CHENGDU, China, May 15 /PRNewswire-Asia/ --
- Third Quarter 2009 Revenue Increased 7.4% to $9.9 Million while Net
Income Increased 48.8% to $1.9 Million with EPS of $0.10
- Revenue for the First Nine Months Increased 22.4 % to $29.6 Million, Net
Income Increased 29.2% to $5.7 Million with EPS of $0.23
- Cash and Equivalents of $10.7 Million on March 31, 2009
- Cash Flow from Operations Increased 150.6% to $4.4 million for the First
Nine Months of Fiscal 2009
- Received Ten New Approvals from the SFDA during the First 9 Months of
Fiscal 2009
- New Production Facility to Commence Operations this Summer Increasing
Capacity for Solid Dose Drugs by 300%
Tianyin Pharmaceutical Co., Inc., (NYSE Alternext: TPI), a manufacturer and supplier of modernized traditional Chinese medicine ("TCM") based in Chengdu, China, today announced fiscal results for its third quarter ended March 31, 2009.
Revenue for the third quarter of 2009 increased 7.4% to approximately $9.9 million compared to $9.2 million for the third quarter of 2008. The slowdown in year-over-year growth was due to capacity production constraints and longer lead times into the distribution channels as new drugs were commercialized.
Cost of goods sold for the three months ended March 31, 2009 was approximately $5.1 million or 51.1% of revenue as compared to $5.1 million or 55.4% of revenue for the three months ended March 31, 2008, yielding a gross profit of $4.9 million and gross margins of 48.9%, compared to $4.1 million in gross profit and a margins of 44.6% during the third quarter of fiscal 2008. Thus, gross profits grew by 17.8% on a year-over-year basis as a result of higher sales, while margins improved through the optimization of product portfolio and enhanced cost controls implemented during the manufacturing process.
Operating expenses for the three months ended March 31, 2009 were approximately $2.6 million, up 13.1% compared to the same period in 2008. Selling, general and administration expenses for the period increased to approximately $2.5 million from $2.2 million in the third quarter of 2008 as a result of the implementation of Tianyin's sales and marketing strategy, including increased sales payrolls and direct marketing expenses. Research and development expenses were nearly flat at $0.1 million for the three months ended March 31, 2009 compared to the year ago period.
Operating income for the third quarter of 2009 totaled approximately $2.3 million, a 23.5% increase from the $1.9 million reported for the third quarter of 2008. Operating margins were 23.1% and 20.1% for the third quarter of fiscal 2009 and fiscal 2008, respectively and were the result of increased revenues and gross profit, along with the prudent management of operating expenses.
Net income was approximately $1.9 million in the third quarter of fiscal 2009, a 48.8% increase, compared to $1.3 million for the third quarter of 2008. The company had an effective tax rate of 16.7% and 20.9%, for the third quarter of fiscal 2009 and 2008, respectively. Diluted earnings per share were $0.10 compared to $0.05 for the third quarter of fiscal 2009 and fiscal 2008 respectively, based upon 16 million and 24.5 million shares. The divergence in the share account relates to accounting for the company's preferred shares which are convertible into common.
Nine Month Results
For the nine months ended March 31, 2009, revenues increased approximately 22.4% to $29.6 million compared to the same period in 2008. Gross profit was $14.9 million for the first nine months of 2009, representing an increase of 46.3% from the first nine months of 2008. Gross margins were 50.3% for the first nine months of 2009 compared to 42.1% for the same period in 2008.
Income from operations was $6.9 million for the first nine months of 2009, representing an increase of 22.7% over the first nine months of 2008. Operating margins were at 23.4% for both nine month periods, respectively. Net income was $5.7 million for the nine months ended March 31, 2009, an increase of 29.2% from the same period in 2008. Diluted earnings per share were $0.23 compared to $0.27 for the first nine months of 2009 and 2008 respectively, based up on 25 million and 16.7 million shares.
"We are pleased to report another quarter of revenue growth and improved profitability. While revenue growth was impacted by capacity constraints, we are very enthusiastic about the launch of our new production facility which is expected to be online during the summer of 2009," commented Dr. Guoqing Jiang, Tianyin's Chief Executive Officer. "The Chinese government recently announced that it will significantly increase the overall investment in the Traditional Chinese Medicine (TCM) sector while implementing favorable policies to accelerate the development of new drugs, which we believe will provide a solid foundation for sustained future growth. Companies like Tianyin will be a beneficiary of this enhanced government support, which includes China's $123 billion health care reform plan focused on bringing a broader spectrum of services and pharmaceutical products to all Chinese residents. We are confident that our extensive product portfolio and drug pipeline, proven sales and marketing capabilities, and committed management team will enable us to accelerate our growth and capitalize on a long-term, secular growth opportunity."
Balance Sheet and Cash Flow
Cash and cash equivalents and restricted cash totaled $10.7 million on March 31, 2009 compared to $12.1 million on June 30, 2008. The Company had a current ratio of 5.8 to 1 and stockholders' equity of 39.2 million, with total assets of $42.9 million versus total liabilities of $3.8 million on March 31, 2009. For the first nine months of 2009, the Company generated $4.4 million in cash from operations versus $1.8 million for the same period in 2008.
Business Development
On January 30, 2009, Tianyin began initial purchases under its previously announced stock repurchase program to buy back up to $3.0 million of its common stock. These shares will be retired to the treasury while reducing the number of outstanding common shares. As of March 31, 2009, 79,285 shares have been bought back at prevailing market prices.
During the third quarter of fiscal 2009, Tianyin adopted the "Cost Preference Strategy" for Azithromycin Dispersible Tablets which could yield over $3.7 million in incremental revenues on an annual basis in the future.
On March 26, 2009, Tianyin announced that the Board of Directors declared an annual cash dividend of $0.10 per common share that will be paid quarterly. On April 14, the majority of the Company's Series A Preferred Shareholders approved the cash dividend to common stockholders. The initial dividend of $.025 will be paid to common shareholders of record on April 30, 2009, with the actual distribution occurring on or about June 10, 2009. The decision was made so the company could provide its common shareholders with ongoing participation in company profits while ensuring that adequate capital was available for future growth.
During the quarter, Tianyin completed installing the steel framework and roofing of the new production facility with production expected to commence in the summer of 2009. The Company recently completed the construction and began testing its production line recently. The new plant will expand production capacity of solid dosage drugs by 300% and will be utilized to meet growing demand for the Company's current products, while also accommodating new product launches for those in the development pipeline.
During the first nine months of fiscal 2009, Tianyin received ten new approvals from the SFDA to produce Laonian Kechuan Tablet (SFDA approval number H2008S02059), Fuke Zhidai Tablet (SFDA approval number Z20083375), Tongbianling Capsule (SFDA approval number Z20083424), Baotailing Tablets (SFDA approval numberZ20093087), Duyiwei Dispersible Tablets (SFDA approval number Z20090239), Compound Dantong Capsules (SFDA approval number Z20093012), Mycophenolate Mofetil Capsule(SFDA approval number H20080819), Tongqiao Biyan Tablets(SFDA approval number Z20093063), Child Qingrezhike Oral Liquid(SFDA approval number Z20093060), Yiqing Capsules(SFDA approval number Z20093084). In addition, Tianyin currently has 17 drug candidates under the Chinese State Food and Drug Administration (SFDA) review.
"We are making progress on all aspects of our business. We have completed construction of the new production facility and are in the testing production phase. As of today, we have successfully tested most equipment and anticipate finishing this phase by the end of May 2009. The tripled capacity of solid dosage drugs will accommodate increasing production volumes and expected future growth. In addition, we received ten approvals from the Chinese State Food and Drug Administration (SFDA) during the first nine months of fiscal 2009. The increased production capacity and new additions to our production portfolio, along with other initiatives, have set a foundation for long-term growth and profitability of our business. We will continue to execute our growth plan and maximize value for our shareholders," concluded Dr. Jiang.
Business Outlook
Management is confirming fiscal 2009 guidance for the year which ends June 30 and expects to report revenues of more than $46 million and net income of at least $7.5 million, representing 37.3% and 25% year over year growth respectively.
Conference Call
The Company will host a conference call to discuss the 2009 third quarter financial results on Friday, May 15, 2009 at 11:00 a.m. EDT. Interested participants should call +1-877-941-2927 within the United States, or US
+1-480-629-9725 if calling internationally. The conference ID is 4076664. It is advisable to dial in approximately 5-10 minutes prior to 11:00 a.m. EDT. If you are unable to participate in the call at the scheduled time, a playback will be available through May 29, 2009. To listen to the playback, please call +1-800-406-7325 from within the United States, or US +1-303-590-3030 internationally. Please use passcode 4076664 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 39 products, 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 40 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 1,365 employees. Tianyin achieved revenue of approximately $33.5 million and net income of approximately $6 million in FY2008 ending June 30, 2008. 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:
For the Company:
Allen Tang, Ph.D., MBA, Assistant to the CEO
China
Tel: +86-158-2122-5642
Email: Allen.y.tang@gmail.com
Investors:
Mr. Matthew Hayden, HC International
Tel: +1-561-245-5155
Email: matt.hayden@hcinternational.net
Web: http://www.hcinternational.net
Consolidated Balance Sheets
March 31, June 30,
2009 2008
(Unaudited)
Assets:
Current assets:
Cash and cash equivalents $10,733,671 $12,057,150
Accounts receivable, net of allowance
for doubtful accounts of $90,435 and
$90,064 at March 31, 2009 and June 30,
2008, respectively 4,991,353 4,460,406
Inventory 4,666,509 3,555,691
Advance payments 1,188,115 --
Other receivables 415,849 371,815
Other current assets -- 247,139
Total current assets: 21,995,497 20,692,201
Property and equipment, net: 8,292,735 5,758,966
Intangibles, net: 12,646,750 10,307,754
Total assets: $42,934,982 $36,758,921
Liabilities and stockholders' equity:
Current liabilities:
Accounts payable and accrued expenses $1,266,619 $1,337,682
Short-term bank loans 1,399,075 1,393,345
VAT taxes payable 324,311 277,090
Income taxes payable 380,546 341,214
Payroll taxes payable 9,007 39,939
Dividends payable -- 378,545
Other current liabilities 391,272 142,733
Total current liabilities: 3,770,830 3,910,548
Total liabilities: 3,770,830 3,910,548
Stockholders' equity:
Common stock, $0.001 par value,
50,000,000 shares authorized,
16,064,428 and 14,738,450 shares
issued and outstanding at March 31,
2009 and June 30, 2008 16,064 14,739
Common stock dividend distributable 217 --
Series A convertible preferred stock,
$0.001 par value, 8,744,375 and
9,384,375 shares issued and
outstanding at March 31, 2009
and June 30, 2008 8,744 9,384
Additional paid-in capital 19,445,520 18,002,439
Statutory reserve 2,031,451 1,380,806
Treasury stock (102,737) --
Retained earnings 14,991,010 10,963,131
Accumulated other comprehensive
income 2,773,883 2,477,874
Total stockholders' equity: 39,164,152 32,848,373
Total liabilities and
stockholders' equity: $42,934,982 $36,758,921
Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
For the Three Months Ended For the Nine Months
Ended
March 31, March 31,
2009 2008 2009 2008
Sales: $9,929,301 $9,249,229 $29,593,109 $24,167,921
Cost of sales: 5,069,133 5,123,587 14,696,736 13,984,845
Gross profit: 4,860,168 4,125,642 14,896,373 10,183,076
Operating expenses:
Selling, general and
administrative 2,481,188 2,180,161 7,709,861 4,380,702
Research and
development 86,495 89,372 253,353 150,930
Total operating
expenses: 2,567,683 2,269,533 7,963,214 4,531,632
Income from operations: 2,292,485 1,856,109 6,933,159 5,651,444
Other income (expenses):
Other income 4,874 -- 34,682 --
Interest expense (20,821) (245,174) (75,515) (311,536)
Total other income
(expenses): (15,947) (245,174) (40,833) (311,536)
Income before provision
for income tax: 2,276,538 1,610,935 6,892,326 5,339,908
Provision for income tax: 380,521 337,132 1,148,197 893,779
Net income: 1,896,017 1,273,803 5,744,129 4,446,129
Other comprehensive
income (loss):
Foreign currency
translation
adjustment (50,359) 793,507 296,009 1,368,473
Comprehensive income: $1,845,658 $2,067,310 $6,040,138 $5,814,602
Basic earnings per share: $0.10 $0.09 $0.29 $0.33
Diluted earnings per share: $0.10 $0.05 $0.23 $0.27
Weighted average number
of common shares
outstanding:
Basic 15,987,334 14,274,783 15,902,618 13,289,072
Diluted 15,987,334 24,455,363 24,980,236 16,707,369
Consolidated Statements of Cash Flows
(Unaudited)
For the Nine Months Ended
March 31,
2009 2008
Cash flows from operating activities:
Net Income $5,744,129 $4,446,129
Adjustments to reconcile net income to
net cash provided by (used in) operating
activities:
Depreciation and amortization 355,933 273,060
Changes in current assets and
current liabilities:
Accounts receivable (512,429) (535,631)
Inventory (1,095,822) (550,711)
Other receivables 628,103 89,183
Other current assets (940,570) (2,005,616)
Accounts payable and accrued expenses (76,119) (13,158)
VAT taxes payable 46,066 9,280
Income taxes payable 37,915 13,565
Payroll taxes payable (31,085) 4,254
Other current liabilities 247,867 26,753
Total adjustments: (1,340,141) (2,689,021)
Net cash provided by
operating activities: 4,403,988 1,757,108
Cash flows from investing activities:
Additions to property and equipment (57,994) (276,472)
Additions to intangibles (2,416,425) (786,712)
Additions to construction in progress (2,686,567) --
Net cash used in investing
activities: (5,160,986) (1,063,184)
Cash flows from financing activities:
Proceeds from capital contribution -- 9,089,700
Proceeds from (repayment of) bank loans (512,575) 2,674,873
Repayment of shareholder loans (102,737) (143,967)
Net cash provided by (used
in) financing activities: (615,312) 11,620,606
Effect of foreign currency translation
on cash: 48,831 685,138
Net increase (decrease) in cash and
cash equivalents: (1,323,479) 12,999,668
Cash and cash equivalents - beginning: 12,057,150 624,390
Cash and cash equivalents - ending: $10,733,671 $13,624,058
