Investments in Infrastructure Expected to Positively Effect Performance This Year
NEW YORK, May 27 /PRNewswire-Asia/ -- Biostar Pharmaceuticals, Inc. ("Biostar" or the "Company") (OTC Bulletin Board: BSPM) today reported financial results for the three months ended March 31, 2009.
The Company reported revenue of $7,447,664 for the quarter ended March 31, 2009 as compared to $6,810,259 during the first quarter of 2008. Net Income for the first quarter 2009 was $1,829,032, or $0.08 per share on a fully diluted basis, versus $1,821,130, or $0.08 per share, respectively, for 2008.
The increase in revenue reflects an increase in sales for four of Biostar's five state approved drugs. The sales in the four products increased mainly due to the continued implementation of the "Blue Sea" project which markets directly to consumers in the PRC's rural area through retail pharmacies.
Net income did not increase at the same rate as sales did, primarily due to the increase in Selling General and Administrative ("SG&A") expenses as a percentage of sales. SG&A accounted for 33% of sales in the first quarter of 2009 as compared to 30% for the first quarter of 2008, which reflects an increase in staff and marketing budget and expenditure which is expected to benefit the Company's sales effort going forward. This increase in SG&A was partially offset by a decrease in the cost of raw materials, as the Sichuan Province is recovering from the devastating earthquake of 2008, and herbal supplies from the province and their prices have returned to their normal levels.
Ronghua Wang, Chairman and Chief Executive Officer of the Company, stated, "I am pleased that we have been able to report continued growth in revenues as we implement our plans to establish Biostar as a leading provider of over-the-counter and prescription treatments for disease and chronic conditions throughout the People's Republic of China. The investments we are making in marketing, staff and infrastructure will serve us well into the future."
Mr. Wang also commented, "In addition to preparing to commence construction on our new raw materials processing facility, we are completing the planning phase of our 'Mercury Project,' which should commence in the fourth quarter of this year. The Mercury Project targets counties within 31 provinces in the PRC to promote our 'Gan Wang' Compound, our Paracetamol and Amantadine Hydrochloride Capsule -- an over-the-counter drug for the treatment of influenza. As with hepatitis, influenza affects a large portion of the population in the People's Republic of China and there is strong demand for an effective OTC drug to treat the influenza in rural and urban areas."
About Biostar Pharmaceuticals, Inc.
Biostar Pharmaceuticals, Inc., through its wholly-owned subsidiary in China, develops, manufactures and markets pharmaceutical and medical nutrient products for a variety of diseases and conditions. The Company's most popular product is its Xin Ao Xing Oleanolic Acid Capsule, an over-the-counter ("OTC") medicine for Chronic hepatitis B, a disease affecting approximately 10% of the Chinese population. In addition to its hepatitis product, Biostar manufactures two broad-based OTC products, two prescription-based pharmaceuticals and ten nutrients. The Company has adopted international standards and is in the process of applying for three patents.
Safe Harbor
Certain statements in this release concerning our future growth prospects are forward-looking statements, within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding the success of our investments, risks and uncertainties regarding fluctuations in earnings, our ability to sustain our previous levels of profitability including on account of our ability to manage growth, intense competition, wage increases in China, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, our ability to successfully complete and integrate potential acquisitions, withdrawal of governmental fiscal incentives, political instability and regional conflicts and legal restrictions on raising capital or acquiring companies outside China. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our S-1 dated June 27, 2008, our Quarterly Report on Form 10-Q for the quarters ended September 30, 2008 and March 31, 2009, our 10-K for the year ended December 31, 2008, and other recent filings. These filings are available at http://www.sec.gov . We may, from time to time, make additional written and oral forward-looking statements, including statements contained in our filings with the Securities and Exchange Commission and our reports to shareholders. We do not undertake to update any forward-looking statements that may be made from time to time by or on our behalf.
For more information on Biostar Pharmaceuticals, Inc., visit the websites at http://www.biostarpharmaceuticals.com and http://www.zggbyy.com .
For more information, please contact:
Email: info@biostarpharmaceuticals.com
Tel: +1-866-374-1957 (US)
BIOSTAR PHARMACEUTICALS, INC.
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2009 2008
(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $694,645 $758,316
Accounts receivable 13,838,976 11,700,841
Inventories 304,605 315,745
Prepaid expenses and other
receivables 3,324,594 2,926,505
Total Current Assets 18,162,820 15,701,407
Property and equipment, net 5,845,925 5,930,467
Intangible assets, net 7,284,037 7,365,765
Total Assets $31,292,782 $28,997,639
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses $2,573,483 $2,191,976
Customer advances 2,559,308 2,592,250
Value-added tax payable 564,814 527,103
Income tax payable 480,221 413,205
Total Current Liabilities 6,177,826 5,724,534
Commitment
Stockholders' Equity
Series A, convertible preferred
stock, $0.001 par value, 5,000,000
shares authorized, none issued and
outstanding -- --
Undesignated preferred stock, $.001
par value, 5,000,000 shares
authorized, -- --
Common stock, $.001 par value,
100,000,000 shares
authorized,23,240,899 shares issued
and outstanding at March 31, 2009
and December 31, 2008 23,241 23,241
Additional paid-in capital 10,430,168 10,430,168
Statutory reserves 1,776,634 1,585,383
Retained earnings 12,634,436 10,996,655
Accumulated other comprehensive
income 250,477 237,658
Total Stockholders' Equity 25,114,956 23,273,105
Total Liabilities and Stockholders'
Equity $31,292,782 $28,997,639
BIOSTAR PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended
March 31,
2009 2008
Sales, net $7,447,664 $6,810,259
Cost of sales 2,658,807 2,638,679
Gross profit 4,788,857 4,171,580
Selling, general and administrative
expenses 2,479,984 2,052,678
Income from operations 2,308,873 2,118,902
Other Income (Expense)
Interest income 310 79
Interest expense -- (13,953)
Total other Income (Expense) 310 (13,874)
Income before income taxes 2,309,183 2,105,028
Provision for income taxes 480,151 283,898
Net income $1,829,032 $1,821,130
Net income per common share
Basic $0.08 $0.08
Diluted $0.08 $0.08
Weighted average common shares
outstanding
Basic 23,240,899 22,152,311
Diluted 23,509,458 23,240,899
