Huifeng Bio-pharmaceutical Technology (fka HFGB)

[Harleyman]

News for 'HFGB' - (Huifeng Bio-Pharmaceutical Reported Third-Quarter 2010 Financial Results and Raises its 2010 Year-End Guidance)


XI'AN, China, Nov. 16, 2010 /PRNewswire via COMTEX/ -- Huifeng
Bio-Pharmaceutical Technology, Inc. (OTC Bulletin Board: HFGB), specializing in
developing and producing botanical extracts and other raw materials for
pharmaceuticals and food additives today announced its financial results for its
third-quarter 2010.

Third Quarter 2010 Highlights

Net Revenues grew 66.2% year over year to $7,422,334

Gross profit was $3,906,538, up 165.5% from the third quarter of 2009 with gross
margin of 52.6%, significantly increased 19.7% from 32.9% for the third quarter
of 2009.

Net income was $2,155,930, an increase of $1,153,925 or 115% from the third
quarter 2009, and earnings per diluted share were $0.08 based on 25.9 million
shares.

Company increases full-year guidance for net income to $5.5-$6 million from
previous guidance of $4.5-$5 million.



Third Quarter 2010 Results

Q3 2010 Q3 2009 CHANGE

Revenue $7.4 million $4.4 million +66.2%

Gross profit $3.9 million $1.4 million +165.5%

Net Income $2.1 million $1.1 million +115%

EPS (Diluted)* $0.08 $0.05 +60%

* Weighted average shares outstanding (diluted) for Q3 2010 was 25,908,427 and for Q3 2009 was 22,354,212.



"We are pleased to announce record financial results and robust growth in
both our revenue and net income," Mr. Jing'an Wang, the Company's CEO,
commented. "Net Revenues grew 66.2% year over year, as we experienced
increased sales in our Diosmin and Rutin product lines. Our gross margins for
the third-quarter 2010 increased 165%, which is a result of higher selling
prices and further economies of scale. This strong performance and growth has
led us to raise our full-year net income guidance for 2010."

"We are also very excited about the construction of our new 500 ton Diosmin
plant, which we expect will be completed in 2011 and the final stages of the
European COS audit and certification process. We believe that with European COS
certification and our new 500 ton COS Standard Diosmin, the Company is
positioned to be the leading producer of Diosmin for years to come." Mr.
Wang continued.

For the Three Months EndedSeptember 30, 2010and 2009

Revenues for the quarter ended September 30, 2010 were $7,422,334, an increase
of $2,956,564, or 66.2%, from $4,465,770 for the same quarter in 2009. Our
increase in sales revenues for the third quarter of 2010 was mainly due to the
increase in our sales of pharmaceutical raw-material and pharmaceutical
intermediates, which include our products of Rutin, Troxerutin and Quercetin. An
analysis of our results in sales of our products is as follows:





For the quarter ended Increase

September 30,

------------------------

Product 2010 2009

---------------------------- ------------- --------------

Pharmaceutical intermediates $ 2,305,410 $ 1,104,279 $ 1,201,131

Pharmaceutical raw-material 4,417,384 2,696,843 1,720,541

Plant extractive and others 699,540 664,648 34,892

--------- --------- ---------

TOTAL $ 7,422,334 $ 4,465,770 $ 2,956,564





Cost of sales for the quarter ended September 30, 2010 was $3,515,796, an
increase of$521,191, or 17.4%, from $2,994,605 for the quarter ended September
30, 2009. Compared to the quarter ended September 30, 2009, the increase in cost
of sales for the third quarter of 2010 was caused by an increase in sales of our
pharmaceutical intermediates. An analysis of our results in cost of sales of our
products is as follows:





For the quarter ended Increase

September 30,

------------------------

Product 2010 2009

---------------------------- ------------- -------------

Pharmaceutical intermediates $ 1,108,012 $ 697,933 $ 410,079

Pharmaceutical raw-material 1,972,627 1,863,999 108,628

Plant extractive and others 435,157 432,673 2,484

--------- --------- -------

TOTAL $ 3,515,796 $ 2,994,605 $ 521,191





Our gross margin for the quarter ended September 30, 2010 was $3,906,538, an
increase of $2,435,373, or 165%, from $1,471,165 for the same quarter in 2009 as
a result of the increase in our products sold and a significant increase in the
selling price of our products, mainly due to the sales increase of
pharmaceutical raw-material and pharmaceutical intermediates.

Our gross margin as a percentage of revenues for 2010 increased 19.6% from 33%
for the third quarter of 2009 to 52.6% in the same quarter in 2010, mainly
because of a significant increase in the selling price of our products.

For the Nine Months EndedSeptember 30, 2010and 2009

Revenues for the nine months ended September 30, 2010 were $18,273,172, an
increase of $9,389,982, or 106%, from $8,883,190 for the same period in 2009.
Our increase in revenues for the nine months ended September 30, 2010 was mainly
due to the increase in our sales of pharmaceutical raw-material and
pharmaceutical intermediates, which include our products of Rutin,
Troxerutin,L-Rhamnose, Quercetin and Diosmin. An analysis of our results in
sales of our products is as follows:





Nine Months ended Increase

September 30,

---------------------------

Product 2010 2009

---------------------------- ---------------- ---------------



Pharmaceutical intermediates $ 4,611,947 $ 2,002,165 $ 2,609,782

Pharmaceutical raw-material 11,894,424 5,445,430 6,448,994

Plant extractive and others 1,766,801 1,435,595 331,206

---------- --------- ---------

TOTAL $ 18,273,172 $ 8,883,190 $ 9,389,982





Cost of sales for the nine months ended September 30, 2010 were $10,276,838, an
increase of $4,316,373, or 72.4%, from $5,960,465 for the nine months ended
September 30, 2009.The increase in the cost of sales for the nine months ended
September 30, 2010 was caused by an increase in sales of pharmaceutical
intermediates and pharmaceutical raw-materials, which include our products
L-Rhamnose, Quercetin and Diosmin. An analysis of our results in cost of sales
of our products is as follows:





Nine Months ended Increase

September 30,

------------------------

Product 2010 2009

---------------------------- ------------ ------------



Pharmaceutical intermediates $ 2,597,664 $ 1,247,493 $ 1,350,171

Pharmaceutical raw-material 6,830,394 3,864,665 2,965,729

Plant extractive and others 848,780 848,307 473





TOTAL $ 10,276,838 $ 5,960,465 $ 4,316,373





The gross profit margin for the nine months ended September 30, 2010 was
$7,996,334, an increase of $5,073,609 or 173.6% from $2,922,725 for the nine
months ended September 30, 2009 as a result of an increase in sales of our
products and a significant increase in the selling price of our products, mainly
due to an increase in sales of our pharmaceutical raw-material and
pharmaceutical intermediates.

Our gross margin as a percentage of sales for the nine months ended September
30, 2010 increased by 10.8% to 43.8% from 33% in the same period in 2009. The
increase in gross margin was mainly due to the increasein the selling price of
raw-materials.

Financial condition

Cash and cash equivalents as ofSeptember 30, 2010 were $2,088,599.

In the nine months ended September 30, 2010, cash provided by operating
activities was $2,931,146, compared to cash used in operating activities of
$169,785 for the nine months ended September 30, 2009, mainly due to the
significant increase in our net income from continuing operations. In the nine
months ended September 30, 2010, cash used in investing activities was $545,997
compared to cash used in investing activities of $194,238 for the same period in
2009, mainly as a result of the purchase of new production machinery and
equipment. Cash used in financing activities in the nine months ended September
30, 2010 was $854,937, compared to cash provided by financing activities of
$263,062 in the same period in 2009, primarily as the result of the repayment of
a bank loan and the repayment of amounts owed to six Note holders.

The Company Increases its 2010 Guidance

The Company reaffirms its expectation that it will earn approximately $25
millionin revenues for the year endedDecember 31, 2010, however, the Company now
expects to earn net income for the year ended December 31, 2010 of approximately
$5.5-$6 million, an increase of $1 million from its previous guidance of
approximately $4.5-$5 million. The Company expects continued revenue growth in
the last quarter of 2010 as it enters its most profitable selling period.

About Huifeng Bio-Pharmaceutical Technology, Inc.

Huifeng Bio-Pharmaceutical Technology, Inc., located inXi'an,People's Republic
of China, develops and produces plant extracts and pharmaceutical raw materials
for use in pharmaceutical, nutraceutical and food production. It is the leading
Chinese producer of rutin and related plant-derived chemicals in a class called
flavonoids, with medicinal and other beneficial properties. Founded in 2002,
Huifeng uses proprietary patented processes to extract rutin more efficiently
than traditional extraction techniques. The Company is diversifying its product
lines through internal development, acquisition and cooperation with scientific
research organizations. More information can be found on the Company's web site
at:http://www.hfgb.cn/