HARBIN, China, May 15 /Xinhua-PRNewswire-FirstCall/ -- China Sky One Medical, Inc. , 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
China Sky One Medical, Inc.
CONTACT: Ashley Ammon MacFarlane and Bill Zima, Integrated CorporateRelations, Inc., +1-203-682-8200
Web site: http://www.skyonemedical.com?/
