JIANGBO PHARMACEUTCL (NASDAQ:JGBO)

First Quarter Results:

• 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.

"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.

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.

LAIYANG, China, May 16, 2011 /PRNewswire-Asia-FirstCall/ -- Jiangbo Pharmaceuticals, Inc.  today announced the appointment of Ms. Ziling Sun as the Company's Interim Chief Financial Officer effective May 12, 2011.

LAIYANG, China, April 18, 2011 /PRNewswire-Asia-FirstCall/ -- Jiangbo Pharmaceuticals, Inc. today announced that Laiyang Jiangbo Pharmaceutical Co., Ltd., a limited liability company organized under the laws of PRC  and controlled by Jiangbo through contractual arrangements. ("Laiyang Jiangbo"), has entered into a letter of intent (the "LOI") 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.

Founded in 2003, Xinkangqi was one of the first companies in Shandong to receive the Province's Good Sales Practice license. Xinkangqi currently has approximately 180 employees and professionals and distributes pharmaceuticals, traditional Chinese medicines, antibiotics, chemical drugs, biological products, disinfection products and chemical raw materials manufactured by more than 600 pharmaceutical companies to retail pharmacies, hospitals, medical centers and health clinics throughoutShandong Province.

Xinkangqi's unaudited revenue and net income in 2010 are estimated to be approximately $180 million and $4.4 million, respectively.  The transaction purchase price will be finalized upon conclusion of the due diligence process.

Laiyang Jiangbo plans to complete legal, operational and financial due diligence of Xinkangqi within a period of three months, including but not limited to, an assessment of Xinkangqi's intellectual property, business operations, assets, liabilities, organizational structure, and contracts with other parties. Pursuant to the LOI, Laiyang Jiangbo has agreed to retain Xinkangqi's current employees and management team after the transaction closes.  The Company expects that the acquisition will close by the end of September 2011.

"We are very pleased to announce the entry into the LOI with Xinkangqi which we believe has a strong presence in Shandong, one of China's largest provinces with over 94 million inhabitants," commented Mr. Linxian Jin, CEO of Jiangbo.  "Xinkangqi currently distributes many of our products and we anticipate achieving meaningful synergies by vertically integrating our manufacturing operations with Xinkanqi's distribution business after the transaction is closed. We plan to continue to evaluate strategic uses for our substantial remaining cash balance, including additional acquisitions in the fragmented distribution sector.  Among our current operational goals, we plan to build Xinkangqi into one of the largest vertically-integrated wholesale drug distributors in Shandong."

LAIYANG, China, April 4, 2011 /PRNewswire-Asia-FirstCall/ -- Jiangbo Pharmaceuticals, Inc. today announced that the Company has appointed 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.

The decision to change accountants was approved by Jiangbo's audit committee and board of directors, following the notification by Frazer Frost that it did not intend to stand for re-appointment as the company's principal accountant for the next fiscal year.

Frazer Frost, LLP had no disagreements with the Company, on any matters of accounting principle or practice, financial statement disclosure, or auditing scope or procedure for the fiscal years ended June 30, 2010, 2009 and 2008, or for the subsequent interim period ended December 31, 2010.

On March 15, 2011, Jiangbo Pharmaceuticals, Inc. received notification from Ms. Elsa Sung that effective March 31, 2011, she resigns from her position as the Chief Financial Officer of the Company due to family reasons. There were no disagreements between Ms. Sung and the Company on any matter relating to the Company’s operations, policies or practices, which resulted in her resignation. Following her resignation as the Chief Financial Officer, Ms. Sung will serve as a consultant to the Company on a part time basis

GeoTeam Note:

Excluding non-cash gains related to the change in fair value of derivative liabilities of $4.9 million, amortization of debt discount and debt issuance costs related to convertible debentures of $2.8 million, and unrealized loss on investments of $0.02 million, non-GAAP adjusted net income for diluted EPS was $5.5 million, or $0.37 per fully diluted share for the three months ended December 31, 2010, compared to non-GAAP adjusted net loss for diluted EPS of $16.8 million, or a loss of $1.11 per fully diluted share for the quarter ended December 31, 2009. *

Guidance:

"While our top-selling drugs have reached a mature phase in their product lifecycles, we believe their revenue run-rates can be maintained in the near-term.  In the second half of fiscal 2011, we expect a continued increase in sales of our new line of Felodipine sustained-release tablets and incremental revenue from the re-launch of several traditional Chinese medicines at our Hongrui facility," commented Mr. Jin.  

The Company reaffirms its guidance of revenues for fiscal year 2011 of between $94 million and $96 million, but withholds its previous guidance of net income. The management needs additional time to observe and evaluate the situation of higher raw material costs which is expected to affect the Company's profitability of fiscal year 2011."

 

LAIYANG, China, Jan. 21, 2011 /PRNewswire-Asia-FirstCall/ -- Jiangbo Pharmaceuticals, Inc., today announced that it has reached a settlement with the holder of its November 2007 Debenture and with the holders of its May 2008 Notes under which the Company has agreed to issue to such holders a total of 886,277 shares of its common stock as a payment for all delinquent interest and associated penalties with respect to its November 2007 Debenture and May 2008 Notes.  As part of the settlement, the holders of its November 2007 Debenture and May 2008 Notes have agreed to waive events of default that occurred as a result of the Company's failure to make timely payments on interest due on November 30, 2009, on May 30, 2010 and on November 30, 2010. Additionally, the holder of its November 2007 Debenture has agreed to extend the due date on the November 2007 Debenture to February 28, 2011.

"Consummation of this settlement brings the Company current on its November 2007 Debenture and May 2008 Notes. We thank our debenture and note holders for their continued support of Jiangbo Pharmaceuticals as we execute on our growth strategy in 2011," said Mr. Linxian Jin, the Company's Chief Executive Officer.

LAIYANG, China, Dec. 3, 2010 /PRNewswire-Asia-FirstCall/ -- Jiangbo Pharmaceuticals, Inc. today announced that negotiations with the holder of its November 2007 Debenture and the holders of its May 2008 Notes are continuing and that management believes that progress has been made in connection with reaching a settlement with such holders. To date, neither the holder of the November 2007 Debenture nor the holders of the May 2008 Notes have delivered an event of default notice with respect to these securities.

"We appreciate the support that our debenture and note holders have provided to the Company and are working hard to finalize a settlement that is in the interest of all parties. We will announce further details as soon as we have finalized the agreement," commented Mr. Linxian Jin, CEO of Jiangbo.

First Quarter Fiscal Year 2011 Highlights:

• Revenues increased 13.5% year-over-year to $27.7 million

• Gross profit was $20.0 million, up 10.4% from the comparable period in fiscal 2010

• Operating income increased 14.8% year-over-year to $14.6 million

• Net income increased 436.3% to $10.6 million, or $0.29 per fully diluted share

• Non-GAAP adjusted net income was $10.1 million, or $0.67 per fully diluted share, for the three months ended September 30, 2010, up 14.0% from non-GAAP adjusted net income of $8.9 million, or $0.60 per fully diluted share, for the quarter ended September 30, 2009  

• Jiangbo started the production and sale of Felodipine sustained release tablets

• Cash and equivalents as of September 30, 2010 totaled $123.9 million

"We are pleased with this quarter's year-over-year revenue growth, which was driven by increased sales of our top three products, Clarithromycin, Itopride Hydrochloride, and Radix Isatidis dispersible tablets," said Mr. Linxian Jin, Jiangbo's Chief Executive Officer. "We also are excited about the early performance of our Felodipine sustained release tablets, which we officially launched during the first quarter. We believe that this new drug, along with the anticipated production of several traditional Chinese medicines at our Hongrui facility, will begin to contribute meaningfully to revenue as we head into 2011."

Business Outlook and Guidance

While Clarithromycin sustained-release tablets, Itopride Hydrochloride granules and Baobaole chewable tablets have reached mature stages in their product lifecycles, the Company believes that its total current sales levels can be maintained in fiscal year 2011.

Management continues to estimate that the portfolio of TCM drugs to be manufactured at Hongrui will generate revenues of $7 million to $15 million during the first year of production, beginning in the second quarter of fiscal year 2011. Felodipine is expected to generate revenues of $8 million to $12 million during the first twelve months after its launch, which took place this quarter.

Therefore, based on its current outlook, the Company reaffirms guidance for fiscal year 2011 of revenues between $94 million and $96 million and net income, excluding the impact from change in fair value of derivative liabilities and expenses related to the Company's convertible debentures, between $29 million and $31 million.

"We ended the quarter with over $123 million in cash and are evaluating ways to deploy our capital to enhance the growth and profitability of our product portfolio and improve our strategic positioning within China's rapidly growing pharmaceutical industry. In particular, we are targeting strategic acquisitions that will strengthen our market position and vertically integrate our operations," concluded Mr. Jin.

Fourth Quarter FY 2010 Highlights:

• Revenues decreased 5.9% year-over-year to $29.3 million
  
• Gross profit was $21.1 million, a 8.2% decrease from the comparable period in 2009
  
• Operating income decreased 17.1% year-over-year to $14.7 million
  
• Net income decreased 37.5% to $7.2 million, or $(0.39) per fully diluted share
  
• Non-GAAP adjusted net income was $9.8 million, or $0.65 per fully diluted share, for the three months ended June 30, 2010, down 19.1% from non-GAAP adjusted net income of $12.1 million, or $0.81 per fully diluted share, for the quarter ended June 30, 2009 

    Fiscal Year 2010 Highlights:

• Total revenue decreased 17.0% year-over-year to $97.4 million
• Gross profit decreased 20.3% to $71.3 million, as compared to the results in fiscal year 2009
• Operating income decreased 3.1% year-over-year to $48.2 million
• Net income grew 3.4% to $29.9 million, as compared to the results in fiscal year 2009
• Non-GAAP adjusted net income was $30.9 million, or $2.04 per fully diluted share in fiscal year of 2010, down 13.0% from non-GAAP adjusted net income of $35.6 million, or $2.46 per fully diluted share in fiscal year 2009

    "Fiscal year 2010 was a transitional year for Jiangbo as we worked to upgrade our traditional Chinese medicine ("TCM") production facility and prepared for the introduction of new drugs. We are very pleased to have our shares begin trading on The NASDAQ Global Market, which is a significant milestone for our company," commented Mr. Jin, Jiangbo's Chief Executive Officer. "We are encouraged by the SFDA approval of our sustained release Felodipine tablets, which we believe will help counterbalance revenue declines of some of our more mature products such as Itopride and Baobaole Chewable tablets. While we have experienced delays in the renovation of our Hongrui facility for traditional Chinese medicine, we now expect to commence production of six of Hongrui's TCM products in October."

Business Outlook and Guidance

    Combined sales of the Company's top four products in fiscal year 2010 are expected to decline by 15% to 20% in fiscal year 2011, reflecting intensifying competition and the Chinese government's control over drug pricing under recent health care reform policies.

    Incremental sales from the Company's recently approved Felodipine sustained release tablets and from the Company's TCM products to be manufactured at Hongrui are expected to largely offset this decline in 2011.

    Management estimates that the portfolio of TCM drugs to be manufactured at Hongrui will generate revenues of $7 million to $15 million during the first year of production, beginning in the second quarter of fiscal year 2011. Felodipine is expected to generate revenues of $8 million to $12 million during the first twelve months after its launch, which took place in the first quarter of fiscal year 2011.

Based on current information, the Company expects that:

• Revenues for fiscal year 2011 will be in the range of $94 million and $96 million,
  
• Net income, excluding the impact from change in fair value of derivative liabilities and expenses related to the Company's convertible debentures, will be in the range of $29 million and $31 million.

    "We believe that our strong balance sheet and cash position provides Jiangbo with unique flexibility to acquire innovative new products and pursue strategic acquisitions.  Presently we are evaluating select opportunities to enhance our growth prospects, strengthen our market position and vertically integrate our operations. With the transitional year of 2010 behind us, we believe that we are well positioned to create value for shareholders in 2011 and beyond," commented Mr. Jin.

We are removing Jiangbo Pharmaceuticals ($11.30) from the GeoBargain list.  The Company issued 2010 guidance that is below 2009 reported figures. This seems to be a temporary situation:

The Company expects to achieve:

• Revenues for fiscal 2010 in the range of $96-98 million
• Operating income in the range of $42-44 million.
• In 2009 the JGBO reported operating income of $49.8 million on revenues of $117.4 million.

"These results include the impact of the temporary suspension of production at the Hongrui facility and increased marketing expenses to support the anticipated introduction of new drugs and a higher volume of TCM product sales."

"Fiscal 2010 is expected to be a transitional year for Jiangbo as we upgrade our TCM production facility, prepare for the introduction of new drugs, and pursue additional opportunities for both organic growth and potential strategic acquisitions. Our current outlook reflects only the drugs that we have in hand today and will be subject to update as we execute strategic initiatives to expand our market position and profitability in the future. We remain very confident regarding our future growth prospects and look forward to sharing further details with our shareholders as our expansion plans reach a definitive stage," concluded Mr. Cao.

 Source: PR Newswire (September 29, 2009)

Jiangbo Pharmaceuticals never really got going since it was added to the GeoBargain list on May 21, 2009 at $10.00. The stock did a reach a high of $14.25, but on light volume.

Still, with the slew of opportunities present in market, we are opting to move on.  The GeoTeam® will continue to track Jiangbo Pharmaceuticals.

On April 6, 2009, China unveiled its “Guideline of Deepening the Reform of Health Care System” (“Guideline”), a blueprint for health care over the next decade. By 2020, the world's most populous nation plans to have a basic health care system that can provide "safe, effective, convenient and affordable" health services to urban and rural residents. The State Council announced an investment of 850 billion Yuan (US $124 billion) to implement the health care reform plan in China.

“We believe that the Chinese government’s planned reforms for China’s heathcare system will increase demand for Jiangbo’s products because a number of Jiangbo products are used to treat common and widespread illnesses. “Several of our products should be good candidates for inclusion on provincial and the national drug lists, which are used to stock clinics and hospitals. We look forward to working with the government’s planned programs to help meet the needs of an increasing number of China’s consumers.” concluded Mr. Cao.

Recently updated its previously issued full year fiscal 2009 financial guidance, maintaining its operating income projections, while reducing its revenue projection.

"This adjustment to revenue guidance was mainly because of the Company’s charging lower unit prices to the 28 independent distributors which sell and distribute the Company’s three major products. The Company expects to meet or exceed its fiscal year 2009 guidance."

FULL YEAR 2009 Guidance Ending June ^a

	Full Year 2009 Guidance	Full Year 2008 Reported	Period Change
GAAP Revenue	$111.0 to $116.0 million	$99.5 million	11.6% to 16.6%
Operating Income b	$40.0 to $43.0 million	$32.2 million	24.2 to 33.5%

Source: SEC Form 8K (May 18, 2009)

^a The above forecasts reflect the Company's current and preliminary views and are therefore subject to change. Please refer to the Company's Safe Harbor Statement (usually in press releases) for the factors that could cause actual results to differ materially from those contained in any forward-looking statement.

^bThe company did not provide any income guidance other than operating income. It excludes interest expense. It also excludes results from a recently announced acquisition (Hongrui). The GeoTeam® believes that it is important to understand the company's future interest burden, which has been increasing, to garner a full understanding of potential valuation scenarios. The GeoTeam® will provide guidance updates when they become available.

Guidance Report:

In January of 2009, China's government announced that it will spend more than $120 billion over the next three years to expand insurance coverage, revamp public hospitals and improve access to medical treatment. Genesis expects these government programs to create favorable market conditions for the Company, especially because most of the Company's products are used to treat commonly occurring diseases.

 The government aims to extend medical insurance to 90% of the population by 2011 and make 'basic health-care services' available to all of China's 1.3 billion citizens. Making medical services available to more people is line with the Company's marketing strategy which includes increasing sales in rural markets.

FULL YEAR 2009 Guidance Ending June ^a

	Full Year 2009 Guidance	Full Year 2008 Reported	Period Change
GAAP Revenue	$122.0 to $130.0 million	$99.5 million	22.6% to 33.7%
Operating Income b	$40.0 to $43.0 million	$32.2 million	24.2 to 33.5%

Source: PR Newswire (February 17, 2009)

^a The above forecasts reflect the Company's current and preliminary views and are therefore subject to change. Please refer to the Company's Safe Harbor Statement (usually in press releases) for the factors that could cause actual results to differ materially from those contained in any forward-looking statement.

^b The company did not provide any income guidance other than operating income. It excludes interest expense. It also excludes results from a recently announced acquisition (Hongrui). The GeoTeam® believes that it is important to understand the company's future interest burden, which has been increasing, to garner a full understanding of potential valuation scenarios. The GeoTeam® will provide guidance updates when they become available.