CHENGDU, China, Sept. 24 /PRNewswire-Asia-FirstCall/ --
-- Q4 FY 2009 Revenues increased 43.2% to $13.3 Million, Net Income
increased 41.8% to $2.2 Million with diluted EPS of $0.08
-- FY 2009 Revenues increased 28.2% to $42.9 Million and Net Income
Increased 32.4% to $7.9 Million vs. FY08 with diluted EPS of $0.32
-- FY 2009 Cash flow from operations increased 124.8% to $8.3 Million
-- June 30, 2009 Cash and equivalents of $12.4 million, working capital of
$19.3 million and current ration of 5.4 to 1
-- Completed construction and received GMP approval for its new
manufacturing facility
-- Company successfully launched 9 products during FY09
-- Reaffirms Fiscal 2010 Guidance: Revenues Expected to Exceed $59 Million
with a Net Income of at Least $10.5 million
Tianyin Pharmaceutical Co., Inc., (NYSE Amex: TPI), a developer, manufacturer and supplier of modernized traditional Chinese medicine ("TCM") and generic pharmaceuticals in China, today announced Annual 2009 financial results ended June 30, 2009.
Fourth Quarter Ending June 30, 2009 Financial Results
Fourth quarter 2009 revenues were $13.3 million, representing a 43.2% increase from $9.3 million recorded in the fourth quarter of fiscal 2008. The increase was driven by enhanced marketing and advertising programs supporting a broader product portfolio and improvements in the Company’s sales channels which led to increased market penetration. Revenues in the fourth quarter generated by the top three selling products, Ginkgo Mihuan Oral Liquid, Arpu Shuangxin Oral Liquid, and Azithromycin Dispersible Tablets, were collectively $7.8 million and represented approximately 58.6% of total revenues for the quarter. During the fourth quarter of fiscal 2008 sales of top three products were approximately $5.9 million which represented 63.4% of total revenue.
Cost of sales in the fourth quarter 2009 increased 41.6% to $6.8 million, from $4.8 million in the fourth quarter of 2008. Gross profit in the fourth quarter 2009 was $6.5 million, a 44.9% increase from $4.5 million in the fourth quarter of 2008.
Gross margins were 48.7% in the fourth quarter of 2009, compared to 48.9% in the third quarter of 2009 and 48.2% in the fourth quarter of 2008.
Operating expenses were $3.7 million and operating income was $2.8 million in the fourth quarter of 2009, representing a 45.2% increase from $1.9 million reported in the fourth quarter of 2008.
Net income for the quarter was $2.2 million, up 41.8% from net income of $1.5 million in the same period a year ago. Income taxes were approximately $0.5 million representing an effective tax rate of 18.5%.
Fully diluted earnings per share were $0.08 for the last quarter of 2009, compared to fully diluted earnings per share of $0.05 in the fourth quarter of 2008.
Tianyin incurred a one time impairment loss on intangible assets of $0.4 million related to Huganning Tablets, Qianbai Biyan Tablets and Xiaoyan Lidan Tablets. Without this charge net income would have been $2.6 million with diluted EPS of $0.10 based on 26.3 million shares.
Dr. Guoqing Jiang, Chief Executive Officer of Tianyin, commented, "We are very pleased with our financial results. Several factors contributed to our strong performance for the fiscal year as growth accelerated in the fourth quarter. These included our ability to achieve SFDA approvals and launch several new products, an expanded marketing strategy focused on branding key products, and our ability to gain market share by leveraging a large internal sales team with key distributors. We met a significant milestone by completing the construction of our new production facility which greatly improves our capacity to support growth during fiscal 2010 and beyond. While the past year was challenging for the global marketplace, we took decisive corporate actions which included issuing a cash dividend and buying back stock to reward our loyal shareholders."
Year Ending June 30, 2009 Financial Results
For the fiscal year ended June 30, 2009, revenues increased 28.2% to $42.9 million from $33.5 million reported for the prior year period. Expanded sales efforts helped create strong demand for the Company’s branded and generic drugs including the introduction of 9 new drugs. Ginkgo Mihuan, one of Tianyin’s flagship products, contributed approximately $11.6 million or 27.1% to total revenues for the fiscal year 2009, representing 28% year-over-year growth. Revenues generated from the Arpu Shuangxin Oral Liquid were $10.4 million, or 24.2% of total revenues, a 54.3% increase from fiscal 2008. Tianyin’s top 5 selling products generated revenue of $29.3 million and represented 68.3% of total revenue.
Cost of goods sold for fiscal year 2009 was approximately $21.5 million, yielding a gross profit of $21.4 million and gross margins of 49.8%, compared to $14.7 million in gross profit and a gross margin of 43.8% for fiscal year of 2008. The 600 basis point improvement in gross margins was primarily attributable to the growth in revenue, product mix optimization, enhanced cost control 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 2009 were $11.7 million, up 64.5% compared to the same period in 2008. Selling, general and administration expenses for the period increased to approximately $7.8 million from $4.7 million. The increase was primarily due to enhanced marketing efforts including increased sales payrolls and direct marketing expense.
Operating income totaled approximately $9.7 million, a 28.4% increase from the $7.6 million reported for fiscal year 2008. Operating margins were 22.7% and 22.6% for the fiscal year 2009 and 2008, respectively.
For fiscal 2009, net income was approximately $7.9 million, a 32.4% increase from $6.0 million recorded for fiscal 2008 and surpassed previously announced guidance by approximately 5.3%. Diluted earnings per share were $0.32, compared to $0.31 in the same period 2008, based on 24.8 million and 19.1 million shares for 2009 and 2008, respectively. The increase in the diluted shares was related to preferred stock which carries a fixed conversion price of $1.60.
The provision for income taxes was $1.6 million and $1.2 million for fiscal 2009 and 2008 with an effective tax rate was 17.2% and 17.1%, respectively.
"China’s healthcare reform is being implemented to provide basic medical care for its 1.3 billion citizens by 2020 with approximately $126 billion being allocated during the next three years alone. This initiative is well underway as evidenced by the build-out of new Clinics and the publishing of the formal EDL. This creates significant growth opportunities for Chinese pharmaceutical companies like Tianyin which possess a diversified product portfolio and extensive sales and distribution channels. We currently have 17 products in our R&D pipeline which address wide range of chronic and critical conditions. We expect to receive additional SFDA approvals during fiscal 2010 which will further diversify our branded product base with high margin revenue potential while enabling us to further differentiate our company from our competitors. We will leverage the new production capacity to continue the growth momentum in fiscal 2010 and beyond," concluded Dr. Jiang.
Balance Sheet and Cash Flow
The Company had a current ratio of 5.4 to 1 and $12.4 million in cash and cash equivalents on June 30, 2009. Stockholders’ equity was $40.9 million, with working capital of $19.3 million$ and total liabilities of $4.4 million. Days Sales Outstanding for fiscal 2009 were 48 days compared to 49 days for 2008. For the fiscal year of 2009, the Company generated $8.3 million in cash from operations versus $3.7 million for the same period in 2008.
Significant Business Developments
-- Tianyin engaged a major advertising firm to commence a marketing
initiative for its Xuelian Chongcao Oral Liquid product that will
include prominent, prime-time advertisements on China Central
Television (CCTV), China’s most famous television station, which is
viewed by 98% of households throughout China. Xuelian Chongcao Oral
Liquid is an Over-The-Counter TCM drug that effectively replenishes
kidney functionality and also improves overall energy.
-- Tianyin completed construction of its new production facility in
Chengdu which recently received Good Manufacturing Practices
Certificate for pharmaceutical products from the State Food and Drug
Administration ("SFDA") in China. Construction was delayed due to the
earthquake in Sichuan which occurred on May 12, 2008. The new
production facility is expected to triple the production capacity of
solid dosage drugs, such as Azithromycin Dispersible Tablets,
Mycophenolate Mofetil Capsules, and Dantong Capsules, and will be able
to support approximately $100 million in annual revenues assuming the
current product mix. The Company expects to commence production by
October, 2009.
-- Tianyin further expanded its product portfolio during fiscal 2009 which
now totals 39 drugs. The Company received 10 new production approvals
from the Chinese SFDA for drugs which address multiple medical
conditions and will be produced in the new facility to drive
incremental growth. The company has 17 different drugs currently
moving through the approval process.
-- Tianyin had four products included in China’s Essential Drug List (EDL)
released by the Chinese government on August 18, 2009. Azithromycin
Dispersible Tablets, Simvastatin Tablets, Hugan Tablets and Xiao Yan Li
Dan Capsules and Tablets are all generic. The inclusion will
significantly increase revenues generated by these products while the
gross margin will be lower due to pricing control.
-- Tianyin declared a quarterly cash dividend of $0.025 with the second
dividend being paid in September to common stock shareholders of
record as of July 31, 2009. In addition, the Company announced and
executed a buyback program during fiscal 2009.
Fiscal 2010 Guidance
For fiscal year 2010 which ends June 30, 2010, Tianyin forecasts that revenues will exceed $59 million with net income at least $10.5 million, representing approximately 37.5% and 32.9% growth compared to fiscal 2009. Management anticipates that approximately $7 million, or 12% of total revenues will emanate from products which were launched during fiscal 2009, while sales of the Company’s flagship product, Ginkgo Mihuan, will grow by approximately 80% to $20 million for the year. Net income forecasted does not include non-cash expenses associated with stock compensation plans or future interest expense. This guidance does not include any contribution from potential future acquisitions. Manage will continue to evaluate and update guidance if and when its appropriate.
Conference Call
The Company will host a conference call to discuss the 2009 annual financial results on Thursday, September 24, 2009 at 10:30 a.m. EDT. Interested participants should call 877-941-2068 within the United States, or US +1-480-629-9712 if calling internationally. The conference ID is 4161412. It is advisable to dial in approximately 5-10 minutes prior to 10:30 a.m. EDT. If you are unable to participate in the call at the scheduled time, a playback will be available through October 8, 2009. Please call 800-406-7325 from within the United States, or US +1-303-590-3030 internationally. Please use pass code 4161412 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 17 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. For more information about Tianyin, please visit http://www.tianyinpharma.com .
Safe Harbor Statement
The Statements which are not historical facts during the presentation 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 in 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
-- FINANCIAL TABLES FOLLOW --
Consolidated Balance Sheet
June 30, June 30,
2009 2008
Assets
Current assets:
Cash and cash equivalents $12,352,223 $12,057,150
Accounts receivable, net of allowance
for doubtful accounts of $171,947
and $90,064 at June 30, 2009 and
2008, respectively 5,620,519 4,460,406
Inventory 3,808,289 3,555,691
Advance payments 1,188,115 --
Other receivables 601,912 371,815
Other current assets 81,277 247,139
Total current assets 23,652,335 20,692,201
Property and equipment, net 9,642,526 5,758,966
Intangibles, net 12,037,483 10,307,754
Total assets $45,332,344 $36,758,921
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable and accrued expenses $1,392,639 $1,337,682
Short-term bank loans 1,399,075 1,393,345
VAT taxes payable 458,930 277,090
Income taxes payable 490,514 341,214
Other taxes payable 11,890 39,939
Dividends payable 325,417 378,545
Other current liabilities 307,934 142,733
Total current liabilities 4,386,399 3,910,548
Total liabilities 4,386,399 3,910,548
Stockholders’ equity:
Common stock, $0.001 par value,
50,000,000 shares authorized,
17,908,912 and 14,738,450 shares
issued and outstanding at June 30,
2009 and 2008, respectively 17,909 14,739
Series A convertible preferred stock,
$0.001 par value, 7,146,500 and
9,384,375 shares issued and
outstanding at June 30, 2009 and
2008, respectively 7,147 9,384
Additional paid-in capital 19,694,514 18,002,439
Statutory reserve 2,299,807 1,380,806
Treasury stock (111,587) --
Retained earnings 16,486,775 10,963,131
Accumulated other comprehensive income 2,551,380 2,477,874
Total stockholders’ equity 40,945,945 32,848,373
Total liabilities and
stockholders’ equity $45,322,344 $36,758,921
Consolidated Statements of Operations and Comprehensive Income
For the Years Ended June 30,
2009 2008
Sales $42,894,355 $33,459,609
Cost of sales 21,516,065 18,802,225
Gross profit 21,378,290 14,657,384
Operating expenses
Selling expenses 7,825,939 4,725,480
General and administrative expenses 3,491,804 2,132,438
Research and development 343,952 230,745
Total operating expenses 11,661,695 7,088,663
Income from operations 9,716,595 7,568,721
Other income (expenses):
Interest income 357,343 --
Interest expense (95,880) (368,113)
Impairment loss on intangible assets (431,344) --
Total other income (expenses) (169,881) (368,113)
Income before provision for income tax 9,546,714 7,200,608
Provision for income tax 1,639,104 1,229,300
Net income 7,907,610 5,971,308
Other comprehensive income
Foreign currency translation adjustment 73,506 2,044,766
Comprehensive income $7,981,116 $8,016,074
Basic earnings per share $0.41 $0.38
Diluted earnings per share $0.32 $0.31
Weighted average number of common shares
outstanding:
Basic 15,937,411 14,511,717
Diluted 24,805,281 19,127,853
Consolidated Statements of Cash Flows
For the Years Ended June 30,
2009 2008
Cash flows from operating activities:
Net Income $7,907,610 $5,971,308
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 676,605 372,612
Loss on intangible assets 431,344 --
Provision for bad debts 81,512 51,995
Stock based compensation 249,026 68,000
Changes in current assets and current
liabilities:
Accounts receivable (1,223,282) (994,310)
Inventory (237,975) (1,400,366)
Other receivables (253,595) (209,556)
Other current assets 190,890 (246,952)
Accounts payable and accrued expenses 49,867 31,336
VAT taxes payable 180,701 41,771
Income tax payable 147,897 2,228
Other taxes payable (28,213) 13,521
Other current liabilities 164,611 7,330
Total adjustments 429,388 (2,262,391)
Net cash provided by operating
activities 8,336,998 3,708,917
Cash flows from investing activities:
Additions to property and equipment (58,014) (211,065)
Additions to construction in progress (4,179,902) (757,295)
Additions to intangible assets-drug (2,417,250) (3,702,484)
Advance payments for intangible assets-drug (1,188,115) --
Net cash used in investing
activities (7,843,281) (4,670,844)
Cash flows from financing activities:
Issuance of preferred stock -- 13,248,054
Dividends paid (73,944) (83,206)
Repayment of short-term bank loans -- (826,140)
Treasury stock (111,587) --
Repayment of shareholder loans -- (146,143)
Repayment of long-term bank loans -- (119,667)
Net cash provided by (used in)
financing activities (185,531) 12,072,898
Effect of foreign currency translation on cash (13,113) 321,789
Net increase in cash and cash equivalents 295,073 11,432,760
Cash and cash equivalents at beginning of year 12,057,150 624,390
Cash and cash equivalents at end of year $12,352,223 $12,057,150
