HARBIN, CHINA--(Marketwire - April 05, 2010) - Weikang Bio-Technology Group Co., Inc. (OTCBB: WKBT) ("Weikang" or "the "Company"), a leading developer, manufacturer and marketer of Traditional Chinese Medicine (TCM), Western prescription pharmaceuticals and other health and nutritional products in the People's Republic of China announced its 2009 year-end financial results.
Financial Highlights
-- FY 2009 revenues increased 269% to $47.4 million, from $12.8 million for FY 2008 -- FY 2009 gross profit increased 214% to $25.8 million, compared to $8.2 million for FY2008 -- At December 31, 2009, cash and cash equivalents of $11.3 million -- FY2009 net income increased 115% to $15.6 million, from $7.2 million for FY 2008 or diluted EPS of $0.62
Summary Financials
Fiscal 2009 Results
FY 2009 FY 2008 Change
Net Sales $47.4 million $ 12.8 million 269%
Gross Profit $25.8 million $ 8.2 million 214%
GAAP Net Income $15.6 million $ 7.2 million 115%
GAAP EPS (Fully Diluted) $0.62 $0.29 113%
"Despite of the recent global financial crisis, we are very proud to deliver another outstanding financial quarter to our shareholders," commented by Mr. Ying Wang, Chairman & CEO of Weikang Bio-Technology Group, Inc., "The strategic acquisition of Tianfang in 2008 has yielded phenomenal results for us as Tianfang's sales grew more than 400% to $34.6 million in 2009. We are continuing to achieve greater market penetration and saw a tremendous increase in the demand for our products, particularly our TCM and nutritional supplement, despite an increase in our selling price.
Fiscal Year 2009 Results
During the year ended December 31, 2009, the Company recorded revenue of $47.48 million, compared to $12.85 million for 2008, an increase of $34.63 million or 269%. The increase in sales was primarily a result of increased sales from Tianfang, which contributed about $34 million sales or 72% of our total revenue during 2009. Tianfang's sales increased $28.45 million or 493% during the year ended December 31, 2009; while in 2008, Tianfang had only 6 months operations due to the snow disaster in China. In addition, there was increased demand from the Company's dealers and distributors as a result of growing acceptance and trust in our products from end users despite of the fact the Company has increased the selling price for some of its products in 2009. Weikang believes that the sales will continue to grow as the Company develops new products and continues to improve the quality of our existing products.
Cost of sales increased $17.06 million or 372%, year over year. The increase was mainly due to increased production as a result of our acquisition of Tianfang and overall increases in revenue in 2009. Gross profit was $25.84 million for the year ended December 31, 2009, compared to $8.27 million for 2008, representing profit margins of 54% and 64% respectively. The decrease in profit margin was mainly due to the increase in cost of sales from Tianfang's operations during the year 2009.
Total operating expenses consisted of selling, general and administrative expenses of $5.85 million for the year ended December 31, 2009 compared to $1.21 million for the year ended December 31, 2008. This increase was attributable to the combined expenses of Heilongjiang Weikang and Tianfang due to the acquisition of Tianfang in July 2008. In addition, the Company has spent approximately $1.95 million in R&D expense for developing certain new medicine and health supplemental products with the Botany medicine research center of Northeast Forestry University.
Net income for fiscal year 2009 was $15.62 million compared to $7.27 million prior year, an increase of $8.35 million or 115%. The increase was mainly attributed to growth in top line revenue and efficiency of operations. The Company's Earning Per Share, or EPS, was $.62, based on Basic and diluted weighted average shares outstanding of 25,375,581 shares.
Mr. Wang concludes, "Looking ahead, we will continue our growth strategy of developing newer and higher margin pharmaceutical and nutriceutical products, while expanding our sales and distribution network in China. In 2010, we will also deploy more time and resources towards the U.S. capital markets by increasing our investor relations efforts and potentially uplifting to a senior stock exchange. The management team is fully committed to build long term value for all of our stakeholders."
For the complete corporate filing of Weiking Bio-Technology Group,, Co., including a full report of fiscal year 2009 financial results, or 10K report, please visit www.sec.gov.
About Weikang Bio-Technology Group Co., Inc.
Weikang Bio-Technology Group Co., Inc., is principally engaged in developing, manufacturing and distributing Traditional Chinese Medicine (TCM), and health and nutritional supplements in China, in compliance with requisite Chinese licenses and approvals. The Company is also expanding its business scope to develop, manufacture and distribute Chinese herbal extract products and GMP certified western prescription pharmaceuticals through its acquisition of Tianfang.
Safe Harbor Statement
Certain statements in this release concerning our future growth prospects are forward-looking statements, within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding the success of our investments, risks and uncertainties regarding fluctuations in earnings, our ability to sustain our previous levels of profitability including on account of our ability to manage growth, intense competition, wage increases in China, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, our ability to successfully complete and integrate potential acquisitions, withdrawal of governmental fiscal incentives, political instability and regional conflicts and legal restrictions on raising capital or acquiring companies outside China. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our S-1 dated March 25, 2010, our 10-K for the year ended December 31, 2009, filed on March 31, 2010 and other recent filings. These filings are available at http://www.sec.gov/. We may, from time to time, make additional written and oral forward-looking statements, including statements contained in our filings with the Securities and Exchange Commission and our reports to shareholders. We do not undertake to update any forward-looking statements that may be made from time to time by or on our behalf.
WEIKANG BIO-TECHNOLOGY GROUP CO, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS December 31 December 31
2009 2008
CURRENT ASSETS
Cash & cash equivalents $ 11,380,019 $ 16,927
Advances to suppliers and other receivables 24,334 41,697
Inventory 285,395 151,942
Due from management 1,745 1,243,672
Total current assets 11,691,493 1,454,238
NONCURRENT ASSETS
Property and equipment, net 10,162,946 11,098,046
Intangible assets 15,558,731 12,214,405
Total noncurrent assets 25,721,677 23,312,451
TOTAL ASSETS $ 37,413,170 $ 24,766,689
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 12,668 $ 12,996
Unearned revenue 11,716 224,271
Taxes payable 2,247,410 1,250,087
Other payables 7,620,321 11,434,937
Advance from officer 650,000 650,000
Total current liabilities 10,542,115 13,572,291
CONTINGENCIES
DEFERRED TAX LIABILITY 3,450,005 3,551,025
STOCKHOLDERS' EQUITY
Common stock, $.00001 par value; authorized
shares 100,000,000; issued and outstanding
shares 25,486,600 and 25,229,800 at
December 31, 2009 and 2008, respectively 255 252
Additional paid in capital (deficit) 139,245 (252)
Statutory reserve 1,069,507 512,637
Accumulated other comprehensive income 844,526 823,151
Retained earnings 21,367,517 6,307,585
Total stockholders' equity 23,421,050 7,643,373
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 37,413,170 $ 24,766,689
WEIKANG BIO-TECHNOLOGY GROUP CO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
YEAR ENDED
DECEMBER 31, DECEMBER 31,
2009 2008
Net sales $ 47,484,188 $ 12,852,884
Cost of goods sold 21,640,326 4,584,093
Gross profit 25,843,862 8,268,791
Operating expenses
Selling expenses 2,583,202 351,840
General and administrative expenses 1,321,838 857,158
Research and development expenses 1,951,000 -
Total operating expenses 5,856,040 1,208,998
Income from operations 19,987,822 7,059,793
Non-operating income (expenses)
Interest income 13,206 997
Financial expense (1,664) (4,973)
Other income 1,034,885 1,032,896
Other expenses (61,689) (69,185)
Total non-operating income, net 984,738 959,735
Income before income tax 20,972,560 8,019,528
Income tax 5,355,758 748,919
Net income 15,616,802 7,270,609
Other comprehensive income
Foreign currency translation gain 21,375 626,719
Comprehensive Income $ 15,638,177 $ 7,897,328
Basic and diluted weighted average shares
outstanding 25,375,581 25,229,800
Basic and diluted net earnings per share $ 0.62 $ 0.29
WEIKANG BIO-TECHNOLOGY GROUP CO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEAR YEAR
ENDED ENDED
DECEMBER 31, DECEMBER 31,
2009 2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 15,616,802 $ 7,270,609
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 1,176,909 1,338,326
Stock issued for consulting expenses 139,500 -
Changes in deferred tax (104,306) (38,104)
(Increase) decrease in current assets:
Accounts receivable - 416,885
Advances to suppliers and other receivables (1,903) 113,384
Inventory (133,257) 104,205
Increase (decrease) in current liabilities:
Accounts payable (340) (12,856)
Unearned revenue (212,677) 220,706
Other payables 8,559 243
Taxes payable 979,150 765,211
Net cash provided by operating activities 17,468,437 10,178,609
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property & equipment (3,563,305) (808,739)
Net cash used in investing activities (3,563,305) (808,739)
CASH FLOWS FROM FINANCING ACTIVITIES:
Changes in due from management 1,261,882 1,712,790
Cash acquired at purchase of business - 10,176
Payment for purchase of Tianfang (3,812,596) (11,278,744)
Changes in due from related party - (79,890)
Net cash used in financing activities (2,550,714) (9,635,668)
EFFECT OF EXCHANGE RATE CHANGE ON CASH & CASH
EQUIVALENTS 8,674 165,485
INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS 11,363,092 (100,313)
CASH & CASH EQUIVALENTS, BEGINNING OF YEAR 16,927 117,240
CASH & CASH EQUIVALENTS, END OF YEAR $ 11,380,019 $ 16,927
Supplemental Cash flow data:
Income tax paid $ 4,163,362 $ 372,423
Interest paid $ - $ -
For more information contact:
Snowy Wang
Weikang Bio-Technology Group Co., Inc
snowyyfgroup@yahoo.com.cn
86-451-88355530
