Revenue up 30% Year Over Year to $5.2 million
Net Income Up 74% to $1.5 million
HARBIN, China, May 16 /Xinhua-PRNewswire/ -- China Sky One
Medical, Inc. (OTC Bulletin Board: CSKI.OB), one of the leading producers and
distributors for external-Chinese medicine in China, today announced its first
quarter 2007 financial results.
Key Highlights from the First Quarter of 2007 include:
-- Revenue up 30% year over year to $5.2 million from $4.0 million
-- Gross profit up 34% year over year to $4.1 million from $3.0 million
-- Gross margin of 78.2% compared to 76.1% in the first quarter of 2006
-- Operating income increased 73% year over year to $1.9 million from
$1.1 million
-- Net income increased 74% to $1.5 million, or $0.12 per diluted share,
from $892,000 or $0.08 per diluted share in the prior year period
"We successfully continued our sales momentum into the first quarter of
2007 and I'd like to thank all of our employees for their outstanding effort,"
commented Dr. Liu Yan-Qing, Chief Executive Officer and President of China Sky
One Medical, Inc. "We are particularly pleased to report a 74% increase in net
income on revenue growth of 30% year over year. To support our growth this
year, we recently enhanced our sales efforts by adding more than 200 new
points of sale and 16 new sales agents in China. At the same time, we made
strategic investments in advertising and marketing to bolster our brand to
support future growth."
Revenue for the first quarter of 2007 was $5.2 million, up 30% from $4.0
million in the first quarter of 2006. The increase in revenue is attributable
to strong performance from the Company's proprietary product sales as well as
from the new contract to sell other manufactured brands through the Company's
existing distribution network.
Gross profit in the first quarter of 2007 increased 34% to $4.1 million
from $3.0 million in the first quarter of 2006. Gross margin increased to
78.2% from 76.1% in the same period of 2006, which was due to a stabilization
in the cost of materials and an improved cost control process.
Operating income in the first quarter of 2007 increased 73% to $1.9
million from $1.1 million in the first quarter of 2006 and operating margin
increased substantially to 36.9% from 27.8%, respectively. The Company's
selling, general and administrative expenses increased 8% to $2.1 million from
$1.9 million in the prior year period. Expense levels were primarily driven
by the higher headcount costs, which were in line with the expansion of the
sales distribution network. In addition, the increase is attributable to a
general expansion of the sales and marketing and promotional activities
relating to business growth.
Net income increased 74% to $1.5 million, or $0.12 per diluted share in
the first quarter of 2007 from $892,000, or $0.08 per diluted shares in the
first quarter of 2006. Net margin of 29.9% increased from 22.4% in the same
period of 2006.
Balance Sheet
As of March 31, 2007, the Company had $6.7 million of cash, compared to
$6.6 million at December 31, 2006 and $3.9 million at March 31, 2006.
Recent Business Highlights
-- Three new products of CSKI -- the AMI Diagnostic Kit, Human Urinary
Albumin Elisa Kit and Early Pregnancy Diagnostic Kit have passed the
final stages of national inspection in March 2007. Early Pregnancy was
launched to the market in April 2007. AMI Diagnostic Kit and Human
Urinary Albumin Elisa Kit will be launched around June and July 2007
respectively. The Company expects these diagnostic kits will be issued
drug certificates and sold through drug stores, hospitals, examination
stations and independent sales agents throughout China.
-- In March 2007, CSKI entered into a strategic agreement with Takasima
Industry, which engaged Takasima as the sole agent of CSKI's patch
products in Malaysia, Indonesia and other countries in Southeast Asia.
-- CSKI's slim patch has already been registered in Malaysia Health
Department. It is sold through Takasima's own shops and another health
care chain shop, which has more than 200 sales outlets all over
Malaysia.
-- CSKI has received a grant of $500,000 from the Heilongjiang government
to perform monoclonal antibody research and development in April 2007.
It is the first company in the Heilongjiang province to receive such a
government grant.
About China Sky One Medical, Inc.
China Sky One Medical, Inc., a Nevada corporation, is a holding company
whose principal operations are through its subsidiaries, which are engaged in
the manufacturing, marketing and distribution of pharmaceutical, medicinal and
diagnostic kit products. Through its wholly-owned subsidiaries, American
California Pharmaceutical Group, Inc. (''ACPG''), Harbin Tian Di Ren Medical
Science and Technology Company (''TDR''), Kangxi Medical Care Product Factory
(''Kangxi''), and Harbin First Bio-Engineering Company Limited ("First"), the
Company's principal revenue source is the manufacture and sale of over-the-
counter pharmaceutical products. http://www.skyonemedical.com.
Certain of the statements made herein constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995. Such statements typically involve risks and uncertainties and may
include financial projections or information regarding our future plans,
objectives or performance. Actual results could differ materially from the
expectations reflected in such forward-looking statements as a result of a
variety of factors, including the risks associated with the effect of changing
economic conditions in The People's Republic of China, variations in cash
flow, reliance on collaborative retail partners and on new product
development, variations in new product development, risks associated with
rapid technological change, and the potential of introduced or undetected
flaws and defects in products, and other risk factors detailed in reports
filed with the Securities and Exchange Commission from time to time.
CONTACT
Ashley Ammon MacFarlane & Bill Zima
Integrated Corporate Relations, Inc.
203-682-8200
China Sky One Medical, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
For the Three Months Ended March 31, 2007 and 2006
(Unaudited)
2007 2006
Revenues $ 5,179,116 $ 3,979,119
Cost of Goods Sold 1,126,695 949,598
Gross Profit 4,052,421 3,029,521
Operating Expenses
Selling, general and administrative 2,043,776 1,895,966
Depreciation and amortization 83,355 6,156
Research and development 15,210 23,146
Total operating expenses 2,142,341 1,925,268
Other Income (Expense)
Interest expense (16,494) (9,152)
Total other (expense) (16,494) (9,152)
Net Income Before Provision for
Income Tax 1,893,586 1,095,101
Provision for Income Taxes
Current 344,265 203,468
Deferred - -
344,265 203,468
Net Income $ 1,549,321 $ 891,633
Basic Earnings Per Share $ 0.13 $ 0.08
Basic Weighted Average Shares
Outstanding 12,036,524 10,929,370
Diluted Earnings Per Share $ 0.12 $ 0.08
Diluted Weighted Average Shares
Outstanding 12,498,303 10,929,370
The Components of Other
Comprehensive Income
Net Income $ 1,549,321 $ 891,633
Foreign currency translation
adjustment 258,766 19,067
Comprehensive Income $ 1,808,087 $ 910,700
China Sky One Medical, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
March 31, 2007
(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $6,710,247
Accounts receivable 4,430,084
Other receivables 138,391
Inventories 788,451
Prepaid expenses 89,170
Total current assets 12,156,343
Property and equipment, net 5,168,537
Intangible assets, net 1,997,878
$19,322,758
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses $1,587,919
Wages payable 299,210
Welfare payable 154,636
Taxes payable 596,191
Notes payble 516,796
Total current liabilities 3,154,752
Stockholders' Equity
Preferred stock ($0.001 par value,
5,000,000 shares authorized,
none issued and outstanding) -
Common stock ($0.001 par value, 20,000,000
shares authorized, 12,031,536 issued
and outstanding) 12,037
Additional paid-in capital 7,919,234
Accumulated other comprehensive income 738,671
Retained earnings 7,498,064
Total stockholders' equity 16,168,006
$19,322,758
