CHENGDU, China, Feb. 14 /Xinhua-PRNewswire-FirstCall/ -- Tianyin Pharmaceutical, Inc., , a manufacturer and supplier of modernized traditional Chinese medicine (TCM) based in Chengdu, China, today announced fiscal results for its second quarter ending December 31, 2007.
Total revenue for the second quarter of 2008 increased 69.8% to approximately $7.7 million compared to approximately $4.3 million for the second quarter of 2007. Cost of goods sold for the second quarter of 2008 was approximately $4.6 million, yielding a gross profit of approximately $3.2 million and gross margins of 41%, compared to approximately $1.6 million in gross profit at a gross margin of 37.2% during the second quarter of 2007.
Operating income for the second quarter of 2008 totaled approximately $2 million, representing a 68% increase from the $1.2 million reported for the second quarter of 2007 and was directly related to the increase in revenues. Operating margins were 25.5% and 27.1% for the second quarter of 2008 and 2007, respectively.
For the second quarter of 2008, net income was approximately $1.7 million, an increase of 67.5% from $986,317 recorded during the second quarter of 2007. The Company incurred taxes of $300,000 and $160,000 for the second quarter of 2008 and 2007, respectively, which equated to an effective tax rate of 15% and 13.6%. Tianyin had 14.6 million shares outstanding on February 12, 2008.
Tianyin has experienced significant growth over the previous period due to their continuous efforts in penetrating the market. The Company signed six sizable regional distributors who facilitated the reach of Tianyin’s products into previously inaccessible market regions. Tianyin increased its sales force at the district level and thus increased its coverage at drug stores, clinics, hospitals and distributors. The Company also witnessed stronger than expected demand for leading products including Qinrejiedu Oral Liquid and Ginkgo Mihuan. Television-based marketing for Arphshuangxing also contributed to the increased demand by generating additional sales in the regions where campaigns aired.
“We are very pleased with our performance for both the second quarter and year to date. 2008 has proven to be an inflection point for our Company after we entered the U.S. capital markets with a $15 million investment by a diverse group of institutional investors in support of our highly qualified and competent management team,” stated Dr. Guoqing Jiang, Chief Executive Officer of Tianyin. “These results are the culmination of hard work, prudent planning and solid execution on behalf of our entire organization. The underlying growth dynamics, supported by increases in disposable income and improving fundamentals in the overall modern traditional Chinese medicine industry provide further confirmation that we are properly positioned to capitalize on this opportunity on a go forward basis.”
Six Month Results
For the six months ended December 31, 2007, revenues increased approximately 82% to $14.9 million compared to the same period in 2006. Gross profit was $6.1 million for the first six months of 2008, representing an increase of 94.3% from the first six months of 2007. Gross margins were 40.6% for the first six months of 2008 compared to 38% for the same period in 2007. Income from operations was $3.8 million for the first six months of 2008, representing an increase of 65% over the first six months of 2007. Operating margins were 25.4% for the first six months of 2008 compared to 28% for the first six months of 2007. Net income was $3.2 million for the six months ended December 31, 2007, an increase of 65% from the same period in 2006.
Balance Sheet and Cash Flow
The Company had a current ratio of 2.6 to 1 and $4.6 million in cash and accounts receivable on December 31, 2007. The Company reported $1.3 million in short-term notes and no long-term debt. For the first six months of 2008, the Company provided $1.75 million in cash for operations, the main driver for cash flow was net income of $3.2 million and a significant increase in revenues. On January 28, 2008, subsequent to the end of their second quarter, Tianyin announced a private placement of $15.2 million.
“I would like to thank all of the investors who participated in our recent private placement. This capital will be used to significantly expand our production capacity during the coming six to twelve months to meet demand supported by the continued growth in expenditures per capita on Traditional Chinese Medicines (TCMs) and government support for additional cost reimbursement of our products,” stated Jiang. “TCM’s have been deeply ingrained in Chinese culture for thousands of years and long been perceived by many Chinese to be both safe and efficacious. Strong government support to include more TCM’s to the list of medicines subject to reimbursement in the National Medicine Catalog, along with the Chinese SFDA’s plan to release more product approvals will be advantageous for the future growth prospects for our large pipeline of new products.”
Conference Call
The Company will host a conference call to discuss the 2008 second quarter financial results on Thursday, February 14, 2008 at 4:15 p.m. EST. Interested participants should call 800-762-8908 within the United States, or US +1-480- 629-1990 if calling internationally. It is advisable to dial in approximately 5-10 minutes prior to the 4:15 p.m. EST start time. There will be a playback available until March 15, 2008. 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 3843464 for the replay. The call will also be Web cast at the following link: http://viavid.net/dce.aspx?sid=00004BD5
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 current management team in August 2003. It has a comprehensive product portfolio of 34 modernized TCMs 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 51 pharmaceutical products pending approval. Tianyin has an extensive nationwide distribution network throughout China with a sales force of 523 salespeople. Tianyin is headquartered in Chengdu, Sichuan Province with two manufacturing facilities and a total of 869 employees. Tianyin achieved revenue of $20.4 million and net income of $3.95 million in FY2007 ending June 30, 2007.
Safe Harbor Statement
The Statements which are not historical facts contained in this press release 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.
CONTACT: Investor Relations, Alan Sheinwald, of HC International, Partner,
+1-914-669-0222, alan.sheinwald@hcinternational.net
