Jiangbo Pharmaceuticals Announces Third Quarter Fiscal Year 2011 Results
LAIYANG, China, May 24, 2011 /PRNewswire-Asia-FirstCall/ — Jiangbo Pharmaceuticals, Inc. (Nasdaq: JGBO) (“Jiangbo” or the “Company”), a pharmaceutical company with its principal operations in the People’s Republic of China, today announced its third quarter fiscal year 2011 financial results for the three and nine month periods ended March 31, 2011.
Third Quarter Fiscal Year 2011 Highlights
- Revenue decreased 29.2% to $18.1 million from $25.6 million in the corresponding quarter ended March 31, 2010
- Gross profit declined 35.3% to $12.0 million from $18.6 million in the corresponding quarter ended March 31, 2010
- Operating income decreased 56.5% to $6.0 million from $13.7 million in the corresponding quarter ended March 31, 2010
- Net income was $5.1 million, or $0.38 per basic share, for the quarter ended March 31, 2011, compared to $15.2 million, or $1.33 per basic share, for the quarter ended March 31, 2010
- Excluding non-cash gains related to the change in fair value of derivative liabilities of $2.8 million, amortization of debt discount and debt issuance costs related to convertible debentures of $2.4 million, and unrealized loss on investments of $49,264, non-GAAP adjusted net income for diluted EPS was $0.8 million, or $0.05 per fully diluted share, for the three months ended March 31, 2011, compared to non-GAAP adjusted net loss for diluted EPS of $11.3 million, or a loss of $0.74 per fully diluted share, for the quarter ended March 31, 2010.
- On January 4, 2011, the Company’s Hongrui factory was awarded with the Good Manufacturing Practices Certificate for Pharmaceutical Products (“GMP Certificate”) by China’s State Food and Drug Administration (“SFDA”). The GMP Certificate is valid until the end of 2015.
- The Company appointed Marcum Bernstein & Pinchuk LLP as its new independent registered public accountants, effective March 30, 2011, replacing Frazer Frost, LLP, to begin providing services for the quarter ended March 31, 2011.
“Our fiscal third quarter 2011 revenue declined 29.2% on difficult comparisons to the same period last year, which benefitted from the release of pent-up demand caused by six weeks of downtime in late 2009 to complete Good Manufacture Practices recertification procedures at our main facility,” said Jiangbo’s CEO, Mr. Linxian Jin. “While several of our top products continued to experience relatively weak sales during the quarter, we are actively evaluating strategic options to enhance the Company’s growth rate and build shareholder value. This quarter we continued to generate robust cash flow from operations and ended the period with over $146 million in cash and cash equivalents, some of which we plan to deploy on strategic acquisitions, such as our previously announced planned purchase of Shandong Xinkangqi Medical Company, a regional wholesale drug distributor in Shandong Province,” continued Mr.Jin.
Third Quarter Fiscal Year 2011 Results
Total revenue for the three months ended March 31, 2011 decreased 29.2% to $18.1 million from $25.6 million in the comparable quarter of 2010, primarily reflecting lower sales of Clarithromycin Sustained Release Tablets, Itopride Hydrochloride Granules, Radix Isatidis Dispersible Tablets, and Baobaole Chewable Tablets, partially offset by incremental sales of Felodipine Sustained Release Tablets, which were launched in September 2010, and higher sales of Ciproflocacin Hydrochloride Tablets. During the third quarter of fiscal year 2011, the Company resumed production at its Hongrui factory, resulting in modest revenue contribution from the sale of Laiyang Pear Cough Syrup and Cold and Cough Granules.
The Company’s total revenue in the third quarter of the prior fiscal year benefitted from the release of pent-up demand upon resumption of production at the Company’s main facility after a six week shutdown in the second quarter of fiscal year 2010 to complete the Good Manufacture Practice (“GMP”) recertification procedure.
For the three months ended March 31, 2011, Clarithromycin Sustained Release Tablets, Itopride Hydrochloride Granules, Radix Isatidis Dispersible Tablets, and Baobaole Chewable Tablets, accounted for approximately 43.7%, 24.4%, 14.9%, and 13.9% of the Company’s total revenue, respectively.
Gross profit in the third quarter of fiscal year 2011 was $12.0 million, a decrease of 35.3% from $18.6 million in the prior year’s corresponding period. Gross margin decreased to 66.5% from 72.7% in the prior year quarter, primarily due to an increase in raw material prices, particularly related to the Company’s Clarithromycin Sustained Release Tablets and Radix Isatidis Dispersible Tablets and also due to a greater portion of sales from products with lower profit margin in the Western Pharmaceutical Medicines product category.
Selling, general and administrative expenses totaled $5.8 million for the three months ended March 31, 2011, up 53.9% from $3.8 million in the three months ended March 31, 2010. Advertising, marketing and promotional expenses for the third quarter of fiscal 2011 decreased to $15,000 from $1.1 million in the year ago period, primarily because the Company eliminated advertising activities at the corporate level and implemented a strategy that significantly increased commission payout percentages to its sales representatives. Depreciation and amortization increased to $1.5 million from $492,000 in the three months ended March 31, 2010, mainly attributable to the amortization of land use rights for two parcels of land that were purchased in the prior fiscal year. Salaries, wages, commissions and related benefits increased 89.8% year-over-year to $3.7 million, primarily due to accrued compensation to directors and the Company’s decision to increase sales commission payouts to its sales representatives.
Research and development expenses totaled $0.2 million for the three months ended March 31, 2011, compared with $1.1 million for the three months ended March 31, 2010. The significant year-over-year decrease in research and development expense reflects the expiration, in September 2010, of the Company’s R&D cooperative agreement with Shandong University.
Income from operations during the third quarter of fiscal year 2011 was $6.0 million, a 56.5% decrease from $13.7 million during the three months ended March 31, 2010.
Other income was $0.6 million, primarily reflecting non-cash gains related to the change in fair value of derivative liabilities of $2.8 million, partially offset by interest expense of $2.5 million.
Net income for the three months ended March 31, 2011 was $5.1 million, compared to $15.2 million in the year ago quarter. Basic earnings per share were $0.38, compared with $1.33 per basic share in the year ago period. In the third quarter of fiscal 2011, the Company recorded diluted earnings per share of $0.22, compared to $0.02 in the same quarter last year.
Excluding non-cash gains related to the change in fair value of derivative liabilities of $2.8 million, amortization of debt discount and debt issuance costs related to convertible debentures of $2.4 million, and unrealized loss on investments of $49,264, non-GAAP adjusted net income for diluted EPS was $0.8 million, or $0.05 per fully diluted share, for the three months ended March 31, 2011, compared to non-GAAP adjusted net loss for diluted EPS of $11.3 million, or a loss of $0.74 per fully diluted share, for the quarter ended March 31, 2010.
(*) See the reconciliation table at the end of this press release for a reconciliation of net income and EPS to non-GAAP adjusted net income and EPS.
Nine Months Fiscal Year 2011 Results
Total revenue for the nine month period ended March 31, 2011, increased by 1.6% to $69.2 million, compared to $68.1 million for the nine month period ended March 31, 2010. Gross profit decreased 2.7% to $48.9 million for the nine month period ended March 31, 2011 as compared to $50.2 million for the nine month period ended March 31, 2010. Gross profit margin was 70.6% for the first nine months of fiscal year 2011, versus 73.7% for the corresponding prior year period. Operating income was $33.5 million, unchanged compared to operating income in the comparable period of last year. Net income during the nine months ended March 31, 2011, was $26.8 million, or $2.09 per basic share, compared to $22.7 million, or $2.07 per basic share, for the corresponding period in 2010. Diluted earnings per share were $1.76 per share, compared to $0.57 per diluted share in the year ago period. Excluding non-cash gains related to the change in fair value of derivative liabilities of $15.1 million, amortization of debt discount and debt issuance costs related to convertible debentures of $12.2 million, and unrealized loss on investments of $68,210, non-GAAP adjusted net income for diluted EPS was $11.7 million, or $0.77 per fully diluted share, for the nine months ended March 31, 2011, compared to non-GAAP adjusted net loss for diluted EPS of $4.9 million, or a loss of $0.32 per fully diluted share, for the nine months ended March 31, 2010.
Financial Condition
As of March 31, 2011, the Company had $146.9 million in cash and cash equivalents as compared to $108.6 million at the end of fiscal 2010. Working capital was $139.6 million as of March 31, 2011 as compared to $88.5 million at the end of fiscal 2010. Shareholder’s equity totaled $184.7 million, as compared to $134.5 million at the end of fiscal 2010. The Company generated $36.0 million in cash flow from operating activities during the first nine months of fiscal 2011.
Business Outlook and Guidance
Several of the Company’s major products, including Clarithromycin Sustained Release Tablets, Itopride Hydrochloride Granules and Baobaole Chewable Tablets, have entered into mature stages of their product lifecycles. Management expects future sales of Clarithromycin Sustained Release Tablets to remain relatively flat compared to current levels and future sales of Itopride Hydrochloride Granules and Baobaole Chewable Tablets to moderately decline compared to current levels. Management expects a continued increase in sales of Felodipine Sustained Release Tablets and incremental revenue from the re-launch of several traditional Chinese medicines at the Company’s Hongrui facility. Given management’s current business outlook, the Company reaffirms its guidance of revenue between $94 million and $96 million for fiscal year 2011.
Subsequent Events
In April 2011, the Company through Laiyang Jiangbo Pharmaceutical Co., Ltd., a limited liability company organized under the laws of PRC and controlled by the Company through contractual arrangements, entered into a letter of intent with Shandong Xinkangqi Medical Company (“Xinkangqi”), a regional wholesale drug distributor in Shandong Province, pursuant to which Laiyang Jiangbo plans to acquire 100% of the outstanding equity of Xinkangqi. The Company plans to hire Marcum Bernstein & Pinchuk LLP, its current independent registered public accountants, to conduct due diligence on Xinkangqi beginning in late May 2011.
Risk Disclosure
The Company became delinquent in the payment of principal on its November 2007 Debenture on March 1, 2011. To date, we have remained unable to make these payments. We were required to repay the then outstanding aggregate principal amount of the November 2007 Debentures, together with all accrued interest and penalties. To date, no formal event of default notice has been presented by the sole holder of the November 2007 Debentures and we are currently in discussions with the sole holder of the November 2007 Debenture to resolve the delinquent situation. However, the sole holder of the November 2007 Debentures may deliver an event of default notice to us at any time. In the event that an event of default notice is delivered to us, a cross-default will occur with respect to our May 2008 Notes and the majority holder of the May 2008 Notes will have the right to deliver an acceleration notice with respect to the May 2008 Notes. In such an event, we may be forced to seek protection under the United States Bankruptcy Code. In addition, on May 30, 2011, we will be required to repay the then outstanding aggregate principal amount of the May 2008 Notes, together with all accrued interest. There can be no assurance that we will be able to make the repayments on time. In the event that we are unable to repay the May 2008 Notes, when due, the majority holder of the May 2008 Notes may deliver an acceleration notice to the Company with respect to the May 2008 Notes. In the event that an acceleration notice is delivered to us, we may be forced to seek protection under the United States Bankruptcy Code.
Conference Call
Jiangbo Pharmaceuticals, Inc. management will host a conference call at 8:30 a.m. Eastern Time on Wednesday, May 25, 2011 to discuss financial results for the third quarter fiscal 2011 ended March 31, 2011.
To participate in the live conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: (866) 395-5819. International callers should dial +1 (706) 643-6986. The Conference ID for this call is 65647292.
If you are unable to participate on the live call, a replay will be available for 14 days starting on Wednesday, May 25, 2011 at 11:30 a.m. Eastern Time. To access the replay, dial (800) 642-1687, international callers dial +1 (706) 645-9291. The Conference ID is 65647292.
Use of Non-GAAP Adjusted Financial Information
This press release includes certain financial information, non-GAAP adjusted net income and non-GAAP adjusted fully diluted earnings per share, which are not presented in accordance with GAAP. Non-GAAP adjusted net income was derived by taking net income and adjusting it with non-cash gains or losses related to the change in fair value from derivative liabilities and the amortization of debt discount and debt issuance costs related to convertible debentures. The Company’s management believes that these non-GAAP adjusted measures provide investors with a better understanding of the Company’s historical results from its core business operations. To supplement the Company’s condensed consolidated financial statements presented on a non-GAAP adjusted basis, the Company has provided non-GAAP adjusted financial information, which is non-GAAP adjusted net income and non-GAAP adjusted earnings per share, excluding the impact of these items in this press release. The non-GAAP adjusted information is not meant to be considered in isolation or as a substitute for GAAP financials. The non-GAAP adjusted financial information provided by the Company may also differ from non-GAAP adjusted information provided by other companies. A table at the end of this press release provides a reconciliation of the non-GAAP adjusted financial information to the nearest GAAP measure.
About Jiangbo Pharmaceuticals, Inc.
Jiangbo Pharmaceuticals, Inc. is engaged in the research, development, production, marketing and sales of pharmaceutical products in China. The Company’s operations are located in Eastern China in an Economic Development Zone in Laiyang City, Shandong Province. Jiangbo produces both western and Chinese herbal-based medical drugs in tablet, capsule, granule, syrup and electuary (sticky syrup) form. For additional information, please visit the Company’s website (www.jiangbopharma.com).
Safe Harbor Statement
Certain statements in this press release that are not historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not guarantees of future performance and are subject to risks and uncertainties that could cause the Company’s actual results and financial position to differ materially from those included within the forward-looking statements. Forward-looking statements involve risks and uncertainties, including those relating to the Company’s ability to introduce, manufacture and distribute new drugs. Actual results may differ materially from predicted results, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties include, among others, the Company’s ability to obtain raw materials needed in manufacturing, the continuing employment of key employees, the failure risks inherent in testing any new drug, the possibility that regulatory approvals may be delayed or become unavailable, patent or licensing concerns that may include litigation, direct competition from other manufacturers and product obsolescence. More information about the potential factors that could affect the Company’s business and financial results is included in the Company’s filings, available via the United States Securities and Exchange Commission.
Contact:
Jiangbo Pharmaceuticals, Inc. CCG Investor Relations
Mr. Jin Linxian, CEO Mr. Crocker Coulson, President
Phone: +86 (535) 728-2397 Phone: (646) 213-1915
E-mail:jinlinxian@jiangbo.com E-mail: crocker.coulson@ccgir.com
http://www.jiangbopharma.com http://www.ccgirasia.com
- Financial Statements Follow -
JIANGBO PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, June 30,
2011 2010
---- ----
(Unaudited)
ASSETS
------
CURRENT ASSETS:
Cash and cash equivalents $146,886,471 $108,616,735
Restricted cash 10,383,600 11,135,880
Investments 46,094 168,858
Accounts receivable, net of
allowance for doubtful
accounts of $737,268 and
$1,343,421as of March 31,
2011 and June 30, 2010,
respectively 20,759,766 33,195,201
Inventories 2,896,877 2,200,614
Other receivables 64,387 13,241
Other receivable -related
parties 251,955 324,060
Advances to suppliers 209,841 260,688
Financing costs 46,541 435,634
------ -------
Total current assets 181,545,532 156,350,911
PLANT AND EQUIPMENT, NET 13,469,481 13,284,312
OTHER ASSETS:
Long term prepayments 30,470 110,725
Intangible assets, net 31,597,140 32,594,326
---------- ----------
Total other assets 31,627,610 32,705,051
---------- ----------
Total assets $226,642,623 $202,340,274
============ ============
LIABILITIES AND
SHAREHOLDERS' EQUITY
---------------------
CURRENT LIABILITIES:
Accounts payable $4,302,424 $4,113,219
Short term bank loans - 2,209,500
Notes payable 10,383,600 11,135,880
Other payables 658,454 677,464
Other payables -related
parties 526,540 255,595
Accrued liabilities 2,128,719 8,110,399
Taxes payable 2,863,943 6,259,271
Refundable security deposits
due to distributors 3,970,200 3,829,800
Liabilities assumed from
reorganization 307,142 524,614
Derivative liabilities 1,218,616 18,497,227
Convertible debt, net of
discount $1,833,267 and
$13,669,752 as of March 31,
2011and June 30, 2010,
respectively 15,546,733 12,210,248
---------- ----------
Total current liabilities 41,906,371 67,823,217
---------- ----------
Total liabilities 41,906,371 67,823,217
---------- ----------
COMMITMENTS AND
CONTINGENCIES
SHAREHOLDERS' EQUITY:
Convertible preferred stock
Series A ($0.001 par value;
20,000,000 shares
authorized, 0 shares issued
and outstanding as of March
31, 2011 and June 30, 2010) - -
Common stock ($0.001 par
value, 22,500,000 shares
authorized, 13,692,179 and
11,701,802 shares issued
and outstanding as of March
31, 2011 and June 30, 2010,
respectively) 13,692 11,702
Additional paid-in capital 47,706,099 30,846,915
Capital contribution
receivable (11,000) (11,000)
Retained earnings 119,559,930 92,797,859
Statutory reserves 3,253,878 3,253,878
Accumulated other
comprehensive income 14,213,653 7,617,703
---------- ---------
Total shareholders' equity 184,736,252 134,517,057
----------- -----------
Total liabilities and
shareholders' equity $226,642,623 $202,340,274
============ ============
JIANGBO PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
(UNAUDITED)
For the Three Months
Ended
March 31,
2011 2010
---- ----
CONTINUIG OPERATIONS:
REVENUES $18,109,343 $25,571,389
COST OF SALES 6,070,653 6,974,455
--------- ---------
GROSS PROFIT 12,038,690 18,596,934
---------- ----------
RESEARCH AND DEVELOPMENT EXPENSE 233,145 1,093,440
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 5,845,257 3,799,136
--------- ---------
INCOME FROM OPERATIONS 5,960,288 13,704,358
--------- ----------
OTHER INCOME(EXPENSE):
Change in fair value of derivative
liabilities 2,754,749 11,624,079
Other income - related parties 83,672 80,652
Non-operating income(expense), net 338,540 (5,790)
Interest expense, net (2,539,807) (6,643,163)
---------- ----------
Total other income (expense), net 637,154 5,055,778
------- ---------
INCOME FROM CONTINUING OPERATIONS BEFORE
PROVISION FOR INCOME TAXES 6,597,442 18,760,136
PROVISION FOR INCOME TAXES 1,539,695 3,539,870
--------- ---------
INCOME FROM CONTINUING OPERATIONS 5,057,747 15,220,266
--------- ----------
DISCONTINUED OPERATIONS:
Loss from discontinued operations-net - 36,000
--- ------
NET INCOME 5,057,747 15,184,266
========= ==========
COMPREHENSIVE INCOME
Net income 5,057,747 15,184,266
Unrealized gainon available-for-sale
securities - 32,164
Foreign currency translation adjustment 1,177,397 509
--------- ---
COMPREHENSIVE INCOME $6,235,144 $15,216,939
========== ===========
BASIC WEIGHTED AVERAGE NUMBER OF SHARES 13,486,711 11,419,991
========== ==========
BASIC EARNINGS PER SHARE $0.38 $1.33
===== =====
DILUTED WEIGHTED AVERAGE NUMBER OF SHARES 15,659,211 15,235,811
========== ==========
DILUTED EARNINGS PER SHARE $0.22 $0.02
For the Nine Months Ended
March 31,
2011 2010
---- ----
CONTINUIG OPERATIONS:
REVENUES $69,199,820 $68,135,385
COST OF SALES 20,331,519 17,901,903
---------- ----------
GROSS PROFIT 48,868,301 50,233,482
---------- ----------
RESEARCH AND DEVELOPMENT EXPENSE 1,426,425 3,299,400
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 13,949,528 13,400,155
---------- ----------
INCOME FROM OPERATIONS 33,492,348 33,533,927
---------- ----------
OTHER INCOME(EXPENSE):
Change in fair value of derivative
liabilities 15,078,239 13,490,071
Other income - related parties 247,748 241,956
Non-operating income(expense),
net 392,443 (220,061)
Interest expense, net (13,649,378) (15,562,981)
----------- -----------
Total other income (expense), net 2,069,052 (2,051,015)
--------- ----------
INCOME FROM CONTINUING OPERATIONS
BEFORE PROVISION FOR INCOME TAXES 35,561,400 31,482,912
PROVISION FOR INCOME TAXES 8,799,329 8,618,061
--------- ---------
INCOME FROM CONTINUING OPERATIONS 26,762,071 22,864,851
---------- ----------
DISCONTINUED OPERATIONS:
Loss from discontinued operations-
net - 200,769
--- -------
NET INCOME 26,762,071 22,664,082
========== ==========
COMPREHENSIVE INCOME
Net income 26,762,071 22,664,082
Unrealized gainon available-for-
sale securities - 88,535
Foreign currency translation
adjustment 6,595,950 197,393
--------- -------
COMPREHENSIVE INCOME $33,358,021 $22,950,010
=========== ===========
BASIC WEIGHTED AVERAGE NUMBER OF
SHARES 12,818,593 10,965,346
========== ==========
BASIC EARNINGS PER SHARE $2.09 $2.07
===== =====
DILUTED WEIGHTED AVERAGE NUMBER OF
SHARES 15,192,372 15,234,156
========== ==========
DILUTED EARNINGS PER SHARE $1.76 $0.57
JIANGBO PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Nine Months Ended
-------------------------
March 31,
---------
2011 2010
---- ----
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net income $26,762,071 $22,664,082
Adjustments to reconcile
net income to cash
provided by operating
activities:
Depreciation 628,964 615,565
Amortization of
intangible assets 2,155,483 1,194,331
Amortization of debt
issuance costs 389,093 670,984
Amortization of debt
discount 11,836,485 11,409,936
Loss from discontinued
operations-net - 200,769
Gain from issuance of
shares in lieu of cash
interest payment (396,152) 318,936
Interest expense payment
of shares in lieu of
cash - 4,457
Bad debt (recovery)
expense (644,458) 446,257
Realized loss on sale of
marketable securities 3,241 406,346
Unrealized (gain) loss
on investments 68,210 (270,339)
Change in fair value of
derivative liabilities (14,961,390) (13,490,071)
Stock-based
compensation 124,951 155,104
Gain on legal settlement
settled on shares (91,495) -
Changes in operating
assets and liabilities
Accounts receivable 14,068,839 (8,813,521)
Inventories (605,309) (86,604)
Other receivables (25,267) 154,654
Other receivables-
related parties 82,583 (241,956)
Advances to suppliers 58,967 (273,373)
Long term prepayments 82,906 -
Accounts payable 43,147 (3,926,015)
Customer deposit - (1,026,480)
Other payables 125,055 725,041
Other payables -related
parties 265,247 712,114
Accrued liabilities (185,326 3,338,191
Liabilities assumed from
reorganization (217,472) (95,384)
Taxes payable (3,564,035) (6,308,625)
---------- ----------
Net cash provided by
operating activities 36,004,338 8,484,399
---------- ---------
CASH FLOWS FROM
INVESTING ACTIVITIES:
Proceeds from sale of
marketable securities 51,313 531,750
Purchase of equipment
and building
improvements (114,454) (76,977)
Purchase of land use
right - (16,975,633)
--- -----------
Net cash used in
investing activities (63,141) (16,520,860)
------- -----------
CASH FLOWS FROM
FINANCING ACTIVITIES:
Change in restricted
cash 1,141,140 (4,186,572)
Payments for bank loans (2,252,250) (2,199,600)
Proceeds from bank loans - 2,199,600
Proceeds from notes
payable 17,781,889 19,173,180
Principal payments on
notes payable (18,923,029) (14,986,608)
----------- -----------
Net cash used in
financing activities (2,252,250) -
---------- ---
EFFECTS OF FOREIGN
CURRENCY EXCHANGE RATE
FLUCTUATION ON CASH AND
CASH EQUIVALENTS 4,580,789 134,826
--------- -------
NET INCREASE (DECREASE)
IN CASH AND CASH
EQUIVALENTS 38,269,736 (7,901,635)
CASH AND CASH
EQUIVALENTS, BEGINNING
OF PERIOD 108,616,735 104,366,117
----------- -----------
CASH AND CASH
EQUIVALENTS, END OF
PERIOD $146,886,471 $96,464,482
============ ===========
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Cash paid for interest $61,176 $393,111
======= ========
Cash paid for income
taxes $11,808,802 $2,631,495
=========== ==========
NON-CASH INVESTING AND
FINANCING ACTIVITIES:
Common stock issued for
stock based
compensation $ - $20,000
=== === =======
Common stock issued to
offset related party
payable $ - $20,000
=== === =======
Common stock issued for
interest payment $6,281,031 $673,929
========== ========
Common stock issued for
convertible notes
conversion $8,500,000 $7,610,000
========== ==========
Common stock issued for
legal settlement $150,975 $ -
======== === ===
Derivative liability
reclassified to equity
upon conversion $2,200,370 $6,287,408
========== ==========
Transfer of investments
to settle liabilities
assumed from
reorganization $ - 1,133,807
=== === =========
JIANGBO PHARMACEUTICALS, INC. AND SUBSIDIARIES
(FORMERLY GENESIS PHARMACEUTICALS ENTERPRISES, INC.)
RECONCILIATION OF NON-GAAP NET INCOME
(Unaudited)
For the Three Months Ended
March 31,
2011 2010
---- ----
Net income for basic EPS -
GAAP $5,057,747 $15,184,266
Loss from discontinued
operations - 36,000
Unrealized loss (gain) on
investments 49,264 (36,756)
Loss (gain) in change of
fair value of derivative
liabilities (2,754,749) (11,624,079)
Amortization of debt
discount and issuance
costs related to
convertible debentures 2,377,406 4,060,332
Adjusted net income for
basic EPS -non GAAP $4,729,668 $7,619,763
========== ==========
Net income (loss) for
diluted EPS -GAAP 3,484,343 289,703
Loss from discontinued
operations - 36,000
Unrealized loss (gain) on
investments 49,264 (36,756)
Loss (gain) in change of
fair value of derivative
liabilities (2,754,749) (11,624,079)
---------- -----------
Adjusted net income (loss)
for diluted EPS -non GAAP 778,858 (11,335,132)
------- -----------
Basic Weighted Average
Number of Shares 13,486,711 11,419,991
========== ==========
Adjusted basic earnings per
share - non GAAP $0.35 $0.67
===== =====
Diluted Weighted Average
Number of Shares** 15,659,211 15,235,811
========== ==========
Adjusted diluted earnings
per share -non GAAP $0.05 $(0.74)
===== ======
For the Nine Months Ended
March 31,
2011 2010
---- ----
Net income for basic EPS -
GAAP $26,762,071 $22,664,082
Loss from discontinued
operations - 200,769
Unrealized loss (gain) on
investments 68,210 (358,874)
Loss (gain) in change of
fair value of derivative
liabilities (15,078,239) (13,490,071)
Amortization of debt
discount and issuance
costs related to
convertible debentures 12,193,461 12,080,922
Adjusted net income for
basic EPS -non GAAP $23,945,503 $21, 096,828
=========== ===========
Net income (loss) for
diluted EPS -GAAP 26,750,602 8,759,605
Loss from discontinued
operations - 200,769
Unrealized loss (gain) on
investments 68,210 (358,874)
Loss (gain) in change of
fair value of derivative
liabilities (15,078,239) (13,490,071)
----------- -----------
Adjusted net income (loss)
for diluted EPS -non GAAP 11,740,573 (4,888,571)
---------- ----------
Basic Weighted Average
Number of Shares 12,818,593 10,965,346
========== ==========
Adjusted basic earnings per
share - non GAAP $1.87 $1.92
===== =====
Diluted Weighted Average
Number of Shares** 15,192,372 15,234,156
========== ==========
Adjusted diluted earnings
per share -non GAAP $0.77 $(0.32)
===== ======
** Including outstanding options and warrants using treasury method
of calculation plus the number of shares if converted from the
convertible debt
SOURCE Jiangbo Pharmaceuticals, Inc.