NEW YORK, May 9, 2011 /PRNewswire-Asia-FirstCall/ --
American Oriental Bioengineering, Inc. (NYSE: AOB), (the "Company"
or "AOB"), a pharmaceutical company dedicated to improving health
through the development, manufacture and commercialization of a
broad range of prescription and over–the-counter ("OTC") products,
today announced financial results for the first quarter ended
March 31, 2011.
First Quarter 2011 Financial Performance
In the first quarter of 2011, revenue decreased to $52.0 million from $53.7
million in the same period of 2010.
- The Company generated revenue of $48.7
million from its manufacturing business in the first quarter
of 2011 compared with $50.5 million
in the prior year period. Revenue from pharmaceutical
products decreased 4.7% to $39.0
million from $40.9 million in
the prior year period. Nutraceutical products generated revenue of
approximately $9.8 million in the
first quarter of 2011, an increase of 1.2% from $9.7 million in the prior year period. The
revenue performance reflects the combined results of the Company's
continuous marketing efforts, new product launches, and expanding
coverage in rural areas. This was offset by the impact from
the Company's strategic shift of revenue mix toward higher-margin
products to minimize the impact from the increased costs of certain
raw materials.
- The Company generated $3.3
million from its distribution business, Nuo Hua, in the first quarter of 2011, compared
to $3.2 million in the prior year
period.
Gross profit in the first quarter of 2011 was $25.1 million compared to $28.2 million in the first quarter of 2010. Gross
margin was 48.2% compared to 52.5% in the prior year period.
The margin pressure was mainly caused by a higher proportion
of generic product sales in the rural market, the increased costs
of certain raw materials, as well as the new levied urban
construction and maintenance tax and educational surcharge.
Operating income in the first quarter of 2011 decreased to
$5.5 million compared with
$6.4 million in the prior year
period. Total operating expenses decreased 10.7% to
$19.5 million from $21.9 million in the prior year period.
Selling, general and administrative expenses were
$11.2 million, or 21.6% of total
revenue, compared to $10.7 million,
or 20.0% of total revenue, in the prior year period.
Advertising expense decreased to $3.8
million in the first quarter of 2011 compared to
$6.7 million in the prior year
period, reflecting reduced advertising efforts on OTC drugs to
correspond to the Company's selective product sales strategy.
Research and development expenses were $2.7
million compared to $2.8
million in the prior year period. Management continued
to implement stringent cost control measures which offset the
increased labor costs.
Net income attributable to controlling interest for the first
quarter of 2011 was $0.9 million, or
$0.01 per diluted share, compared to
$3.1 million, or $0.04 per diluted share, in the prior year
period.
Balance Sheet
As of March 31, 2011, the Company
had $111.4 million in cash and cash
equivalents, and generated approximately $21.6 million of operating cash flow during the
first quarter of 2011. Working capital was $162.9 million as of March
31, 2011, compared to $162.2
million as of December 31,
2010.
Mr. Tony Liu, Chairman and Chief
Executive Officer of AOB, commented, "We are pleased with our
financial performance despite the increasingly challenging economic
and regulatory environment in China and worldwide. Our first quarter
results reflect our continuing efforts on profitability focus and
cost control. We dynamically adjusted our product mix to
minimize the negative impact from the increased costs of certain
raw materials and the government's price reduction on certain
drugs. In addition, we believe our continued investments in
CAPEX and R&D will give us a competitive advantage in for the
long term, especially under the stricter regulatory
environment."
Conference Call
The Company will hold a conference call at 8:00 am ET on Tuesday, May
10, 2011, to discuss its results. Listeners may access
the call by dialing 1-877-299-4454 or 1-617-597-5447 for
international callers, access code: 91826695. A webcast will
also be available through AOB's website at www.bioaobo.com. A
replay of the call will be available through May 17, 2011. Listeners may access the
replay by dialing 1-888-286-8010 or 1-617-801-6888 for
international callers, access code: 86841058.
About American Oriental Bioengineering, Inc.
American Oriental Bioengineering, Inc. is a pharmaceutical
company dedicated to improving health through the development,
manufacture and commercialization of a broad range of prescription
and over the counter products.
Safe Harbor Statement
Statements made in this press release are forward-looking and
are made pursuant to the safe harbor provisions of the Securities
Litigation Reform Act of 1995. Such statements involve risks
and uncertainties that may cause actual results to differ
materially from those set forth in these statements. The
economic, competitive, governmental, technological and other
factors identified in the Company's filings with the Securities and
Exchange Commission may cause actual results or events to differ
materially from those described in the forward looking statements
in this press release. The Company undertakes no obligation
to publicly update or revise any forward-looking statements,
whether because of new information, future events, or
otherwise.
Contact:
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ICR, LLC
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Christine Duan or Ashley
Ammon
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203-682-8200
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AMERICAN
ORIENTAL BIOENGINEERING, INC. AND SUBSIDIARIES
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CONDENSED
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
INCOME
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(UNAUDITED)
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THREE MONTHS
ENDED
MARCH
31
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2011
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2010
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Revenues
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$
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52,002,110
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$
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53,749,768
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Cost of sales
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26,926,200
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25,513,047
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GROSS PROFIT
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25,075,910
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28,236,721
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Selling, general &
administrative expenses
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11,239,247
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10,742,712
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Advertising costs
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3,821,148
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6,748,470
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Research and development
costs
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2,701,212
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2,778,809
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Depreciation and
amortization
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1,770,711
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1,596,958
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Total operating
expenses
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19,532,318
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21,866,949
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INCOME FROM
OPERATIONS
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5,543,592
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6,369,772
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Equity in (losses) earnings from
unconsolidated entities
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(409,886)
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117,473
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Interest expense, net
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(1,513,585)
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(1,565,785)
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Other expenses, net
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425,880
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12,247
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INCOME BEFORE INCOME
TAXES
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4,046,001
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4,933,707
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Income tax
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|
3,124,855
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|
1,815,930
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|
|
|
|
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NET INCOME
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921,146
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3,117,777
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Net loss attributable to
non-controlling interest
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3,006
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5,400
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NET INCOME ATTRIBUTABLE TO
CONTROLLING INTEREST
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924,152
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3,123,177
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OTHER COMPREHENSIVE
INCOME
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3,132,466
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92,849
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COMPREHENSIVE
INCOME
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$
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4,056,618
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$
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3,216,026
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EARNINGS PER COMMON
SHARE
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Basic
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$
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0.01
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$
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0.04
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Diluted
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$
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0.01
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$
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0.04
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WEIGHTED AVERAGE SHARES
OUTSTANDING
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Basic
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74,987,374
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74,697,044
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Diluted
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76,018,561
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89,460,953
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AMERICAN
ORIENTAL BIOENGINEERING, INC. AND SUBSIDIARIES
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CONDENSED
CONSOLIDATED BALANCE SHEETS
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(UNAUDITED)
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|
|
|
|
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MARCH
31,
|
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DECEMBER
31,
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|
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2011
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2010
|
|
|
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CURRENT
ASSETS
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Cash and cash
equivalents
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$
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111,432,776
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$
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94,568,520
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Restricted Cash
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875,318
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537,297
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Accounts and notes receivable,
net
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46,865,375
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80,598,919
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Inventories, net
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25,138,004
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12,665,586
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Advances to suppliers and
prepaid expenses
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16,715,346
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14,246,144
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Deferred tax
assets
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440,174
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649,503
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Other current
assets
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3,394,063
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2,986,005
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Total
Current Assets
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204,861,056
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206,251,974
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LONG-TERM
ASSETS
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Property, plant and
equipment, net
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108,907,254
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109,547,616
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Land use rights,
net
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155,562,594
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155,433,311
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Other long term
assets
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8,212,645
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8,167,880
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Construction in
progress
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28,556,117
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22,516,044
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Other intangible assets,
net
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14,144,113
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14,889,127
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Goodwill
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33,164,121
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33,164,121
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Investments in and
advances to equity investments
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58,933,172
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59,068,491
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Deferred tax
assets
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145,302
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147,024
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Unamortized financing
costs
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2,127,332
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2,359,404
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Total
Long-Term Assets
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409,752,650
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405,293,018
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TOTAL
ASSETS
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$
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614,613,706
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$
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611,544,992
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LIABILITIES AND SHAREHOLDERS’
EQUITY
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MARCH
31,
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DECEMBER
31,
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2011
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2010
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CURRENT
LIABILITIES
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Accounts
payable
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$
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11,436,580
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$
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10,716,686
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Notes payable
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875,318
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537,297
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Other payables and accrued
expenses
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13,922,647
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18,039,557
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Taxes payable
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2,590,172
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|
1,237,169
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Short-term bank
loans
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|
7,001,416
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6,957,258
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Current portion of
long-term bank loans
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61,706
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61,405
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Other
liabilities
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5,881,213
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6,284,107
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Deferred tax
liabilities
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193,671
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243,304
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Total
Current Liabilities
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41,962,723
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44,076,783
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LONG-TERM
LIABILITIES
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Long-term bank loans, net
of current portion
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663,783
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679,866
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Deferred tax
liabilities
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|
15,656,086
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15,837,479
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|
Unrecognized tax
benefits
|
|
5,551,703
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|
5,050,157
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Convertible
Notes
|
|
115,000,000
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115,000,000
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Total
Long-Term Liabilities
|
|
136,871,572
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|
136,567,502
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TOTAL
LIABILITIES
|
|
178,834,295
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|
180,644,285
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|
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EQUITY
|
|
|
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SHAREHOLDERS’
EQUITY
|
|
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|
Preferred stock, $0.001 par
value; 2,000,000 shares authorized; 1,000,000 shares issued and
outstanding at March 31, 2011 and December 31, 2010,
respectively
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|
1,000
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1,000
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Common stock, $0.001 par value;
150,000,000 shares authorized; 78,598,604 shares issued and
outstanding at both March 31, 2011 and December 31, 2010
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78,598
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78,598
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Common stock to be
issued
|
|
435,000
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350,500
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Prepaid forward repurchase
contract
|
|
(29,998,616)
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(29,998,616)
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Additional paid-in
capital
|
|
204,063,263
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|
203,322,671
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Retained earnings (the
restricted portion of retained earnings is $26,471,124 at both
March 31, 2011 and December 31, 2010)
|
|
208,439,256
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|
207,515,104
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Accumulated other comprehensive
income
|
|
52,258,717
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|
49,126,251
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Total
Shareholders’ Equity
|
|
435,277,218
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430,395,508
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Non-controlling
Interest
|
|
502,193
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|
505,199
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|
TOTAL
EQUITY
|
|
435,779,411
|
|
430,900,707
|
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TOTAL
LIABILITIES AND EQUITY
|
$
|
614,613,706
|
$
|
611,544,992
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SOURCE American Oriental Bioengineering, Inc.