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Tianyin Pharmaceutical Co., Inc. Announces Record Second Quarter 2009 Financial Results
Date:2/17/2009

CHENGDU, China, Feb. 17 /PRNewswire-Asia-FirstCall/ -- Tianyin Pharmaceutical Co., Inc., (NYSE Alternext: TPI), a manufacturer and supplier of modernized traditional Chinese medicine ("TCM") based in Chengdu, China, today announced fiscal results for its second quarter ended December 31, 2008.

Revenue for the second quarter of 2009 increased 30.4% to approximately $10.1 million compared to $7.7 million for the second quarter of 2008. The increase in revenues resulted from Tianyin's enhanced marketing and sales efforts to expand sales channels and increase overall market penetration, supported by an expanded product portfolio and increased production capabilities. Ginkgo Mihuan, one of Tianyin's flagship products, contributed approximately 25.7% to total revenues for the quarter, and increased $0.5 million, or 23.3% to $2.6 million, compared to the second quarter of fiscal 2008. Revenues generated by another core product, Arpu Shuangxin Oral Liquid, increased 130% to approximately $2.8 million from the second quarter of fiscal 2008.

Cost of goods sold for the three months ended December 31, 2008 was approximately $4.9 million or 48.9% of revenue as compared to US$4.6 million or 58.9% of revenue for the three months ended December 31, 2007, yielding a gross profit of $5.2 million and gross margins of 51%, compared to $3.2 million in gross profit and a gross margin of 41.1% during the second quarter of fiscal 2008. Thus, gross profits grew by 61.8% on a year-over-year basis. The increase in gross margins was primarily attributable to the focus on higher margin products such as Ginkgo Mihuan Oral Liquid and Arpu Shuangxin Oral Liquid, and stringent cost controls implemented during the manufacturing process.

Operating expenses for the three months ended December 31, 2008 were approximately $2.7 million, up 122.1% compared to the same period in 2007. Selling, general and administration expenses for the period increased to approximately $2.6 million from $1.2 million in the second quarter of 2008. The increase was primarily a result of the planned increased investment in Tianyin's overall marketing efforts, including increased costs in advertising and, promotion and payrolls of an expanded sales force. Research and development expenses were $84,220 in the three months ended December 31, 2008, versus $34,106 in 2007.

Operating income for the second quarter of 2009 totaled approximately $2.5 million, a 25.4% increase from the $2 million reported for the second quarter of 2008. Operating margins were 24.5% and 25.5% for the second quarter of fiscal 2009 and fiscal 2008, respectively. The slight decrease in the operating margin was due to increased spending on R&D and marketing to expand Tianyin's market presence and penetration.

For the second quarter of fiscal 2009, net income was approximately $2.1 million, a 24.5% increase, compared to $1.7 million for the second quarter of 2008. The increase in net income was due to the increase of revenues along with improved gross margins and efficiencies partially offset by increases in sales and marketing costs. Diluted earnings per share were $0.13 compared to $0.13 for the second quarter of 2009 and 2008 respectively, based up on 15.7 million and 12.8 million shares. The company had an effective tax rate of 16.6% and 15%, for the second quarter of fiscal 2009 and 2008, respectively.

"We are very pleased to report another quarter of strong revenue and net income growth. The success of our overall marketing strategy focusing on high margin products enabled us to achieve this growth for the second quarter of fiscal 2009 and positions us well for the remainder of the year. While the global economy is experiencing a sharp downturn, our industry is not affected and has little correlation with the overall economic environment," commented Dr. Guoqing Jiang, Tianyin's Chief Executive Officer. "The Chinese government recently announced a new health care reform plan and will invest $123 billion between 2009 and 2011 with a principal goal to cover 90% of urban and rural residents with basic medical insurance. In addition, the Pharmaceutical Industry in China will be a beneficiary of expanded social reform with the recently announced $586 billion stimulus plan. With 35% of all Pharmaceutical sales emanating from Traditional Chinese Medicines (TCM) and the central government's open commitment to significantly upgrading China's healthcare system, we believe Tianyin is ideally positioned to benefit from an industry which is experiencing long-term secular growth characteristics. Our enhanced sales and marketing efforts, extensive product portfolio and strong pipeline, supported by an experienced and motivated management team, are the attributes which not only differentiate us from other competitors but will enable us to capitalize on this opportunity."

Six Month Results

For the six months ended December 31, 2008, revenues increased approximately 31.8% to $19.7 million compared to the same period in 2007. Gross profit was $10 million for the first six months of 2009, representing an increase of 65.7% from the first six months of 2008. Gross margins were 51% for the first six months of 2009 compared to 40.6% for the same period in 2008.

Income from operations was $4.6 million for the first six months of 2009, representing an increase of 22.3% over the first six months of 2008. Operating margins were 23.6% for the first six months of 2009 compared to 25.4% for the first six months of 2008. Net income was $3.8 million for the six months ended December 31, 2008, an increase of approximately 21.3% from the same period in 2007. Fully diluted earnings per share were $0.24 compared to $0.23 for the first six months of fiscal 2009 and 2008 respectively, based up on 15.7 million and 12.8 million shares.

Balance Sheet and Cash Flow

The Company had a current ratio of 6.9 to 1 and $12.7 million in cash and cash equivalents on December 31, 2008. On December 31, 2008, the Company had stockholders' equity of $37 million, with total assets of $24 million versus total liabilities of $3.5 million. For the first six months of 2009, the Company generated $3.9 million in cash from operations versus $2.8 million for the same period in 2008.

Business Development

During the second quarter of fiscal 2009, Tianyin implemented a new sales and marketing strategy to categorize both distributors and hospital clients into three classes. This initiative was established to improve long-term relationships with strategic distribution partners, while optimizing and further diversifying its customer base. The Company has already experienced measurable improvement in optimization of salespersons' time and efforts with different classes of clients.

During the first six months of fiscal 2009, Tianyin received three approvals from the SFDA to produce Laonian Kechuan Tablet (SFDA approval number H2008S02059), Fuke Zhidai Tablet (SFDA approval number Z20083375) and Tongbianling Capsule (SFDA approval number Z20083424). Laonian Kechuan Tablet is a TCM drug that effectively treats asthma in people aged 60 or above. Fuke Zhidai Tablet is a TCM drug used to treat abnormal leucorrhea, which is caused by chronic cervicitis, endometritis and endocolpitis. Tongbianling Capsule is a generic TCM and highly effective in treating common diseases including one-time abdominal distention constipation, bedridden constipation, and elderly chronic constipation, with initial shipments expected to begin in February 2009.

Tianyin has completed installing the steel framework and roofing of the new production facility with production expected to commence in the spring of 2009. The Company has recently completed the civil construction and began interior design efforts. The new plant will expand overall production capacity by 3 times and will be utilized to meet growing demand for current products, while also accommodating new product launches from the Company's development pipeline.

On October 27, 2008, Tianyin's Board of Directors authorized the Company to repurchase up to $3.0 million of its common stock from time to time in the open-market or through privately negotiated transactions. The buyback may be conducted through June 30, 2009. The Company is subject to Rule 10b-18 of the Exchange Act of 1934, as amended, regarding the buyback including the timing and amount of the purchase. The Company had $12.7 million in net cash and equivalents on December 31, 2008 and generated $3.9 million in cash from operations for the first six months of 2009. Management believes the Company is adequately funded to meet all of the working capital and capital expenditure plans for 2009.

"We received three approvals from the Chinese State Food and Drug Administration (SFDA), which will further diversify our portfolio and provide strong support to our future growth. These recent approvals provide confirmation of our ability to move additional drugs that are currently in our pipeline through the approval process toward commercialization. We will remain focused on introducing higher margin products that address larger indications and will contribute to our long-term growth and profitability. Our management team is committed to creating value for our shareholders and will continue to implement and execute a growth plan which will enable us to accomplish this goal," concluded Dr. Jiang.

Conference Call

The Company will host a conference call to discuss the 2009 second quarter financial results on Wednesday, February 18, 2009 at 8:45 a.m. EST. Interested participants should call 800-762-8795 within the United States, or US +1-480-629-9031 if calling internationally. The conference ID is 3987044. It is advisable to dial in approximately 5-10 minutes prior to 8:45 a.m. EST. If you are unable to participate in the call at the scheduled time, a playback will be available through March 4, 2009. To listen to the playback, please call 800-406-7325 from within the United States, or US +1-303-590-3030 internationally. Please use pass code 3987044 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 33 modernized TCMs and 5 generic western medicines in the market, 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 22 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. Tianyin achieved revenue of approximately $33.5 million and net income of approximately $6 million in FY2008 ending June 30, 2008. For more information about Tianyin, please visit http://www.tianyinpharma.com .

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.

-- FINANCIAL TABLES FOLLOW --



                       Tianyin Pharmaceutical Co. Inc.
                           (FORMERLY VISCORP, INC.)

                         Consolidated Balance Sheets
                                 (Unaudited)

                                                   December 31,    June 30,
                                                       2008          2008
                                                   (Unaudited)
    Assets:
    Current assets:
        Cash and cash equivalents                  $12,673,338   $12,057,150
        Accounts receivable, net of allowance for
         doubtful accounts of $90,558
         and $90,064 at December 31, 2008 and
         June 30, 2008, respectively                 4,351,959     4,460,406
        Inventory                                    4,695,104     3,555,691
        Advance payments                             2,159,424            --
        Other receivables                              436,520       371,815
        Other current assets                            20,000       247,139
                Total current assets:               24,336,345    20,692,201

    Property and equipment, net:                     6,204,568     5,758,966

    Intangibles, net:                               10,414,298    10,307,754

                Total assets:                      $40,955,211   $36,758,921

    Liabilities and stockholders' equity:
    Current liabilities:
        Accounts payable and accrued expenses       $1,224,733    $1,337,682
        Short-term bank loans                        1,400,985     1,393,345
        VAT taxes payable                              350,143       277,090
        Income taxes payable                           409,483       341,214
        Payroll taxes payable                            4,385        39,939
        Dividends payable                                   --       378,545
        Other current liabilities                      144,250       142,733
                Total current liabilities:           3,533,979     3,910,548

                Total liabilities:                   3,533,979     3,910,548

    Stockholders' equity:
        Common stock, $0.001 par value, 50,000,000
         shares authorized, 15,691,495 and
         14,738,450 shares issued and outstanding at
         December 31, 2008 and June 30, 2008            15,692        14,739
        Common stock dividend distributable                224            --
        Series A convertible preferred stock,
         $0.001 par value, 8,893,750 and
         9,384,375 shares issued and outstanding
         at December 31, 2008 and June 30, 2008          8,894         9,384
        Additional paid-in capital                  19,099,158    18,002,439
        Statutory reserve                            1,815,823     1,380,806
        Retained earnings                           13,657,200    10,963,131
        Accumulated other comprehensive income       2,824,241     2,477,874
                Total stockholders' equity:         37,421,232    32,848,373

                Total liabilities and
                 stockholders' equity:             $40,955,211   $36,758,921



                       Tianyin Pharmaceutical Co. Inc.
                           (FORMERLY VISCORP, INC.)

                    CONSOLIDATED STATEMENTS OF OPERATIONS
                           AND COMPREHENSIVE INCOME
                                 (UNAUDITED)

                                 For the Three Months    For the Six Months
                                         Ended                 Ended
                                      December 31,           December 31,
                                   2008        2007        2008        2007

    Sales:                   $10,101,869  $7,749,199 $19,663,809 $14,918,692

    Cost of goods sold:        4,944,980   4,567,429   9,627,603   8,861,258

    Gross profit:              5,156,889   3,181,770  10,036,206   6,057,434

    Operating expenses:
        Selling, general and   2,595,311   1,172,062   5,228,672   2,200,541
         administrative
        Research and
         development              84,220      34,106     166,858      61,558
            Total operating
             expenses:         2,679,531   1,206,168   5,395,530   2,262,099

    Income from operations:    2,477,358   1,975,602   4,640,676   3,795,335

    Other income (expenses):
        Other income              15,564          --      29,808          --
        Interest expense         (26,975)    (31,659)    (54,695)    (66,362)
            Total other income
             (expenses):         (11,411)    (31,659)    (24,887)    (66,362)

    Income before provision
     for income tax:           2,465,947   1,943,943   4,615,789   3,728,973

    Provision for income tax:    408,827     291,572     767,677     556,646

    Net income:                2,057,120   1,652,371   3,848,112   3,172,327

    Other comprehensive
     income:
        Foreign currency
         translation
         adjustment              256,933     391,115     346,367     574,966

    Comprehensive income:     $2,314,053  $2,043,486  $4,194,479  $3,747,293

    Basic earnings per share:      $0.11       $0.13       $0.20       $0.25
    Diluted earnings per
     share:                        $0.13       $0.13       $0.16       $0.25

    Weighted average number of
     common shares outstanding:

        Basic                 15,691,495  12,790,800  15,637,623  12,790,800
        Diluted               15,691,495  12,790,800  24,697,018  12,790,800



                       Tianyin Pharmaceutical Co. Inc.
                           (FORMERLY VISCORP, INC.)

                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                    FOR THE SIX MONTHS ENDED DECEMBER 31,
                                 (UNAUDITED)

                                                    For the Six Months Ended
                                                             December 31,
                                                          2008        2007
    Cash flows from operating activities:
    Net Income                                        $3,848,112  $3,172,327
    Adjustments to reconcile net income to net
     cash provided by (used in) operating activities:
    Depreciation and amortization                        237,619     164,758
    Changes in current assets and current
     liabilities:
    Accounts receivable                                  132,660      (6,899)
    Inventory                                         (1,117,856)    306,194
    Other receivables                                    608,042    (624,610)
    Other current assets                                 227,140          --
    Accounts payable and accrued expenses               (119,588)   (252,002)
    VAT taxes payable                                     71,402     (16,051)
    Income taxes payable                                  66,275     (20,953)
    Payroll taxes payable                                (35,705)     (1,707)
    Other current liabilities                                732      66,426
                Total adjustments:                        70,721    (384,844)

                Net cash provided by operating
                 activities:                           3,918,833   2,787,483

    Cash flows from investing activities:
        Additions to property and equipment             (570,491)   (133,591)
        Additions to intangibles                        (130,323)         --

        Advance payments for research and
         development                                  (2,155,450) (1,040,484)

                Net cash used in investing
                 activities:                          (2,856,264) (1,174,075)

    Cash flows from financing activities:
        Repayment of short-term bank loans                    --    (801,540)
        Repayment of long-term bank loans               (512,505)   (121,569)

                Net cash used in financing
                 activities:                            (512,505)   (923,109)

    Effect of foreign currency translation on
     cash:                                                66,124      44,728

    Net increase in cash and cash equivalents:           616,188     735,027

    Cash and cash equivalents - beginning:            12,057,150     624,390

    Cash and cash equivalents - ending:              $12,673,338  $1,359,417



    For more information, please contact:

    For the Company:
     Allen Tang, Ph.D., MBA, Assistant to the CEO
     China
     Tel:   +86-158-2122-5642
     Email: Allen.y.tang@gmail.com

    Investors:
     Mr. Matthew Hayden, HC International
     Tel:   +1-561-245-5155
     Email: matt.hayden@hcinternational.net
     Web:  http://www.hcinternational.net

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


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