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Tianyin Pharmaceutical Co., Inc. Reports Record Fiscal 2009 Financials With $7.9 Million in Net Income

    CHENGDU, China, Sept. 24 /PRNewswire-Asia-FirstCall/ --

    -- Q4 FY 2009 Revenues increased 43.2% to $13.3 Million, Net Income
       increased 41.8% to $2.2 Million with diluted EPS of $0.08
    -- FY 2009 Revenues increased 28.2% to $42.9 Million and Net Income
       Increased 32.4% to $7.9 Million vs. FY08 with diluted EPS of $0.32
    -- FY 2009 Cash flow from operations increased 124.8% to $8.3 Million
    -- June 30, 2009 Cash and equivalents of $12.4 million, working capital of
       $19.3 million and current ration of 5.4 to 1
    -- Completed construction and received GMP approval for its new
       manufacturing facility
    -- Company successfully launched 9 products during FY09
    -- Reaffirms Fiscal 2010 Guidance: Revenues Expected to Exceed $59 Million
       with a Net Income of at Least $10.5 million

Tianyin Pharmaceutical Co., Inc., (NYSE Amex: TPI), a developer, manufacturer and supplier of modernized traditional Chinese medicine ("TCM") and generic pharmaceuticals in China, today announced Annual 2009 financial results ended June 30, 2009.

Fourth Quarter Ending June 30, 2009 Financial Results

Fourth quarter 2009 revenues were $13.3 million, representing a 43.2% increase from $9.3 million recorded in the fourth quarter of fiscal 2008. The increase was driven by enhanced marketing and advertising programs supporting a broader product portfolio and improvements in the Company's sales channels which led to increased market penetration. Revenues in the fourth quarter generated by the top three selling products, Ginkgo Mihuan Oral Liquid, Arpu Shuangxin Oral Liquid, and Azithromycin Dispersible Tablets, were collectively $7.8 million and represented approximately 58.6% of total revenues for the quarter. During the fourth quarter of fiscal 2008 sales of top three products were approximately $5.9 million which represented 63.4% of total revenue.

Cost of sales in the fourth quarter 2009 increased 41.6% to $6.8 million, from $4.8 million in the fourth quarter of 2008. Gross profit in the fourth quarter 2009 was $6.5 million, a 44.9% increase from $4.5 million in the fourth quarter of 2008.

Gross margins were 48.7% in the fourth quarter of 2009, compared to 48.9% in the third quarter of 2009 and 48.2% in the fourth quarter of 2008.

Operating expenses were $3.7 million and operating income was $2.8 million in the fourth quarter of 2009, representing a 45.2% increase from $1.9 million reported in the fourth quarter of 2008.

Net income for the quarter was $2.2 million, up 41.8% from net income of $1.5 million in the same period a year ago. Income taxes were approximately $0.5 million representing an effective tax rate of 18.5%.

Fully diluted earnings per share were $0.08 for the last quarter of 2009, compared to fully diluted earnings per share of $0.05 in the fourth quarter of 2008.

Tianyin incurred a one time impairment loss on intangible assets of $0.4 million related to Huganning Tablets, Qianbai Biyan Tablets and Xiaoyan Lidan Tablets. Without this charge net income would have been $2.6 million with diluted EPS of $0.10 based on 26.3 million shares.

Dr. Guoqing Jiang, Chief Executive Officer of Tianyin, commented, "We are very pleased with our financial results. Several factors contributed to our strong performance for the fiscal year as growth accelerated in the fourth quarter. These included our ability to achieve SFDA approvals and launch several new products, an expanded marketing strategy focused on branding key products, and our ability to gain market share by leveraging a large internal sales team with key distributors. We met a significant milestone by completing the construction of our new production facility which greatly improves our capacity to support growth during fiscal 2010 and beyond. While the past year was challenging for the global marketplace, we took decisive corporate actions which included issuing a cash dividend and buying back stock to reward our loyal shareholders."

Year Ending June 30, 2009 Financial Results

For the fiscal year ended June 30, 2009, revenues increased 28.2% to $42.9 million from $33.5 million reported for the prior year period. Expanded sales efforts helped create strong demand for the Company's branded and generic drugs including the introduction of 9 new drugs. Ginkgo Mihuan, one of Tianyin's flagship products, contributed approximately $11.6 million or 27.1% to total revenues for the fiscal year 2009, representing 28% year-over-year growth. Revenues generated from the Arpu Shuangxin Oral Liquid were $10.4 million, or 24.2% of total revenues, a 54.3% increase from fiscal 2008. Tianyin's top 5 selling products generated revenue of $29.3 million and represented 68.3% of total revenue.

Cost of goods sold for fiscal year 2009 was approximately $21.5 million, yielding a gross profit of $21.4 million and gross margins of 49.8%, compared to $14.7 million in gross profit and a gross margin of 43.8% for fiscal year of 2008. The 600 basis point improvement in gross margins was primarily attributable to the growth in revenue, product mix optimization, enhanced cost control and focus on higher margin products in the Company's portfolio such as Ginkgo Mihuan Oral Liquid and Arpu Shuangxin Oral Liquid.

Operating expenses for fiscal year 2009 were $11.7 million, up 64.5% compared to the same period in 2008. Selling, general and administration expenses for the period increased to approximately $7.8 million from $4.7 million. The increase was primarily due to enhanced marketing efforts including increased sales payrolls and direct marketing expense.

Operating income totaled approximately $9.7 million, a 28.4% increase from the $7.6 million reported for fiscal year 2008. Operating margins were 22.7% and 22.6% for the fiscal year 2009 and 2008, respectively.

For fiscal 2009, net income was approximately $7.9 million, a 32.4% increase from $6.0 million recorded for fiscal 2008 and surpassed previously announced guidance by approximately 5.3%. Diluted earnings per share were $0.32, compared to $0.31 in the same period 2008, based on 24.8 million and 19.1 million shares for 2009 and 2008, respectively. The increase in the diluted shares was related to preferred stock which carries a fixed conversion price of $1.60.

The provision for income taxes was $1.6 million and $1.2 million for fiscal 2009 and 2008 with an effective tax rate was 17.2% and 17.1%, respectively.

"China's healthcare reform is being implemented to provide basic medical care for its 1.3 billion citizens by 2020 with approximately $126 billion being allocated during the next three years alone. This initiative is well underway as evidenced by the build-out of new Clinics and the publishing of the formal EDL. This creates significant growth opportunities for Chinese pharmaceutical companies like Tianyin which possess a diversified product portfolio and extensive sales and distribution channels. We currently have 17 products in our R&D pipeline which address wide range of chronic and critical conditions. We expect to receive additional SFDA approvals during fiscal 2010 which will further diversify our branded product base with high margin revenue potential while enabling us to further differentiate our company from our competitors. We will leverage the new production capacity to continue the growth momentum in fiscal 2010 and beyond," concluded Dr. Jiang.

Balance Sheet and Cash Flow

The Company had a current ratio of 5.4 to 1 and $12.4 million in cash and cash equivalents on June 30, 2009. Stockholders' equity was $40.9 million, with working capital of $19.3 million$ and total liabilities of $4.4 million. Days Sales Outstanding for fiscal 2009 were 48 days compared to 49 days for 2008. For the fiscal year of 2009, the Company generated $8.3 million in cash from operations versus $3.7 million for the same period in 2008.

    Significant Business Developments
    -- Tianyin engaged a major advertising firm to commence a marketing
       initiative for its Xuelian Chongcao Oral Liquid product that will
       include prominent, prime-time advertisements on China Central
       Television (CCTV), China's most famous television station, which is
       viewed by 98% of households throughout China.  Xuelian Chongcao Oral
       Liquid is an Over-The-Counter TCM drug that effectively replenishes
       kidney functionality and also improves overall energy.
    -- Tianyin completed construction of its new production facility in
       Chengdu which recently received Good Manufacturing Practices
       Certificate for pharmaceutical products from the State Food and Drug
       Administration ("SFDA") in China.  Construction was delayed due to the
       earthquake in Sichuan which occurred on May 12, 2008.  The new
       production facility is expected to triple the production capacity of
       solid dosage drugs, such as Azithromycin Dispersible Tablets,
       Mycophenolate Mofetil Capsules, and Dantong Capsules, and will be able
       to support approximately $100 million in annual revenues assuming the
       current product mix.  The Company expects to commence production by
       October, 2009.
    -- Tianyin further expanded its product portfolio during fiscal 2009 which
       now totals 39 drugs.  The Company received 10 new production approvals
       from the Chinese SFDA for drugs which address multiple medical
       conditions and will be produced in the new facility to drive
       incremental growth.  The company has 17 different drugs currently
       moving through the approval process.
    -- Tianyin had four products included in China's Essential Drug List (EDL)
       released by the Chinese government on August 18, 2009.  Azithromycin
       Dispersible Tablets, Simvastatin Tablets, Hugan Tablets and Xiao Yan Li
       Dan Capsules and Tablets are all generic.  The inclusion will
       significantly increase revenues generated by these products while the
       gross margin will be lower due to pricing control.
    -- Tianyin declared a quarterly cash dividend of $0.025 with the second
       dividend being paid in September to common stock shareholders of
       record as of July 31, 2009. In addition, the Company announced and
       executed a buyback program during fiscal 2009.

Fiscal 2010 Guidance

For fiscal year 2010 which ends June 30, 2010, Tianyin forecasts that revenues will exceed $59 million with net income at least $10.5 million, representing approximately 37.5% and 32.9% growth compared to fiscal 2009. Management anticipates that approximately $7 million, or 12% of total revenues will emanate from products which were launched during fiscal 2009, while sales of the Company's flagship product, Ginkgo Mihuan, will grow by approximately 80% to $20 million for the year. Net income forecasted does not include non- cash expenses associated with stock compensation plans or future interest expense. This guidance does not include any contribution from potential future acquisitions. Manage will continue to evaluate and update guidance if and when its appropriate.

Conference Call

The Company will host a conference call to discuss the 2009 annual financial results on Thursday, September 24, 2009 at 10:30 a.m. EDT. Interested participants should call 877-941-2068 within the United States, or US +1-480-629-9712 if calling internationally. The conference ID is 4161412. It is advisable to dial in approximately 5-10 minutes prior to 10:30 a.m. EDT. If you are unable to participate in the call at the scheduled time, a playback will be available through October 8, 2009. Please call 800-406-7325 from within the United States, or US +1-303-590-3030 internationally. Please use pass code 4161412 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 39 products, 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 17 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. For more information about Tianyin, please visit .

Safe Harbor Statement

The Statements which are not historical facts during the presentation 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.

    For more information, please contact:

    For the Company:
     Allen Tang, Ph.D., MBA, Assistant to the CEO in China
     Tel:   +86-158-2122-5642

     Mr. Matthew Hayden, HC International
     Tel:   +1-561-245-5155


Consolidated Balance Sheet

                                                     June 30,       June 30,
                                                        2009          2008
    Current assets:
        Cash and cash equivalents                  $12,352,223   $12,057,150
        Accounts receivable, net of allowance
         for doubtful accounts of $171,947
         and $90,064 at June 30, 2009 and
         2008, respectively                          5,620,519     4,460,406
        Inventory                                    3,808,289     3,555,691
        Advance payments                             1,188,115            --
        Other receivables                              601,912       371,815
        Other current assets                            81,277       247,139
                Total current assets                23,652,335    20,692,201

    Property and equipment, net                      9,642,526     5,758,966

    Intangibles, net                                12,037,483    10,307,754

                Total assets                       $45,332,344   $36,758,921

    Liabilities and stockholders' equity
    Current liabilities:
        Accounts payable and accrued expenses       $1,392,639    $1,337,682
        Short-term bank loans                        1,399,075     1,393,345
        VAT taxes payable                              458,930       277,090
        Income taxes payable                           490,514       341,214
        Other taxes payable                             11,890        39,939
        Dividends payable                              325,417       378,545
        Other current liabilities                      307,934       142,733
                Total current liabilities            4,386,399     3,910,548

                Total liabilities                    4,386,399     3,910,548

    Stockholders' equity:
        Common stock, $0.001 par value,
         50,000,000 shares authorized,
         17,908,912 and 14,738,450 shares
         issued and outstanding at June 30,
         2009 and 2008, respectively                    17,909        14,739
        Series A convertible preferred stock,
         $0.001 par value, 7,146,500 and
         9,384,375 shares issued and
         outstanding at June 30, 2009 and
         2008, respectively                              7,147         9,384
        Additional paid-in capital                  19,694,514    18,002,439
        Statutory reserve                            2,299,807     1,380,806
        Treasury stock                                (111,587)           --
        Retained earnings                           16,486,775    10,963,131
        Accumulated other comprehensive income       2,551,380     2,477,874
                Total stockholders' equity          40,945,945    32,848,373

                Total liabilities and
                 stockholders' equity              $45,322,344   $36,758,921

Consolidated Statements of Operations and Comprehensive Income

                                                   For the Years Ended June 30,
                                                        2009         2008

    Sales                                           $42,894,355  $33,459,609

    Cost of sales                                    21,516,065   18,802,225

    Gross profit                                     21,378,290   14,657,384

    Operating expenses
        Selling expenses                              7,825,939    4,725,480
        General and administrative expenses           3,491,804    2,132,438
        Research and development                        343,952      230,745
            Total operating expenses                 11,661,695    7,088,663

    Income from operations                            9,716,595    7,568,721

    Other income (expenses):
        Interest income                                 357,343           --
        Interest expense                                (95,880)    (368,113)
        Impairment loss on intangible assets           (431,344)          --
            Total other income (expenses)              (169,881)    (368,113)

    Income before provision for income tax            9,546,714    7,200,608

    Provision for income tax                          1,639,104    1,229,300

    Net income                                        7,907,610    5,971,308

    Other comprehensive income
        Foreign currency translation adjustment          73,506    2,044,766

    Comprehensive income                             $7,981,116   $8,016,074

    Basic earnings per share                              $0.41        $0.38
    Diluted earnings per share                            $0.32        $0.31

    Weighted average number of common shares
        Basic                                        15,937,411   14,511,717
        Diluted                                      24,805,281   19,127,853

Consolidated Statements of Cash Flows

                                                   For the Years Ended June 30,
                                                        2009          2008
    Cash flows from operating activities:
    Net Income                                      $7,907,610    $5,971,308
    Adjustments to reconcile net income to net cash
      provided by (used in) operating activities:
        Depreciation and amortization                  676,605       372,612
        Loss on intangible assets                      431,344            --
        Provision for bad debts                         81,512        51,995
        Stock based compensation                       249,026        68,000
        Changes in current assets and current
    Accounts receivable                             (1,223,282)     (994,310)
    Inventory                                         (237,975)   (1,400,366)
    Other receivables                                 (253,595)     (209,556)
    Other current assets                               190,890      (246,952)
    Accounts payable and accrued expenses               49,867        31,336
    VAT taxes payable                                  180,701        41,771
    Income tax payable                                 147,897         2,228
    Other taxes payable                                (28,213)       13,521
    Other current liabilities                          164,611         7,330
                Total adjustments                      429,388    (2,262,391)

                Net cash provided by operating
                 activities                          8,336,998     3,708,917

    Cash flows from investing activities:
        Additions to property and equipment            (58,014)     (211,065)
        Additions to construction in progress       (4,179,902)     (757,295)
        Additions to intangible assets-drug         (2,417,250)   (3,702,484)
        Advance payments for intangible assets-drug (1,188,115)           --

                Net cash used in investing
                 activities                         (7,843,281)   (4,670,844)

    Cash flows from financing activities:
        Issuance of preferred stock                         --    13,248,054
        Dividends paid                                 (73,944)      (83,206)
        Repayment of short-term bank loans                  --      (826,140)
        Treasury stock                                (111,587)           --
        Repayment of shareholder loans                      --      (146,143)
        Repayment of long-term bank loans                   --      (119,667)

                Net cash provided by (used in)
                 financing activities                 (185,531)   12,072,898

    Effect of foreign currency translation on cash     (13,113)      321,789

    Net increase in cash and cash equivalents          295,073    11,432,760

    Cash and cash equivalents at beginning of year  12,057,150       624,390

    Cash and cash equivalents at end of year       $12,352,223   $12,057,150

SOURCE Tianyin Pharmaceutical Co., Inc.
Copyright©2009 PR Newswire.
All rights reserved

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