CHENGDU, China, Nov. 11 /Xinhua-PRNewswire-FirstCall/ -- Tianyin Pharmaceutical Co., Inc., , a manufacturer and supplier of modernized traditional Chinese medicine (“TCM”) based in Chengdu, China, today announced results for its first quarter 2009 ended September 30, 2008.
Revenue for the first quarter of 2009 increased 33.4% to approximately $9.6 million compared to approximately $7.2 million for the first quarter of 2008. The increase in revenues was primarily due to enhanced marketing efforts, expansion of current sales channels and broadened product portfolio.
Cost of goods sold for the first quarter was approximately $4.7 million, yielding a gross profit of $4.9 million and gross margins of 51%, compared to $2.9 million in gross profit and a gross margin of 40.1% during the first quarter of 2008. Thus, gross profits grew by 69.7% on a year-over-year basis. The increase in gross profit and improved margins were primarily attributable to the growth in revenue, the relatively stable price of raw materials and the management’s focus on high margin products. The sales of Ginkgo Mihuan Oral Liquid and Arpu Shuangxin, which had comparatively higher gross margin, increased 340% and 31% respectively, compared to that for the same period in 2007.
Operating expenses for the three months ended September 30, 2008 were $2.7 million, up 155.4% compared to the same period in 2007. Selling, general and administration expenses for the period increased to approximately $2.6 million from $1 million in the first quarter of 2008. The increase in SG&A expenses was mainly the result of the Company’s efforts to strengthen the marketing and sales activities to increase revenue, including increasing advertisement and promotion, and hiring more sales people. For the three months ended September 30, 2008, the number of employees in Tianyin’s sales department increased by 206 employees, compared to the same period one year ago, resulting in a total of 720 sales people. Research and development expenses were $82,638 in the three months ended September 30, 2008, versus $27,451.
Operating income for the first quarter of 2009 totaled approximately $2.2 million, a 19.4% increase from the $1.8 million reported for the first quarter of 2008. Operating margins were 22.6% and 25.3% for the first quarter of 2009 and 2008, respectively. The decrease in the operating margin was due to increased spending on R&D and marketing to expand Tianyin’s market presence.
For the first quarter of 2009, net income was $1.8 million, a 10.9% increase, compared to $1.5 million for the first quarter of 2008. Fully diluted earnings per share were $0.07 compared to $0.12 for the first quarter of 2009 and 2008 respectively, based up on 24.6 million and 12.8 million shares. The increase in net income was primarily due to increased sales with higher gross margin.
“We continued to experience strong year-over-year revenue and earning growth from our current portfolio of products combined with enhanced gross profit margins. We believe the results validate the plan management has been implementing to focus on products with high gross margins and increased sales and marketing efforts. We expect the benefits of these will continue into the future as well,” Dr. Guoqing Jiang, Chief Executive Officer of Tianyin, commented.
Balance Sheet and Cash Flow
The Company had a current ratio of 6.4 to 1 and $12.4 million in cash and cash equivalents on September 30, 2008. The Company had Stockholders’ Equity of $35.1 million, with total assets of $38.5 million versus total liabilities of $3.4 million. For the first three months of fiscal year 2009, the Company generated $0.5 million in cash from operations versus $1 million for the same period in 2008.
Business Development
Tianyin has received approval from the Chinese State Food and Drug Administration (SFDA) to produce Laonian Kechuan Tablets in the dosage form of 0.25 gram/tablet (SFDA approval number Z20083360) and Fuke Zhidai Tablets in the dosage form of 0.4 gram/tablet (SFDA approval number Z20083375). Laonian Kechuan Tablets is a TCM drug that effectively treats asthma in people aged 60 or above. Fuke Zhidai Tablets is a TCM drug used to treat abnormal leucorrhea, which is caused by chronic cervicitis, endometritis and endocolpitis. The Company plans to launch Laonian Kechuan Tablets and Fuke Zhidai Tablets in the domestic market and begin recording revenue in November 2008 and December 2008, respectively. The Company launched the production of Azithromycin Dispersible Tablets in August 2008 and is due to market the new product in October 2008. Azithromycin is highly effective in treating upper and lower respiratory tract infections and other bacterial infections in the skin and reproductive system. Tianyin received approval from the Chinese State Food and Drug Administration (SFDA) to produce Azithromycin Dispersible Tablets in December 28, 2007.
Tianyin continues to invest in information systems and post-marketing studies and monitoring to improve efficiency. The Company is also making progress constructing the plant they started building in the end of April 2008. Also, Tianyin continues to evaluate acquisition opportunities which will complement the existing product and manufacturing lines, as well as provide accretive earnings growth.
Tianyin’s common stock began trading on the NYSE Alternext U.S. (formerly known as the American Stock Exchange) under the ticker “TPI” at market open on Wednesday, October 1, 2008. In addition, the Company’s board of directors approved a $3 million stock repurchase program on October 28, 2008.
“In the first quarter of fiscal year 2009, our organic growth from existing core products and new products launched in fiscal year 2008 demonstrates the success of our growth strategy. We received two approvals from the Chinese SFDA to produce Laonian Kechuan Tablets and Fuke Zhidai Tablets. We plan to launch these two drugs before the end of 2008 and we are optimistic that these new drugs will further improve our profitability and be additional growth contributors to our top-line and bottom-line numbers. We will continue to focus on broadening our product portfolio, increasing our sales and marketing activities, and further expanding our distribution network. Our extensive market research provides evidence that we are well positioned in the Chinese pharmaceutical industry, the benefit of which will continue to support our revenue and net income growth throughout fiscal 2009 and beyond,” concluded Dr. Jiang.
Conference Call
The Company will host a conference call to discuss the 2009 first quarter financial results on Tuesday, November 11, 2008 at 8:30 a.m. EST. Interested participants should call 800-762-8795 within the United States, or US +1-480- 629-9031 if calling internationally. The conference ID is 3940851. It is advisable to dial in approximately 5-10 minutes prior to 8:30 a.m. EST. If you are unable to participate in the call at the scheduled time, a playback will be available on Tuesday, November 11, 2008 at 11:30 a.m. ET through Thursday, November 27, 2008 at 11:59 p.m. ET. To listen to the playback, please call 800-406-7325 from within the United States, or US +1 303-590-3030 internationally. Please use pass code 3940851 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 33 modernized TCMs and 5 generic western medicines in the market, 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 47 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 Pharmaceuticals, please visit http://www.tianyinpharma.com .
Safe Harbor Statement
This Press Release contains or may contain forward looking statements and information that are based upon beliefs of and information currently available to the Company’s management as well as estimates and assumptions made by the Company’s management. When used herein the words “anticipate”, “believe”, “estimate”, “expect”, “future”, “intend”, “plan” and similar expressions as they relate to the Company or the Company’s management identify forward looking statements. These statements 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. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, intended or planned.
CONTACT: For the Company: Allen Tang, Ph.D., MBA, Assistant to the CEO,
+86-158-212-25642 (China), or Allen.y.tang@gmail.com; Investors: Alan
Sheinwald of HC International, Inc., +1-914-669-0222 (U.S.), or
Alan.Sheinwald@hcinternational.net
Web site: http://www.tianyinpharma.com/
