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David Gao, Chief Executive Officer of BMP Sunstone, stated, "We achieved arecord year in 2009 and we are proud of the progress we have made across ouroperating segments, all of which were profitable on an operating basis by theend of the year. Revenue growth and operating income performance wereparticularly strong in the back part of the year. As we enter 2010, we arefocused on driving greater-than-industry growth with our diverse productportfolio, established distribution in many of China's most importanthealthcare markets, and leading brands in pediatrics and women's health."
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Fourth Quarter 2009 Financial Results
Revenue in the fourth quarter of 2009 increased 13.4% to $41.5 millionfrom $36.6 million in the fourth quarter of 2008, reflecting increased demandfor the Company's manufactured products and licensed products. The formerincreased by 20.7% to $25.6 million and the latter by 34.6% to $2.1 million,reflecting sales and marketing efforts of Propess, Anpo, Ferriprox and Galakecompared to the prior year. Revenue from distribution was roughly flat on ayear over year basis at $13.9 million, reflecting continued sales performanceat Rongheng and from Wanwei's major products.
Gross profit in the fourth quarter of 2009 increased 21.3% to $23.3million from $19.2 million in the fourth quarter of 2008. Gross margin was56.1% compared to 52.4% in the prior year period. Gross margin performancereflects increased sales of higher margin products from manufactured productsand licensed products, which carried margins of 80.6% and 62.3% respectively.
The Company's operating income improved significantly year over year to$4.0 million in the fourth quarter of 2009 compared to $1.8 million in thefourth quarter of 2008. Non-GAAP operating income was $5.5 million in thefourth quarter of 2009, compared to $3.5 million in the prior year period,further highlighting the significant increase in revenues contributed fromacquired businesses in the year over year period.
Non-GAAP net income was $3.6 million, or $0.07 per diluted share, comparedto $4.1 million, or $0.10 per diluted share, in the fourth quarter of 2008. Ona GAAP basis, the Company reported net income of $2.0 million, or $0.04 perdiluted share, compared to $1.4 million, or $0.03 per diluted share, in thefourth quarter of 2008. During the fourth quarter of 2008, the Company had a$1.4 million tax benefit reflecting the reduction in tax rate from 25% to 15%for 2008, 2009 and 2010, as a result of receiving hi-tech tax status.
Non-GAAP net income and earnings per share exclude stock basedcompensation expense, amortization related to acquisitions, amortization ofdebt discount and issuance cost, loss on early extinguishment of debt and gainon the embedded derivative value on convertible notes. Adjusted EBITDA is anon-GAAP measure which provides earnings before interest, taxes, depreciationand amortization and excludes loss on early extinguishment of debt and gain onthe embedded derivative value on convertible notes. Please refer to thefinancial tables provided in this news release for a reconciliation of GAAPresults to non-GAAP results for the three and twelve month periods endedDecember 31, 2008 and 2009.
Full Year 2009 Financial Results
Revenue in the fiscal year 2009 increased 27.9% to $146.9 million from$114.9 million in 2008, reflecting approximately $84.0 million in revenue fromSunstone, which was up 27.8% on a year over year basis. Revenue fromdistribution increased 27.7% to $55.8 million from $43.7 million in the year2008. Revenue from licensed products increased 30.0% to $7.0 million from $5.4million in 2008, reflecting sales and marketing efforts of Propess, Anpo,Ferriprox and Galake, compared to the prior year.
Gross profit increased 29.1% to $74.0 million from $57.3 million in 2008,and gross margin for the year was 50.4% compared to 49.9% in the prior year.Higher gross profit largely reflects revenue from the sales of the Company'smanufactured products, which yielded a gross margin of 77.8% in 2009.
The Company's operating income improved significantly year over year to$8.4 million compared to $3.7 million in 2008. Operating expenses of $65.6million reflect a 20.5% increase in sales and marketing expenses and a 28.4%increase in general and administrative expenses, commensurate with year overyear growth in the business. Non-GAAP operating income reached $14.3 millionin 2009 compared to $10.5 million in the prior year, further highlighting thesignificant increase in revenues contributed from acquired businesses in theyear over year period.
Non-GAAP net income was $8.2 million, or $0.17 per diluted share, in 2009compared to $7.2 million, or $0.18 per diluted share, in 2008. On a GAAP basis,the Company's net loss improved to $2.0 million, a net loss of $0.05 perdiluted share, from a net loss of $3.4 million, a net loss of $0.09 perdiluted share, in 2008.
Balance Sheet
As of December 31, 2009, the Company had cash and cash equivalents of$21.5 million and notes receivable of $17.5 million, totaling $39.1 million.Notes receivables from customers for the settlement of trade receivablebalances are guaranteed by established banks in China and have maturities ofsix months or less.
Financial Guidance
In 2010, revenue is anticipated to grow from $146.9 million for 2009 to$160 million - $170 million.
The Company expects adjusted EBITDA for the full year 2010 to reach $16million - $17 million.
The Company expects non-GAAP net income for the full year 2010 to reach $9million - $10 million.
Yanping Zhao Promoted to Chief Operating Officer
Today the Company announced Yanping Zhao has been promoted to ChiefOperating Officer of BMP Sunstone. Ms. Zhao has served as the Corporate VicePresident of BMP Sunstone since October 2007. Prior to joining BMP Sunstone in2007, Ms. Zhao held various senior positions with Sino Biopharmaceutical Ltd.Ms Zhao has successfully grown BMP China's operations and has played acritical role helping the Company achieve operational excellence at allbusiness units as well as in the successful transition at Sunstone.
Conference Call
The Company will hold a conference call at 5:00 pm ET on March 15, 2010 todiscuss its results. Listeners may access the call by dialing 1-888-679-8035or 1-617-213-4848 for international callers, access code: 60008597.Pre-registration and a webcast will be available through the Company's websiteat http://www.bmpsunstone.com . A replay of the call will be accessiblethrough March 22, 2010 by dialing 1-888-286-8010 or 1-617-801-6888 forinternational callers, access code: 50833260.
About BMP Sunstone Corporation
BMP Sunstone Corporation ("BMP Sunstone" or the "Company") is a specialtypharmaceutical company that is building a proprietary portfolio of brandedpharmaceutical and healthcare products in China. Through SunstonePharmaceutical Co. Ltd., the Company manufactures leading pediatric andwomen's health products, including two of China's most recognized brands, "HaoWawa" and "Confort," sold throughout the country in approximately 120,000pharmacies. The Company also markets a portfolio of products under exclusivemulti-year licenses into China, primarily focused on women's health andpediatrics, as well as provides pharmaceutical distribution services throughsubsidiaries in Beijing and Shanghai. BMP Sunstone's main office is in Beijing,with a U.S. office in Plymouth Meeting, PA. For more information, please visithttp://www.bmpsunstone.com .
Safe Harbor Statement
This news release contains forward-looking statements as defined by thePrivate Securities Litigation Reform Act of 1995. Forward-looking statementsinclude statements concerning plans, objectives, goals, strategies, futureevents or performance, and underlying assumptions and other statements thatare other than statements of historical facts, including but not limited tostatements about the Company's strategic and market penetration strategies andthe potential effects of the listing of the Company's products on China'sNational (Medical) Insurance Catalog. These statements are subject touncertainties and risks including, but not limited to, operating performance,general financial, economic, and political conditions affecting thebiotechnology and pharmaceutical industries and the Chinese pharmaceuticalmarket, the ability to timely manufacture and distribute the Company'sproducts and other risks contained in reports filed by the Company with theSecurities and Exchange Commission. In addition, the Company disclaims anyobligation to update any forward-looking statements to reflect events orcircumstances after the date hereof.Fourth Quarter 2009 Financial Highlights: -- Revenue increased to $41.5 million, from $36.6 million in the fourth quarter of 2008; -- Gross profit increased 21% to $23.3 million, from $19.2 million in the fourth quarter of 2008; -- Gross margin increased to 56.1% from 52.4% in the prior year period; -- Operating income increased to $4.0 million from $1.8 million in the prior year period; -- Adjusted EBITDA, as defined below, was $5.5 million for the quarter, up 69% on a year over year basis. Full Year 2009 Financial Highlights: -- Revenue increased 28% to $146.9 million, from $114.9 million in 2008; -- Gross profit increased 29% to $74.0 million, from $57.3 million in 2008; -- Gross margin increased to 50.4% from 49.9% on a year over year basis; -- Operating income increased to $8.4 million from $3.7 million in the prior year period; -- Adjusted EBITDA, as defined below, was $14.4 million for the year 2009, up 36% on a year over year basis.
SOURCE BMP Sunstone Corporation
