- Revenues For Fiscal Year 2008 Increased 64.3% Year-over-Year to $33.5
Million
- Fiscal Year 2008 Gross Margins Improved 410-Basis Point to 43.8% over
Fiscal Year 2007
- Net Income For Fiscal Year 2008 Increased 51.3% Year-over-Year to $6.0
Million with Diluted EPS of $0.31
- Provides Fiscal 2009 Guidance: Revenues Expected to Exceed $46 Million
with a Net Income of at Least $7.5 million
CHENGDU, China, Sept. 29 /Xinhua-PRNewswire/ -- Tianyin Pharmaceutical Co., Inc., (OTC Bulletin Board: TYNP), a manufacturer and supplier of modernized traditional Chinese medicine (“TCM”) based in Chengdu, China, today announced Annual 2008 financial results ended June 30, 2008.
Fourth Quarter Ending June 30, 2008 Financial Results
Tianyin announced record revenue for its fourth quarter of $9.3 million, representing a 37.7% increase from $6.7 million recorded in the fourth quarter of fiscal 2007.
Gross profit in the fourth quarter 2008 was $4.5 million, a 9.8% sequentially from $4.1 million in the third quarter of 2008, and a 52.0% increase from $2.9 million in the fourth quarter of 2007.
Gross margins were 48.2% in the fourth quarter of 2008, compared to 44.6% in the third quarter of 2008 and 43.6% in the fourth quarter of 2007.
Operating expenses were $2.6 million and operating income was $1.9 million in the fourth quarter of 2008, slightly lower than $2.2 million in the fourth quarter of 2007.
Net income for the quarter was $1.5 million, up 156.0% from net income of $595,745 in the same period a year ago. Income taxes were approximately $335,600 representing an effective tax rate of 17.6%for the fiscal fourth quarter of 2008.
Fully diluted earnings per share were $0.04 for the last quarter of 2008, compared to fully diluted earnings per share of $0.05 in the fourth quarter of 2007, utilizing 19.1 million shares and 12.8 million shares respectively. The variance in net income and earnings per share was related to the company’s merger with the capital raise which occurred simultaneous with the merger.
Year Ending June 30, 2008 Financial Results
For the fiscal year ended June 30, 2008, Tianyin announced revenue of $33.5 million, a 64.3% increase versus $20.4 million reported for the prior year period. The significant increase in revenues was due to strong demand of the Company’s current product portfolio supported by enhanced marketing efforts and expansion of current sales channels.
Cost of goods sold was approximately $18.8 million, yielding a gross profit of $14.7 million and gross margins of 43.8%, compared to $8.1 million in gross profit and a gross margin of 39.7% for fiscal year of 2007. Thus, gross profits grew by 81.1% on a year-over-year basis. The increase in gross profit and improved margins were primarily attributable to the growth in revenue and focus on higher margin products in the Company’s portfolio such as Ginkgo Mihuan Oral Liquid and Arpu Shuangxin Oral Liquid.
Operating expenses for fiscal year 2008 were $7.1 million, up 277.0% compared to the same period in 2007. Selling, general and administration expenses for the period increased to approximately $6.9 million from $1.8 million, which included a one-time expense of $0.4 million in public market listing expenses, in addition to increased investment in overall marketing directly related to increased costs in advertisement, promotion and sales force related expenses. Research and development expenses were $230,745 in fiscal year 2008 versus $71,438 for the same period 2007.
Operating income totaled approximately $7.6 million, a 21.8% increase from the $6.2 million reported for fiscal year 2007. Operating margins were 22.6% and 30.5% for the fiscal year 2008 and 2007, respectively. The decrease in the operating margins was due to a significant increase in spending on sales and marketing to bolster market share, increased spending on R&D, in addition to one-time expenses associated with going public.
For fiscal 2008, net income was approximately $6.0 million, an increase of 51.3% from $3.9 million recorded for fiscal 2007. Fully diluted earnings per share were $0.31, unchanged from same period 2007, based on 19.1 million and 12.8 million shares for 2008 and 2007, respectively. This increase in the shares was related to the capital raise and merger completed In January 2008.
The provision for income taxes was $1.2 million compared with 2007’s figure of $837,292, while the effective tax rate actually lowered to 17.1% from 17.5% in 2007.
Dr. Guoqing Jiang, Chief Executive Officer of Tianyin, commented “We are very pleased with our strong financial performance which was supported by increased marketing efforts and increased market share of several key products, while we took the necessary steps to prepare for increased production capacity in 2009. Fiscal 2008 was a key inflection point for our Company as we completed our formal listing in the United States simultaneous with an equity raise to fund our growth initiatives and received confirmation of our graduation to the American Stock Exchange this week. During the 2008 fiscal year, our overall marketing strategy of expanding sales for higher margin products proved to be successful and helped us achieve a 64.3% increase in revenues for fiscal 2008. Our focus on expanding our distribution channels through new partners has also enabled us to gain incremental market share while our reputation as a premier R&D pharmaceutical enterprise allows us to attract the best industry talent, which we believe will enable us to continue expanding our pipeline and position the Company for continued future growth.”
Balance Sheet and Cash Flow
The Company had a current ratio of 5.3 to 1 and $12.1 million in cash and cash equivalents on June 30, 2008. Stockholders’ equity was $32.8 million, with total assets of $36.8 million and total liabilities of $3.9 million. Days Sales Outstanding for fiscal 2008 were 49 days compared to 56 days for 2007. For the fiscal year of 2008, the Company generated $3.7 million in cash from operations versus $4.5 million for the same period in 2007. The decrease in cash flow was primarily attributable to an increase in inventory of $1.2 million due to our growth in sales and the expansion of our production facilities to prepare for continued revenue growth.
Business Development
Tianyin’s key products continue to gain market share in China. For example, Ginkgo Mihuan Oral Liquid, Tianyin’s leading product and core prescription drug, has obtained product entry into the formularies of over 30 Tier I and Tier II hospitals in China since the third quarter of 2008. Additionally, plans call for the Company to enter 150 more hospitals before December 31, 2008 which will result in incremental sales of Ginkgo Mihuan Oral Liquid for fiscal 2009 and beyond.
Tianyin has successfully installed newly purchased equipment, including a high speed tablet press machine, a high speed capsule filling machine, and a one-step granulator, which will increase overall production of solid dosage form by 15%. Additionally, Tianyin signed contract manufacturing agreements with two major pharmaceutical manufactures, Sichuan Kofule Pharmaceutical Group and Sichuan Medco Pharmaceutical Group, which will further alleviate the current capacity requirements to meet the rapidly increasing market demand of the Company’ products.
The Sichuan local government has approved Tianyin’s application for a new solid dosage production plant. The new production plant project will enhance our overall production capacity by 3 times with an estimated expenditure of $5 million. The capital needed for the expansion was utilized from the $15.2 million financing completed in January 2008. The planned gross floor area is approximately ten thousand square meters with state- of-the-art equipment which will be installed. Construction started in July 2008 and operations are planned to begin in January 2009. The new capacity is expected to meet our estimates for increasing market demand of current products and support new product launches from our pipeline which we believe will drive future revenue growth.
“The growth of the TCM industry remains robust and is supported by both the Chinese National Medical Insurance Program and overall increases in personal disposable income, which is providing the means to improve consumers’ overall level of healthcare,. We also received approval from the Chinese State Food and Drug Administration (SFDA) to produce Azithromycin Dispersible Tablets, Simvastatin Tablets and Laonian Kechuan Tablets, thus further diversifying and complementing our existing product portfolio, while demonstrating our ability to get drugs through the approval process and to commercialization. Backed by our experienced management team, enhanced sales and marketing efforts, diversified product portfolio and extensive pipeline, we believe we are well positioned to capitalize on the significant growth opportunity in the TCM industry," commented Dr. Jiang.
2009 Fiscal Guidance and American Stock Exchange Update
Tianyin is forecasting strong growth in fiscal year 2009 and anticipates that revenues for fiscal year 2009 will exceed $46 million with a net income of at least $7.5 million.
Additionally, the Company’s common shares have recently been approved for listing on the American Stock Exchange (the “AMEX”) and such shares are anticipated to begin trading this week on the AMEX under the ticker symbol TPI. The Company will make a formal announcement specifying the date.
“We have implemented a multi-pronged growth strategy to ensure our financial targets are met. These include several focused sales and marketing strategies to increase the market share of higher gross-margin products; establishing Over The Counter (OTC) sales teams in the major cities to increase the revenues in this segment; recruiting additional sales people for our branded and prescription products; commercializing four to six new products during fiscal 2009; and, utilizing our new production facility to ensure necessary quantities of both new and existing products are available to meet customer demand. Given our financial results, we believe trading on the AMEX will enhance our corporate visibility among the investment community, and increase trading liquidity of Tianyin’s common shares” concluded Dr. Jiang.
Conference Call
The Company will host a conference call to discuss the 2008 annual financial results on Monday, September 29, 2008 at 9:00 a.m. EDT. Interested participants should call 800-762-8795 within the United States, or US +1-480-629-9031 if calling internationally. The conference ID is 3924338. It is advisable to dial in approximately 5-10 minutes prior to 9:00 a.m. EDT. If you are unable to participate in the call at the scheduled time, a playback will be available through October 13, 2008. Please call 800-406-7325 from within the United States, or US +1 303-590-3030 internationally. Please use pass code 3924338 for the replay.
About Tianyin Pharmaceuticals
Tianyin is a manufacturer and supplier of modernized Traditional Chinese Medicine ("TCM") in China. It was established in 1994 and acquired by the current management team in August 2003. It has a comprehensive product portfolio of 33 modernized TCMs and 4 generic western medicines in the market, 22 of which are listed in the highly selective National Medicine Catalog of the National Medical Insurance Program. Tianyin owns and operates two GMP manufacturing facilities and an R&D platform supported by leading Chinese academic institutions. The Company has a pipeline of 48 pharmaceutical products pending approval. Tianyin has an extensive nationwide distribution network throughout China with a sales force of 720 salespeople. Tianyin is headquartered in Chengdu, Sichuan Province with two manufacturing facilities and a total of 1,384 employees. Tianyin achieved revenue of $20.4 million and net income of $3.95 million in FY2007 ending June 30, 2007. For more information about Tianyin Pharmaceuticals, 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.
TIANYIN PHARMACEUTICAL CO. INC.
(FORMERLY VISCORP, INC.)
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
June 30, 2008 June 30, 2007
CURRENT ASSETS
Cash and cash equivalents $12,057,150 $624,390
Accounts receivable, net of allowance
for doubtful accounts of $90,064
and $31,517 at June 30, 2008 and
June 30, 2007, respectively 4,460,406 3,120,223
Inventory 3,555,691 1,867,342
Other receivables 371,815 134,443
Other current assets 247,139 717
Total Current Assets 20,692,201 5,747,115
PROPERTY AND EQUIPMENT, NET 5,758,966 4,553,925
INTANGIBLES, NET 10,307,754 5,822,045
Total Assets $36,758,921 $16,123,085
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $1,337,682 $1,302,748
Short-term bank loans 1,393,345 2,044,825
Due to shareholders -- 139,573
VAT taxes payable 277,090 209,849
Income tax payable 341,214 305,410
Payroll taxes payable 39,939 23,026
Dividend payable 378,545 --
Other current liabilities 142,733 --
Total Current Liabilities 3,910,548 4,025,431
LONG-TERM LIABILITIES -- 119,667
Total Liabilities 3,910,548 4,145,098
STOCKHOLDERS’ EQUITY
Common stock, $0.001 par value,
50,000,000 shares authorized,
14,738,450 and 12,790,800
shares issued and outstanding
at June 30, 2008 and 2007 14,739 12,791
Series A convertible preferred stock,
$0.001 par value, 9,384,375
shares issued and outstanding at
June 30, 2008 9,384 --
Additional paid-in capital 18,002,439 4,697,717
Statutory reserve 1,380,806 683,437
Retained earnings 10,963,131 6,150,934
Accumulated other comprehensive
income 2,477,874 433,108
Total Stockholders’ Equity 32,848,373 11,977,987
Total Liabilities and Stockholders’
Equity $36,758,921 $16,123,085
TIANYIN PHARMACEUTICAL CO. INC.
(FORMERLY VISCORP, INC.)
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
(UNAUDITED)
For the Years Ended June 30,
2008 2007
SALES $33,459,609 $20,369,293
COST OF GOODS SOLD 18,802,225 12,276,296
GROSS PROFIT 14,657,384 8,092,997
OPERATING EXPENSES
Selling, general and administrative 6,857,918 1,808,715
Research and development 230,745 71,438
Total Operating Expenses 7,088,663 1,880,153
INCOME FROM OPERATIONS 7,568,721 6,212,844
OTHER INCOME (EXPENSES)
Other income -- 1,809
Interest expense (368,113) (165,918)
Impairment loss -- (1,207,171)
Other expense -- (56,744)
Total Other Income (Expenses) (368,113) (1,428,024)
INCOME BEFORE PROVISION FOR INCOME
TAX 7,200,608 4,784,820
PROVISION FOR INCOME TAX 1,229,300 837,292
NET INCOME 5,971,308 3,947,528
OTHER COMPREHENSIVE INCOME
Foreign currency translation
adjustment 2,044,766 388,597
1.1.1 $7,554,332 $4,336,125
1.1.2 COMPREHENSIVE INCOME
BASIC EARNINGS PER SHARE $0.38 $0.31
DILUTED EARNINGS PER SHARE $0.31 $0.31
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING
BASIC 14,511,717 12,790,800
DILUTED 19,127,853 12,790,800
TIANYIN PHARMACEUTICAL CO. INC.
(FORMERLY VISCORP, INC.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED MARCH 31,
(UNAUDITED)
For the Years Ended June 30,
2008 2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $5,971,308 $3,947,528
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 372,612 305,132
Loss on disposal of fixed assets -- 50,494
Loss of intangible assets -- 1,207,171
Bad debt expense 51,995 19,191
Stock based compensation 68,000 --
Changes in current assets and current
liabilities:
Accounts receivable (994,310) (1,919,077)
Inventory (1,400,366) (188,946)
Other receivables (209,556) 38,393
Other current assets (246,952) 1,150,376
Accounts payable and accrued expenses 31,336 (315,759)
VAT taxes payable 41,771 79,360
Income tax payable 2,228 140,325
Payroll taxes payable 13,521 8,674
Other current liabilities 7,330 --
Total Adjustments (2,262,391) 575,334
Net Cash Provided by Operating
Activities 3,708,917 4,522,862
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment (211,065) (63,398)
Additions to construction in progress (757,295) --
Additions to intangibles (3,702,484) (1,783,269)
Net Cash Used in Investing Activities (4,670,844) (1,846,667)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of preferred stock 13,248,054 --
Proceeds from short-term bank loans -- 326,630
Dividends (83,206) --
Repayment of short-term bank loans (826,140) --
Repayment of shareholder loans (146,143) (2,934,764)
Repayment of long-term bank loans (119,667) (217,742)
Net Cash Provided by (Used in)
Financing Activities 12,072,898 (2,825,876)
EFFECT OF FOREIGN CURRENCY
TRANSLATION ON CASH 321,789 33,291
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 11,432,760 (116,390)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR 624,390 740,780
CASH AND CASH EQUIVALENTS AT END OF
YEAR $12,057,150 $624,390
