HARBIN, China, April 15 /PRNewswire-Asia-FirstCall/ -- China Sky One Medical, Inc. ("China Sky One Medical" or "the Company") (Nasdaq: CSKI), a leading fully integrated pharmaceutical company producing over-the-counter drugs in the People's Republic of China ("PRC"), today announced record financial results for the fourth quarter and fiscal year ended December 31, 2008.
Fourth Quarter 2008 Highlights -- Total revenues increased 104.0% year-over-year to $26.0 million -- Gross profit increased 95.2% year-over-year to $19.3 million -- Operating income increased 80.4% to $8.9 million from $4.9 a year ago -- Net income increased 68.8% year-over-year to $6.9 million, or $0.45 per diluted share Full Year 2008 Highlights -- Total revenues increased 86.2% to $91.8 million -- Gross profit increased 80.9% to $69.4 million -- Operating income increased 91.6% to $35.7 million -- Net income increased 88.2% to $28.9 million, or $1.87 per diluted share -- Common shares began trading on the NASDAQ Global Market under the symbol "CSKI" on September 15, 2008 -- Completed the acquisitions of Heilongjiang Tianlong Pharmaceuticals Inc., Heilongjiang Haina Pharmaceuticals Inc., and Peng Lai Jin Chuang Pharmaceutical Company -- Received SFDA final approval for 19 drugs -- Reached an agreement to acquire a proprietary breast drug from Harbin Medical University
"We are happy to report another quarter of excellent results and a very strong year filled with many accomplishments. We achieved record financial performance in 2008 with significant increases in revenue and net income as we successfully executed our business strategy and made solid progress in establishing ourselves as a leading pharmaceutical company in China," said Mr. Yan-Qing Liu, Chairman and CEO of China Sky One Medical, Inc. "As part of our strategy, we made a number of important strategic acquisitions that contributed to our growth and signed several distribution agreements for our top selling products. We also continued to build and enhance our brand awareness through a successful marketing and advertising campaign that helped to increase demand for our products."
Fourth Quarter 2008 Results
China Sky One's total revenues increased 104.0% in the fourth quarter to $26.0 million. This was mainly a result of the Company's continued efforts to develop and enhance its sales distribution channels and to insure that its sales agents and products are visible by those making or influencing key purchasing decisions.
Gross profit in the fourth quarter was $19.3 million, an increase of 95.2% on a year-over-year basis. Gross margin decreased to 74.4% of total revenues from 77.7% in the fourth quarter of 2007. The decrease was attributable to lower unit selling prices in 2008, by which the Company aims to maintain the competitiveness in the PRC markets. However, the Company was able to negotiate a lower purchase price from its suppliers.
Operating expenses in the fourth quarter of 2008 were $10.4 million, up 110.0% from $4.9 million in the fourth quarter of 2007. The increase was primarily the result of higher selling, general and administrative expenses associated with the Company's sales growth, and an increase in R&D spending during the quarter. Research and development expenses were $2.7 million in the fourth quarter, compared to $1.4 million in the fourth quarter of 2007.
Operating income was $8.9 million, representing an 80.4% increase from $4.9 million in the fourth quarter of 2007. Operating margin was 34.4%, compared to 38.9% in the fourth quarter of 2007.
Provision for income taxes was $2.1 million in the fourth quarter of 2008, compared to $0.9 million in the same period last year.
Net income for the fourth quarter of 2008 was $6.9 million, or $0.45 per diluted share, compared to net income of $4.1 million, or $0.25 per diluted share, in the fourth quarter of 2007.
Full Year 2008 Results
For the full year 2008, total revenues were $91.8 million, up 86.1% from $49.3 million in 2007. Product sales increased 137% year-over-year to $86.2 million, or 93.8% of total revenues, and contract sales decreased 56.5% year- over-year to $5.7 million, or 6.2% of total revenues, in 2008.
Gross profit for the full year 2008 was $69.4 million, an increase of 80.9% from $38.4 million in 2007. Gross profit margin was 75.6% in 2008 compared to 77.8% in 2007.
Operating income was $35.7 million, up 91.6% from $18.6 million in 2007. Operating margin was 38.8%, up from 37.7% in 2007.
Net income for 2008 was $28.9 million, or $1.87 per diluted share, compared to net income of $15.3 million, or $1.15 per diluted share, in the year 2007.
As of December 31, 2008, China Sky One had $40.3 million in cash and equivalents, approximately $58.0 million in working capital, and no debt. Stockholders' equity at December 31, 2008, was $94.9 million, a 194.4% increase over the $32.2 million recorded at December 31, 2007. In 2008, the Company raised approximately $23.5 million in net proceeds under a January 2008 private placement of equity.
The Company generated $27.5 million in net cash flow from operating activities in 2008, up from $11.6 million in 2007.
Recent Events of 2009
In January, the Company qualified for a preferential income tax rate of 15%, versus the regular rate of 25%, when three of its wholly-owned subsidiaries -- Harbin Tian Di Ren Medical Science and Technology ("TDR"), Heilongjiang Tianlong Pharmaceutical ("Tianlong"), and Harbin First Bioengineering ("First") -- were granted the High-Technology Enterprise Certificate by the provincial government in Heilongjiang Province.
In February, the Company's wholly-owned subsidiary, Peng Lai Jin Chuang Pharmaceutical Company ("Jin Chuang"), signed an exclusive distribution agreement with Shaanxi Buchang Group ("Buchang") for naftopidil dispersible tablets with an expected sales target of 100 million RMB (US $14.6 million) over five years. Jin Chuang received SFDA approval to produce and distribute naftopidil dispersible tablets, which are used to treat benign enlargement of the prostate, in 2005. Also in February, the Company announced that it had expanded the sale of its best-selling Slim Patch into South Korea and Sudan after engaging PAX-Medicare and Lai Li Investment Company as exclusive sales agents. The product is now available in 26 countries and regions.
In March, the Company announced that it received SFDA approval to manufacture two new drugs, Calcium Folinate injection, intended as an auxiliary therapy for sprue, (a disease of the small intestine), infancy- related megaloblastic anemia, and colonic and rectal cancer; and Policresulen vaginal suppositories indicated for the treatment of cervical erosion, cervicitis, and various vaginal inflammations.
"We are confident about the prospects for our business in 2009 and will continue to focus on increasing market share by both strengthening and further refining our successful sales and distribution network, building and enhancing our brand image, and making strategic acquisitions that continue to support our growth," said Mr. Yan-Qing Liu, Chairman and CEO of China Sky One Medical, Inc.
"In 2009, we expect full year revenue to increase by 40%, or approximately $37.0 million, to $128-$130 million, driven by growth in all of our product sales categories. We expect that net income will increase to $38-$39 million, resulting in net profit margin of approximately 30%. We expect 2009 gross margin to be approximately 74% due to higher raw material costs," Mr. Yan-Qing Liu added.
The Company will conduct a conference call at 10:00 a.m. Eastern Daylight Time on Thursday, April 16, 2009 to discuss its fourth quarter and fiscal year 2008 results. To participate in the call, please dial the following number five to ten minutes prior to the scheduled call time: 866-573-1052. International callers should dial 404-537-3305. The conference ID for this call is 95492620. If you are unable to participate in the call at this time, a replay will be available for fourteen days starting on Thursday, April 16, 2009 at 12:00 p.m. Eastern Daylight Time. To access the replay, dial 800-642- 1687, international callers dial 706 645-9291, conference ID 95492620.
About China Sky One Medical, Inc.
China Sky One Medical, Inc., a Nevada corporation, is a holding company. The Company engages in the manufacturing, marketing and distribution of pharmaceutical, medicinal and diagnostic products. Through its wholly-owned subsidiaries, Harbin Tian Di Ren Medical Science and Technology Company, Harbin First Bio- Engineering Company Limited, Heilongjiang Tianlong Pharmaceutical, Inc. and Peng Lai Jin Chuang Pharmaceutical Company the Company manufactures and distributes over-the-counter pharmaceutical products, which make up its major revenue source. For more information, visit http://www.skyonemedical.com.
Safe Harbor Statement
Certain of the statements made in the press release constitute forward- looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the use of forward- looking terminology such as "believe," "expect," "may," "will," "should," "project," "plan," "seek," "intend," or "anticipate" or the negative thereof or comparable terminology. Such statements typically involve risks and uncertainties and may include financial projections or information regarding the progress of new product development. 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.
CHINA SKY ONE MEDICAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS AND TWELVE MONTHS ENDED DECEMBER 31, 2008 AND 2007 Three Months Ended Years Ended December 31, December 31, 2008 2007 2008 2007 (Unaudited) (Audited) Revenues $25,954,879 $12,723,375 $91,816,183 $49,318,308 Cost of Goods Sold 6,654,502 2,835,176 22,403,303 10,939,531 Gross Profit 19,300,377 9,888,199 69,412,880 38,378,777 Operating Expenses Selling, general and administrative 7,341,394 3,365,194 25,482,201 16,163,577 Depreciation and amortization 335,031 166,556 858,406 443,063 Research and development 2,693,341 1,406,727 7,412,895 3,158,351 Total operating expenses 10,369,766 4,938,477 33,753,502 19,764,991 Income From Operations 8,930,661 4,949,722 35,659,378 18,613,786 Other Income (Expense) Miscellaneous income 110,598 40,517 813,704 38,332 Net Income Before Provision for Income Tax 9,041,209 4,990,239 36,473,082 18,652,118 Provision for Income Taxes Current 2,103,309 885,209 7,616,169 3,319,173 Net Income $6,937,901 $4,109,829 $28,856,914 $15,332,945 Basic Earnings Per Share $ 0.45 $ 0.34 $ 1.91 $ 1.27 Basic Weighted Average Shares Outstanding -- -- 15,101,833 12,094,949 Diluted Earnings Per Share $ 0.45 $ 0.25 $ 1.87 $ 1.15 Diluted Weighted Average Shares Outstanding 16,566,776 13,907,696 15,429,136 13,370,528 China Sky One Medical, Inc. and Subsidiaries Consolidated Balance Sheet December 31, 2008 December 31, 2007 ASSETS Current Assets Cash and cash equivalents $40,288,116 $9,190,870 Accounts receivable 14,978,648 10,867,106 Inventories 462,351 371,672 Prepaid and other current assets 106,386 57,907 Land and construction deposit 8,513,284 8,003,205 Total current assets 64,348,785 28,490,760 Property and equipment, net 21,058,779 6,861,432 Intangible assets, net 15,851,765 1,933,014 $101,259,329 $37,285,206 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable and accrued expenses $2,937,068 $3,448,701 Taxes payable 3,362,888 1,567,188 Deferred revenue 26,079 24,504 Total current liabilities 6,326,035 5,040,393 Stockholders' Equity Preferred stock ($0.001 par value, 5,000,000 shares authorized, none issued and outstanding) -- -- Common stock ($0.001 par value, 50,000,000 shares authorized, 16,306,184 and 12,228,363 issued and outstanding, respectively) 16,306 12,228 Additional paid-in capital 40,105,134 9,572,608 Accumulated other comprehensive income 5,566,806 2,271,843 Retained earnings 49,245,048 20,388,134 Total stockholders' equity 94,933,294 32,244,813 $101,259,329 $37,285,206 China Sky One Medical, Inc. and Subsidiaries Consolidated Statements of Cash Flows Years Ended December 31, 2,008 2,007 CASH FLOWS FROM OPERATING ACTIVITIES Net income $28,856,914 $15,332,945 Adjustments to reconcile net income to net cash provided (used) by operating activities: Allowance for bad debt 37,883 -- Depreciation and amortization 858,406 443,063 Share-based compensation expenses 315,662 235,468 Decrease (increase) in operating assets: Accounts receivable and other receivables (3,398,228) (7,478,964) Inventories (65,762) (73,142) Prepaid expenses and others (23,840) 93,463 Land and construction deposit 4,084 -- Increase (decrease) in operating liabilities: Accounts payable and accrued liabilities (677,722) 2,136,356 1,660,382 960,170 Deferred revenue (25,674) (47,879) Net cash provided (used) by operating activities 27,538,021 11,601,480 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of fixed assets (11,167,396) (2,222,448) Purchase of land use rights 4,084 (8,003,205) Purchase of intangible assets (11,951,210) (35,280) Net cash provided (used) by investing activities (23,114,522) (10,260,933) CASH FLOWS FROM FINANCING ACTIVITIES Sales of common stock for cash, net of offering costs 23,487,963 -- Proceeds from warrants conversion 1,867,507 515,834 Payment to short-term loan -- (548,350) Net cash provided (used) by financing activities 25,355,470 (32,516) Effect of exchange rate changes on cash 1,318,277 1,296,039 NET INCREASE IN CASH AND CASH EQUIVALENTS $31,097,246 $2,604,070 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 9,190,870 6,586,800 CASH AND CASH EQUIVALENTS AT END OF YEAR $40,288,116 $9,190,870 For more information, please contact: Company Contact: China Sky One Medical, Inc. Mr. Yu-Bo Hao, CFO Tel: +86-451-5399-4069 Email: firstname.lastname@example.org Investor Relations Contact: CCG Investor Relations Mr. Crocker Coulson, President Tel: +1-646-213-1915 Email: email@example.com Web: http://www.ccgirasia.com
|SOURCE China Sky One Medical, Inc.|
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