Exhibit 99.1
/C O R R E C T I O N — American Oriental Bioengineering, Inc./
In the news release “American Oriental Bioengineering Reports First Quarter 2009 Financial Results”, issued earlier today by American Oriental Bioengineering, Inc. over PR Newswire, we are advised by the company that the column headings in the Balance Sheet under “LIABILITIES AND SHAREHOLDERS’ EQUITY” should be “March 31, 2009” and “December 31, 2008”, not as originally issued inadvertently. Full corrected text follows:
American Oriental Bioengineering Reports
First Quarter 2009 Financial Results
New York, May 11, 2009 — American Oriental Bioengineering, Inc. (NYSE: AOB), 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 first quarter ended March 31, 2009.
Financial Results
Revenue in the first quarter of 2009 increased 18.9% year over year to $46.1 million from $38.8 million, reflecting continued demand for the Company’s core pharmaceutical and nutraceutical products. Revenue from pharmaceutical products increased 8.9% to $34.7 million from $31.9 million in the prior year’s first quarter. Prescription pharmaceutical products revenue increased 14.5% to $16.2 million during the first quarter of 2009, reflecting prescription formulation Jinji and CCXA products, which offset declines in Shuanghuanglian Injection Powder (“SHL”). OTC pharmaceutical products generated $18.5 million in revenue during the first quarter of 2009, roughly flat to the prior year period, reflecting continued demand for Boke nasal spray and Jinji Yimucao products and a shift of Jinji Capsule products from OTC to prescription sales. Nutraceutical products generated revenue of approximately $8.9 million in the first quarter of 2009, up 29.0% from the prior year period, reflecting continued demand for peptide products and an expanded distribution network versus the prior year’s first quarter. The Company generated $2.5 million in distribution revenue in the first quarter of 2009 from Nuo Hua’s majority owned subsidiary.
Gross profit in the first quarter of 2009 increased 8.1% to $28.4 million from $26.3 million in the first quarter of 2008. Gross margin was 61.7%, compared with 67.8% in the prior year period, reflecting lower margin distribution revenue and CCXA’s generic product sales.
Operating income in the first quarter was $11.2 million compared with $12.0 million in the prior year period, reflecting a 20.2% increase in operating expenses to $17.2 million in the first quarter of 2009 from $14.3 million in the prior year period. General and administration expenses as well as selling and marketing expenses increased 9.3% to $9.8 million from $8.9 million in the prior year period. The increase primarily reflects marketing and promotional initiatives related to Jinji and Boke products. Advertising expense increased 26.7% to $5.6 million in the first quarter of 2009, compared to $4.4 million in the prior year period.
Net income for the first quarter of 2009 was $7.9 million, compared to $9.4 million in the prior year period. Excluding the $1.7 million of interest expense related to the Company’s outstanding convertible notes in the first quarter of 2009, which did not occur in the first quarter of 2008, net income performance was roughly flat on a year over year basis. Net income per diluted share was $0.11 in the first quarter of 2009 compared to $0.12 per diluted share in the first quarter of 2008.
As of March 31, 2009, the Company had $73.9 million in cash and generated approximately $3.6 million of operating cashflow during the quarter.
Mr. Tony Liu, Chairman and Chief Executive Officer of American Oriental Bioengineering, commented “We are pleased with our first quarter performance and have met our key near-term objective to foster a dynamic business model that is diversified across prescription, OTC and nutraceutical products. Notably, our distribution business began to strengthen overall performance this quarter, contributing to net income as anticipated, and enlarging our distribution reach, particularly for our prescription pharmaceutical products. We are more flexible today than we were one year ago and, because of this, we can quickly adapt to change and capitalize on new opportunities despite the uncertain regulatory environment. Our marketing capabilities, extensive distribution platform, compelling product portfolio and ongoing rural expansion offset anticipated challenges in SHL sales during the first quarter of 2009 and we remain focused on becoming a top five pharmaceutical company in China.”
Conference Call
The Company will hold a conference call at 8:00 am ET on May 11, 2009 to discuss first quarter 2009 results. Listeners may access the call by dialing 1-866-798-2884 or 1-617-614-6207 for international callers, access code: 34266051. A webcast will also be available through AOBO’s website at www.bioaobo.com. A replay of the call will be available through May 18, 2009. Listeners may access the replay by dialing 1-888-286-8010 or 1-617-801-6888 for international callers, access code: 57318398.
About American Oriental Bioengineering, Inc.
American Oriental Bioengineering, Inc. is a China-based pharmaceutical company dedicated to improving health through the development, manufacture and commercialization of a broad range of prescription and over the counter products.
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.
Integrated Corporate Relations, Inc.
Ashley M. Ammon
203-682-8208
AMERICAN ORIENTAL BIOENGINEERING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)
THREE MONTHS ENDED March 31 | ||||||||
2009 | 2008 | |||||||
REVENUES | $ | 46,077,190 | $ | 38,768,598 | ||||
COST OF GOODS SOLD | 17,660,338 | 12,477,636 | ||||||
GROSS PROFIT | 28,416,852 | 26,290,962 | ||||||
Selling and marketing | 5,211,502 | 5,029,708 | ||||||
Advertising | 5,567,357 | 4,394,341 | ||||||
General and administrative | 4,565,643 | 3,912,683 | ||||||
Depreciation and amortization | 1,858,915 | 977,210 | ||||||
Total operating expenses | 17,203,417 | 14,313,942 | ||||||
INCOME FROM OPERATIONS | 11,213,435 | 11,977,020 | ||||||
EQUITY IN EARNINGS (LOSS) FROM UNCONSOLIDATED ENTITIES | 437,794 | — | ||||||
INTEREST INCOME (EXPENSE), NET | (1,579,269 | ) | 16,847 | |||||
OTHER (EXPENSE), NET | (98,609 | ) | (101,790 | ) | ||||
INCOME BEFORE INCOME TAXES | 9,973,351 | 11,892,077 | ||||||
INCOME TAXES | 2,103,299 | 2,469,948 | ||||||
NET INCOME | 7,870,052 | 9,422,129 | ||||||
NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTEREST | (3,551 | ) | — | |||||
NET INCOME ATTRIBUTABLE TO CONTROLLING INTEREST | 7,866,501 | 9,422,129 | ||||||
OTHER COMPREHENSIVE INCOME | ||||||||
Foreign currency translation gain, net of tax | 378,466 | 6,934,434 | ||||||
OTHER COMPREHENSIVE INCOME, NET OF TAX | 378,466 | 6,934,434 | ||||||
COMPREHENSIVE INCOME | $ | 8,244,967 | $ | 16,356,563 | ||||
NET INCOME PER COMMON SHARE | ||||||||
BASIC | $ | 0.11 | $ | 0.12 | ||||
DILUTED | $ | 0.11 | $ | 0.12 | ||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | ||||||||
BASIC | 74,538,593 | 78,191,242.00 | ||||||
DILUTED | 86,917,603 | 78,192,795.00 |
AMERICAN ORIENTAL BIOENGINEERING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
MARCH 31, 2009 | DECEMBER 31, 2008 | |||||
UNAUDITED | ||||||
CURRENT ASSETS | ||||||
Cash and cash equivalents | $ | 73,899,602 | $ | 70,636,510 | ||
Accounts receivable, net of reserve of $130,631 and $226,330 at March 31, 2009 and December 31, 2008, respectively | 31,812,778 | 36,982,167 | ||||
Inventories, net of provision for slow moving inventories | 17,954,075 | 13,042,123 | ||||
Advances to suppliers | 2,241,176 | 3,593,979 | ||||
Notes receivable | 1,039,914 | 708,076 | ||||
Refundable deposit | 6,397,106 | 6,396,996 | ||||
Tax refund claims | 823,737 | — | ||||
Deferred tax assets | 456,444 | 347,216 | ||||
Other current assets | 863,554 | 744,903 | ||||
Total Current Assets | 135,488,386 | 132,451,970 | ||||
LONG-TERM ASSETS | ||||||
Plant and equipment, net | 97,192,300 | 98,154,443 | ||||
Land use rights, net | 148,319,092 | 148,988,870 | ||||
Deposit for long-term assets | 6,355,148 | 6,347,174 | ||||
Construction in progress | 25,675,899 | 25,385,835 | ||||
Deferred tax assets | 1,322,194 | 1,313,832 | ||||
Other intangible assets, net | 22,426,393 | 23,690,440 | ||||
Goodwill | 28,543,226 | 28,543,226 | ||||
Investments in and advances to equity investments | 55,554,438 | 54,963,064 | ||||
Unamortized financing costs | 3,983,911 | 4,215,983 | ||||
Total Long-Term Assets | 389,372,601 | 391,602,867 | ||||
TOTAL ASSETS | $ | 524,860,987 | $ | 524,054,837 | ||
LIABILITIES AND SHAREHOLDERS’ EQUITY
MARCH 31, 2009 | DECEMBER 31, 2008 | |||||||
UNAUDITED | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable | $ | 10,355,431 | $ | 12,287,887 | ||||
Notes payables | 3,277,285 | 3,262,877 | ||||||
Other payables and accrued expenses | 13,578,351 | 19,766,652 | ||||||
Taxes payable | — | 420,671 | ||||||
Short-term bank loans | 7,441,276 | 7,140,148 | ||||||
Current portion of long-term bank loans | 59,022 | 58,659 | ||||||
Other liabilities | 2,738,113 | 2,253,440 | ||||||
Deferred tax liability | 999,454 | �� | 846,026 | |||||
Total Current Liabilities | 38,448,932 | 46,036,360 | ||||||
LONG-TERM LIABILITIES | ||||||||
Long-term bank loans | 789,579 | 804,521 | ||||||
Long-term notes payable | — | 269,908 | ||||||
Deferred tax liabilities | 16,102,048 | 16,083,768 | ||||||
Convertible Note | 115,000,000 | 115,000,000 | ||||||
Total Long-Term Liabilities | 131,891,627 | 132,158,197 | ||||||
TOTAL LIABILITIES | 170,340,559 | 178,194,557 | ||||||
EQUITY | ||||||||
SHAREHOLDERS’ EQUITY | ||||||||
Preferred stock, $0.001 par value; 2,000,000 shares authorized; 1,000,000 shares issued and outstanding at March 31, 2009 and December 31, 2008, respectively | 1,000 | 1,000 | ||||||
Common stock, $0.001 par value; 150,000,000 shares authorized; 78,291,735 and 78,249,264 shares issued and outstanding at March 31, 2009 and December 31, 2008, respectively. | 78,292 | 78,249 | ||||||
Common stock to be issued | 177,000 | 376,335 | ||||||
Prepaid forward repurchase contract | (29,998,616 | ) | (29,998,616 | ) | ||||
Additional paid-in capital | 196,352,466 | 195,741,544 | ||||||
Retained earnings (the restricted portion of retained earnings is $29,532,699 at March 31, 2009 and December 31, 2008) | 157,790,182 | 149,923,681 | ||||||
Accumulated other comprehensive income | 29,464,472 | 29,086,006 | ||||||
Total Shareholders’ Equity | 353,864,796 | 345,208,199 | ||||||
NONCONTROLLING INTEREST | 655,632 | 652,081 | ||||||
TOTAL EQUITY | 354,520,428 | 345,860,280 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 524,860,987 | $ | 524,054,837 | ||||