NEW YORK, Feb. 18 /PRNewswire-Asia-FirstCall/ -- China YCT International Group Inc., (OTC Bulletin Board: CYIG) ("China YCT" or "the Company"), a leading company engaged in the business of developing, manufacturing and marketing gingko-based products through its wholly owned subsidiary, Shandong Spring Pharmaceutical Co. Ltd, today announced its fiscal 2009 third quarter results for the period ended December 31, 2008.
Third Quarter Highlights -- Revenue increased 60.4% period-over-period to $8.6 million -- Gross profit was $4.8 million, up 61.9% versus the third quarter 2008 -- Income from operations grew to $3.0 million, an increase of 91.6% versus the third quarter 2008 -- Net Income was $2.2 million, representing an increase of 130.3% period- over period
"Through the third quarter fiscal 2009, we continued to benefit from the ongoing trend of growth and expanding acceptance of our products. During the first nine months of fiscal year 2009, April 1 2008 through December 31, 2008, the Company kept experiencing the emergence and development of Shandong Spring Pharmaceutical as a marketing force. Having commenced revenue-producing operations only in January 2007, we realized $981,849 in revenue for the year ended March 31, 2007," commented Mr. Yan Tinghe, China YCT's Chairman and CEO, "During the first nine months of fiscal year 2009, which ended on December 31, 2008, we realized $21,973,438 in revenue."
Revenue for the third quarter of fiscal 2009 increased to $8.6 million, up 60.4% from $5.3 million for the third quarter of fiscal 2008. Overall, higher revenues were primarily attributable to increasing sales volume and income from our core business segments. During the past 2 years of operations, we have a total of 38 products each contributed to revenue, including health care supplements, cosmetics and toiletries and daily necessities, and no single product has accounted for more than 20% of our revenue. For the quarter ended December 31, 2008, health care supplements segment accounts for 61.4% of sales, and Cosmetics segment and Daily necessities segment accounts for 26.8% and 11.8% of sales, respectively.
Gross profit for the third quarter was $4.8 million, up 61.9% from gross profit of $2.9 million for the third quarter of fiscal 2008. Gross margin was 56.4% compared to 55.5% in the same period a year ago. The increase in gross profit is a result of our increase in revenues as we experienced an increase in demand for our products. Our gross margin largely remained unchanged. The increase in gross profit was mainly due to the increased revenue.
Selling expenses for the third quarter of fiscal 2009 were $1.7 million, or 20.4% of revenue, compared to $1.4 million, or 26.4% of revenue for the third fiscal quarter of fiscal 2008. The increase in the amount of SG&A expenses was primarily due to the increase in advertising expenditures. However, this increase can not be directly used to track and measure our ongoing SG&A expenses stream trend. It needs to be examined and measured in line with the movement of net sales. In particular, for the three-month periods ended December 31, 2008, the SG&A expenses to sales ratio is 20%, where it is 26% for the same period of fiscal year 2008. It sufficiently indicates we have made progress on reasonably controlling SG&A expenses. From this perspective, for the nine months ended December 31, 2008, our SG&A expense to sales ratio was 16%, representing a descending trend as compared to 23% for nine months ended December 31, 2007.
Operating income for the third quarter was $3.0 million compared to operating income of $1.5 million in the same period a year ago. Contributing to the operating income for the quarter was the significant increase in our sales.
Effective in January 2008, the income tax rate imposed by the government of China was reduced from 33% to 25%. The new tax provisions added to our improved results. Our net income for the third quarter of fiscal 2009 was $2.2 million compared to net income of $0.9 million in the prior year period. Fully diluted income per share was $0.08 compared to fully diluted earnings per share of $0.03 in the comparable period a year ago. Weighted average diluted shares outstanding for the quarter remained at 29.3 million.
Nine Months Financial Results
Revenues for the first nine months of fiscal 2009 were $21.9 million, up 106.7% from revenues of $10.6 million in the first nine months of fiscal 2008. Gross profit was $12.3 million, up 108.9% from gross profit of $5.9 million for the nine months of fiscal 2008. Gross margin was 56.1% compared to 54.9% for the comparable period a year ago. Operating income was $8.6 million, up 152.9% from operating income of $3.4 million in the first nine months of fiscal 2008. Net income was $6.4 million, up 188.4% from net income of $2.2 million in the same period a year ago. Fully diluted earnings per share were $0.22 compared to $0.08 in the first nine months of fiscal 2008. Diluted weighted average shares outstanding stayed at 29.3 million.
As of December 31, 2008, the Company had $9,798,162 in working capital. Cash and cash equivalents were $10,297,023. In addition to $10,297,023 in cash and cash equivalents, the other significant portion of our current working capital consists of a loan receivable of $954,818 from Changqing Paper Co., an affiliated company also majority owned by our chairman, Mr. Yan Tinghe. Shareholders' equity was $15.7 million, compared to $9.0 million as of March 31, 2008. The Company generated $9.7 million in cash flow from operating activities in the first nine months of fiscal 2009.
"We believe that the mid- to long-term market opportunity for our products is growing at noticeable speed. Moreover, we have strengthened our balance sheet by reducing other receivable and current liabilities," Mr. Yan continued. "While the impact of the global economic slowdown will persist for the foreseeable future, we are seeing stronger operating results quarter-to- quarter, and we believe that, on a year-to-year basis, we will continue our strong growth into fiscal year 2010."
About China YCT International Group Inc.
Established in 2005, China YCT International Group, Inc., through its operating subsidiary, Shandong Spring Pharmaceutical Co. Ltd. ("Shandong Spring Pharmaceutical"), a corporation organized under the laws of the People's Republic of China, is a high-tech enterprise, which applies modern biological technology and integrates research & development, production and sales of ginkgo healthcare products, ginkgo cosmetics, daily-use chemical products, ginkgo glycoside products and biological medicines. All of Shandong YCT's businesses are currently in China.
The statements contained herein that are not historical facts are "forward-looking statements" within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may be identified by, among other things, the use of forward-looking terminology such as "believes," "expects," "may," "will," "should," or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. In particular, our statements regarding the potential growth of the markets are examples of such forward-looking statements. The forward-looking statements include risks and uncertainties, including but not limited to, general economic conditions and regulatory developments, not within our control. The factors discussed herein and expressed from time to time in our filings with the Securities and Exchange Commission could cause actual results and developments to be materially different from those expressed or implied by such statements. The forward-looking statements are made only as of the date of this filing, and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.
CHINA YCT INTERNATIONAL GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE NINE AND THREE MONTHS ENDED DECEMBER 31, 2008 AND 2007 (UNAUDITED) Nine Months Ended Three Months Ended December 31, December 31, 2008 2007 2008 2007 Revenues $21,973,438 $10,628,628 $8,634,345 $5,381,028 Cost of Goods Sold 9,587,697 4,701,605 3,777,786 2,382,088 Gross Profit 12,385,741 5,927,023 4,856,559 2,998,940 Operating Expenses Research and development expenses 139,603 -- 62,386 -- Selling, general and administrative 3,563,003 2,494,626 1,772,191 1,421,987 Income before other Income and (Expenses) 8,683,135 3,432,397 3,021,981 1,576,953 Other Income and (Expenses) (94,289) (42,021) (51,022) (38,309) Income Before Income Taxes 8,588,846 3,390,376 2,970,959 1,538,644 Provision for Income Taxes 2,130,969 1,151,938 728,584 565,130 Net Income $6,457,877 $2,238,438 $2,242,376 $973,514 Other Comprehensive Income: Foreign Currency Translation Adjustment 302,570 352,673 301,912 182,648 Comprehensive Income $6,760,447 $2,591,111 $2,544,289 $1,156,162 Basic and diluted income per common share Basic $0.22 $0.08 $0.08 $0.03 Diluted $0.22 $0.08 $0.08 $0.03 Weighted average number of common shares outstanding Basic 29,380,073 29,380,073 29,380,073 29,380,073 Diluted 29,380,073 29,380,073 29,380,073 29,380,073 CHINA YCT INTERNATIONAL GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS ASSETS December 31, 2008 March 31, 2008 (Unaudited) (Audited) Current assets: Cash and cash equivalents $10,297,023 $1,614,336 Inventory 64,450 737,153 Advance to suppliers -- 834,284 Other receivable - related party 954,818 2,022,742 Total Current Assets 11,316,291 5,208,515 Property and equipment, net of accumulated depreciation of $66,617 and $68,282, respectively 4,444,354 3,083,031 Land use right, net of accumulated amortization 1,421,133 1,404,803 Total Assets $17,181,778 $9,696,349 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $461,708 $59,688 Unearned Revenue 35,506 33,742 Tax payable 861,156 563,135 Accrued expenses 11,076 25,689 Other payables -- 7,305 Due to related party 45,095 -- Total Current Liabilities 1,414,541 689,560 Stockholders' Equity Preferred stock series A, $500 par value, 45 shares authorized and outstanding as of December 31, 2008 and March 31, 2007 respectively 22,500 22,500 Preferred stock series B convertible, $0.001 par value, 5,000,000 shares authorized, - 0 - shares issued and outstanding -- -- Common stock, $0.001 par value, 100,000,000 shares authorized; 29,380,073 shares issued and outstanding as of December 31, 2008 and March 31, 2008 29,380 29,380 Additional paid-in capital 4,063,039 4,063,039 Accumulated other comprehensive income 1,160,333 857,763 Retained earnings 10,491,985 4,034,108 Total Stockholders' Equity 15,767,237 9,006,790 Total Liabilities and Stockholders' Equity $17,181,778 $9,696,349 CHINA YCT INTERNATIONAL GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED DECEMBER 31, 2008 AND 2007 (UNAUDITED) Nine Months Ended December 31, 2008 2007 Cash Flows From Operating Activities: Net income $6,457,877 $2,238,438 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 85,488 48,767 Changes in operating assets and liabilities: Inventory 672,703 (426,533) Advance to suppliers 834,284 (88,020) Loan to related party 1,067,924 -- Accounts payable 402,020 4,667 Unearned revenue 1,764 -- Taxes payable 298,021 256,577 Accrued expenses and other payables (21,916) 33,701 Cash provided by operating activities 9,798,162 2,067,597 Cash Flows From Investing Activities: Purchase of plant and equipment -- (35,927) Purchase of land use right -- (304,473) Addition to construction in progress (1,328,402) (425,133) Cash used in investing activities (1,328,402) (765,533) Cash Flows From Financing Activities Proceeds from (payment to) related party 45,095 (534,683) Cash provided by financing activities 45,095 (534,683) Effect of exchange rate changes on cash and cash equivalents 167,832 260,254 Increase in cash and cash equivalents 8,682,687 1,027,635 Cash and Cash Equivalents - Beginning of period 1,614,336 679,770 Cash and Cash Equivalents - Ending of period $10,297,023 $1,707,405 Supplemental disclosures of cash flow information: Interest paid $-- $-- Income Taxes paid $1,877,874 $--
|SOURCE China YCT International Group Inc.|
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