total correctly due to rounding.
Bohai Pharmaceuticals Group, Inc. and Subsidiaries
Summary Selected Consolidated Cash Flow
Items
------------------------------------------------------------------------
(in millions)
(unaudited)
Fiscal three months ended
September 30,
------------------------
2010 2009
------- -------
Net cash provided (used)
by operating activities $
2.8 $ 2.6
Net cash provided (used)
by investing activities
(4.7 ) (0.0 )
Net cash provided (used)
by financing activities
0.1 (0.0 )
------- ------- -
Net change in cash and
cash equivalents
$ (1.6 ) $ 2.6
======= = =======
NOTE: The above numbers
may not total correctly due to rounding.
SOURCE: Bohai Pharmaceuticals
Group, Inc.
Company Contact: Bohai
Pharmaceuticals Group, Inc. Gene Hsiao, Chief Financial Officer 212-521-4470
or Financial Communications Contact: Trilogy Capital Partners - Asia Darren
Minton, President Toll-free: 800-592-6067 info@trilogy-capital.com
Copyright Business Wire
2010 |
