omniture

China Sky One Medical Reports First Quarter 2007 Financial Results

2007-05-16 09:27 598

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

Source: China Sky One Medical, Inc.
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