Third Quarter Revenue Increased 70.9% to $9.2 Million
CHENGDU, China, May 15 /Xinhua-PRNewswire-FirstCall/ -- Tianyin Pharmaceutical Co., Inc., (OTC Bulletin Board: TYNP), a manufacturer and supplier of modernized traditional Chinese medicine ("TCM") based in Chengdu, China, today announced fiscal results for its third quarter ended March 31, 2008.
Revenue for the third quarter of 2008 increased 70.9% to approximately $9.2 million compared to approximately $5.4 million for the third quarter of 2007. The significant increase in revenues was due to strong demand of the Company's current product portfolio supported by enhanced marketing efforts and expansion of current sales channels.
Cost of goods sold for the third quarter was approximately $5.1 million, yielding a gross profit of $4.1 million and gross margins of 44.6%, compared to $2 million in gross profit and a gross margin of 37.5% during the third quarter of 2007. Thus, gross profits grew by 103.2% on a year-over-year basis. The increase in gross profit and improved margins were primarily attributable to the growth in revenue and our focus on high margin products in the Company's portfolio such as Ginkgo Mihuan Oral Liquid and Arpu Shuangxin Oral Liquid.
Operating expenses for the three months ended March 31, 2008 were $2.3 million, up 560.7% compared to the same period in 2007. Selling, general and administration expenses for the period increased to approximately $2.2 million from $0.33 million in the third quarter of 2007, which included a one-time expense of $0.4 million in public market listing expenses, in addition to increased investment in overall marketing including increased costs in advertisement, promotion and sales force related expenses. Research and development expenses were $89,372 in the three months ended March 31, 2008, versus $15,749.
Operating income for the third quarter of 2008 totaled approximately $1.9 million, a 10% increase from the $1.7 FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and equipment (208,652) (54,939)
Construction in progress (67,820) --
Additions to intangibles (786,712) (865,844)
Net Cash Used by Investing
Activities (1,063,184) (920,783)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from capital contribution 9,089,700 --
Proceeds from bank loans 2,674,873 --
Repayment of shareholder loans (143,967) (13)
Repayment of bank loans -- (40,386)
Net Cash Provided (Used) by
Financing Activities 11,620,606 (40,399)
EFFECT OF FOREIGN CURRENCY TRANSLATION ON CASH 685,138 16,759
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 12,999,668 (161,498)
CASH AND CASH EQUIVALENTS - BEGINNING 624,390 740,780
CASH AND CASH EQUIVALENTS - ENDING $13,624,058 $579,282million reported for the third quarter of 2007. Operating margins were 20.1% and 31.2% for the third quarter of 2008 and 2007, respectively. The decrease in the operating margin was due to increased spending on R&D and marketing to expand Tianyin's market presence, and the one-time expense of going public. Without going public and investing in the growth initiatives undertaken during the third quarter, margins would have increased.
For the third quarter of 2008, net income was approximately $1.3 million, a 10.9% decrease, compared to approximately $1.4 million for the third quarter of 2007. Fully diluted earnings per share were $0.05 compared to $0.11 for the third quarter of 2008 and 2007 respectively, based up on 24.5 million and 12.8 million shares. The decrease in net income was primarily due to the Company's one-time listing and marketing expenses incurred in the quarter as discussed above. Additionally, the Company had increased interest expense of $245,174 during the quarter versus $31,465 a year ago due to a financing in the third quarter and the recently established bank loan. The Company also increased its provision for income taxes from $225,663 to $337,132 during the current quarter, yielding an effective tax rate of 20.9% vs. 13.6%. The Company incurred approximately $800,000 in expenses, not including the increased marketing expenditures, during the third quarter of 2008, which were not present during the same period of 2007. The items included are the increased expenditures for R&D, interest, taxes, and going public expenses.
"We are very pleased to report another quarter of strong revenue growth. The success of our overall marketing strategy and focusing on high margin products enabled us to achieve a 70% increase in revenues for the third quarter of 2008. While the overall net income was impacted by several non-operating expenses , our focus on expanding our distribution channels has brought new distribution partners, has enabled us to gain incremental market share and is contributing to our overall growth," commented Dr. Guoqing Jiang, Chief Executive Officer of Tianyin. "In addition, our reputation as a premier pharmaceutical organization has attracted a number of experienced sales and marketing executives. We recently appointed Mr. Shenxing Yuan, an industry veteran who previously worked for two well-known Chinese pharmaceutical manufacturers, as the head of our first marketing division. His addition has enabled us to expand our second marketing division to over 400 salespersons, We would like to publicly welcome Mr. Yuan and I am confident that his promotion will not only help create a stronger marketing division, but lead to future growth for the overall organization. "
Nine Month Results
For the nine months ended March 31, 2008, revenues increased approximately 77.4% to $24.2 million compared to the same period in 2007. Gross profit was $10.2 million for the first nine months of 2008, representing an increase of 97.8% from the first nine months of 2007. Gross margins were 42.1% for the first nine months of 2008 compared to 37.8% for the same period in 2007.
Income from operations was $5.7 million for the first nine months of 2008, representing an increase of 41.6% over the first nine months of 2007. Operating margins were 23.4% for the first nine months of 2008 compared to 29.3% for the first nine months of 2007. Net income was approximately $4.4 million for the nine months ended March 31, 2008, an increase of approximately 32.6% from the same period in 2007. Fully diluted earnings per share were $0.27 compared to $0.26 for the first nine months of 2008 and 2007 respectively, based up on 16.7 million and 12.8 million shares.
Balance Sheet and Cash Flow
The Company had a current ratio of 6.4 to 1 and $13.6 million in cash and cash equivalents on March 31, 2008. The Company had Stockholders' equity of $31 million, with total assets of $34.4 million versus total liabilities of $3.4 million. For the first nine months of 2008, the Company generated $1.76 million in cash from operations versus $0.78 million for the same period in 2007.
Tianyin's key products continue to gain market shares in China. Ginkgo Mihuan Oral Liquid, Tianyin's leading product and core prescription drug, obtained product entry into the formularies of over 30 Tier I and Tier II hospitals in China during the third quarter of 2008. Additionally, plans call for the Company to enter 150 more hospitals before December 31, 2008 which will result in further increase of total sales of Ginkgo Mihuan Oral Liquid.
Tianyin has successfully installed newly purchased equipment including a high speed tablet press machine, a high speed capsule filling machine, and a one-step granulator. The installation has increased the overall production capacity of solid dosage form by 15%. Tianyin signed manufacturing agreements with two major pharmaceutical manufactures, Sichuan Kofule Pharmaceutical Group and Sichuan Medco Pharmaceutical Group, which will further alleviate the current capacity deficiency and meet the rapidly increasing market demand of their products. Additionally, Sichuan local government has approved Tianyin's application for a new solid dosage production plant. Construction of the plant started in the end of April 2008.
Although China's strongest earthquake in 58 years hit Sichuan Province on May 12, the Company's production was not affected and no one from Tianyin was injured by the disaster.
"Supported by the Chinese government and increases in personal income which is providing the means to improve consumers' overall level of healthcare, the growth of the TCM industry remains robust. Backed by our experienced management team, enhanced sales and marketing efforts, diversified product portfolio and extensive pipeline, we believe we are well positioned to capitalize on the significant growth opportunity in the TCM industry," concluded Dr. Jiang.
The Company will host a conference call to discuss the 2008 third quarter financial results on Thursday, May 15, 2008 at 9:00 a.m. EDT. Interested participants should call 800-762-9058 within the United States, or US +1-480-629-9039 if calling internationally. The conference ID is 3879213. It is advisable to dial in approximately 5-10 minutes prior to 9:00 a.m. EDT. If you are unable to participate in the call at the scheduled time, a playback will be available on Thursday, May 15, 2008 at 12:00 p.m. EDT through Thursday, May 29, 2008 at 11:59 p.m. EDT. 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 3879213 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 34 modernized TCMs 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 51 pharmaceutical products pending approval. Tianyin has an extensive nationwide distribution network throughout China with a sales force of 523 salespeople. Tianyin is headquartered in Chengdu, Sichuan Province with two manufacturing facilities and a total of 1,187 employees. Tianyin achieved revenue of $20.4 million and net income of $3.95 million in FY2007 ending June 30, 2007.
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:
For the Company:
Allen Tang, Ph.D., MBA, Assistant to the CEO
HC International, Inc.
-- FINANCIAL TABLES FOLLOW --
Tianyin Pharmaceutical Co. Inc.
(FORMERLY VISCORP, INC.)
CONSOLIDATED BALANCE SHEET
March 31, 2008
Cash and cash equivalents $13,624,058
Accounts receivable, net of allowance of
Advance payments to vendors 1,812,132
Other receivables 52,690
Prepaid expenses and other current
Total Current Assets 22,333,248
PROPERTY AND EQUIPMENT, NET 4,990,756
INTANGIBLES, NET 7,108,671
Total Assets $34,432,675
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $1,254,956
Short term bank loans 1,363,740
VAT taxes payable 237,651
Income tax payable 345,936
Other taxes payable 29,484
Other payables 160,265
Total Current Liabilities 3,392,032
Common stock, $0.001 par value,
50,000,000 shares authorized 14,587
14,587,200 shares issued and outstanding
Series A convertible preferred stock,
$0.001 par value, 9,515,625
shares issued and outstanding 9,516
Additional paid-in capital 17,934,459
Statutory reserve 1,189,912
Retained earnings 10,090,588
Accumulated other comprehensive income 1,801,581
Total Stockholders' Equity 31,040,643
Total Liabilities and
Stockholders' Equity $34,432,675
Tianyin Pharmaceutical Co. Inc.
(FORMERLY VISCORP, INC.)
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
Three Months Ended Nine Months Ended
March 31, March 31,
2008 2007 2008 2007
SALES $9,249,229 $5,412,969 $24,167,921 $13,622,991
COST OF GOODS SOLD 5,123,587 3,382,399 13,984,845 8,474,163
GROSS PROFIT 4,125,642 2,030,570 10,183,076 5,148,828
administrative 2,180,161 327,773 4,380,702 1,129,549
development 89,372 15,749 150,930 29,129
Expenses 2,269,533 343,522 4,531,632 1,158,678
INCOME FROM 1,856,109 1,687,048 5,651,444 3,990,150
Other income -- 10 -- 1,442
Interest expense (245,174) (31,465) (311,536) (103,210)
Total Other (245,174) (31,455) (311,536) (101,768)
INCOME TAX 1,610,935 1,655,593 5,339,908 3,888,382
INCOME TAX 337,132 225,663 893,779 536,599
NET INCOME 1,273,803 1,429,930 4,446,129 3,351,783
adjustment 780,932 63,644 1,355,898 170,267
INCOME $2,054,735 $1,493,574 $5,802,027 $3,522,050
BASIC EARNINGS PER
SHARE $.09 $.11 $.33 $.26
PER SHARE $.05 $.11 $.27 $.26
SHARES OF COMMON
BASIC 14,274,783 12,790,800 13,289,072 12,790,800
DILUTED 24,455,363 12,790,800 16,707,369 12,790,800
Tianyin Pharmaceutical Co. Inc.
(FORMERLY VISCORP, INC.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED MARCH 31,
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $4,446,129 $3,351,783
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 273,060 293,572
Bad debt expense -- 19,434
Changes in current assets and current
Accounts receivable (535,631) (2,195,180)
Inventory (550,711) (386,727)
Advance payments to vendors - 351,303
Other receivables 89,183 (107,288)
Prepaid expense and other current
assets (2,005,616) --
Accounts payable and accrued expenses (13,158) (401,089)
VAT taxes payable 9,280 48,797
Income tax payable 13,565 67,390
Other taxes payable 4,254 5,368
Other payables 26,753 (264,438)
Total Adjustments (2,689,021) (2,568,858)
Net Cash Provided by Operating
Activities 1,757,108 782,925
|SOURCE Tianyin Pharmaceutical Co., Inc.|
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