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Tianyin Reports Record First Quarter Fiscal Year 2011 Financial Results

CHENGDU, China, Nov. 10, 2010 /PRNewswire-Asia-FirstCall/ -- Tianyin Pharmaceutical Co., Inc. (NYSE Amex: TPI), a pharmaceutical company that specializes in the patented biopharmaceutical, modernized traditional Chinese medicine, branded generics and other pharmaceuticals announced financial results for the first quarter of Fiscal Year 2011.

First quarter fiscal year 2011 ending September 30, 2010 financial highlights

  • 1Q FY2011 revenue increased 63.7% year over year to $22.0 million from $13.4 million a year earlier
  • 1Q FY2011 Operating income delivered $4.6 million, up 66.3% from $ 2.7 million a year earlier
  • Net Income increased 68.0% to $3.7 million, up from $2.2 million a year earlier
  • Earnings per share of $0.13 per basic share, or $0.12 per diluted share, up from $0.10 per basic share, or $0.08 per diluted share a year earlier, a gain of 54.4%  
  • Cash and equivalents totaled $26.9 million on September 30, 2010
  • Sichuan Jiangchuan Pharmaceutical Co., Ltd. ("Jiangchuan") macrolide facility construction progress on schedule: completion by yearend 2010

  • 1Q FY2011 Results1Q FY2010

    1Q FY2009

    YoY Sales

    $22.0 million

    $13.4 million

    +63.7% Gross Profit

    $10.8 million

    $7.1 million

    +53.2%Operating Income

    $4.6 million

    $2.7 million

    +66.3% Net Income

    $3.7 million

    $2.2 million

    +68.0% EPS (Diluted)



    +54.4% Diluted Shares

    29.9 million

    27.5 million

    +8.7%Sales for 1Q FY2011 was $22.0 million, up 63.7% vs. $13.4 million for 1Q FY2010. The sales growth was supported by the continuing channel expansion, market penetration and optimized usage of our expanded production facility.

    Revenues from our top selling products are listed as follows, Ginkgo Mihuan Oral Liquid (GMOL): $4.7 million Apu Shuangxin (Benorylate) Granules (APU): $1.5 million Azithromycin Dispersible Tablets (AZI): $0.87 million Xuelian Chongcao Oral Liquid (XLCC): $0.83 millionQingrejiedu Oral Liquid (QR): $0.64 million These major products revenue totaled $8.5 million, representing 38.7% of the quarterly revenue for 1Q FY2011.Cost of sales for the three months ended September 30, 2010 was $11.1 million or 50.7% of sales as compared to $6.3 million or 47.4% of sales for the three months ended September 30, 2009. The cost of sales consists of the raw material cost, labor, depreciation and amortization of manufacturing equipment and facilities, and other overhead.

    Gross margin for the three months ended September 30, 2010 was 49.3% as compared to 52.6% for the three months ended September 30, 2009. The stabilization of our cost of sales was due to an increase of distribution revenue which averaged 15% margins from Tianyin Medicine Trading (TMT), a fully owned subsidiary of Tianyin, combined with a steady increase of high margin products led by GMOL in our organic portfolio.

    Operating expenses were $6.2 million for the three months ended September 30, 2010, as compared to $4.3 million for the three months ended September 30, 2009. The increase was primarily due to 1) continuing sales and marketing strategy that raises our sales payroll and marketing expenses and 2) one-time restricted stock compensation for the total of 55 Tianyin's employees for their contribution in delivering significant growth for the Company in FY2009 and FY2010.

    Net income was $3.7 million for the three months ended September 30, 2010, as compared to net income of $2.2 million for the three months ended September 30, 2009, a net increase of $1.5 million or 68.0% year over year. Net margins of 1Q FY2011 improved to 16.7% up from 16.3% for 1Q FY2010 mainly due to the leverage of the business operation that drives the sales expansion while keeping the operating expenses in-line with the revenue growth.

    Diluted earnings per share for the three months ended September 30, 2010 were $0.12, up 54.4% from the earnings of $0.08 per diluted share for the three months ended September 30, 2009, based on 29.9 million and 27.5 million shares for 1Q FY2011 and 1Q FY2010, respectively.

    Balance Sheet and Cash FlowAs of September 30, 2010, we had cash and cash equivalents of $26.9 million. Net cash generated from operating activities was $1.5 million for the three months ended September 30, 2010 as compared to $2.2 million for the three months ended September 30, 2009. The decrease in cash generated from the operating activities during 1Q FY2011 was primarily the result of 1) $1.6 million inventory increase following the sales expansion of TMT and 2) $ 1.1 million Jiangchuan related construction costs that offset the net cash flow from operating activities driven by net income growth of $1.5 million. We believe that Tianyin is adequately funded to meet all of the working capital and capital expenditure needs for FY2011.

    Business Development & OutlookJiangchuan Progress Update

    Jiangchuan focuses on the production of one of the world's best-selling antibiotics, macrolide antibiotics, such as Azithromycin. Jiangchuan holds a license from China's SFDA to produce macrolide antibiotics and a related business license from the Industry and Commerce Bureau and Tax department. Tianyin owns 77% of Jiangchuan and will utilize Jianchuan as the foundation of a broader, longer term strategy to build a significant presence in the rapidly growing macrolide antibiotics market. Construction of the new production facility in Xinjin Industrial Development Area commenced on January 8, 2010 with Phase I capacity of 240 ton capacity, followed by Phase II (total of 480 ton capacity including phase I) with a total estimated capital expenditures of $20 million. Tianyin anticipates Jiangchuan's revenue contribution to begin in the 2nd half of fiscal year 2011.

    Development of Tianyin Medicine Trading Distribution Business

    Since the inception of Tianyin Medicine Trading (TMT), we have been developing the distribution portfolio of TMT, Tianyin's distribution arm for specialty products manufactured by other pharmaceuticals that provide synergy to our existing organic product portfolio. Previously, TMT distributes mainly Tianyin's own products. In early November this year, we have successfully obtained one year distribution rights from state-owned Jiangsu Lianshui Pharmaceutical (Lianshui) to distribute approximately 15 Lianshui-branded generic injection products including cough suppressant, antiobiotics along with other healthcare indications. We forecast the annual distribution revenue from TMT to reach approximately $10 million.

    Conference CallSenior management of Tianyin will host a conference call to discuss its fiscal year 2011 first quarter results at 9:00 a.m. ET on Thursday, November 11, 2010.

    Interested parties may access the call by dialing +1-877-941-4774 (U.S.), or +1-480-629-9764 (International). The conference ID is 4384159. It is advisable to dial in approximately 5 minutes prior to the start of the call.

    A replay will be available from November 11, 2010 till November 25, 2010 by dialing 1-877-870-5176 (U.S.) or 1-858-384-5517 (International), Replay Pin Number: 4384159

    This call is being web cast by ViaVid Broadcasting and can be accessed at ViaVid's website at the following link:

    About Tianyin Pharmaceutical

    Tianyin Pharmaceutical Co., Inc., headquartered at Chengdu, China, specializes in the development, manufacturing, marketing and sale of patented biopharmaceutical, modernized traditional Chinese medicines, branded generics and other pharmaceuticals. Tianyin currently manufactures and markets a comprehensive portfolio of 56 products, 23 of which are listed in the highly selective National Reimbursement List, 7 are included in the Essential Drug List of China. Tianyin has a pipeline of 10 products pending SFDA approval targeting cardiovascular conditions, women's health, immune system and respiratory disorders. Tianyin has an extensive nationwide distribution network with 730 sales representatives out of totaled 1,365 employees. For more information about Tianyin, please visit

    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:Investors Contact:James Jiayuan Tong M.D. Ph.D.Chief Financial Officer, Chief Business & Development OfficerDirectorTianyin Pharmaceutical Co., Inc.Web:   http://www.tianyinpharma.comEmail: Dr.Tong@tianyinpharma.comTel:   +86-28-8551-6696 (Chengdu, China)+1-949-350-6999 (U.S.)+86-134 36 550011 (China)Address:23rd Floor Unionsun Yangkuo PlazaNo. 2, Block 3, South Renmin RoadChengdu, 610041ChinaConsolidated Balance SheetsSeptember 30,June 30,20102010Assets(Unaudited)Current assets:Cash and cash equivalents


    $27,009,066Accounts receivable, net of allowance for doubtful accounts of $427,939


    8,185,240and $421,079 at September 30, 2010 and June 30, 2010, respectivelyInventory


    3,588,824Advance payments


    382,980Loans receivable


    294,600Other current assets


    77,283Total current assets42,140,14339,537,993Property and equipment, net17,023,43314,968,822Intangibles, net15,297,91115,232,286Total assets$74,461,487

    $69,739,101Liabilities Current liabilities:Accounts payable and accrued expenses

    $  1,523,622

    $  1,715,781Accounts payable – construction related


    2,248,849Short-term bank loans


    1,473,000VAT taxes payable


    658,312Income taxes payable


    861,614Other taxes payable


    19,564Dividends payable


    72,995Other current liabilities


    429,135Total current liabilities6,364,7517,479,250Total liabilities6,364,7517,479,250EquityStockholders' equity:Common stock, $0.001 par value, 50,000,000 shares authorized,


    27,37227,986,026 and 27,371,526 shares issued and outstanding atSeptember 30, 2010 and June 30, 2010, respectivelySeries A convertible preferred stock, $0.001 par value 1,360,250 shares


    1,360issued and outstanding at September 30, 2010 and June 30, 2010,RespectivelyAdditional paid-in capital


    29,623,350Statutory reserve


    3,732,883Treasury stock


    (111,587)Retained earnings


    25,687,770Accumulated other comprehensive income


    2,845,076Total stockholders' equity67,650,95361,806,224Noncontrolling interest445,783453,627Total equity68,096,73662,259,851Total liabilities and equity$74,461,487

    $69,739,101Consolidated Statements of Operations and Comprehensive Income(Unaudited)For the Three Months Ended September 30,20102009Sales$21,950,814$13,405,203Cost of sales11,139,6896,349,227Gross profit10,811,1257,055,976Operating expenses:Selling, general and administrative


    4,117,766Research and development


    192,490Total operating expenses6,245,2014,310,256Income from operations4,565,9242,745,720Other income (expenses):Interest income (expense)


    (9,560)Other expenses


    (39,502)Total other income (expenses)9,206(49,062)Income before provision for income taxes4,575,1302,696,658Provision for income taxes905,439509,936Net income3,669,6912,186,722Less: Net loss attributable to noncontrolling interest(7,844)

    (2,526)Net income attributable to Tianyin Pharmaceutical Co., Inc.3,677,5352,189,248Other comprehensive incomeForeign currency translation adjustment


    35,857Comprehensive income$4,630,417

    $ 2,225,105Basic earnings per share$

    Diluted earnings per share$

    Weighted average number of common shares outstandingBasic




    27,516,458Consolidated Statements of Cash Flows(Unaudited)For the Three Months EndedSeptember 30,20102009Cash flows from operating activities:Net Income

    $  3,669,691

    $  2,186,722Adjustments to reconcile net income to net cash  provided by (used in) operating activities:Depreciation and amortization


    197,037Share-based payments


    512,209Loss on disposal of fixed assets


    39,502Changes in current assets and current liabilities:Accounts receivable




    126,979Other current assets


    419,905Accounts payable and accrued expenses


    183,242Accounts payable – construction related


    -VAT taxes payable


    16,025Income tax payable


    19,054Other taxes payable


    (433)Dividends payable


    -Other current liabilities


    33,582Total adjustments(2,123,909)54,740Net cash provided by operating activities1,545,7822,241,462Cash flows from investing activities:Additions to property and equipment


    (525,965)Additions to intangible assets – drug


    (1,891,269)Loan receivable


    (293,220)Net cash used in investing activities(1,922,700)(2,710,454)Cash flows from financing activities:Additional paid-in capital


    2,534,581Contribution from minority shareholders


    439,830Dividends paid


    (499,331)Net cash provided by (used in) financing activities(54,857)2,475,080Effect of foreign currency translation on cash311,912(5,435)Net increase (decrease) in cash and cash equivalents(119,863)2,000,653Cash and cash equivalents – beginning27,009,06612,352,223Cash and cash equivalents – ending$26,889,203

    $14,352,876Supplemental schedule of non cash activitiesAdvance payments exchanged for intangible assets – drug




    SOURCE Tianyin Pharmaceutical Co., Inc.
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