omniture

Tianyin Reports Record First Quarter Fiscal Year 2011 Financial Results

2010-11-10 22:12 1628

CHENGDU, China, Nov. 10, 2010 /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 financial results for the first quarter of Fiscal Year 2011.

First quarter fiscal year 2011 ending September 30, 2010 financial highlights

  • 1Q FY2011 revenue increased 63.7% year over year to $22.0 million from $13.4 million a year earlier
  • 1Q FY2011 Operating income delivered $4.6 million, up 66.3% from $ 2.7 million a year earlier
  • Net Income increased 68.0% to $3.7 million, up from $2.2 million a year earlier
  • Earnings per share of $0.13 per basic share, or $0.12 per diluted share, up from $0.10 per basic share, or $0.08 per diluted share a year earlier, a gain of 54.4%  
  • Cash and equivalents totaled $26.9 million on September 30, 2010
  • Sichuan Jiangchuan Pharmaceutical Co., Ltd. ("Jiangchuan") macrolide facility construction progress on schedule: completion by yearend 2010

1Q FY2011 Results




 

1Q FY2010

1Q FY2009

YoY

 

Sales

$22.0 million

$13.4 million

+63.7%

 

Gross Profit

$10.8 million

$7.1 million

+53.2%

 

Operating Income

$4.6 million

$2.7 million

+66.3%

 

Net Income

$3.7 million

$2.2 million

+68.0%

 

EPS (Diluted)

$0.12

$0.08

+54.4%

 

Diluted Shares

29.9 million

27.5 million

+8.7%

 
       


Sales for 1Q FY2011 was $22.0 million, up 63.7% vs. $13.4 million for 1Q FY2010. The sales growth was supported by the continuing channel expansion, market penetration and optimized usage of our expanded production facility.

Revenues from our top selling products are listed as follows,

 

Ginkgo Mihuan Oral Liquid (GMOL): $4.7 million

 

Apu Shuangxin (Benorylate) Granules (APU): $1.5 million

 

Azithromycin Dispersible Tablets (AZI): $0.87 million

 

Xuelian Chongcao Oral Liquid (XLCC): $0.83 million

 

Qingrejiedu Oral Liquid (QR): $0.64 million

 

These major products revenue totaled $8.5 million, representing 38.7% of the quarterly revenue for 1Q FY2011.

 
 


Cost of sales for the three months ended September 30, 2010 was $11.1 million or 50.7% of sales as compared to $6.3 million or 47.4% of sales for the three months ended September 30, 2009. The 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 three months ended September 30, 2010 was 49.3% as compared to 52.6% for the three months ended September 30, 2009. The stabilization of our cost of sales was due to an increase of distribution revenue which averaged 15% margins from Tianyin Medicine Trading (TMT), a fully owned subsidiary of Tianyin, combined with a steady increase of high margin products led by GMOL in our organic portfolio.

Operating expenses were $6.2 million for the three months ended September 30, 2010, as compared to $4.3 million for the three months ended September 30, 2009. The increase was primarily due to 1) continuing sales and marketing strategy that raises our sales payroll and marketing expenses and 2) one-time restricted stock compensation for the total of 55 Tianyin's employees for their contribution in delivering significant growth for the Company in FY2009 and FY2010.

Net income was $3.7 million for the three months ended September 30, 2010, as compared to net income of $2.2 million for the three months ended September 30, 2009, a net increase of $1.5 million or 68.0% year over year. Net margins of 1Q FY2011 improved to 16.7% up from 16.3% for 1Q FY2010 mainly due to the leverage of the business operation that drives the sales expansion while keeping the operating expenses in-line with the revenue growth.

Diluted earnings per share for the three months ended September 30, 2010 were $0.12, up 54.4% from the earnings of $0.08 per diluted share for the three months ended September 30, 2009, based on 29.9 million and 27.5 million shares for 1Q FY2011 and 1Q FY2010, respectively.

Balance Sheet and Cash Flow

As of September 30, 2010, we had cash and cash equivalents of $26.9 million. Net cash generated from operating activities was $1.5 million for the three months ended September 30, 2010 as compared to $2.2 million for the three months ended September 30, 2009. The decrease in cash generated from the operating activities during 1Q FY2011 was primarily the result of 1) $1.6 million inventory increase following the sales expansion of TMT and 2) $ 1.1 million Jiangchuan related construction costs that offset the net cash flow from operating activities driven by net income growth of $1.5 million. We believe that Tianyin is adequately funded to meet all of the working capital and capital expenditure needs for FY2011.

Business Development & Outlook

Jiangchuan Progress Update

Jiangchuan focuses on the production of one of the world's best-selling antibiotics, macrolide antibiotics, such as Azithromycin. Jiangchuan holds a license from China's SFDA to produce macrolide antibiotics and a related business license from the Industry and Commerce Bureau and Tax department. Tianyin owns 77% of Jiangchuan and will utilize Jianchuan as the foundation of a broader, longer term strategy to build a significant presence in the rapidly growing macrolide antibiotics market. Construction of the new production facility in Xinjin Industrial Development Area commenced on January 8, 2010 with Phase I capacity of 240 ton capacity, followed by Phase II (total of 480 ton capacity including phase I) with a total estimated capital expenditures of $20 million. Tianyin anticipates Jiangchuan's revenue contribution to begin in the 2nd half of fiscal year 2011.

Development of Tianyin Medicine Trading Distribution Business

Since the inception of Tianyin Medicine Trading (TMT), we have been developing the distribution portfolio of TMT, Tianyin's distribution arm for specialty products manufactured by other pharmaceuticals that provide synergy to our existing organic product portfolio. Previously, TMT distributes mainly Tianyin's own products. In early November this year, we have successfully obtained one year distribution rights from state-owned Jiangsu Lianshui Pharmaceutical (Lianshui) to distribute approximately 15 Lianshui-branded generic injection products including cough suppressant, antiobiotics along with other healthcare indications. We forecast the annual distribution revenue from TMT to reach approximately $10 million.

Conference Call

Senior management of Tianyin will host a conference call to discuss its fiscal year 2011 first quarter results at 9:00 a.m. ET on Thursday, November 11, 2010.

Interested parties may access the call by dialing +1-877-941-4774 (U.S.), or +1-480-629-9764 (International). The conference ID is 4384159. It is advisable to dial in approximately 5 minutes prior to the start of the call.

A replay will be available from November 11, 2010 till November 25, 2010 by dialing 1-877-870-5176 (U.S.) or 1-858-384-5517 (International), Replay Pin Number: 4384159

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=00007DBB

About Tianyin Pharmaceutical

Tianyin Pharmaceutical Co., Inc., headquartered at Chengdu, China, specializes in the development, manufacturing, marketing and sale of patented biopharmaceutical, modernized traditional Chinese medicines, branded generics and other pharmaceuticals. Tianyin 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. Tianyin has a pipeline of 10 products pending SFDA approval targeting cardiovascular conditions, women's health, immune system and respiratory disorders. Tianyin 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

 
 



Consolidated Balance Sheets

 

September 30,

June 30,

 

2010

2010

 

Assets

(Unaudited)


 

Current assets:



 

  Cash and cash equivalents

$26,889,203

$27,009,066

 

  Accounts receivable, net of allowance for doubtful accounts of $427,939

9,171,877

8,185,240

 

     and $421,079 at September 30, 2010 and June 30, 2010, respectively



 

  Inventory

5,218,254

3,588,824

 

  Advance payments

389,220

382,980

 

  Loans receivable

299,400

294,600

 

  Other current assets

172,189

77,283

 

        Total current assets

42,140,143

39,537,993

 



 

Property and equipment, net

17,023,433

14,968,822

 



 

Intangibles, net

15,297,911

15,232,286

 



 

        Total assets

$74,461,487

$69,739,101

 



 

Liabilities



 

Current liabilities:



 

  Accounts payable and accrued expenses

$  1,523,622

$  1,715,781

 

  Accounts payable – construction related

1,131,717

2,248,849

 

  Short-term bank loans

1,497,000

1,473,000

 

  VAT taxes payable

583,630

658,312

 

  Income taxes payable

916,459

861,614

 

  Other taxes payable

59,801

19,564

 

  Dividends payable

54,857

72,995

 

  Other current liabilities

597,665

429,135

 

        Total current liabilities

6,364,751

7,479,250

 



 

        Total liabilities

6,364,751

7,479,250

 



 

Equity



 

Stockholders' equity:



 

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

27,986

27,372

 

     27,986,026 and 27,371,526 shares issued and outstanding at



 

    September 30, 2010 and June 30, 2010, respectively



 

  Series A convertible preferred stock, $0.001 par value 1,360,250 shares

1,360

1,360

 

     issued and outstanding at September 30, 2010 and June 30, 2010,



 

     Respectively



 

  Additional paid-in capital

30,891,906

29,623,350

 

  Statutory reserve

3,732,883

3,732,883

 

  Treasury stock

(111,587)

(111,587)

 

  Retained earnings

29,310,447

25,687,770

 

  Accumulated other comprehensive income

3,797,958

2,845,076

 

        Total stockholders' equity

67,650,953

61,806,224

 



 

Noncontrolling interest

445,783

453,627

 



 

        Total equity

68,096,736

62,259,851

 



 

        Total liabilities and equity

$74,461,487

$69,739,101

 



 

 
     



Consolidated Statements of Operations and Comprehensive Income

(Unaudited)

 

For the Three Months Ended

 

September 30,

 

2010

2009

 



 

Sales

$21,950,814

$13,405,203

 



 

Cost of sales

11,139,689

6,349,227

 



 

Gross profit

10,811,125

7,055,976

 



 

Operating expenses:



 

  Selling, general and administrative

5,987,226

4,117,766

 

  Research and development

257,975

192,490

 

     Total operating expenses

6,245,201

4,310,256

 



 

Income from operations

4,565,924

2,745,720

 



 

Other income (expenses):



 

  Interest income (expense)

9,206

(9,560)

 

  Other expenses

-

(39,502)

 

     Total other income (expenses)

9,206

(49,062)

 



 

Income before provision for income taxes

4,575,130

2,696,658

 



 

Provision for income taxes

905,439

509,936

 



 

Net income

3,669,691

2,186,722

 



 

Less: Net loss attributable to noncontrolling interest

(7,844)

(2,526)

 



 

Net income attributable to Tianyin Pharmaceutical Co., Inc.

3,677,535

2,189,248

 



 

Other comprehensive income



 

  Foreign currency translation adjustment

952,882

35,857

 



 

Comprehensive income

$4,630,417

$ 2,225,105

 



 

Basic earnings per share

$         0.13

$          0.10

 

Diluted earnings per share

$         0.12

$          0.08

 



 

Weighted average number of common shares outstanding



 

  Basic

27,891,488

19,735,790

 

  Diluted

29,945,191

27,516,458

 



 

 
     



Consolidated Statements of Cash Flows

(Unaudited)

 

For the Three Months Ended

 

September 30,

 

2010

2009

 

Cash flows from operating activities:



 

Net Income

$  3,669,691

$  2,186,722

 

Adjustments to reconcile net income to net cash



 

 provided by (used in) operating activities:



 

  Depreciation and amortization

314,116

197,037

 

  Share-based payments

1,269,170

512,209

 

  Loss on disposal of fixed assets

-

39,502

 

  Changes in current assets and current liabilities:



 

Accounts receivable

(843,012)

(1,492,362)

 

Inventory

(1,552,067)

126,979

 

Other current assets

(93,032)

419,905

 

Accounts payable and accrued expenses

(189,572)

183,242

 

Accounts payable – construction related

(1,139,900)

-

 

VAT taxes payable

(111,405)

16,025

 

Income tax payable

40,316

19,054

 

Other taxes payable

66,462

(433)

 

Dividends payable

(18,138)

-

 

Other current liabilities

133,153

33,582

 

        Total adjustments

(2,123,909)

54,740

 



 

        Net cash provided by operating activities

1,545,782

2,241,462

 



 

Cash flows from investing activities:



 

  Additions to property and equipment

(1,922,700)

(525,965)

 

  Additions to intangible assets – drug

-

(1,891,269)

 

  Loan receivable

-

(293,220)

 



 

        Net cash used in investing activities

(1,922,700)

(2,710,454)

 



 

Cash flows from financing activities:



 

  Additional paid-in capital

-

2,534,581

 

  Contribution from minority shareholders

-

439,830

 

  Dividends paid

(54,857)

(499,331)

 



 

        Net cash provided by (used in) financing activities

(54,857)

2,475,080

 



 

Effect of foreign currency translation on cash

311,912

(5,435)

 



 

Net increase (decrease) in cash and cash equivalents

(119,863)

2,000,653

 



 

Cash and cash equivalents – beginning

27,009,066

12,352,223

 



 

Cash and cash equivalents – ending

$26,889,203

$14,352,876

 



 

Supplemental schedule of non cash activities



 

  Advance payments exchanged for intangible assets – drug

$                -

$     425,169

 



 

 
     
Source: Tianyin Pharmaceutical Co., Inc.
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