China Botanic Pharmaceutical Inc., a biopharmaceutical and botanical products developer in the People’s Republic of China, today announced financial results for the three months ended July 31, 2011, reflecting increases across the board.
Third quarter net sales increased 33.6 percent to $12.4 million compared to $9.3 million during the same period in 2010. The company attributes the increase mainly to a year-over-year increase in average selling prices of the company’s products.
Net income for the third quarter of 2011 rose 73.0 percent to $2.5 million, or $0.07 per diluted share.
Gross profit increased 60.8 percent to $7.5 million compared to $4.6 million in the third quarter of fiscal 2010. Gross margin increased to 60.3 percent as compared to 50.1 percent in the comparable quarter of 2010. Price increases in all the company’s products countered modest increases in raw material prices and fueled growth in gross profit.
Operating expenses for the third quarter of fiscal 2011 were $4.5 million, as compared to $3.2 million in the same period last year. Operating income in the third quarter of 2011 was $3.0 million compared to $1.4 million in the third quarter of 2010. Operating margin increased year-over-year to 24.1 percent from 15.5 percent.
“We are pleased to report double-digit revenue and net income growth in the third quarter of fiscal year 2011. Our strong growth in sales, profitability, and operating cash flow during the quarter was largely driven by increase in our average selling prices and four new products introduced in the fourth quarter of fiscal year 2010,” Shaoming Li, chairman and CEO of China Botanic stated in the press release.
Li also highlighted strong sales of the company’s Siberian Ginseng products, which accounted for 50 percent of total third-quarter 2011 revenue.
As of July 31, 2011, the company had cash and cash equivalents of approximately $38.3 million; total current assets of approximately $58.9 million; working capital of approximately $45.8 million as compared to $47.1 million for the fiscal year ended October 31, 2010; and no long-term debt on its balance sheet as of July 31, 2011.
Moving forward, China Botanical will pay special attention to several products that it believes will contribute to the company meeting its 2011 guidance, as well as to its Ah City project.
“We will continue to focus on our botanical anti depression and nerve regulations products, and continue to invest in research and development of these products,” Li stated. “We remain confident that we will meet our fiscal year 2011 guidance for revenue in the range of $70.6 million and $71.7 million and net income of $25.5 million. We have completed the architectural design of our Ah City phase two project and are in the process of obtaining approval from relevant government authorities. and expect to begin construction following receipt of approval documents. The Ah City phase two project is expected to be completed in the end of 2012. In the longer term, we expect Ah City natural and pharmaceutical plant expansion and new products which are currently in our R&D pipeline will provide sizeable contribution to our future revenue and net income growth.”
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