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.
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.
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.firstname.lastname@example.org Investors: Mr. Matthew Hayden, HC International Tel: +1-561-245-5155 Email: email@example.com Web: http://www.hcinternational.net
|SOURCE Tianyin Pharmaceutical Co., Inc.|
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