نتائج الارباح
Armand Dauplaise, President and Chief Executive Officer
Bernard Shinder, Director and CFO
1630 Winter Springs Boulevard, Winter Springs, Fl 32708 ph.(888) 327-4703
www.bioonecorp.us and
www.hawkassociates.com
Investor Relations: Frank N. Hawkins, Jr./Julie Marshall (305) 852-2383
November 16, 2004
Bio-One Reports Q3 Revenue $10.4M, Operating Income $938,994. Nine Months Revenue $26.0M, Operating Income $2M. Signs LOI to Acquire $17M Chinese Herbal Medicine Company.
COMPANY DESCRIPTION
Bio-One Corporation, a nutritional supplements company serving the preventive and alternative healthcare segments, is rapidly expanding through an aggressive global acquisition strategy. The company is selectively acquiring industry leaders in order to provide quality nutraceuticals to consumers through vertical integration of manufacturing, distribution and marketing. Since September 2003, the company has acquired five companies with combined annual revenue exceeding $40 million. Bio-One also has signed letters of intent to acquire ownership or majority control of three other companies with combined annual revenue of $36 million. The company says it is in discussions with additional acquisition candidates.
Health Care Industry
Independent research has estimated that more than 100 million Americans are consuming nutritional supplements at record rates. Industry sources estimate the U.S. nutrition industry to be approximately $58 billion. Many analysts believe this consumer-directed health care expenditure will grow even faster than the 8% annual growth predicted on average for the heath care industry overall.
The nutritional supplements industry is highly fragmented. Less than twenty companies realize annual revenues in excess of $100 million. Over 5,000 companies in this market segment are relatively small family businesses, most being first generation with annual sales of less than $25 million. These mom and pop type businesses often have limited access to capital and face illiquid exit strategies. However, many of these businesses are highly profitable with EBITDA in the 15% to 20% range of sales. These are the businesses that Bio-One has targeted for acquisition.
Recent Acquisitions
1. PNLabs, Inc. Acquired September 2003. Produces nutritional supplements with annual revenue of $1 million. Its natural health and nutritional products are developed and formulated by health care professionals.
2. American Nutritional Exchange, Inc. Acquired 80% interest in February 2004. Is a supplement distributor with annual revenues over $8.5 million.
3. Interactive Nutrition International Acquired March 2004. A $12 million a year leader in manufacturing and distribution of branded, specialty, nutritional supplements.
4. WeiFang Shengtai Pharmaceuticals Co. Ltd. Acquired majority control in April 2004. A Chinese manufacturer and distributor of glucose in China, with 30% share of glucose market in China. Audited 2003 revenues of US$16.3 million.
5. Florida Sport Nutrition Distributors, Inc. ANI Distribution acquired the assets in June 2004. A wholesale distributor of supplements with sales of approximately $2 million in 2003.
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BICO - OTC BB
Closing Price (11/15/04) $0.05
52 week range $0.029 - 0.585
Market Capitalization $8.2 mil.
Basic Shares 165.0 mil.
Insider Ownership 2.9%
Est. Public Float 160.5 mil.
Average Daily Trading 3,561,917
2003 Revenue $103,312
2003 Net Loss ($1,383,112)
2003 EPS (diluted) ($0.04)
Total Assets (9/30/04) $52.2 mil.
Total Debt (9/30/04) $40.1 mil.
Fiscal Year End Dec. 31
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RECENT KEY DEVELOPMENTS
11/16/04 Bio-One reports Q3 '04 revenue $10.4 mil., operating income $9;38,994. Nine months revenue $26.0 mil., operating income $2.0 mil.
08/19/04 Bio-One reports Q2 '04 revenue $10.9 mil., operating income $1.3 mil. Six months revenue $15.6 mil.
08/03/04 Bio-One promotes management veteran Bob Ramsey to VP of Operations.
07/30/04 Bio-One revises status of proposed investment by Hong Kong based investor.
07/20/04 Bio-One to acquire majority interest in $17 mil. Chinese company.
06/21/04 Bio-One acquires supplements distributor.
06/01/04 Bio-One to acquire majority interest in $10 million Chinese company.
05/05/04 Bio-One to acquire majority interest in $9 million Chinese herbal medicine company.
04/12/04 Bio-One aquires majority conrol of leading Chinese glucose maker and distributer.
04/01/04 Bio-One aquires Interactive Nutrition International, Canadian-based supplements company with $12 million in 2003 revenue.
THE OUTLOOK
Through an aggressive acquisition program, Bio-One is striving to become a leading manufacturer and marketer of brand name nutritional supplements sold through multiple distribution pipelines. This strategy will be dependent on successfully acquiring manufacturing, marketing and distribution companies currently engaged in various aspects of this industry. The company successfully negotiated a $30 million agreement to fund its acquisition strategy.
Management believes the U.S. retail market for vitamins, minerals and other supplements, including sports nutrition products and nutritionally enhanced foods and diet products, was approximately $58 billion in 2003. Of this total, supplement sales accounted for approximately $20 billion. As the "baby boomer" population ages and life expectancies and discretionary income increases, more emphasis is being placed on the quality of a person's health and wellness. People want to live well as they live longer. The Consumer Health Care Products Association presented evidence of the strength of the Self-Care Movement in a recent survey. Among the respondents: 73% would rather treat themselves at home than see a doctor. 96% say they are generally confident about health care decisions they make for themselves.
It is estimated that the population of those 65 years and older will double to nearly 25% of the U.S. population by the year 2030. Up to 85% of elderly people have diseases that could be alleviated with nutritional interventions such as changes in dietary patterns or supplement use. Nutritional supplement use is prevalent among the elderly, ranging from 30% to more than 70%, depending on the population studied and the frequency of supplement use.
A recent survey showed that 42% of Americans now routinely use Complementary and Alternative Medicine Services (CAM) therapies. 80% of spending on CAM services is out-of-pocket, non-reimbursable dollars. Consumers make almost twice as many visits to CAM practitioners as they do to primary care practitioners. A powerful recent trend has been the establishment of so-called Integrative Medicine practices, in which practitioners use both traditional and alternative methods. A central feature of CAM and Integrative Medicine is a search for alternatives to drug therapy and in many cases this leads practitioners to recommending and in some cases selling nutritional supplements.
Bio-One's July 20 announcement of an LOI to acquire majority control of a $17 million Chinese herbal medicine company marked another step in establishing a presence in China. The company says it is aggressively pursuing additional synergistic candidates in China as well as in North America that meet its criteria for profitability and revenue growth. Bio-One announced in June an agreement to acquire 51% of a $10 million Chinese herbal medicine company with 2004 operating profit of $2.7 million. In April, Bio-One announced the purchase of majority control of WeiFang Shengtai Pharmaceuticals, a Shandong Province-based manufacturer and distributor of glucose that reported $16.3 million in revenue in 2003 and a net income of $2.3 million.
MANAGEMENT TEAM
Frank Clark, Chairman of the Board - former officer and director of several national and international health care companies. Former EVP and a director of a Johnson & Johnson subsidiary.
Armand Dauplaise, President and CEO - officer and director since 1999. Extensive experience in management, operations, marketing, mergers and acquisitions. Formerly with Burger King Corporation, Hardees Corporation and Hallmark Cards.
Bernard Shinder, Director and CFO - experienced developer of operational infrastructures.
Irwin Newman, Secretary and Director - practicing attorney in Boca Raton, FL.
Roy Lerman, Director - 40 years of experience in the brokerage business and current member with the American Stock Exchange for more than 30 years.
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RISK FACTORS
Success of acquisition program
Need for additional capital
Ability to introduce new and innovative products
No historical revenue or earnings
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