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Tianyin Reports Record Fiscal 2010 Financial Results

Tianyin Reports Record Fiscal 2010 Financial Results -- CHENGDU, China, Sept. 29 /PRNewswire-Asia-FirstCall/ --

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Biotechnology, Health Care & Hospitals, Medical Pharmaceuticals, Pharmaceuticals, Supplementary Medicine, Earnings Forecasts & Projections, Earnings Click to view news release full screen  

Tianyin Reports Record Fiscal 2010 Financial Results


CHENGDU, China, Sept. 29 /PRNewswire-Asia-FirstCall/ -- Tianyin Pharmaceutical Co., Inc., (NYSE Amex: TPI), a biopharmaceutical company that specializes in patented biopharmaceutical, modernized traditional Chinese medicine ("TCM"), branded generics and other pharmaceuticals, announced the results of fiscal year 2010 ended June 30, 2010.

Fiscal year 2010 ending June 30, 2010 financial highlights -- FY2010 revenue exceeds our revenue guidance of $63.0 million for FY2010, up 49.0% year over year (yoy) to $63.9 million from $42.9 million for FY2009 -- Gross profit delivered $33.3 million, up 55.6% yoy from $21.4 million for FY2009 -- Gross margins increased to 52.2% from 49.8% for FY2009 -- Net income rose 51.9% yoy to $12.0 million at 19.0% net margin from $7.9 million at 18.0% net margin for FY2009; the net income also exceeds our net income guidance of $11.0 million for FY2010 -- Earnings per share equals to $0.47 per basic share, or $0.40 per diluted share, up 25.0% year over year from $0.32 per diluted share in FY2009 -- Cash and cash equivalents were $27.0 million on June 30, 2010 as compared to $12.4 million in cash and cash equivalents on June 30, 2009 -- FY2010 operating cash flow rose 85.5% year over year to $15.4 million from $8.3 million in FY2009 FY2010 results FY2010 FY2009 YoY Sales $63.9 million $42.9 million +49.0% Gross Profit $33.3 million $21.4 million +55.6% Operating Income $14.7 million $9.7 million +51.8% Net Income $12.0 million $7.9 million +51.9% EPS (Diluted) $0.40 $0.32 +25.0% Diluted Shares 30.1 million 24.8 million +21.4%

Revenue delivered $63.9 million for the FY2010 up from $42.9 million for FY2009, growing 49.0% yoy, supported by our continuous sales channel expansion and market penetration for our current product portfolio especially the lead products. The results exceeded our targeted $63.0 million FY2010 revenue guidance and validated our growth strategies on sales and marketing, manufacturing capacity expansion along with new pipeline development.

Our lead product revenues are Ginkgo Mihuan Oral Liquid (GMOL): $22.8 million, Apu Shuangxin (Benorylate) Granules (APU) $6.0 million, Xuelian Chongcao Oral Liquid (XLCC): $3.9 million, Azithromycin Dispersible Tablets (AZI): $4.1 million, Qingre Jiedu Oral Liquid (QRE): $3.6 million. The lead product revenues totaled $40.4 million, representing 63.0% of the FY2010 revenue.

Cost of revenue for the FY2010 was $30.6 million or 47.9% of the revenue compared to $21.5 million or 50.2% of the revenue of the FY2009.

Gross profit for the FY2010 was $33.3 million, at 52.2% gross margin, up from 49.8% gross margin for the FY2009. The improvement of the gross margins was the result of our portfolio optimization strategy that focused on higher margin products such as GMOL in the sales mix in addition to enhanced cost control measures that yielded greater efficiencies in manufacturing process.

Operating and R&D expenses were $19.0 million in FY2010 compared to $11.7 million in FY2009. The increase was primarily due to our recent sales and marketing expansion along with the compensation expenses to external service providers. We anticipate these costs may continue to increase but in line with our revenue growth.

Operating income delivered $14.7 million at 23.1% operating margin for the FY2010, up 51.8% yoy from $9.7 million at 22.7% operating margin for the FY2009.

Net income was $12.0 million for FY2010, as compared to the net income of $7.9 million for FY2009, an increase of $4.1 million or 51.9%. The net income gain was primarily the result of the revenue growth (49.0% yoy), improved gross margins (52.2% up from 49.8% in FY2009), and improved operating margins (23.1% up from 22.7% in FY2009).

Diluted earnings per share for FY2010 were $0.40, compared to $0.32 in FY2009, based on 30.1 million and 24.8 million shares for FY2010 and FY2009, respectively.

"For the fiscal year 2010, we have reached and exceeded our revenue and net income targets of $63.0 million and $11.0 million respectively. We thank our 1,365 employees whose diligence and persistence make possible Tianyin's successful operating performance not only for this year but for the past almost a decade of growth. In addition, we exceeded our revenue target of $22.0 million for Gingko Mihuan Oral Liquid through our continuous effort in sales expansion and market penetration," stated Dr. Jiang, Guoqing, Tianyin's Chief Executive Officer. "In addition to our 10 late-stage pipeline drugs pending approval that target various high-incidence medical indications in China, the future lays ahead with our initiative in the growing pharmaceutical raw material space. We expect our Jiangchuan macrolide facility to contribute to our revenue growth in the fiscal year 2011."

Balance sheet and cash flow

As of June 30, 2010, we had cash and cash equivalents of $27.0 million. Net cash generated from operating activities was $15.4 million for FY2010 ended June 30, 2010 as compared to $8.3 million for FY2009.

The strong cash flow was primarily the result of net income growth and further improved accounts receivable $8.2 million 12.8% of the FY2010 revenue versus $5.6 million or 13.1% of the FY2009 revenue.

We believe that Tianyin is adequately funded to meet all of our working capital and capital expenditure needs for the FY 2011.

Net cash used in investing activities for FY2010 and FY2009 totaled $8.8 million and $7.8 million respectively. The increase was mainly due to the construction of Jiangchuan facility and the new drug development.

Business Development & Outlook

Jiangchuan macrolide facility progress update:

Jiangchuan holds a license from China's SFDA to produce macrolide antibiotics such as Azithromycin, one of the world's best-selling antibiotics. Tianyin's goal is to utilize Jiangchuan as the foundation of a broader, longer-term strategy to build a significant presence in the rapidly growing macrolide antibiotics market. Construction of the new production facility at Xinjin Industrial Development Area commenced on January 8, 2010 with Phase I testing production (250 tons capacity) scheduled by the year-end 2010. Tianyin anticipates the revenue contribution from our macrolide facility starting in the fiscal year 2011.

Pipeline update:

We currently have 10 product candidates pending SFDA approval: 1) Huangtengsu Tablets, 2) Lifei Tablets, 3) Fuyang Granules, 4) Shuxiong Tablets, 5) Suxiao Zhixie Capsules, 6) Shuanghuang Xiaoyan Tablets, 7) Huoxiang Zhengqi Capsules, 8) Jiegu Xujing Ointment, 9) Runing Tablets, and 10) Dengzhan Huasu Tablets. We will be updating the progress of the approval process accordingly.

Fiscal year 2011 Guidance

The management reaffirms FY2011 revenue guidance of $113.0 million and net income guidance of $18.0 million, representing 77.0% and 50.0% year over year growth respectively.

Conference Call

Management will host a conference call to discuss the FY2010 results at 9:00 a.m. ET on Thursday, September 30, 2010.

Interested parties may access the call by dialing +1-877-941-4776 (U.S.), or +1-480-629-9762 (International). The conference ID is 4369258. It is advisable to dial in approximately 5-10 minutes prior to the start of the call.

A replay will be available through September 30, 2010 and can be accessed by dialing 1-877-870-5176 (U.S.), or +1-858-384-5517 (International). The passcode is 4369258.

This call is being web cast by ViaVid Broadcasting and can be accessed at the following link: .

This event is optimized for Microsoft's Windows media player version 9. To download go to .

About Tianyin Pharmaceutical

Tianyin Pharmaceutical Co., Inc., headquartered at Chengdu, China, specializes in the development, manufacturing, marketing and sale of patented biopharmaceutical, modernized traditional Chinese medicines, branded generics and other pharmaceuticals. Tianyin currently manufactures and markets a comprehensive portfolio of 56 products, of which 23 are listed in the highly selective National Reimbursement List, 7 are included in the Essential Drug List of China. Tianyin has a pipeline of 10 products pending SFDA approval targeting high incidence indications in China. Tianyin has an extensive nationwide distribution network with 730 sales representatives out of totaled 1,365 employees. For more information about Tianyin, please visit .

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.

For more information, please contact: James Jiayuan Tong M.D. Ph.D. Chief Financial Officer, Chief Business & Development Officer Director Tianyin Pharmaceutical Co., Inc. Web: Email: Tel: +86-28-8551-6696 (Chengdu, China) +1-949-350-6999 (U.S.) +86 134 36 550011 (China) Address: 23rd Floor Unionsun Yangkuo Plaza No 2 Block 3 South Renmin Road Chengdu, 610041 China Consolidated Balance Sheets June 30, June 30, 2010 2009 Assets Current assets: Cash and cash equivalents $27,009,066 $12,352,223 Accounts receivable, net of allowance for doubtful accounts of $421,079 and $171,947 at June 30, 2010 and 2009, respectively 8,185,240 5,620,519 Inventory 3,588,824 3,808,289 Advance payments 382,980 1,188,115 Loans receivable 294,600 -- Other current assets 77,283 683,189 Total current assets 39,537,993 23,652,335 Property and equipment, net 14,968,822 9,642,526 Intangibles, net 15,232,286 12,037,483 Total assets $69,739,101 $45,332,344 Liabilities and stockholders' equity Current liabilities: Accounts payable and accrued expenses $1,715,781 $1,392,639 Accounts payable - construction related 2,248,849 -- Short-term bank loans 1,473,000 1,399,075 VAT taxes payable 658,312 458,930 Income taxes payable 861,614 490,514 Other taxes payable 19,564 11,890 Dividends payable 72,995 325,417 Other current liabilities 429,135 307,934 Total current liabilities 7,479,250 4,386,399 Total liabilities 7,479,250 4,386,399 Stockholders' equity: Common stock, $0.001 par value, 50,000,000 shares authorized, 27,326,527 and 17,908,912 shares issued and outstanding at June 30, 2010 and 2009, respectively 27,326 17,909 Series A convertible preferred stock, $0.001 par value, 1,360,250 and 7,146,500 shares issued and outstanding at June 30, 2010 and 2009, respectively 1,360 7,147 Additional paid-in capital 29,623,396 19,694,514 Statutory reserve 3,732,883 2,299,807 Treasury stock (111,587) (111,587) Retained earnings 25,687,770 16,486,775 Accumulated other comprehensive income 2,845,076 2,551,380 Total stockholders' equity 61,806,224 40,945,945 Noncontrolling interest 453,627 -- Total equity 62,259,851 40,945,945 Total liabilities and stockholders' equity $69,739,101 $45,322,344 Consolidated Statements of Operations and Comprehensive Income For the Years Ended June 30, 2010 2009 Sales $63,939,684 $42,894,355 Cost of sales 30,594,639 21,516,065 Gross profit 33,345,045 21,378,290 Operating expenses Selling expenses 12,796,881 7,825,939 General and administrative expenses 4,949,179 3,491,804 Research and development 852,848 343,952 Total operating expenses 18,598,908 11,661,695 Income from operations 14,746,137 9,716,595 Other income (expenses): Interest (expense) income, net (26,649) 261,463 Impairment loss on intangible assets -- (431,344) Other expenses (39,518) -- Total other expenses (65,167) (169,881) Income before provision for income taxes 14,680,970 9,546,714 Provision for income taxes 2,626,143 1,639,104 Net income 12,054,827 7,907,610 Less: Net income attributable to noncontrolling interest 11,677 -- Net income attributable to Tianyin Pharmaceutical Co., Inc. 12,043,150 7,907,610 Other comprehensive income Foreign currency translation adjustment 293,696 73,506 Comprehensive income $12,336,846 $7,981,116 Basic earnings per share $0.47 $0.41 Diluted earnings per share $0.40 $0.32 Weighted average number of common shares outstanding: Basic 24,427,329 15,937,411 Diluted 30,081,685 24,805,281 Consolidated Statements of Cash Flows For the Years Ended June 30, 2010 2009 Cash flows from operating activities: Net Income $12,043,150 $7,907,610 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 953,767 676,605 Provision for bad debts 247,131 81,512 Loss on disposal of fixed assets 39,518 -- Impairment loss on intangible assets -- 431,344 Stock-based payments 1,037,686 249,026 Noncontrolling interest 11,677 -- Changes in current assets and current liabilities: Accounts receivable (2,770,322) (1,223,282) Inventory 239,233 (237,975) Other current assets 606,785 (62,705) Accounts payable and accrued expenses 315,202 49,867 Accounts payable - construction related 2,239,231 -- VAT taxes payable 222,833 180,701 Income tax payable 366,845 147,897 Other taxes payable (19,223) (28,213) Dividend payable (252,422) -- Other current liabilities 119,007 164,611 Total adjustments 3,356,948 429,388 Net cash provided by operating activities 15,400,098 8,336,998 Cash flows from investing activities: Loans receivable (293,340) -- Additions to property and equipment (59,946) (58,014) Additions to construction in progress (5,749,230) (4,179,902) Additions to intangible assets-drug (2,742,729) (2,417,250) Advance payments for intangible assets-drug -- (1,188,115) Net cash used in investing activities (8,845,245) (7,843,281) Cash flows from financing activities: Proceeds from short-term bank loans 66,002 -- Additional paid-in capital 8,894,828 -- Dividend declared and paid (1,409,079) (73,944) Treasury stock -- (111,587) Proceeds from minority shareholders 440,010 -- Net cash provided by (used in) financing activities 7,991,761 (185,531) Effect of foreign currency translation on cash 110,229 (13,113) Net increase in cash and cash equivalents 14,656,843 295,073 Cash and cash equivalents at beginning of year 12,352,223 12,057,150 Cash and cash equivalents at end of year $27,009,066 $12,352,223 Supplemental schedule of non-cash activities Advance payments for intangible assets-drug $808,152 $--

SOURCE Tianyin Pharmaceutical Co., Inc.
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