Jiangbo Pharmaceuticals Q4 Profit Plunges 38%, Stock Retreats 5%
Jiangbo Pharmaceuticals (Nasdaq:JGBO), a pharmaceutical company based in China that produces both western medical drugs and Chinese herbal-based drugs, announced today its results for the fourth quarter and fiscal year ended June 30, 2010.
Jiangbo's fourth quarter revenue declined 5.9% year-over-year to $29.3 million. Net income for the period decreased 37.5% to $7.2 million, or 39 cents per diluted share. The drop in profits was mainly because of a substantial increase in interest expense associated with the company's convertible debentures.
Because Jiangbo was delinquent on interest payments, it is liable to pay additional penalty interest on its convertible. The reason for the delinquency, according to the company, was due to its inability to transfer cash out of China, where it is based.
For the fiscal 2010, total revenue decreased 17% year over year to $97.4 million Net income, however, managed to increase 3.4% to 29.9 million. 2010 earnings per diluted share was $1.36 compared to 9 cents per share for the year earlier.
At the end of the year, Jiangbo had about $156.3 million in current assets, of which roughly $108.6 million was cash. Total liabilities, which are all due within the next twelve months, were $67.8 million. The liabilities included $18.5 million of derivative liabilities and $12.2 million of convertible debentures.
Looking ahead, the company expects to have sales between $94 million and $96 million in fiscal 2011. Net income, excluding fair value changes in the company's convertible debentures, is expected to be between $29 million and $31 million.
On Thursday trading, Jiangbo's shares has declined 5% to trade at $7.45 as of 1:42 pm ET.
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