Navigation Links
China Medicine Announces First Quarter 2009 Results

GUANGZHOU, China, May 13 /PRNewswire-Asia/ -- China Medicine Corporation (OTC Bulletin Board: CHME) ("China Medicine" or "the Company"), a developer and a leading distributor of prescription and over the counter pharmaceuticals, traditional Chinese medicines (TCM), nutritional and dietary supplements, and medical devices and medical formulations, today announced its first quarter 2009 results.

    First Quarter 2009 Highlights:
    -- Revenues increased 43% from Q1 of 2008 to $10.1 million
    -- Gross profit increased 20.2% from Q1 of 2008 to $2.8 million
    -- Operating income increased 25.3% from Q1 of 2008 to $1.8 million
    -- Adjusted net income, which excluded a non-cash expense related to
       change in fair value of warrants for the first quarter of 2009, was
       $1.3 million, or $0.09 per diluted share
    -- Net income was $0.5 million, or $0.04 per diluted share
    -- Added 11 new customers
    -- Granted manufacturing licenses for its facility to produce certain feed
       additives, making the Company eligible to develop a new rADTZ feed
    -- Received provincial exclusive distribution rights for Nianlianping-
       medical macrogol berberine solution

"We are pleased with our top line growth during the first quarter. Normally, pharmaceutical companies and hospitals place purchase orders to stock up their inventories in the first quarter of the year prior to the Chinese New Year holidays. However, due to the early Chinese New Year celebration in January 2009, a large portion of these sales recorded in the fourth quarter of 2008. Despite this, we achieved double digit growth in our pharmaceutical product sales," said Mr. Senshan Yang, Chairman and CEO of the China Medicine Corporation. "While our gross margin was down from the same period last year due to changes in our product mix adopted to maintain our market share, gross margin increased from the fou respectively 14,919,635 19,225,091 Inventories 7,879,305 4,725,322 Advances to suppliers 9,415,546 6,121,974 Other current assets 230,801 192,080 Total current assets 35,212,442 33,657,192 EQUIPMENT, net 3,559,893 3,761,637 OTHER ASSETS Long term prepayment 5,536,804 6,014,920 Intangible assets, net 1,245,844 1,247,567 Total other assets 6,782,648 7,262,487 Total assets $45,554,983 $44,681,316 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable, trade $57,758 $61,243 Other payables and accrued liabilities 23,292 50,559 Customer deposits 88,914 151,429 Taxes payable 570,184 772,289 Liquidated damages payable 44,003 44,003 Total current liabilities 784,151 1,079,523 Fair value of warrant liabilities 1,174,231 -- Total liabilities 1,958,382 1,079,523 Commitment and contingencies SHAREHOLDERS' EQUITY Preferred stock, $0.0001 par value; 10,000,000 shares authorized, no shares issued and outstanding -- -- Common stock, $0.0001 par value; 900,000,000 shares authorized, 15,226,742 shares issued and outstanding at March 31, 2009 and December 31, 2008 1,522 1,522 Paid-in capital 12,470,726 13,011,012 Statutory reserves 3,178,861 3,178,861 Retained earnings 22,822,647 22,146,572 Accumulated other comprehensive income 4,369,586 4,428,294 Total shareholders' equity 42,843,342 42,766,261 NONCONTROLLING INTEREST 753,259 835,532 Total shareholders' equity 43,596,601 43,601,793 Total liabilities and shareholders' equity $45,554,983 $44,681,316 CHINA MEDICINE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2009 AND 2008 (Unaudited) 2009 2008 CASH FLOWS FROM OPERATING ACTIVITIES: Net income attributable to China Medicine Corporation $550,082 $1,175,813 Net income attributable to noncontrolling interest (81,140) (27,477) Consolidated net income 468,942 1,148,336 Adjustments to reconcile net income to cash used in operating activities: Depreciation and amortization 216,195 96,744 Loss on sale of assets 5,934 -- Stock option and warrant compensation 1,249 26,157 Amortization of deferred expenses -- 86,431 Change in fair value of warrant liabilities 758,689 -- Change in operating assets and liabilities Notes receivables (396,135) (1,646,491) Accounts receivable, trade 4,279,540 959,968 Inventories (3,160,625) (793,559) Advances to suppliers (3,302,140) (662,079) Other current assets (38,849) (79,904) Accounts payable, trade (3,402) (30,774) Other payables and accrued liabilities (17,056) (49,957) Customer deposits (62,312) (54,499) Taxes payable (201,065) (142,540) Net cash used in operating activities (1,451,035) (1,142,167) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of equipment (25,478) (4,490) Long term prepayment 469,949 -- Net cash provided by (used in) investing activities 444,471 (4,490) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from exercise of options and warrants -- 362,500 Net cash provided by financing activities -- 362,500 EFFECT OF EXCHANGE RATE ON CASH (14,295) 193,444 DECREASE IN CASH (1,020,859) (590,713) CASH, beginning of period 2,791,814 5,767,774 CASH, end of period $1,770,955 $5,177,061 For more information, please contact: Company Contact: Ms. Huizhen Yu Chief Financial Officer China Medicine Corp Tel: +86-20-8739-1718 Email: Investor Relations Contact: Mr. Crocker Coulson, President CCG Investor Relations Tel: +1-646-213-1915 (NY Office) Email: Web: rth quarter of 2008."

"Our top-selling drugs for the quarter included Iopamidol by injection, which accounted for 17% of revenues and is used to help diagnose heart, brain, blood and nervous system disorders in X-rays or CT scans; Hongjin Xiaojie capsules, which accounted for 15% of revenues are used to treat pain and for blood circulation and Xiasang Ju granules, which are used to treat coughs, headaches and dizziness, accounted for 15% of revenue. Collectively, our top three selling drugs accounted for approximately 47% of revenues," said Mr. Yang.

First Quarter 2009 Results

China Medicine's total revenues in the first quarter were $10.1 million, an increase of 43% over the first quarter of 2008. This was attributable to an increase in sales of pharmaceutical products from Guangdong Sunshine Medicine Public Internet Bidding System. Product sales in the first quarter totaled $10.1 million and accounted for 100% of total net revenues. Sales of Western-style prescription products and over-the-counter products accounted for 56.2% of total revenues in the first quarter. Sales of TCM prescription and over-the-counter products accounted for 42.8% of total revenues. Sales of dietary supplements, and medical equipment accounted for 1% of revenues.

Gross profit in the first quarter of 2009 was $2.8 million, an increase of 20.2% over the first quarter of 2008. Gross margin was 27.5% of total revenues for the first quarter, versus 32.7% in the first quarter of 2008. The government's health care plan, which is focused on restructuring the rural health care system in China, has changed the pricing structure and product mix in China's pharmaceutical industry. As a result, the Company experienced lower selling prices on certain generic drugs and a reduction in gross margin as a result. In addition, lower margin generic pharmaceutical product sales also increased during the first quarter, and medical formula sales fell to zero in the first quarter from 3% of total revenues in the year ago period due to stricter regulation by the State Food and Drug Administration (SFDA), which must approve every transfer of ownership of a medical formula in China and has increased the complexity of the approval process. However, the Company is confident that it can increase its gross margins in coming quarters by adjusting its portfolio to increase sales of pharmaceutical products with exclusive distribution rights as well as sales of self-branded products, which have higher margins.

Operating expenses in the first quarter of 2009 were $1.0 million, up 12.3% from $0.9 million in the first quarter of 2008. This increase was due to higher selling, general and administrative expenses related to the increase in expenses in the first quarter of 2009.

Operating expenses represented 10% of total revenues in the first quarter of 2009, decrease from 12.8% in the first quarter of 2008.

Operating income was $1.8 million in the first quarter of 2009, up 25.3% from $1.4 million in first quarter of 2008. Operating margin was 17.6%, as compared to 20% during the same period a year ago.

The Company's provision for income taxes was $0.5 million in the first quarter of 2009, compared to $0.3 million in the same period a year ago. The increase was subject to an effective income tax rate in China of 25% in 2009, versus a reduced rate of 16.5% in 2008, as tax exemptions enjoyed by the Company's Konzern subsidiary ended in 2008.

Net income for the first quarter of 2009 was $0.55 million, or $0.04 per diluted share, which included a $0.8 million non-cash expense related to a change in the fair value of warrants, compared to $1.2 million, or $0.08 per diluted share, in the first quarter of 2008. This is due to the adoption of a new accounting policy that became effective January 1, 2009, which requires changes in the fair value of warrants to be recognized in earnings each quarter. Excluding this expense, adjusted net income for the first quarter of 2009 was $1.3 million, or $0.09 per fully diluted share, which translates to an 11% increase in net income for the first quarter of 2009 compared to the same period last year. Earnings per share were calculated using a diluted weighted share count of 15.2 million shares for the first quarter of 2009 and 15.3 million shares for the first quarter of 2008.

Financial Condition

As of March 31, 2009, China Medicine had approximately $34.4 million in working capital, an increase of 5.7% from $32.5 million as of December 31, 2008. Accounts receivable stood at $14.9 million at quarter end, down from $19.2 million as of December 31, 2008. Also as of March 31, 2009, China Medicine had $1.8 million in cash and cash equivalents. Stockholders' equity as of March 31, 2009 was $43.6 million compared to $43.6 million recorded as of December 31, 2008. For the quarter ended March 31, 2009, cash used in operating activities was $1.4 million, primarily for purchases of inventory and advances to suppliers, compared with cash used in operating activities of $1.1 million for the quarter ended March 31, 2008. The Company increased inventory in anticipation of higher sales of prescription drugs as well as increased its new product portfolio and increased advances to suppliers associated with drugs that it distributes on a national basis.

2009 Outlook

"We remain confident about the prospect for our business in 2009 despite the challenging global economic environment. In the first quarter of 2009, we have obtained the exclusive provincial-level rights to distribute Nianlianping, which is widely used to prevent surgical adhesions, in Guangdong province, and believe that the addition of exclusive distribution rights products such as these will help improve our margins going forward," said Mr. Yang.

"As we get further into the second quarter, we are also excited about the progress we have made on our novel product, recombinant Aflatoxin Detoxifizyme (rADTZ). Our previous announcement on obtaining a manufacturing license for a premixed feed additive and a manufacturing license for a feed additive for our production facility, which is leased from Guangzhou Municipal Microbe Research Institute, has enabled us to enter into a trial production phase. We expect trial sales phase for rADTZ to begin in late May. We expect gross margin for this product to be approximately 90%," added Mr. Yang.

Based on China Medicine's research, total feed production in China in 2008 was 404 million tonnes. Assuming 1 kilogram of rADTZ will eliminate aflatoxins in one tonne of feed at a cost $10, the total addressable feed market for rADTZ is estimated at approximately $4.04 billion. The Company is actively working with potential rADTZ customers and is currently carrying out experiments with them in order to prepare for the launch and commercialization of rADTZ in second quarter of 2009. In addition, the projected revenues contributed from rADTZ are expected to reach approximately $2.3 million in 2009.

"We believe that the strength and experience of our management team, our exciting new self-branded pharmaceutical products, which include a new herbal tea and "BeThin," our weight loss product, combined with our strategy of obtaining more national exclusive distribution rights to pharmaceutical products and further improving our core business, will enable us to perform well this year and expand our overall market share. We are strongly committed to increasing value for our shareholders in 2009 and beyond and look forward to reporting many quarters of positive performance."

Conference Call

China Medicine will hold its first quarter conference call for all interested persons at 9:00 a.m. Eastern Time on Wednesday, May 13, 2009, to discuss its results. To participate in the live conference call, please dial the following number five to ten minutes prior to the scheduled conference call time 888.419.5570. International callers should dial 617.896.9871. When prompted by the operator, mention conference passcode 991 874 58. If you are unable to participate in the call at its scheduled time, a replay will be available for seven days starting on Wednesday, May 13 at 11:00 a.m. Eastern Time. To access the replay, dial 888-286-8010 (international callers dial 617-801-6888, and enter the passcode 460 255 05.

About China Medicine Corporation

China Medicine Corporation is a developer and leading distributor of prescription and over the counter ("OTC") drugs, traditional Chinese medicine products, herbs and dietary-supplements, medical devices, and medical formulations in China. China Medicine also has its research and development force for certain products it manufactures through OEM arrangement makes the distribution. The Company distributes its products to wholesale distributors including more than 300 hospitals and 500 medicine companies that sell to over 2,000 drug stores in 28 provinces throughout China. The Company actively develops a number of proprietary products for a variety of uses, including oncology, high blood pressure and the removal of toxins from food and animal feeds. For more information visit the Company's website at

Use of Non-GAAP Financial Measures

GAAP results for first quarter 2009 include $0.76 million non-cash charge related to change in Company's fair value of warrants. Because the charge is non-cash, and is not related to the Company's operating results, the Company believes that the non-GAAP information is useful to supplement the Company's condensed consolidated financial statements. A reconciliation of the adjustments to GAAP results appears in the table accompanying this press release. This additional non-GAAP information is not meant to be considered as a substitute for GAAP financials. The non-GAAP financial information that the Company provides also may differ from the non-GAAP information provided by other companies.

Cautionary Statement

This press release contains forward-looking statements concerning the Company's business and products. The Company's actual results may differ materially depending on a number of risk factors including, but not limited to, the following: general economic and business conditions, obtaining regulatory approval for new products, the expected contribution of higher margin products, government support for rural health care, competition from existing and new competitors, changes in technology, and various other factors beyond its control. All forward-looking statements are expressly qualified in their entirety by this Cautionary Statement and the risk factors detailed in the Company's reports filed with the Securities and Exchange Commission. China Medicine Corporation undertakes no duty to revise or update any forward-looking statement to reflect events or circumstances after the date of this release.

                        - FINANCIAL TABLES FOLLOW -


               FOR THE THREE MONTHS ENDED MARCH 31, 2009 AND 2008
                                                      2009              2008
      Product sales                              $10,098,390        $6,851,384
      Medical formula sales                               --           209,655
        Total revenues                            10,098,390         7,061,039

    COST OF GOOD SOLD                              7,318,762         4,749,019

    GROSS PROFIT                                   2,779,628         2,312,020

      Research and development                       184,880            88,392
      Selling, general and administrative            827,184           812,508
      Reverse acquisition                                 --                --
        Total operating expenses                   1,012,064           900,900

    INCOME FROM OPERATIONS                         1,767,564         1,411,120

    Other Income, Net                                  5,553             5,983
    Change in Fair Value of Warrants                (758,689)               --

     AND NONCONTROLLING INTEREST                   1,014,428         1,417,103

    PROVISION FOR INCOME TAXES                       545,486           268,767

     INTEREST                                        468,942         1,148,336

    Add: Net Income Attributable to
     Noncontrolling Interest                          81,140            27,477

     MEDICINE CORPORATION                            550,082         1,175,813

      Foreign Currency Translation
       Adjustment                                    (58,708)        1,290,620
      Comprehensive (loss) attributable to
       noncontrolling interest                        (1,133)           36,546

    COMPREHENSIVE INCOME                            $490,241        $2,502,979

      Basic                                            $0.04             $0.08
      Diluted                                          $0.04             $0.08

      Basic                                       15,226,742        15,029,865
      Diluted                                     15,226,742        15,339,834

                               AND DILUTED EPS

                                        For the Three Months ended March 31,
                                           2009                  2008
                                               Diluted               Diluted
                                    Net Income   EPS   Net Income      EPS
    Adjusted Amount of Net
     Income available to
     Common Shareholders            $1,308,771  $0.09  $1,175,813     $0.08
    Change in fair value of
     warrants (1)                      758,689   0.05          --        --

    Amount per consolidated
     statement of
     operations                       $550,082  $0.04  $1,175,813     $0.08

    (1) Change in fair value of warrants

    Weighted average diluted shares, 15,226,742 for three months ended March
    31, 2009 and 15,339,834 for three months ended March 31, 2008


                           CONSOLIDATED BALANCE SHEETS
                    AS OF MARCH 31, 2009 AND DECEMBER 31, 2008

                                                  March 31,       December 31,
                                                    2009              2008
      Cash                                       $1,770,955        $2,791,814
      Notes receivables                             996,200           600,911
      Accounts receivable, trade, net of
       allowance for doubtful accounts of
       $96,447 and $96,609 as of March 31,
       2009 and December 31, 2008,

SOURCE China Medicine Corporation
Copyright©2009 PR Newswire.
All rights reserved

Related medicine news :

1. Chinas 1-child policy could backfire on its elderly
2. Omnicom Acquires Leading Healthcare Marketing Communications Firm in China
3. Expanding Prevalent Population Will Drive Dramatic Growth for the Asthma Drug Market in China
4. Bridgetech Announces Addition of the Agency for Healthcare Research and Quality as Content Provider in its Development of a Healthcare Web Portal in China
5. China Holdings Appoints Ronald Shon Chairman of Advisory Board to Its Wholly-Owned Subsidiary China Power, Inc.
6. China Bionanometer Industries Corporation Promotes New Cosmetics Product Line in China
7. China Shenghuo Pharmaceutical Holdings, Inc. Begins Full-Scale Launch of 12Ways(R) Chinese Herbal Skin Care Product Line
8. Statement by Mike Leavitt Secretary of Health and Human Services on the United States-China Bilateral Meetings on Food and Drug Safety
9. Supplier Assessments to Help Buyers Identify Reliable China Exporters
10. Study shows lead-based paint problem isnt isolated to China
11. Bracco Announces Initiative to Save Children in China at 2007 Annual Meeting of CGI
Post Your Comments:
(Date:10/9/2015)... ... , ... With the FCPX LUT Vibrance pack from Pixel Film Studios, editors ... Lookup Table that contains a mathematical formula for modifying an image. The LUT changes ... with 60 vibrant CUBE LUT files. , Inspired by many YouTube make-up ...
(Date:10/9/2015)... ... 09, 2015 , ... Dentist in Huntington Beach , ... that uses clear, plastic aligners. This alternative to braces has become wildly popular ... patients to complete treatment in privacy. Additionally, Invisalign aligners are removable, so patients ...
(Date:10/9/2015)... Stockton, CA (PRWEB) , ... October 09, 2015 ... ... year anniversary of their “Agents of Change” program, a community improvement initiative that ... The newest charity to benefit from the assistance of Confidence Plus Insurance is ...
(Date:10/9/2015)... ... October 09, 2015 , ... ViewPoint Center, a teen mental health hospital ... mental illness, the stigma associated with mental illness causes many to hide away in ... importance of supporting teens with mental illness , providing teens with comprehensive diagnostic ...
(Date:10/9/2015)... ... , ... Most people assume that Chinese food is more nutritious than American ... T’ai Chi Master and integrative medicine guru Steven Aung, MD agrees with that assessment, ... that they potentially complement one another, with each supplying nutritional elements the other may ...
Breaking Medicine News(10 mins):
... Sales and Marketing Veteran to Drive International Retail Expansion, ... Group and New WrinkleFree Brand Line ExtensionIRVINE, Calif., Jan. ... developer and distributor of medically developed and efficacy-based skin ... mass market retail locations throughout the U.S., announced today ...
... The following statement can be attributed to Michael ... has consistently said two things: We are not ... But we have urged public policy makers to ... merger without conditions, because without conditions the merger ...
... (Nasdaq: OMCL ), a leading provider of system solutions to acute healthcare ... quarter 2008 financial results. , What: Omnicell ... webcast, When: January ... Lipps, chairman, president and chief executive officer, ...
... Maine, Jan. 21 IDEXX Laboratories, Inc. (Nasdaq: ... quarter and full-year financial results for Friday, January 30, at ... conference call beginning at 9:00 a.m. (eastern) on that day. ... through a link on the IDEXX Web site, ...
... can lead to failure, , , WEDNESDAY, Jan. 21 (HealthDay ... a common cause of kidney transplant failure may help ... polyomavirus nephropathy, which affects about 9 percent of kidney ... adults but can cause serious problems for people with ...
... CAMBRIDGE, Mass. -- Schizophrenia may blur the boundary between ... that is involved in self-reflection, and thus causing an ... brain imaging study has found. , The traditional ... and emotions that characterize the disease are caused by ...
Cached Medicine News:
(Date:10/9/2015)... , October 9, 2015 ClinicalKey ... 7-9   Elsevier , ... and services, today launched ClinicalKey for Nursing , a ... tailored to meet the unique needs of nursing professionals. Attendees ... Atlanta , Oct. 7-9, will have the opportunity ...
(Date:10/9/2015)... 9, 2015 Eli Lilly and Company (NYSE: ... and approximately 50 new jobs to its research and development ... New York, New York . ... space will include a translational immuno-oncology hub and a Lilly ... collaborative access to cutting-edge drug discovery capabilities, including chemistry and ...
(Date:10/9/2015)... 2015 Der " JCA-Mauvernay Award ... Kondo und Dr.   Junko Takita    --> ... geht an Dr.   Yutaka Kondo und Dr. ... " JCA-Mauvernay Award   2015 " geht ... Takita    ™ , das weltweit tätige Schweizer Biopharmazieunternehmen, ...
Breaking Medicine Technology:
... DIEGO, May 2, 2012  Trovagene, Inc. (Pink Sheets: ... initiated development of a diagnostic test to determine the ... from urine specimens. The proprietary test (U.S. patent application ... determination of carrier status in males. The ...
... 2, 2012 Official journal of the American ... world-leading provider of scientific, technical and medical information products and ... the American Association for Geriatric Psychiatry (AAGP) to ... ( AJGP ) beginning in January 2013. ...
Cached Medicine Technology:
... 4 Dot with 955R Red/Green glasses ... presence of binocular vision. Consists of ... discs: two green, one red and ... any distance. Patient wears red/green glasses ...
20 foot distance 22-1/2" X 11-1/2". This test for illiterate patients has HOTV letters on one side and Allen figures on the other....
Angled 30 degree shaft. 13 mm from tip to bend with 2.5 mm hook curved tip. Polished finished. Overall length excluding hub: 35 mm, 1.4 inches....
McIntyre-Binkhorst, length 18 mm....
Medicine Products: