- Company Reports Record Revenue and Gross Margin Performance -
- Revenue Increased 218% Year Over Year to $18.1 million -
- 42.7% Gross Margin Reached in 1Q 2008 -
PLYMOUTH MEETING, Penn., May 19 /Xinhua-PRNewswire-FirstCall/ -- BMP
Sunstone Corporation (Nasdaq: BJGP) ("BMP Sunstone" or the "Company"),
today announced its financial results from the first quarter of 2008. The
Company intends to file its Form 10Q today.
Key Highlights from the First Quarter of 2008 include:
-- Revenue increased 218% year over year to $18.1 million from $5.7
million in 1Q07
-- Gross profit increased to $7.7 million from $654,000 in 1Q07
-- Gross margin increased to 42.7% from 11.5% in 1Q07
-- Adjusted EBITDA improves to $1,523,000 from a loss of $1.4 million in
1Q07
David Gao, Chief Executive Officer of BMP Sunstone, stated, "Our first
quarter 2008 financial results are the strongest achieved in our Company's
history and reflect the initial revenue and gross margin contributions from
Sunstone. Our growing licensed products business also drove gross margin
improvements and we are excited about the increasing presence we are
realizing at BMP China."
Gao continued, "Through the Sunstone acquisition, we significantly
enhanced our product offering with two of China's leading healthcare brands
in therapeutic areas that we believe are extremely compelling: pediatrics
and women's health. We also expanded our distribution reach into more than
50,000 retail pharmacies in China. With a stronger brand portfolio and a
materially larger retail presence, we remain dedicated to realizing
synergies across our organization in 2008 and beyond."
Revenue for the first quarter of 2008 was $18.1 million, as compared to
$5.7 million in the first quarter of 2007. OTC sales, which reflect
Sunstone revenues, were included in the period from February 18, 2008 to
the end of the quarter, and contributed $9.5 million. Revenue from licensed
products was $1.2 million in the first quarter of 2008 as compared to
$406,000 in the first quarter of 2007. Revenue from distribution was $7.4
million in the first quarter of 2008 compared to $5.3 million in the
comparable period of 2007.
Gross profit increased to $7.7 million from $654,000 in the first
quarter of 2007. This reflects a gross margin of 42.7%, which is a
substantial increase year over year from 11.5% in the first quarter of
2007. The increase in gross margins was due to Sunstone revenue
contributions as well as increased licensed products sales, both of which
carry a higher gross margin than distribution revenue. Gross profit
includes a one time non-cash adjustment of $609,000 related to amortization
on the fair value inventory for the Sunstone acquisition. Excluding this
adjustment, gross profit margin would have been 46.1%.
Loss from operations improved to $1.4 million from $1.8 million in the
first quarter of 2007. Operating expense increases included
Sunstone-related general and administrative expenses, as well as costs
related to additional senior management, administrative and corporate staff
in China. General and administration expenses increased 70% to $3.2 million
in the first quarter of 2008 from $1.9 million in the first quarter of
2007. Excluding the $609,000 purchase accounting adjustment in cost of
sales, described above, the loss from operations improved to $787,000 from
a loss of $1.8 million in the prior year period.
Adjusted EBITDA in the first quarter of 2008 was $1,523,000, which
excludes the impact of $563,000 of stock compensation expense, $977,000 of
amortization debt discount and issuance costs, $802,000 of interest
expense, $609,000 of amortization of fair value inventory for the Sunstone
acquisition, and $470,000 of amortization for the Sunstone acquisition. The
Company incurs significant non-cash charges for depreciation, amortization
and stock compensation expense that may not reflect the Company's operating
performance and ability to generate cash flow from operations. Management
believes that adjusted EBITDA is a worthwhile indicator of the Company's
financial performance. Adjusted EBITDA is a non-GAAP financial measure
within the meaning of the Securities and Exchange Commission (SEC)
regulations. A reconciliation of Adjusted EBITDA to net income is included
in a table at the end of this press release.
Net loss was $2.5 million, or ($0.07) per diluted share. On a pro forma
basis, assuming the Sunstone acquisition was completed on January 1, 2008,
revenues would be $26.8 million, net loss would be ($1.4) million and EPS
would be ($0.04) in the first quarter of 2008.
Balance Sheet
As of March 31, 2008, the Company had cash and cash equivalents as well
as bills receivable totaling $22.8 million. This compares to $22.8 million
as of December 31, 2007. The Company had long-term debt of approximately
$22.5 million as of March 31, 2008.
Business Update
On May 6, 2008, the clinical trial application for Enablex was
officially accepted by China's State Food & Drug Administration. The
clinical trial application acceptance is a key requirement to pursuing the
clinical trial and an integral step toward the completion of the Enablex
commercialization process in China.
Financial Outlook
The Company continues to expect to reach revenue of at least $96.0
million in the full year 2008, with a corresponding net loss of roughly
$3.0 million, or $0.07 per share, based on 39.5 million shares outstanding.
This financial guidance includes the impact of approximately $9.0 million
of non-cash expenses through the year, including but not limited to the
amortization of the debt discount on the Company's long term debt financing
as well as stock compensation expenses. The Company's financial guidance
excludes any pending acquisitions.
Mr. Gao concluded, "Creating cost synergies across our organization
remains a top priority for the future and we also remain committed to our
long-term goal to be one of China's leading specialty pharmaceutical
companies."
Conference Call
The Company will hold a conference call on May 19, 2008, at 8:00 am ET
to discuss fiscal first quarter 2008 results. Listeners may access the call
by dialing 1-888-680-0865 or 1-617-213-4853 for international callers,
access code: 87528378. A webcast will also be available through BMP
Sunstone's website at http://www.bmpsunstone.com . A replay of the call
will be available through May 26, 2008. Listeners may access the replay by
dialing 1-888-286-8010 or 1-617-801-6888 for international callers, access
code: 25780211.
Also note that pre-registration is available to expedite access to the
call. Please visit:
https://www.theconferencingservice.com/prereg/key.process?key=PHRGJ6Y4B .
About BMP Sunstone Corporation
BMP Sunstone Corporation is a specialty pharmaceutical company that is
building a proprietary portfolio of branded pharmaceutical and healthcare
products in China and is pursuing partnerships with other companies seeking
to enter the Chinese pharmaceutical market. It is the only U.S. public
company to offer industry partners a comprehensive suite of market-entry
services in China that includes pre-market entry analysis, clinical trial
management, product registration, market research, as well as
pharmaceutical marketing and distribution. The Company provides
distribution services for a wide range of products, including Western
medicines, traditional Chinese medicines, bio-chemical medicines, medical
applications, branded generic pharmaceuticals, over-the-counter healthcare
products, and home healthcare supplies and equipments. BMP Sunstone's
proprietary portfolio primarily focuses on women's health and pediatrics.
The Company is headquartered in Plymouth Meeting, Pennsylvania.
Safe Harbor Statement
This news release contains forward-looking statements as defined by the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements include statements concerning plans, objectives, goals,
strategies, future events or performance, and underlying assumptions and
other statements that are other than statements of historical facts,
including but not limited to statements about our acquisitions, joint
ventures and management team being able to generate successful results for
2008 and any information regarding guidance for our results for future
periods. These statements are subject to uncertainties and risks including,
but not limited to, our ability to generate additional revenue, control our
expenses and take advantage of synergies between our various subsidiaries
and other risks contained in reports filed by the Company with the
Securities and Exchange Commission. All such forward-looking statements,
whether written or oral, and whether made by or on behalf of the company,
are expressly qualified by the cautionary statements and any other
cautionary statements which may accompany the forward-looking statements.
In addition, the Company disclaims any obligation to update any
forward-looking statements to reflect events or circumstances after the
date hereof.
BMP SUNSTONE CORPORATION
CONSOLIDATED BALANCE SHEET
($ in thousands)
March 31, December 31,
2008 2007
Assets
Current Assets:
Cash and Cash Equivalents $8,398 $22,837
Restricted Cash 1,297 1,297
Accounts Receivable, net of
allowance for doubtful accounts
of $50 and $44, respectively 27,821 11,707
Inventory, net of allowance for
obsolescence of $0 7,581 2,897
Bills Receivable 14,386 --
Note Receivable 659 659
Due from Related Party 2,169 --
Other Receivables 1,499 720
VAT Receivable 870 828
Prepaid Expenses and Other Current
Assets 4,748 2,444
Total Current Assets 69,428 43,389
Restricted Cash -- --
Property and Equipment, Net 23,355 745
Investment in Hong Kong Health
Care -- 33,126
Investments at cost 142 137
Investment in Alliance BMP 15,093 --
Goodwill 65,953 --
Other Assets 923 3,053
Intangible Assets, net of
accumulated amortization 43,697 473
Total Assets $218,591 $80,923
Liabilities and Stockholders'
Equity
Current Liabilities:
Notes Payable $4,871 $117
Accounts Payable 13,972 8,784
Deferred Revenue 1,725 151
Due to Related Parties 4,656 --
Accrued Expenses 19,234 3,952
Total Current Liabilities 44,458 13,004
Long-term debt, net of debt
discount 22,525 18,910
Deferred Taxes 10,934 --
Total Liabilities 77,917 31,914
Stockholders' Equity:
Common stock, $0.001 par value;
75,000,000 shares authorized 39,462,026
and 31,240,913 shares are issued and
outstanding at March 31, 2008 and
December 31, 2007 39 31
Additional Paid in Capital 156,317 66,123
Common Stock Warrants 9,156 9,747
Accumulated Deficit (30,078) (27,600)
Accumulated Other Comprehensive
Income 5,240 708
Total Stockholders' Equity 140,674 49,009
Total Liabilities and
Stockholders' Equity $218,591 $80,923
BMP SUNSTONE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
($ in thousands except per share amounts)
Quarter Ended March 31,
2008 2007
Revenues
Third Parties $17,298 $5,685
Related Parties 791 --
Total Revenues 18,089 5,685
Cost of Goods Sold 10,368 5,031
Gross Margin 7,721 654
Sales and Marketing Expenses 5,961 614
General and Administration
Expenses 3,156 1,859
Total Operating Expenses 9,117 2,473
Loss From Operations (1,396) (1,819)
Other Income (Expense):
Interest Income 48 150
Interest Expense (1,569) (19)
Debt Issuance Cost Amortization (210) --
Equity Method Investment Income 996 --
Total Other (Expense) Income (735) 131
Loss Before Provision for Income
Taxes (2,131) (1,688)
Provision for Income Taxes 347 --
Net Loss $(2,478) $(1,688)
Basic and Fully-Diluted Loss Per
Share $(0.07) $(0.06)
Basic and Fully-Diluted Weighted -
average Shares Outstanding 35,096 26,588
BMP SUNSTONE CORPORATION
ADJUSTED EBITDA
($ in thousands except per share amounts)
Quarter Ended March 31,
2008 2007
Adjusted EBITDA $1,523 $(1,413)
Adjustment: FAS123R 563 316
EBITDA 960 (1,729)
EBITDA Reconciliation to GAAP Net
Loss:
Interest Income (48) (150)
Interest Expense 802 19
Income Taxes 347 --
Depreciation 257 26
Amortization of intangibles and fair
value of inventory increase 1,103 64
Amortization of debt discount and
debt issuance costs 977 --
Net Loss $(2,478) $(1,688)
For more information, please contact:
BMP Sunstone Corporation
Fred M. Powell
Chief Financial Officer
Tel: +1-610-940-1675
Integrated Corporate Relations, Inc.
Ashley Ammon MacFarlane and Christine Duan
Tel: +1-203-682-8200 (Investor Relations)
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SOURCE BMP Sunstone Corporation
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Related links:
http://www.bmpsunstone.com
CONTACT:
Fred M. Powell, Chief Financial Officer at
BMP Sunstone Corporation, +1-610-940-1675; Ashley Ammon
MacFarlane and Christine Duan of Integrated Corporate Relations,
Inc., +1-203-682-8200 (Investor Relations)
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