omniture

TPI Reports Third Quarter Fiscal Year 2011 Financial Results

2011-05-16 23:28 1752


CHENGDU, China, May 16, 2011 /PRNewswire-Asia-FirstCall/ -- Tianyin Pharmaceutical Co., Inc. (NYSE Amex: TPI), a pharmaceutical company that specializes in the patented biopharmaceutical, modernized traditional Chinese medicine, branded generics and other pharmaceuticals, announced the financial results for the third quarter of Fiscal Year 2011.


Third quarter fiscal year 2011 ending March 31, 2011 financial highlights

  • Revenue increased 56.3% year over year to $24.9 million from $15.9 million in third quarter fiscal year 2010;
  • Operating income increased 39.9% year over year to $5.0 million from $3.6 million in third quarter fiscal year 2010;
  • Net Income increased to $3.7 million, up 27.7% year over year from $2.9 million in third quarter fiscal year 2010;
  • Earnings per share of $0.13 per basic share, or $0.12 per diluted share, up from $0.11 per basic share, or $0.09 per diluted share a year earlier, a gain of 19.3% and 35.5%,  respectively;
  • Cash and cash equivalents totaled $31.1 million on March 31, 2011 or $1.10 per basic share in cash;
  • Targeting 900 hospitals coverage by the end of fiscal year 2011 up from the current 880 hospitals network;
  • Forecasting $30 million JCM macrolide API revenue for the first year of operation.

Third quarter fiscal year 2011 ending March 31, 2011 Results

 
 

 

3Q FY2011

 

3Q FY2010

 

YoY

 
 

Sales

 

$24.9 million

 

$15.9 million

 

+56.3%

 
 

Gross Profit

 

$10.8 million

 

$8.4 million

 

+28.6%

 
 

Operating Income

 

$5.0 million

 

$3.6 million

 

+39.9%

 
 

Net Income

 

$3.7 million

 

$2.9 million

 

+27.7%

 
 

EPS (Diluted)

 

$0.12

 

$0.09

 

+35.5%

 
 

Diluted Shares

 

29.8 million

 

31.6 million

 

 
 
       


Sales for the quarter ended March 31, 2011 was $24.9 million, up 56.3% as compared to $15.9 million for the quarter ended March 31, 2010. Although our generic pharmaceutical sales have been under pricing pressure since the beginning of the third quarter, the channel expansion, optimized production facility usage, and the continuous stream of Tianyin Medicine Trading (TMT) distribution revenue supported the quarterly sales growth.

With the current hospital coverage at 880 hospitals up from 850 hospitals from the beginning of fiscal year 2011, we are targeting to reach 900 hospitals by the end of fiscal year 2011 ending June 30, 2011.

Revenues from the top selling products are listed as follows,

  • Gingko Mihuan Oral Liquid (GMOL): $5.6 million, revenue driving prescription patented proprietary medicine for stroke treatment, nationally reimbursed;  
  • Apu Shuangxin Benorylate Granules (APU): $1.8 million, flagship OTC product with proprietary granular formulation for inflammation and rheumatism;  
  • Azithromycin Tablets (AZI): $0.98 million, branded Essential Drug Listed (EDL) highly effective broad spectrum antibiotics;
  • Xuellian Chongcao Oral Liquid (XLCC): $1.1 million, formulated proprietary TCM oral liquid for immunity and sexual function enhancement;
  • Qing Re Jie Du Oral Liquid (QR): $0.77 million, modernized TCM legacy product for viral infections such as H1N1 influenza.

These products totaled $10.2 million in sales, representing 41.2% of the quarterly revenue.

Cost of Sales for the quarter ended March 31, 2011 was $14.0 million or 56.2% of sales as compared to $7.5 million or 47.2% of the sales of the quarter ended March 31, 2010. Our cost of sales consists of the raw material cost, labor, depreciation and amortization of manufacturing equipment and facilities, and other overhead.

Gross Margin for the quarter ended March 31, 2011 was 43.6% as compared to 52.8% for the quarter ended March 31, 2010. The decrease in gross margins was attributable to the addition of TMT revenues, the distribution arm of TPI, whose gross margins average approximately 15%. In addition, the pricing pressure on our generic products also contributes to the gross margin reduction. During this quarter, our 56 product organic portfolio delivered approximately 51.4% gross margins, about 1.4% lower than the gross margin of 52.8% from a year earlier. Given the blend of the TMT lower margin distribution revenue and recent decline of the gross margins associated with our proprietary portfolio under the current pricing trend, we anticipate that our overall gross margin in the near term, on a quarter to quarter comparison basis, may trend lower, but on a sequential basis should stabilize and improve depending upon the revenue mix percentages of TMT revenue, upcoming JCM macrolide API revenue as compared to the proprietary portfolio's revenue performance.

Operating Expenses for the quarter ended March 31, 2011 were $5.8 million, compared with $4.8 million for the quarter ended March 31, 2010. Continuing sales payroll and marketing expenses are the main components of the operating expenses.

Net Income was $3.7 million for the quarter ended March 31, 2011, as compared to net income of $2.9 million for the quarter ended March 31, 2010, a net increase of $0.8 million or 27.6% year over year. Net profit margins for the quarter ended March 31, 2011 decreases to 14.9% from 18.3% for the quarter ended March 31, 2010 mainly attributable to 1) recent pricing pressure on the generic pharmaceutical business, 2) lower margin TMT distribution revenue, 3) increase of income tax provision to 25% starting January 2011 from the previous 15% for Chengdu Tianyin at the expiration of the three year tax benefit for high tech enterprise. We expect the stabilization of the net profit margin at approximately 15% going forward under the current pharmaceutical sales market condition.

Diluted earnings per share for the three months ended March 31, 2011 were $0.12, up 35.5% from the earnings of $0.09 per diluted share for the three months ended March 31, 2010, based on 29.8 million and 31.6 million shares, respectively.

Balance Sheet and Cash Flow

As of March 31, 2011, we had working capital totaling $37.2 million, including cash and cash equivalents of $31.1 million or $1.10 per share in cash. Net cash generated from operating activities for the nine months ended March 31, 2011 was $12.3 million, compared with $11.5 million for the nine months ended March 31, 2010. We believe that TPI is adequately funded to meet all of the working capital and capital expenditure needs for FY2011.

Business Outlook

Jiangchuan Macrolide Project - JCM

Since the construction completion of JCM, we have entered into the equipment installation and GMP certification preparation phase of the JCM project. We forecast the first year JCM macrolide API revenue contribution to reach $30 million.

Tianyin Medicine Trading Distribution Business - TMT

Since the signing of one-year distribution rights in last November with Jiangsu Lianshui Pharmaceutical to distribute 15 Lianshui-branded generic injection products including cough suppressant, antibiotics, and anti-inflammatory medicines, our TMT business continues to revenue contribution for TPI. The annual distribution revenue is estimated to be approximately $15 million.

Fiscal Year 2011 Financial Guidance

Due to the recent healthcare reform and the resulting pricing pressure on  generic pharmaceutical sales nationwide, since January 2011, our generic division which makes up approximately 40% of our total revenue is expected to experience sales reduction for the next few quarters. In addition, the longer than expected equipment installation and GMP certification preparation process following the newly issued SFDA GMP standards by the PRC government at the beginning of March 2011, are expected to reduce the previously forecast revenue of JCM macrolide facility. We therefore revise our fiscal year 2011 revenue guidance to $90.0 million representing 40.8% year over year growth, from the previously guided $113.0 million in total revenue.

Based on the revised revenue forecast of $90.0 million along with the new 25% income tax rate starting in January 2011 from the previous 15% for Chengdu Tianyin, we revise our net income forecast to $16 million, representing 32.9% year over year growth from previous $18 million. The forecasted net income excludes any non-cash expenses associated with stock compensation plans or stock option expenses. 

Our analysis of the market condition suggests that although the pricing pressure on the generic division is likely to continue for the remainder of 2012 calendar year, the JCM along with TMT distribution business are expected to support the growth of TPI for the coming fiscal year.

Management will continue to evaluate the Company's business outlook and communicate any changes on a quarterly basis or as when appropriate.

Conference Call

Senior management will host the earnings conference call for the third quarter of fiscal year 2011 ending March 31, 2011 to be held at 9:00 a.m. ET on Tuesday, May 17, 2011.

Interested parties may access the call by dialing +1-877-941-1427 (U.S.), 1-480-629-9664 (International)

The conference ID is 4441371. It is advisable to dial in approximately 5 minutes prior to the start of the call.

A replay will be available by calling +1-877-870-5176 (U.S.), 1-858-384-5517 (International), from 05/17/2011 at 12:00 Noon ET till 05/31/2011 at 11:59 pm ET.

Replay Pin Number: 4441371

This call is being web cast by ViaVid Broadcasting and can be accessed at ViaVid's website at the following link: http://viavid.net/dce.aspx?sid=0000869E

About Tianyin Pharmaceutical

Tianyin Pharmaceutical Co., Inc. (TPI), headquartered at Chengdu, China, specializes in the development, manufacturing, marketing and sale of patented biopharmaceutical, modernized traditional Chinese medicines, branded generics and other pharmaceuticals. TPI currently manufactures and markets a comprehensive portfolio of 56 products, 23 of which are listed in the highly selective National Reimbursement List, 7 are included in the Essential Drug List of China. TPI's pipeline targets cardiovascular diseases, women's health, immune system and respiratory disorders. TPI has an extensive nationwide distribution network with 730 sales representatives out of totaled 1,365 employees. For more information about Tianyin, please visit http://www.tianyinpharma.com .

Safe Harbor Statement

The Statements which are not historical facts contained in this press release are forward-looking statements that involve certain risks and uncertainties including but not limited to risks associated with the uncertainty of future financial results, additional financing requirements, development of new products, government approval processes, the impact of competitive products or pricing, technological changes, the effect of economic conditions and other uncertainties detailed in the Company's filings with the Securities and Exchange Commission.

For more information, please contact:

 
 

 
 

Investors Contact:

 
 

 
 

James Jiayuan Tong M.D. Ph.D.

 
 

Chief Financial Officer, Chief Business & Development Officer

 
 

Director

 
 

Tianyin Pharmaceutical Co., Inc.

 
 

Web:   http://www.tianyinpharma.com

 
 

Email: Dr.Tong@tianyinpharma.com

 
 

Tel:   +86-28-8551-6696 (Chengdu, China)

 
 

       +1-949-350-6999 (U.S.)

 
 

       +86-134 36 550011 (China)

 
 

 
 

Address:

 
 

    23rd Floor Unionsun Yangkuo Plaza

 
 

    No. 2, Block 3, South Renmin Road

 
 

    Chengdu, 610041

 
 

    China

 
 
 



TIANYIN PHARMACEUTICAL CO., INC.

Consolidated Balance Sheets

 
 

 

March 31,

 

June 30,

 
 

 

2011

 

2010

 
 

Assets

 

(Unaudited)

 

 
 

Current assets:

 

 

 
 

   Cash and cash equivalents

 

$31,066,927

 

$27,009,066

 
 

   Accounts receivable, net of allowance for doubtful accounts of $436,515

 

9,742,186

 

8,185,240

 
 

      and $421,079 at March 31, 2011 and June 30, 2010, respectively

 

 

 
 

   Inventory

 

5,431,746

 

3,588,824

 
 

   Advance payments

 

397,020

 

382,980

 
 

   Loans receivable

 

-

 

294,600

 
 

   Other current assets

 

31,831

 

77,283

 
 

           Total current assets

 

46,669,710

 

39,537,993

 
 

 

 

 
 

Property and equipment, net

 

25,596,835

 

14,968,822

 
 

 

 

 
 

Intangibles, net

 

15,295,417

 

15,232,286

 
 

 

 

 
 

           Total assets

 

$87,561,962

 

$69,739,101

 
 

 

 

 
 

Liabilities

 

 

 
 

Current liabilities:

 

 

 
 

   Accounts payable and accrued expenses

 

$1,556,489

 

$  1,715,781

 
 

   Accounts payable – construction related

 

2,389,461

 

2,248,849

 
 

   Short-term bank loans

 

2,748,600

 

1,473,000

 
 

   VAT taxes payable

 

746,997

 

658,312

 
 

   Income taxes payable

 

1,333,674

 

861,614

 
 

   Other taxes payable

 

159,356

 

19,564

 
 

   Dividends payable

 

34,661

 

72,995

 
 

   Other current liabilities

 

537,834

 

429,135

 
 

           Total current liabilities

 

9,507,072

 

7,479,250

 
 

 

 

 
 

           Total liabilities

 

9,507,072

 

7,479,250

 
 

 

 

 
 

Equity

 

 

 
 

Stockholders' equity:

 

 

 
 

   Common stock, $0.001 par value, 50,000,000 shares authorized,

 

29,396

 

27,326

 
 

       29,396,276 and 27,371,526 shares issued and outstanding at

 

 

 
 

     March 31, 2011 and June 30, 2010, respectively

 

 

 
 

   Series A convertible preferred stock, $0.001 par value -0- and 1,360,250

 

-

 

1,360

 
 

      shares issued and outstanding at March 31, 2011 and June 30, 2010,

 

 

 
 

      Respectively

 

 

 
 

   Additional paid-in capital

 

31,536,139

 

29,623,396

 
 

   Statutory reserve

 

3,732,883

 

3,732,883

 
 

   Treasury stock

 

(111,587)

 

(111,587)

 
 

   Retained earnings

 

37,339,441

 

25,687,770

 
 

   Accumulated other comprehensive income

 

5,096,149

 

2,845,076

 
 

           Total stockholders' equity

 

77,622,421

 

61,806,224

 
 

 

 

 
 

Noncontrolling interest

 

432,469

 

453,627

 
 

 

 

 
 

           Total equity

 

78,054,890

 

62,259,851

 
 

 

 

 
 

           Total liabilities and equity

 

$87,561,962

 

$69,739,101

 
 

 

 

 
 

 
 
     



TIANYIN PHARMACEUTICAL CO., INC.

Consolidated Statements of Operations

(Unaudited)

 
 

 

For the Three Months Ended

 

For the Nine Months Ended

 
 

 

March 31,

 

March 31,

 
 

 

2011

 

2010

 

2011

 

2010

 
 

 

 

 

 

 
 

Sales

 

$24,880,980

 

$15,917,771

 

$72,165,647

 

$44,259,352

 
 

 

 

 

 

 
 

Cost of sales

 

14,044,670

 

7,493,230

 

39,183,982

 

21,019,960

 
 

 

 

 

 

 
 

Gross profit

 

10,836,310

 

8,424,541

 

32,981,665

 

23,239,392

 
 

 

 

 

 

 
 

Operating expenses:

 

 

 

 

 
 

   Selling, general and administrative

 

5,517,647

 

4,607,897

 

17,252,309

 

13,135,398

 
 

   Research and development

 

286,020

 

218,515

 

802,696

 

608,385

 
 

       Total operating expenses

 

5,803,667

 

4,826,412

 

18,055,005

 

13,743,783

 
 

 

 

 

 

 
 

Income from operations

 

5,032,643

 

3,598,129

 

14,926,660

 

9,495,609

 
 

 

 

 

 

 
 

Other income (expenses):

 

 

 

 

 
 

   Interest income

 

33,083

 

15,068

 

90,681

 

34,436

 
 

   Interest expense

 

(29,791)

 

(18,913)

 

(72,599)

 

(58,276)

 
 

   Other income (expenses)

 

-

 

-

 

-

 

(39,510)

 
 

       Total other Income (Expenses)

 

3,292

 

(3,845)

 

18,082

 

(63,350)

 
 

 

 

 

 

 
 

Income before provision for income tax

 

5,035,935

 

3,594,284

 

14,944,742

 

9,432,259

 
 

 

 

 

 

 
 

Provision for income tax

 

1,323,665

 

686,161

 

3,171,172

 

1,767,852

 
 

 

 

 

 

 
 

Net income

 

3,712,270

 

2,908,123

 

11,773,570

 

7,664,407

 
 

 

 

 

 

 
 

Less: Net income (loss) attributable to

 

 

 

 

 
 

noncontrolling interest

 

(4,492)

 

(1,357)

 

(21,121)

 

(2,397)

 
 

 

 

 

 

 
 

Net income attributable to Tianyin

 

 

 

 

 
 

Pharmaceutical Co., Inc.

 

3,716,762

 

2,909,480

 

11,794,691

 

7,666,804

 
 

 

 

 

 

 
 

Basic earnings per share

 

$            0.13

 

$           0.11

 

$           0.42

 

$          0.31

 
 

Diluted earnings per share

 

$            0.12

 

$           0.09

 

$           0.39

 

$          0.26

 
 

 

 

 

 

 
 

Weighted average number of common shares

 

 

 

 

 
 

  outstanding

 

 

 

 

 
 

   Basic

 

28,218,732

 

26,363,749

 

28,031,064

 

23,650,332

 
 

   Diluted

 

29,822,596

 

31,631,330

 

30,062,270

 

29,931,923

 
 

 

 

 

 

 
 

 
 
         



TIANYIN PHARMACEUTICAL CO., INC.

 
 

Consolidated Statements of Comprehensive Income

 
 

(Unaudited)

 
 

 

For the Three Months Ended

 

For the Nine Months Ended

 
 

 

March 31,

 

March 31,

 
 

 

2011

 

2010

 

2011

 

2010

 
 

 
 

 
 

Net income

 

$3,712,270

 

$2,908,123

 

$11,773,570

 

$7,664,407

 
 

 

 

 

 

 
 

Other comprehensive income

 

 

 

 

 
 

Foreign currency translation adjustment

 

484,258

 

(155)

 

2,251,109

 

46,808

 
 

 

 

 

 

 
 

Total other comprehensive income

 

484,258

 

(155)

 

2,251,109

 

46,808

 
 

 

 

 

 

 
 

Comprehensive income

 

4,196,528

 

2,907,968

 

14,024,679

 

7,711,215

 
 

 

 

 

 

 
 

Comprehensive income attributable to the

 

 

 

 

 
 

 noncontrolling interest

 

(103)

 

-

 

(37)

 

(179)

 
 

 

 

 

 

 
 

Comprehensive income attributable to

 

 

 

 

 
 

 Tianyin Pharmaceutical Co., Inc.

 

$4,196,425

 

$2,907,968

 

$14,024,642

 

$7,711,036

 
 
         



TIANYIN PHARMACEUTICAL CO., INC.

Consolidated Statements of Cash Flows

(Unaudited)


 
 

 

For the Nine Months Ended

 
 

 

March 31,

 
 

 

2011

 

2010

 
 

Cash flows from operating activities:

 

 

 
 

Net Income

 

$11,773,570

 

$ 7,664,407

 
 

Adjustments to reconcile net income to net cash

 

 

 
 

 provided by (used in) operating activities:

 

 

 
 

   Depreciation and amortization

 

893,896

 

678,372

 
 

   Bad debt expense

 

-

 

96,734

 
 

   Share-based payments

 

1,913,453

 

1,274,516

 
 

   Loss on disposal of fixed assets

 

-

 

39,510

 
 

   Changes in assets and liabilities:

 

 

 
 

Accounts receivable

 

(1,235,887)

 

(2,725,110)

 
 

Inventory

 

(1,682,777)

 

190,744

 
 

Other current assets

 

46,400

 

457,487

 
 

Accounts payable and accrued expenses

 

(267,848)

 

437,483

 
 

Accounts payable – construction related

 

280,295

 

2,887,122

 
 

VAT taxes payable

 

36,038

 

87,300

 
 

Income taxes payable

 

433,118

 

195,177

 
 

Other taxes payable

 

164,187

 

5,175

 
 

Dividends payable

 

(18,138)

 

-

 
 

Other current liabilities

 

(131,682)

 

195,931

 
 

           Total adjustments

 

431,055

 

3,820,441

 
 

 

 

 
 

           Net cash provided by operating activities

 

12,204,625

 

11,484,848

 
 

 

 

 
 

Cash flows from investing activities:

 

 

 
 

   Additions to property and equipment

 

(10,317,824)

 

(5,338,740)

 
 

   Additions to intangible assets – approved drugs

 

-

 

(2,742,168)

 
 

   Loans receivable

 

300,300

 

(293,280)

 
 

 

 

 
 

           Net cash used in investing activities

 

(10,017,524)

 

(8,374,188)

 
 

 

 

 
 

Cash flows from financing activities:

 

 

 
 

   Proceeds from bank loans

 

1,201,200

 

65,988

 
 

   Additional paid-in capital

 

-

 

8,864,825

 
 

   Contribution from minority shareholders

 

-

 

439,920

 
 

   Dividends paid

 

(54,857)

 

(1,577,068)

 
 

 

 

 
 

           Net cash provided by financing activities

 

1,146,343

 

7,793,665

 
 

 

 

 
 

Effect of foreign currency translation on cash

 

724,417

 

2,852

 
 

 

 

 
 

Net increase in cash and cash equivalents

 

4,057,861

 

10,907,177

 
 

 

 

 
 

Cash and cash equivalents – beginning

 

27,009,066

 

12,352,223

 
 

 

 

 
 

Cash and cash equivalents – ending

 

$31,066,927

 

$23,259,400

 
 

 

 

 
 

Supplemental schedule of non cash activities

 

 

 
 

   Advance payments exchanged for intangible assets – drug

 

$                 -

 

$     807,986

 
 

 

 

 
 

 

 

 
 

 
 
     

Source: Tianyin Pharmaceutical Co., Inc.
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