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BMP Sunstone Reports Fourth Quarter and Full Year 2008 Financial Results
Date:3/17/2009

PLYMOUTH MEETING, Pa., March 17 /PRNewswire-Asia-FirstCall/ -- BMP Sunstone Corporation (Nasdaq: BJGP) ("BMP Sunstone" or the "Company"), today announced financial results for the fourth quarter and fiscal year ended December 31, 2008.

    Financial Highlights as of December 31, 2008:
    -- Fourth quarter revenues increased to $36.6 million, from $9.2 million
       in the fourth quarter of 2007.
    -- Non-GAAP operating income, as defined below, was $3.5 million for the
       quarter, improving from a loss of $4.7 million in the prior year period.
       Non-GAAP operating income for the twelve-month period was $10.5 million.
    -- Non-GAAP net income, as defined below, was $3.8 million for the quarter.
       Non-GAAP net income was $7.2 million for the twelve-month period.
    -- Non-GAAP EPS, as defined below, was $0.09 for the quarter and $0.19 for
       the twelve-month period.
    -- EBITDA was $10.6 million for the full year 2008.

Non-GAAP operating income, net income, and earnings per share exclude stock based compensation expense, amortization related to acquisitions, and amortization of debt discount and issuance cost. EBITDA is a non-GAAP measure which provides earnings before interest, taxes, depreciation and amortization. Please refer to the financial reconciliations provided in this news release for a reconciliation of GAAP results to non-GAAP results for the three and twelve month periods ended December 31, 2008 and 2007.

David Gao, Chief Executive Officer of BMP Sunstone, stated, "We are very proud of the progress we have made over the course of the last year, especially in light of the economic environment. We generated $3.3 million of operating cash flow through the year and the Sunstone acquisition greatly improved our top line and gross margin performance, while revenue from other segments improved significantly across the board. Our diverse product portfolio, established distribution in many of China's most important healthcare markets, and leading brands in pediatrics and women's health we believe are key competitive advantages which drive our growth despite the greater economic environment and potential for regulatory change. While we anticipate industry-wide changes in China's healthcare industry in the future, we feel strongly that our double-digit growth can continue."

Fourth Quarter 2008 Financial Results

Revenue in the fourth quarter of 2008 increased to $36.6 million from $9.2 million in the fourth quarter of 2007, reflecting increased demand for the Company's manufactured and licensed products, as well as the $21.2 million of revenue from Sunstone, which was acquired in February of 2008. Revenue from distribution increased 72% to $13.9 million in the fourth quarter of 2008 from $8.1 million in the prior year period, reflecting revenue from Rongheng, which was acquired in July 2008, and sales growth of Wanwei's major products. Revenue from licensed products increased to $1.5 million from $1.1 million in the prior year period, reflecting sales and marketing efforts of Propess, Anpo, Ferriprox and Galake compared to the prior year.

Gross profit in the fourth quarter of 2008 increased to $19.2 million from $1.5 million in the fourth quarter of 2007. Gross margin was 52.4% compared with 16.2% in the prior year period. Gross margin performance reflects increased sales of higher margin products and services from Sunstone and Beijing Medpharm.

Non-GAAP operating income was $3.5 million in the fourth quarter of 2008 compared to a loss of $4.7 million in the prior year period, primarily reflecting the significant increase in revenues contributed from acquired businesses in the year over year period. On a GAAP basis, the Company's operating income improved significantly year over year to $1.8 million in the fourth quarter compared with an operating loss of $5.4 million in the fourth quarter of 2007.

Non-GAAP net income was $3.8 million, or $0.09 per diluted share, compared to a net loss of $5.3 million, or ($0.17) per diluted share, in the fourth quarter of 2007. On a GAAP basis, the Company reported net income of $1.1 million compared to a net loss of $6.6 million in the fourth quarter of 2007.

Full Year 2008 Financial Results

Revenue in the fiscal year 2008 increased to $114.9 million from $31.0 million in 2007, reflecting approximately $65.7 million in revenue from Sunstone, which was acquired in February of 2008. Revenue from distribution increased 57% to $43.7 million from $27.9 million in the year 2007, reflecting the acquisition of Rongheng in July 2008 and the sales growth of Wanwei's major products. Revenue from licensed products increased to $5.4 million from $3.1 million in 2007, reflecting sales and marketing efforts of Propess, Anpo, Ferriprox and Galake compared to the prior year.

Gross profit increased to $57.3 million from $4.3 million in 2007, and gross margin for the year was 49.9%, compared with 13.8% in 2007. The higher margin was largely due to revenue from the sales of the Company's branded OTC products, which yielded a gross margin of 77.2% in 2008.

Non-GAAP operating income reached $10.5 million in 2008 compared to a loss of $8.9 million in the prior year, primarily reflecting the significant increase in revenues contributed from acquired businesses in the year over year period. Operating expenses of $17.4 million reflect increased advertising and marketing, employee benefits, selling expenses and the amortization of intangibles resulting from the acquisition of Sunstone. On a GAAP basis, the Company's operating income improved significantly year over year to $3.7 million compared with an operating loss of $10.9 million in 2007.

Non-GAAP net income was $7.2 million, or $0.19 per diluted share, in 2008 compared to a net loss of $9.0 million, or $0.32 per share, in 2007. On a GAAP basis, the Company reported a net loss of $3.4 million in 2008, compared to $11.6 million in 2007.

Balance Sheet

As of December 31, 2008, the Company had cash and cash equivalents of $15.7 million and notes receivable of $15.8, totaling $31.5 million. Notes receivables are notes accepted from customers for the settlement of trade receivable balances. All notes receivables are guaranteed by established banks in China and have maturities of six months or less.

Financial Guidance

As previously announced, for the fiscal year 2009, revenue is anticipated to increase at least 35% year over year to reach $150 to $160 million.

The Company announced today that it expects EBITDA for the full year 2009 to reach $16 million to $18 million.

The Company is also adjusting its 2009 net income guidance to reflect interest costs and debt discount amortization related to newly issued convertible debt due in July 2011. The Company expects GAAP net income to be between $2 million and $4 million and expects non-GAAP net income to be between $9 million and $11 million.

David Gao, Chief Executive Officer of BMP Sunstone, stated, "We expect 2009 to be another record year for our Company, with revenue growth of over 35% at the low end of our guidance range. We are actively transforming BMP Sunstone from a low margin distribution business into a high margin OTC and prescription specialty pharmaceutical company, and our guidance for 2009 reflects a more mature, diversified company with significant ability to drive shareholder value."

Gao continued, "Our 2009 financial guidance reflects sales and marketing expansion in China resulting from continued performance at all of our business units, especially at Sunstone, and reflects operational synergies resulting from acquisitions the Company completed in 2008. In 2009, we expect all of our business units to be profitable and to outperform the market growth. Importantly, we expect our in-license business at Beijing Medpharm will start contributing to the Company's bottom line in 2009, which will mark a significant milestone in the Company's development."

Conference Call

The Company will hold a conference call at 5:00 pm ET on March 17, 2009 to discuss fiscal fourth quarter and full year 2008 results. Listeners may access the call by dialing 1-888-680-0892 or 1-617-213-4858 for international callers, access code: 38492655. Pre-registration and a webcast will also be available through the Company's website at http://www.bmpsunstone.com . A replay of the call will be available through March 26, 2009. Listeners may access the replay by dialing 1-888-286-8010 or 1-617-801-6888 for international callers, access code: 34716825.

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. Currently this portfolio includes eight products under exclusive multi-year licenses for China, primarily focused on women's health and pediatrics. The Company also owns Sunstone Pharmaceutical Co. Ltd., which manufactures leading pediatric and women's health products, including two of China's most recognized brands, "Hao Wawa" and "Confort," sold through approximately 120,000 pharmacies in China. The Company also provides pharmaceutical distribution services through its subsidiaries in Beijing and Shanghai, and through its affiliate, Guangzhou Pharmaceuticals Corp. The Company has its main office in Beijing, with a US office in Plymouth Meeting, PA. For more information, please visit http://www.bmpsunstone.com .

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 regarding the Company's competitive advantages, the impact of changes in China's healthcare industry on the Company's growth, the Company's expected financial performance in 2009 and the Company's expectations for each of its business units in 2009. These statements are subject to uncertainties and risks including, but not limited to, operating performance, general financial, economic, and political conditions affecting the biotechnology and pharmaceutical industries and the Chinese pharmaceutical market, the ability to timely manufacture and distribute the Company's products and other risks contained in reports filed by the Company with the Securities and Exchange Commission. 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 and Subsidiaries
             Non GAAP Condensed Consolidated Statements of Operation
                ($ amounts, except per share amounts in thousands)

                                           For the Three      For the Twelve
                                            months ended       months ended
                                            December 31,       December 31,
                                           2008     2007      2008      2007

    Revenues:
     Third parties                       $35,267   $9,159   $108,246   $31,003
     Related parties                       1,370       --      6,621        --
    Total Revenues                        36,637    9,159    114,867    31,003
    Cost of Goods Sold                    17,308    7,676     56,543    26,716
    Gross Margin                          19,329    1,483     58,324     4,287

    Sales and Marketing Expenses          12,532    1,953     36,607     4,377
    General and Administration Expenses    3,342    4,276     11,194     8,790
    Total Operating Expenses              15,874    6,229     47,801    13,167
    Income (Loss) From Operations          3,455   (4,746)    10,523    (8,880)
    Other Income (Expense):
     Interest Income                           2      179         70       620
     Interest (Expense)                     (765)    (446)    (3,234)     (536)
     Equity Method Investment Gain          (321)    (264)       675      (264)
     Other Income                             --       10         --        81
    Total Other Income (Expense)          (1,084)    (521)    (2,489)      (99)
    Income (Loss) Before Provision For
     Income Taxes                          2,371   (5,267)     8,034    (8,979)
    Provision For Income Taxes            (1,406)      15        792        15
    Net Income (Loss)                     $3,777  $(5,282)    $7,242   $(8,994)
    Basic and Fully-Diluted Loss Per
     Share                                 $0.09   $(0.17)     $0.19    $(0.32)

    Basic and Fully-Diluted Weighted-
     average Shares Outstanding           40,185   30,708     38,617    28,120



                    BMP Sunstone Corporation and Subsidiaries
                  Condensed Consolidated Statements of Operation
                ($ amounts, except per share amounts in thousands)

                                  For the Three months For the Twelve months
                                   ended December 31,   ended December 31,
                                     2008      2007      2008       2007

    Revenues:
     Third parties                  $35,267    $9,159   $108,246    $31,003
     Related parties                  1,370        --      6,621         --
    Total Revenues                   36,637     9,159    114,867     31,003
    Cost of Goods Sold               17,437     7,676     57,557     26,716
    Gross Margin                     19,200     1,483     57,310      4,287
    Sales and Marketing Expenses     13,415     1,953     39,666      4,377
    General and Administration
     Expenses                         4,012     4,933     13,898     10,780
    Total Operating Expenses         17,427     6,886     53,564     15,157
    Profit (Loss) From Operations     1,773    (5,403)     3,746    (10,870)
    Other Income (Expense):
     Interest Income                      2       179         70        620
     Interest (Expense)              (1,531)     (957)    (6,301)    (1,047)
     Debt Issuance Cost
      Amortization                     (210)     (140)      (840)      (140)
     Equity Method Investment Gain     (321)     (264)       675       (264)
     Other Income                        --        10         --         81
    Total Other Income (Expense)     (2,060)   (1,172)    (6,396)      (750)
    Loss Before Provision For
     Income Taxes                      (287)   (6,575)    (2,650)   (11,620)
    Provision For Income Taxes       (1,406)       15        792         15
    Net Loss                         $1,119   $(6,590)   $(3,442)  $(11,635)
    Basic and Fully-Diluted Loss
     Per Share                        $0.03    $(0.21)    $(0.09)    $(0.41)

    Basic and Fully-Diluted
     Weighted-average Shares
     Outstanding                     40,185    30,708     38,617     28,120



                    BMP Sunstone Corporation and Subsidiaries
                      Condensed Consolidated Balance Sheets
                             ($ amounts in thousands)

                                                  December 31,     December 31,
                                                     2008               2007
    Assets
    Current Assets:
     Cash and Cash Equivalents                      $15,740           $22,837
     Restricted Cash                                  1,150             1,297
     Notes Receivable                                15,797                --
     Accounts Receivable, net of allowance
      for doubtful accounts of $51 and $44           30,897            11,707
     Inventory, net of allowance for
      obsolescence of $0                             10,184             2,897
     Due from Related Party                           1,834                --
     Other Receivables                                2,168             1,379
     VAT Receivable                                     921               828
     Prepaid Expenses and Other Current
      Assets                                          6,247             2,444
    Total Current Assets                             84,938            43,389
    Property and Equipment, net                      22,840               745
    Investment in Sunstone China Limited                 --            33,126
    Investment in Alliance BMP                       15,093             2,773
    Investments, at Cost                                146               137
    Goodwill                                         69,866                --
    Other Assets                                        875               280
    Land Use Rights, net of accumulated
     amortization                                     2,002                --
    Intangible Assets, net of accumulated
     amortization                                    41,891               473
    Total Assets                                   $237,651           $80,923

    Liabilities and Stockholders' Equity
    Current Liabilities:
     Notes Payable and Bank Borrowings,
      net of debt discounts                         $33,591              $117
     Accounts Payable                                27,482             8,784
     Due to Related Parties                           4,361                --
     Deferred Revenues                                  128               151
     Accrued Expenses                                14,601             3,952
    Total Current Liabilities                        80,163            13,004
    Long-term debt, net of debt discount                 --            18,910
    Deferred Taxes                                    9,856                --
    Total Liabilities                                90,019            31,914

    Stockholders' Equity:
    Common Stock, $.001 Par Value;
     75,000,000 and 50,000,000 Shares
     Authorized as of December 31, 2008 and
     2007, respectively; 40,246,410 and
     31,240,913 Shares Issued and
    Outstanding as of December 31, 2008
     and 2007, respectively                              40                31
     Additional Paid in Capital                     160,864            66,123
     Common Stock Warrants                            9,049             9,747
     Accumulated Deficit                            (31,042)          (27,600)
     Accumulated Other Comprehensive
      Income                                          8,721               708
    Total Stockholders' Equity                      147,632            49,009
    Total Liabilities and Stockholders'
     Equity                                        $237,651           $80,923



                    BMP Sunstone Corporation and Subsidiaries
                             Non GAAP Reconciliations
                   ($ amounts, except per share in thousands)

                                  Three Months Ended     Twelve Months Ended
                                      December 31,           December 31,
                                    2008       2007        2008        2007

    GAAP Gross Profit             $19,200    $ 1,483     $57,310    $  4,287
    Amortization Related to
     Acquisition                      129         --       1,014          --

    Non GAAP Gross Profit         $19,329    $ 1,483     $58,324    $  4,287


                                  Three Months Ended     Twelve Months Ended
                                      December 31,           December 31,
                                    2008       2007        2008        2007
    GAAP Operating Income
     (Loss)                       $ 1,773    $(5,403)    $ 3,746    $(10,870)

    Stock Based Compensation          622        601       2,438       1,734
    Amortization Related to
     Acquisitions                   1,060         56       4,339         256
    Non GAAP Operating Income
     (Loss)                       $ 3,455    $(4,746)    $10,523    $ (8,880)


                                  Three Months Ended     Twelve Months Ended
                                      December 31,           December 31,
                                    2008       2007        2008        2007

    GAAP Net Income (Loss)        $ 1,119    $(6,590)    $(3,442)   $(11,635)

    GAAP EPS                      $  0.03    $ (0.06)    $ (0.10)   $  (0.12)

    Stock Based Compensation          622        601       2,438       1,734
    Debt Amortization and
     Issuance Cost                    976        651       3,907         651
    Amortization Related to
     Acquisitions                   1,060         56       4,339         256

    Non GAAP Net Income (Loss)    $ 3,777    $(5,282)    $ 7,242    $ (8,994)

    Non GAAP EPS                  $  0.09    $ (0.17)    $  0.19    $  (0.32)



                    BMP Sunstone Corporation and Subsidiaries
                              EBITDA Reconciliation
                            ($ amounts in thousands)
                                                                     2008

    Net Loss                                                    $     (3,442)
    Net Loss Reconciliation to EBITDA:
     Interest expense, net                                             3,164
     Income taxes                                                        792
     Depreciation                                                      1,842
     Amortization of intangibles and fair value of
      inventory increase                                               4,339
     Amortization of debt discount and debt issuance costs             3,907
    EBITDA                                                      $     10,602


    For more information, please contact:

    Integrated Corporate Relations, Inc.
     Ashley M. Ammon and Christine Duan
     Tel: 203-682-8200 (Investor Relations)

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SOURCE BMP Sunstone Corporation
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